Exhibit 99.2
Ingevity Corporation
Supplemental Historical Quarterly Financial Information
The financial information included within this Exhibit 99.2 includes quarterly periods ended December 31, 2015 and 2014, September 30, 2015 and 2014, June 30, 2015 and 2014 and March 31, 2015 and 2014, as well as the twelve month periods ending December 31, 2015 and 2014 on both a GAAP, non-GAAP basis and Pro Forma basis. Additionally, unaudited reconciliations of quarterly GAAP to non-GAAP pro forma combined statements of operations as well as segment operating results of Ingevity for the quarterly periods ended December 31, 2015 and 2014, September 30, 2015 and 2014, June 30, 2015 and 2014 and March 31, 2015 and 2014, as well as the twelve month periods ending December 31, 2015 and 2014.
In addition, this information should be read in conjunction with Ingevity’s historical combined statements of income and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Form 10. The unaudited pro forma condensed combined statements of income constitute forward-looking information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. See “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” included in the Form 10 and in Ingevity's subsequent filings with the SEC.
TABLE OF CONTENTS
FINANCIAL SCHEDULES | Page | |
Combined Statement of Operations | Financial Schedules - Page 1 | |
Segment Operating Results | Financial Schedules - Page 2 | |
Non-GAAP Financial Measures | Financial Schedules - Page 3 | |
Pro Forma Combined Adjusted EBITDA | Financial Schedules - Page 4 | |
Pro Forma Segment EBITDA | Financial Schedules - Page 5 | |
Reconciliation to Non-GAAP Financial Measures | Financial Schedules - Page 6 | |
December 31, 2015 Reconciliation | Financial Schedules - Page 6 | |
December 31, 2014 Reconciliation | Financial Schedules - Page 20 | |
Notes to the Unaudited Pro Forma Adjustments | Financial Schedules - Page 35 |
INGEVITY CORPORATION
Combined Statements of Operations
| 2015 | 2014 | |||||||||||||||||||||||||||||
Unaudited | Audited | Unaudited | Audited | ||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||
Net sales | $ | 239.2 | $ | 262.2 | $ | 256.5 | $ | 209.8 | $ | 967.7 | $ | 232.5 | $ | 285.2 | $ | 282.3 | $ | 241.0 | $ | 1,041.0 | |||||||||||
Cost of sales | 170.1 | 177.1 | 178.9 | 160.9 | 687.0 | 160.2 | 194.3 | 192.8 | 171.0 | 718.3 | |||||||||||||||||||||
Gross Profit | 69.1 | 85.1 | 77.6 | 48.9 | 280.7 | 72.3 | 90.9 | 89.5 | 70.0 | 322.7 | |||||||||||||||||||||
Selling, general and administrative expenses | 28.2 | 32.1 | 28.0 | 25.5 | 113.8 | 26.9 | 29.3 | 28.8 | 26.0 | 111.0 | |||||||||||||||||||||
Separation costs | 1.5 | 4.8 | 5.5 | 5.4 | 17.2 | — | — | — | 0.4 | 0.4 | |||||||||||||||||||||
Interest expense | 4.1 | 4.4 | 5.1 | 6.5 | 20.1 | 4.4 | 3.9 | 4.1 | 4.0 | 16.4 | |||||||||||||||||||||
Other (income) expense, net | (1.1 | ) | 0.2 | (1.5 | ) | (6.1 | ) | (8.5 | ) | (0.2 | ) | (1.4 | ) | — | (6.5 | ) | (8.1 | ) | |||||||||||||
Income before income taxes | 36.4 | 43.6 | 40.5 | 17.6 | 138.1 | 41.2 | 59.1 | 56.6 | 46.1 | 203.0 | |||||||||||||||||||||
Provision for income taxes | 12.2 | 16.5 | 15.8 | 8.3 | 52.8 | 14.3 | 20.3 | 20.4 | 14.8 | 69.8 | |||||||||||||||||||||
Net income | 24.2 | 27.1 | 24.7 | 9.3 | 85.3 | 26.9 | 38.8 | 36.2 | 31.3 | 133.2 | |||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.2 | 1.2 | 1.3 | 1.3 | 5.0 | 0.9 | 1.1 | 0.9 | 0.9 | 3.8 | |||||||||||||||||||||
Net income attributable to the Company | $ | 23.0 | $ | 25.9 | $ | 23.4 | $ | 8.0 | $ | 80.3 | $ | 26.0 | $ | 37.7 | $ | 35.3 | $ | 30.4 | $ | 129.4 |
Financial Schedules - Page 1 |
INGEVITY CORPORATION
Segment Operating Results
2015 | 2014 | ||||||||||||||||||||||||||||||
In millions | Unaudited | Audited | Unaudited | Audited | |||||||||||||||||||||||||||
Net sales | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||
Performance Chemicals | $ | 175.0 | $ | 198.4 | $ | 192.6 | $ | 145.1 | $ | 711.1 | $ | 171.8 | $ | 221.6 | $ | 217.7 | $ | 180.5 | $ | 791.6 | |||||||||||
Performance Materials | 64.2 | 63.8 | 63.9 | 64.7 | 256.6 | 60.7 | 63.6 | 64.6 | 60.5 | 249.4 | |||||||||||||||||||||
Total net sales | $ | 239.2 | $ | 262.2 | $ | 256.5 | $ | 209.8 | $ | 967.7 | $ | 232.5 | $ | 285.2 | $ | 282.3 | $ | 241.0 | $ | 1,041.0 | |||||||||||
Segment operating profit(1) | |||||||||||||||||||||||||||||||
Performance Chemicals | 19.1 | 30.8 | 30.4 | 6.5 | 86.8 | 23.9 | 38.2 | 38.6 | 23.5 | 124.2 | |||||||||||||||||||||
Performance Materials | 22.6 | 21.6 | 20.3 | 16.6 | 81.1 | 21.7 | 24.5 | 25.0 | 18.8 | 90.0 | |||||||||||||||||||||
Total segment operating profit | 41.7 | 52.4 | 50.7 | 23.1 | 167.9 | 45.6 | 62.7 | 63.6 | 42.3 | 214.2 | |||||||||||||||||||||
Separation costs(2) | (1.5 | ) | (4.8 | ) | (5.5 | ) | (5.4 | ) | (17.2 | ) | — | — | — | (0.4 | ) | (0.4 | ) | ||||||||||||||
Restructuring and other income (charges)(3) | 0.3 | 0.4 | 0.4 | 6.4 | 7.5 | — | 0.3 | 0.1 | 5.2 | 5.6 | |||||||||||||||||||||
Interest expense | (4.1 | ) | (4.4 | ) | (5.1 | ) | (6.5 | ) | (20.1 | ) | (4.4 | ) | (3.9 | ) | (4.1 | ) | (4.0 | ) | (16.4 | ) | |||||||||||
Provision for income taxes | (12.2 | ) | (16.5 | ) | (15.8 | ) | (8.3 | ) | (52.8 | ) | (14.3 | ) | (20.3 | ) | (20.4 | ) | (14.8 | ) | (69.8 | ) | |||||||||||
Net income attributable to noncontrolling interests | (1.2 | ) | (1.2 | ) | (1.3 | ) | (1.3 | ) | (5.0 | ) | (0.9 | ) | (1.1 | ) | (0.9 | ) | (0.9 | ) | (3.8 | ) | |||||||||||
Net income attributable to the Company | $ | 23.0 | $ | 25.9 | $ | 23.4 | $ | 8.0 | $ | 80.3 | $ | 26.0 | $ | 37.7 | $ | 38.3 | $ | 27.4 | $ | 129.4 |
_______________
(1) | Segment operating profit is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses and other (income) expense, net). We have excluded the following items from segment operating profit: interest expense associated with corporate debt facilities, income taxes, gains (or losses) on divestitures of businesses, restructuring and other (income) charges and separation costs. |
(2) | These charges are in connection with the separation and distribution of Ingevity from WestRock,. These costs were primarily related to professional fees associated with separation activities within the finance, tax and legal functions. |
(3) | Restructuring and other income (charges) in 2015 included a $11.5 million gain associated with our Performance Materials segment and charge of $4 million incurred in the fourth quarter in our Performance Chemicals segment. Restructuring and other income (charges) in 2014 included a $5 million gain on sale of a business in our Performance Materials segment. |
Financial Schedules - Page 2 |
Ingevity Corporation
Non-GAAP Financial Measures
Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These financial measures are not meant to be considered in isolation or as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. The company believes these non-GAAP measures provide investors, potential investors, securities analysts and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.
