Ingevity Corp

Index

Note 8: Goodwill and Other Intangible Assets, net

Goodwill

As described in Note 1, we reorganized our segment reporting structure to increase transparency for our investors and better align with the markets and customers we serve through each of our segments. This structure is also consistent with the manner in which information is presently used internally by our chief operating decision maker to evaluate performance and make resource allocation decisions. This reportable segment change impacted the identification of our Performance Chemicals reporting unit, resulting intwo reporting units, Performance Chemicals and Advanced Polymer Technologies.

We have reallocated goodwill as of January 1, 2023, to align to our new reporting unit structure by using a relative fair value approach and tested goodwill for impairment immediately before and after the realignment; no impairment was identified.

(1) See Note 16 for more information about our acquisitions.

During the third quarter of 2023, continued reduction in demand in industrial end markets has negatively impacted our ability to offset elevated CTO costs through pricing actions within our Performance Chemicals’ reportable segment, particularly in our industrial specialties product line. CTO is essential to our industrial specialties and some of our road technologies product lines within our Performance Chemicals reportable segment. As a result, we concluded that a triggering event occurred for our Performance Chemicals’ reporting unit, and we performed an analysis of the reporting unit’s goodwill, intangibles and long-lived assets as of September 1, 2023. Our analysis included 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. We concluded that there wasno impairment for the quarter ended September 30, 2023.

Our fiscal year 2023 annual goodwill impairment test was performed as of October 1, 2023. We determined that the fair value of our reporting units were in excess of their carrying value and therefore concluded thatno goodwill impairment existed. There were no events or circumstances indicating that goodwill might be impaired as of December 31, 2023.

Index

Other Intangible Assets

(1) Represents trademarks, trade names, and know-how.

(2) See Note 16 for more information about our acquisitions.

(3) The weighted average amortization period remaining for all intangibles is 10.8 years, while the weighted average amortization period remaining for customer contracts and relationships, brands, developed technology and other intangibles is 11.4 years,11.4 years,7.6 years, andzero years, respectively.

(4) As a result of the Performance Chemicals' repositioning, as further described in Note 15, we accelerated the amortization of certain customer contract and relationship finite-lived intangible assets in 2023. This resulted in $37.4 million of additional expense in 2023, which is included in Restructuring and other (income) charges, net within the consolidated statement of operations.

Index

Intangible assets subject to amortization were allocated among our business segments as follows:

(1) Refer to footnote 4 in the preceding Other Intangible Asset table for more information on the change in amortization in 2023.

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

(1) Amounts recorded to Restructuring and other (income) charges, net are not included within segment depreciation and amortization.

Based on the current carrying values of intangible assets, estimated pre-tax amortization expense for the next five years is as follows: 2024 - $53.8 million, 2025 - $29.5 million, 2026 - $28.8 million, 2027 - $28.8 million and 2028 - $28.8 million. The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency exchange rates.