Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Ingevity Corp | |
Entity Central Index Key | 0001653477 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common stock, shares outstanding | 41,845,429 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 276.8 | $ 235.2 |
Cost of sales | 179.7 | 150.1 |
Gross profit | 97.1 | 85.1 |
Selling, general and administrative expenses | 39.1 | 26.5 |
Research and technical expenses | 5.1 | 5 |
Restructuring and other (income) charges, net | 0 | (0.6) |
Acquisition-related costs | 22.8 | 3.8 |
Other (income) expense, net | (3.7) | (1.2) |
Interest expense, net | 11.1 | 6.1 |
Income (loss) before income taxes | 22.7 | 45.5 |
Provision (benefit) for income taxes | 0 | 9.7 |
Net income (loss) | 22.7 | 35.8 |
Less: Net income (loss) attributable to noncontrolling interests | 0 | 5 |
Net income (loss) attributable to Ingevity stockholders | $ 22.7 | $ 30.8 |
Per share data | ||
Basic earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 0.54 | $ 0.73 |
Diluted earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 0.54 | $ 0.72 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 22.7 | $ 35.8 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment | 9.4 | 3.9 |
Derivative instruments: | ||
Unrealized gain (loss), net of tax provision (benefit) of zero and zero | 0.1 | 0.1 |
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of ($0.1) and zero | (0.4) | 0 |
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of ($0.1) and zero | (0.3) | 0.1 |
Other comprehensive income (loss), net of tax provision (benefit) of $0.1 and zero | 9.1 | 4 |
Comprehensive income (loss) | 31.8 | 39.8 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0 | 5 |
Comprehensive income (loss) attributable to Ingevity stockholders | $ 31.8 | $ 34.8 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized tax (benefit) expense | $ 0 | $ 0 |
Reclassifications tax expense (benefit) | 100,000 | 0 |
Total derivative instruments tax (benefit) expense | 100,000 | 0 |
Other comprehensive income (loss) tax (benefit) expense | $ 100,000 | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 38.4 | $ 77.5 |
Accounts receivable, net of allowance of $0.4 million at March 31, 2019 and December 31, 2018, respectively | 151 | 118.9 |
Inventories, net | 229.3 | 191.4 |
Prepaid and other current assets | 36.3 | 34.9 |
Current assets | 455 | 422.7 |
Property, plant and equipment, net | 628.5 | 523.8 |
Operating lease assets, net | 59.7 | 0 |
Goodwill | 431.6 | 130.7 |
Other intangibles, net | 414.9 | 125.6 |
Deferred income taxes | 3.4 | 2.9 |
Restricted investment | 71.7 | 71.2 |
Other assets | 42.4 | 38.3 |
Total Assets | 2,107.2 | 1,315.2 |
Liabilities | ||
Accounts payable | 119.8 | 92.9 |
Accrued expenses | 26.1 | 36.7 |
Accrued payroll and employee benefits | 16 | 42 |
Current operating lease liabilities | 17.9 | 0 |
Notes payable and current maturities of long-term debt | 18 | 11.2 |
Income taxes payable | 0.5 | 0.5 |
Current liabilities | 198.3 | 183.3 |
Long-term debt including finance lease obligations | 1,403.2 | 741.2 |
Noncurrent operating lease liabilities | 42 | 0 |
Deferred income taxes | 85.6 | 36.9 |
Other liabilities | 19.4 | 15.1 |
Total Liabilities | 1,748.5 | 976.5 |
Commitments and contingencies (Note 15) | ||
Equity | ||
Preferred stock (par value $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding at March 31, 2019 and December 31, 2018) | 0 | 0 |
Common stock (par value $0.01 per share; 300,000,000 shares authorized; 42,659,316 and 42,331,913 issued; 41,823,723 and 41,693,261 outstanding at March 31, 2019 and December 31, 2018) | 0.4 | 0.4 |
Additional paid-in capital | 103.8 | 98.3 |
Retained earnings | 336.2 | 313.5 |
Accumulated other comprehensive income (loss) | (8.6) | (17.7) |
Treasury stock, common stock, at cost (835,593 shares at March 31, 2019; 638,652 shares at December 31, 2018) | (73.1) | (55.8) |
Total Equity | 358.7 | 338.7 |
Total Liabilities and Equity | $ 2,107.2 | $ 1,315.2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0.4 | $ 0.4 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 42,659,316 | 41,823,723 |
Common stock shares outstanding (shares) | 42,331,913 | 41,693,261 |
Treasury shares (in shares) | 835,593 | 638,652 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Cash provided by (used in) operating activities: | |||
Net income (loss) | $ 22.7 | $ 35.8 | |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||
Depreciation and amortization | 18.5 | 11.5 | |
Deferred income taxes | (0.4) | 0.6 | |
Share-based compensation | 4.1 | 3.1 | |
Pension and other postretirement (benefit) costs | 0.3 | 0.4 | |
Other non-cash items | 0.1 | 1.5 | |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable, net | (16.1) | (13.4) | |
Inventories, net | (15) | (23.1) | |
Prepaid and other currents assets | 0.6 | 1.6 | |
Planned major maintenance outage | (2) | (0.3) | |
Accounts payable | 15.4 | 8.9 | |
Accrued expenses | (12.4) | (1.6) | |
Accrued payroll and employee benefit costs | (26.6) | (23.4) | |
Income taxes | (0.2) | 8 | |
Changes in other operating assets and liabilities, net | 3 | 0.1 | |
Net cash provided by (used in) operating activities | (8) | 9.7 | |
Cash provided by (used in) investing activities: | |||
Capital expenditures | (28.1) | (13.3) | |
Payments for acquired businesses, net of cash acquired | (537.9) | (315) | |
Other investing activities, net | (3.3) | 0.9 | |
Net cash provided by (used in) investing activities | (569.3) | (327.4) | |
Cash provided by (used in) financing activities: | |||
Proceeds from revolving credit facility | 714.2 | 0 | |
Proceeds from long-term borrowings | 375 | 300 | |
