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What changed in Ingevity Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Ingevity Corp's 2024 and 2025 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 2025 report.

+379 added−401 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-19)

Top changes in Ingevity Corp's 2025 10-K

379 paragraphs added · 401 removed · 262 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+30 added−41 removed19 unchanged
Biggest changeWe work hard to protect employees, contractors, and the communities where we operate from injuries, illnesses and incidents through the design and delivery of safe operations, continuous improvement of personal and process safety performance, management systems, and programs, a strong culture of compliance, and a commitment to strive for zero harm to people and the environment.
Biggest changeOur approach includes the design and maintenance of safe operations, continuous improvement of safety performance, robust management systems, strong compliance culture, and a long‑term commitment to achieving zero harm to people and the environment. 7 In 2025, we advanced our safety performance through increased reporting and response to near‑miss incidents and hazardous conditions, enabling us to address risks before they resulted in injuries.
We make available, free of charge through our website, our filings with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after such items are filed with, or furnished to, the SEC.
We make available, free of charge through our website, our filings with the Securities and Exchange Commission (the "SEC"), including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after such items are filed with, or furnished to, the SEC.
Although our intellectual property taken as a whole is material to the business, there is no individual patent or trademark the loss of which could have a material adverse effect on the business. On July 19, 2018, we filed suit against BASF Corporation (“BASF”) in the U.S.
Although our intellectual property taken as a whole is material to the business, there is no individual patent or trademark the loss of which could have a material adverse effect on the business. On July 19, 2018, we filed suit against BASF Corporation ("BASF") in the U.S.
We offer a full range of specialized cationic, anionic, and amphoteric emulsifiers with additional, custom-formulated specialty additives. Pavement Reconstruction and Recycling. We provide an array of pavement reconstruction and recycling additives that reduce the life cycle cost of pavement by enabling the milling and reuse of existing roadways.
We offer a full range of specialized cationic, anionic, and amphoteric emulsifiers with additional, custom-formulated specialty additives. Asphalt Pavement Reconstruction and Recycling. We provide an array of pavement reconstruction and recycling emulsifiers and additives that reduce the life cycle cost of pavement by enabling the milling and reuse of existing roadways.
Competition Our competitors include Norit, Kuraray Co., Ltd., and several domestic U.S. manufacturers and distributors of imported products and Chinese manufacturers. Ingevity has a decades-long track record of providing activated carbon that achieves life-of-vehicle emission standards.
Competition Our competitors include Norit, Kuraray Co., Ltd., domestic U.S. manufacturers and distributors of imported products, and Chinese manufacturers. Ingevity has a decades-long track record of providing activated carbon that achieves life-of-vehicle emission standards.
Our business originated as part of the operations of our former parent company, Westvaco Corporation, in 1964, and we operated as a division of Westvaco Corporation and its corporate successors, including MeadWestvaco Corporation and WestRock Company (“WestRock”) until our separation from WestRock in May 2016.
Our business originated as part of the operations of our former parent company, Westvaco Corporation, in 1964, and we operated as a division of Westvaco Corporation and its corporate successors, including MeadWestvaco Corporation and WestRock Company ("WestRock"), until our separation from WestRock in May 2016.
On February 14, 2019, BASF asserted counterclaims against us in the Delaware Proceeding, alleging two claims for violations of U.S. antitrust law (one for exclusive dealing and the other for tying) as well as a claim for tortious interference with an alleged prospective business relationship between BASF and a BASF customer (the “BASF Counterclaims”).
On February 14, 2019, BASF asserted counterclaims against us in the Delaware Proceeding, alleging two claims for violations of U.S. antitrust law (one for exclusive dealing and the other for tying) as well as a claim for tortious interference with an alleged prospective business relationship between BASF and a BASF customer (the "BASF Counterclaims").
At the heart of our efforts, we aim to strengthen empathetic and inclusive leadership, cultivate a sense of safety and belonging, and structure our systems, policies and processes to enable employee success. Working as one team, we are building a diverse, equitable and inclusive workplace where everyone has the opportunity to thrive.
At the heart of our efforts, we aim to strengthen empathetic and inclusive leadership, cultivate a sense of safety and belonging, and structure our systems, policies and processes to enable employee success. Working as one team, we are building a workplace where everyone has the opportunity to thrive.
By focusing on making a positive impact through everyday actions, “The IngeviWay in Action” bolsters the way we live our core values of safety and sustainability, maximize value for our people and our customers, commitment to excellence, integrity and ethical behavior, and drive to create innovative solutions.
By focusing on making a positive impact through everyday actions, "The IngeviWay in Action" bolsters the way we live our core values of safety and sustainability, maximize value for our people and our customers, commitment to excellence, integrity and ethical behavior, and drive to create innovative solutions.
We also utilize phosphoric acid to chemically activate the hardwood sawdust. This phosphoric acid is sourced through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.
Sawdust is readily available and is sourced through multiple suppliers to protect against supply disruptions and to maintain competitive pricing. We also utilize phosphoric acid to chemically activate the hardwood sawdust. This phosphoric acid is sourced through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.
It is not possible to quantify with certainty the material effects that compliance with these regulations may have upon the capital expenditures, earnings, or competitive position of Ingevity, but we currently anticipate that such compliance will not have a material adverse effect on any of the foregoing.
It is not possible to quantify with certainty the material effects that compliance with these regulations may have on Ingevity's capital expenditures, earnings, or competitive position, but we currently anticipate that such compliance will not have a material adverse effect on any of the foregoing.
The market price of phosphoric acid is affected by the global agriculture market as the majority of global phosphate rock production is used for fertilizer production and only a portion of that production is used to manufacture purified phosphoric acid. Customers We sell our automotive technologies products to approximately 60 customers around the globe.
The market price of phosphoric acid is affected by the global agriculture market as the majority of global phosphate rock production is used for fertilizer production and only a portion of that production is used to manufacture purified phosphoric acid. Customers We sell our automotive technology products to approximately 65 customers around the globe.
Crop protection formulations are highly engineered, specifically formulated, and cover a range of different formulation types, from liquids to solids. We deliver a wide range of dispersants that are high performing and consistent. In addition, our crop protection products are approved for use as inert ingredients in agrochemicals by regulatory agencies throughout the world. Rubber.
Crop protection formulations are highly engineered, specifically formulated, and cover a range of different formulation types, from liquids to solids. We deliver a wide range of dispersants that are high-performing and consistent. In addition, our crop protection products are approved for use as inert ingredients in agrochemicals by regulatory agencies worldwide.
In 2024, our ten largest customers accounted for approximately 46 percent of the segment's sales. Our largest customers are active in polyurethane, elastomers, adhesives, coatings, and bioplastics manufacturers. Competition Our primary caprolactone competitors are Daicel Corporation, Hunan Juren Chemical Hitechnology, and BASF SE, but we also face competition from other competing materials.
In 2025, our ten largest customers accounted for approximately 44 percent of the segment's sales. Our largest customers are active in polyurethane, elastomers, adhesives, coatings, and bioplastics applications. Competition Our primary caprolactone competitors are Daicel Corporation, Hunan Juren Chemical Hitechnology, and BASF SE, but we also face competition from other competing materials.
Advanced Polymer Technologies' net sales for 2024, 2023, and 2022 were $188.6 million, $204.0 million, and $244.7 million, respectively. The chart below reflects our 2024 Advanced Polymer Technologies' net sales by geography. Sales are assigned to geographic areas based on the location of the party to which the product was shipped.
Advanced Polymer Technologies' net sales for 2025, 2024, and 2023 were $160.2 million, $188.6 million, and $204.0 million, respectively. The chart below reflects our 2025 Advanced Polymer Technologies' net sales by geography. Sales are assigned to geographic areas based on the location of the party to which the product was shipped.
Performance Materials' net sales for 2024, 2023, and 2022 were $609.6 million, $586.0 million, and $548.5 million, respectively. The chart below reflects our 2024 Performance Materials' net sales by geography. Sales are assigned to geographic areas based on the location of the party to which the product was shipped.
Performance Materials' net sales for 2025, 2024, and 2023 were $606.9 million, $609.6 million, and $586.0 million, respectively. The chart below reflects our 2025 Performance Materials' net sales by geography. Sales are assigned to geographic areas based on the location of the party to which the product was shipped.
We maintain multiple suppliers of cyclohexanone to protect against supply disruptions and to maintain competitive pricing. Our hydrogen peroxide is currently supplied by Solvay Interox Limited under a long-term supply agreement. Customers We sell our Advanced Polymer Technologies products to approximately 250 customers around the globe through our own direct sales representatives and third-party sales representatives and distributors.
We maintain multiple suppliers of cyclohexanone to protect against supply disruptions and to maintain competitive pricing. Our hydrogen peroxide is currently supplied by Solvay Interox Limited. Customers We sell our Advanced Polymer Technologies products to approximately 200 customers around the globe through our own direct sales representatives and third-party sales representatives and distributors.
On February 13, 2024, the court in the Delaware Proceeding denied BASF’s motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative.
On February 13, 2024, the court in the Delaware Proceeding denied BASF's motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative. On March 13, 2024, we appealed the verdict as well as the U.S.
District Court for the District of Delaware (the “Delaware Proceeding”) alleging BASF infringed Ingevity’s patent covering canister systems used in the control of automotive gasoline vapor emissions (U.S. Patent No. RE38,844) (the “844 Patent”).
District Court for the District of Delaware (the "Delaware Proceeding") alleging BASF infringed Ingevity's patent covering canister systems used in the control of automotive gasoline vapor emissions (U.S. Patent No. RE38,844) (the "844 Patent").
We believe that the diversity of our leadership continues to positively impact our growth and success. Today, our board of directors is 33 percent women and 22 percent racially and ethnically diverse, and our executive team is 14 percent women-led and 29 percent racially and ethnically diverse.
We believe that the diversity of our leadership continues to positively impact our growth and success. Today, our board of directors is 27 percent women and 27 percent racially and ethnically diverse, and our executive team is 25 percent women-led and 38 percent racially and ethnically diverse.
Given the imperative for automotive manufacturers to produce vehicles for the U.S., Canada, and China markets capable of meeting life-of-vehicle emission standards, or potentially face expensive recalls and unfavorable publicity, our automotive activated carbon products provide our customers the low-risk choice for this high-performance application. Additionally, we are well-positioned to meet increasing emissions standards around the world.
Given the imperative for automotive manufacturers to produce vehicles for the U.S., Canada, and China markets capable of meeting life-of-vehicle emission standards, or potentially face expensive recalls and unfavorable publicity, our automotive activated carbon products provide our customers with the low-risk choice for this high-performance application.
Approximately 51 percent of our production employees are represented by labor unions under various collective bargaining agreements ("CBA"). We engage in negotiations with labor unions for new CBAs from time to time based on expiration dates of agreements and statutory requirements. We consider our relationships with all salaried, union-hourly, and non-hourly employees to be positive and collaborative.
We engage in negotiations with labor unions for new CBAs from time to time based on expiration dates of agreements and statutory requirements. We consider our relationships with all salaried, union-hourly, and non-hourly employees to be positive and collaborative.
Performance Materials Performance Chemicals Advanced Polymer Technologies Product Lines Road Technologies Industrial Specialties End-Use Markets Automotive Purification: Food, Chemicals, and Water Pavement Construction Pavement Preservation Pavement Reconstruction and Recycling Pavement Markings Agricultural Chemicals Lubricants Rubber Industrial Intermediates Adhesives Oilfield Automotive & Transportation Industrial Equipment Footwear & Apparel Bioplastics Consumer Packaging Medical & Health 2024 Revenue $609.6 million $608.2 million $188.6 million Seasonality There are a variety of seasonal dynamics, including global climate and weather conditions, that impact our businesses, though none have currently materially affected our financial results, except in the case of the road technologies product line, where roughly 70 to 75 percent of revenue is generated between April and September.
Item 8 of this Form 10-K. 5 Performance Materials Performance Chemicals Advanced Polymer Technologies End-Use Markets Automotive Filtration: Chemicals, Food, and Water Asphalt Pavement Construction Asphalt Pavement Preservation Asphalt Pavement Reconstruction and Recycling Road Markings Agrochemical Dispersants Automotive & Transportation Industrial Equipment Footwear & Apparel Bioplastics Consumer Packaging Medical & Health 2025 Revenue $606.9 million $400.5 million $160.2 million Seasonality There are a variety of seasonal dynamics, including global climate and weather conditions, that impact our businesses, though none have currently materially affected our financial results, except in the case of the pavement technologies and road markings product lines, where roughly 70 to 75 percent of revenue is generated between April and September.
On September 15, 2021, a jury in the Delaware Proceeding issued a verdict in favor of BASF on the BASF Counterclaims and awarded BASF damages of approximately $28.3 million, which will be trebled under U.S. antitrust law to approximately $85.0 million.
District Court dismissed our patent infringement claims on November 18, 2020, and the case proceeded to trial on the BASF Counterclaims in September 2021. 8 On September 15, 2021, a jury in the Delaware Proceeding issued a verdict in favor of BASF on the BASF Counterclaims and awarded BASF damages of approximately $28.3 million, which will be trebled under U.S. antitrust law to approximately $85.0 million.
Final resolution of these matters could take up to 15 months from the date of this Annual Report on Form 10-K. 7 Segments Performance Materials We engineer, manufacture, and sell hardwood-based, chemically activated carbon products which are produced through a highly technical and specialized process primarily for use in gasoline vapor emission control systems in internal combustion engines and hybrid electric vehicles including cars, trucks, motorcycles, and boats.
Segments Performance Materials We engineer, manufacture, and sell hardwood-based, chemically activated carbon products which are produced through a highly technical and specialized process primarily for use in gasoline vapor emission control systems in internal combustion engines and hybrid electric vehicles including cars, trucks, motorcycles, and boats.
Our products are used in a variety of demanding applications, including adhesives, agrochemicals, asphalt paving, bioplastics, coatings, elastomers, lubricants, paint for road markings, oil drilling, and automotive components. We operate in three reportable segments: Performance Materials, Performance Chemicals and Advanced Polymer Technologies.
Our products are used in a variety of demanding applications, including automotive gasoline vapor emissions control systems, food, water and chemical filtration, asphalt paving, agrochemical dispersants, bioplastics, coatings, elastomers, and paint for road markings. We operate in three reportable segments: Performance Materials, Performance Chemicals and Advanced Polymer Technologies.
Talent Our employees are critical to our success, and we strive to provide a safe, rewarding, and respectful workplace where our people have opportunities to pursue career paths based on skills, performance, and potential.
Talent & Culture Our employees are critical to our success, and we strive to provide a safe, rewarding, and respectful workplace where our people have opportunities to pursue career paths based on skills, performance, and potential. Our success depends, in part, on our ability to attract, retain and motivate critical resources across production, technical, engineering, sales, and various functional disciplines.
The BASF Counterclaims relate to our enforcement of the 844 Patent and our entry into several supply agreements with customers of our fuel vapor canister honeycombs. The U.S. District Court dismissed our patent infringement claims on November 18, 2020, and the case proceeded to trial on the BASF Counterclaims in September 2021.
The BASF Counterclaims relate to our enforcement of the 844 Patent and our entry into several supply agreements with customers of our fuel vapor canister honeycombs. The U.S.
The parties began negotiations in the fourth quarter of 2024 and will continue to operate under the same terms and conditions while negotiations are pending. Also, the CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers expires December 1, 2025.
The CBA at our Covington, Virginia plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers expired on December 1, 2025. The parties began contract renewal negotiations during the fourth quarter of 2025 and negotiations are in process.
The chart below reflects our 2024 Performance Chemicals' net sales by geography. Sales are assigned to geographic areas based on the location of the party to which the product was shipped. In 2023, Ingevity began a transformation of the Performance Chemicals’ industrial specialties product line.
Performance Chemicals' net sales for 2025, 2024, and 2023 were $400.5 million, $401.9 million, and $425.5 million, respectively. The chart below reflects our 2025 Performance Chemicals' net sales by geography. Sales are assigned to geographic areas based on the location of the party to which the product was shipped.
Based on the customer and/or governmental agency requirements, the markings can be designed for varying levels of initial and retained performance properties. Customers We supply our road technologies products to approximately 750 customers in 60 countries through our own direct sales force, primarily in the Americas and Europe, as well as a network of third-party distributors.
Based on the customer and/or governmental agency requirements, the markings can be designed for varying levels of initial and retained performance properties. Customers We supply our road markings products to approximately 200 customers in North America through our own direct sales force. In 2025, our ten largest customers accounted for approximately 59 percent of the product line's sales.
All of our manufacturing processes also consume a significant amount of electricity and are located in regulated service areas that have stable electricity rate structures with reliable supply.
We enter into certain derivative financial instruments to mitigate expected fluctuations in market prices and the resulting volatility of earnings and cash flow. All of our manufacturing processes also consume a significant amount of electricity and are located in regulated service areas that have stable electricity rate structures with reliable supply.
Reinforcing our IngeviWay foundation we launched “The IngeviWay in Action,” an initiative that raises the bar on expectations to build, inspire and lead, and better aligns how we work as a team to create the Ingevity of the future.
It describes who we are, what we want to be, and what's important to us as we work together to fulfill our purpose to purify, protect and enhance the world around us. 6 Reinforcing our IngeviWay foundation is the "The IngeviWay in Action," an initiative that raises the bar on expectations to build, inspire and lead, and better aligns how we work as a team to create the Ingevity of the future.
In 2024, our ten largest customers accounted for approximately 85 percent of sales. We are the trusted source of these products for many of the world’s largest automotive parts manufacturers, including PHINIA Inc. (previously BorgWarner Inc.), A. Kayser Automotive System GmbH, Korea Fuel-Tech Corporation, MAHLE GmbH, and many other large and small component manufacturers throughout the global automotive supply chain.
In 2025, our ten largest customers accounted for approximately 90 percent of sales. We are the trusted source of these products for many of the world's largest automotive parts manufacturers, including PHINIA Inc. (previously part of BorgWarner Inc.), A.
Our method involves keeping a codified record of employee performance at mid-year and end-of-year. It also includes a requirement for all Ingevity employees to ask for feedback from those who are aware of their performance and contributions. We encourage managers and their employees to have regular discussions to boost productivity, provide positive business outcomes, and raise employee engagement.