Ingevity uses the following non-GAAP measures: Combined Adjusted EBITDA, inclusive of pro forma adjustments and Segment EBITDA, inclusive of pro forma adjustments.
Combined Adjusted EBITDA is defined as net income plus provision for income taxes, interest expense, depreciation and amortization, separation costs and restructuring and other (income) charges.
Segment EBITDA is defined as segment operating profit plus depreciation and amortization.
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. Reconciliations of Combined Adjusted EBITDA and Segment EBITDA to net income and segment profit, respectively, are set forth within the following pages.
Unaudited Pro Forma Combined Financial Statements
The following Unaudited Pro Forma Combined Financial Statements are derived from the historical combined financial statements of Ingevity, prepared in accordance with U.S. generally accepted accounting principles. These Unaudited Pro Forma Combined Financial Statements include adjustments required by SEC Staff Accounting Bulletin Topic 1:B-3 and Article 11 of SEC Regulation S-X. For more information on the pro forma adjustments see the section entitled:"Notes to the Unaudited Pro Forma Adjustments" included within this Exhibit.
Financial Schedules - Page 3 |
INGEVITY CORPORATION
Pro Forma - Combined Statements of Operations
2015 | 2014 | ||||||||||||||||||||||||||||||
Unaudited | Unaudited | ||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD (1) | Q1 | Q2 | Q3 | Q4 | YTD (1) | |||||||||||||||||||||
Net sales | $ | 239.2 | $ | 262.2 | $ | 256.5 | $ | 209.8 | $ | 967.7 | $ | 232.5 | $ | 285.2 | $ | 282.3 | $ | 241.0 | $ | 1,041.0 | |||||||||||
Cost of sales | 170.9 | 177.9 | 179.8 | 161.7 | 690.3 | 160.8 | 194.9 | 193.5 | 171.6 | 720.8 | |||||||||||||||||||||
Gross Profit | 68.3 | 84.3 | 76.7 | 48.1 | 277.4 | 71.7 | 90.3 | 88.8 | 69.4 | 320.2 | |||||||||||||||||||||
Selling, general and administrative expenses | 30.0 | 33.9 | 29.9 | 27.3 | 121.1 | 28.7 | 31.1 | 30.7 | 27.8 | 118.3 | |||||||||||||||||||||
Separation costs | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Interest expense | 4.7 | 4.8 | 4.7 | 4.8 | 19.0 | 4.4 | 4.4 | 4.4 | 4.4 | 17.6 | |||||||||||||||||||||
Other (income) expense, net | (1.1 | ) | 0.2 | (1.5 | ) | (6.1 | ) | (8.5 | ) | (0.2 | ) | (1.4 | ) | — | (6.5 | ) | (8.1 | ) | |||||||||||||
Income before income taxes | 34.7 | 45.4 | 43.6 | 22.1 | 145.8 | 38.8 | 56.2 | 53.7 | 43.7 | 192.4 | |||||||||||||||||||||
Provision for income taxes | 12.4 | 16.7 | 16.0 | 8.2 | 53.3 | 13.5 | 19.3 | 19.4 | 14.0 | 66.2 | |||||||||||||||||||||
Net income | 22.3 | 28.7 | 27.6 | 13.9 | 92.5 | 25.3 | 36.9 | 34.3 | 29.7 | 126.2 | |||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.2 | 1.2 | 1.3 | 1.3 | 5.0 | 0.9 | 1.1 | 0.9 | 0.9 | 3.8 | |||||||||||||||||||||
Net income attributable to the Company | $ | 21.1 | $ | 27.5 | $ | 26.3 | $ | 12.6 | $ | 87.5 | $ | 24.4 | $ | 35.8 | $ | 33.4 | $ | 28.8 | $ | 122.4 |
_______________
(1) | The YTD (Year to Date) column for both 2015 and 2014 above have been reconciled to the nearest GAAP financial statement presentation, see the Reconciliation to Non-GAAP Financial Measurements section within this Form 8-K. |
Pro Forma - Combined Adjusted EBITDA (Non-GAAP)
2015 | 2014 | ||||||||||||||||||||||||||||||
Unaudited | Unaudited | ||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD (1) | Q1 | Q2 | Q3 | Q4 | YTD (1) | |||||||||||||||||||||
Net income | $ | 22.3 | $ | 28.7 | $ | 27.6 | $ | 13.9 | $ | 92.5 | $ | 25.3 | $ | 36.9 | $ | 34.3 | $ | 29.7 | $ | 126.2 | |||||||||||
Provision for income taxes | 12.4 | 16.7 | 16.0 | 8.2 | 53.3 | 13.5 | 19.3 | 19.4 | 14.0 | 66.2 | |||||||||||||||||||||
Interest expense | 4.7 | 4.8 | 4.7 | 4.8 | 19.0 | 4.4 | 4.4 | 4.4 | 4.4 | 17.6 | |||||||||||||||||||||
Separation costs | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Depreciation and amortization | 8.5 | 8.4 | 8.7 | 9.0 | 34.6 | 7.9 | 8.0 | 8.1 | 8.3 | 32.3 | |||||||||||||||||||||
Restructuring and other (income) charges | (0.3 | ) | (0.4 | ) | (0.4 | ) | (6.4 | ) | (7.5 | ) | — | (0.3 | ) | (0.1 | ) | (5.2 | ) | (5.6 | ) | ||||||||||||
Combined Adjusted EBITDA (Non-GAAP) | 47.6 | 58.2 | 56.6 | 29.5 | 191.9 | 51.1 | 68.3 | 66.1 | 51.2 | 236.7 |
_______________
(1) | The YTD (Year to Date) column for both 2015 and 2014 above have been reconciled to the nearest GAAP financial statement presentation, see the Reconciliation to Non-GAAP Financial Measurements section within this Form 8-K. |
Financial Schedules - Page 4 |
INGEVITY CORPORATION
Pro Forma - Segment Data
2015 | 2014 | ||||||||||||||||||||||||||||||
In millions | Unaudited | Unaudited | |||||||||||||||||||||||||||||
Net sales | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||
Performance Chemicals | $ | 175.0 | $ | 198.4 | $ | 192.6 | $ | 145.1 | $ | 711.1 | $ | 171.8 | $ | 221.6 | $ | 217.7 | $ | 180.5 | $ | 791.6 | |||||||||||
Performance Materials | 64.2 | 63.8 | 63.9 | 64.7 | 256.6 | 60.7 | 63.6 | 64.6 | 60.5 | 249.4 | |||||||||||||||||||||
Total net sales | $ | 239.2 | $ | 262.2 | $ | 256.5 | $ | 209.8 | $ | 967.7 | $ | 232.5 | $ | 285.2 | $ | 282.3 | $ | 241.0 | $ | 1,041.0 | |||||||||||
Segment operating profit(1) | |||||||||||||||||||||||||||||||
Performance Chemicals | 17.2 | 28.9 | 28.3 | 4.5 | 78.9 | 22.2 | 36.5 | 36.7 | 21.6 | 117.0 | |||||||||||||||||||||
Performance Materials | 21.9 | 20.9 | 19.6 | 16.0 | 78.4 | 21.0 | 23.8 | 24.3 | 18.3 | 87.4 | |||||||||||||||||||||
Total segment operating profit | 39.1 | 49.8 | 47.9 | 20.5 | 157.3 | 43.2 | 60.3 | 61.0 | 39.9 | 204.4 | |||||||||||||||||||||
Separation costs(2) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Restructuring and other income (charges)(3) | 0.3 | 0.4 | 0.4 | 6.4 | 7.5 | — | 0.3 | 0.1 | 5.2 | 5.6 | |||||||||||||||||||||
Interest expense | (4.7 | ) | (4.8 | ) | (4.7 | ) | (4.8 | ) | (19.0 | ) | (4.4 | ) | (4.4 | ) | (4.4 | ) | (4.4 | ) | (17.6 | ) | |||||||||||
