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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________ 
FORM 10-Q
_______________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-37586
__________________________________________________________________________
NGVT-20200331_G1.JPG
INGEVITY CORPORATION
(Exact name of registrant as specified in its charter)
__________________________________________________________________________ 
Delaware 47-4027764
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
5255 Virginia Avenue North Charleston South Carolina 29406
(Address of principal executive offices) (Zip code)

843-740-2300
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ($0.01 par value) NGVT New York Stock Exchange

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x No  o
        Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit such files).  Yes  x No  o
        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company

        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).  Yes   No  x

The registrant had 41,208,906 shares of common stock, $0.01 par value, outstanding at April 28, 2020.



Ingevity Corporation
INDEX

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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INGEVITY CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31,
In millions, except per share data 2020 2019
Net sales $ 288.2    $ 276.8   
Cost of sales 173.6    179.7   
Gross profit 114.6    97.1   
Selling, general and administrative expenses 38.5    39.1   
Research and technical expenses 6.2    5.1   
Restructuring and other (income) charges, net 0.5    —   
Acquisition-related costs 1.3    22.8   
Other (income) expense, net 2.0    (3.7)  
Interest expense, net 10.9    11.1   
Income (loss) before income taxes 55.2    22.7   
Provision (benefit) for income taxes 9.9    —   
Net income (loss) $ 45.3    $ 22.7   
Per share data
Basic earnings (loss) per share $ 1.09    $ 0.54   
Diluted earnings (loss) per share 1.08    0.54   

The accompanying notes are an integral part of these financial statements.
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INGEVITY CORPORATION
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended March 31,
In millions 2020 2019
Net income (loss) $ 45.3    $ 22.7   
Other comprehensive income (loss), net of tax:
Foreign currency adjustments:
Foreign currency translation adjustment (40.1)   9.4   
Unrealized gain (loss) on net investment hedges, net of tax provision (benefit) of $1.7 and zero
5.7    —   
Total foreign currency adjustments, net of tax provision (benefit) of $1.7 and zero
(34.4)   9.4   
Derivative instruments:
Unrealized gain (loss), net of tax provision (benefit) of $(1.4) and zero
(4.8)   0.1   
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of zero and $(0.1)
0.1    (0.4)  
Total derivative instruments, net of tax provision (benefit) of $(1.4) and $(0.1)
(4.7)   (0.3)  
Other comprehensive income (loss), net of tax provision (benefit) of $0.3 and $(0.1)
(39.1)   9.1   
Comprehensive income (loss) $ 6.2    $ 31.8   

The accompanying notes are an integral part of these financial statements.
4


INGEVITY CORPORATION
Condensed Consolidated Balance Sheets
In millions, except share and par value data March 31, 2020 December 31, 2019
Assets (Unaudited)
Cash and cash equivalents $ 302.7    $ 56.5   
Accounts receivable, net of allowance for credit losses of $0.5 million - 2020 and $0.5 million - 2019
140.8    150.0   
Inventories, net 236.2    212.5   
Prepaid and other current assets 44.8    44.2   
Current assets 724.5    463.2   
Property, plant and equipment, net 659.7    664.7   
Operating lease assets, net 52.2    53.4   
Goodwill 416.8    436.4   
Other intangibles, net 370.3    396.2   
Deferred income taxes 5.0    5.0   
Restricted investment, net of allowance for credit losses of $0.9 million - 2020
72.2    72.6   
Other assets 52.6    50.2   
Total Assets $ 2,353.3    $ 2,141.7   
Liabilities
Accounts payable $ 105.0    $ 99.1   
Accrued expenses 30.1    33.3   
Accrued payroll and employee benefits 15.6    28.2   
Current operating lease liabilities 16.9    17.1   
Notes payable and current maturities of long-term debt 21.6    22.5   
Income taxes payable 18.5    15.3   
Current liabilities 207.7    215.5   
Long-term debt including finance lease obligations 1,467.8    1,228.4   
Noncurrent operating lease liabilities 35.7    36.7   
Deferred income taxes 104.3    100.3   
Other liabilities 35.7    30.0   
Total Liabilities 1,851.2    1,610.9   
Commitments and contingencies (Note 16)
Equity
Preferred stock (par value $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding - 2020 and 2019)
—    —   
Common stock (par value $0.01 per share; 300,000,000 shares authorized; issued: 42,836,074 - 2020 and 42,675,171 - 2019; outstanding: 41,176,953 - 2020 and 41,826,136 - 2019)
0.4    0.4   
Additional paid-in capital 113.6    112.8   
Retained earnings 541.9    497.2   
Accumulated other comprehensive income (loss) (44.1)   (5.0)  
Treasury stock, common stock, at cost (1,659,121 shares - 2020; 849,035 shares - 2019)
(109.7)   (74.6)  
Total Equity 502.1    530.8   
Total Liabilities and Equity $ 2,353.3    $ 2,141.7   
The accompanying notes are an integral part of these financial statements.
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INGEVITY CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31,
In millions 2020 2019
Cash provided by (used in) operating activities:
Net income (loss) $ 45.3    $ 22.7   
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization 24.3    18.5   
Deferred income taxes 6.5    (0.4)  
Share-based compensation 0.8    4.1   
Pension and other postretirement benefit costs 0.4    0.3   
Other non-cash items 5.0    0.1   
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net 7.7    (16.1)  
Inventories, net (25.9)   (15.0)  
Prepaid and other current assets (0.2)   0.6   
Planned major maintenance outage (0.8)   (2.0)  
Accounts payable 9.4    15.4   
Accrued expenses (3.2)   (12.4)  
Accrued payroll and employee benefits (12.4)   (26.6)  
Income taxes 2.0    (0.2)  
Changes in other operating assets and liabilities, net 1.3    3.0   
Net cash provided by (used in) operating activities $ 60.2    $ (8.0)  
Cash provided by (used in) investing activities:
Capital expenditures $ (19.5)   $ (28.1)  
Payments for acquired businesses, net of cash acquired —    (537.9)  
Other investing activities, net (0.7)   (3.3)  
Net cash provided by (used in) investing activities $ (20.2)   $ (569.3)  
Cash provided by (used in) financing activities:
Proceeds from revolving credit facility $ 346.1    $ 714.2   
Proceeds from long-term borrowings —    375.0   
Payments on revolving credit facility (102.3)   (421.1)  
Payments on long-term borrowings (4.7)   (113.1)  
Debt issuance costs —    (1.8)  
Borrowings (repayments) of notes payable and other short-term borrowings, net (0.8)   2.1   
Tax payments related to withholdings on vested equity awards (3.1)   (14.3)  
Proceeds and withholdings from share-based compensation plans, net 0.4    1.7   
Repurchases of common stock under publicly announced plan (32.4)   (3.3)  
Net cash provided by (used in) financing activities $ 203.2    $ 539.4   
Increase (decrease) in cash, cash equivalents, and restricted cash 243.2    (37.9)  
Effect of exchange rate changes on cash 2.9    (0.1)  
Change in cash, cash equivalents, and restricted cash(1)
246.1    (38.0)  
Cash, cash equivalents, and restricted cash at beginning of period 64.6    77.5   
Cash, cash equivalents, and restricted cash at end of period(1)
$ 310.7    $ 39.5   
(1)
Includes restricted cash of $8.0 million and $1.1 million and cash and cash equivalents of $302.7 million and $38.4 million of March 31, 2020 and 2019, respectively. Restricted cash is included within "Prepaid and other current assets" within the condensed consolidated balance sheets.
Supplemental cash flow information:
Cash paid for interest, net of capitalized interest $ 16.9    $ 14.4   
Cash paid for income taxes, net of refunds 1.4    0.5   
Purchases of property, plant and equipment in accounts payable 5.1    6.6   
Leased assets obtained in exchange for new finance lease liabilities —    —   
Leased assets obtained in exchange for new operating lease liabilities 4.2    —   
The accompanying notes are an integral part of these financial statements.
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Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)


