What changed in STEPAN CO's 2024 10-K compared to 2023?

Across the narrative sections we track, STEPAN CO (SCL) added 427 paragraphs, removed 430, and edited 337 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+386/−399), Item 1C. Cybersecurity (+41/−31).

What changed in STEPAN CO's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 386 new/edited paragraphs and 399 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did STEPAN CO update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 41 paragraph-level changes between the 2023 and 2024 filings.

Where does this SCL 10-K diff come from?

The source filings are STEPAN CO's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in STEPAN CO's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of STEPAN CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+427 added−430 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in STEPAN CO's 2024 10-K

427 paragraphs added · 430 removed · 337 edited across 2 sections

Item 7. Management's Discussion & Analysis+386 / −399 · 308 edited
Item 1C. Cybersecurity+41 / −31 · 29 edited

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

29 edited+12 added−2 removed15 unchanged

2023 filing

2024 filing

Biggest changeDepending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ materially from the Company’s current recorded liability. Wilmington Site Property formerly owned and operated by the Company in Wilmington, Massachusetts was listed on the National Priorities List in 2006.

Biggest changeBased on current information, the Company believes that its recorded liability is reasonable having considered the range of estimated cost of remediation for the D’Imperio site. Depending on the ultimate cost of the remediation at this site, the amount for which the Company is liable could differ materially from the Company’s current recorded liability.

Properties The following are the Company’s principal physical properties. Unless otherwise noted, the listed properties are owned by the Company. Management believes that the facilities are suitable and adequate for the Company’s current operations. Name of Facility Location Site Size Segment 1. Millsdale Elwood, Illinois 492 acres Surfactants/Polymers 2. Winder Winder, Georgia 202 acres Surfactants 3.

Properties The following are the Company’s principal physical properties. Unless otherwise noted, the listed properties are owned by the Company. Management believes that the Company’s facilities are suitable and adequate for the Company’s current operations. Name of Facility Location Site Size Segment 1. Millsdale Elwood, Illinois 492 acres Surfactants/Polymers 2. Winder Winder, Georgia 202 acres Surfactants 3.

The Company’s material legal proceedings are described below: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey, property formerly owned by the Company adjacent to its current property and other nearby properties (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical and radiological contamination.

The Company’s material legal proceedings are described below: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey, property formerly owned by the Company adjacent to its current site and other nearby properties (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical and radiological contamination.

Global Technology Center Northfield, Illinois 8 acres N/A 10. Company Headquarters Northbrook, Illinois 1.72 acres (leased) N/A 17 It em 3. Legal Proceedings There are a variety of legal proceedings pending or threatened against the Company that occur in the normal course of the Company’s business, the majority of which relate to environmental assessment, protection and remediation matters.

Global Technology Center Northfield, Illinois 8 acres N/A 10. Company Headquarters Northbrook, Illinois 1.72 acres (leased) N/A It em 3. Legal Proceedings There are a variety of legal proceedings pending or threatened against the Company that occur in the normal course of the Company’s business, the majority of which relate to environmental assessment, protection and remediation matters.

In addition, the Company maintains and communicates to its workforce a Use of Information Technology Policy to support the understanding of and commitment to safely using IT assets. This knowledge can help prevent accidental or intentional misuse of Company IT resources, which can compromise the confidentiality, integrity, and availability of 16 sensitive data and systems.

The ultimate amount for which the Company is liable could differ materially from the Company’s current recorded liability. D’Imperio Property Site During the mid-1970’s, Jerome Lightman and the Lightman Drum Company disposed of hazardous substances generated by the Company at several sites in New Jersey, including the D’Imperio Property Superfund Site (the D’Imperio site).

The ultimate amount for which the Company is liable could differ materially from the Company’s current recorded liability. 18 D’Imperio Property Site During the mid-1970’s, Jerome Lightman and the Lightman Drum Company disposed of hazardous substances generated by the Company at several sites in New Jersey, including the D’Imperio Property Superfund Site (the D’Imperio site).

As of the filing of this Form 10-K, we are not aware of any attacks, incidents, misuse or manipulation that have occurred since the beginning of 2023 that have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations or financial condition.

As of the filing of this Form 10-K, we are not aware of any attacks, incidents, misuse or manipulation that have occurred since the beginning of 2024 that have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations or financial condition.

Other U.S. Sites Through the regular environmental monitoring of its plant production sites, the Company discovered levels of chemical contamination that were above thresholds allowed by law at its Elwood, Illinois (Millsdale) and Fieldsboro, New Jersey plants. The Company voluntarily reported its results to the applicable state environmental agencies.

Sites Through the regular environmental monitoring of its plant production sites, the Company discovered levels of chemical contamination that were above thresholds allowed by law at its Elwood, Illinois (Millsdale) and Fieldsboro, New Jersey plants. The Company voluntarily reported its results to the applicable state environmental agencies.

As a result, the Company is required to perform self-remediation of the affected areas. Based on current information, the Company believes that its recorded liability for the remediation of the affected areas is appropriate based on an estimate of expected costs. However, actual costs could differ materially from the current recorded liability. It em 4.

The Company’s Vice President of Information Technology, who reports to the Vice President and Chief Financial Officer, is in charge of assessing and managing our risks related to cybersecurity and oversees a team of full-time cybersecurity specialist employees. Utilizing the processes noted above, this team remains informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents.

The Company’s Chief Information Officer , who reports to the President and Chief Executive Officer, is in charge of assessing and managing our risks related to cybersecurity and oversees a team of full-time cybersecurity specialist employees. Utilizing the processes noted above, this team remains informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents.

The Company and three other potentially responsible parties have entered into a consent decree, dated September 28, 2023, with USEPA and the Commonwealth of Massachusetts that requires the remedial design and remedial action of the remedy selected in the Record of Decision for two operable units and an interim remedy for another operable unit.

The Company and three other potentially responsible parties entered into a consent decree, dated September 28, 2023, with USEPA and the Commonwealth of Massachusetts that requires the remedial design and remedial action of the remedy selected in the ROD for two operable units and an interim remedy for another operable unit.

The estimate of the cost of remediation for the Maywood site could change again as the Company continues to hold discussions with the USEPA, as the remedial action is finalized, if a groundwater Record of Decision is issued or if other potentially responsible parties are identified.

The estimate of the cost of remediation for the Maywood site could change again as the Company continues to hold discussions with the USEPA, as the design of the remedial action is finalized, if a groundwater ROD is issued or if other potentially responsible parties are identified.

The Company has been included in the Russell 2000 Index since 1992. The graph assumes $100 was invested on December 31, 2018 and shows the cumulative total return as of each December 31 thereafter. It em 6. (Removed and Reserved) 21

The Company has been included in the Russell 2000 Index since 1992. The graph assumes $100 was invested on December 31, 2019 and shows the cumulative total return as of each December 31 thereafter. It em 6. (Removed and Reserved) 22

The alleged damages may result in a range of possible penalties and the Company believes it is probable that it will have exposure for this claim; however, at this stage, the Company is unable to predict the ultimate outcome of this claim, the allocation of costs among 18 the potentially responsible parties or what impact, if any, the outcome might have on the Company’s financial position, results of operations or cash flows.

The alleged damages may result in penalties and the Company believes it may have exposure for this claim; however, at this stage, the Company is unable to predict the ultimate outcome of this claim, the allocation of costs among potentially responsible parties or what impact, if any, the outcome might have on the Company’s financial position, results of operations or cash flows.

The Company’s Vice President of Information Technology has served in a variety of IT and cybersecurity roles for twenty-five years, including serving in IT infrastructure, cybersecurity, enterprise application, and project management office leadership roles for both public and privately held companies in the chemical, pharmaceutical, and manufacturing industries. He has earned the IT Infrastructure Library (ITIL) Service Master Certification.

The Company’s Chief Information Officer has served in a variety of IT and cybersecurity roles for more than twenty-five years, including serving in IT infrastructure, cybersecurity, enterprise application, and project management office leadership roles for both public and privately held companies in the chemical, pharmaceutical, and manufacturing industries. He has earned the IT Infrastructure Library (ITIL) Service Master Certification.

The Company’s Cybersecurity Manager, who reports to the Vice President of Information Technology, has earned multiple cybersecurity industry certifications and has over fifteen years of IT and cybersecurity experience. The Company’s cybersecurity program and cybersecurity practices are reviewed by internal and external auditors. The Company’s cybersecurity team provides periodic reports to such auditors. It em 2.

The Company’s Cybersecurity Senior Manager, who reports to the Chief Information Officer, has earned multiple cybersecurity industry certifications and has over fifteen years of IT and cybersecurity experience. The Company’s cybersecurity program and cybersecurity practices are reviewed by internal and external auditors. The Company’s cybersecurity team provides periodic reports to such auditors. 17 It em 2.

(2) Consists of 418 shares and 9 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the exercise of SARs and the distribution of restricted stock units, respectively. 20 (c) Stock Performance Graph The following stock performance graph compares the yearly change since December 31, 2018, in cumulative return on the common stock of the Company on a dividend reinvested basis to the Dow Jones Chemical Industry Index and the Russell 2000 Index.