Our method involves keeping a codified record of employee performance at mid-year and end-of-year. We encourage managers and their employees to have regular discussions to boost productivity, provide positive business outcomes, and raise employee engagement. With our all-encompassing strategy, Ingevity is able to gain a comprehensive understanding of each worker's strengths and identify opportunities for growth and development.
Raw Materials and Production Our Performance Materials segment serves customers globally from three manufacturing locations in the U.S. and two in China. The primary raw material (by volume) used in the manufacture of our activated carbon is hardwood sawdust. Sawdust is readily available and is sourced through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.
Europe's emissions control standards also lag those of North America and Asia Pacific. 9 Raw Materials and Production Our Performance Materials segment serves customers globally from three manufacturing locations in the U.S. and two in China. The primary raw material (by volume) used in the manufacture of our activated carbon is hardwood sawdust.
The Advanced Polymer Technologies manufacturing plant in Warrington, United Kingdom negotiates pay and conditions annually with the GMB Trade Union. In addition, the CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers on behalf of its affiliated Local Union 464 expired January 15, 2025.
The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers ("IBEW") on behalf of its affiliated Local Union 464 expired on January 15, 2025. A new CBA with IBEW was ratified on June 24, 2025.
Our combined expertise in the disciplines of chemistry and civil engineering provides us with a comprehensive understanding of the relationship between the molecular structure of our products and their impact on the performance of pavement systems. This allows us to develop products customized to local markets and to consistently deliver cost-effective solutions for our customers.
We use these strengths to develop consultative relationships with government departments of transportation, facilitating new technology introduction into key markets around the world. Our combined expertise in the disciplines of chemistry and civil engineering provides us with a comprehensive understanding of the relationship between the molecular structure of our products and their impact on the performance of pavement systems.
The table below illustrates our product lines and the primary end-use markets for our products by segment, as well as our net sales by segment for the fiscal year 2024. For more information on our U.S. and foreign operations, see Notes 4 and 19, to the Consolidated Financial Statements included within Part II. Item 8 of this Form 10-K.
Item 8 within this Form 10-K for further information regarding discontinued operations. Ingevity as of December 31, 2025 The table below illustrates our primary end-use markets for our products by segment, as well as our net sales by segment for the fiscal year 2025.
Human Capital Management Core Values Developed collaboratively by Ingevity employees, the IngeviWay is the cultural framework that shapes Ingevity’s future and enables our success. It describes who we are, what we want to be, and what’s important to us as we work together to fulfill our purpose to purify, protect and enhance the world around us.
Human Capital Management Core Values Developed collaboratively by Ingevity employees, the IngeviWay is the cultural framework that shapes Ingevity's future and enables our success.
These are sourced where possible through multiple suppliers to protect against supply disruptions and to maintain competitive pricing. 10 Markets Served Road Technologies Our road technologies product line produces a broad line of innovative additives and technologies utilized globally in road construction and pavement preservation, including pavement reconstruction and recycling.
Markets Served Pavement Technologies Our pavement technologies product line produces a broad line of innovative additives and technologies utilized globally in asphalt pavement construction, preservation, reconstruction and recycling, and agrochemical dispersants . Asphalt Pavement Construction.
We provide an array of pavement preservation products that eliminate many traditional asphalt heating, mixing, and transportation demands – saving our customers time, energy, and money. Our technical team matches the right emulsifier and design to our customers’ materials and conditions to create high-performing emulsions.
Evotherm improves the quality of the asphalt mix, improves road density and extends road life by up to 30%. Asphalt Pavement Preservation. We provide an array of pavement preservation products used to create asphalt emulsions for road maintenance projects. Our technical team matches the right emulsifier and design to our customers' materials and conditions to create high-performing emulsions.
Although we believe that we currently have a stable natural 4 gas supply and infrastructure for our operations, we are subject to volatility in the market price of natural gas. We enter into certain derivative financial instruments to mitigate expected fluctuations in market prices and the resulting volatility of earnings and cash flow.
Energy Our manufacturing processes require a significant amount of energy. We depend on natural gas to power the processes in our activated carbon plants and chemical manufacturing operations. Although we believe that we currently have a stable natural gas supply and infrastructure for our operations, we are subject to volatility in the market price of natural gas.
Our business is built on our ability to maximize the value and utility of materials over their lifecycle, and we will continue to enhance this value proposition through future acquisitions and new product development. Strategic Portfolio Review On October 29, 2024, we announced our intention to comprehensively review Ingevity’s asset and product portfolios.
The superior durability of caprolactone-based polyurethane technologies extends product life, and the biodegradable performance of our thermoplastic polycaprolactones offers compostable end-of-life solutions. Our business is built on our ability to maximize the value and utility of materials over their lifecycle, and we will continue to enhance this value proposition through product development.
Customers We sell our industrial specialties products to approximately 400 customers around the globe in over 40 countries through our own direct sales representatives and third-party sales representatives and distributors. In 2024, our ten largest customers accounted for approximately 39 percent of the product line's sales. Our largest customers include Solenis, Arboris, ChampionX, and Syngenta.
Customers We supply our pavement technologies products to approximately 600 customers in 60 countries through our own direct sales force, primarily in the Americas and Europe, as well as a network of third-party distributors. In 2025, our ten largest customers accounted for approximately 38 percent of the product line's sales.
Our food, water, beverage, and chemical purification products are sold to approximately 70 customers globally. We sell our products primarily through our own direct sales force in North America, 8 Europe, South America, Asia, and a smaller, focused network of third-party distributors that have established a strong direct sales and marketing presence in North America and China.
Kayser Automotive System GmbH, Korea Fuel-Tech Corporation, MAHLE GmbH, and many other large and small component manufacturers throughout the global automotive supply chain. Our food, water, beverage, and chemical purification products are sold to approximately 70 customers globally. We primarily sell our products through our own direct sales force in North America, Europe, South America, and Asia.
Our success depends, in part, on our ability to attract, retain and motivate critical resources across production, technical, engineering, sales, and various functional disciplines. 5 Labor Relations and Collective Bargaining We currently employ approximately 1,600 employees, of whom approximately 73 percent are employed in the U.S.
Labor Relations and Collective Bargaining We currently employ approximately 1,500 employees, of whom approximately 74 percent are employed in the U.S. Approximately 52 percent of our production employees are represented by labor unions under various collective bargaining agreements ("CBA").
We have a broad and diverse customer base in this segment. In 2024, our top ten customers accounted for approximately 26 percent of our segment revenue, with the next 100 customers making up approximately 47 percent of our segment revenue. Performance Chemicals' net sales for 2024, 2023, and 2022 were $608.2 million, $902.1 million, and $875.1 million, respectively.
Our application expertise is often called upon by our customers to provide unique solutions that maximize resource efficiency. We have a broad and diverse customer base in this segment. In 2025, our top ten customers accounted for approximately 32 percent of our segment revenue, with the next 100 customers making up approximately 46 percent of our segment revenue.
In addition, BASF has indicated it will seek attorneys’ fees and costs in amounts that they will allege and have to demonstrate at a future date. Unless the judgment is set aside, BASF will be entitled to post-judgment interest pursuant to the rate provided under federal law.
We expect payment of the judgment, plus post-judgment interest, to be made in the second quarter of 2026. BASF has indicated it will seek attorneys' fees and costs in amounts that they will allege and have to demonstrate at a future date. See Note 17 to the Consolidated Financial Statements included within Part II. Item 8 of this Form 10-K.
In 2024, our ten largest customers accounted for approximately 37 percent of the product line's sales. Our largest customers include Ergon, Inc., TRP Group, Frontline, The Heritage Group, and Idaho Asphalt Supply Inc. Competition Our primary competitors in road technologies are Nouryon Chemicals B.V., Arkema S.A., Kao Specialties Americas LLC, Sherwin-Williams Company, and PPG Industries Traffic Solutions.
Our largest customers include Ergon, Inc., Idaho Asphalt Supply Inc., The Heritage Group, and Syngenta. Competition Our primary competitors in pavement technologies are Nouryon Chemicals B.V., Arkema S.A., and Zydex Group. We compete based on deep knowledge of our customers' businesses and extensive insights into road-building technologies and trends globally.
Our cold in-place recycling additives allow our customers to reopen existing roadways faster, while also lowering overall costs and jobsite emissions. Pavement Markings. We provide thermoplastic and waterborne paint road markings technologies which provide long service life, excellent adhesion, superior color, and higher retro-reflectivity.
Our cold in-place recycling additives allow our customers to reopen existing roadways faster, while also lowering overall costs and jobsite emissions. 11 Agrochemical Dispersants . We produce dispersants for crop protection products as well as other naturally derived products for agrochemicals.
Performance Chemicals Our Performance Chemicals segment is comprised of two product lines: road technologies and industrial specialties. Our products are utilized in road construction, preservation, reconstruction and recycling, road markings, agrochemical dispersants, lubricants, certain adhesives, rubber, and other diverse industrial uses. Our application expertise is often called upon by our customers to provide unique solutions that maximize resource efficiency.
Additionally, we are well-positioned to meet increasingly stringent emissions standards worldwide. 10 Performance Chemicals Our Performance Chemicals segment is comprised of two product lines: pavement technologies and road markings. Our Performance Chemicals products are utilized in asphalt pavement construction, reconstruction and recycling, road markings, and agrochemical dispersants.
Governmental Regulations Our manufacturing operations are subject to regulation by governmental and other regulatory authorities with jurisdiction over our operations.
In the United States, we utilize CHEMTREC for real‑time incident reporting and coordination; internationally, we partner with Ricardo, a trusted emergency response service that provides experienced support for incidents outside the U.S. Governmental Regulations Our manufacturing operations are subject to regulation by governmental and other regulatory authorities with jurisdiction over our operations.
We disagree with the verdict, including the court’s application of the law and entry of judgment. Therefore, on March 13, 2024, we appealed the verdict as well as the U.S. District Court’s November 2020 dismissal of our patent infringement claims against BASF.
District Court's November 2020 dismissal of our patent infringement claims against BASF to the U.S. Federal Circuit Court of Appeals. On February 11, 2026, the U.S. Federal Circuit Court of Appeals ruled against Ingevity on our appeal and we have decided to no longer pursue any further appeals.
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From a supply perspective, this seasonality is effectively managed through pre-season inventory build and active inventory management throughout the year. Energy Our manufacturing processes require a significant amount of energy. We are dependent on natural gas to fuel the processes in our chemical refineries and activated carbon plants.
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Finalized our Strategic Portfolio Review and Announced New Ingevity On October 29, 2024, we announced our intention to comprehensively review Ingevity's asset and product portfolios, referred to as our Strategic Portfolio Review.
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To create a majority of our chemistries, we take CTO from pine trees, hardwood sawdust (both co-products of the lumber, paper, and furniture-making industries), and plant based oils and convert them into products that benefit customers, the environment, and society.
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On September 4, 2025, we announced the agreement to sell the North Charleston crude tall oil refinery and the majority of the industrial specialties product line, and on January 1, 2026, the announced sale was completed. On December 8, 2025, we announced the completion of our Strategic Portfolio Review.
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For the caprolactone-based products in our Advanced Polymer Technologies segment – although derived from non-oleo feedstocks – these products provide solutions that enable performance attributes in end-use markets that directly help customers and consumers meet sustainability goals. Put simply: Ingevity’s products help customers reduce their ecological impact.
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We labeled the state of the Company following the actions contemplated by the Strategic Portfolio Review, New Ingevity.
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Our alternative-fuel vehicle technology enables the use of renewable natural gas as fuel for pickup trucks and buses. The superior durability of caprolactone-based polyurethane technologies extends product life and the biodegradable performance of our thermoplastic polycaprolactones offer compostable end of-life solutions.
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To become New Ingevity, we announced the simplification of our businesses including the exploration of strategic alternatives for our Advanced Polymer Technologies ("APT") reportable segment and the Performance Chemicals road markings product line, which we expect to complete by the end of 2026.
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This process includes all industrial specialties pine chemicals based chemistries that serve the paper chemical, rubber, adhesive, oilfield, lubricants and industrial intermediate end-use markets, and the North Charleston, South Carolina, CTO refinery. This process will not include the Performance Chemicals road technologies product line, nor certain lignin-based products that are currently reported in the Performance Chemicals industrial specialties product line.
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New Ingevity will be comprised of two attractive businesses aligned around strong core competencies, with superior and consistent profitability: Performance Materials and Pavement Technologies.
Removed
We will continue to evaluate the rest of our portfolio and remain committed to taking appropriate actions to ensure our cost structure is aligned with our objective of being a specialty chemicals leader. We cannot assure this strategic review will result in a transaction and will update investors when appropriate.
Added
New Ingevity's businesses will be focused on high-value, mission-critical applications that benefit from durable, long-term demand and will allow Ingevity to retain our global scale, maintain a strong pro forma financial profile, and provide a more stable, simplified specialty materials portfolio poised to deliver profitable growth with best-in-class earnings before interest, taxes, depreciation, and amortization ("EBITDA") margins.
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In 2024, the International Association of Machinists and Aerospace Workers, on behalf of its affiliated Local Union 1362 at our Crossett, Arkansas manufacturing plant ratified a one year extension agreement which expires March 1, 2025. The parties will begin contract renewal negotiations during the first quarter of 2025.
Added
We believe our two business segments are unified by very strong core competencies, including unique technologies that incorporate deep technical expertise on highly engineered materials, leading market positions, and intellectual property, all of which creates a sustainable competitive advantage for Ingevity. 4 Industrial Specialties Divestiture On September 3, 2025, Ingevity entered into an Asset Purchase Agreement (the "Purchase Agreement") with Mainstream Pine Products, LLC, a Delaware limited liability company ("Purchaser"), pursuant to which Purchaser agreed to purchase substantially all of the assets and assume and acquire certain of the rights and liabilities of Ingevity or its applicable affiliates that relate to or are used in connection with (a) Ingevity's industrial specialties product line (other than Ingevity's lignin dispersant and alternative fatty acid based products, pavement technologies product line and other businesses and products more fully described in the Purchase Agreement) and (b) Ingevity's North Charleston, South Carolina crude tall oil refinery (the "CTO Refinery") and Ingevity's and its affiliates' operations thereof (collectively, the "Divestiture").
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It is anticipated that the parties will begin contract renewal negotiations in the fourth quarter of 2025. Diversity, Equity, Inclusion and Belonging We are committed to fostering Diversity, Equity, Inclusion and Belonging.
Added
We determined that, upon execution of the Purchase Agreement, the industrial specialties product line and CTO Refinery included within the Divestiture met the criteria to be classified as held for sale and that the sale represents a strategic shift that will have a major effect on Ingevity's operations and results.
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With our all-encompassing strategy, Ingevity is able to gain a comprehensive understanding of each worker's strengths and identify opportunities for growth and development. Health & Safety Ingevity has a world-class safety program and a strong safety culture. Personal, process, and public safety are core values at Ingevity.
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As such, the results of operations of the Divestiture have been reclassified and presented as discontinued operations for all periods presented. The Divestiture was completed on January 1, 2026. Unless otherwise noted, discussion within Part II relates to continuing operations. Refer to Note 20 of the Notes to the Consolidated Financial Statements included in Part II.
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In 2024, we continued our efforts to increase reporting of and response to near miss incidents to prevent more serious injuries before they occur. This included efforts to increase the number of near misses reported and an increase in reporting by a broader number of employees.
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For more information on our U.S. and foreign operations, see Notes 4 and 18, to the Consolidated Financial Statements included within Part II.
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We also continued to improve safety training, further expanded the use of leading indicators to ensure effective initiatives are proactively implemented, and improved incident investigation quality to ensure contributing factors are appropriately identified and addressed.
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Furthermore, our Performance Chemicals pavement technologies and road markings product lines financial results can be sensitive to weather conditions, particularly prolonged or severe wet weather, which can disrupt operations, delay projects, and reduce customer demand across certain markets. From a supply perspective, this seasonality is effectively managed through pre-season inventory build and active inventory management throughout the year.
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Employees were trained on the importance of our Life-Saving Rules, put in place to prevent fatalities and serious injuries through leadership videos, monthly interactive training packages, and upgraded procedures, checklists, work permits, and audits.
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Our mission to purify, protect and enhance is reflected in our bio-based and certified biodegradable products, which help industries like automotive, asphalt paving, packaging and agriculture create sustainable solutions that benefit both end-users and the environment. Put simply: Ingevity's products help customers reduce their ecological impact.
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Additionally, in North America where the majority of our bulk shipments are 6 executed, we abide by the American Chemistry Council’s Responsible Care practices for transporting our chemicals safely. We strategically utilize logistics providers that have committed to these higher standards of safety, security, stewardship, and sustainability.
Added
T he CBA at our Warrington, United Kingdom Advanced Polymer Technologies manufacturing plant with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese actions have, and may continue to, adversely affect the Company’s financial condition and results of operations. Our review of strategic alternatives for the industrial specialties product line and North Charleston, South Carolina crude tall oil (“CTO”) refinery may not result in a transaction and any transaction entered into may not yield the expected results or benefits.
Biggest changeOperational Risks Our review of strategic alternatives for the APT reportable segment and Performance Chemicals road markings product line may not result in a transaction and any transaction we enter into , including the completed sale of our North Charleston CTO refinery assets and the majority of the Performance Chemicals industrial specialties product line, may not yield the expected results or benefits.
Furthermore, in the event that Smurfit WestRock’s Covington, VA paper mill’s wastewater treatment operations do not comply with permits or applicable law and Smurfit WestRock is unable to determine the cause of such non-compliance, 14 then we will be responsible for between 10 percent and 50 percent of the costs and expenses of such noncompliance (increasing in 10 percent increments per violation during each twelve-month period) despite representing less than 3 percent of the total wastewater volume.
Furthermore, in the event that Smurfit WestRock's Covington, VA paper mill's wastewater treatment operations do not comply with permits or applicable law and Smurfit WestRock is unable to determine the cause of such non-compliance, then we will be responsible for between 10 percent and 50 percent of the costs and expenses of such noncompliance (increasing in 10 percent increments per violation during each twelve-month period) despite representing less than 3 percent of the total wastewater volume.