Note 1: Description of Business and Basis of Presentation
Description of Business
Ingevity Corporation ("Ingevity," "the Company," "we," "us," or "our") is a leading global manufacturer of specialty chemicals and high performance activated carbon materials. We provide innovative solutions to meet our customers’ unique and demanding requirements through proprietary formulated products. We report in two business segments, Performance Materials and Performance Chemicals.
        Our Performance Materials segment consists of our automotive technologies and process purification product lines. Performance Materials manufactures products in the form of powder, granular, extruded pellets, extruded honeycombs, and activated carbon sheets. Automotive technologies products are sold into gasoline vapor emission control applications within the automotive industry, while process purification products are sold into the food, water, beverage, and chemical purification industries.
Our Performance Chemicals segment consists of our pavement technologies, oilfield technologies, industrial specialties, and engineered polymers product lines. Performance Chemicals manufactures products derived from crude tall oil ("CTO") and lignin extracted from the kraft paper making process as well as caprolactone monomers and derivatives derived from cyclohexanone and hydrogen peroxide. Performance Chemicals products serve as critical inputs used in a variety of high performance applications, including pavement preservation, pavement adhesion promotion, and warm mix paving (pavement technologies product line), oil well service additives, oil production, and downstream application chemicals (oilfield technologies product line), printing inks, adhesives, agrochemicals, lubricants, and industrial intermediates (industrial specialties product line), coatings, resins, elastomers, adhesives, and bio-plastics (engineered polymers product line).