(4) Consists of 400 shares and 1,082 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the exercise of SARs and the distribution of restricted stock units, respectively. 21 (c) Stock Performance Graph The following stock performance graph compares the yearly change since December 31, 2019, in cumulative return on the common stock of the Company on a dividend reinvested basis to the Dow Jones Chemical Industry Index and the Russell 2000 Index.

(b) Below is a summary by month of shares purchases by the Company during the fourth quarter of 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1) October — $ — — $ 125,050,905 November — $ — — $ 125,050,905 December 427 (2) $ 92.45 — $ 125,050,905 Total 427 $ 92.45 — $ 125,050,905 (1) On October 20, 2021, the Company announced that its Board of Directors had authorized the Company to repurchase up to $150,000,000 of its outstanding common stock.

(b) Below is a summary by month of shares purchases by the Company during the fourth quarter of 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1) October 75 (2) $ 75.54 — $ 125,050,905 November 150 (3) $ 77.67 — $ 125,050,905 December 1,482 (4) $ 66.30 — $ 125,050,905 Total 1,707 $ 67.71 — $ 125,050,905 (1) On October 20, 2021, the Company announced that its Board of Directors had authorized the Company to repurchase up to $150,000,000 of its outstanding common stock.

The Company has paid the current owner $3.6 million for the Company’s portion of environmental response costs at the Wilmington site through December 31, 2023. The Company has recorded a liability for its portion of the estimated remediation costs for the site.

The Company had paid the current owner $4.0 million for the Company’s portion of environmental response costs at the Wilmington site through December 31, 2024. The Company has recorded a liability for its portion of the estimated remediation costs for the site.

As of January 31, 2024, there were 1,877 holders of record of the Company’s common stock. This number does not include beneficial owners whose shares are held by banks, brokers and other institutions holding shares of the Company’s common stock on behalf of their customers.

This number does not include beneficial owners whose shares are held by banks, brokers and other institutions holding shares of the Company’s common stock on behalf of their customers.

Based on the most current information available, the Company believes its recorded liability is reasonable having considered the range of estimated costs of remediation for the Maywood site.

The USEPA has not yet issued a ROD for chemically-contaminated groundwater at the Maywood site. Based on the most current information available, the Company believes its recorded liability is reasonable having considered the range of estimated costs of remediation for the Maywood site.

On September 23, 2014, USEPA issued its Record of Decision for chemically-contaminated soil at the Maywood site; the Record of Decision was amended pursuant to an Explanation of Significant Differences in January 2021. The USEPA has not yet issued a Record of Decision for chemically-contaminated groundwater at the Maywood site.

On September 24, 2014, the USEPA issued its Record of Decision (ROD) for chemically-contaminated soil at the Maywood site. The ROD was amended pursuant to an Explanation of Significant Differences in January 2021. On February 29, 2024, the U.S.

Pursuant to (i) a September 21, 1987 Administrative Order on Consent entered into between the USEPA and the Company for property formerly owned by the Company at the Maywood site and (ii) the issuance of an order on May 2, 1991, by the USEPA to the Company for property currently owned by the Company at the Maywood site, the Company has completed various Remedial Investigation/Feasibility Studies of soils and groundwater at the Maywood site.

Environmental Protection Agency (USEPA) and the Company for property formerly owned by the Company at the Maywood site and (ii) the issuance of an order on May 2, 1991, by the USEPA to the Company for property currently owned by the Company at the Maywood site, the Company has completed various Remedial Investigation/Feasibility Studies of soil and groundwater at the Maywood site.

Under this program, which does not have an expiration date, repurchases may be made from time to time through open market transactions, privately negotiated transactions or a combination of the foregoing, subject to applicable laws. (2) Consists of 75 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the distribution of restricted stock units.

Interruption of, damage to or compromise of the Company’s IT systems and failure to maintain the integrity of customer, colleague or Company data could harm the Company’s reputation and have an adverse effect on the Company’s business, financial position, results of operations and cash flows.” included in “Part I—Item 1A. Risk Factors” of this Annual Report on Form 10-K.

For risks associated with cybersecurity threats, see the risk factor “Interruption of, damage to or compromise of the Company’s information technology (IT) systems, failure to maintain the integrity of customer, colleague or Company data or illegal or fraudulent activities committed against the Company could harm the Company’s reputation and have an adverse effect on the Company’s business, financial position, results of operations and cash flows.” included in “Part I—Item 1A.

Cybersecurity Governance The Audit Committee of the Company’s Board of Directors (the Audit Committee) oversees the Company’s cybersecurity risk management. The Audit Committee receives quarterly reports on cybersecurity risks and risk management from the Company’s Vice President of Information Technology.

Risk Factors” of this Annual Report on Form 10-K. Cybersecurity Governance The Audit Committee of the Company’s Board of Directors (the Audit Committee) oversees the Company’s cybersecurity risk management. The Audit Committee receives quarterly reports on cybersecurity risks and risk management from the Company’s Chief Information Officer.

The Company, together with the current site owner and another potentially responsible party, entered into an Administrative Order on Consent in July 2007 to undertake a Remedial Investigation and Feasibility Study. A Record of Decision was issued by the USEPA on March 30, 2021.

Wilmington Site Property formerly owned and operated by the Company in Wilmington, Massachusetts was listed on the National Priorities List in 2006. The Company, together with the current site owner and another potentially responsible party, entered into an Administrative Order on Consent in July 2007 to undertake a Remedial Investigation and Feasibility Study.

Mine Safety Disclosures Not Applicable. 19 PA RT II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol SCL.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol SCL. As of January 31, 2025, there were 1,912 holders of record of the Company’s common stock.

The Company was named as a potentially responsible party in an October 2, 1998 lawsuit in the U.S. District Court for the District of New Jersey that involved the D’Imperio site. Based on current information, the Company believes that its recorded liability is reasonable having considered the range of estimated cost of remediation for the D’Imperio site.

The Company was named as a potentially responsible party in an October 2, 1998 lawsuit in the U.S. District Court for the District of New Jersey that involved the D’Imperio site. The Company is cooperating with other potentially responsible parties to implement the selected remedy.

Removed

For risks associated with cybersecurity threats, see the risk factor “The Company relies extensively on information technology (IT) systems to conduct its business.

Added

Pursuant to (i) a September 21, 1987 Administrative Order on Consent entered into between the U.S.

Removed

While the Company is unable to predict the outcome of these matters, it does not believe, based upon current available facts, that the ultimate resolution of any of these matters will have a material effect on its overall financial position.

Added

District Court for the District of New Jersey entered a consent decree among the Company, the United States, the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey Spill Compensation Fund Administrator that requires the Company to take certain actions and to pay certain past costs of the United States and NJDEP.

Added

A ROD was issued by USEPA on March 30, 2021.

Added

Based on current information, the Company believes that its recorded liability is reasonable; however, depending on the ultimate resolution of this matter, the amount for which the Company is liable could differ materially from the current recorded liability.

Added

Millsdale Site On March 26, 2024, the Company received a Notice and Finding of Violation from the USEPA alleging violations of air regulations at the Company’s Elwood, Illinois (Millsdale) facility. The notice alleges violations related to operating parameters and air emission requirements. The notice does not state whether the USEPA intends to pursue financial penalties or operational remedies.

Added

The alleged violations may result in a range of possible penalties; however, at this stage of the matter, the Company is unable to predict the ultimate outcome or what impact, if any, the outcome might have on the Company’s financial position, results of operations or cash flows. Other U.S.

Added

Brazil Tax Rescission Action In March 2017, the Brazil Supreme Court ruled that ICMS (State VAT) does not represent a Company’s revenue and should not be included in the calculation basis of certain indirect taxes (PIS/COFINS). Based on the Supreme Court’s decision, the Company’s Brazilian subsidiary filed a lawsuit on March 23, 2017 to recover PIS/COFINS overpayments.

Added

The Company’s recovery case was successful and became final in November 2018. In May 2021, the Brazil Supreme Court modulated its original decision so that only taxpayers that had filed lawsuits before March 15, 2017, should recover prior PIS/COFINS overpayments.

Added

On June 12, 2023, the Brazil National Treasury filed a rescission action against the Company’s Brazilian subsidiary to rescind its use of the PIS/COFINS tax credits for the period from March 23, 2012, to March 15, 2017.

Added

In September and October 2024, the Brazil Superior Court and Supreme Court, respectively, ruled that the generally held two-year “res judicata” principle would start from the May 2021 ruling and not the final ruling 19 in prior taxpayer cases (e.g., November 30, 2018, for the Company’s case).