Provision for income taxes | (12.4 | ) | (16.7 | ) | (16.0 | ) | (8.2 | ) | (53.3 | ) | (13.5 | ) | (19.3 | ) | (19.4 | ) | (14.0 | ) | (66.2 | ) | |||||||||||
Net income attributable to noncontrolling interests | (1.2 | ) | (1.2 | ) | (1.3 | ) | (1.3 | ) | (5.0 | ) | (0.9 | ) | (1.1 | ) | (0.9 | ) | (0.9 | ) | (3.8 | ) | |||||||||||
Net income attributable to the Company | $ | 21.1 | $ | 27.5 | $ | 26.3 | $ | 12.6 | $ | 87.5 | $ | 24.4 | $ | 35.8 | $ | 36.4 | $ | 25.8 | $ | 122.4 |
_______________
(1) | The YTD (Year to Date) column for both 2015 and 2014 above have been reconciled to the nearest GAAP financial statement presentation, see the Reconciliation to Non-GAAP Financial Measurements section within this Form 8-K. |
Pro Forma - Segment EBITDA (Non-GAAP)
2015 | 2014 | ||||||||||||||||||||||||||||||
In millions | Unaudited | Unaudited | |||||||||||||||||||||||||||||
Performance Chemicals | Q1 | Q2 | Q3 | Q4 | YTD (1) | Q1 | Q2 | Q3 | Q4 | YTD (1) | |||||||||||||||||||||
Segment operating profit | $ | 17.2 | $ | 28.9 | $ | 28.3 | $ | 4.5 | $ | 78.9 | $ | 22.2 | $ | 36.5 | $ | 36.7 | $ | 21.6 | $ | 117.0 | |||||||||||
Depreciation and amortization | 5.8 | 5.8 | 5.9 | 5.9 | 23.4 | 5.5 | 5.6 | 5.7 | 5.6 | 22.4 | |||||||||||||||||||||
Segment EBITDA (Non-GAAP) | $ | 23.0 | $ | 34.7 | $ | 34.2 | $ | 10.4 | $ | 102.3 | $ | 27.7 | $ | 42.1 | $ | 42.4 | $ | 27.2 | $ | 139.4 | |||||||||||
Performance Materials | |||||||||||||||||||||||||||||||
Segment operating profit | $ | 21.9 | $ | 20.9 | $ | 19.6 | $ | 16.0 | $ | 78.4 | $ | 21.0 | $ | 23.8 | $ | 24.3 | $ | 18.3 | $ | 87.4 | |||||||||||
Depreciation and amortization | 2.7 | 2.6 | 2.8 | 3.1 | 11.2 | 2.4 | 2.4 | 2.4 | 2.7 | 9.9 | |||||||||||||||||||||
Segment EBITDA (Non-GAAP) | $ | 24.6 | $ | 23.5 | $ | 22.4 | $ | 19.1 | $ | 89.6 | $ | 23.4 | $ | 26.2 | $ | 26.7 | $ | 21.0 | $ | 97.3 |
_______________
(1) | The YTD (Year to Date) column for both 2015 and 2014 above have been reconciled to the nearest GAAP financial statement presentation, see the Reconciliation to Non-GAAP Financial Measurements section within this Form 8-K. |
Financial Schedules - Page 5 |
Ingevity Corporation
Reconciliation of Non-GAAP Financial Measures and Pro Forma Financials
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Year Ended December 31, 2015
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 967.7 | $ | — | $ | 967.7 | |||||
Cost of sales | 687.0 | 3.3 | (A) | 690.3 | |||||||
Gross profit | 280.7 | (3.3 | ) | 277.4 | |||||||
Selling, general and administrative expenses | 113.8 | 7.3 | (A) | 121.1 | |||||||
Separation costs | 17.2 | (17.2 | ) | (B) | — | ||||||
Interest expense | 20.1 | (1.1 | ) | (C) | 19.0 | ||||||
Other (income) expense, net | (8.5 | ) | — | (8.5 | ) | ||||||
Income before income taxes | 138.1 | 7.7 | 145.8 | ||||||||
Provision for income taxes | 52.8 | 0.5 | (D) | 53.3 | |||||||
Net income | 85.3 | 7.2 | 92.5 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 5.0 | — | 5.0 | ||||||||
Net income attributable to the company | $ | 80.3 | $ | 7.2 | $ | 87.5 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Year Ended December 31, 2015
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 85.3 | $ | 7.2 | (A) | $ | 92.5 | ||||
Provision for income taxes | 52.8 | 0.5 | (D) | 53.3 | |||||||
Interest expense | 20.1 | (1.1 | ) | (C) | 19.0 | ||||||
Separation costs | 17.2 | (17.2 | ) | (B) | — | ||||||
Depreciation and amortization | 34.6 | 34.6 | |||||||||
Restructuring and other (income) charges | (7.5 | ) | (7.5 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 202.5 | (E) | $ | 191.9 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 6 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Year Ended December 31, 2015
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 711.1 | $ | 711.1 | |||||||
Performance Materials | 256.6 | 256.6 | |||||||||
Total net sales | $ | 967.7 | $ | 967.7 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 86.8 | (7.9 | ) | 78.9 | |||||||
Performance Materials | 81.1 | (2.7 | ) | 78.4 | |||||||
Total segment operating profit | 167.9 | (10.6 | ) | (A) | 157.3 | ||||||
Separation costs | (17.2 | ) | 17.2 | (B) | — | ||||||
Restructuring and other income (charges) | 7.5 | 7.5 | |||||||||
Interest expense | (20.1 | ) | 1.1 | (C) | (19.0 | ) | |||||
Provision for income taxes | (52.8 | ) | (0.5 | ) | (D) | (53.3 | ) | ||||
Net income attributable to noncontrolling interests | (5.0 | ) | (5.0 | ) | |||||||
Net income attributable to the Company | $ | 80.3 | $ | 7.2 | $ | 87.5 | |||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Year Ended December 31, 2015
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 86.8 | $ | (7.9 | ) | (A) | $ | 78.9 | |||
Depreciation and amortization | 23.4 | 23.4 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 110.2 | $ | 102.3 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 81.1 | $ | (2.7 | ) | (A) | $ | 78.4 | |||
Depreciation and amortization | 11.2 | 11.2 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 92.3 | $ | 89.6 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 7 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended March 31, 2015
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 239.2 | $ | — | $ | 239.2 | |||||
Cost of sales | 170.1 | 0.8 | (A) | 170.9 | |||||||
Gross profit | 69.1 | (0.8 | ) | 68.3 | |||||||
Selling, general and administrative expenses | 28.2 | 1.8 | (A) | 30.0 | |||||||
Separation costs | 1.5 | (1.5 | ) | (B) | — | ||||||
Interest expense | 4.1 | 0.6 | (C) | 4.7 | |||||||
Other (income) expense, net | (1.1 | ) | — | (1.1 | ) | ||||||
Income before income taxes | 36.4 | (1.7 | ) | 34.7 | |||||||
Provision for income taxes | 12.2 | 0.2 | (D) | 12.4 | |||||||
Net income | 24.2 | (1.9 | ) | 22.3 | |||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.2 | — | 1.2 | ||||||||
Net income attributable to the company | $ | 23.0 | $ | (1.9 | ) | $ | 21.1 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended March 31, 2015