Basis of Presentation
These unaudited Condensed Consolidated Financial Statements reflect the consolidated operations of the Company and have been prepared in accordance with United States Securities and Exchange Commission ("SEC") interim reporting requirements. Accordingly, the accompanying Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for full financial statements and should be read in conjunction with the Annual Consolidated Financial Statements for the years ended December 31, 2019, 2018 and 2017, collectively referred to as the “Annual Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Annual Report").
In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated results for the interim periods presented. The consolidated results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. During the three months ended March 31, 2020 and subsequent to this date, there have been significant changes to the global economic situation and to public securities markets as a consequence of the novel strain of coronavirus ("COVID-19") pandemic. It is reasonably possible that this could cause changes to estimates as a result of the financial circumstances of the markets in which we operate, the price of our publicly traded equity in comparison to the carrying value, and the health of the global economy. Such changes to estimates could potentially result in impacts that would be material to the condensed consolidated financial statements. While there was not a material impact to our condensed consolidated financial statements as of and for the quarter ended March 31, 2020, our future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our consolidated financial statements in future reporting periods.
Certain prior year amounts have been reclassified to conform with the current year's presentation.
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Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Note 2: Coronavirus Pandemic
On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. COVID-19 has led to adverse impacts on the U.S. and global economies, and created uncertainty regarding potential impacts to our supply chain, operations, and customer demand. We have been classified as an essential business in the jurisdictions that have made this determination to date, allowing us to continue operations. However, our facilities - as well as the operations of our suppliers, customers, third-party sales representatives, and distributors - have been, and will continue to be, disrupted by governmental and private sector responses to COVID-19. This includes business shutdowns, work-from-home orders and social distancing protocols, travel or health-related restrictions, as well as quarantines, self-isolations, and disruptions to transportation channels.
On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment. We estimate the payment of approximately $5.3 million of employer payroll taxes otherwise due in 2020 will be delayed with 50 percent due by December 31, 2021 and the remaining 50 percent by December 31, 2022. The CARES Act is not expected to have a material impact on our Condensed Consolidated Financial Statements.
In order to strengthen our short term liquidity and to ensure financial flexibility, in March 2020, we drew down $250 million from our revolving credit facility as a precautionary measure and also suspended our share repurchase program. We also implemented work-from-home policies and protocols for the majority of our global salaried workforce, as well as social distancing practices to ensure the safety of our employees at our manufacturing facilities. Further, in April 2020, we decreased production at some of our U.S. based Performance Materials' manufacturing plants, due to COVID-19 impacts to the projected demand of our U.S. based automotive customers.
As of March 31, 2020, we evaluated, in accordance with ASC 350 - Goodwill and Other and ASC 360 - Property, Plant, and Equipment, whether the economic impacts of the COVID-19 pandemic constitute triggering events requiring impairment or recoverability analysis to be performed. We considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of the reporting units and asset groups. Further, we assessed the current market capitalization, forecasts and the amount of headroom in the 2019 impairment test. We determined that a triggering event has not occurred which would require an interim impairment test to be performed.However, a lack of recovery or further deterioration in market conditions related to the general economy and the industries in which we operate, a sustained trend of weaker than anticipated financial performance, a lack of recovery or further decline in our share price for a sustained period of time, or an increase in the market-based weighted average cost of capital, among other factors, could significantly impact the impairment analysis and may result in future impairment charges that, if incurred, could have a material adverse effect on our financial condition and results of operations.
While the disruptions caused by the pandemic are currently expected to be temporary, there is uncertainty regarding the virus's duration. COVID-19 has impacted, and will continue to impact, our results of operations, financial position, and liquidity.

Note 3: New Accounting Guidance
        The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC" or "Codification") is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update ("ASU") to communicate changes to the Codification. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.
Recently Adopted Accounting Pronouncements
In August 2018, the FASB issued ASU 2018-15 "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." This ASU requires companies to defer specific implementation costs incurred in a Cloud Computing Arrangement ("CCA") that are often expensed as incurred under current GAAP, and recognize the expense over the noncancellable term of the CCA. We adopted this standard on a prospective basis on January 1, 2020. As a result of the adoption, we anticipate capitalizing certain implementation costs that were previously expensed as incurred, which will be recorded to either prepaid
8


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

and other current assets or other assets on the condensed consolidated balance sheets, depending on the duration of the agreement. The impact of the adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit losses: Measurement of Credit Losses on Financial Instruments." In 2019 and 2020, the FASB issued several ASUs to amend and clarify the credit loss guidance in the original ASU 2016-13 (ASU 2016-13 and its amendments are herein referred to as “ASC 326” or "CECL"). ASC 326 amends FASB's guidance on the impairment of financial instruments, specifically adding an impairment model to GAAP that is based on expected losses, rather than incurred losses, which is intended to result in more timely recognition of such losses. We adopted this standard on January 1, 2020. We have updated our internal controls and operational processes and procedures, to include certain forward-looking considerations in our current process of developing and recognizing credit losses for our accounts receivable and restricted investment accounted for at amortized cost. Generally, the adoption of ASC 326 did not have a material impact on our condensed consolidated balance sheet, results of operations or cash flows. ASC 326 had an immaterial impact to our allowance for credit losses reported in accounts receivable on our condensed consolidated balance sheet upon adoption. Additionally, upon adoption of ASC 326, we estimated an allowance for credit losses for our restricted investment on our condensed consolidated balance sheet. Our restricted investment, which is accounted for as a held-to-maturity investment, consists of highly rated corporate long-term bonds that mature in 2025 and 2026. To calculate our expected credit loss allowance, we utilized a probability-of-default method (“PDM”) for each bond based on each securities term. This process uses historical credit loss experience on similar product types, adjusted for reasonable and supportable forecasts of future default rates. Using a PDM, we calculated an expected credit loss allowance at January 1, 2020 of $0.6 million, which was recorded as an adjustment to the opening balance of retained earnings.
The following table displays changes in our allowance for credit losses as of March 31, 2020, including the transition impact of adopting the CECL standard.

(in millions)
Balance at
December 31, 2019 (1)
Impact from Adoption of ASC 326 Balance at January 1, 2020 Current Period Provision
Balance at
March 31, 2020 (2)
Allowance for credit losses $ 0.5    0.6    1.1    0.3    $ 1.4   
______________
(1) The allowance for credit losses at December 31, 2019 of $0.5 million was included in "Accounts receivable, net" on the condensed consolidated balance sheets.
(2) The allowance for credit losses at March 31, 2020 of $0.5 million and $0.9 million was included "Accounts receivable, net" and "Restricted investment" on the condensed consolidated balance sheets, respectively.