The failure of our patents or confidentiality agreements to protect our proprietary technology, know-how or trade secrets could result in significantly lower revenues, reduced profit margins, or loss of market share . Environmental and Sustainability Risks Certain elements of our strategic growth are dependent on the adoption of more stringent air quality standards around the world.
The failure of 19 our patents or confidentiality agreements to protect our proprietary technology, know-how or trade secrets could result in significantly lower revenues, reduced profit margins, or loss of market share. Environmental and Sustainability Risks Certain elements of our strategic growth are dependent on the adoption of more stringent air quality standards around the world.
If we fail to keep pace with the evolving or disruptive 16 technological innovations in our end-use markets on a competitive basis, our financial condition and results of operations could be adversely affected . In the Performance Materials segment, there is competition from other activated carbon manufacturers.
If we fail to keep pace with the evolving or disruptive technological innovations in our end-use markets on a competitive basis, our financial condition and results of operations could be adversely affected. 16 In the Performance Materials segment, there is competition from other activated carbon and honeycomb manufacturers.
GDPR, which applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries, mandates new compliance obligations and imposes significant fines and sanctions for violations. CCPA requires 18 companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California.
GDPR, which applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries, mandates new compliance obligations and imposes significant fines and sanctions for violations. CCPA requires companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California.
Volatility in the world financial markets could increase borrowing costs or affect our ability to gain access to the capital markets, which could have a material adverse effect on our competitive position, business, financial condition, results of operations, and cash flows . ITEM 1B. UNRESOLVED STAFF COMMENTS None. 22
Volatility in the world financial markets could increase borrowing costs or affect our ability to gain access to the capital markets, which could have a material adverse effect on our competitive position, business, financial condition, results of operations, and cash flows. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Demand for our Advanced Polymer Technologies products which are sold into automotive applications, footwear adhesives and structural support, may be affected by consumer discretionary spending and changes in consumer preferences. Additionally, sales of our industrial specialties and Advanced Polymer Technologies products have, and may continue to be, negatively impacted due to reduced global industrial demand.
Demand for our Advanced Polymer Technologies products which are sold into automotive applications, footwear adhesives and structural support, may be affected by consumer discretionary spending and changes in consumer preferences. Additionally, sales of our Advanced Polymer Technologies products have, and may continue to be, negatively impacted due to reduced global industrial demand.
Any such changes are uncertain and, therefore, it is not possible for Ingevity to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes .
Any 20 such changes are uncertain and, therefore, it is not possible for Ingevity to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.
Our manufacturing facilities use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gasses that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions.
Our manufacturing plants use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gasses that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions.
However, regulators may react to a variety of considerations, including economic and political, that may result in any such more stringent regulations being delayed or 20 shelved entirely, in one or more countries or regions.
However, regulators may react to a variety of considerations, including economic and political, that may result in any such more stringent regulations being delayed or shelved entirely, in one or more countries or regions.
The Delaware Proceeding and other legal actions to protect, defend or enforce our intellectual property rights could result in significant costs and diversion of our resources and our management’s attention, and we may not prevail in any such suits or proceedings, which could have an adverse effect on our financial condition and results of operations.
The Delaware Proceeding and other legal actions to protect, defend or enforce our intellectual property rights could result in significant costs and diversion of our resources and our management's attention, and we may not prevail in any such other actions, which could have an adverse effect on our financial condition and results of operations.
District Court for the District of Delaware (the “Delaware Proceeding”) issued a verdict in favor of BASF on certain counterclaims filed by BASF in the Delaware Proceeding. The jury awarded BASF damages of approximately $28.3 million, which will be trebled under U.S. antitrust law to approximately $85.0 million when the court enters judgment.
District Court for the District of Delaware (the "Delaware Proceeding") issued a verdict in favor of BASF on certain counterclaims filed by BASF in the Delaware Proceeding. The jury awarded BASF damages of approximately $28.3 million, which will be trebled under U.S. antitrust law to approximately $85.0 million when the court enters judgment.
Intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and trade dress, are important to our business. See “Intellectual Property” included within Part I. Item 1 of this Form 10-K for more information on the 844 Patent.
Intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and trade dress, are important to our business. See "Intellectual Property" included within Part I. Item 1 of this Form 10-K for more information on the 844 Patent.
We rely on our information technology systems, some of which are managed by third parties, to support, manage and maintain the day-to-day operations and activities of our business, including our manufacturing facilities, customer and vendor transactions, and financial, accounting, and business records.
We rely on our information technology systems, some of which are managed by third parties, to support, manage and maintain the day-to-day operations and activities of our business, including our manufacturing plants, customer and vendor transactions, and financial, accounting, and business records.
In addition, as a result of the judgment being officially entered on May 18, 2023, we have started accruing for post-judgment interest at the legally mandated interest rate. As of December 31, 2024 and 2023, the total amount accrued, inclusive of post-judgement interest, was $91.4 million and $87.4 million, respectively.
In addition, as a result of the judgment being officially entered on May 18, 2023, we have started accruing for post-judgment interest at the legally mandated interest rate. As of December 31, 2025 and 2024, the total amount accrued, inclusive of post-judgement interest, was $95.4 million and $91.4 million, respectively.
These hazards could lead to an interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing facility or on us as a whole.
These hazards could lead to an interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing plant or on us as a whole.
Potential consequences could include increased energy, transportation, and raw material costs and may require us to make additional investments in facilities and equipment or limit our ability to grow.
Potential consequences could include increased energy, transportation, and raw material costs and may require us to make additional investments in plants and equipment or limit our ability to grow.
We have exposure to risks of operating outside the U.S., including: fluctuations in foreign currency exchange rates, including the euro, pound sterling, Japanese yen, Brazilian Real, and Chinese renminbi; restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the U.S.; difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations, which may carry significant penalties for non-compliance; unexpected changes in political or regulatory environments; earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions; geopolitical and economic instability, including the wars in Ukraine and the Middle East; general country strikes or work stoppages; unforeseen public health crises, such as pandemic and epidemic diseases; import and export restrictions; difficulties in maintaining overseas subsidiaries and international operations; difficulties in obtaining approval for significant transactions; government limitations on foreign ownership; government takeover or nationalization of business; and government mandated price controls.
We have exposure to risks of operating outside the U.S., including: fluctuations in foreign currency exchange rates, including the euro, pound sterling, Japanese yen, Brazilian Real, and Chinese renminbi; restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the U.S.; difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations, which may carry 15 significant penalties for non-compliance including reputational harm, fines or shutdowns; unexpected changes in political or regulatory environments; earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions; geopolitical and economic instability, including the wars in Ukraine and the Middle East and the potential escalation of these conflicts; general country strikes or work stoppages; unforeseen public health crises, such as pandemic and epidemic diseases; import and export restrictions; difficulties in maintaining overseas subsidiaries and international operations; difficulties in obtaining approval for significant transactions; government limitations on foreign ownership; government takeover or nationalization of business; and government mandated price controls.
For example, demand for our Advanced Polymer Technologies products in the automotive market, where our products are formulated into automotive resins and coatings and various components, may be affected by technological advances, changing automotive original equipment manufacturer ("OEM") specifications, and global automobile production levels.
For example, demand for our Advanced Polymer Technologies products in the automotive market, where our products are formulated into automotive resins and coatings and various components, may be affected by technological advances, changing OEM specifications, and global automobile production levels.
We have certain large customers in particular businesses, the loss of which could have a material adverse effect on the applicable segment’s sales and, depending on the significance of the loss, our results of operations, financial condition or cash flows. Sales to the Company’s ten largest customers (across all three segments) accounted for 38 percent of total sales for 2024.
We have certain large customers in particular businesses, the loss of which could have a material adverse effect on the applicable segment's sales and, depending on the significance of the loss, our results of operations, financial condition or cash flows. Sales to the Company's ten largest customers (across all three segments) accounted for 41 percent of total sales for 2025.
On February 13, 2024, the court in the Delaware Proceeding denied BASF’s motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative.
On February 13, 2024, the court in the Delaware Proceeding denied BASF's motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative. Earlier in the Delaware Proceeding, the U.S.
While we have some redundancies within the facilities that are the sole manufacturer of certain products, we have limited ability to make these products at other facilities .
While we have some redundancies within the plants that are the sole manufacturer of certain products, we have limited ability to make these products at other plants.
These costs and expenses may be significant and may adversely impact our financial condition and results of operations. Additionally, several of our manufacturing facilities are leased.
These costs and expenses may be significant and may adversely impact our financial condition and results of operations. Additionally, several of our manufacturing plants are leased.
Adverse weather conditions, which directly affect the ability to engage in paving and/or road marking activity, have had, and going forward may have, an adverse effect on sales in the road technologies product line if such conditions result in lower customer demand due to a shortened season.
Adverse weather conditions, which directly affect the ability to engage in paving and/or road marking activity, have had, and going forward may have, an adverse effect on sales in the pavement technologies and road markings product lines if such conditions result in lower customer demand due to a shortened season.
While we do not do business directly with governmental agencies, our customers provide paving services to the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues.
While we do not do business directly with governmental agencies in our pavement technologies product line, our customers provide paving services to the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues.
We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.
We are dependent upon third parties for the provision of certain critical operating services at several of our plants.
In addition, the global regulatory environment pertaining to information security and privacy is increasingly complex, with new and changing requirements, such as the European Union’s General Data Protection Regulation (“GDPR”), California Consumer Privacy Act (“CCPA”), and the China Cybersecurity Law and Personal Information Protection Law.
In addition, the global regulatory environment pertaining to information security and privacy is increasingly complex, with new and changing requirements, such as the European Union's General Data Protection Regulation ("GDPR"), California Consumer Privacy Act ("CCPA"), and the China Cybersecurity Law and Personal Information Protection Law.
No customer accounted for more than 10 percent of total sales for 2024. Wi th some exceptions, our business with those large customers is based primarily upon individual purchase orders. As such, our customers could cease buying our products from us at any time, for any reason, with little or no recourse.
No customer accounted for more than 10 percent of total sales for 2025. With some exceptions, our business with those large customers is based primarily upon individual purchase orders. As such, our customers could cease buying our products from us 17 at any time, for any reason, with little or no recourse.
We are currently involved in several legal actions related to the intellectual property associated with 19 the 844 Patent. On September 15, 2021, a jury in the lawsuit filed by the Company against BASF Corporation for patent infringement in the U.S.
We are currently involved in a legal action related to the intellectual property associated with the 844 Patent. On September 15, 2021, a jury in the lawsuit filed by the Company against BASF Corporation for patent infringement in the U.S.
Disruptions at any of our facilities could negatively impact our production, financial condition and results of operations.
Disruptions at any of our plants could negatively impact our production, financial condition and results of operations.
The third party provider of critical and non-critical services at our location in Warrington, United Kingdom has announced plans to discontinue operations at its Warrington, United Kingdom plant, but continues to provide services to us.
The third party provider of critical and non-critical services at our location in Warrington, United Kingdom has discontinued most of its operations at its Warrington, United Kingdom plant, but continues to provide services to us.
Disruptions to any of our manufacturing operations or other facilities due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood or fire, or other unanticipated problems such as labor difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, could cause operational disruptions of varied duration.
Disruptions to any of our manufacturing operations or other plants due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood or fire, or other unanticipated problems such as labor 14 difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, and planned or unplanned production slowdowns and shutdowns, turnarounds and outages, could cause operational disruptions of varied duration.
We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., steam, compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our Covington, Virginia Performance Materials facility and at our Warrington, United Kingdom Advanced Polymer Technologies facility.
We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our plants in Covington, Virginia, and Warrington, United Kingdom.
The amount accrued for this matter is included within Other liabilities on the consolidated balance sheet as of December 31, 2024, and the charge is included within Other (income) expense, net on the consolidated statement of operations for the twelve months ended December 31, 2021.
The amount accrued for this matter is included within Accrued expenses on the consolidated balance sheets as of December 31, 2025, and the charge was included within Other (income) expense, net on the consolidated statement of operations for the twelve months ended December 31, 2021.
Also, many of our production employees are governed by collective bargaining agreements (“CBAs”). The CBA at our Warrington, United Kingdom Advanced Polymer Technologies manufacturing facility with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed.
Also, many of our production employees are governed by collective bargaining agreements. T he CBA at our Warrington, United Kingdom APT manufacturing plant with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed.
Our road technologies product line is seasonal in nature, with roughly 70 to 75 percent of revenue generated between April and September each year.
Our pavement technologies and road markings product lines are seasonal in nature, with roughly 70 to 75 percent of revenue generated between April and September each year.
Certain of our products face competition from substitute products where the costs of different raw material inputs can impact the price competitiveness of our products and negatively impact our sales and/or profits as we respond to substitute product competition.
Certain of our products face competition from substitute products where the costs of different raw material inputs can impact the price competitiveness of our products and negatively impact our sales and/or profits as we respond to substitute product competition. Other monomers, thermoplastics, and polyols compete with our caprolactone-based products.
We could be adversely affected by disruptions within our supply chain and transportation network. Our products are transported by truck, rail, barge or ship primarily by third-party providers.
Disruptions within our supply chain could negatively impact, our production, financial condition and results of operations. We could be adversely affected by disruptions within our supply chain and transportation network. Our products are transported by truck, rail, barge or ship primarily by third-party providers.
While it is our intent to identify and pursue a transaction that will strengthen the Performance Chemicals segment and improve the Company’s financial performance, and benefit our stockholders by enabling us to focus on higher growth and higher margin opportunities, there can be no guarantee that this strategic review will result in such a transaction or achieve such expected results or benefits.
While it is our intent to identify and pursue a transaction for each of APT and the road markings product line, that, in each case will improve the Company's financial performance and benefit our stockholders by enabling us to focus on higher margin opportunities, there can be no guarantee that this strategic review will result in such transactions or achieve such expected results or benefits.
A significant portion of our customers’ revenues in our road technologies business is derived from contracts with various foreign and U.S. governmental agencies, and therefore, when government spending is reduced, our customers’ demand for our products is similarly reduced.
The Company's pavement technologies product line is heavily dependent on government infrastructure spending. A significant portion of our customers' revenues in our pavement technologies is derived from contracts with various foreign and U.S. governmental agencies, and therefore, when government spending is reduced, our customers' demand for our products is similarly reduced.
However, to the extent our customers are under fixed-price contracts with limited or no price adjustment mechanisms, we are unable to mitigate the impact of inflation by passing on price increases through to our customers, and we could experience an adverse impact on our results of operations as a result .
However, to the extent our customers are under fixed-price contracts with limited or no price adjustment mechanisms, we are unable to mitigate the impact of inflation by passing on price increases through to our customers, and we could experience an adverse impact on our results of operations as a result. 21 Challenges in the commercial and credit environment may materially adversely affect Ingevity's future access to capital.
We may not be able to pass through raw material cost increases, or we may lose market share if we do not effectively manage our pricing, which in either case could negatively impact our financial results . Additionally, the price of energy may directly or indirectly impact demand, pricing or profitability for certain of our products.
We may not be able to pass through raw material cost increases, or we may lose market share if we do not effectively manage our pricing, which in either case could negatively impact our financial results.
The impact of these changes may lead to increased competition from competing and substitute products and downward pricing pressures on our customers, and therefore, on our Advanced Polymer Technologies and industrial specialties product offerings. We face competition from new technologies and new or emerging competitors.
The impact of these changes may lead to increased competition from competing and substitute products and downward pricing pressures on our customers, and therefore, on our Advanced Polymer Technologies product offerings. We are dependent on certain large customers.
While sealed tank fuel systems generally require an increased sized pelleted activated carbon canister to deal with refueling emissions, in most cases, they do not use an extruded honeycomb to meet current U.S. and California regulations. There is also emerging competition in the "honeycomb" space, which may impact sales of the Company's products.
While sealed tank fuel systems generally require an increased sized pelleted activated carbon canister to deal with refueling emissions, in most cases, they do not use an extruded honeycomb to meet current U.S. and California regulations.
Further, the CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers will expire on December 1, 2025. It is anticipated that the parties will begin contract renewal negotiations during the fourth quarter of 2025.
The CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers expired on December 1, 2025. The parties began contract renewal negotiations during the fourth quarter of 2025 and negotiations are in process.
In certain cases, we have products, such as our extruded honeycomb, caprolactone, pavement preservation products, road construction products, pavement reconstruction and recycling products, and industrial specialties products, that are only made at a single site, such as our Covington, Virginia Performance Materials plant .
In certain cases, we have products, such as our extruded honeycomb, caprolactone, pavement preservation products, road construction products, pavement reconstruction and recycling products, that are only made at a single site, such as our Waynesboro, Georgia Performance Materials plant, North Charleston Performance Chemicals plant and Warrington, U.K. APT plant.
Lignin is also in limited supply and if we are unable to secure a sufficient amount of lignin on a cost-effective basis we could suffer disruption to our road technologies product line, which could negatively impact our financial results and our results of operations. 15 Disruptions within our supply chain could negatively impact, our production, financial condition and results of operations.
For example, lignin and TOFA are in limited supply and if we are unable to secure a sufficient amount of lignin or TOFA on a cost-effective basis we could suffer disruption to our pavement technologies product line, which could negatively impact our financial results and our results of operations.
Our industries and the end-use markets into which we sell our products experience periodic technological change and product innovation.
We face competition from new technologies and new or emerging competitors. Our industries and the end-use markets into which we sell our products experience periodic technological change and product innovation.
These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees depending upon the facility, the duration of the disruption, and our ability to shift business to another facility or find alternative sources of manufacturing capacity.
In addition, existing CBAs may not prevent a strike or work stoppage at the applicable plant. These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees depending upon the plant, the duration of the disruption, and our ability to shift business to another plant or find alternative sources of manufacturing capacity.
Information security breaches, cyber incidents, and disruptions, or failure to comply with laws and regulations related to information security or privacy, could result in legal claims or proceedings against us by governmental entities or individuals, significant fines, penalties or judgements, disruption of our operations, remediation requirements, changes to our business practices, and damage to our reputation, which could adversely affect our business, financial condition or results of operations .