Added

(3) Consists of 87 shares and 63 shares of Company common stock tendered by employees to settle statutory withholding taxes related to the exercise of SARs and the distribution of restricted stock units, respectively.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

308 edited+78 added−91 removed209 unchanged

2023 filing

2024 filing

Biggest changeWe also evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Chicago, Illinois February 29, 2024 We have served as the Company’s auditor since 2002. 40 Stepan Company Consol idated Statements of Income For the years ended December 31, 2023, 2022 and 2021 (In thousands, except per share amounts) 2023 2022 2021 Net Sales (Note 1) $ 2,325,768 $ 2,773,270 $ 2,345,966 Cost of Sales 2,048,170 2,346,201 1,950,156 Gross Profit 277,598 427,069 395,810 Operating Expenses: Selling (Note 1) 48,367 59,030 59,186 Administrative (Note 1) 93,202 102,177 92,906 Research, development and technical services (Note 1) 59,039 66,633 62,689 Deferred compensation (income) expense (Note 12) 4,371 ( 9,393 ) 6,895 204,979 218,447 221,676 Goodwill and other intangibles impairment (Note 4) 2,038 978 — Business restructuring, assets impairment and loss on asset disposition (Note 22) 11,968 308 3,353 Operating Income 58,613 207,336 170,781 Other Income (Expense): Interest, net (Note 6) ( 12,103 ) ( 9,809 ) ( 5,753 ) Other, net (Note 8) 1,881 ( 8,824 ) 7,509 ( 10,222 ) ( 18,633 ) 1,756 Income Before Provision for Income Taxes 48,391 188,703 172,537 Provision for Income Taxes (Note 9) \ 8,187 41,550 34,642 Net Income 40,204 147,153 137,895 Net Income Attributable to Noncontrolling Interest (Note 1) — — ( 91 ) Net Income Attributable to Stepan Company $ 40,204 $ 147,153 $ 137,804 Net Income Per Common Share Attributable to Stepan Company (Note 18): Basic $ 1.77 $ 6.46 $ 6.01 Diluted $ 1.75 $ 6.38 $ 5.92 Shares Used to Compute Net Income Per Common Share Attributable to Stepan Company (Note 18): Basic 22,777 22,781 22,922 Diluted 22,946 23,064 23,287 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 41 Stepan Company Cons olidated Statements of Comprehensive Income For the years ended December 31, 2023, 2022 and 2021 (In thousands) 2023 2022 2021 Net Income $ 40,204 $ 147,153 $ 137,895 Other Comprehensive Income: Foreign currency translation adjustments (Note 19) 40,423 ( 21,567 ) ( 28,154 ) Defined benefit pension plans: Net actuarial gain (loss) arising in period (net of tax benefit of $ 508 , tax benefit of $ 894 and tax expense of $ 2,661 for 2023, 2022 and 2021, respectively) ( 1,630 ) ( 2,857 ) 8,188 Amortization of prior service cost included in pension expense (net of tax expense of $ 2 , $ 3 and $ 4 for 2023, 2022 and 2021, respectively) 8 6 8 Amortization of actuarial loss included in pension expense (net of tax expense of $ 99 , $ 599 and $ 1,157 for 2023, 2022 and 2021, respectively) 293 1,794 3,643 Net defined benefit pension plan activity (Note 19) ( 1,329 ) ( 1,057 ) 11,839 Cash flow hedges: Cash flow hedge activity ( 2,174 ) 8,357 — Reclassifications to income in period ( 10 ) ( 9 ) ( 9 ) Net cash flow hedge activity (Note 19) ( 2,184 ) 8,348 ( 9 ) Other Comprehensive Income 36,910 ( 14,276 ) ( 16,324 ) Comprehensive Income 77,114 132,877 121,571 Comprehensive Income Attributable to Noncontrolling Interest — — ( 122 ) Comprehensive Income Attributable to Stepan Company $ 77,114 $ 132,877 $ 121,449 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 42 Stepan Company Co nsolidated Balance Sheets December 31, 2023 and 2022 (Dollars in thousands) 2023 2022 Assets Current Assets: Cash and cash equivalents $ 129,823 $ 173,750 Receivables, less allowances of $ 11,143 in 2023 and $ 11,100 in 2022 422,050 436,914 Inventories (Note 5) 265,558 402,531 Other current assets 34,452 31,607 Total current assets 851,883 1,044,802 Property, Plant and Equipment: Land 52,842 50,695 Buildings and improvements 335,033 293,264 Machinery and equipment 1,796,820 1,640,478 Construction in progress 400,363 386,115 2,585,058 2,370,552 Less: Accumulated depreciation ( 1,378,393 ) ( 1,297,255 ) Property, plant and equipment, net 1,206,665 1,073,297 Goodwill, net (Note 4) 97,442 95,922 Other intangible assets, net (Note 4) 52,571 58,026 Long-term investments (Note 2) 26,804 23,294 Operating lease assets (Note 7) 70,646 62,540 Other non-current assets 57,343 75,291 Total Assets $ 2,363,354 $ 2,433,172 Liabilities and Equity Current Liabilities: Current maturities of debt (Note 6) $ 252,898 $ 132,111 Accounts payable 233,031 375,726 Accrued liabilities (Note 14) 121,941 162,812 Total current liabilities 607,870 670,649 Deferred income taxes (Note 9) 10,373 10,179 Long-term debt, less current maturities (Note 6) 401,248 455,029 Non-current operating lease liability (Note 7) 58,026 50,559 Other non-current liabilities (Note 15) 69,347 80,691 Commitments and Contingencies (Note 16) Equity (Note 10): Common stock, $ 1 par value; 60,000,000 authorized shares; 27,005,852 issued shares in 2023 and 26,840,843 issued shares in 2022 27,006 26,841 Additional paid-in capital 247,032 237,202 Accumulated other comprehensive loss (Note 19) ( 130,602 ) ( 167,512 ) Retained earnings 1,257,466 1,250,130 Less: Common treasury stock, at cost, 4,628,072 shares in 2023 and 4,605,858 shares in 2022 ( 184,412 ) ( 180,596 ) Total Stepan Company stockholders’ equity 1,216,490 1,166,065 Total Liabilities and Equity $ 2,363,354 $ 2,433,172 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 43 Stepan Company Con solidated Statements of Cash Flows For the years ended December 31, 2023, 2022 and 2021 (In thousands) 2023 2022 2021 Cash Flows From Operating Activities Net income $ 40,204 $ 147,153 $ 137,895 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 105,338 94,650 90,876 Deferred compensation 4,371 ( 9,393 ) 6,895 Realized and unrealized (gains) losses on long-term investments ( 4,314 ) 8,188 ( 2,289 ) Stock-based compensation 5,741 13,851 11,716 Deferred income taxes 18,303 ( 27,452 ) ( 33,605 ) Goodwill and other intangibles impairment (Note 4) 2,038 978 — Other non-cash items 5,123 1,752 2,158 Changes in assets and liabilities, excluding effects of acquisitions: Receivables, net 32,007 ( 26,153 ) ( 104,231 ) Inventories 144,846 ( 99,394 ) ( 79,258 ) Other current assets ( 4,528 ) ( 4,354 ) ( 1,434 ) Accounts payable and accrued liabilities ( 158,924 ) 54,173 44,414 Pension liabilities ( 1,204 ) ( 1,821 ) ( 1,729 ) Environmental and legal liabilities ( 11,985 ) 9,547 450 Deferred revenues ( 2,140 ) ( 962 ) 277 Net Cash Provided By Operating Activities 174,876 160,763 72,135 Cash Flows From Investing Activities Expenditures for property, plant and equipment ( 260,335 ) ( 301,553 ) ( 194,482 ) Proceeds from asset disposition — — 4,149 Asset acquisition (Note 20) — — ( 3,503 ) Business acquisitions, net of cash acquired (Note 20) — ( 9,693 ) ( 184,473 ) Other, net 1,669 3,156 1,480 Net Cash Used In Investing Activities ( 258,666 ) ( 308,090 ) ( 376,829 ) Cash Flows From Financing Activities Revolving debt and bank overdrafts, net (Note 6) 104,717 186,551 2,861 Other debt borrowings (Note 6) — 75,000 200,000 Other debt repayments (Note 6) ( 37,858 ) ( 37,857 ) ( 37,858 ) Dividends paid ( 32,868 ) ( 30,573 ) ( 28,083 ) Company stock repurchased — ( 24,949 ) ( 16,969 ) Stock option exercises 2,795 782 1,369 Other, net ( 3,502 ) ( 2,745 ) ( 3,987 ) Net Cash Provided By Financing Activities 33,284 166,209 117,333 Effect of Exchange Rate Changes on Cash 6,579 ( 4,318 ) ( 3,391 ) Net Increase (Decrease) in Cash and Cash Equivalents ( 43,927 ) 14,564 ( 190,752 ) Cash and Cash Equivalents at Beginning of Year 173,750 159,186 349,938 Cash and Cash Equivalents at End of Year $ 129,823 $ 173,750 $ 159,186 Supplemental Cash Flow Information Cash payments of income taxes, net of refunds $ 29,558 $ 41,617 $ 92,867 Cash payments of interest $ 27,951 $ 16,526 $ 9,542 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 44 Stepan Company C onsolidated Statements of Equity For the year ended December 31, 2021 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Noncontrolling Interest Balance, December 31, 2020 $ 988,365 $ 26,658 $ 206,716 $ ( 133,629 ) $ ( 136,881 ) $ 1,023,829 $ 1,672 Issuance of 20,435 shares of common stock under stock option plan 1,369 20 1,349 — — — — Purchase of 135,103 shares of common stock ( 16,969 ) — — ( 16,969 ) — — — Stock-based and deferred compensation 9,734 83 12,755 ( 3,104 ) — — — Net income 137,895 — — — — 137,804 91 Other comprehensive income ( 16,324 ) — — — ( 16,355 ) — 31 Cash dividends paid: Common stock ($ 1.250 per share) ( 28,083 ) — — — — ( 28,083 ) — Other (1) ( 1,794 ) — — — — — ( 1,794 ) Balance, December 31, 2021 $ 1,074,193 $ 26,761 $ 220,820 $ ( 153,702 ) $ ( 153,236 ) $ 1,133,550 $ — (1) Reflects the derecognition of noncontrolling interest due to the dissolution of the China joint venture.