Our expected credit losses can vary from period to period based on several factors, such as changes in bond ratings, actual observed bond defaults, and overall economic environment. The primary factor that contributed to our provision for expected credit losses in the first quarter of 2020 was a pessimistic outlook of the macroeconomic environment due to the COVID-19 pandemic, and related effects on the financial performance of U.S.-based corporations. The increase in the allowance for credit losses of $0.3 million is attributed to Level 1 securities expected credit loss. There was no material change in the accounts receivable expected credit loss.
Recently Issued Accounting Pronouncements
        In August 2018, the FASB issued ASU 2018-14 "Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The new standard is effective for fiscal years ending after December 15, 2020. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Condensed Consolidated Financial Statements and related disclosures.
        In December 2019, the FASB issued ASU 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU amends ASC 740 to add, remove, and clarify disclosure requirements related to income taxes. The new standard is effective for fiscal years ending after December 15, 2020. Although we are still evaluating the impact of this
9


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

new standard, we do not believe that the adoption of this new standard will materially impact our Condensed Consolidated Financial Statements and related disclosures.
In March 2020, the FASB issued ASU 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The ASU is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance became effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively until December 31, 2022. We are currently evaluating the impact this guidance may have on our Condensed Consolidated Financial Statements and related disclosures.

Note 4: Acquisitions
Perstorp Holding AB's Caprolactone Business
        On February 13, 2019, we completed the acquisition of 100 percent of the equity of Perstorp UK Ltd with Perstorp Holding AB ("Seller"), including the Seller's entire caprolactone business ("Caprolactone Business"), herein referred to as the "Caprolactone Acquisition." The Caprolactone Acquisition was completed for an aggregate purchase price of €578.9 million ($652.5 million), less assumed debt of €100.4 million ($113.1 million). At closing, the assumed debt was settled with an affiliate of the Seller. The Caprolactone Acquisition has been integrated into our Performance Chemicals segment and included within our engineered polymers product line.
        The Caprolactone Acquisition contributed Net sales of $36.3 million and $24.2 million for the three months ended March 31, 2020 and 2019, respectively, to the consolidated operating results of Ingevity. A substantial portion of the Caprolactone Business was integrated into our existing Performance Chemicals operations during 2019. As a result, we were no longer able to separate operating performance of the Caprolactone Acquisition from our existing Performance Chemicals' operating results.
        Purchase Price Allocation
        The following table summarizes the consideration paid for the Caprolactone Business and the assets acquired and liabilities assumed, which was finalized in Q4 2019:

10


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Purchase Price Allocation
In millions Weighted Average Amortization Period Fair Value
Cash and cash equivalents $ 0.7   
Accounts receivable 15.7   
Inventories (1)
21.7   
Prepaid and other current assets 1.9   
Property, plant and equipment 86.3   
Operating lease assets, net 1.8   
Intangible assets (2)
Customer relationships 17 years 159.0   
Developed technology 12 years 64.8   
Brands 17 years 67.0   
Non-compete agreement 3 years 0.5   
Goodwill 295.1   
Other assets 1.3   
Total fair value of assets acquired $ 715.8   
Accounts payable 13.6   
Accrued expenses 2.3   
Long-term debt 113.1   
Operating lease liabilities 1.7   
Deferred income taxes 45.7   
Total fair value of liabilities assumed $ 176.4   
Cash and restricted cash acquired (3)
1.5   
Total cash paid, less cash and restricted cash acquired $ 537.9   
______________
(1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $8.4 million, all of which was expensed in the three months ended March 31, 2019. The expense is included in "Cost of sales" on the condensed consolidated statement of operations. Inventories are accounted for on a first-in, first-out basis of accounting.
(2) The aggregate amortization expense was $4.8 million and $1.9 million for the three months ended March 31, 2020 and 2019, respectively. Estimated amortization expense is as follows: 2020 - $19.6 million, 2021 - $19.6 million, 2022 - $19.5 million, 2023 - $19.5 million, and 2024 - $19.5 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency.
(3) Cash and cash equivalents and restricted cash were $0.7 million and $0.8 million, respectively, at closing. Restricted cash is included in "Prepaid and other current assets" on the consolidated balance sheet.

Unaudited Pro Forma Financial Information
        The following unaudited pro forma results of operations assume that the Caprolactone Acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisitions occurred at the beginning of the periods presented, nor are they indicative of future results of operations. The pro forma results include additional interest expense on the debt issued to finance the acquisition, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and tangible assets, and related tax effects. The pro forma results presented below are adjusted for the removal of Acquisition and other-related costs for the three months ended March, 31 2019 of $31.2 million.
11


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Three Months Ended
In millions March 31, 2019
Net sales $ 294.5   
Income (loss) before income taxes 53.5   
Diluted earnings (loss) per share   $ 1.14   

Acquisition and other-related costs
Costs incurred to complete and integrate the Caprolactone Acquisition noted above into our Performance Chemicals segment are expensed as incurred on our condensed consolidated statement of operations. The following table summarizes such costs.
Three Months Ended March 31,
In millions 2020 2019
Legal and professional service fees $ 1.3    $ 10.1   
Loss on hedging purchase price —    12.7   
Acquisition-related costs $ 1.3    $ 22.8   
Inventory fair value step-up amortization (1)
—    8.4   
Acquisition and other-related costs $ 1.3    $ 31.2   
______________
(1) Included within "Cost of sales" on the condensed consolidated statement of operations.
Note 5: Revenues
        Ingevity's operating segments are (i) Performance Materials and (ii) Performance Chemicals. A description of both operating segments is included in Note 1.
        