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 24.2 | $ | (1.9 | ) | (A) | $ | 22.3 | |||
Provision for income taxes | 12.2 | $ | 0.2 | (D) | 12.4 | ||||||
Interest expense | 4.1 | $ | 0.6 | (C) | 4.7 | ||||||
Separation costs | 1.5 | $ | (1.5 | ) | (B) | — | |||||
Depreciation and amortization | 8.5 | 8.5 | |||||||||
Restructuring and other (income) charges | (0.3 | ) | (0.3 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 50.2 | (E) | $ | 47.6 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 8 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended March 31, 2015
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 175.0 | $ | 175.0 | |||||||
Performance Materials | 64.2 | 64.2 | |||||||||
Total net sales | $ | 239.2 | $ | 239.2 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 19.1 | (1.9 | ) | 17.2 | |||||||
Performance Materials | 22.6 | (0.7 | ) | 21.9 | |||||||
Total segment operating profit | 41.7 | (2.6 | ) | (A) | 39.1 | ||||||
Separation costs | (1.5 | ) | 1.5 | (B) | — | ||||||
Restructuring and other income (charges) | 0.3 | 0.3 | |||||||||
Interest expense | (4.1 | ) | (0.6 | ) | (C) | (4.7 | ) | ||||
Provision for income taxes | (12.2 | ) | (0.2 | ) | (D) | (12.4 | ) | ||||
Net income attributable to noncontrolling interests | (1.2 | ) | (1.2 | ) | |||||||
Net income attributable to the Company | $ | 23.0 | $ | (1.9 | ) | $ | 21.1 | ||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 9 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended March 31, 2015
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 19.1 | $ | (1.9 | ) | (A) | $ | 17.2 | |||
Depreciation and amortization | 23.4 | 5.8 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 42.5 | $ | 23.0 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 22.6 | $ | (0.7 | ) | (A) | $ | 21.9 | |||
Depreciation and amortization | 11.2 | 2.7 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 33.8 | $ | 24.6 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 10 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended June 30, 2015
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 262.2 | $ | — | $ | 262.2 | |||||
Cost of sales | 177.1 | 0.8 | (A) | 177.9 | |||||||
Gross profit | 85.1 | (0.8 | ) | 84.3 | |||||||
Selling, general and administrative expenses | 32.1 | 1.8 | (A) | 33.9 | |||||||
Separation costs | 4.8 | (4.8 | ) | (B) | — | ||||||
Interest expense | 4.4 | 0.4 | (C) | 4.8 | |||||||
Other (income) expense, net | 0.2 | — | 0.2 | ||||||||
Income before income taxes | 43.6 | 1.8 | 45.4 | ||||||||
Provision for income taxes | 16.5 | 0.2 | (D) | 16.7 | |||||||
Net income | 27.1 | 1.6 | 28.7 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.2 | — | 1.2 | ||||||||
Net income attributable to the company | $ | 25.9 | $ | 1.6 | $ | 27.5 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended June 30, 2015
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 27.1 | $ | 1.6 | (A) | $ | 28.7 | ||||
Provision for income taxes | 16.5 | $ | 0.2 | (D) | 16.7 | ||||||
Interest expense | 4.4 | $ | 0.4 | (C) | 4.8 | ||||||
Separation costs | 4.8 | $ | (4.8 | ) | (B) | — | |||||
Depreciation and amortization | 8.4 | 8.4 | |||||||||
Restructuring and other (income) charges | (0.4 | ) | (0.4 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 60.8 | (E) | $ | 58.2 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 11 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended June 30, 2015
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 198.4 | $ | 198.4 | |||||||
Performance Materials | 63.8 | 63.8 | |||||||||
Total net sales | $ | 262.2 | $ | 262.2 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 30.8 | (1.9 | ) | 28.9 | |||||||
Performance Materials | 21.6 | (0.7 | ) | 20.9 | |||||||
Total segment operating profit | 52.4 | (2.6 | ) | (A) | 49.8 | ||||||
Separation costs | (4.8 | ) | 4.8 | (B) | — | ||||||
Restructuring and other income (charges) | 0.4 | 0.4 | |||||||||
Interest expense | (4.4 | ) | (0.4 | ) | (C) | (4.8 | ) | ||||
Provision for income taxes | (16.5 | ) | (0.2 | ) | (D) | (16.7 | ) | ||||
Net income attributable to noncontrolling interests | (1.2 | ) | (1.2 | ) | |||||||
Net income attributable to the Company | $ | 25.9 | $ | 1.6 | $ | 27.5 | |||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 12 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended June 30, 2015
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 30.8 | $ | (1.9 | ) | (A) | $ | 28.9 | |||
Depreciation and amortization | 5.8 | 5.8 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 36.6 | $ | 34.7 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 21.6 | $ | (0.7 | ) | (A) | $ | 20.9 | |||
Depreciation and amortization | 2.6 | 2.6 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 24.2 | $ | 23.5 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 13 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended September 30, 2015
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 256.5 | $ | — | $ | 256.5 | |||||
Cost of sales | 178.9 | 0.9 | (A) | 179.8 | |||||||
Gross profit | 77.6 | (0.9 | ) | 76.7 | |||||||
Selling, general and administrative expenses | 28.0 | 1.9 | (A) | 29.9 | |||||||
Separation costs | 5.5 | (5.5 | ) | (B) | — | ||||||
Interest expense | 5.1 | (0.4 | ) | (C) | 4.7 | ||||||
Other (income) expense, net | (1.5 | ) | — | (1.5 | ) | ||||||
Income before income taxes | 40.5 | 3.1 | 43.6 | ||||||||
Provision for income taxes | 15.8 | 0.2 | (D) | 16.0 | |||||||
Net income | 24.7 | 2.9 | 27.6 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.3 | — | 1.3 | ||||||||
Net income attributable to the company | $ | 23.4 | $ | 2.9 | $ | 26.3 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended September 30, 2015
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 24.7 | $ | 2.9 | (A) | $ | 27.6 | ||||
Provision for income taxes | 15.8 | $ | 0.2 | (D) | 16.0 | ||||||
Interest expense | 5.1 | $ | (0.4 | ) | (C) | 4.7 | |||||