Information security breaches, cyber incidents, and disruptions, or failure to comply with laws and regulations related to information security or privacy, could result in legal claims or proceedings against us by governmental entities or individuals, significant fines, penalties or judgements, disruption of our operations, remediation requirements, changes to our business practices, and damage to our reputation, which could adversely affect our business, financial condition or results of operations. 18 Legal and Regulatory Risks From time to time, we may be engaged in legal actions associated with our intellectual property rights; if we are unsuccessful, these could potentially result in an adverse effect on our financial condition and results of operations.
International Operations Risks We are exposed to the risks inherent in international sales and operations. In 2024, sales to customers outside of the U.S. made up approximately 42 percent of our total sales, and we sell our products to customers in approximately 70 countries.
In 2025, sales to customers outside of the U.S. made up approximately 43 percent of our total sales, and we sell our products to customers in approximately 70 countries.
If we fail to achieve our sustainability goals or reduce our impact on the environment or if we are unable to respond or are perceived to be inadequately responding to sustainability concerns, we may receive adverse publicity, and certain investors may divert from, or avoid investing in, our securities, which could have a negative impact on our business and reputation . 21 Adverse weather conditions and other environmental impacts (such as climate change and extreme weather) may impact our operations and the demand for some of our products, which could negatively affect our financial condition and results of operations.
If we fail to achieve our sustainability goals or reduce our impact on the environment or if we are unable to respond or are perceived to be inadequately responding to sustainability concerns, we may receive adverse publicity, and certain investors may divert from, or avoid investing in, our securities, which could have a negative impact on our business and reputation.
Disruptions at our suppliers could lead to volatility or increases in raw material or energy costs and/or reduced availability of materials or energy, potentially affecting our financial condition and results of operations . Market Risks Adverse conditions in the automotive market may negatively impact demand for our automotive carbon products.
Disruptions at our suppliers could lead to volatility or increases in raw material or energy costs and/or reduced availability of materials or energy, potentially affecting our financial condition and results of operations. International Operations Risks We are exposed to the risks inherent in international sales and operations.
In the Advanced Polymer Technologies segment, there is competition from other caprolactone manufacturers, including new market entrants. If we are unable to successfully compete in our end-use markets, our financial condition and results of operations could be adversely affected.
In the Advanced Polymer Technologies segment, there is competition from other caprolactone manufacturers, including new market entrants. This increased competition in our end-use markets, has impacted and may continue to impact, our financial condition and results of operations.
District Court dismissed the Company’s patent infringement claims against BASF alleging BASF infringed the 844 Patent and invalidated some, but not all, of the claims in our 844 patent, which expired in March 2022 . The Company disagrees with the verdict, including the court’s application of the law and entry of judgment.
District Court dismissed the Company's patent infringement claims against BASF alleging BASF infringed the 844 Patent and invalidated some, but not all, of the claims in our 844 patent, which expired in March 2022. On March 13, 2024, we appealed the verdict as well as the U.S.
ICE and HEV automotive production in the markets we serve can be affected by macro-economic factors such as interest rates, fuel prices, shifts in vehicle mix (including shifts toward alternative energy vehicles), consumer confidence, employment trends, regulatory and legislative oversight requirements, and trade agreements. The Company’s road technologies product line is heavily dependent on government infrastructure spending.
ICE and HEV automotive production in the markets we serve can be affected by macro-economic and other outside factors such as interest rates, fuel prices, shifts in vehicle mix (including shifts toward alternative energy vehicles), consumer confidence, employment trends, regulatory and legislative oversight requirements, tariffs, trade agreements, microchip shortages, and disruptions to the operations of suppliers within the automotive original equipment manufacturer ("OEM") supply chain.
While the Company has generally positive relations with its labor unions, there is no guarantee the Company will be able to successfully negotiate new union contracts without work stoppages, labor difficulties or unfavorable terms. In addition, existing CBAs may not prevent a strike or work stoppage at the applicable plant.
The parties will continue to operate under the same terms and conditions while negotiations are pending. While the Company has generally positive relations with its labor unions, there is no guarantee the Company will be able to successfully negotiate new union contracts without work stoppages, labor difficulties or unfavorable terms.
The Company purchases a variety of raw materials from third parties for its manufacturing operations, including, but not limited to, CTO, hardwood sawdust, phosphoric acid, ethylene amines, black liquor, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates. Each raw material is subject to its own supply and demand dynamics which may, at times, limit availability and/or cause price volatility.
The Company purchases a variety of raw materials from third parties for its manufacturing operations, including, but not limited to, hardwood sawdust, phosphoric acid, ethylene amines, tall oil fatty acid ("TOFA"), lignin, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates.
Challenges in the commercial and credit environment may materially adversely affect Ingevity’s future access to capital. We have, at times, relied on various forms of credit to satisfy working capital needs.
We have, at times, relied on various forms of credit to satisfy working capital needs.
The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers on behalf of its affiliated Local Union 464 expired on January 15, 2025. The parties began negotiations in the fourth quarter of 2024 and will continue to operate under the same terms and conditions while negotiations are pending.
The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers ("IBEW") on behalf of its affiliated Local Union 464 expired on January 15, 2025. A new CBA with IBEW was ratified on June 24, 2025.
If the Company is required to pay the entire jury verdict (together with any associated fees, costs, and expenses), or the Company must make certain changes to its business when the matters associated with the Delaware Proceeding are eventually resolved, such outcomes could have an adverse effect on the Company’s business, financial condition, and operating results .
The Company has and may continue to incur additional fees, costs and expenses for as long as the post-trial motions are ongoing. If the Company is required to pay any associated fees, costs, and expenses, such outcomes could have an adverse effect on the Company's business, financial condition, and operating results.
The amount of any liability the Company may ultimately incur related to the Delaware Proceeding could be more or less than the amount accrued. The Company has and may continue to incur additional fees, costs and expenses for as long as the post-trial motions and possible appeal are ongoing.
The amount of any liability the Company may ultimately incur related to the Delaware Proceeding could be more or less than the amount accrued. BASF has indicated it will seek attorneys' fees and costs in amounts that they will allege and have to demonstrate at a future date.
Sales of our automotive activated carbon products are tied to global internal-combustion-engine (“ICE”) and hybrid electric vehicle automobile (“HEV”) production levels.
As such, we could lose market position and our business, operating results, and financial condition would be adversely impacted. Market Risks Adverse conditions in the automotive market may negatively impact demand for our automotive carbon products. Sales of our automotive activated carbon products are tied to global internal combustion engine ("ICE") and hybrid electric vehicle automobile ("HEV") production levels.
Therefore, on March 13, 2024, we appealed the verdict as well as the U.S. District Court’s November 2020 dismissal of our patent infringement claims against BASF.
District Court's November 2020 dismissal of our patent infringement claims against BASF to the U.S. Federal Circuit Court of Appeals. On February 11, 2026, the U.S. Federal Circuit Court of Appeals ruled against Ingevity on our appeal and we have decided to no longer pursue any further appeals.
Because the outcome of the Company’s post-trial motions and possible appeal is difficult to predict, as of December 31, 2024, the Company has accrued a total of $85.0 million , the full amount of the jury’s verdict (including treble damages).
We expect payment of the judgment, plus post-judgment interest, to be made in the second quarter of 2026. The Company continues to accrue a total of $85.0 million, the full amount of the jury's verdict (including treble damages).
Removed
Operational Risks The repositioning of our Performance Chemicals business has reduced our net sales and may otherwise adversely affect our financial condition and results of operations during this transition period.
Added
On December 8, 2025, we announced plans to explore strategic alternatives for our APT reportable segment and Performance Chemicals road markings product line.
Removed
On November 1, 2023 and July 31, 2024, we announced a number of strategic actions designed to further reposition our Performance Chemicals reportable segment to improve the profitability and reduce the cyclicality of the Company as a whole.
Added
We are co-located with third parties at each of the foregoing plants, and we face related risks of disruptions to our operations arising out of the acts or omissions of such third parties. We are also co-located with, and provide certain critical operating services to, a third party at our North Charleston, South Carolina plant.
Removed
These initiatives, including the closure of our plants in DeRidder, Louisiana and Crossett, Arkansas (the “Plant Closures”), focus on reducing exposure to lower margin end-use markets of our industrial specialties product line.
Added
If we are unable to provide such services, we could face liability for disrupting such third party's operations.
Removed
The anticipated timing, charges, costs and results of the closure of the Plant Closures and other current or future repositioning activities are subject to a number of assumptions and risks and the actual results could materially differ from our estimates if such actions result in adverse legal or regulatory actions, if personnel required to effect the shutdown become unavailable, or we are affected by other factors not currently contemplated.
Added
Each raw material is subject to its own supply and demand dynamics which may, at times, limit availability and/or cause price volatility.
Removed
On January 16, 2025, we announced plans to explore strategic alternatives for our industrial specialties product line and North Charleston, South Carolina CTO refinery, including a potential divestiture of portions of the North Charleston site.
Added
Changes in tariff regimes could negatively impact our business. The U.S. government has imposed new global tariffs, and is considering the imposition of additional tariffs. These new tariffs have resulted in (or could result in) retaliatory measures imposed, announced or under consideration by certain U.S. trading partners, most notably China.
Removed
The CBA at our Crossett, Arkansas Performance Chemicals manufacturing facility with the International Association of Machinists and Aerospace Workers Union ("IAM") expires on March 1, 2025. The parties will begin contract renewal negotiations during the first quarter of 2025.
Added
These changes to trade policy are expected to make it more difficult or costly for us to export our products and import raw materials. This in turn could require us to increase prices to our customers, which may reduce demand. Such demand reduction or inability to increase customer prices may negatively impact our profitability.
Removed
For example, our Performance Chemicals segment produces many products derived from CTO and lignin, which are co-products of the kraft pulping process.
Added
The retaliatory tariff measures imposed by China, if not unwound, may significantly lower our margin on Performance Materials and Performance Chemicals products sold from the United States into China if we are unable to pass these costs onto our customers.
Removed
While we have taken aggressive action to limit the Company’s exposure to the volatility of the CTO market, its limited availability and competing demands for its use could again impact our financial results and results of operations if we are unable to source a sufficient supply at a reasonable cost.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe maintain a robust cybersecurity incident response plan that incorporates regular simulations, drills, vulnerability scans, penetration testing and third-party assessments to evaluate and enhance our cybersecurity controls and resilience. Third-Party Monitoring. We partner with a managed security services provider for 24/7 monitoring of our enterprise network.
Biggest changeOur program includes continuous network monitoring, preventive and detective controls, and annual independent security assessments to help safeguard sensitive information. Incident Response and Testing . We maintain a comprehensive incident response plan supported by regular simulations, vulnerability scans, penetration tests, and independent assessments to continually strengthen our cybersecurity controls and resilience. Third‑Party Monitoring .
We have a team of skilled internal and external cybersecurity professionals, led by our Vice President of Information Technology, Chief Information Officer and Chief Information Security Officer ("CIO"), who has over three decades of experience in information security and information technology infrastructure.
We maintain a highly skilled team of internal and external cybersecurity professionals, led by our Vice President of Information Technology, Chief Information Officer, and Chief Information Security Officer ("VP of IT"), who brings more than three decades of experience in information security and information technology.
We actively collaborate with local, state and federal agencies, as well as peers in the chemical manufacturing industry to identify the latest threats and implement effective defenses that safeguard our employees and customers. Key Components of Our Cybersecurity Program: Leadership and Governance.
We also collaborate closely with local, state, and federal agencies, as well as peers across the chemical manufacturing sector, to stay ahead of emerging threats and implement effective measures that safeguard our employees, customers, and operations. Key Components of Our Cybersecurity Program: Leadership and Governance.
We require third-party service providers with access to personal, confidential or proprietary information to implement and maintain comprehensive cybersecurity measures aligned with applicable legal standards and industry best practices. Our proactive approach to cybersecurity involves the integration of leading technologies and collaboration with third-party experts to ensure alignment with industry standards.
We also require third‑party providers with access to personal, confidential, or proprietary information to maintain strong cybersecurity measures aligned with legal requirements and industry best practices. 22 Our proactive cybersecurity approach combines advanced technologies with collaboration from third‑party experts to maintain alignment with industry standards and strengthen the protection of sensitive information for both our organization and our customers.
We enforce collection, storage, and access controls of personal, proprietary, and confidential information, focusing on protecting trade secrets, intellectual property, clinical trial data, third-party information, and employee data. Industry-Standard Frameworks and Policies. We incorporate industry-standard frameworks, policies, and practices such as ISO 27001 which are designed to protect the confidentiality and privacy of information. Protection Mechanisms.
We also maintain strict controls over the collection, storage, and access of personal, proprietary, and confidential information, with a focus on protecting trade secrets, intellectual property, third‑party data, and employee information. Industry-Standard Frameworks, Policies, and Protection Measures. We follow industry‑recognized practices, including the ISO 27001 information security standard, for which we earned certification in 2024.
Despite our security architecture and controls, and those of our third-party providers, we may be vulnerable to cyber-attacks, computer viruses, security breaches, ransomware attacks, inadvertent or intentional employee actions, system failures, and other risks that could materially impact our financial results and our results of operations.
However, despite our security architecture, controls, and those of our third‑party providers, we remain exposed to risks such as cyberattacks, ransomware, security breaches, system failures, the rapid evolution and increased adoption of AI and inadvertent or malicious employee actions. Any such event could materially impact our operations or financial performance.
Beginning in 2025, the Sustainability & Safety Committee of our Board of Directors (“the Board”) has oversight of our cybersecurity and risk management programs. Prior to that, the full Board exercised oversight of cybersecurity risk management. The Board moved oversight of cybersecurity risk management into the Sustainability & Safety Committee to allow for more in-depth reviews.
Beginning in 2025, the Sustainability & Safety Committee of our Board of Directors assumed oversight of our cybersecurity and risk management programs, a responsibility previously held by the full Board. This shift enables more focused and in‑depth review of cybersecurity matters.
We believe these measures contribute to the protection of both our organization's and our clients' sensitive information. During the past three years, there have been no material impacts from cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company’s business strategy, results of operations, 23 or financial condition.
Over the past three years, we have not experienced any cybersecurity threats or incidents that have had, or are reasonably likely to have, a material effect on our business strategy, results of operations, or financial condition.
Our team has experience in information security and information technology infrastructure and holds several advanced and expert licenses and certifications, including International Society of Automation 62443, Cybersecurity Expert and International Information System Security Certification Consortium (ISC2), Certified Information Security Manager (CISM), and Certified Information Systems Security Professional (CISSP).
Our cybersecurity team holds deep expertise across the security domain and maintains a range of advanced industry certifications, including ISA/IEC 62443 Cybersecurity Expert, ("ISC")² certifications, Certified Information Security Manager ("CISM"), and Certified Information Systems Security Professional ("CISSP").
ITEM 1C. CYBERSECURITY At Ingevity, we recognize the paramount importance of cybersecurity in safeguarding sensitive information. We align with industry standards, including the ISO 27001 information security framework, for which we became certified in 2024.
ITEM 1C. CYBERSECURITY At Ingevity, we understand that strong cybersecurity is essential to protecting sensitive information and maintaining trust. Our program is grounded in industry-recognized standards, including the ISO 27001 information security framework, for which we achieved certification in 2024. Our diverse cybersecurity team uses advanced technologies, including AI and machine learning, to enhance and continuously refine our defenses.
Removed
Our comprehensive cybersecurity program is led by a team of diverse, highly skilled professionals, and we invest in modern technologies, including artificial intelligence and machine learning, to fortify our defenses.
Added
The Committee receives quarterly updates from the VP of IT and periodic briefings from external cybersecurity experts, while the full Board receives at least one formal update each year supported by regular Committee reporting. We continuously monitor our information systems with advanced security controls and routine audits to identify and address vulnerabilities.
Removed
The Sustainability & Safety Committee receives at least quarterly updates from the CIO on cybersecurity matters and our related risk management program, and periodic updates from external cybersecurity experts on the overall risk landscape.
Added
Our incident response plan provides immediate mitigation steps, long‑term remediation, and measures to prevent recurrence. The VP of IT regularly briefs the executive leadership team to ensure senior management stays informed of cybersecurity risks, incidents, and emerging threats.
Removed
Our full Board of Directors also receives an update at least once a year on these matters in addition to regular reporting from the Sustainability & Safety Committee on matters reviewed. We have implemented processes for continual monitoring of our information systems, including the deployment of advanced security measures and system audits to identify potential vulnerabilities.
Added
A managed security services provider monitors our enterprise network 24/7.
Removed
If a cybersecurity incident were to occur, we have developed and documented an incident response plan that includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Removed
Additionally, our CIO regularly meets with our executive management leadership team to provide updates on our cybersecurity risks and incidents ensuring management is keenly aware of any potential threat. Protection of Sensitive Information.
Removed
We currently adhere to the ISO 27001 information security framework and are advancing our program having achieved ISO 27001 certification in 2024. We continuously monitor our enterprise network and have deployed detective and preventative controls. In-depth third-party security assessments are conducted annually. Incident Response and Testing.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed1 unchanged
Biggest change(4) Certain manufacturing assets are subject to a finance lease. (5) Portions of the manufacturing operations are on leased land.
Biggest change(2) Certain manufacturing assets are subject to a finance lease with the Development Authority of Burke County (the county in which Waynesboro, Georgia is located). (3) Certain manufacturing assets are subject to a finance lease. (4) Portions of the manufacturing operations are on leased land.
Location Own / Lease Functional Use North Charleston, South Carolina Own / Lease (1) Corporate Headquarters; Application Labs; Performance Chemicals: Manufacturing Covington, Virginia Lease Performance Materials: Manufacturing Crossett, Arkansas Lease (2) Performance Chemicals: Manufacturing DeRidder, Louisiana Own (2) Performance Chemicals: Manufacturing Waynesboro, Georgia Own (3) Performance Materials: Manufacturing Shanghai, People's Republic of China Lease Regional Headquarters; Application Lab Wickliffe, Kentucky Own (4) Performance Materials: Manufacturing Changshu, People’s Republic of China Lease Performance Materials: Manufacturing Warrington, United Kingdom Lease Advanced Polymer Technologies: Manufacturing, Application Lab Zhuhai, People’s Republic of China Lease Performance Materials: Manufacturing, Application Lab Greenville, Alabama Lease Performance Chemicals: Manufacturing Dayton, Nevada Own Performance Chemicals: Manufacturing Childress, Texas Own (5) Performance Chemicals: Manufacturing Marion, Indiana Own Performance Chemicals: Manufacturing ________________________ (1) Portions of the manufacturing operations are on leased land and our corporate headquarters building is leased.