Biggest changeIn addition, we tested payments made on the remediation of environmental contamination. If the Company’s reasonable estimate of loss for a remediation site is a range, we evaluated whether the amount of the liability recognized by the Company within that range was reasonable based on the facts and circumstances specific to the remediation site. We evaluated the Company’s environmental contingencies disclosures for consistency with our knowledge of the Company’s environmental matters. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Chicago, Illinois February 27, 2025 We have served as the Company’s auditor since 2002. 39 Stepan Company Consol idated Statements of Income For the years ended December 31, 2024, 2023 and 2022 (In thousands, except per share amounts) 2024 2023 2022 Net Sales (Note 1) $ 2,180,274 $ 2,325,768 $ 2,773,270 Cost of Sales 1,908,060 2,048,170 2,346,201 Gross Profit 272,214 277,598 427,069 Operating Expenses: Selling (Note 1) 45,628 48,367 59,030 Administrative (Note 1) 98,277 93,202 102,177 Research, development and technical services (Note 1) 55,674 59,039 66,633 Deferred compensation (income) expense (Note 12) 2,155 4,371 ( 9,393 ) 201,734 204,979 218,447 Goodwill and other intangibles impairment (Note 4) — 2,038 978 Business restructuring and assets impairment (Note 22) — 11,968 308 Operating Income 70,480 58,613 207,336 Other Income (Expense): Interest, net (Note 6) ( 14,182 ) ( 12,103 ) ( 9,809 ) Other, net (Note 8) 4,141 1,881 ( 8,824 ) ( 10,041 ) ( 10,222 ) ( 18,633 ) Income Before Provision for Income Taxes 60,439 48,391 188,703 Provision for Income Taxes (Note 9) \ 10,069 8,187 41,550 Net Income 50,370 40,204 147,153 Net Income Per Common Share (Note 18): Basic $ 2.21 $ 1.77 $ 6.46 Diluted $ 2.20 $ 1.75 $ 6.38 Shares Used to Compute Net Income Per Common Share (Note 18): Basic 22,832 22,777 22,781 Diluted 22,931 22,946 23,064 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 40 Stepan Company Cons olidated Statements of Comprehensive Income For the years ended December 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Net Income $ 50,370 $ 40,204 $ 147,153 Other Comprehensive Income (Loss): Foreign currency translation adjustments (Note 19) ( 59,390 ) 40,423 ( 21,567 ) Defined benefit pension plans: Net actuarial gain (loss) arising in period (net of tax benefit of $ 2,044 , tax benefit of $ 508 and tax benefit of $ 894 for 2024, 2023 and 2022, respectively) ( 5,888 ) ( 1,630 ) ( 2,857 ) Amortization of prior service cost included in pension expense (net of tax expense of $ 2 , $ 2 and $ 3 for 2024, 2023 and 2022, respectively) 8 8 6 Amortization of actuarial loss included in pension expense (net of tax expense of $ 104 , $ 99 and $ 599 for 2024, 2023 and 2022, respectively) 292 293 1,794 Net defined benefit pension plan activity (Note 19) ( 5,588 ) ( 1,329 ) ( 1,057 ) Cash flow hedges: Cash flow hedge activity ( 1,249 ) ( 2,174 ) 8,357 Reclassifications to income in period ( 9 ) ( 10 ) ( 9 ) Net cash flow hedge activity (Note 19) ( 1,258 ) ( 2,184 ) 8,348 Other Comprehensive Income (Loss) ( 66,236 ) 36,910 ( 14,276 ) Comprehensive Income (Loss) ( 15,866 ) 77,114 132,877 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 41 Stepan Company Co nsolidated Balance Sheets December 31, 2024 and 2023 (Dollars in thousands) 2024 2023 Assets Current Assets: Cash and cash equivalents $ 99,665 $ 129,823 Receivables, less allowances of $ 10,827 in 2024 and $ 11,143 in 2023 388,027 422,050 Inventories (Note 5) 288,722 265,558 Other current assets 34,015 34,452 Total current assets 810,429 851,883 Property, Plant and Equipment: Land 54,464 52,842 Buildings and improvements 399,226 335,033 Machinery and equipment 1,917,196 1,796,820 Construction in progress 275,045 400,363 2,645,931 2,585,058 Less: Accumulated depreciation ( 1,447,477 ) ( 1,378,393 ) Property, plant and equipment, net 1,198,454 1,206,665 Goodwill, net (Note 4) 91,368 97,442 Other intangible assets, net (Note 4) 42,673 52,571 Long-term investments (Note 2) 25,558 26,804 Operating lease assets (Note 7) 71,477 70,646 Other non-current assets 64,689 57,343 Total Assets $ 2,304,648 $ 2,363,354 Liabilities and Equity Current Liabilities: Current maturities of debt (Note 6) $ 292,807 $ 252,898 Accounts payable 258,787 233,031 Accrued liabilities (Note 14) 117,440 121,941 Total current liabilities 669,034 607,870 Deferred income taxes (Note 9) 9,612 10,373 Long-term debt, less current maturities (Note 6) 332,632 401,248 Non-current operating lease liability (Note 7) 57,392 58,026 Other non-current liabilities (Note 15) 66,044 69,347 Commitments and Contingencies (Note 16) Equity (Note 10): Common stock, $ 1 par value; 60,000,000 authorized shares; 27,156,436 issued shares in 2024 and 27,005,852 issued shares in 2023 27,156 27,006 Additional paid-in capital 253,779 247,032 Accumulated other comprehensive loss (Note 19) ( 196,838 ) ( 130,602 ) Retained earnings 1,273,886 1,257,466 Less: Common treasury stock, at cost, 4,655,798 shares in 2024 and 4,628,072 shares in 2023 ( 188,049 ) ( 184,412 ) Total Stepan Company stockholders’ equity 1,169,934 1,216,490 Total Liabilities and Equity $ 2,304,648 $ 2,363,354 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 42 Stepan Company Con solidated Statements of Cash Flows For the years ended December 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Cash Flows From Operating Activities Net income $ 50,370 $ 40,204 $ 147,153 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 112,197 105,338 94,650 Deferred compensation 2,155 4,371 ( 9,393 ) Realized and unrealized (gains) losses on long-term investments ( 3,323 ) ( 4,314 ) 8,188 Stock-based compensation 5,347 5,741 13,851 Deferred income taxes ( 10,291 ) 18,303 ( 27,452 ) Goodwill and other intangibles impairment (Note 4) — 2,038 978 Other non-cash items 2,812 5,123 1,752 Changes in assets and liabilities, excluding effects of acquisitions: Receivables, net 9,036 32,007 ( 26,153 ) Inventories ( 37,178 ) 144,846 ( 99,394 ) Other current assets ( 1 ) ( 4,528 ) ( 4,354 ) Accounts payable and accrued liabilities 33,970 ( 158,924 ) 54,173 Pension liabilities ( 131 ) ( 1,204 ) ( 1,821 ) Environmental and legal liabilities ( 695 ) ( 11,985 ) 9,547 Deferred revenues ( 2,215 ) ( 2,140 ) ( 962 ) Net Cash Provided By Operating Activities 162,053 174,876 160,763 Cash Flows From Investing Activities Expenditures for property, plant and equipment ( 122,776 ) ( 260,335 ) ( 301,553 ) Business acquisitions, net of cash acquired (Note 20) — — ( 9,693 ) Other, net 5,831 1,669 3,156 Net Cash Used In Investing Activities ( 116,945 ) ( 258,666 ) ( 308,090 ) Cash Flows From Financing Activities Revolving debt and bank overdrafts, net (Note 6) 19,886 104,717 186,551 Other debt borrowings (Note 6) — — 75,000 Other debt repayments (Note 6) ( 48,571 ) ( 37,858 ) ( 37,857 ) Dividends paid ( 33,950 ) ( 32,868 ) ( 30,573 ) Company stock repurchased — — ( 24,949 ) Stock option exercises 1,112 2,795 782 Other, net ( 2,997 ) ( 3,502 ) ( 2,745 ) Net Cash Provided By (Used In) Financing Activities ( 64,520 ) 33,284 166,209 Effect of Exchange Rate Changes on Cash ( 10,746 ) 6,579 ( 4,318 ) Net Increase (Decrease) in Cash and Cash Equivalents ( 30,158 ) ( 43,927 ) 14,564 Cash and Cash Equivalents at Beginning of Year 129,823 173,750 159,186 Cash and Cash Equivalents at End of Year $ 99,665 $ 129,823 $ 173,750 Supplemental Cash Flow Information Cash payments of income taxes, net of refunds $ ( 12,342 ) $ 29,558 $ 41,617 Cash payments of interest $ 29,848 $ 27,951 $ 16,526 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 43 Stepan Company C onsolidated Statements of Equity For the year ended December 31, 2022 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2021 $ 1,074,193 $ 26,761 $ 220,820 $ ( 153,702 ) $ ( 153,236 ) $ 1,133,550 Issuance of 11,888 shares of common stock under stock option plan 782 12 770 — — — Purchase of 251,120 shares of common stock ( 24,949 ) — — ( 24,949 ) — — Stock-based and deferred compensation 13,735 68 15,612 ( 1,945 ) — — Net income 147,153 — — — — 147,153 Other comprehensive income ( 14,276 ) — — — ( 14,276 ) — Cash dividends paid: Common stock ($ 1.370 per share) ( 30,573 ) — — — — ( 30,573 ) Balance, December 31, 2022 $ 1,166,065 $ 26,841 $ 237,202 $ ( 180,596 ) $ ( 167,512 ) $ 1,250,130 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 44 Stepan Company Consolidated Statements of Equity For the year ended December 31, 2023 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2022 $ 1,166,065 $ 26,841 $ 237,202 $ ( 180,596 ) $ ( 167,512 ) $ 1,250,130 Issuance of 52,999 shares of common stock under stock option plan 2,875 53 2,822 — — — Stock-based and deferred compensation 3,304 112 7,008 ( 3,816 ) — — Net income 40,204 — — — — 40,204 Other comprehensive income 36,910 — — — 36,910 — Cash dividends paid: Common stock ($ 1.470 per share) ( 32,868 ) — — — — ( 32,868 ) Balance, December 31, 2023 $ 1,216,490 $ 27,006 $ 247,032 $ ( 184,412 ) $ ( 130,602 ) $ 1,257,466 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 45 Stepan Company Consolidated Statements of Equity For the year ended December 31, 2024 STEPAN COMPANY STOCKHOLDERS (In thousands, except share and per share amounts) Total Common Stock Additional Paid-in Capital Common Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Balance, December 31, 2023 $ 1,216,490 $ 27,006 $ 247,032 $ ( 184,412 ) $ ( 130,602 ) $ 1,257,466 Issuance of 26,735 shares of common stock under stock option plan 1,135 27 1,108 — — — Stock-based and deferred compensation 2,125 123 5,639 ( 3,637 ) — — Net income 50,370 — — — — 50,370 Other comprehensive income ( 66,236 ) — — — ( 66,236 ) — Cash dividends paid: Common stock ($ 1.510 per share) ( 33,950 ) — — — — ( 33,950 ) Balance, December 31, 2024 $ 1,169,934 $ 27,156 $ 253,779 $ ( 188,049 ) $ ( 196,838 ) $ 1,273,886 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 46 Not es to Consolidated Financial Statements For the years ended December 31, 2024, 2023 and 2022 1.