Separation costs | 5.5 | $ | (5.5 | ) | (B) | — | |||||
Depreciation and amortization | 8.7 | 8.7 | |||||||||
Restructuring and other (income) charges | (0.4 | ) | (0.4 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 59.4 | (E) | $ | 56.6 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 14 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended September 30, 2015
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 192.6 | $ | 192.6 | |||||||
Performance Materials | 63.9 | 63.9 | |||||||||
Total net sales | $ | 256.5 | $ | 256.5 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 30.4 | (2.1 | ) | 28.3 | |||||||
Performance Materials | 20.3 | (0.7 | ) | 19.6 | |||||||
Total segment operating profit | 50.7 | (2.8 | ) | (A) | 47.9 | ||||||
Separation costs | (5.5 | ) | 5.5 | (B) | — | ||||||
Restructuring and other income (charges) | 0.4 | 0.4 | |||||||||
Interest expense | (5.1 | ) | 0.4 | (C) | (4.7 | ) | |||||
Provision for income taxes | (15.8 | ) | (0.2 | ) | (D) | (16.0 | ) | ||||
Net income attributable to noncontrolling interests | (1.3 | ) | (1.3 | ) | |||||||
Net income attributable to the Company | $ | 23.4 | $ | 2.9 | $ | 26.3 | |||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 15 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended September 30, 2015
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 30.4 | $ | (2.1 | ) | (A) | $ | 28.3 | |||
Depreciation and amortization | 5.9 | 5.9 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 36.3 | $ | 34.2 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 20.3 | $ | (0.7 | ) | (A) | $ | 19.6 | |||
Depreciation and amortization | 2.8 | 2.8 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 23.1 | $ | 22.4 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 16 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended December 31, 2015
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 209.8 | $ | — | $ | 209.8 | |||||
Cost of sales | 160.9 | 0.8 | (A) | 161.7 | |||||||
Gross profit | 48.9 | (0.8 | ) | 48.1 | |||||||
Selling, general and administrative expenses | 25.5 | 1.8 | (A) | 27.3 | |||||||
Separation costs | 5.4 | (5.4 | ) | (B) | — | ||||||
Interest expense | 6.5 | (1.7 | ) | (C) | 4.8 | ||||||
Other (income) expense, net | (6.1 | ) | — | (6.1 | ) | ||||||
Income before income taxes | 17.6 | 4.5 | 22.1 | ||||||||
Provision for income taxes | 8.3 | (0.1 | ) | (D) | 8.2 | ||||||
Net income | 9.3 | 4.6 | 13.9 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.3 | — | 1.3 | ||||||||
Net income attributable to the company | $ | 8.0 | $ | 4.6 | $ | 12.6 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended December 31, 2015
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 9.3 | $ | 4.6 | (A) | $ | 13.9 | ||||
Provision for income taxes | 8.3 | $ | (0.1 | ) | (D) | 8.2 | |||||
Interest expense | 6.5 | $ | (1.7 | ) | (C) | 4.8 | |||||
Separation costs | 5.4 | $ | (5.4 | ) | (B) | — | |||||
Depreciation and amortization | 9.0 | 9.0 | |||||||||
Restructuring and other (income) charges | (6.4 | ) | (6.4 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 32.1 | (E) | $ | 29.5 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 17 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended December 31, 2015
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 145.1 | $ | 145.1 | |||||||
Performance Materials | 64.7 | 64.7 | |||||||||
Total net sales | $ | 209.8 | $ | 209.8 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 6.5 | (2.0 | ) | 4.5 | |||||||
Performance Materials | 16.6 | (0.6 | ) | 16.0 | |||||||
Total segment operating profit | 23.1 | (2.6 | ) | (A) | 20.5 | ||||||
Separation costs | (5.4 | ) | 5.4 | (B) | — | ||||||
Restructuring and other income (charges) | 6.4 | 6.4 | |||||||||
Interest expense | (6.5 | ) | 1.7 | (C) | (4.8 | ) | |||||
Provision for income taxes | (8.3 | ) | 0.1 | (D) | (8.2 | ) | |||||
Net income attributable to noncontrolling interests | (1.3 | ) | (1.3 | ) | |||||||
Net income attributable to the Company | $ | 8.0 | $ | 4.6 | $ | 12.6 | |||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 18 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended December 31, 2015
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 6.5 | $ | (2.0 | ) | (A) | $ | 4.5 | |||
Depreciation and amortization | 5.9 | 5.9 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 12.4 | $ | 10.4 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 16.6 | $ | (0.6 | ) | (A) | $ | 16.0 | |||
Depreciation and amortization | 3.1 | 3.1 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 19.7 | $ | 19.1 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 19 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Year Ended December 31, 2014
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 1,041.0 | $ | — | $ | 1,041.0 | |||||
Cost of sales | 718.3 | 2.5 | (A) | 720.8 | |||||||
Gross profit | 322.7 | (2.5 | ) | 320.2 | |||||||
Selling, general and administrative expenses | 111.0 | 7.3 | (A) | 118.3 | |||||||
Separation costs | 0.4 | (0.4 | ) | (B) | — | ||||||
Interest expense | 16.4 | 1.2 | (C) | 17.6 | |||||||
Other (income) expense, net | (8.1 | ) | — | (8.1 | ) | ||||||
Income before income taxes | 203.0 | (10.6 | ) | 192.4 | |||||||
Provision for income taxes | 69.8 | (3.6 | ) | (D) | 66.2 | ||||||
Net income | 133.2 | (7.0 | ) | 126.2 | |||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 3.8 | — | 3.8 | ||||||||
Net income attributable to the company | $ | 129.4 | $ | (7.0 | ) | $ | 122.4 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Year Ended December 31, 2014
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 133.2 | $ | (7.0 | ) | (A) | $ | 126.2 | |||
Provision for income taxes | 69.8 | (3.6 | ) | (D) | 66.2 | ||||||
Interest expense | 16.4 | 1.2 | (C) | 17.6 | |||||||
Separation costs | 0.4 | (0.4 | ) | (B) | — | ||||||
Depreciation and amortization | 32.3 | 32.3 | |||||||||
