Ingevity CorpNGVT
Ingevity Corp Fair Value Disclosure
Fair Value Measurements
Recurring Fair Value Measurements
The following information is presented for assets and liabilities that are recorded on the consolidated balance sheets at fair value measured on a recurring basis. There were no transfers of assets and liabilities that are recorded at fair value between the three-level fair value hierarchy during the periods reported.
| In millions | Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Deferred compensation plan investments (4) | $ | 3.9 | $ | — | $ | — | $ | 3.9 | |||||||||||||||
| Total assets | $ | 3.9 | $ | — | $ | — | $ | 3.9 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Deferred compensation arrangement (4) | $ | 15.9 | $ | — | $ | — | $ | 15.9 | |||||||||||||||
| Total liabilities | $ | 15.9 | $ | — | $ | — | $ | 15.9 | |||||||||||||||
| In millions | Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Deferred compensation plan investments (4) | $ | 3.7 | $ | — | $ | — | $ | 3.7 | |||||||||||||||
| Total assets | $ | 3.7 | $ | — | $ | — | $ | 3.7 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Deferred compensation arrangement (4) | $ | 15.9 | $ | — | $ | — | $ | 15.9 | |||||||||||||||
| Total liabilities | $ | 15.9 | $ | — | $ | — | $ | 15.9 | |||||||||||||||
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(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) Consists of a deferred compensation arrangement through which we hold various investment securities recognized on our consolidated balance sheets. Both the asset and liability related to investment securities are recorded at fair value and are included within "Other assets" and "Other liabilities" on the consolidated balance sheets, respectively. In addition to the investment securities, we also had company-owned life insurance related to the deferred compensation arrangement recorded at cash surrender value in "Other assets" of $18.2 million and $16.5 million at December 31, 2025 and 2024, respectively.
Nonrecurring Fair Value Measurements
During the year ended December 31, 2025, we measured our Advanced Polymer Technologies reporting units' goodwill and our Performance Chemicals road markings long-lived assets at fair value in connection with impairment testing. These measurements are Level 3 and were determined using both the income approach and market approach for Goodwill and both quoted market prices in active markets and a discounted value of estimated future cash flows for our long-lived assets. Refer to Note 7 and Note 8 for more information, including key assumptions.
Strategic Investments
Equity Method Investments
The aggregate carrying value of all strategic equity method investments was $3.1 million and $15.4 million at December 31, 2025 and 2024, respectively. During the fourth quarter of 2025, we sold a strategic equity method investment for $6.8 million, resulting in a $7.1 million loss, recorded within "Other (income) expense, net" on the consolidated statement of operations. We recognized an additional $0.1 million gain associated with an equity method investment sale during the years ended December 31, 2025, and 2024, respectively.
As of December 31, 2025 and 2024, respectively, we had approximately $3.5 million and $5.3 million of unfunded commitments, associated with a venture capital fund investment accounted for under the equity method of accounting, which we anticipate will be paid over a period of 10 years beginning from the fourth quarter of 2022. There were no adjustments to the carrying value of equity method investments for impairment for the periods ended, December 31, 2025 and 2024.
Measurement Alternative Investments
The aggregate carrying value of all measurement alternative investments where fair value is not readily determinable totaled $80.0 million and $71.9 million at December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, strategic investments accounted for under the measurement alternative method increased $20.0 million.
For the years ended December 31, 2025 and 2024, the Company identified triggering events indicating that investments being accounted for under the measurement alternative may be impaired, and recognized impairment charges of $11.9 million and $2.1 million, respectively, recorded in "Other (income) expense, net" on the consolidated statement of operations.
Restricted Investment
Our restricted investment is a trust managed in order to secure repayment of the finance lease obligation associated with Performance Materials' Wickliffe, Kentucky, manufacturing plant at maturity. The trust, presented as Restricted investment on our consolidated balance sheets, originally purchased long-term bonds that mature through 2026. The principal received at maturity of the bonds, along with interest income that is reinvested in the trust, are expected to be equal to or more than the $80.0 million finance lease obligation that is due in 2027. Because the provisions of the trust provide us the ability, and it is our intent, to hold the investments to maturity, the investments held by the trust are accounted for as held to maturity ("HTM"); therefore, they are held at their amortized cost. The investments held by the trust earn interest at the stated coupon rate of the invested bonds. Interest earned on the investments held by the trust is recognized and presented as Interest income on our consolidated statement of operations. As interest from the bonds is received and as bonds mature, any proceeds not reinvested are held in highly liquid securities and treated as restricted cash.
At December 31, 2025 and 2024, the carrying value of our restricted investment was $84.4 million and $81.6 million, net of an allowance for credit losses of $0.2 million and $0.2 million, and included restricted cash of $34.0 million and $18.2 million, respectively. The fair value at December 31, 2025 and 2024 was $84.0 million and $80.3 million, respectively, based on Level 1 inputs.
The following table shows the total amortized cost of our HTM debt securities by credit rating, excluding the allowance for credit losses and cash. 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.
| HTM Debt Securities | |||||||||||||||||||||||||||||||||||
| In millions | AA+ | AA- | A | A- | BBB+ | Total | |||||||||||||||||||||||||||||
| December 31, 2025 | $ | 13.2 | 10.5 | 13.1 | 3.8 | 10.0 | $ | 50.6 | |||||||||||||||||||||||||||
| December 31, 2024 | $ | 13.2 | 10.3 | 23.3 | 6.8 | 10.0 | $ | 63.6 | |||||||||||||||||||||||||||
Debt and Finance Lease Obligations
At December 31, 2025 and 2024, the carrying value of finance lease obligations was $98.8 million and $100.0 million, respectively, and the fair value was $100.2 million and $102.2 million, respectively. The fair value of our finance lease obligation associated with our Performance Materials' Wickliffe, Kentucky manufacturing plant, is based on the period-end quoted market prices for the obligations, using Level 2 inputs. The fair value of all other finance lease obligations approximates their carrying values.
The carrying value of our variable rate debt, excluding debt issuance fees and adjusted for our $200.0 million floating-to-fixed interest rate swap, was $362.8 million, and $555.2 million as of December 31, 2025 and 2024, respectively. The carrying value of our variable rate debt is a reasonable estimate of the fair value.
At December 31, 2025 and 2024, the carrying value of our fixed rate debt was $550.0 million and $550.0 million, respectively, and the fair value was $535.7 million and $503.2 million, respectively, based on Level 2 inputs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 20, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 2, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.