Payments on revolving credit facility | (421.1) | 0 | |
Payments on long-term borrowings | (113.1) | 0 | |
Debt issuance costs | (1.8) | (5.7) | |
Borrowings (repayments) of notes payable and other short-term borrowings, net | 2.1 | 0 | |
Tax payments related to withholdings on vested equity awards | (14.3) | (1.5) | |
Proceeds and withholdings from share-based compensation plans, net | 1.7 | 0.5 | |
Repurchases of common stock under publicly announced plan | (3.3) | (3.1) | |
Noncontrolling interest distributions | 0 | 5.3 | |
Net cash provided by (used in) financing activities | 539.4 | 284.9 | |
Increase (decrease) in cash, cash equivalents and restricted cash | (37.9) | (32.8) | |
Effect of exchange rate changes on cash | (0.1) | (0.1) | |
Change in cash, cash equivalents, and restricted cash(1) | (38) | (32.9) | |
Cash, cash equivalents, and restricted cash at beginning of period | 77.5 | 87.9 | |
Cash, cash equivalents and restricted cash at end of period | [1] | 39.5 | 55 |
Supplemental cash flow information: | |||
Cash paid for interest, net of capitalized interest | 14.4 | 6 | |
Cash paid for income taxes, net of refunds | 0.5 | 0.3 | |
Purchases of property, plant and equipment in accounts payable | 6.6 | 3.8 | |
Leased assets obtained in exchange for new finance lease liabilities | 0 | 0 | |
Leased assets obtained in exchange for new operating lease liabilities | $ 0 | $ 0 | |
[1] | Includes restricted cash of $1.1 million and zero and cash and cash equivalents of $38.4 million and $55.0 million as of March 31, 2019 and 2018, respectively. Restricted cash is included within "Prepaid and Other Current Assets" within the condensed consolidated balance sheets. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Statement of Cash Flows [Abstract] | ||
Restricted cash and cash equivalents | $ 1,100,000 | $ 0 |
Cash and cash equivalents | $ 38,400,000 | $ 55,000,000 |
Background
Background | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background 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 purifications 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 (acquired in 2019; see Note 4 for more information) 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 Consolidation and Pres
Basis of Consolidation and Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and 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, 2018 , 2017 and 2016 , collectively referred to as the “Annual Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2018 (the " 2018 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. Certain prior year amounts have been reclassified to conform with the current year's presentation. |
New Accounting Guidance
New Accounting Guidance | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Guidance | New Accounting Guidance The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 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. The Company considers the applicability and impact of all ASU's. ASU's 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 2018-13 "Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU eliminates, amends, and adds disclosure requirements for fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this standard on January 1, 2019. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 "Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting." This ASU provides for a single accounting model for all share-based payments, with the employee based guidance now applying to nonemployee share-based transactions. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We adopted this standard on January 1, 2019. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)." Under the new guidance, lessees are required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Since the issuance of ASU 2016-02, the FASB issued several amendments that clarify certain points in Topic 842, including ASU 2018-20 ("Lease (Topic 842): Narrow-Scope Improvements for Lessors"), ASU 2018-01 ("Land Easement Practical Expedient"), ASU 2018-10 ("Codification Improvements"), ASU 2018-11 ("Targeted Improvements") and ASU 2019-01 (“Codification Improvements”). ASU 2016-02 and all subsequent amendments will herein be referred to as ASC 842. We adopted ASC 842 utilizing the modified retrospective approach as of January 1, 2019. The modified retrospective approach we selected provides a method of transition allowing for the recognition of existing leases as of the beginning of the period of adoption (i.e. January 1, 2019), and which does not require the adjustment of comparative periods. We have elected the practical expedient package upon transition that does not require reassessment of prior conclusions related to contracts containing a lease, lease classification, and initial direct costs for any leases that existed at the period of adoption of ASC 842. We also adopted the practical expedient to apply hindsight in determining lease term; we chose to account for lease and non-lease components together as a single component for all lease asset classes; and we elected the practical expedient related to land easements allowing us to carry-forward our current accounting treatment for land easements on existing agreements. We include the option to extend or terminate a lease when it is reasonably certain that we will exercise the option. In addition, we elected the accounting policy to not apply the balance sheet recognition criteria required in ASC 842 to leases with an initial lease term of twelve months or less by class of underlying asset for all lease asset classes. Payments for these leases are recognized on a straight-line basis over the lease term. As a