Restructuring and other (income) charges | (5.6 | ) | (5.6 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 246.5 | (E) | $ | 236.7 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 20 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Year Ended December 31, 2014
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 791.6 | $ | 791.6 | |||||||
Performance Materials | 249.4 | 249.4 | |||||||||
Total net sales | $ | 1,041.0 | $ | 1,041.0 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 124.2 | (7.2 | ) | 117.0 | |||||||
Performance Materials | 90.0 | (2.6 | ) | 87.4 | |||||||
Total segment operating profit | 214.2 | (9.8 | ) | (A) | 204.4 | ||||||
Separation costs | (0.4 | ) | 0.4 | (B) | — | ||||||
Restructuring and other income (charges) | 5.6 | 5.6 | |||||||||
Interest expense | (16.4 | ) | (1.2 | ) | (C) | (17.6 | ) | ||||
Provision for income taxes | (69.8 | ) | 3.6 | (D) | (66.2 | ) | |||||
Net income attributable to noncontrolling interests | (3.8 | ) | (3.8 | ) | |||||||
Net income attributable to the Company | $ | 129.4 | $ | (7.0 | ) | $ | 122.4 | ||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 21 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Year Ended December 31, 2014
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 124.2 | $ | (7.2 | ) | (A) | $ | 117.0 | |||
Depreciation and amortization | 22.4 | 22.4 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 146.6 | $ | 139.4 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 90.0 | $ | (2.6 | ) | (A) | $ | 87.4 | |||
Depreciation and amortization | 9.9 | 9.9 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 99.9 | $ | 97.3 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 22 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended March 31, 2014
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 232.5 | $ | — | $ | 232.5 | |||||
Cost of sales | 160.2 | 0.6 | (A) | 160.8 | |||||||
Gross profit | 72.3 | (0.6 | ) | 71.7 | |||||||
Selling, general and administrative expenses | 26.9 | 1.8 | (A) | 28.7 | |||||||
Separation costs | — | — | (B) | — | |||||||
Interest expense | 4.4 | — | (C) | 4.4 | |||||||
Other (income) expense, net | (0.2 | ) | — | (0.2 | ) | ||||||
Income before income taxes | 41.2 | (2.4 | ) | 38.8 | |||||||
Provision for income taxes | 14.3 | (0.8 | ) | (D) | 13.5 | ||||||
Net income | 26.9 | (1.6 | ) | 25.3 | |||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 0.9 | — | 0.9 | ||||||||
Net income attributable to the company | $ | 26.0 | $ | (1.6 | ) | $ | 24.4 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended March 31, 2014
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 26.9 | $ | (1.6 | ) | (A) | $ | 25.3 | |||
Provision for income taxes | 14.3 | $ | (0.8 | ) | (D) | 13.5 | |||||
Interest expense | 4.4 | $ | — | (C) | 4.4 | ||||||
Separation costs | — | $ | — | (B) | — | ||||||
Depreciation and amortization | 7.9 | 7.9 | |||||||||
Restructuring and other (income) charges | — | — | |||||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 53.5 | (E) | $ | 51.1 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 23 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended March 31, 2014
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 171.8 | $ | 171.8 | |||||||
Performance Materials | 60.7 | 60.7 | |||||||||
Total net sales | $ | 232.5 | $ | 232.5 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 23.9 | (1.7 | ) | 22.2 | |||||||
Performance Materials | 21.7 | (0.7 | ) | 21.0 | |||||||
Total segment operating profit | 45.6 | (2.4 | ) | (A) | 43.2 | ||||||
Separation costs | — | — | (B) | — | |||||||
Restructuring and other income (charges) | — | — | |||||||||
Interest expense | (4.4 | ) | — | (C) | (4.4 | ) | |||||
Provision for income taxes | (14.3 | ) | 0.8 | (D) | (13.5 | ) | |||||
Net income attributable to noncontrolling interests | (0.9 | ) | (0.9 | ) | |||||||
Net income attributable to the Company | $ | 26.0 | $ | (1.6 | ) | $ | 24.4 | ||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 24 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended March 31, 2014
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 23.9 | $ | (1.7 | ) | (A) | $ | 22.2 | |||
Depreciation and amortization | 5.5 | 5.5 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 29.4 | $ | 27.7 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 21.7 | $ | (0.7 | ) | (A) | $ | 21.0 | |||
Depreciation and amortization | 2.4 | 2.4 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 24.1 | $ | 23.4 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 25 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended June 30, 2014
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 285.2 | $ | — | $ | 285.2 | |||||
Cost of sales | 194.3 | 0.6 | (A) | 194.9 | |||||||
Gross profit | 90.9 | (0.6 | ) | 90.3 | |||||||
Selling, general and administrative expenses | 29.3 | 1.8 | (A) | 31.1 | |||||||
Separation costs | — | — | (B) | — | |||||||
Interest expense | 3.9 | 0.5 | (C) | 4.4 | |||||||
Other (income) expense, net | (1.4 | ) | — | (1.4 | ) | ||||||
Income before income taxes | 59.1 | (2.9 | ) | 56.2 | |||||||
Provision for income taxes | 20.3 | (1.0 | ) | (D) | 19.3 | ||||||
Net income | 38.8 | (1.9 | ) | 36.9 | |||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 1.1 | — | 1.1 | ||||||||
Net income attributable to the company | $ | 37.7 | $ | (1.9 | ) | $ | 35.8 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended June 30, 2014
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 38.8 | $ | (1.9 | ) | (A) | $ | 36.9 | |||
Provision for income taxes | 20.3 | $ | (1.0 | ) | (D) | 19.3 | |||||
Interest expense | 3.9 | $ | 0.5 | (C) | 4.4 | ||||||
Separation costs | — | $ | — | (B) | — | ||||||
Depreciation and amortization | 8.0 | 8.0 | |||||||||
Restructuring and other (income) charges | (0.3 | ) | (0.3 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 70.7 | (E) | $ | 68.3 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 26 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended June 30, 2014