See Item 3. Legal Proceedings , in this Form 10-K and Note 16, Contingencies , in the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for a summary of the significant environmental proceedings related to certain environmental sites.

Volume and cash discounts due customers are estimated and recorded in the same period as the sales to which the discounts relate and are reported as reductions of revenue in the consolidated statements of income.

Volume and cash discounts due to customers are estimated and recorded in the same period as the sales to which the discounts relate and are reported as reductions of revenue in the consolidated statements of income.

Weighted-average remaining lease term-operating leases 9 Years Weighted-average discount rate-operating leases 3.8 % 8.

Weighted-average remaining lease term-operating leases 8 Years Weighted-average discount rate-operating leases 3.9 % 8.

The main factors in the increase of the 2023 deferred compensation expense versus 2022 deferred compensation income was an increase in the value of the mutual fund investment assets, partially offset by an $ 11.91 per share decrease in the market price of the Company’s common stock during 2023.

The main factors in the increase of the 2023 deferred compensation expense versus 2022 deferred compensation income was an increase in the value of the mutual fund investment assets, partially offset by the $ 11.91 per share decrease in the market price of the Company’s common stock during 2023.

In addition, the Company is from time to time involved in routine legal proceedings incidental to the conduct of its business, including personal injury, property damage, tax, trade and labor matters. The Company believes that it has made adequate provisions for the costs it is likely to incur with respect to these claims.

For certain sites, the Company has responded to information requests made by federal, state or local government agencies but has received no response confirming or denying the Company’s stated positions.

As such, estimates of the total costs, or range of possible costs, of remediation, if any, or the Company’s share of such costs, if any, cannot be determined with respect to these sites. Consequently, the Company is unable to predict the effect thereof on the Company’s financial position, cash flows and results of operations.

Based on the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities for cleanup, and the extended period over which any costs would be incurred, management believes that the Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position.

Based on the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities 33 for cleanup, and the extended period over which any costs would be incurred, management believes that the Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position.

Based on the Company’s present knowledge with respect to its involvement at these sites, the possibility of other viable entities’ responsibilities for cleanup, and the extended period over which any costs would be incurred, management believes that the 72 Company has no material liability at these sites and that these matters, individually and in the aggregate, will not have a material effect on the Company’s financial position.

The Organisation for Economic Co-operation and Development (OECD) proposed a global minimum tax of 15 percent on reported profits (entitled “Pillar Two”) that has been agreed upon in principle by over 100 countries. During 2023, many countries took steps to 54 incorporate Pillar Two into their domestic laws.

In past years, at the time a plan participant retired, the plan trustee would periodically purchase insurance contracts to cover the future payments due the retiree. This practice is no longer followed. The contracts are revocable, and the related plan obligations are not considered settled. Therefore, the plan assets and obligations include the insured amounts. Plan Assets U.S.

The Company estimates the fair value of each of its reporting units based on the average of market and income-based computations. During the fourth quarter of 2023 the Company recorded a non-cash charge of $ 1,060,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line.

The Company estimates the fair value of each of its reporting units based on an average of market and income-based computations. During the fourth quarter of 2023 the Company recorded a non-cash charge of $ 1,060,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line.

The cost of property retired or 49 sold, and the related accumulated depreciation, are removed from the accounts and any resulting gain or loss is reflected in income. Long-lived assets are reviewed for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable.

The cost of property retired or sold, and the related accumulated depreciation, are removed from the accounts and any resulting gain or loss is reflected in income. Long-lived assets are reviewed for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable.

Any resulting translation adjustments are included within the consolidated balance sheets on the accumulated other comprehensive loss line of stockholders’ equity. Gains or losses on foreign currency transactions are reflected in the other, net line of the consolidated statements of income. The Company has four foreign subsidiaries whose functional currencies are the U.S. dollar.

Any resulting translation adjustments are included within the consolidated balance sheets on the accumulated other 51 comprehensive loss line of stockholders’ equity. Gains or losses on foreign currency transactions are reflected in the other, net line of the consolidated statements of income. The Company has four foreign subsidiaries whose functional currencies are the U.S. dollar.

The first in, first out (FIFO) method is used to determine the cost of the Company’s inventory. Property, Plant and Equipment Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets. Lives used for calculating depreciation are generally 30 years for buildings and 15 years for building improvements.

The first in, first out (FIFO) method is used to determine the cost of the Company’s inventory. Property, Plant and Equipment Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets. Lives used for calculating depreciation are generally 30 to 40 years for buildings and 15 years for building improvements.

A small percentage of the fixed income assets may be in debt securities that are below investment grade. The target allocation for fixed income 69 is 78 percent. The fixed income portfolio has a duration similar to the plan’s liability stream and is designed to perform consistent with the movement of the plan’s liabilities.

A small percentage of the fixed income assets may be in debt securities that are below investment grade. The target allocation for fixed income is 78 percent. The fixed income portfolio has a duration similar to the plan’s liability stream and is designed to perform consistent with the movement of the plan’s liabilities.

The overall investment return forecast reflects the target allocations and the capital markets forecasts for each asset category, plus a premium for active asset management expected over the long term. U.K. Plan The overall expected long-term return on plan assets is a weighted-average of the expected long-term returns for equity securities, debt securities and other assets.

The overall investment return forecast reflects the target allocations and the capital markets forecasts for each asset category, plus a premium for active asset management expected over the long term. 70 U.K. Plan The overall expected long-term return on plan assets is a weighted average of the expected long-term returns for equity securities, debt securities and other assets.

The ultimate amount for which the Company is liable could differ materially from the Company’s current recorded liability. 74 D’Imperio Property Site During the mid-1970’s, Jerome Lightman and the Lightman Drum Company disposed of hazardous substances generated by the Company at several sites in New Jersey, including the D’Imperio site.