Disaggregation of Revenue
        The following table presents our Net sales disaggregated by product line.
  Three Months Ended March 31,
In millions 2020 2019
Automotive Technologies product line $ 112.9    $ 99.7   
Process Purification product line 8.2    9.4   
Performance Materials segment $ 121.1    $ 109.1   
Oilfield Technologies product line 30.2    29.2   
Pavement Technologies product line 20.7    18.5   
Industrial Specialties product line 79.9    95.8   
Engineered Polymers product line(1)
36.3    24.2   
Performance Chemicals segment $ 167.1    $ 167.7   
Net sales $ 288.2    $ 276.8   
______________
(1) Engineered Polymers product line was acquired on February 13, 2019; see Note 4 for more information.
        
12


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer.
Three Months Ended March 31,
In millions 2020 2019
North America $ 171.1    $ 171.7   
Asia Pacific 67.9    49.1   
Europe, Middle East and Africa 43.4    51.2   
South America 5.8    4.8   
Net sales $ 288.2    $ 276.8   

Contract Balances

        The following table provides information about contract assets and contract liabilities from contracts with customers. The contract assets primarily relate to our rights to consideration for products produced but not billed at the reporting date on contracts with certain customers. The contract assets are recognized as accounts receivables when the rights become unconditional and the customer has been billed. Contract liabilities represent obligations to transfer goods to a customer for which we have received consideration from our customer. For all periods presented we had no contract liabilities.
Contract Asset(1)
In millions March 31, 2020 March 31, 2019
Beginning balance $ 6.2    $ 5.1   
Contract asset additions 4.6    4.7   
Reclassification to accounts receivable, billed to customers (3.9)   (4.5)  
Ending balance $ 6.9    $ 5.3   
______________
(1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet.
Note 6: Fair Value Measurements
Fair-Value Measurements
        We have categorized our assets and liabilities that are recorded at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair-value hierarchy. The fair-value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets and liabilities fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair-value measurement of the instrument. The carrying value of our financial instruments: cash and cash equivalents, other receivables, other payables and accrued liabilities, approximate their fair values due to the short-term nature of these financial instruments.
Recurring Fair-Value Measurements
        The following information is presented for assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. There were no transfers of assets and liabilities that were recorded at fair value between Level 1 and Level 2 during the periods reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2020 or December 31, 2019.
13


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

In millions
Level 1(1)
Level 2(2)
Level 3(3)
Total
March 31, 2020
Assets:
Equity securities (4)
$ 0.1    $ —    $ —    $ 0.1   
Deferred compensation plan investments (5)
1.5    —    —    1.5   
Total assets $ 1.6    $ —    $ —    $ 1.6   
Liabilities:
Deferred compensation arrangement (5)
$ 9.9    $ —    $ —    $ 9.9   
Total liabilities $ 9.9    $ —    $ —    $ 9.9   
December 31, 2019
Assets:
Equity securities (4)
$ 0.4    $ —    $ —    $ 0.4   
Deferred compensation plan investments (5)
1.4    —    —    1.4   
Total assets $ 1.8    $ —    $ —    $ 1.8   
Liabilities:
Deferred compensation arrangement (5)
$ 10.0    $ —    $ —    $ 10.0   
Separation-related reimbursement awards (6)
0.1    —    —    0.1   
Total liabilities $ 10.1    $ —    $ —    $ 10.1   
______________
(1) Quoted prices in active markets for identical assets.
(2) Quoted prices for similar assets and liabilities in active markets.
(3) Significant unobservable inputs.
(4) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet.
(5) Consists of a deferred compensation arrangement, through which we hold various investment securities, recognized on our balance sheets. Both the asset and liability are recorded at fair value, and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively.
(6) Included within "Accrued expenses" on the condensed consolidated balance sheet.

14


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Equity Securities
        Our investments in equity securities with a readily determinable fair value totaled $0.1 million and $0.4 million at March 31, 2020 and December 31, 2019, respectively. The net realized gain/(loss) recognized during the three months ended March 31, 2020 and 2019 was $(0.1) million and zero, respectively. The unrealized gain/(loss) was zero for both the three months ended March 31, 2020 and 2019. The aggregate carrying value of investments in equity securities where fair value is not readily determinable totaled $0.2 million and $1.5 million as of March 31, 2020 and December 31, 2019, respectively, and is included in "Other assets" on the condensed consolidated balance sheet. During the three months ended March 31, 2020, we recorded an impairment charge of $1.3 million to an equity security where fair value is not readily determinable held within our Performance Materials segment. The charge was based on recently updated expected future cash flow projections for the investment.
Restricted Investment
At March 31, 2020, the book value of our restricted investment, which is accounted for as held to maturity ("HTM") and therefore held at amortized costs, was $72.2 million, which includes an allowance for credit losses of $0.9 million and cash of $0.8 million, and the fair value was $75.4 million, based on Level 1 inputs.
The following table shows the total amortized cost of our HTM debt securities by credit rating. The primary factor in our expected credit loss calculation is the composite bond rating. As the rating decreases, the risk present in holding the bond is inherently increased, leading to an increase in expected credit losses.
March 31, 2020
(in millions) AA+ AA A A- BBB+ Total
Level 1 Securities $ 13.5    10.7    24.2    13.4    10.5    $ 72.3   