lessee, most of our leases under prior guidance ASC 840 “Leases” were classified as operating leases, and therefore, were not recorded on the condensed consolidated balance sheet but were recorded as expense in the condensed consolidated statement of operations as incurred. We cataloged our existing lease contracts and implemented changes to our systems to perform the lease accounting and reporting under the new guidance going forward. The adoption of ASC 842 resulted in the recognition of lease assets and liabilities. Our existing capital leases were accounted for as finance leases upon adoption of ASC 842. The impact of ASC 842 to our condensed consolidated statements of operations and condensed consolidated statement of cash flows for the period ended March 31, 2019 was not material. Additionally, we do not expect a significant impact in the timing of expense recognition based on the classification of leases as either operating or financing. In accordance with ASC 842, the impact of adoption on our condensed consolidated balance sheet was as follows: In millions Balance at December 31, 2018 Adjustments Balance at January 1, 2019 Assets Prepaid and other current assets $ 34.9 $ (0.2 ) (1) $ 34.7 Operating lease assets, net — 64.6 (2) 64.6 Liabilities Current operating lease liabilities — 18.4 (3) 18.4 Noncurrent operating lease liabilities — 46.0 (4) 46.0 _______________ (1) Represents prepaid rent reclassified to operating lease assets. (2) Represents capitalization of operating lease assets and straight-line rent accrual. (3) Represents recognition of the current portion of operating lease liabilities. (4) Represents recognition of the noncurrent operating lease liabilities. Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Perstorp Holding AB's Caprolactone Business On December 10, 2018, we entered into an agreement for the sale and purchase of Perstorp UK Ltd. (the “Caprolactone Agreement”) with Perstorp Holding AB, a company registered in Sweden that develops, manufactures, and sells specialty chemicals (the “Seller”). Pursuant to the Caprolactone Agreement, we agreed to purchase the shares held by the Seller in Perstorp UK Ltd., including the Seller’s entire caprolactone business ("Caprolactone Business"), in exchange for €570.9 million , less assumed debt and other miscellaneous transaction costs, as further defined in the Caprolactone Agreement (the “Purchase Price”), plus interest accrued on the Purchase Price (herein referred to as the “Caprolactone Acquisition”). On February 13, 2019, pursuant to the terms and conditions set forth in the Caprolactone Agreement, we completed the Caprolactone Acquisition 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 will be integrated into our Performance Chemicals segment and included within our Engineered Polymers product line. Our revolving credit facility was utilized as the primary source of funds, along with available cash on hand, to fund the Caprolactone Acquisition. The Caprolactone Acquisition contributed Net sales and Income (loss) before income taxes of $24.2 million and $(2.3) million , respectively, to the consolidated operating results of Ingevity for the period from February 13, 2019 through March 31, 2019. Preliminary Purchase Price Allocation Caprolactone Acquisition is considered a business under business combinations accounting guidance, and therefore we applied acquisition accounting. Acquisition accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date using primarily Level 2 and Level 3 inputs. These Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates. Additionally, estimated fair values are based, in part, upon outside appraisals for certain assets, including specifically-identified intangible assets. See Note 6 for additional explanation of Level 2 and Level 3 inputs. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based upon preliminary information and is subject to change within the measurement period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair value of inventories, property, plant and equipment, and intangible assets. During the measurement period, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date, we will revise the preliminary purchase price allocation. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date. The impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings. Preliminary Purchase Price Allocation In millions Weighted Average Amortization Period Fair Value Cash and cash equivalents $ 0.7 Accounts receivable, net 15.7 Inventories (1) 21.7 Prepaid and other current assets 1.3 Property, plant and equipment 88.8 Intangible assets (2) Customer relationships 17 years 159.0 Developed technology 12 years 64.8 Brands Indefinite 67.0 Non-compete agreement 3 years 0.5 Goodwill (3) 295.4 Other assets 1.3 Total fair value of assets acquired $ 716.2 Accounts payable 13.6 Accrued expenses 2.2 Long-term debt 113.1 Deferred income taxes 47.9 Total fair value of liabilities assumed $ 176.8 Cash and restricted cash acquired (4) 1.5 Total cash paid, less cash and restricted cash acquired $ 537.9 _______________ (1) Fair value of finished good 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 $1.9 million for the three months ended March 31, 2019. Estimated amortization expense is as follows: 2019 - $13.1 million, 2020 - $14.9 million, 2021 - $14.9 million, 2022 - $14.8 million and 2023 - $14.8 million. (3) Goodwill consists of estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. See Note 9 for further information regarding our allocation of goodwill among our reportable segments. None of the acquired goodwill will be deductible for income tax purposes. (4) 