Capitalized costs for internal-use software include external direct costs of materials and services consumed in obtaining and developing the software. For development projects where major internal resources are committed, payroll and payroll-related costs incurred during the application development phase of the project are also capitalized.

Capitalized costs for internal-use software include external direct costs of materials and services consumed in obtaining and developing the software. For development projects where major internal resources are committed, payroll 48 and payroll-related costs incurred during the application development phase of the project are also capitalized.

The options’/SARs’ exercise prices were greater than the average market price for the Company’s common stock and inclusion of the instruments would have had an antidilutive effect on the computations of earnings per share. 78 19.

During the fourth quarter of 2024, the Company recognized an additional $ 2,883,000 of restructuring expense associated with workforce productivity measures to reduce costs. In addition, the Company also recognized $ 3,164,000 of asset impairment charges in the fourth quarter of 2023.

During the fourth quarter of 2023, the Company recognized an additional $ 2,883,000 of restructuring expense associated with workforce productivity measures to reduce costs. In addition, the Company also recognized $ 3,164,000 of asset impairment charges in the fourth quarter of 2023.

Prior to 2018, the Company made profit sharing contributions into the qualified retirement plans for its U.S. employees and starting in 2018 made profit sharing contributions into the qualified retirement plans for U.S. employees and for certain non-U.S. employees. Profit sharing contributions were determined using 72 a formula applied to Company earnings.

In all Company locations, approximately 85 percent of union and non-union employees are eligible for either the Company’s sponsored or statutory profit sharing contributions and 100 percent of U.S. based union and non-union employees are eligible for the Company’s sponsored profit sharing contribution. 14.

For derivative instruments designated as hedging instruments, depending on the nature of the hedge, changes in the fair values of the derivative instruments are either offset in earnings against changes in the fair values of the hedged items 53 or recognized in AOCI until the hedged transaction is recognized in earnings.

For derivative instruments designated as hedging instruments, depending on the nature of the hedge, changes in the fair values of the derivative instruments are either offset in earnings against changes in the fair values of the hedged items or recognized in AOCI until the hedged transaction is recognized in earnings.

During the fourth quarter of 2023 the Company concluded that the goodwill related to its Specialty Products segment was impaired. The Specialty Products segment’s impairment resulted from the Company’s decision to exit portion of its Lipid Nutrition business.

Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding items affective comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions and evaluate the Company’s core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating the Company’s financial results.

Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding items affecting comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions and evaluate the Company’s core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating the Company’s financial results.

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statements of Income. Accrued interest and penalties are included within the related tax liability line in 52 the Consolidated Balance Sheet.

As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate (IBR) based on the information available at the commencement date in determining the present value of lease payments. IBRs were specifically determined for the United States, Philippines, Singapore, Brazil and China, typically for five-year increments. The U.S.

Following are summaries of the Company’s major contingencies at December 31, 2023: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey, property formerly owned by the Company adjacent to its current site and other nearby properties (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical and radiological contamination.

Following are summaries of the Company’s major contingencies at December 31, 2024: Maywood, New Jersey Site The Company’s property in Maywood, New Jersey, property formerly owned by the Company adjacent to its current site and other nearby properties (collectively, the Maywood site) were listed on the National Priorities List in September 1993 pursuant to the provisions of CERCLA because of alleged chemical and radiological contamination.

Given the subjectivity of estimating the likelihood of a loss, the range of potential loss, and the amount of liability to recognize associated with the Maywood site, performing audit procedures to evaluate whether environmental loss contingencies were appropriately recorded and disclosed as of December 31, 2023, required especially challenging, subjective, and complex auditor judgment and an increased extent of effort.

Given the subjectivity of estimating the likelihood of a loss, the range of potential loss, and the amount of liability to recognize associated with the Maywood site, performing audit procedures to evaluate whether the environmental loss contingencies were appropriately recorded and disclosed as of December 31, 2024, required especially challenging, subjective, and complex auditor judgment and an increased extent of effort.

The amendments in this update are effective for annual period beginning after December 15, 2024 and should be applied on a prospective basis. The implementation of ASU No. 2023-09 will not have an impact on the Company’s financial position, results of operations and cash flow but will impact the Company’s annual income tax disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis. The implementation of ASU No. 2023-09 will not have an impact on the Company’s financial position, results of operations and cash flow but will impact the Company’s annual income tax disclosures.

While the amounts involved may be material, such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. During the twelve months ended December 31, 2023, the Company did not purchase any shares of its common stock on the open market.

While the amounts involved may be material, such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. During the twelve months ended December 31, 2024, the Company did not purchase any shares of its common stock on the open market.

Reconciliations of Non-GAAP Adjusted Net Income and Dilutive Earnings per Share Management uses the non-GAAP adjusted net income metric to evaluate the Company’s operating performance. Management excludes the items listed in the table below because they are non-operational items. The cumulative tax effect was calculated using the statutory tax rates for the jurisdictions in which the transactions occurred.

Reconciliations of Non-GAAP Adjusted Net Income and Diluted Earnings per Share Management uses the non-GAAP adjusted net income metric to evaluate the Company’s operating performance. Management excludes the items listed in the table below because they are non-operational items. The cumulative tax effect was calculated using the statutory tax rates for the jurisdictions in which the transactions occurred.

This acquisition was accounted for as a business combination and the assets were measured and recorded at their estimated fair values. The primary assets acquired were intangibles, mostly comprised of goodwill ($ 1,792,000 ), manufacturing know-how 79 ($ 2,750,000 ), customer relationships ($ 3,250,000 ) and non-compete agreements ($ 10,000 ).

This acquisition was accounted for as a business combination and the assets were measured and recorded at their estimated fair values. The primary assets acquired were intangibles, mostly comprised of goodwill ($ 1,792,000 ), manufacturing know-how ($ 2,750,000 ), customer relationships ($ 3,250,000 ) and non-compete agreements ($ 10,000 ). 21.

In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affective the Company’s underlying business than could be obtained absent these disclosures.

In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affecting the Company’s underlying business than could be obtained absent these disclosures.

Because the Company has agreed to fixed prices for the noted quantity of natural gas, a hypothetical 10 percent fluctuation in the price of natural gas would cause the Company’s actual natural gas cost to be $0.3 million higher or lower than the cost at market price. 37 It em 8.

Because the Company has agreed to fixed prices for the noted quantity of natural gas, a hypothetical 10 percent fluctuation in the price of natural gas would cause the Company’s actual natural gas cost to be $0.1 million higher or lower than the cost at market price. 37 It em 8.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

At December 31, 2023 , the Company held an interest rate swap contract with a notional value of $ 100,000,000 that was designated as a cash flow hedge. Period-to-period changes in the fair value of the interest rate swap are initially recognized as gains or losses in other comprehensive income.

At December 31, 2024 , the Company held an interest rate swap contract with a notional value of $ 100,000,000 that was designated as a cash flow hedge. Period-to-period changes in the fair value of the interest rate swap are initially recognized as gains or losses in other comprehensive income.

(2) Interest payments on debt obligations represent interest on all Company debt at December 31, 2023. Future interest rates may change, and, therefore, actual interest payments could differ from those disclosed in the above table. (3) The majority of operating lease obligations consist of railcar and real estate leases.

(2) Interest payments on debt obligations represent interest on all Company debt at December 31, 2024. Future interest rates may change, and, therefore, actual interest payments could differ from those disclosed in the above table. (3) The majority of operating lease obligations consist of railcar and real estate leases.

Stock-based Compensation On December 31, 2023 , the Company had outstanding stock options, performance shares, RSUs and SARs awarded under its 2011 Incentive Compensation Plan (2011 Plan) and 2022 Equity Incentive Compensation Plan (2022 Plan). Equity incentive awards are granted to Company executives and other key employees. In addition, stock awards are granted to non-employee directors of the Company.

Stock-based Compensation On December 31, 2024 , the Company had outstanding stock options, performance shares, RSUs and SARs awarded under its 2011 Incentive Compensation Plan (2011 Plan) and 2022 Equity Incentive Compensation Plan (2022 Plan). Equity incentive awards are granted to Company executives and other key employees. In addition, stock awards are granted to non-employee directors of the Company.

Fair Value Measurements The following were the financial instruments held by the Company at December 31, 2023 and 2022, and the methods and assumptions used to estimate the instruments’ fair values: Cash and cash equivalents Carrying value approximated fair value because of the short maturity of the instruments. Fair value of cash and cash equivalents is a Level 1 measurement.

Fair Value Measurements The following were the financial instruments held by the Company at December 31, 2024 and 2023, and the methods and assumptions used to estimate the instruments’ fair values: Cash and cash equivalents Carrying value approximated fair value because of the short maturity of the instruments. Fair value of cash and cash equivalents is a Level 1 measurement.

The remainder of the deferred compensation liability was tied to the chosen mutual fund investment assets. A $ 1.00 increase in the market price of the Company’s common stock will result in approximately $ 143,000 of additional compensation expense. A $ 1.00 reduction in the market price of the common stock will reduce compensation expense by a like amount.