Location Own / Lease Functional Use North Charleston, South Carolina Own / Lease (1) Corporate Headquarters; Application Labs; Performance Chemicals: Manufacturing Covington, Virginia Lease Performance Materials: Manufacturing Waynesboro, Georgia Own (2) Performance Materials: Manufacturing Shanghai, People's Republic of China Lease Regional Headquarters; Application Lab Wickliffe, Kentucky Own (3) Performance Materials: Manufacturing Changshu, People's Republic of China Lease Performance Materials: Manufacturing Warrington, United Kingdom Lease Advanced Polymer Technologies: Manufacturing, Application Lab Zhuhai, People's Republic of China Lease Performance Materials: Manufacturing, Application Lab Greenville, Alabama Lease Performance Chemicals: Manufacturing Dayton, Nevada Own Performance Chemicals: Manufacturing Childress, Texas Own (4) Performance Chemicals: Manufacturing Marion, Indiana Own Performance Chemicals: Manufacturing ________________________ (1) Portions of the manufacturing operations are on leased land and our corporate headquarters building is leased.
We believe these facilities are adequate and suitable for our current operations, and that the production capacity of our facilities is sufficient to meet current demand. In the case of the properties identified as “Leased,” we nevertheless own the manufacturing facilities and equipment.
We believe these facilities are adequate and suitable for our current operations, and that the production capacity of our facilities is sufficient to meet current demand. In the case of the properties identified as "Leased," we nevertheless own the manufacturing facilities and equipment.
Removed
(2) All production at our DeRidder and Crossett Plants ceased during 2024. We continue to lease the Crossett, Arkansas site and own the DeRidder, Louisiana site. (3) Certain manufacturing assets are subject to a finance lease with the Development Authority of Burke County (the county in which Waynesboro, Georgia is located).

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

7 edited+3 added−1 removed0 unchanged
Biggest changeSteve Hulme 56 Senior Vice President & President of Advanced Polymer Technologies (2022-present); Vice President, Engineered Polymers (2020-2022); General Manager at Maysta International Ltd (2018-2020); Prior to that role, he held various senior-level positions of increasing responsibility with Evonik and Air Products and Chemicals from 2010 through 2018.
Biggest changeRuth Castillo 48 Senior Vice President and President, Performance Materials (2025-present), Vice President, Global Chemicals at Avantor (2025); Vice President, Business Transformation at Avantor (2023-2025); Vice President, Supply Chain and Engineering at Avantor (2020-2023); Vice President Global Product Management at Avantor (2018-2020); Prior to that role, she held various senior-level positions of increasing responsibility with Celanese from 2009 through 2018.
All officers are elected to hold office for one year or until their successors are elected and qualified. No family relationships exist among any of our executive officers or directors, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer. 25 PART II
All officers are elected to hold office for one year or until their successors are elected and qualified. No family relationships exist among any of our executive officers or directors, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer. 24 PART II
Mary Dean Hall 67 Executive Vice President and Chief Financial Officer (2021-present); Senior Vice President, Chief Financial Officer and Treasurer at Quaker Houghton (2015-2021); Vice President and Treasurer at Eastman Chemical Company (2009-2015); Prior to that role, she held various senior-level financial positions of increasing responsibility with Eastman from 1995 through 2009, including Treasurer, Vice President and Controller, and Vice President, Finance.
Mary Dean Hall 68 Executive Vice President and Chief Financial Officer (2021-present); Senior Vice President, Chief Financial Officer and Treasurer at Quaker Houghton (2015-2021); Vice President and Treasurer at Eastman Chemical Company (2009-2015); Prior to that role, she held various senior-level financial positions of increasing responsibility with Eastman from 1995 through 2009, including Treasurer, Vice President and Controller, and Vice President, Finance.
Ryan Fisher 49 Senior Vice President, General Counsel & Secretary (2024-present); Vice President, Deputy General Counsel, Chief Compliance Officer and Assistance Secretary (2021-2024); Deputy General Counsel, Chief Legal Officer - Performance Chemicals and Assistant Secretary (2016-2020); Senior Counsel, WestRock Company (2015-2015); Associate General Counsel, WestRock Company (2014-2015); Assistant General Counsel, WestRock Company (2006-2013).
Ryan Fisher 50 Senior Vice President, General Counsel & Secretary (2024-present); Vice President, Deputy General Counsel, Chief Compliance Officer and Assistance Secretary (2021-2024); Deputy General Counsel, Chief Legal Officer - Performance Chemicals and Assistant Secretary (2016-2020); Senior Counsel, WestRock Company (2015-2015); Associate General Counsel, WestRock Company (2014-2015); Assistant General Counsel, WestRock Company (2006-2013).
Terry Dyer 58 Senior Vice President & Chief Human Resources Officer (2024-present); Senior Vice President Human Resources and Communications, Billerud (2020-2024); Chief Human Resource Officer, Worthington Industries (2012-2016); Prior to that role, he held various senior-level positions of increasing responsibility with Armstrong World Industries and Burlington Industries from 1998 through 2012. _______________ (1) As of December 31, 2024.
Terry Dyer 59 Senior Vice President & Chief Human Resources Officer (2024-present); Senior Vice President Human Resources and Communications, Billerud (2020-2024); Chief Human Resource Officer, Worthington Industries (2012-2016); Prior to that role, he held various senior-level positions of increasing responsibility with Armstrong World Industries and Burlington Industries from 1998 through 2012.
Edward Woodcock 59 Executive Vice President & President of Performance Materials (2015-present); Vice President of MeadWestvaco's Carbon Technologies business (2010-2015) Rich White 62 Senior Vice President & President of Performance Chemicals (2022-present); Vice President, Industrial Specialties (2019-2022); Vice President, Global Sales at DuPont Nutrition & Biosciences (2017-2019); Prior to that role, he held various senior-level positions of increasing responsibility with FMC from 1998 through 2017.
Rich White 63 Senior Vice President & President of Performance Chemicals (2022-present); Vice President, Industrial Specialties (2019-2022); Vice President, Global Sales at DuPont Nutrition & Biosciences (2017-2019); Prior to that role, he held various senior-level positions of increasing responsibility with FMC from 1998 through 2017.
MINE SAFETY DISCLOSURES Not applicable. 24 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The executive officers of Ingevity Corporation, the offices they currently hold, their business experience over the past five years and their ages are as follows: Name Age (1) Present Position and Business Experience Luis Fernandez-Moreno 62 Interim President and Chief Executive Officer (2024-present); Senior Vice President of Ashland Inc.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The executive officers of Ingevity Corporation, the offices they currently hold, their business experience over the past five years and their ages are as follows: Name Age (1) Present Position and Business Experience David H.
Removed
(2012-2017); President, Ashland Inc. Chemicals Group (2015-2017); President, Ashland Inc. Specialty Ingredients (2013-2015); and President, Ashland Water Technologies (2012-2013). Prior to that role, he held various senior-level positions of increasing responsibility with Rohm & Haas Company for 27 years.
Added
Li 53 Chief Executive Officer and President (2025-present); Chief Executive Officer, President of CMC Materials (formerly Cabot Microelectronics) (2015-2022); Vice President Asia Pacific Region at CMC Materials (2006-2015); Prior to that role, he held various senior-level positions of increasing responsibility with CMC Materials from 1997 through 2006.
Added
Michael Shukov 57 Senior Vice President and President, Advanced Polymer Technologies (2025-present); Managing Director, Industrial Coatings EMEA at PPG (2020-2023); Managing Director, PPG Industries at PPG (2017-2020); Regional Business Director at PPG (2014-2017); Managing Director at Solvay (2012-2014); Business Director at Dow Chemical (2009-2011); Prior to that role, he held various senior-level positions of increasing responsibility with Rohm and Haas from 2001 through 2011.
Added
Reid Clontz 52 Senior Vice President, Operations (2025-Present); Vice President, Global Operations (2025-2025), Vice President Operations, Performance Materials (2022-2025); Plant Manager (2018-2022); Production Manager (2014-2018); Prior to that role, he held various senior-level positions of increasing responsibility with MeadWestvaco from 2002 through 2014. _______________ (1) As of December 31, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed4 unchanged
Biggest changeIn light of our market capitalization, the S&P SmallCap 600 Index is a more comparable broad market index with which to compare Ingevity's common stock. 26 December 31, 2019 2020 2021 2022 2023 2024 Ingevity Corporation $ 100.00 $ 86.67 $ 82.06 $ 80.61 $ 54.04 $ 46.64 S&P Small Cap 600 Index $ 100.00 $ 111.24 $ 140.98 $ 118.22 $ 137.07 $ 148.91 S&P MidCap 400 Index $ 100.00 $ 113.65 $ 141.76 $ 123.19 $ 143.38 $ 163.30 S&P Chemicals 600 Index $ 100.00 $ 118.60 $ 148.68 $ 127.25 $ 135.24 $ 128.11 Dow Jones U.S.
Biggest changeIn light of our market capitalization, the S&P SmallCap 600 Index is a more comparable broad market index with which to compare Ingevity's common stock. 25 December 31, 2020 2021 2022 2023 2024 2025 Ingevity Corporation $ 100.00 $ 82.06 $ 80.61 $ 54.04 $ 46.64 $ 67.73 S&P Small Cap 600 Index $ 100.00 $ 140.98 $ 118.22 $ 137.07 $ 148.91 $ 157.83 S&P MidCap 400 Index $ 100.00 $ 141.76 $ 123.16 $ 143.34 $ 163.26 $ 175.48 S&P Chemicals 600 Index $ 100.00 $ 148.68 $ 127.25 $ 135.24 $ 128.11 $ 107.23 Dow Jones U.S.
Stock Performance Graph The following table and graph present the cumulative total stockholder return for Ingevity's common stock compared with the Standard & Poor's (S&P) SmallCap 600 Index, S&P MidCap 400 Index, the S&P Chemicals 600 Index, and the Dow Jones (DJ) U.S. Specialty Chemicals Index for the five-year period ended December 31, 2024.
Stock Performance Graph The following table and graph present the cumulative total stockholder return for Ingevity's common stock compared with the Standard & Poor's ("S&P") SmallCap 600 Index, S&P MidCap 400 Index, the S&P Chemicals 600 Index, and the Dow Jones ("DJ") U.S. Specialty Chemicals Index for the five-year period ended December 31, 2025.
Previously, Ingevity was included in the S&P MidCap 400 Index and was moved to the S&P SmallCap 600 Index on June 16, 2023. We updated our comparative broad market index accordingly for the fiscal year ended December 31, 2024.
Previously, Ingevity was included in the S&P MidCap 400 Index and was moved to the S&P SmallCap 600 Index on June 16, 2023. We updated our comparative broad market index accordingly for the fiscal year ended December 31, 2025.
Specialty Chemicals Index $ 100.00 $ 115.21 $ 142.61 $ 123.18 $ 124.91 $ 118.83 The graph and related information set forth above are not deemed to be "filed" with the SEC for purposes of Section 18 of the Exchange Act or incorporated by reference into any future filing made by us with the SEC, except to the extent that we specifically incorporate it by reference into any such filing.
Specialty Chemicals Index $ 100.00 $ 142.61 $ 123.18 $ 124.91 $ 118.83 $ 121.82 The graph and related information set forth above are not deemed to be "filed" with the SEC for purposes of Section 18 of the Exchange Act or incorporated by reference into any future filing made by us with the SEC, except to the extent that we specifically incorporate it by reference into any such filing.
("NYSE") under the symbol "NGVT." There were approximately 4,200 record holders of our common stock as of February 14, 2025 . Unregistered Sales of Equity Securities Not Applicable. Issuer Purchases of Equity Securities The following table summarizes information with respect to the repurchase of our common stock during the three months ended December 31, 2024.
("NYSE") under the symbol "NGVT." There were approximately 4,200 record holders of our common stock as of February 18, 2026 . Unregistered Sales of Equity Securities Not Applicable. Issuer Purchases of Equity Securities The following table summarizes information with respect to the repurchase of our common stock during the three months ended December 31, 2025.
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1) October 1-31, 2024 — $ — — $ 353,384,633 November 1-30, 2024 — $ — — $ 353,384,633 December 1-31, 2024 — $ — — $ 353,384,633 Total — — _______________ (1) On July 25, 2022, our Board of Directors authorized the repurchase of up to $500.0 million of our common stock (the "2022 Authorization"), and rescinded the prior outstanding repurchase authorization with respect to the shares that remained unused under the prior authorization.
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1) October 1-31, 2025 121,977 $ 54.34 121,977 $ 321,756,728 November 1-30, 2025 493,759 $ 49.13 493,759 $ 297,498,482 December 1-31, 2025 — $ — — $ 297,498,482 Total 615,736 615,736 _______________ (1) On July 25, 2022, our Board of Directors authorized the repurchase of up to $500.0 million of our common stock (the "2022 Authorization"), and rescinded the prior outstanding repurchase authorization with respect to the shares that remained unused under the prior authorization.

Item 7. Management's Discussion & Analysis

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

101 edited+71 added−61 removed33 unchanged
Biggest changeReconciliation of Net Income (Loss) to Adjusted EBITDA Years Ended December 31, In millions 2024 2023 2022 Net income (loss) (GAAP) $ (430.3) $ (5.4) $ 211.6 Interest expense 97.8 93.3 61.8 Interest income (7.7) (6.3) (7.5) Provision (benefit) for income taxes (105.3) (4.7) 58.0 Depreciation and amortization (1) 108.3 122.8 108.8 Restructuring and other (income) charges, net (2) 186.2 170.2 13.8 Goodwill impairment charge (3) 349.1 — — Acquisition and other-related costs (4) 0.3 4.5 5.9 Loss on CTO resales (5) 52.7 22.0 — CTO supply contract termination charges (6) 100.0 — — (Gain) loss on strategic investments (7) 11.4 (19.3) — Pension and postretirement settlement and curtailment charges (income), net (8) 0.2 — 0.2 Adjusted EBITDA (Non-GAAP) $ 362.7 $ 377.1 $ 452.6 _______________ (1) Refer to Note 19 for more information.
Biggest changeReconciliations are set forth within this section. 39 Reconciliation of Net Income (Loss) from Continuing Operations (GAAP) and Net Income (Loss) from Discontinued Operations (GAAP) to Adjusted EBITDA from Continuing Operations (Non-GAAP), Adjusted EBITDA from Discontinued Operations (Non-GAAP), and Total Adjusted EBITDA (Non-GAAP) Years Ended December 31, In millions 2025 2024 2023 Net income (loss) from continuing operations (GAAP) $ (150.3) $ (121.4) $ 105.8 Interest expense 78.3 97.8 93.3 Interest income (5.2) (7.7) (6.3) Provision (benefit) for income taxes on continuing operations 8.2 (19.1) 24.2 Depreciation and amortization (1) 105.2 99.6 97.4 Restructuring and other (income) charges, net (2) 12.8 18.1 53.4 Goodwill impairment charge (3) 183.8 306.6 — Acquisition and other-related costs (4) — 0.3 4.5 (Gain) loss on strategic investments (5) 19.6 2.1 (19.3) Long lived assets impairment charge (6) 109.3 — — Proxy contest charges (7) 8.2 — — Portfolio realignment costs (8) 3.1 — — Pension and postretirement settlement and curtailment charges (income), net (9) — 0.2 — Adjusted EBITDA from continuing operations (Non-GAAP) $ 373.0 $ 376.5 $ 353.0 Net income (loss) from discontinued operations (GAAP) $ (16.8) $ (308.9) $ (111.2) Provision (benefit) for income taxes on discontinued operations (2.8) (86.2) (28.9) Interest expense, net — — — Depreciation and amortization (1) 1.2 8.7 25.4 Restructuring and other (income) charges, net (2) 42.9 168.1 116.8 Goodwill impairment charge (3) — 42.5 — Loss on CTO resales (10) — 52.7 22.0 CTO supply contract termination charges (11) — 100.0 — (Gain) loss on strategic investments (5) — 9.3 — Adjusted EBITDA from discontinued operations (Non-GAAP) $ 24.5 $ (13.8) $ 24.1 Total Adjusted EBITDA (Non-GAAP) $ 397.5 $ 362.7 $ 377.1 _______________ (1) Refer to Note 18 and Note 20 for more information.
We believe this non-GAAP financial measure provides management as well as investors, potential investors, securities analysts, and others with useful information to evaluate the performance of the business, because such measure, when viewed together with our financial results computed in accordance with GAAP, provides a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.
(9) We believe this non-GAAP financial measure provides management as well as investors, potential investors, securities analysts, and others with useful information to evaluate the performance of the business, because such measure, when viewed together with our financial results computed in accordance with GAAP, provides a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.
(3) Refer to Note 8 for more information. (4) Charges represent costs incurred to complete and integrate acquisitions and other strategic investments and include the expensing of the inventory fair value step-up resulting from the application of purchase accounting for acquisitions and certain legal and professional fees associated with the completion of acquisitions and strategic investments.
(3) Refer to Note 8 and Note 20 for more information. (4) Charges represent costs incurred to complete and integrate acquisitions and other strategic investments, and include the expensing of the inventory fair value step-up resulting from the application of purchase accounting for acquisitions, and certain legal and professional fees associated with the completion of acquisitions and strategic investments.
Since these CTO resale activities 39 are directly attributable to the Performance Chemicals’ repositioning, that is, they do not represent normal, recurring expenses necessary to operate our business, we have excluded the CTO resale (income) charges for the purposes of calculating our non-GAAP financial performance measures.
Since these CTO resale activities are directly attributable to the Performance Chemicals' repositioning, that is, they do not represent normal, recurring expenses necessary to operate our business, we have excluded the CTO resale (income) charges for the purposes of calculating our non-GAAP financial performance measures.