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 221.6 | $ | 221.6 | |||||||
Performance Materials | 63.6 | 63.6 | |||||||||
Total net sales | $ | 285.2 | $ | 285.2 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 38.2 | (1.7 | ) | 36.5 | |||||||
Performance Materials | 24.5 | (0.7 | ) | 23.8 | |||||||
Total segment operating profit | 62.7 | (2.4 | ) | (A) | 60.3 | ||||||
Separation costs | — | — | (B) | — | |||||||
Restructuring and other income (charges) | 0.3 | 0.3 | |||||||||
Interest expense | (3.9 | ) | (0.5 | ) | (C) | (4.4 | ) | ||||
Provision for income taxes | (20.3 | ) | 1.0 | (D) | (19.3 | ) | |||||
Net income attributable to noncontrolling interests | (1.1 | ) | (1.1 | ) | |||||||
Net income attributable to the Company | $ | 37.7 | $ | (1.9 | ) | $ | 35.8 | ||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 27 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended June 30, 2014
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 38.2 | $ | (1.7 | ) | (A) | $ | 36.5 | |||
Depreciation and amortization | 5.6 | 5.6 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 43.8 | $ | 42.1 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 24.5 | $ | (0.7 | ) | (A) | $ | 23.8 | |||
Depreciation and amortization | 2.4 | 2.4 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 26.9 | $ | 26.2 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 28 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended September 30, 2014
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 282.3 | $ | — | $ | 282.3 | |||||
Cost of sales | 192.8 | 0.7 | (A) | 193.5 | |||||||
Gross profit | 89.5 | (0.7 | ) | 88.8 | |||||||
Selling, general and administrative expenses | 28.8 | 1.9 | (A) | 30.7 | |||||||
Separation costs | — | — | (B) | — | |||||||
Interest expense | 4.1 | 0.3 | (C) | 4.4 | |||||||
Other (income) expense, net | — | — | — | ||||||||
Income before income taxes | 56.6 | (2.9 | ) | 53.7 | |||||||
Provision for income taxes | 20.4 | (1.0 | ) | (D) | 19.4 | ||||||
Net income | 36.2 | (1.9 | ) | 34.3 | |||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 0.9 | — | 0.9 | ||||||||
Net income attributable to the company | $ | 35.3 | $ | (1.9 | ) | $ | 33.4 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended September 30, 2014
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 36.2 | $ | (1.9 | ) | (A) | $ | 34.3 | |||
Provision for income taxes | 20.4 | $ | (1.0 | ) | (D) | 19.4 | |||||
Interest expense | 4.1 | $ | 0.3 | (C) | 4.4 | ||||||
Separation costs | — | $ | — | (B) | — | ||||||
Depreciation and amortization | 8.1 | 8.1 | |||||||||
Restructuring and other (income) charges | (0.1 | ) | (0.1 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 68.7 | (E) | $ | 66.1 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 29 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended September 30, 2014
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 217.7 | $ | 217.7 | |||||||
Performance Materials | 64.6 | 64.6 | |||||||||
Total net sales | $ | 282.3 | $ | 282.3 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 38.6 | (1.9 | ) | 36.7 | |||||||
Performance Materials | 25.0 | (0.7 | ) | 24.3 | |||||||
Total segment operating profit | 63.6 | (2.6 | ) | (A) | 61.0 | ||||||
Separation costs | — | — | (B) | — | |||||||
Restructuring and other income (charges) | 0.1 | 0.1 | |||||||||
Interest expense | (4.1 | ) | (0.3 | ) | (C) | (4.4 | ) | ||||
Provision for income taxes | (20.4 | ) | 1.0 | (D) | (19.4 | ) | |||||
Net income attributable to noncontrolling interests | (0.9 | ) | (0.9 | ) | |||||||
Net income attributable to the Company | $ | 38.3 | $ | (1.9 | ) | $ | 36.4 | ||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 30 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended September 30, 2014
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 38.6 | $ | (1.9 | ) | (A) | $ | 36.7 | |||
Depreciation and amortization | 5.7 | 5.7 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 44.3 | $ | 42.4 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 25 | $ | (0.7 | ) | (A) | $ | 24.3 | |||
Depreciation and amortization | 2.4 | 2.4 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 27.4 | $ | 26.7 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 31 |
Reconciliation of the U.S. GAAP Combined Statements of Operations
to Pro Forma Combined Statement of Operations
Quarter Ended December 31, 2014
In millions | Ingevity U.S. GAAP | Pro Forma Adjustments | Unaudited Pro Forma | ||||||||
Net sales | $ | 241.0 | $ | — | $ | 241.0 | |||||
Cost of sales | 171.0 | 0.6 | (A) | 171.6 | |||||||
Gross profit | 70.0 | (0.6 | ) | 69.4 | |||||||
Selling, general and administrative expenses | 26.0 | 1.8 | (A) | 27.8 | |||||||
Separation costs | 0.4 | (0.4 | ) | (B) | — | ||||||
Interest expense | 4.0 | 0.4 | (C) | 4.4 | |||||||
Other (income) expense, net | (6.5 | ) | — | (6.5 | ) | ||||||
Income before income taxes | 46.1 | (2.4 | ) | 43.7 | |||||||
Provision for income taxes | 14.8 | (0.8 | ) | (D) | 14.0 | ||||||
Net income | 31.3 | (1.6 | ) | 29.7 | |||||||
Less: Net income (loss) attributable to noncontrolling interests, net of taxes | 0.9 | — | 0.9 | ||||||||
Net income attributable to the company | $ | 30.4 | $ | (1.6 | ) | $ | 28.8 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Reconciliation of Net Income
to Combined Adjusted EBITDA (Non-GAAP)
Quarter Ended December 31, 2014
In millions | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
Net income | $ | 31.3 | $ | (1.6 | ) | (A) | $ | 29.7 | |||
Provision for income taxes | 14.8 | $ | (0.8 | ) | (D) | 14.0 | |||||
Interest expense | 4.0 | $ | 0.4 | (C) | 4.4 | ||||||
Separation costs | 0.4 | $ | (0.4 | ) | (B) | — | |||||
Depreciation and amortization | 8.3 | 8.3 | |||||||||
Restructuring and other (income) charges | (5.2 | ) | (5.2 | ) | |||||||