The remainder of the deferred compensation liability was tied to the chosen mutual fund investment assets. A $ 1.00 increase in the market price of the Company’s common stock will result in approximately $ 94,000 of additional compensation expense. A $ 1.00 reduction in the market price of the common stock will reduce compensation expense by a like amount.

Specialty Products – Specialty products, which accounted for three percent of consolidated net sales in 2023, include flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications. Specialty products are primarily manufactured at the Company’s Maywood, New Jersey, site.

Specialty Products – Specialty products, which accounted for three percent of consolidated net sales in 2024, include flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications. Specialty products are primarily manufactured at the Company’s Maywood, New Jersey site.

The fair values of the derivative instruments held by the Company on December 31, 2023, and December 31, 2022, are disclosed in Note 2, Fair Value Measurements , of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K).

The fair values of the derivative instruments held by the Company on December 31, 2024, and December 31, 2023, are disclosed in Note 2, Fair Value Measurements , of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K).

Although the Company believes that its estimated range of possible environmental losses and legal losses and its reserves are adequate for contingencies, it is possible due to the uncertainties noted above, that additional reserves could be required in the future.

Although the Company believes that its estimated range of possible environmental losses and legal losses and its reserves are adequate for contingencies, it is possible due to uncertainties including those noted above, that additional reserves could be required in the future.

In 2022, the Company did not repatriate any cash to the U.S. parent company. The Company evaluated its indefinite reinvestment assertion with regards to certain accumulated foreign earnings as of December 31, 2023.

For assets classified as machinery and equipment, lives generally used for calculating depreciation expense range from 10 to 15 years for manufacturing equipment, five to 10 years for furniture and fixtures, three to five years for vehicles and three to 10 years for computer equipment and software.

For assets classified as machinery and equipment, lives generally used for calculating depreciation expense range from 10 to 30 years for manufacturing equipment, five to 10 years for furniture and fixtures, three to five years for vehicles and three to 10 years for computer equipment and software.

Cash Flows As a result of pension funding relief included in the Highway and Transportation Funding Act of 2014, the Company does no t expect to make any 2024 contributions to the funded U.S. qualified defined benefit plans. The Company expects to contribute $ 308,000 in 2024 to the unfunded non-qualified U.S. pension plans.

Cash Flows As a result of pension funding relief included in the Highway and Transportation Funding Act of 2014, the Company does no t expect to make any 2024 contributions to the funded U.S. qualified defined benefit plans. The Company expects to contribute $ 167,000 in 2025 to the unfunded non-qualified U.S. pension plans.

The Company does not expect to make any 2024 contributions to the U.K. defined benefit plan in 2024. Defined Contribution Plans The Company sponsors retirement savings defined contribution retirement plans that cover eligible U.S. and U.K. employees.

The Company does not expect to make any contributions to the U.K. defined benefit plan in 2025. Defined Contribution Plans The Company sponsors retirement savings defined contribution retirement plans that cover eligible U.S. and U.K. employees.

In 2021, 2022 and 2023, profit sharing contributions for U.S. employees were made to the ESOP trust. Profit sharing contributions are allocated to participant accounts on the basis of participant base earnings.

In 2022, 2023 and 2024, profit sharing contributions for U.S. employees were made to the ESOP trust. Profit sharing contributions are allocated to participant accounts on the basis of participant base earnings.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2025 , expressed an unqualified opinion on the Company’s internal control over financial reporting.

No single customer comprised more than 10 percent of the Company’s consolidated net sales in 2023, 2022 or 2021. The Company maintains allowances for potential credit losses.

No single customer comprised more than 10 percent of the Company’s consolidated net sales in 2024, 2023 or 2022. The Company maintains allowances for potential credit losses.

Presentation of Information The discussion that follows includes a comparison of the Company’s results of operations and liquidity and capital resources for the fiscal years ended December 31, 2022 and 2023.

Treasury bond as the base rate along with historical data from the U.S. Treasury yield curve. For equities, the expected return is 9.57 percent for U.S. and international equities.

Treasury bond as the base rate along with historical data from the U.S. Treasury yield curve. For equities, the expected return is 9.88 percent for U.S. and international equities.

(2) Includes net property, plant and equipment, goodwill and other intangible assets. 18.

(2) Includes net property, plant and equipment, goodwill and other intangible assets. 77 18.

Plans The overall expected long-term rate of return on assets of 5.50 percent that was used to develop the 2023 pension expense is based on plan asset allocation, capital markets forecasts and expected benefits of active investment management. For fixed income, the expected return is 5.35 percent. This assumption includes the yield on the five-year zero-coupon U.S.

Plans The overall expected long-term rate of return on assets of 5.50 percent that was used to develop the 2024 pension expense is based on plan asset allocation, capital markets forecasts and expected benefits of active investment management. For fixed income, the expected return is 5.36 percent. This assumption includes the yield on the five-year zero-coupon U.S.

A distribution from any of these subsidiaries should not result in any significant foreign taxes to the extent of the distribution limitations discussed above and therefore, the Company has not recognized a deferred tax liability for these undistributed earnings as of December 31, 2023.

A distribution from any of these subsidiaries should not result in any significant foreign taxes to the extent of the distribution limitations discussed above and therefore, the Company 61 has not recognized a deferred tax liability for these undistributed earnings as of December 31, 2024.

The redemption yield at the measurement date on U.K. government fixed interest bonds and the yield on corporate bonds are used as proxies for the return on the debt portfolio. The returns for equities and property are estimated as a premium of 3.0 percent added to the risk-free rate. Cash is assumed to have a long-term return of 5.25 percent.

The Company uses forward contracts to mitigate the exposure of certain foreign currency transactions and balances to fluctuating exchange rates. At December 31, 2023, the Company had forward contracts with an aggregated notional amount of $106.6 million. Except for the Company’s subsidiaries in Argentina, Brazil, China and Colombia, foreign currency exposures are substantially hedged by forward contracts.

The Company uses forward contracts to mitigate the exposure of certain foreign currency transactions and balances to fluctuating exchange rates. At December 31, 2024, the Company had forward contracts with an aggregated notional amount of $149.6 million. Except for the Company’s subsidiaries in Argentina, Brazil, China and Colombia, foreign currency exposures are substantially hedged by forward contracts.

The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is not subject to U.S. federal income tax examinations by tax authorities for years before 2016. Some foreign jurisdictions and various U.S. states jurisdictions may be subject to examination back to 2016.

Leases The Company’s operating leases are primarily comprised of real estate, railcar, storage tank, warehouse, auto, trailer and manufacturing/office equipment leases. Real estate and railcars comprise approximately 52 percent and 33 percent, respectively, of the Company’s consolidated right of use (ROU) asset balance. Except for real estate, typical lease terms range from one to ten years .

Leases The Company’s operating leases are primarily comprised of real estate, railcar, storage tank, warehouse, auto, trailer and manufacturing/office equipment leases. Real estate and railcars comprise approximately 47 percent and 36 percent, respectively, of the Company’s consolidated right of use (ROU) asset balance. Except for real estate, typical lease terms range from one to ten years .

All of the restructuring charges described above were excluded from Segment operating results and are recorded on the Business restructuring, assets impairment and loss on asset disposition line item of the Consolidated Statements of Income for the year ended December 31, 2023.

All of the restructuring charges described above were excluded from Segment operating results and are recorded on the Business restructuring and assets impairment line item of the Consolidated Statements of Income for the year ended December 31, 2023.

The overall business is comprised of three reportable segments: Surfactants - Surfactants, which accounted for 69 percent of the Company’s consolidated net sales in 2023, are principal ingredients in consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes.

The overall business is comprised of three reportable segments: Surfactants - Surfactants, which accounted for 70 percent of the Company’s consolidated net sales in 2024, are principal ingredients in consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes.

The overfunded status (pretax) of the Company’s U.S and U.K. defined benefit pension plans was $8.5 million at December 31, 2023, versus overfunded status (pretax) of $8.2 million at December 31, 2022. See Note 13, Postretirement Benefit Plans , of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details.

The overfunded status (pretax) of the Company’s U.S and U.K. defined benefit pension plans was $2.3 million at December 31, 2024, versus overfunded status (pretax) of $8.2 million at December 31, 2023. See Note 13, Postretirement Benefit Plans , of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details.