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. Georgia Pacific's Pine Chemical Business On March 8, 2018, pursuant to the terms and conditions set forth in the asset purchase agreement with Georgia-Pacific Chemicals LLC, Georgia-Pacific LLC (together with Georgia-Pacific Chemicals LLC, "GP") and Ingevity Arkansas, LLC, a wholly-owned subsidiary of Ingevity, we completed the acquisition (the "Pine Chemical Acquisition") of substantially all the assets primarily used in GP's pine chemical business (the "Pine Chemical Business") for an aggregate purchase price of $315.5 million . The aggregate purchase price was finalized during the third quarter of 2018 with a final payment to GP in the amount of $0.5 million to finalize the net working capital acquired on March 8, 2018. The Pine Chemical Business included the assets and facilities related to tall oil fractionation operations and the production or modification of tall oil fatty acids, tall oil rosins, rosin derivatives and formulated products. In addition, on March 8, 2018, we entered into a 20 -year, market-based CTO supply contract with certain of Georgia-Pacific’s paper mill operations. The Pine Chemical Business was integrated into our Performance Chemicals segment and has been included within our results of operations since March 8, 2018. The Pine Chemical Business contributed Net sales and Income before income taxes of $4.8 million and $0.3 million , respectively, to the consolidated operating results of Ingevity for the period from March 8, 2018 through March 31, 2018. Purchase Price Allocation The following table summarizes the consideration paid for the Pine Chemical Business and the assets acquired and liabilities assumed: Purchase Price Allocation In millions Weighted Average Amortization Period Fair Value Accounts receivable $ 16.2 Inventories (1) 9.4 Property, plant and equipment 39.3 Intangible assets (2) Patents 12 years 1.9 Non-compete agreement 3 years 2.2 Customer relationships 11 years 129.0 Goodwill (3) 118.7 Other assets 0.1 Total fair value of assets acquired 316.8 Accounts payable 0.8 Accrued expenses 0.5 Total fair value of liabilities assumed $ 1.3 Total cash paid $ 315.5 _______________ (1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $1.4 million, of which $0.8 million was expensed in the three months ended March 31, 2018. The expense is included in "Cost of sales" on the consolidated statement of operations. (2) The aggregate amortization expense for the three months ended March 31, 2019 and 2018 was $3.2 million and $0.7 million, respectively. Estimated amortization expense is as follows: 2019 - $12.7 million, 2020 - $12.7 million, 2021 - $12.0 million, 2022 - $11.8 million, and 2023 - $11.8 million. (3) Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. We expect the full amount to be deductible for income tax purposes. Unaudited Pro Forma Financial Information The following unaudited pro forma results of operations assume that the Caprolactone Acquisition as well as the acquisition of the Pine Chemical Business 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 of $31.2 million and $4.6 million for the three months ended March 31, 2019 and 2018, respectively. Three Months Ended March 31, In millions 2019 2018 Net sales $ 294.5 $ 301.9 Income (loss) before income taxes 53.5 59.2 Diluted earnings (loss) per share attributable to Ingevity stockholders $ 1.14 $ 0.98 Acquisition and other related costs Costs incurred to complete and integrate the acquisitions noted above into our Performance Chemicals segment are expensed as incurred on our condensed consolidated statement of operations. The following table summarizes the costs incurred associated with these combined activities. Three Months Ended March 31, In millions 2019 2018 Legal and professional service fees $ 10.1 $ 3.8 Loss on hedging purchase price 12.7 — Acquisition-related costs $ 22.8 $ 3.8 Inventory fair value step-up amortization (1) 8.4 0.8 Acquisition and other-related costs $ 31.2 $ 4.6 _______________ (1) Included within "Cost of sales" on the condensed consolidated statement of operations. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Ingevity's operating segments are (i) Performance Materials and (ii) Performance Chemicals. A description of both operating segments is included in Note 1. Net sales in both of our reportable segments are based on the sale of manufactured products. Net sales are recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of our products. Since net sales are derived from product sales only, we have disaggregated our net sales by our product lines within each reportable segment. Net sales are measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Sales returns and allowances are not a normal practice in the industry and are not significant. Shipping and handling fees billed to customers continue to be included with Net sales. Certain customers may receive cash-based incentives, including discounts and volume rebates, which are accounted for as variable consideration and included in Net sales. Incidental items immaterial in the context of the contract are recognized as expense. If we pay for the freight and shipping, we recognize the cost when control of the product has transferred to the customer as an expense in Cost of sales on the consolidated statement of operations. Although very rare, from time to time we incur expenses to obtain a sales contract. In these cases, if these costs are for orders that are fulfilled in one year or less, we expense these costs as they are incurred. Because the period between when we transfer a contracted good to a customer and when the customer pays for