Debt Obligations
At March 31, 2020, the book value of finance lease obligations was $80.0 million and the fair value was $100.1 million. The fair value of our finance lease obligations is based on the period-end quoted market prices for the obligations, using Level 2 inputs.
The carrying amount, excluding debt issuance fees, of our variable interest rate long-term debt was $1,115.9 million as of March 31, 2020. The carrying value is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt.
At March 31, 2020, the book value of our fixed rate debt was $300.0 million, and the fair value was $282.8 million, based on Level 2 inputs.
Note 7: Inventories, net
In millions March 31, 2020 December 31, 2019
Raw materials $ 44.2    $ 42.6   
Production materials, stores and supplies 23.0    22.3   
Finished and in-process goods 182.3    158.0   
Subtotal 249.5    222.9   
Less: adjustment of inventories to LIFO basis (13.3)   (10.4)  
Inventories, net $ 236.2    $ 212.5   

15


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Note 8: Property, Plant and Equipment, net
In millions March 31, 2020 December 31, 2019
Machinery and equipment $ 977.0    $ 964.3   
Buildings and leasehold improvements 122.2    116.9   
Land and land improvements 19.2    19.0   
Construction in progress 109.0    119.1   
Total cost 1,227.4    1,219.3   
Less: accumulated depreciation (567.7)   (554.6)  
Property, plant and equipment, net (1)
$ 659.7    $ 664.7   
_______________
(1) This includes finance leases related to machinery and equipment at our Wickliffe, Kentucky facility of $68.8 million and $68.8 million, and net book value of $5.8 million and $6.0 million at March 31, 2020, and December 31, 2019, respectively. This also includes finance leases related to our Waynesboro, Georgia manufacturing facility for (a) machinery and equipment of $18.4 million and $18.4 million and net book value of $16.5 million and $16.8 million, (b) construction in progress of $8.3 million and $6.4 million and (c) buildings and leasehold improvements of $4.3 million and $4.2 million and net book value of $4.2 million and $4.20 million at March 31, 2020 and December 31, 2019, respectively. Amortization expense associated with these finance leases is included within depreciation expense.

Note 9: Goodwill and Other Intangible Assets, net
Goodwill
Operating Segments
In millions Performance Chemicals Performance Materials Total
December 31, 2019 $ 432.1    $ 4.3    $ 436.4   
Foreign currency translation (19.6)   —    (19.6)  
March 31, 2020 $ 412.5    $ 4.3    $ 416.8   

There were no events or circumstances indicating that goodwill might be impaired as of March 31, 2020.
Other Intangible Assets
All of our other intangibles, net are related to the Performance Chemicals operating segment. The following table summarizes these assets:
March 31, 2020 December 31, 2019
In millions Gross Accumulated amortization Net Gross Accumulated amortization Net
Intangible assets subject to amortization
Customer contracts and relationships $ 304.2    $ 56.4    $ 247.8    $ 314.5    $ 51.6    $ 262.9   
Brands (1)
76.0    12.1    63.9    80.3    11.1    69.2   
Developed technology 64.5    6.9    57.6    68.6    5.7    62.9   
Other 2.7    1.7    1.0    2.7    1.5    1.2   
Total Other intangibles, net $ 447.4    $ 77.1    $ 370.3    $ 466.1    $ 69.9    $ 396.2   
_______________
(1) Represents trademarks, trade names and know-how.

        The amortization expense related to our intangible assets in the table above is shown in the table below.
16


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Three Months Ended March 31,
In millions 2020 2019
Cost of sales $ 0.1    $ 0.2   
Selling, general and administrative expenses 8.2    5.3   
Total amortization expense(1)
$ 8.3    $ 5.5   
_______________
(1) See Note 4 for more information about the Caprolactone Acquisition, and the related increase in amortization expense.

Based on the current carrying values of intangible assets, estimated pre-tax amortization expense for the next five years is as follows: 2020 - $25.8 million, 2021 - $24.9 million, 2022 - $24.7 million, 2023 - $24.6 million, and 2024 - $24.3 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency.

Note 10: Financial Instruments and Risk Management

Net Investment Hedges
        Beginning in the second quarter of 2019, we have entered into fixed-to-fixed cross-currency interest rate swaps with an aggregate notional amount of $166.2 million and a maturity date of July 2023. We designated the swaps to hedge a portion of our net investment in a euro functional currency denominated subsidiary against foreign currency fluctuations. These contracts involve the exchange of fixed U.S. dollars with fixed euro interest payments periodically over the life of the contract and an exchange of the notional amount at maturity. This effectively converts a portion of our U.S. dollar denominated fixed-rate debt from a weighted average rate of 3.79 percent to a euro denominated weighted average fixed-rate debt at a rate of 1.35 percent. Any difference between the fixed interest rate between the U.S. dollar denominated debt to euro denominated debt is recorded as interest income on the condensed consolidated statements of operations. The fair value of the fixed-to-fixed cross currency interest rate swap was an asset (liability) of $10.4 million and $3.0 million at March 31, 2020 and December 31, 2019, respectively. During the three months ending March 31, 2020, we recognized net interest income associated with this financial instrument of $0.8 million.
Cash Flow Hedges
        Foreign Currency Exchange Risk Management
        We manufacture and sell our products in several countries throughout the world and, thus, we are exposed to changes in foreign currency exchange rates. To manage the volatility relating to these exposures, we net the exposures on a consolidated basis to take advantage of natural offsets. To manage the remaining exposure, from time to time, we utilize forward currency exchange contracts and zero cost collar option contracts to minimize the volatility to earnings and cash flows resulting from the effect of fluctuating foreign currency exchange rates on export sales denominated in foreign currencies (principally the euro). These contracts are generally designated as cash flow hedges. Designated cash flow hedges entered to minimize foreign currency exchange risk of forecasted revenue transactions are recorded to "Net sales" on the consolidated statement of operations when the forecasted transaction occurs. As of March 31, 2020, there were $14.7 million open foreign currency derivative contracts. The fair value of the designated foreign currency hedge contracts was an asset (liability) of $0.3 million and zero at March 31, 2020 and December 31, 2019, respectively.
        Commodity Price Risk Management
        Certain energy sources used in our manufacturing operations are subject to price volatility caused by weather, supply and demand conditions, economic variables, and other unpredictable factors. This volatility is primarily related to the market pricing of natural gas. To mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to pricing of natural gas purchases, from time to time, we will enter into swap contracts and zero cost collar option contracts and designate these contracts as cash flow hedges. As of March 31, 2020, we had 1.5 million and 0.1 million mmBTUS (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity swap contracts and zero cost collar option contracts, respectively. Designated commodity cash flow hedge gains or losses recorded in Accumulated other comprehensive income ("AOCI") are recognized in "Cost of sales" on the condensed consolidated
17