Financial Statements and Supplementary Data The following statements and data are included in this item: Report of Independent Registered Public Accounting Firm (PCAOB ID Number 34 ) 38 Consolidated Statements of Income (For years ended December 31, 2023, 2022 and 2021) 41 Consolidated Statements of Comprehensive Income (For years ended December 31, 2023, 2022 and 2021) 42 Consolidated Balance Sheets (December 31, 2023 and 2022) 43 Consolidated Statements of Cash Flow (For years ended December 31, 2023, 2022 and 2021) 44 Consolidated Statements of Stockholders’ Equity (For years ended December 31, 2023, 2022 and 2021) 45 Notes to Consolidated Financial Statements 48 Report of Independent Regist ered Public Accounting Firm To the stockholders and the Board of Directors of Stepan Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Stepan Company and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flow, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

Financial Statements and Supplementary Data The following statements and data are included in this item: Report of Independent Registered Public Accounting Firm (PCAOB ID Number 34 ) 38 Consolidated Statements of Income (For years ended December 31, 2024, 2023 and 2022) 40 Consolidated Statements of Comprehensive Income (For years ended December 31, 2024, 2023 and 2022) 41 Consolidated Balance Sheets (December 31, 2024 and 2023) 42 Consolidated Statements of Cash Flow (For years ended December 31, 2024, 2023 and 2022) 43 Consolidated Statements of Stockholders’ Equity (For years ended December 31, 2024, 2023 and 2022) 44 Notes to Consolidated Financial Statements 47 Report of Independent Regist ered Public Accounting Firm To the stockholders and the Board of Directors of Stepan Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Stepan Company and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

These models include factors such as the interest rate on the coupon, maturity, rating, cash flow projections and other factors. Level 3 – no investments held during 2023 or 2022 were categorized as Level 3. U.K.

These models include factors such as the interest rate on the coupon, maturity, rating, cash flow projections and other factors. Level 3 – no investments held during 2024 or 2023 were categorized as Level 3. 69 U.K.

For amounts reclassified out of AOCI into earnings for the years ended December 31, 2023, 2022 and 2021, see Note 19, Accumulated Other Comprehensive Income (Loss ), of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K). 56 4.

For amounts reclassified out of AOCI into earnings for the years ended December 31, 2024, 2023 and 2022, see Note 19, Accumulated Other Comprehensive Income (Loss ), of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K). 55 4.

The following table presents the period-end Company common stock market prices used in the computation of deferred compensation income/expense in 2023, 2022 and 2021: December 31 2023 2022 2021 2020 Company Stock Price $ 94.55 $ 106.46 $ 124.29 $ 119.32 Liquidity and Capital Resources Overview Historically, the Company’s principal sources of liquidity have included cash flows from operating activities, available cash and cash equivalents and the proceeds from debt issuance and borrowings under credit facilities.

The following table presents the period-end Company common stock market prices used in the computation of deferred compensation income/expense in 2024, 2023 and 2022: December 31 2024 2023 2022 2021 Company Stock Price $ 64.70 $ 94.55 $ 106.46 $ 124.29 Liquidity and Capital Resources Overview Historically, the Company’s principal sources of liquidity have included cash flows from operating activities, available cash and cash equivalents and the proceeds from debt issuance and borrowings under credit facilities.

For a discussion of changes from the fiscal year ended December 31, 2021 to the fiscal year ended December 31, 2022, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (filed February 28, 2023).

For a discussion of changes from the fiscal year ended December 31, 2022 to the fiscal year ended December 31, 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (filed February 29, 2024).

The pretax effect of all deferred compensation-related activities (including realized and unrealized gains and losses on the mutual fund assets held to fund deferred compensation obligations) and the income statement line items in which the effects of the activities were recorded are displayed in the following tables: Income (Expense) For the Year Ended December 31, (In millions) 2023 2022 Change Deferred Compensation (Administrative expenses) $ (4.4 ) $ 9.4 $ (13.8 ) (1) Investment Income (Other, net) 0.8 1.7 (0.9 ) Realized/Unrealized Gains (Losses) on Investments (Other, net) 4.3 (8.0 ) 12.3 Pretax Income Effect $ 0.7 $ 3.1 $ (2.4 ) Income (Expense) For the Year Ended December 31, (In millions) 2022 2021 Change Deferred Compensation (Administrative expenses) $ 9.4 $ (6.9 ) $ 16.3 (1) Investment Income (Other, net) 1.7 2.8 (1.1 ) Realized/Unrealized Gains on Investments (Other, net) (8.0 ) 2.1 (10.1 ) Pretax Income Effect $ 3.1 $ (2.0 ) $ 5.1 (1) See the Segment Results – Corporate Expenses sections of this MD&A for details regarding the period-over-period changes in deferred compensation.

The pretax effect of all deferred compensation-related activities (including realized and unrealized gains and losses on the mutual fund assets held to fund deferred compensation obligations) and the income statement line items in which the effects of the activities were recorded are displayed in the following tables: Income (Expense) For the Year Ended December 31, (In millions) 2024 2023 Change Deferred Compensation (Administrative expenses) $ (2.2 ) $ (4.4 ) $ 2.2 (1) Investment Income (Other, net) 1.3 0.8 0.5 Realized/Unrealized Gains on Investments (Other, net) 3.3 4.3 (1.0 ) Pretax Income Effect $ 2.4 $ 0.7 $ 1.7 23 Income (Expense) For the Year Ended December 31, (In millions) 2023 2022 Change Deferred Compensation (Administrative expenses) $ (4.4 ) $ 9.4 $ (13.8 ) (1) Investment Income (Other, net) 0.8 1.7 (0.9 ) Realized/Unrealized Gains (Losses) on Investments (Other, net) 4.3 (8.0 ) 12.3 Pretax Income Effect $ 0.7 $ 3.1 $ (2.4 ) (1) See the Segment Results – Corporate Expenses section of this MD&A for details regarding the period-over-period changes in deferred compensation.

The Company maintains import letters of credit, and standby letters of credit under its workers’ compensation insurance agreements and for other purposes, as needed from time to time, which are issued under the revolving credit agreement.

The Company maintains import and export letters of credit, and standby letters of credit under its workers’ compensation insurance agreements and for other purposes, as needed from time to time, which are issued under the Credit Agreement and under the CIC Credit Agreement.

The total income tax benefit recognized in the income statement for share-based compensation arrangements was $ 1,452,000 , $ 3,537,000 , and $ 2,867,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Stock Options Stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.

The total income tax benefit recognized in the income statement for share-based compensation arrangements was $ 1,323,000 , $ 1,452,000 , and $ 3,537,000 for the years ended December 31, 2024, 2023 and 2022, respectively. Stock Options Stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.

The Company does not believe that the carrying value of these patents is recoverable. The Company recorded a non-cash charge of $ 495,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line.

The Company did not believe that the carrying value of these patents was recoverable. The Company recorded a non-cash charge of $ 495,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line.

This acquisition is also expected to deliver additional baseload volumes for the Company’s Pasadena, Texas alkoxylation facility that is expected to start up in the first half of 2024. The purchase price of the acquisition was $ 9,693,000 and was paid for with cash on hand.

This acquisition is also expected to deliver additional baseload volumes for the Company’s Pasadena, Texas alkoxylation facility that is expected to start up in the first quarter of 2025. The purchase price of the acquisition was $ 9,693,000 and was paid for with cash on hand.

The Company’s deferred compensation liability was $ 39,847,000 and $ 43,005,000 at December 31, 2023 and 2022 , respectively. 13. Postretirement Benefit Plans Defined Benefit Plans The Company sponsors various funded qualified and unfunded non-qualified defined benefit pension plans, the most significant of which cover employees in the U.S. and U.K. locations.

The Company’s deferred compensation liability was $ 31,171,000 and $ 39,847,000 at December 31, 2024 and 2023 , respectively. 13. Postretirement Benefit Plans Defined Benefit Plans The Company sponsors various funded qualified and unfunded non-qualified defined benefit pension plans, the most significant of which cover employees in the U.S. and U.K. locations.

Aggregate amortization expense for the years ended December 31, 2023, 2022 and 2021 , was $ 7,368,000 , $ 6,835,000 , and $ 7,292,000 , respectively. The Company typically recognizes amortization expense within the Cost of Sales line item on the income statement.

Aggregate amortization expense for the years ended December 31, 2024, 2023 and 2022 , was $ 6,914,000 , $ 7,368,000 , and $ 6,835,000 , respectively. The Company typically recognizes amortization expense within the Cost of Sales line item on the income statement.

In 2023, the Company recognized $1.0 million of goodwill impairment expense related to its Colombia reporting unit and $1.0 million of goodwill and other intangibles impairment expense related to its Lipid Nutrition reporting unit. In 2022, the Company recognized $1.0 million of goodwill impairment expense related solely to its Philippines reporting unit.

(5) The “Other” category comprises deferred revenues that represent commitments to deliver products, expected 2024 required contributions to the Company’s funded defined benefit pension plans, estimated payments related to the Company’s unfunded defined benefit supplemental executive and outside director pension plans, estimated payments (undiscounted) related to the Company’s asset retirement obligations, environmental remediation payments for which amounts and periods can be reasonably estimated and income tax liabilities for which payments and periods can be reasonably estimated, payments related to the Company’s voluntary early retirement plan and involuntary retirement plan.

(5) The “Other” category comprises deferred revenues that represent commitments to deliver products, estimated payments related to the Company’s unfunded defined benefit supplemental executive and outside director pension plans, estimated payments (undiscounted) related to the Company’s asset retirement obligations, environmental remediation payments for which amounts and periods can be reasonably estimated and income tax liabilities for which payments and periods can be reasonably estimated and payments related to the Company’s voluntary early retirement plan.

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