that good will be one year or less, we elect not to adjust the contracted amount of consideration for the effects of any significant financing component. Disaggregation of Revenue The following tables present our Net sales disaggregated by product line and geography. In millions Three Months Ended March 31, 2019 2018 Automotive Technologies product line $ 99.7 $ 85.9 Process Purification product line 9.4 9.6 Performance Materials segment $ 109.1 $ 95.5 Oilfield Technologies product line 29.2 22.4 Pavement Technologies product line 18.5 18.5 Industrial Specialties product line 95.8 98.8 Engineered Polymers product line (1) 24.2 — Performance Chemicals segment $ 167.7 $ 139.7 Net sales $ 276.8 $ 235.2 _______________ (1) Engineered Polymers product line was acquired on February 13, 2019; see Note 4 for more information. The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer. In millions Three Months Ended March 31, 2019 2018 North America $ 171.7 $ 154.7 Asia Pacific 49.1 34.0 Europe, Middle East and Africa 51.2 40.4 South America 4.8 6.1 Net sales $ 276.8 $ 235.2 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. In millions Contract Asset (1) March 31, 2019 March 31, 2018 Beginning balance $ 5.1 $ 4.4 Contract asset additions 4.7 2.2 Reclassification to accounts receivable, billed to customers (4.5 ) (2.3 ) Ending balance $ 5.3 $ 4.3 _______________ (1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. |
Financial Instruments, Risk Man
Financial Instruments, Risk Management, and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments, Risk Management, and Fair Value Measurements | Financial Instruments, Risk Management, and Fair Value Measurements Financial Instruments and Risk Management Ingevity’s operations are exposed to market risks, such as changes in foreign currency exchange rates and commodity prices due to transactions denominated in a variety of foreign currencies and purchases of certain commoditized raw materials and inputs. Changes in these rates and prices may have an impact on Ingevity’s future cash flow and earnings. To mitigate these market risks and their effects, we enter into derivative financial instruments which are governed by policies, procedures and internal processes set forth by our Board of Directors. Our risk management program also addresses counterparty credit risk by selecting only major financial institutions with investment grade ratings. Once the derivative financial instrument is entered into, we continuously monitor the financial institutions’ credit ratings and our credit risk exposure held by the financial institution. When appropriate, we reallocate exposures across multiple financial institutions to limit credit risk. If a counterparty fails to fulfill its performance obligations under the derivative financial instrument, then Ingevity is exposed to credit risk equal to the fair value of the financial instrument. Derivative assets and liabilities are reported on a net basis by counterparty, to the extent governed by master netting agreements, in the consolidated balance sheets. Due to our proactive mitigation of these potential credit risks, we anticipate performance by our counterparties to these contracts and therefore no material loss is expected. 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. As of March 31, 2019 , there were no open foreign currency derivative contracts. The fair value of the foreign currency hedge was zero and $0.2 million at March 31, 2019 and December 31, 2018 , 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, 2019 , we had 1.6 million and 1.2 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 as cash flow hedges. As of March 31, 2019 , open commodity contracts hedge forecasted transactions until August 2020. The fair value of the outstanding designated natural gas commodity hedge contracts as of March 31, 2019 and December 31, 2018 was $0.1 million and zero , respectively. Equity Securities Our investments in equity securities with a readily determinable fair value totaled $0.4 million at March 31, 2019 and $0.4 million at December 31, 2018 . The net realized gain/(loss) recognized during the three months ended March 31, 2019 and 2018 was zero and $(0.3) million , respectively. The unrealized gain/(loss) was zero for both the three months ended March 31, 2019 and 2018 . The aggregate carrying value of investments in equity securities where fair value is not readily determinable totaled $1.5 million and $1.5 million as of March 31, 2019 and December 31, 2018 , respectively. There were no adjustments to the carrying value of the not readily determinable investments for impairment or observable price changes for the period ended March 31, 2019 . 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 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 are recorded at fair value between Level 1 and Level 2 during the period reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2019 or December 31, 2018 . In millions Level 1 (1) Level 2 (2) Level 3 (3) Total March 31, 2019 Assets: Equity securities (4) $ 0.4 $ — $ — $ 0.4 Commodity hedging (4) — 0.1 — 0.1 Deferred compensation plan investments (5) 1.9 — — 1.9 Total assets $ 2.3 $ 0.1 $ — $ 2.4 Liabilities: Deferred compensation arrangement (5) $ 5.4 $ — $ — $ 5.4 Separation-related reimbursement awards (6) 0.1 — — 0.1 Total liabilities $ 5.5 $ — $ — $ 5.5 December 31, 2018 Assets: Equity securities (4) $ 0.4 $ — $ — $ 0.4 Foreign currency hedging (4) — 0.2 — 0.2 Commodity hedging (4) — 0.1 — 0.1 Deferred compensation plan investments (5) 1.3 — — 1.3 Total assets $ 1.7 $ 0.3 $ — $ 2.0 Liabilities: Deferred compensation arrangement (5) $ 4.6 $ — $ — $ 4.6 Separation-related reimbursement awards (6) 0.1 — — 0.1 Foreign currency hedging (7) — 3.9 — 3.9 Commodity hedging (6) — 0.1 — 0.1 Total liabilities $ 4.7 $ 4.0 $ — $ 8.7 ______________ (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. (7) At December 31, 2018, this amount represented a non-designated foreign currency derivative associated with the purchase price of our acquisition of the Caprolactone Business, which was settled at the closing of the acquisition for a loss of $16.6 million . The expense recognized during the three months ended March 31, 2019 was $12.7 million . See Note 4 for more information. At March 31, 2019 , the book value of finance lease obligations was $80.0 million and the fair value was $91.7 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 $1,049.2 million as of March 31, 2019 . 