Combined Adjusted EBITDA (Non-GAAP) | $ | 53.6 | (E) | $ | 51.2 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(E) | Ingevity would have incurred incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, Ingevity management estimates that these costs would have ranged from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. |
Financial Schedules - Page 32 |
Reconciliation of the Segment Operating Results
to Unaudited Pro Forma Segment Operating Results
Quarter Ended December 31, 2014
In millions | Segment Operating Results | Pro Forma Adjustments | Unaudited Pro Forma Segment Operating Results | ||||||||
Net sales | |||||||||||
Performance Chemicals | $ | 180.5 | $ | 180.5 | |||||||
Performance Materials | 60.5 | 60.5 | |||||||||
Total net sales | $ | 241.0 | $ | 241.0 | |||||||
Segment operating profit | |||||||||||
Performance Chemicals | 23.5 | (1.9 | ) | 21.6 | |||||||
Performance Materials | 18.8 | (0.5 | ) | 18.3 | |||||||
Total segment operating profit | 42.3 | (2.4 | ) | (A) | 39.9 | ||||||
Separation costs | (0.4 | ) | 0.4 | (B) | — | ||||||
Restructuring and other income (charges) | 5.2 | 5.2 | |||||||||
Interest expense | (4.0 | ) | (0.4 | ) | (C) | (4.4 | ) | ||||
Provision for income taxes | (14.8 | ) | 0.8 | (D) | (14.0 | ) | |||||
Net income attributable to noncontrolling interests | (0.9 | ) | (0.9 | ) | |||||||
Net income attributable to the Company | $ | 27.4 | $ | (1.6 | ) | $ | 25.8 | ||||
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(B) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(C) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
(D) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 33 |
Reconciliation of the U.S. GAAP Segment Operating Profit
to Segment EBITDA (Non-GAAP)
Quarter Ended December 31, 2014
Performance Chemicals | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 23.5 | $ | (1.9 | ) | (A) | $ | 21.6 | |||
Depreciation and amortization | 5.6 | 5.6 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 29.1 | $ | 27.2 | |||||||
Performance Materials | Pro Forma Adjustments | Unaudited Pro Forma | |||||||||
In millions | |||||||||||
Segment operating profit | $ | 18.8 | $ | (0.5 | ) | (A) | $ | 18.3 | |||
Depreciation and amortization | 2.7 | 2.7 | |||||||||
Segment EBITDA (Non-GAAP) | $ | 21.5 | $ | 21.0 |
_______________
(A) | Refer to theNotes to the Unaudited Pro Forma Adjustments for a description of this adjustment. |
Financial Schedules - Page 34 |
Notes to the Unaudited Pro Forma Adjustments
For more information regarding the Ingevity’s unaudited pro forma combined statements of operations for the years ended December 31, 2015, see “Unaudited Pro Forma Combined Financial Statements” in Ingevity’s registration statement on Form 10 and amendments thereto (the “Form 10”), copies of which may be obtained by visiting the web site of the Securities and Exchange Commission, or the SEC, at www.sec.gov.
The "Unaudited Pro Forma Combined Statement of Operations" included within Ingevity's registration statement on Form 10 filed on or before December 10, 2015 is presented for the fiscal year ended December 31, 2014 and gives effect as if the pro forma adjustments had occurred on January 1, the first day of fiscal year 2014. Presented below is a quarterly impact of each respective pro forma adjustments for the fiscal year ended December 31, 2014.
The "Unaudited Pro Forma Combined Statement of Operations" included within Ingevity's registration statement on Form 10 filed on and subsequent to March 7, 2016 is presented for the fiscal year ended December 31, 2015 and gives effect as if the pro forma adjustments had occurred on January 1, the first day of fiscal year 2015. Presented below is a quarterly impact of each respective pro forma adjustments for the fiscal year ended December 31, 2015.
(A) | We have entered into agreements to obtain audit and certain compliance functions as a stand-alone public company, compensation agreements with certain members of our executive team and a long term supply agreement with WestRock. Prior to the completion of the separation, we will also enter into agreements to obtain insurance coverage according to quotations we have received based on our individual loss history, credit profile and selected insurance coverage. These expenses will represent recurring costs in excess of the amounts historically allocated to Ingevity. |
The 2015 and 2014 pro forma adjustment by segment by quarter is included in the below table:
2015 | 2014 | ||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||
Performance Chemicals | 1.9 | 1.9 | 2.1 | 2.0 | 7.9 | 1.7 | 1.7 | 1.9 | 1.9 | 7.2 | |||||||||||||||||||||
Performance Materials | 0.7 | 0.7 | 0.7 | 0.6 | 2.7 | 0.7 | 0.7 | 0.7 | 0.5 | 2.6 | |||||||||||||||||||||
Total | $ | 2.6 | $ | 2.6 | $ | 2.8 | $ | 2.6 | $ | 10.6 | $ | 2.4 | $ | 2.4 | $ | 2.6 | $ | 2.4 | $ | 9.8 | |||||||||||
(B) | Represents the elimination of non-recurring expenses directly related to transaction costs incurred during the years ended December 31, 2015 and 2014, respectively, in connection with the separation from WestRock, primarily related to professional fees associated with separation activities within the finance, tax and legal functions. The 2015 and 2014 pro forma adjustment by quarter is included in the below table: |
| 2015 | 2014 | |||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||
Separation costs | $ | (1.5 | ) | $ | (4.8 | ) | $ | (5.5 | ) | $ | (5.4 | ) | $ | (17.2 | ) | $ | — | $ | — | $ | — | $ | (0.4 | ) | $ | (0.4 | ) | ||||
(C) | Represents adjustments to interest expense and amortization of debt issuance costs related to our target pro forma long-term indebtedness. The 2015 and 2014 pro forma adjustment by quarter is included in the below table: |
| 2015 | 2014 | |||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||
Interest expense | $ | 0.6 | $ | 0.4 | $ | (0.4 | ) | $ | (1.7 | ) | $ | (1.1 | ) | $ | — | $ | 0.5 | $ | 0.3 | $ | 0.4 | $ | 1.2 | ||||||||
(D) | Represents the tax effect of proforma adjustments for each respective period. |
Financial Schedules - Page 35 |