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

statements of operations when the inventory is sold. As of March 31, 2020, open commodity contracts hedge forecasted transactions until September 2020. The fair value of the outstanding designated natural gas commodity hedge contracts as of both March 31, 2020 and December 31, 2019 was an asset (liability) of $(0.5) million.
        Interest Rate Risk Management 
        Our policy is to manage interest expense using a mix of fixed and variable rate debt. To manage interest rate risk effectively, from time to time, we may enter into cash flow interest rate derivative instruments, which can consist of forward starting swaps and treasury locks. In all cases, the notional amount of the interest rate swap agreements is equal to or less than the designated debt being hedged. Designated interest rate cash flow hedge gains or losses recorded in AOCI are recognized in "Interest expense, net" on the condensed consolidated statements of operations on a straight-line basis over the remaining maturity of the underlying debt. These instruments are designated as cash flow hedges. 
        As of March 31, 2020, we have entered into interest rate swaps with a notional amount of $166.2 million to manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest payments, effectively converting $166.2 million of our floating rate debt to a fixed rate. In accordance with the terms of this instrument, we receive floating rate interest payments based upon three-month U.S. dollar LIBOR and in return are obligated to pay interest at a weighted average fixed rate of 3.79 percent until July 2023. The fair value of the interest rate swap was an asset (liability) of $(10.0) million and $(3.9) million at March 31, 2020 and December 31, 2019, respectively.
Effect of Cash Flow and Net Investment Hedge Accounting on AOCI
In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Net income Location of Gain (Loss) Reclassified from AOCI in Net income
Three Months Ended March 31,
2020 2019 2020 2019
Cash flow hedging derivatives
Currency exchange contracts $ 0.3    $ —    $ —    $ —    Net sales
Natural gas contracts (0.4)   0.1 (0.1)   0.5    Cost of sales
Interest rate swap contracts (6.1)   —    —    —    Interest expense, net
Total $ (6.2)   $ 0.1    $ (0.1)   $ 0.5   
Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Recognized in Income on Derivative
(Amount Excluded from Effectiveness Testing)
Location of Gain or (Loss) Recognized in Income on Derivative
(Amount Excluded from
Effectiveness Testing)
Three Months Ended March 31,
2020 2019 2020 2019
Net investment hedging derivative
Currency exchange contracts(1)
$ 7.4    $ —    $ 0.8    $ —    Interest expense, net
Total $ 7.4    $ —    $ 0.8    $ —   
__________
(1) Reclassifications from AOCI to Net Income were zero for all periods presented. Gains and losses would be reclassified from AOCI to Other (income) expense, net.

Within the next twelve months, we expect to reclassify $0.7 million of net losses from AOCI to income, before taxes.

18


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Fair-Value Measurements
The following information is presented for derivative assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis. See Note 6 for more information on our fair value measurements. There were no transfers of assets and liabilities that are recorded at fair value between Level 1 and Level 2 during the periods reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2020 or December 31, 2019.

In millions
Level 1(1)
Level 2(2)
Level 3(3)
Total
March 31, 2020
Assets:
Currency exchange contracts(4)
$ —    $ 0.3    $ —    $ 0.3   
Net investment hedge (5)
—    10.4    —    10.4   
Total assets $ —    $ 10.7    $ —    10.7   
Liabilities:
Natural gas contracts (6)
$ —    $ 0.5    $ —    $ 0.5   
Interest rate swap contracts (7)
—    10.0    —    10.0   
Total liabilities $ —    $ 10.5    $ —    $ 10.5   

In millions
Level 1(1)
Level 2(2)
Level 3(3)
Total
December 31, 2019
Assets:
Net investment hedge (5)
$ —    $ 3.0    $ —    $ 3.0   
Total assets $ —    $ 3.0    $ —    3.0   
Liabilities:
Natural gas contracts (6)
$ —    $ 0.5    $ —    $ 0.5   
Interest rate swap contracts (7)
—    3.9    —    3.9   
Total liabilities $ —    $ 4.4    $ —    $ 4.4   
__________
(1)  Quoted prices in active markets for identical assets.
(2)  Quoted prices for similar assets and liabilities in active markets.
(3) Significant unobservable inputs
(4) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet.
(5) Included within "Other assets" on the condensed consolidated balance sheet.
(6) Included within "Accrued expenses" on the condensed consolidated balance sheet.
(7) Included within "Other liabilities" on the condensed consolidated balance sheet.