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, 2019 , the book value of our fixed rate debt was $300.0 million , and the fair value was $294.9 million , based on Level 2 inputs. At March 31, 2019 , the book value of our Restricted investment was $71.7 million , and the fair value was $70.3 million , based on Level 1 inputs. 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. |
Inventories, net
Inventories, net | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net In millions March 31, 2019 December 31, 2018 Raw materials $ 41.3 $ 36.5 Production materials, stores and supplies 20.1 17.5 Finished and in-process goods 177.4 144.7 Subtotal 238.8 198.7 Less: excess of cost over LIFO cost (9.5 ) (7.3 ) Inventories, net $ 229.3 $ 191.4 |
Property, plant and equipment,
Property, plant and equipment, net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment, net | Property, Plant and Equipment, net In millions March 31, 2019 December 31, 2018 Machinery and equipment $ 929.9 $ 857.2 Buildings and leasehold improvements 118.6 113.1 Land and land improvements 19.6 19.6 Construction in progress 107.8 71.2 Total cost 1,175.9 1,061.1 Less: accumulated depreciation (547.4 ) (537.3 ) Property, plant and equipment, net (1) $ 628.5 $ 523.8 _______________ (1) This includes finance leases related to machinery and equipment at our Wickliffe, Kentucky facility of $69.2 million and $69.2 million , and net book value of $6.6 million and $6.7 million at March 31, 2019 , and December 31, 2018 , respectively. This also includes finance leases related to our Waynesboro, Georgia manufacturing facility for (a) machinery and equipment of $9.3 million and $6.5 million and net book value of $8.5 million and $6.0 million , (b) construction in progress of $14.1 million and $13.7 million and (c) buildings and leasehold improvements of $0.1 million and $0.1 million at March 31, 2019 , and December 31, 2018 , respectively. Amortization expense associated with these capital leases is included within depreciation expense. The payments remaining under these capital leases obligations are included within Note 16. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, net Operating Segments In millions Performance Chemicals Performance Materials Total December 31, 2018 $ 126.4 $ 4.3 $ 130.7 Acquisitions (1) 295.4 — 295.4 Foreign currency translation 5.5 — 5.5 March 31, 2019 $ 427.3 $ 4.3 $ 431.6 ____________ (1) See Note 4 for more information regarding the Caprolactone Acquisition and related increase in goodwill. March 31, 2019 . All of our other intangibles, net are related to the Performance Chemicals operating segment. The following table summarizes these assets: March 31, 2019 December 31, 2018 In millions Gross Accumulated amortization Net Gross Accumulated amortization Net Intangible assets subject to amortization (finite-lived) (1) Brands (2) $ 11.4 $ 9.8 $ 1.6 $ 11.4 $ 9.8 $ 1.6 Customer contracts and relationships 312.3 35.1 277.2 151.0 30.3 120.7 Developed technology 65.5 0.7 64.8 — — — Other 4.6 1.1 3.5 4.1 0.8 3.3 Total $ 393.8 $ 46.7 $ 347.1 $ 166.5 $ 40.9 $ 125.6 Intangible assets not subject to amortization (indefinite life) (1) Brands (2) $ 67.8 $ — $ 67.8 $ — $ — $ — Total $ 67.8 $ — $ 67.8 $ — $ — $ — Total Other intangibles, net $ 461.6 $ 46.7 $ 414.9 $ 166.5 $ 40.9 $ 125.6 _______________ (1) See Note 4 for more information regarding the Caprolactone Acquisition and related increase in intangible assets. (2) 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. Three Months Ended March 31, In millions 2019 2018 Cost of sales $ 0.2 $ 0.3 Selling, general and administrative expenses 5.3 1.0 Total amortization expense (1) $ 5.5 $ 1.3 _______________ (1) See Note 4 for more information about the Caprolactone Acquisition and Pine Chemicals 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: 2019 - $27.3 million , 2020 - $28.2 million , 2021 - $27.2 million , 2022 - $26.9 million and 2023 - $26.9 million . The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency. |
Debt including Finance Lease Ob