If the carrying value of a reporting unit that includes goodwill exceeds its fair 44 value, which is determined using both the income approach and market approach, goodwill is considered impaired. The income approach determines fair value based on discounted cash flow model derived from a reporting unit’s long-term forecasted cash flows.
If the carrying value of a reporting unit that includes goodwill exceeds its fair value, which is determined using both the income approach and market approach, goodwill is considered impaired. The income approach determines fair value based on discounted cash flow model derived from a reporting unit's long-term forecasted cash flows.
We recognize income tax positions that are more likely than not to be realized and accrue interest related to unrecognized income tax positions, which is included as a component of the income tax provision, on the consolidated statements of operations.
We recognize income tax positions that are more likely than not to be realized and accrue interest related to unrecognized income tax positions, which is included as a component of the income tax provision, on the consolidated statements of operations. 46
Investors are cautioned that the forward-looking statements contained in this section and other parts of this Annual Report on Form 10-K involve both risk and 27 uncertainty. Several important factors could cause actual results to differ materially from those anticipated by these statements. Many of these statements are macroeconomic in nature and are, therefore, beyond the control of management.
Investors are cautioned that the forward-looking statements contained in this section and other parts of this Annual Report on Form 10-K involve both risk and 26 uncertainty. Several important factors could cause actual results to differ materially from those anticipated by these statements. Many of these statements are macroeconomic in nature and are, therefore, beyond the control of management.
(2) We regularly perform strategic reviews and assess the return on our operations, which sometimes results in a plan to restructure the business. These costs are excluded from our reportable segment results and for the purposes of calculating our non-GAAP financial performance measures. Refer to Note 15 for more information on the charges.
(2) We regularly perform strategic reviews and assess the return on our operations, which sometimes results in a plan to restructure the business. These costs are excluded from our reportable segment results and for the purposes of calculating our non-GAAP financial performance measures. Refer to Note 15 and Note 20 for more information.
(7) We exclude gains and losses from strategic investments from our segment results, as well as our non-GAAP financial measures, because we do not consider such gains or losses to be directly associated with the operational performance of the segment.
(6) We exclude gains and losses from strategic investments from our segment results, as well as our non-GAAP financial measures, because we do not consider such gains or losses to be directly associated with the operational performance of the segment.
In performing the fair value analysis, management makes various judgments, estimates, and assumptions, the most significant of which are the assumptions related to revenue growth rates, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") margin, and discount rate.
In performing the fair value analysis, management makes various judgments, estimates, and assumptions, the most significant of which are the assumptions related to revenue growth rates, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") margins, and discount rate.
If these earnings were distributed, such amounts would be subject to U.S. federal income tax at the statutory rate less the available foreign tax credits, if any, and would potentially be subject to withholding taxes in the various jurisdictions.
If these earnings were distributed, such amounts could be subject to U.S. federal income tax at the statutory rate less the available foreign tax credits, if any, and could potentially be subject to withholding taxes in the various jurisdictions.
Since this contract termination is directly attributable to the Performance Chemicals’ repositioning, that is, it does not represent normal, recurring expenses necessary to operate our business, we have excluded the CTO supply contract termination charges for the purposes of calculating our non-GAAP financial performance measures. Refer to Note 2 and Note 15 for more information.
Since this contract termination is directly attributable to the Performance Chemicals' repositioning, that is, it does not represent normal, recurring expenses necessary to operate our business, we have excluded the CTO supply contract termination charges for the purposes of calculating our non-GAAP financial performance measures. Refer to Note 20 for more information.
Further, in the future, other items with similar characteristics to those currently included in adjusted EBITDA, that have a similar impact on comparability of periods, and which are not known at this time, may exist and impact adjusted EBITDA. 41 Liquidity and Capital Resources The primary source of liquidity for our business is the cash flow provided by operating activities.
Further, in the future, other items with similar characteristics to those currently included in adjusted EBITDA from continuing operations, that have a similar impact on comparability of periods, and which are not known at this time, may exist and impact adjusted EBITDA from continuing operations. 42 Liquidity and Capital Resources The primary source of liquidity for our business is the cash flow provided by operating activities.
The decrease of $9.3 million in 2024 was driven by unfavorable pricing and sales mix of $18.8 million, and unfavorable foreign currency exchange impacts and other charges of $2.8 million.
The decrease of $10.0 million in 2024, was driven by unfavorable pricing and sales mix of $18.8 million, and unfavorable foreign currency exchange impacts and other charges of $2.9 million.
For the years ended December 31, 2024 and 2023, the loss on CTO resales relates to the Performance Chemicals segment. Refer to Note 2 and Note 15 for more information. (6) As consideration for the termination of the CTO supply contract, we made cash payments totaling $100.0 million during 2024.
For the years ended December 31, 2024 and 2023, the loss on CTO resales relates to the Performance Chemicals segment. Refer to Note 20 for more information. (11) As consideration for the termination of the CTO supply contract, we made cash payments totaling $100.0 million during 2024.
In connection with such transactions, or to fund other anticipated uses of cash, we may modify our existing revolving credit facility, redeem all or part of our outstanding senior notes, seek additional debt financing, issue equity securities, or some combination thereof. Cash and cash equivalents totaled $68.0 million at December 31, 2024.
In connection with such transactions, or to fund other anticipated uses of cash, we may modify our existing revolving credit facility, redeem all or part of our outstanding senior notes, seek additional debt financing, issue equity securities, or some combination thereof. Cash and cash equivalents totaled $78.1 million at December 31, 2025.
Acquisition-related costs Years Ended December 31, 2024, 2023, and 2022 Acquisition costs were $0.3 million, $3.6 million, and $5.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. For the twelve months ended December 31, 2024, 2023, and 2022, all charges related to the integration of Ozark Materials into our Performance Chemicals segment.
Acquisition-related costs Years Ended December 31, 2025, 2024, and 2023 Acquisition costs were zero, $0.3 million, and $3.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. For the twelve months ended December 31, 2024, and 2023, all charges related to the integration of Ozark Materials into our Performance Chemicals reportable segment.
The charge was is included within Goodwill impairment charge on the consolidated statements of operations for the year ended December 31, 2024. Specific to our long-lived assets, we determined that the undiscounted cash flows were in excess of the carrying values and therefore concluded that no impairment existed.
The charge is included within "Goodwill impairment charge" on the consolidated statements of operations for the twelve months ended December 31, 2025. Specific to our long-lived assets, we determined that the undiscounted cash flows were in excess of the carrying values and therefore concluded that no impairment existed.
Research and technical expenses Years Ended December 31, 2024, 2023, and 2022 Research and technical expenses as a percentage of Net sales remained relatively consistent period over period, totaling 2.0 percent of sales in the year ended December 31, 2024, compared to 1.9 percent in the year ended December 31, 2023, and 1.8 percent in the year ended December 31, 2022.
Research and technical expenses Years Ended December 31, 2025, 2024, and 2023 Research and technical expenses as a percentage of Net sales remained relatively consistent period over period, totaling 2.4 percent of sales in the year ended December 31, 2025, compared to 2.0 percent in the year ended December 31, 2024, and 2.1 percent in the year ended December 31, 2023.
The potential tax implications of the repatriation of unremitted earnings are driven by facts at the time of distribution, therefore, it is not practicable to estimate the income tax liabilities that might be incurred if such cash and earnings were repatriated to the U.S.
The potential tax implications of the repatriation of unremitted earnings are driven by facts at the time of distribution, therefore, it is not practicable to estimate the income tax liabilities that might be incurred if such cash and earnings were repatriated to the U.S. Refer to Note 16 for more information.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction Management’s discussion and analysis of Ingevity’s financial condition and results of operations (“MD&A”) should be read in conjunction with Item 8. Financial Statements and Supplementary Data .
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction Management's discussion and analysis of Ingevity's financial condition and results of operations ("MD&A") should be read in conjunction with Item 8. Financial Statements and Supplementary Data .
Measurement Alternative Investments For the year ended December 31, 2024, the Company identified triggering events indicating that investments being accounted for under the measurement alternative may be impaired and recognized impairment charges of $11.5 million, recorded in Other (income) expense, net on the consolidated statement of operations.
Measurement Alternative Investments During the year ended December 31, 2025, the Company identified triggering events indicating that investments being accounted for under the measurement alternative may be impaired, and recognized impairment charges of $11.9 million, recorded in "Other (income) expense, net" on the consolidated statement of operations for the twelve months ended December 31, 2025.
(2) See Note 15 for more information. 33 Interest expense Years Ended December 31, 2024, 2023, and 2022 Years Ended December 31, In millions 2024 2023 2022 Finance lease obligations (1) $ 7.3 $ 7.3 $ 7.5 Revolving credit facility and term loan (2) (3) 57.2 59.1 21.2 Senior Notes (3) 22.4 22.4 33.1 Accounts receivable securitization (3) 5.7 1.5 — Litigation related interest expense (4) 5.2 3.0 — Total interest expense $ 97.8 $ 93.3 $ 61.8 _______________ (1) See Note 13 for more information.
Interest expense Years Ended December 31, 2025, 2024, and 2023 Years Ended December 31, In millions 2025 2024 2023 Finance lease obligations (1) $ 7.2 $ 7.3 $ 7.3 Revolving credit facility and term loan (2) 39.3 57.2 59.1 Senior Notes (2) 22.4 22.4 22.4 Accounts receivable securitization (2) 4.2 5.7 1.5 Litigation related interest expense (3) 4.0 4.0 2.4 Other 1.2 1.2 0.6 Total Interest expense $ 78.3 $ 97.8 $ 93.3 _______________ (1) See Note 13 for more information.
Refer to Note 16 for more information. (5) Due to the DeRidder Plant closure, and the corresponding reduced CTO refining capacity, we were obligated, under an existing CTO supply contract, to purchase CTO at amounts in excess of required CTO volumes. As of July 1, 2024, we terminated the CTO supply contract that resulted in these excess CTO volumes.
(10) Due to the DeRidder Plant closure, and the corresponding reduced CTO refining capacity, we were obligated, under an existing CTO supply contract, to purchase CTO at amounts in excess of required CTO volumes. As of July 1, 2024, we terminated the CTO supply contract that resulted in these excess CTO volumes.
(2) See Note 9 for more information. (3) Primarily consists of bank interest. Provision (benefit) for income taxes Years Ended December 31, 2024, 2023, and 2022 For the years ended December 31, 2024, 2023, and 2022, our effective tax rate was 19.7 percent, 46.5 percent, and 21.5 percent respectively.
(2) See Note 9 for more information. (3) Primarily consists of bank interest. Provision (benefit) for income taxes Years Ended December 31, 2025, 2024, and 2023 For the years ended December 31, 2025, 2024, and 2023, our effective tax rate was (5.7) percent, 13.6 percent, and 18.5 percent respectively.
We have no material commitments associated with these projected capital expenditures as of December 31, 2024. 42 Cash flow comparison of Years Ended December 31, 2024, 2023, and 2022 Years Ended December 31, In millions 2024 2023 2022 Net cash provided by (used in) operating activities $ 128.6 $ 205.1 $ 313.4 Net cash provided by (used in) investing activities (79.5) (77.3) (551.9) Net cash provided by (used in) financing activities (70.2) (99.9) 48.1 Cash flows provided by (used in) operating activities Cash provided by operating activities, which consists of net income (loss) adjusted for non-cash items including the cash impact from changes in operating assets and liabilities (i.e., working capital), totaled $128.6 million for the year ended December 31, 2024.
We have no material commitments associated with these projected capital expenditures as of December 31, 2025. 43 Cash flow comparison of Years Ended December 31, 2025, 2024, and 2023 Years Ended December 31, In millions 2025 2024 2023 Net cash provided by (used in) operating activities $ 331.2 $ 128.6 $ 205.1 Net cash provided by (used in) investing activities (57.5) (79.5) (77.3) Net cash provided by (used in) financing activities (252.2) (70.2) (99.9) Cash flows provided by (used in) operating activities Cash provided by operating activities, inclusive of continuing and discontinued operations, consists of net income (loss) adjusted for non-cash items including the cash impact from changes in operating assets and liabilities (i.e., working capital), totaled $331.2 million for the year ended December 31, 2025.
The increase of $23.6 million in 2024 was driven by favorable pricing and sales mix of $17.3 million (three percent), and a volume increase of $11.2 million (two percent), partially offset by unfavorable foreign currency exchange impacts of $4.9 million (one percent). 35 Segment EBITDA.
Year Ended December 31, 2024 vs. 2023 Segment net sales. The increase of $23.6 million in 2024 was driven by favorable pricing and sales mix of $17.3 million (three percent), and a volume increase of $11.2 million (two percent), partially offset by unfavorable foreign currency exchange impacts of $4.9 million (one percent). 34 Segment EBITDA.
(4) See Note 18 for more information.q Interest income Years Ended December 31 2024, 2023, and 2022 Years Ended December 31, In millions 2024 2023 2022 Restricted investment (1) $ 2.6 $ 2.4 $ 2.1 Fixed-to-fixed cross-currency interest rate swap (2) — — 1.1 Floating-to-fixed interest rate swaps (2) 0.8 — 1.7 Other (3) 4.3 3.9 2.6 Total interest income $ 7.7 $ 6.3 $ 7.5 _______________ (1) See Note 5 for more information.
(3) See Note 17 for more information. 32 Interest income Years Ended December 31 2025, 2024, and 2023 Years Ended December 31, In millions 2025 2024 2023 Restricted investment (1) $ 2.0 $ 2.6 $ 2.4 Floating-to-fixed interest rate swaps (2) 0.8 0.8 — Other (3) 2.4 4.3 3.9 Total Interest income $ 5.2 $ 7.7 $ 6.3 _______________ (1) See Note 5 for more information.
This decrease was driven by a payment to terminate a Performance Chemicals CTO contract of $100.0 million, reduced cash earnings of $75.8 million, CTO resale cash outflows of $35.5 million, increased spending on restructuring initiatives of $15.3 million, and an increase in cash interest paid of $2.7 million due primarily to rising interest rates when compared to 2023.
This decrease was driven by a payment to terminate a Performance Chemicals CTO contract of $100.0 million, CTO resale cash outflows of $35.5 million, increased spending on restructuring initiatives of $15.3 million, a net reduction in trade working capital (accounts receivable, inventory, and accounts payable) of $5.8 million, and an increase in cash interest paid of $2.7 million due primarily to rising interest rates when compared to 2023.
Adjusted EBITDA is defined as net income (loss) plus interest expense, net, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, acquisition and other-related (income) costs, goodwill impairment charge, litigation verdict charges, (loss) gain on strategic investments, loss on CTO resales, CTO supply contract termination charges, and pension and postretirement settlement and curtailment (income) charges, net.
Adjusted EBITDA from discontinued operations is defined as net income (loss) from discontinued operations plus interest expense, interest income, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, goodwill impairment charges, acquisition and other-related (income) costs, (gain) loss on strategic investments, loss on CTO resales, and CTO supply contract termination charges.
In millions Years Ended December 31, 2024 2023 2022 Advanced Polymer Technologies - Net sales $ 188.6 $ 204.0 $ 244.7 Segment EBITDA $ 35.2 $ 44.5 $ 40.0 Net Sales Comparison of Years Ended December 31, 2024, 2023, and 2022 Change vs. prior year In millions Prior year Net sales Volume Price/Mix Currency effect Current year Net sales Year Ended December 31, 2024 vs 2023 $ 204.0 7.1 (18.8) (3.7) $ 188.6 Year Ended December 31, 2023 vs 2022 $ 244.7 (58.3) 17.0 0.6 $ 204.0 Year Ended December 31, 2024 vs. 2023 Segment net sales.
In millions Years Ended December 31, 2025 2024 2023 Advanced Polymer Technologies - Net sales $ 160.2 $ 188.6 $ 204.0 Segment EBITDA $ 32.1 $ 39.0 $ 49.0 Net Sales Comparison of Years Ended December 31, 2025, 2024, and 2023 Change vs. prior year In millions Prior year Net sales Volume Price/Mix Currency effect Current year Net sales Year Ended December 31, 2025 vs 2024 $ 188.6 (28.5) (1.7) 1.8 $ 160.2 Year Ended December 31, 2024 vs 2023 $ 204.0 7.0 (18.7) (3.7) $ 188.6 Year Ended December 31, 2025 vs. 2024 Segment net sales.
We continue to include the service cost, amortization of prior service cost, interest costs, expected return on plan assets, and amortized actual gains and losses in our segment EBITDA. Refer to Note 14 for more information.
These are excluded from our segment results because we consider these costs to be outside our operational performance. We continue to include the service cost, amortization of prior service cost, interest costs, expected return on plan assets, and amortized actual gains and losses in our segment EBITDA. Refer to Note 14 for more information.
Adjusted EBITDA is not meant to be considered in isolation nor as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. Adjusted EBITDA is utilized by management as a measure of profitability.
These measures are not meant to be considered in isolation nor as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. Total Adjusted EBITDA, Adjusted EBITDA from continuing operations, and Adjusted EBITDA from discontinued operations are utilized by management as a measure of profitability.
The decrease of $15.4 million in 2024 was driven by unfavorable pricing and sales mix of $18.8 million (nine percent), and unfavorable foreign currency exchange of $3.7 million (two percent), partially offset by volume growth of $7.1 million (three percent). Segment EBITDA.
Year Ended December 31, 2024 vs. 2023 Segment net sales. The decrease of $15.4 million in 2024 was driven by unfavorable pricing and sales mix of $18.7 million (nine percent) and unfavorable foreign currency exchange of $3.7 million (two percent), partially offset by volume growth of $7.0 million (3 percent). Segment EBITDA.
We expect our cash flow provided by operations combined with cash on hand and available capacity under our revolving credit facility to be sufficient to fund our planned operations and meet our interest and other contractual obligations for at least the next twelve months. As of December 31, 2024, our undrawn capacity under our revolving credit facility was $302.4 million.
We expect our cash flow provided by operations combined with cash on hand and available capacity under our revolving credit facility and revolving accounts receivable securitization to be sufficient to fund our planned operations and meet our interest and other contractual obligations for at least the next twelve months.