19


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Note 11: Debt including Finance Lease Obligations
        Current and long-term debt including finance lease obligations consisted of the following:
March 31, 2020
In millions, except percentages Interest rate Maturity date March 31, 2020 December 31, 2019
Revolving Credit Facility (1)
2.36% 2023 $ 375.0    $ 131.3   
Term Loans 2.62% 2022-2023 735.9    740.6   
Senior Notes 4.50% 2026 300.0    300.0   
Finance lease obligations 7.67% 2027 80.0    80.0   
Other 4.95% 2020-2021 5.0    5.9   
Total debt including finance lease obligations 1,495.9    1,257.8   
Less: debt issuance costs 6.5    6.9   
Total debt including finance lease obligations, net of debt issuance costs 1,489.4    1,250.9   
Less: debt maturing within one year (2)
21.6    22.5   
Long-term debt including finance lease obligations $ 1,467.8    $ 1,228.4   
______________
(1) Letters of credit outstanding under the revolving credit facility were $2.1 million and undrawn capacity under the facility was $372.9 million at March 31, 2020.
(2)  Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets.
Debt Covenants
Our 4.50 percent senior unsecured notes due in 2026 (the "Senior Notes") contain certain customary covenants (including covenants limiting Ingevity's and its restricted subsidiaries’ ability to grant or permit liens on certain property securing debt, declare or pay dividends, make distributions on or repurchase or redeem capital stock, make investments in unrestricted subsidiaries, engage in sale and lease-back transactions, and engage in a consolidation or merger, or sell, transfer or otherwise dispose of all or substantially all of the assets of our and our restricted subsidiaries, taken as a whole) and events of default (subject in certain cases to customary exceptions, as well as grace and cure periods). The occurrence of an event of default under the Senior Notes could result in the acceleration of the Senior Notes and could cause a cross-default that could result in the acceleration of other indebtedness of Ingevity and its subsidiaries.
The revolving credit facility and term loans contain customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-compliance with covenants and cross-defaults to other material indebtedness. The occurrence of an uncured event of default under the revolving credit facility and term loans could result in all loans and other obligations becoming immediately due and payable and the facilities being terminated. The revolving credit facility and term loans' financial covenants require Ingevity to maintain on a consolidated basis a maximum total leverage ratio of 4.0 to 1.0 (which may be increased to 4.5 to 1.0 under certain circumstances) and a minimum interest coverage ratio of 3.0 to 1.0. Our actual leverage for the four consecutive quarters ended March 31, 2020 was 3.5, and our actual interest coverage for the four consecutive quarters ended March 31, 2020 was 8.1. We were in compliance with all covenants at March 31, 2020.

20


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Note 12: Equity
The tables below provide a roll forward of equity.
Common Stock
In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated
other
comprehensive
income (loss)
Treasury stock Total Equity
Balance at December 31, 2019 42,675    $ 0.4    $ 112.8    $ 497.2    $ (5.0)   $ (74.6)   $ 530.8   
Net income (loss) —    —    —    45.3    —    —    45.3   
Other comprehensive income (loss) —    —    —    —    (39.1)   —    (39.1)  
Common stock issued 161    —    —    —    —    —    —   
Exercise of stock options, net —    —    —    —    —    —    —   
Tax payments related to vested restricted stock units —    —    —    —    —    (3.1)   (3.1)  
Share repurchase program —    —    —    —    —    (32.4)   (32.4)  
Share-based compensation plans —    —    0.8    —    —    0.4    1.2   
Adoption of accounting standard —    —    —    (0.6)   —    —    (0.6)  
Balance at March 31, 2020 42,836    $ 0.4    $ 113.6    $ 541.9    $ (44.1)   $ (109.7)   $ 502.1   

Common Stock
In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated
other
comprehensive
income (loss)
Treasury stock Total Equity
Balance at December 31, 2018 42,332    $ 0.4    $ 98.3    $ 313.5    $ (17.7)   $ (55.8)   $ 338.7   
Net income (loss) —    —    —    22.7    —    —    22.7   
Other comprehensive income (loss) —    —    —    —    9.1    —    9.1   
Common stock issued 276    —    —    —    —    —    —   
Exercise of stock options, net 51    —    1.4    —    —    —    1.4   
Tax payments related to vested restricted stock units —    —    —    —    —    (14.3)   (14.3)  
Share repurchase program —    —    —    —    —    (3.3)   (3.3)  
Share-based compensation plans —    —    4.1    —    —    0.3    4.4   
Balance at March 31, 2019 42,659    $ 0.4    $ 103.8    $ 336.2    $ (8.6)   $ (73.1)   $ 358.7   










21


Ingevity Corporation
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)

Accumulated other comprehensive income (loss)
Three Months ended March 31,
In millions 2020 2019
Foreign currency translation
Beginning Balance $ 1.5    $ (16.4)  
Gains (losses) on foreign currency translation (40.1)   9.4   
Less: tax provision (benefit) —    —   
Net gains (losses) on foreign currency translation (40.1)   9.4   
Gains (losses) on net investment hedges 7.4    —   
Less: tax provision (benefit) 1.7    —   
Net gains (losses) on net investment hedges 5.7    —   
Other comprehensive income (loss), net of tax (34.4)