Debt including Finance Lease Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt including Finance Lease Obligations | Debt including Finance Lease Obligations Current and long-term debt including finance lease obligations consisted of the following: March 31, 2019 In millions, except percentages Interest rate Maturity date March 31, 2019 December 31, 2018 Revolving Credit Facility (1) 3.75% 2023 $ 293.1 $ — Term Loan Facilities 3.49% 2022-2023 750.0 375.0 Senior Notes 4.50% 2026 300.0 300.0 Finance lease obligations 7.67% 2027 80.0 80.0 Other 4.95% 2019-2021 6.2 3.9 Total debt including finance lease obligations 1,429.3 758.9 Less: debt issuance costs 8.1 6.5 Total debt including finance lease obligations, net of debt issuance costs 1,421.2 752.4 Less: debt maturing within one year (2) 18.0 11.2 Long-term debt including finance lease obligations $ 1,403.2 $ 741.2 ______________ (1) Letters of credit outstanding under the revolving credit facility were $1.9 million and available funds under the facility were $455.0 million at March 31, 2019 . (2) Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets. Revolving Credit and Term Loan Facility Amendment On March 7, 2019 , we entered into an Amendment No. 3 (the “Amendment No. 3") and an Incremental Facility Agreement and Amendment No. 4 (the “Amendment No. 4”, together with Amendment No. 3, the “Amendments”) to the Credit Agreement, dated as of March 7, 2016 (as amended, supplemented or otherwise modified prior to the date hereof, including pursuant to the Incremental Facility Agreement and Amendment No. 1, dated as of August 21, 2017 and the Incremental Facility Agreement and Amendment No. 2, dated as of August 7, 2018, the “Existing Credit Agreement”, and as amended by the Amendments, the “Amended Credit Agreement”). Among other things, the Amendments established a new class of incremental term loan commitments in the aggregate principal amount of $375.0 million (the incremental term loans made pursuant thereto, the “Incremental Term A-1 Loans”). The Incremental Term A-1 Loans, bear interest at either (a) an adjusted base rate or (b) an adjusted LIBOR rate, in each case, plus an applicable margin (the “Applicable Margin”), in the case of base rate loans, ranging between zero and 0.25 percent , and in the case of adjusted LIBOR rate loans, ranging between 0.75 percent and 1.25 percent . The Applicable Margin is based on a total leverage based pricing grid. As consideration for Amendment No. 3, the Company paid to each lender party thereto a consent fee equal to 0.05 percent of the aggregate principal amount of the commitments and outstanding loans under the Existing Credit Agreement held by such lender immediately prior to the Closing Date. Fees of $1.8 million were incurred to secure the Amended Credit Agreement. These fees have been deferred and will be amortized over the term of the arrangement. The Incremental Term A-1 Loans are not subject to amortization; the full principal balance is due and payable at maturity on August 7, 2022. The Amended Credit Agreement contains customary affirmative covenants, negative covenants and events of default. The Company used the proceeds of the Incremental Term A-1 Loans to repay loans outstanding under its revolving credit facility. 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 Loan Facilities 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 Facilities and Term Loan Facilities could result in all loans and other obligations becoming immediately due and payable and the facilities being terminated. The Revolving Credit Facility and Term Loan Facilities' 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, 2019 was 3.5 , and our actual interest coverage for the four consecutive quarters ended March 31, 2019 was 11.3 . We were in compliance with all covenants at March 31, 2019 . |
Equity
Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Equity | Equity Equity The table provides a roll forward of equity, equity attributable to Ingevity stockholders, and equity attributable to noncontrolling interests. Ingevity Stockholders' Common Stock In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated Treasury stock Noncontrolling interest 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 Ingevity Stockholders' 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 Noncontrolling interest Total Equity Balance at December 31, 2017 42,209 $ 0.4 $ 140.1 $ 142.8 $ (11.7 ) $ (7.7 ) $ 14.0 $ 277.9 Net income (loss) — — — 30.8 — — 5.0 35.8 Other comprehensive income (loss) — — — — 4.0 — — 4.0 Common stock issued 56 — — — — — — — Exercise of stock options, net 5 — 0.1 — — — — 0.1 Tax payments related to vested restricted stock units — — — — — (1.5 ) — (1.5 ) Share repurchase program — — — — — (3.1 ) — (3.1 ) Noncontrolling interest distributions — — — — — — (5.3 ) (5.3 ) Share-based compensation plans — — 3.1 — — 0.4 — 3.5 Adoption of ASC 606 — — — 1.6 — — — 1.6 Balance at March 31, 2018 42,270 $ 0.4 $ 143.3 $ 175.2 $ (7.7 ) $ (11.9 ) $ 13.7 $ 313.0 Accumulated other comprehensive income (loss) Summarized below is the roll forward of accumulated other comprehensive income (loss), net of tax. In millions Foreign currency adjustments Derivative Instruments Pension and other postretirement benefits Total Accumulated other comprehensive income (loss), net of tax at December 31, 2018 $ (16.4 ) $ 0.4 $ (1.7 ) $ (17.7 ) 2019 Activity Other comprehensive income (loss) before reclassifications 9.4 0.1 — 9.5 Amounts reclassified from accumulated other comprehensive income (loss) — (0.4 ) — (0.4 ) Accumulated other comprehensive income (loss), net of tax at March 31, 2019 $ (7.0 ) $ 0.1 $ (1.7 ) $ (8.6 ) Foreign currency adjustments Derivative Instruments Pension and other postretirement benefits Total Accumulated other comprehensive income (loss), net of tax at December 31, 2017 $ (10.1 ) $ — $ (1.6 ) $ (11.7 ) 2018 Activity Other comprehensive income (loss) before reclassifications 3.9 0.1 — 4.0 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Accumulated other comprehensive income (loss), net of tax at March 31, 2018 $ (6.2 ) $ 0.1 $ (1.6 ) $ (7.7 ) Reclassifications of accumulated other comprehensive income (loss) Reclassifications, net of tax, for the three months ended March 31, 2019 and 2018 of $0.4 million and zero , respectively, relate to commodity derivative instruments and were recorded to "Cost of sales" in the condensed consolidated