In millions Years Ended December 31, 2024 2023 2022 Total Performance Materials - Net sales $ 609.6 $ 586.0 $ 548.5 Segment EBITDA $ 319.1 $ 286.6 $ 252.2 Net Sales Comparison of Years Ended December 31, 2024, 2023, and 2022 Change vs. prior year In millions Prior year Net sales Volume Price/Mix Currency effect Current year Net sales Year Ended December 31, 2024 vs 2023 $ 586.0 11.2 17.3 (4.9) $ 609.6 Year Ended December 31, 2023 vs 2022 $ 548.5 17.3 32.2 (12.0) $ 586.0 Year Ended December 31, 2024 vs. 2023 Segment net sales.
In millions Years Ended December 31, 2025 2024 2023 Total Performance Materials - Net sales $ 606.9 $ 609.6 $ 586.0 Segment EBITDA $ 326.3 $ 333.2 $ 303.1 Net Sales Comparison of Years Ended December 31, 2025, 2024, and 2023 Change vs. prior year In millions Prior year Net sales Volume Price/Mix Currency effect Current year Net sales Year Ended December 31, 2025 vs 2024 $ 609.6 (3.7) 0.8 0.2 $ 606.9 Year Ended December 31, 2024 vs 2023 $ 586.0 11.2 17.3 (4.9) $ 609.6 Year Ended December 31, 2025 vs. 2024 Segment net sales.
The decrease in SG&A expenses is primarily due to lower employee-related costs of $18.4 million, and decreased travel and other miscellaneous costs of $6.9 million, partially offset by increased amortization expense of $10.2 million due to the Ozark Materials acquisition.
The decrease in SG&A expenses is primarily due decreased travel and other miscellaneous costs of $8.6 million, and decreased amortization expense of $1.6 million, partially offset by increased employee-related costs of $6.2 million.
Goodwill impairment charge Years Ended December 31, 2024, 2023, and 2022 Goodwill impairment charge of $349.1 million for the year ended December 31, 2024 within our Performance Chemicals reporting unit. See Note 8 for more information.
The goodwill impairment charge of $306.6 million for the year ended December 31, 2024 was recognized within our Performance Chemicals reporting unit. See Note 8 for more information.
Cash used in financing activities for the year ended December 31, 2023, was $99.9 million and was driven by share repurchases of $92.1 million, and net payments on the revolving credit facility and other borrowings of $87.9 million, offset by proceeds from our accounts receivable securitization facility of $81.3 million. 43 New Accounting Guidance Refer to Note 3 for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on our Consolidated Financial Statements.
Cash used in financing activities for the year ended December 31, 2024, was $70.2 million and was primarily driven by net payments on the revolving credit facility and other borrowings of $66.1 million. 44 New Accounting Guidance Refer to Note 3 for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on our Consolidated Financial Statements.
The sales decrease was driven by a volume decline of $58.3 million (24 percent), partially offset by favorable pricing and sales mix of $17.0 million (seven percent), and favorable foreign currency exchange of $0.6 million (zero percent). Segment EBITDA.
The decrease of $2.7 million in 2025 was driven by a volume decline of $3.7 million (one percent), partially offset by favorable pricing and sales mix of $0.8 million (zero percent), and favorable foreign currency exchange impacts of $0.2 million (zero percent). Segment EBITDA.
Year Ended December 31, 2024 vs. 2023 The Net sales decrease in 2024 was driven by volume decline of $274.9 million (16 percent), unfavorable foreign exchange impacts of $9.8 million (one percent), and unfavorable pricing and sales mix of $1.0 million (zero percent).
Year Ended December 31, 2025 vs. 2024 The Net sales decrease in 2025 was driven by a volume decline of $41.2 million (three percent), partially offset by favorable pricing and sales mix of $6.9 million (one percent) and favorable foreign exchange impacts of $1.8 million (zero percent).
The increase of $32.5 million in 2024 was driven by decreased manufacturing costs of $26.0 million, pricing and sales mix of $11.9 million, and favorable volume of $6.3 million. The increase was partially offset by higher SG&A expenses and research and technical costs of $10.9 million, and unfavorable foreign currency exchange and other charges of $0.8 million.
The decrease of $6.9 million in 2025 was driven by increased SG&A expenses and research and technical costs of $6.0 million, volume decline of $5.6 million, and LIFO impact of $3.4 million, partially offset by favorable foreign currency exchange and other charges of $3.7 million, decreased manufacturing costs of $3.6 million, and favorable pricing and sales mix of $0.8 million.
Capital spending included the base maintenance capital supporting ongoing operations and cost improvement and growth spending in our Advanced Polymer Technologies segment.
Capital spending included the base maintenance capital supporting ongoing operations and cost improvement and growth spending. Cash used in investing activities for 2024 was driven by capital spending. Capital spending included the base maintenance capital supporting ongoing operations and cost improvement and growth spending in our Advanced Polymer Technologies segment.
Year Ended December 31, 2023 vs. 2022 SG&A expenses were $183.7 million (11 percent of Net sales) and $198.8 million (12 percent of Net sales) for the years ended December 31, 2023 and 2022, respectively.
Year Ended December 31, 2024 vs. 2023 SG&A expenses were $157.8 million (13 percent of Net sales) and $161.8 million (13 percent of Net sales) for the years ended December 31, 2024 and 2023, respectively.
Income taxes We are subject to income taxes in the U.S. and numerous foreign jurisdictions, including China and the United Kingdom. The provision for income taxes includes income taxes paid, currently payable or receivable, and deferred taxes. We follow the liability method of accounting for income taxes in accordance with current accounting standards regarding the accounting for income taxes.
The provision for income taxes includes income taxes paid, currently payable or receivable, and deferred taxes. We follow the liability method of accounting for income taxes in accordance with current accounting standards regarding the accounting for income taxes.
Gross profit includes the realized savings of $68.0 million from the Performance Chemicals repositioning action initiated in 2023. Refer to the Segment Operating Results section included within this MD&A for more information on the drivers of the changes in gross profit period over period for all segments.
Refer to the Segment Operating Results section included within this MD&A for more information on the drivers of the changes in gross profit period over period for all segments.
Our products are used in a variety of demanding applications, including adhesives, agrochemicals, asphalt paving, bioplastics, coatings, elastomers, lubricants, paint for road markings, oil drilling, and automotive components. We operate in three reportable segments: Performance Materials, Performance Chemicals, and Advanced Polymer Technologies.
Our products are used in a variety of demanding applications, including automotive gasoline vapor emissions control systems, food, water and chemical filtration, asphalt paving, agrochemical dispersants, bioplastics, coatings, elastomers, and paint for road markings. We operate in three reportable segments: Performance Materials, Performance Chemicals, and Advanced Polymer Technologies.
This non-GAAP measure is not intended to replace the presentation of financial results in accordance with GAAP and investors should consider the limitations associated with these non-GAAP measures, including the potential lack of comparability of these measures from one company to another. A reconciliation of Adjusted EBITDA to net income is set forth within this section.
Total adjusted EBITDA is defined as Adjusted EBITDA from continuing operations and Adjusted EBITDA from discontinued operations. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP and investors should consider the limitations associated with these non-GAAP measures, including the potential lack of comparability of these measures from one company to another.
Other (income) expense, net Years Ended December 31, 2024, 2023, and 2022 Years Ended December 31, In millions 2024 2023 2022 (Gain) loss on strategic investments (1) $ 11.4 $ (19.3) $ — Foreign currency transaction (gain) loss 4.2 3.7 2.3 CEO severance charges 4.8 — — Loss on CTO resales (2) 52.7 22.0 — CTO supply contract termination charges (2) 100.0 — — Other (income) expense, net (3.3) (0.7) (4.0) Total Other (income) expense, net $ 169.8 $ 5.7 $ (1.7) _______________ (1) See Note 5 for more information.
Other (income) expense, net Years Ended December 31, 2025, 2024, and 2023 Years Ended December 31, In millions 2025 2024 2023 (Gain) loss on strategic investments (1) $ 19.6 $ 2.1 $ (19.3) Foreign currency transaction (gain) loss (0.6) 4.2 3.7 CEO severance charges — 4.8 — Proxy contest charges (2) 8.2 — — Portfolio realignment costs (2) 3.1 — — Other (income) expense, net (5.3) (3.2) (0.6) Total Other (income) expense, net $ 25.0 $ 7.9 $ (16.2) _______________ (1) See Note 5 for more information.
Capital expenditure categories Years Ended December 31, In millions 2024 2023 2022 Maintenance $ 50.8 $ 65.5 $ 57.4 Safety, health and environment 4.1 11.3 19.7 Growth and cost improvement 22.7 33.0 65.4 Total capital expenditures $ 77.6 $ 109.8 $ 142.5 Cash flows provided by (used in) financing activities Cash used in financing activities for the year ended December 31, 2024, was $70.2 million and was primarily driven by net payments on the revolving credit facility and other borrowings of $66.1 million.
Capital expenditure categories Years Ended December 31, In millions 2025 2024 2023 Maintenance $ 34.8 $ 48.3 $ 60.9 Safety, health and environment 12.7 4.0 11.3 Growth and cost improvement 9.9 18.9 17.2 Total capital expenditures $ 57.4 $ 71.2 $ 89.4 Cash flows provided by (used in) financing activities Cash used in financing activities for the year ended December 31, 2025, was $252.2 million and was primarily driven by net payments on the revolving credit facility and other borrowings of $192.3 million, and share repurchases of $56.3 million.
Our analysis included significant assumptions such as: revenue growth rate, EBITDA margin, and discount rate, which are judgmental, and variations in any assumptions could result in materially different calculations of fair value.
Our analysis included significant assumptions such as the revenue growth rates, EBITDA margins, and EBITDA exit multiple, which are judgmental. Variations in any assumptions could result in materially different calculations of undiscounted cash flows.
We have excluded the following items from segment EBITDA: interest expense associated with corporate debt facilities, interest income, income taxes, depreciation, amortization, restructuring and other income (charges), net, including inventory lower of cost or market charges associated with restructuring actions, goodwill impairment charge, acquisition and other-related income (costs), litigation verdict charges, gain (loss) on strategic investments, loss on CTO resales, CTO supply contract termination charges, and pension and postretirement settlement and curtailment income (charges), net.
We have excluded the following items from EBITDA from discontinued operations: income taxes, depreciation, amortization, restructuring and other income (charges), net, inventory lower of cost or market charges associated with restructuring actions, goodwill impairment charges, gain (loss) on sale of strategic investments, loss on CTO resales, CTO supply contract termination charges, indirect costs allocated to Divestiture.
(8) Our pension and postretirement settlement and curtailment charges (income) are related to the acceleration of prior service costs, as a result of a reduction in the number of participants within the Union Hourly defined benefit pension plan. These are excluded from our segment results because we consider these costs to be outside our operational performance.
(8) Charges represent professional service fees related to a review of the company's portfolio. (9) Our pension and postretirement settlement and curtailment charges (income) are related to the acceleration of prior service costs, as a result of a reduction in the number of participants within the Union Hourly defined benefit pension plan.
In addition, we may also evaluate and consider purchases pursuant to our stock repurchase program (and related excise tax payments), strategic acquisitions, joint ventures, or other transactions to create stockholder value and enhance financial performance.
In addition, we may also evaluate and consider strategic investments, divestitures, joint ventures, or other transactions to create stockholder value and enhance financial performance.
The decrease was partially offset by lower manufacturing costs of $8.8 million, volume growth of $2.9 million, and lower SG&A expenses of $0.6 million. 37 Year Ended December 31, 2023 vs. 2022 Segment net sales.
The decrease was partially offset by LIFO impact of $12.9 million, higher SG&A expenses of $4.5 million, and a volume decline of $4.0 million. Year Ended December 31, 2024 vs. 2023 Segment net sales.
Our analysis includes significant assumptions such as revenue growth rate, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") margin, and discount rate, which are judgmental, and variations in any assumptions could result in materially different calculations of fair value.
The triggering event required us to conduct an impairment analysis of the Performance Chemicals road markings long-lived assets, which included significant assumptions such as the revenue growth rates, earnings before interest, taxes, depreciation, and amortization ("EBITDA") margins, and discount rate, which are judgmental. Variations in any assumptions could result in materially different calculations of fair value.
Cash provided by operating activities for 2024, when compared to 2023, decreased by $76.5 million.
Cash provided by operating activities for 2025, when compared to 2024, increased by $202.6 million.
These increases were partially offset by volume declines of $23.7 million, and unfavorable foreign currency exchange impacts and other miscellaneous charges of $4.7 million. 38 Use of Non-GAAP Financial Measures Ingevity has presented the financial measure, Adjusted EBITDA, defined below, which has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to net income, the most directly comparable financial measure calculated in accordance with GAAP.
The decrease was partially offset by lower SG&A costs of $18.1 million, and a LIFO liquidation benefit of $6.4 million. 38 Use of Non-GAAP Financial Measures Ingevity has presented the financial measures, Total Adjusted EBITDA, Adjusted EBITDA from continuing operations, and Adjusted EBITDA from discontinued operations, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and has provided a reconciliation to net income, the most directly comparable financial measure calculated in accordance with GAAP.
Selling, general, and administrative expenses Year Ended December 31, 2024 vs. 2023 Selling, general, and administrative ("SG&A") expenses were $166.7 million (12 percent of Net sales) and $183.7 million (11 percent of Net sales) for the years ended December 31, 2024 and 2023, respectively. Overall, SG&A decreased by approximately $17.0 million or nine percent.
Selling, general, and administrative expenses Year Ended December 31, 2025 vs. 2024 Selling, general, and administrative ("SG&A") expenses were $171.2 million (15 percent of Net sales) and $157.8 million (13 percent of Net sales) for the years ended December 31, 2025 and 2024, respectively. Overall, SG&A increased by approximately $13.4 million or eight percent.
The cash and cash equivalents balance at December 31, 2024, includ ed $63.9 million held by our foreign subsidiaries. Cash and earnings of our foreign subsidiaries are generally used to finance our foreign operations and their capital expenditures. We believe that our foreign holdings of cash will not have a material adverse impact on our U.S. liquidity.
The cash and cash equivalents balance at December 31, 2025, includ ed $74.2 million held by our foreign subsidiaries. Cash and earnings of our foreign subsidiaries are generally used to finance our foreign operations and their capital expenditures.
Segment EBITDA increased by $34.4 million due to pricing and sales mix of $21.1 million, decreased SG&A expenses and research and technical costs of $11.6 million, and favorable volume of $10.9 million. The increase was partially offset by higher manufacturing costs of $8.8 million, and unfavorable foreign currency exchange impacts of $0.4 million.
The decrease of $6.9 million in 2025 was driven by a volume decline of $10.4 million, unfavorable pricing and sales mix of $1.8 million, and higher SG&A expenses of $1.5 million. The decrease was partially offset by lower manufacturing costs of $3.7 million, and favorable foreign currency exchange impacts and other charges of $3.1 million.
We believe Adjusted EBITDA is a useful measure because it excludes the effects of financing and investment activities as well as non-operating activities.
We believe these measures are useful because they exclude the effects of financing and investment activities as well as non-operating activities.
An explanation of the change in the effective tax rate is presented in Note 17. 34 Segment Operating Results In addition to the information discussed above, the following sections discuss the results of operations for each of Ingevity's segments. Our segments are (i) Performance Materials, (ii) Performance Chemicals, and (iii) Advanced Polymer Technologies.
Additionally, a significant decrease in the Federal Research and Development credit in 2025, further increased total tax expense as compared to 2024. 33 Segment Operating Results In addition to the information discussed above, the following sections discuss the results of operations for each of Ingevity's segments. Our segments are (i) Performance Materials, (ii) Performance Chemicals, and (iii) Advanced Polymer Technologies.
Year Ended December 31, 2023 vs. 2022 The Net sales increase in 2023 was driven by favorable pricing and sales mix of $142.3 million (nine percent), primarily attributed to an increase in Performance Chemicals of $93.1 million, partially offset by volume decline of $106.3 million (six percent), and unfavorable foreign exchange impacts of $12.2 million (one percent). 31 Gross profit Year Ended December 31, 2024 vs. 2023 Gross profit decrease of $17.2 million was driven by unfavorable sales volume of $35.8 million, unfavorable pricing and sales mix of $6.4 million, and unfavorable foreign exchange impacts of $2.9 million, partially offset by decreased manufacturing costs of $27.9 million.
Year Ended December 31, 2024 vs. 2023 The Net sales decrease in 2024 was driven by a volume decline of $8.7 million (one percent), and unfavorable foreign exchange impacts of $9.0 million (one percent), partially offset by favorable pricing and sales mix of $2.3 million (zero percent). 30 Gross profit Year Ended December 31, 2025 vs. 2024 Gross profit decrease of $3.3 million was driven by improved operating efficiencies of $23.4 million, favorable pricing and sales mix of $6.8 million, and favorable foreign exchange impacts of $2.8 million, offset by unfavorable sales volume of $20.0 million and LIFO impact of $16.3 million.
Year Ended December 31, 2023 vs. 2022 Segment net sales. The increase in 2023 was driven by favorable pricing and sales mix of $32.2 million (six percent), and a volume increase of $17.3 million (three percent), partially offset by unfavorable foreign currency exchange impacts of $12.0 million (two percent). Segment EBITDA.
The increase was partially offset by a volume decline of $11.2 million, and unfavorable pricing and sales mix of $3.0 million. Year Ended December 31, 2024 vs. 2023 Net sales from discontinued operations.
As a result, we concluded that the carrying amount of the Performance Chemicals reporting unit exceeded its fair value, resulting in a non-cash goodwill impairment charge of $349.1 million, which represented all of the goodwill within the Performance Chemicals' reportable segment.
(3) During the second quarter of 2024, the company concluded that the carrying value of the Performance Chemicals reporting unit exceeded its fair value, resulting in a non-cash goodwill impairment charge.
The repositioning focused on reducing exposure to lower margin end-use markets of our industrial specialties product line, such as adhesives, publication inks, and oilfield, representing approximately 45 percent of our industrial specialties product line's historical annualized net sales.
The PC Repositioning Actions were designed to: • Prioritize growth in our higher-margin Performance Chemicals product lines, such as pavement technologies; • Improve the financial performance of the industrial specialties product line; and • Reduce exposure to lower-margin, more cyclical end-use markets, including adhesives, publication inks, and oilfield applications, which historically represented approximately 45 percent of our industrial specialties product line's pre-2023 annualized net sales.
Refer to Note 19 for more information. CTO Resale Activity The DeRidder Plant closure, and the corresponding reduced CTO refining capacity, significantly reduced our CTO volume requirements. However, we were obligated under an existing CTO supply contract to purchase CTO volumes through 2025 at amounts in excess of the CTO volumes needed to support our business operations.
(4) Due to the DeRidder Plant closure and the corresponding reduced CTO refining capacity, we were obligated, under an existing CTO supply contract, to purchase CTO through 2025 at amounts in excess of required CTO volumes. On July 1, 2024, the CTO supply contract that resulted in these excess CTO volumes was terminated.
The decrease of $293.9 million in 2024 was driven by a volume decrease of $293.2 million (33 percent), as a result of a decrease in industrial specialties ($262.4 million) and road technologies ($30.8 million), and unfavorable foreign currency exchange of $1.2 million (zero percent).
The decrease of $23.6 million in 2024 was driven by a volume decline of $26.9 million (six percent), as a result of a decrease in pavement technologies ($17.8 million) and road markings ($9.1 million), and unfavorable 35 foreign currency exchange of $0.4 million (zero percent), partially offset by favorable pricing and sales mix of $3.7 million (one percent), comprised of pavement technologies ($7.0 million), offset by road markings ($3.3 million).
Additionally, discrete tax items could drive variability in our projected effective tax rate. All of these components could significantly impact such financial measures.
These components, net of tax, include further restructuring and other 41 income (charges), net; additional acquisition and other-related income (costs); additional pension and postretirement settlement and curtailment (income) charges; and revisions due to legislative tax rate changes. Additionally, discrete tax items could drive variability in our projected effective tax rate. All of these components could significantly impact such financial measures.
In addition to the cash savings, we expect to realize approximately $15 million to $17 million in depreciation and intangible amortization expenses, respectively. During the year ended December 31, 2024, we realized savings of approximately $10 million. We expect to realize the remaining savings in 2025.
In addition to the cash savings, we realized approximately $12 million in lower full year depreciation and intangible amortization expenses.
Prior Year Net sales are expected to be between $1.3 billion and $1.4 billion for 2025. We expect growth in our Performance Materials reportable segment due to increased pricing on select products while global automotive production remains flat compared to the prior year.
We expect Net sales in our Performance Materials reportable segment to grow low-single digits as increased pricing on select products partially offsets forecasted decline in global automotive production for ICE powertrains compared to the prior year.
As of December 31, 2024, $54.5 million of the charges to be settled in cash have been paid and all non-cash charges have been incurred. In total, we expect approximately $100 million of cash charges, including approximately $20-$25 million during 2025.
We expect to incur approximately $10 million of additional cash charges during 2026. Through December 31, 2025, we have incurred $353.7 million in total charges, including $248.3 million of non-cash asset-related charges and $105.4 million in cash charges. As of December 31, 2025, we have paid $91.3 million of the cash charges.
We anticipate that our Advanced Polymer Technologies segment EBITDA will improve versus prior year as our enacted pricing and mix strategies will produce segment EBITDA margins of around 20 percent. A reconciliation of net income to adjusted EBITDA as projected for 2025 is not provided.
We anticipate that our Advanced Polymer Technologies segment EBITDA will improve versus prior year as volume growth is partially offset by defensive pricing actions to maintain segment EBITDA margins of around 20 percent. Corporate and Other costs are expected to be consistent 2025.
Years Ended December 31, In millions 2024 2023 2022 Total Performance Chemicals - Net sales $ 608.2 $ 902.1 $ 875.1 Road Technologies product line 342.3 369.8 241.3 Industrial Specialties product line 265.9 532.3 633.8 Segment EBITDA $ 14.7 $ 65.7 $ 160.4 Net Sales Comparison of Years Ended December 31, 2024, 2023, and 2022 Change vs. prior year In millions Prior year Net sales Volume Price/Mix Currency effect Current year Net sales Year Ended December 31, 2024 vs 2023 $ 902.1 (293.2) 0.5 (1.2) $ 608.2 Road Technologies product line 369.8 (30.8) 3.7 (0.4) 342.3 Industrial Specialties product line 532.3 (262.4) (3.2) (0.8) 265.9 Year Ended December 31, 2023 vs 2022 $ 875.1 (65.3) 93.1 (0.8) $ 902.1 Road Technologies product line 241.3 98.4 30.4 (0.3) 369.8 Industrial Specialties product line 633.8 (163.7) 62.7 (0.5) 532.3 Year Ended December 31, 2024 vs. 2023 Segment net sales.
Years Ended December 31, In millions 2025 2024 2023 Performance Chemicals - Net sales $ 400.5 $ 401.9 $ 425.5 Pavement Technologies product line 302.6 300.9 312.1 Road Markings product line 97.9 101.0 113.4 Segment EBITDA $ 60.3 $ 53.7 $ 71.1 Net Sales Comparison of Years Ended December 31, 2025, 2024, and 2023 Change vs. prior year In millions Prior year Net sales Volume Price/Mix Currency effect Current year Net sales Year Ended December 31, 2025 vs 2024 $ 401.9 (9.1) 7.8 (0.1) $ 400.5 Pavement Technologies product line 300.9 (10.8) 12.6 (0.1) 302.6 Road Markings product line 101.0 1.7 (4.8) — 97.9 Year Ended December 31, 2024 vs 2023 $ 425.5 (26.9) 3.7 (0.4) $ 401.9 Pavement Technologies product line 312.1 (17.8) 7.0 (0.4) 300.9 Road Markings product line 113.4 (9.1) (3.3) — 101.0 Year Ended December 31, 2025 vs. 2024 Segment net sales.
The decrease of $51.0 million in 2024 was driven by a volume decrease of $45.0 million, higher manufacturing costs of $21.4 million, primarily due to higher cost CTO, and unfavorable foreign currency exchange and other charges of $5.1 million.
The decrease of $35.5 million in 2024 was driven by a volume decline of $36.3 million, increased manufacturing costs of $17.8 million, unfavorable price and sales mix of $3.2 million, and unfavorable foreign currency exchange and other charges of $2.7 million.
Partially offsetting these cash outflows was a net reduction in trade working capital (accounts receivable, inventory, and accounts payable) of $108.5 million, reduced employee variable compensation of $41.5 million, and a reduction in tax payments of $2.8 million. Cash provided by operating activities for 2023, when compared to 2022, decreased by $108.3 million.
Partially offsetting these cash outflows was increased cash earnings of $38.5 million, reduced employee variable compensation of $41.5 million, and a reduction in tax payments of $2.8 million. Cash flows provided by (used in) investing activities Cash used in investing activities for 2025 was primarily driven by capital spending and strategic investment charges (refer to Note 5 for more information).
Year Ended December 31, 2023 vs. 2022 Gross profit decrease of $98.2 million was driven by increased manufacturing costs of $158.6 million primarily due to significant CTO raw material cost pressure within our industrial specialties product line in our Performance Chemicals reportable segment, unfavorable sales volume of $46.9 million, inventory charges of $19.7 million, and unfavorable foreign currency exchange impacts of $0.9 million, partially offset by favorable pricing and sales mix of $127.9 million.
Year Ended December 31, 2024 vs. 2023 Gross profit increase of $19.8 million was driven by decreased manufacturing costs of $46.6 million and favorable sales volume of $0.5 million, partially offset by LIFO impact of $16.4 million, unfavorable pricing and sales mix of $3.2 million, and unfavorable foreign currency exchange impacts of $7.7 million.
The increase was partially offset by a volume decline of $65.3 million (seven percent), driven by a decline in industrial specialties ($163.7 million), partially offset by growth in road technologies ($98.4 million). Unfavorable foreign currency exchange also impacted Net sales by $0.8 million (zero percent). Segment EBITDA.
The decrease of $1.4 million in 2025 was driven by a volume decline of $9.1 million (two percent), as a result of a decrease in pavement technologies ($10.8 million), partially offset by growth in road markings ($1.7 million), and unfavorable foreign currency exchange of $0.1 million (zero percent), partially offset by favorable pricing and sales mix of $7.8 million (two percent), comprised of pavement technologies ($12.6 million), offset by road markings ($4.8 million).
Expected Charges We expect to incur total charges of approximately $350.0 million, excluding CTO resale activity as described below, associated with the Performance Chemicals repositioning, consisting of approximately $250.0 million in asset-related charges, approximately $25.0 million in severance and other employee-related costs, and approximately $75.0 million in other restructuring costs including decommissioning, dismantling and removal charges, and contract termination costs.
The PC Repositioning Actions restructuring program is expected to result in total charges of approximately $370 million, consisting primarily of: • ~$255 million in non-cash asset-related charges; and • ~$115 million in cash charges, including: ▪ ~$25 million in severance and other employee-related costs, and 27 ▪ ~$90 million in other restructuring costs, including decommissioning, dismantling, and removal charges, and contract termination costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeNo customer individually accounted for greater than 10 percent of Ingevity's consolidated Net sales. 46 Commodity price risk A portion of our manufacturing costs includes purchased raw materials, which are commodities whose prices fluctuate as market supply and demand fundamentals change. Accordingly, product margins and the level of our profitability tend to fluctuate with the changes in these commodity prices.
Biggest changeSales to the automotive industry, which represents our largest industry concentration, were approximately 48 percent of our consolidated Net sales. No customer individually accounted for greater than 10 percent of Ingevity's consolidated Net sales. Commodity price risk A portion of our manufacturing costs includes purchased raw materials, which are commodities whose prices fluctuate as market supply and demand fundamentals change.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign currency exchange rate risk Net sales originating from our foreign-based operations, primarily Europe, South America, and Asia, accounted for approximately 25 percent of our net sales in 2024. We have designated the local currency as the functional currency of our significant operations outside of the U.S.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign currency exchange rate risk Net sales originating from our foreign-based operations, primarily Europe, South America, and Asia, accounted for approximately 25 percent of our net sales in 2025. We have designated the local currency as the functional currency of our significant operations outside of the U.S.
Natural gas price risk Natural gas, both direct and indirect, is our largest form of energy costs constituting approximately four percent of our cost of goods sold for the year ended December 31, 2024. Increases in natural gas costs, unless passed on to our customers, would adversely affect our results of operations.
Natural gas price risk Natural gas, both direct and indirect, is our largest form of energy costs constituting approximately four percent of our Cost of sales for the year ended December 31, 2025. Increases in natural gas costs, unless passed on to our customers, would adversely affect our results of operations.
For the year ended December 31, 2024, a hypothetical 100 basis point increase in the variable interest rate component of our borrowings would increase our annual interest expense by approximately $6 million or eight percent.
For the year ended December 31, 2025, a hypothetical 100 basis point increase in the variable interest rate component of our borrowings would increase our annual interest expense by approximately $4 million or 6 percent.
Refer to Note 9 for more information on our natural gas price risk hedging program. For the year ended December 31, 2024, a hypothetical, unhedged 10 percent increase in natural gas pricing would have resulted in an increase to cost of sales of approximately $3.6 million or 37 basis points.
Refer to Note 9 for more information on our natural gas price risk hedging program. For the year ended December 31, 2025, a hypothetical, unhedged 10 percent increase in natural gas pricing would have resulted in an increase to cost of sales of approximately $3.0 million or 42 basis points.
Comparatively, a hypothetical 10 percent adverse change in the average Brazilian real, Chinese renminbi, and euro to U.S. dollar exchange rates during the year ended December 31, 2023 would have decreased our net sales and income before income taxes for the year ended December 31, 2023, by approximately $20 million or one percent and $5 million or two percent, respectively.
Comparatively, a hypothetical 10 percent adverse change in the average Brazilian real, Chinese renminbi, and euro to U.S. dollar exchange rates during the year ended December 31, 2024 would have decreased our net sales and income (loss) before income taxes for the year ended December 31, 2024, by approximately $16 million or one percent and $5 million or four percent, respectively.
A hypothetical 10 percent adverse change, excluding the impact of any hedging instruments, in the average Brazilian real, Chinese renminbi, and euro to U.S. dollar exchange rates during the year ended December 31, 2024, would have decreased our net sales and income before income taxes for the year ended December 31, 2024, by approximately $18 million or one percent and $6 million or one percent, respectively.
A hypothetical 10 percent adverse change, excluding the impact of any hedging instruments, in the average Brazilian real, Chinese renminbi, and euro to U.S. dollar exchange rates during the year ended December 31, 2025, would have decreased our net sales and income (loss) before income taxes for the year ended December 31, 2025, by approximately $15 million or one percent and $4 million or three percent, respectively.
Comparatively, for the year ended December 31, 2023, a hypothetical 100 basis point increase in the variable interest rate component of our borrowings would have increased our annual interest expense by approximately $8 million or 10 percent. 47
Comparatively, for the year ended December 31, 2024, a hypothetical 100 basis point increase in the variable interest rate component of our borrowings would have increased our annual interest expense by approximately $6 million or 8 percent. 48
As a result, we are subject to interest rate risk with respect to such floating-rate debt. The weighted average interest rate associated with our variable interest rate borrowings, was 6.52 percent for the period ended December 31, 2024.
As a result, we are subject to interest rate risk with respect to such floating-rate debt. The weighted average interest rate associated with our variable interest rate borrowings, was 5.60 percent for the period ended December 31, 2025.
As of December 31, 2024, we had 1.8 million mmBTUS (millions of British Thermal Units) in open natural gas derivative contracts, designated as cash flow hedges. As of December 31, 2024, open natural gas derivative contracts hedge a portion of forecasted transactions until December 2025.
As of December 31, 2025, we had 0.9 million mmBTUS (millions of British Thermal Units) in open natural gas derivative contracts, designated as cash flow hedges. As of December 31, 2025, open natural gas derivative contracts hedge a portion of forecasted transactions until September 2026.
Sales to our largest customer, which is in our Performance Materials segment, were approximately six percent of total net sales for the year ended December 31, 2024, and four percent for each of the years ended December 31, 2023, and 2022, respectively.
Sales to our largest customer, which is in our Performance Materials segment, were approximately seven percent of total net sales for the year ended December 31, 2025, seven percent for the year ended December 31, 2024, and six percent for the year ended December 31, 2023.
The fair value of outstanding interest rate instruments at December 31, 2024 and 2023 was an asset of $0.6 million and zero, respectively. As of December 31, 2024, approximately $555 million of our borrowings, adjusted for our $200 million floating-to-fixed interest rate swap, include a variable interest rate component.
The fair value of outstanding interest rate instruments at December 31, 2025 and 2024 was an asset (liability) of $(0.4) million and $0.6 million, respectively. As of December 31, 2025, $362.8 million of our borrowings, adjusted for our $200 million floating-to-fixed interest rate swap, include a variable interest rate component.
Comparatively, for the year ended December 31, 2023, a hypothetical, unhedged 10 percent increase in natural gas pricing would have resulted in an increase to cost of sales of approximately $4.7 million or 39 basis points.
Comparatively, for the year ended December 31, 2024, a hypothetical, unhedged 10 percent increase in natural gas pricing would have resulted in an increase to Cost of sales of approximately $3.6 million or 48 basis points.
Our largest customer as of December 31, 2024, had accounts receivable of $8.3 million and $7.5 million as of December 31, 2024 and 2023, respectively.
Our largest customer as of December 31, 2025, had accounts receivable of $11.0 million and $8.3 million as of December 31, 2025 and 2024, respectively.
The cost of energy is a manufacturing cost that is exposed to commodity pricing. Our sources of energy costs are diversified among electricity, steam and natural gas, with natural gas comprising our largest energy input.
Accordingly, product margins and the level of our profitability tend to fluctuate with the changes in these commodity prices. The cost of energy is a manufacturing cost that is exposed to commodity pricing. Our sources of energy costs are diversified among electricity, steam and natural gas, with natural gas comprising our largest energy input.
Interest rate risk During the third quarter of 2024, we entered into a floating-to-fixed interest rate swap with a notional amount of $200.0 million to manage the variability of cash flows in the interest rate payments associated with our existing Secured Overnight Financing Rate ("SOFR") based interest payments, effectively converting $200.0 million of our floating rate debt to a fixed rate.
The fair value of the open natural gas derivative contracts as of December 31, 2025 and 2024 was a net asset (liability) of $(0.5) million and $0.3 million, respectively. 47 Interest rate risk During the third quarter of 2024, we entered into a floating-to-fixed interest rate swap with a notional amount of $200.0 million to manage the variability of cash flows in the interest rate payments associated with our existing Secured Overnight Financing Rate ("SOFR") based interest payments, effectively converting $200.0 million of our floating rate debt to a fixed rate.
Removed
Sales to the automotive industry, which represents our largest industry concentration, were approximately 40 percent of our consolidated Net sales.
Removed
Crude tall oil price risk Our results of ope rations are directly affected by the cost of our raw materials, particularly CTO, which, excluding CTO resales, represents approximately 14 percent of consolidated cost of sales and 38 percent of our full company raw materials purchases for the year ended December 31, 2024.
Removed
Pricing for CTO is driven by the limited supply of the product and competing demands for its use, both of which drive pressure on its price. Our gross profit and margins could be adversely affected by increases in the cost of CTO if we are unable to pass the increases on to our customers.
Removed
Based on average pricing during the year ended December 31, 2024, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our cost of sales for the year ended December 31, 2024, by approximately $13.0 million or one percent, which we may not have been able to pass on to our customers.
Removed
Comparatively, based on average pricing during the year ended December 31, 2023 , a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our cost of sales for the year ended December 31, 2023 by approximately $29.3 million or two percent .
Removed
The repositioning of the Performance Chemicals reportable segment and the termination of the long-term CTO supply contract have significantly reduced the Company's volume requirements and exposure to CTO beginning in 2025.
Removed
The fair value of the open natural gas derivative contracts as of December 31, 2024 and 2023 was a net asset (liability) of $0.3 million and $(0.9) million, respectively.

Other NGVT 10-K year-over-year comparisons