statement of operations. Noncontrolling interest acquisition On August 1, 2018, we completed the acquisition of the remaining 30 percent noncontrolling interest in Purification Cellutions LLC, which was treated as a partnership for tax purposes, for a purchase price of $80.0 million . The acquisition resulted in the elimination of Noncontrolling interest ( $11.4 million ) and the recognition of a Deferred tax asset ( $14.3 million ), with the remainder being recorded against Additional paid in capital ( $54.3 million ) in our Condensed Consolidated Financial Statements. Share Repurchases On February 20, 2017, our Board of Directors authorized the repurchase of up to $100.0 million of our common stock. In addition, on November 1, 2018, the Board of Directors approved the authorization for the repurchase of up to an additional $350.0 million of Ingevity’s outstanding common stock. The repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market prevailing conditions and other factors. During the three months ended March 31, 2019 , we repurchased 40,000 shares of our common stock at a weighted average cost per share of $82.76 . At March 31, 2019 , $392.7 million remained unused under our Board-authorized repurchase program. We record shares of common stock repurchased at cost as treasury stock, resulting in a reduction of stockholders’ equity in the condensed consolidated balance sheets. When the treasury shares are contributed under our employee benefit plans or issued for option exercises, we use a first-in, first-out (“FIFO”) method for determining cost. The difference between the cost of the shares and the market price at the time of contribution to an employee benefit plan is added to or deducted from the related capital in excess of par value of common stock. |
Retirement plans
Retirement plans | 3 Months Ended |
Mar. 31, 2019 | |
Postemployment Benefits [Abstract] | |
Retirement plans | Retirement Plans The following table summarizes the components of net periodic benefit cost (income) for our defined benefit pension plans: Three Months Ended March 31, Pensions Other Benefits In millions 2019 2018 2019 2018 Components of net periodic benefit cost (income): Service cost (1) $ 0.3 $ 0.4 $ — $ — Interest cost (2) 0.3 0.2 — — Expected return on plan assets (2) (0.3 ) (0.2 ) — — Amortization of net actuarial and other (gain) loss (2) — — — — Net periodic benefit cost (income) $ 0.3 $ 0.4 $ — $ — (1) Amounts are recorded to "Cost of sales" on our condensed consolidated statements of operations consistent with the employee compensation costs that participate in the plan. (2) Amounts are recorded to "Other (income) expense, net" on our condensed consolidated statements of operations. Contributions We did no t make any voluntary cash contributions to our Union Hourly defined benefit pension plan in the three months ended March 31, 2019 . There are no required cash contributions to our Union Hourly defined benefit pension plan in 2019 , and we currently have no plans to make any voluntary cash contributions in 2019 . |
Restructuring and other (income
Restructuring and other (income) charges, net | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and other (income) charges, net | Restructuring and Other (Income) Charges, net We continually perform strategic reviews and assess the return on our operations which sometimes results in a plan to restructure the business. The cost and benefit of these strategic restructuring initiatives are recorded as restructuring and other (income) charges, net in our condensed consolidated statements of operations. These costs are excluded from our operating segment results. Detail on the restructuring charges and asset disposal activities is provided below. Three Months Ended March 31, In millions 2019 2018 Restructuring and other (income) charges, net Gain on sale of assets and businesses $ — $ (0.6 ) Total restructuring and other (income) charges, net $ — $ (0.6 ) 2018 activities In February 2018, we sold assets from the Performance Chemicals derivatives operations in Duque De Caxias, Rio de Janeiro, Brazil. These assets were part of a facility that was closed as a result of a restructuring event in 2016. As a result of this sale, we recorded $0.6 million as a gain on sale of assets in the three months ended March 31, 2018. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2019 and 2018 , the effective tax rates, including discrete items, were as follows: Three Months Ended March 31, 2019 2018 Effective tax rate — % 21.3 % We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions. The below table provides a reconciliation between our reported effective tax rates and the EAETR. Three Months Ended March 31, 2019 2018 In millions, except percentages Before tax Tax Effective tax rate % impact Before tax Tax Effective tax rate % impact Consolidated operations $ 22.7 $ — — % $ 45.5 $ 9.7 21.3 % Discrete items: Restructuring and other (income) charges, net — — (0.6 ) — Acquisition and other-related costs (1) 31.2 5.3 4.6 1.1 Other tax only discrete items — 6.7 — (0.2 ) Total discrete items 31.2 12.0 4.0 0.9 Consolidated operations, before discrete items $ 53.9 $ 12.0 $ 49.5 $ 10.6 Quarterly effect of changes in the EAETR (2) 22.3 % 21.4 % _______________ (1) See Note 4 for more information on our acquisition and other-related costs. (2) Increase in EAETR for the three months ended March 31, 2019 , as compared to March 31, 2018 , is driven primarily by the 30 percent acquisition of our noncontrolling interest in Purifications Cellutions, LLC. ("PurCell") on August 1, 2018. PurCell, prior to the acquisition, was a limited liability company and was treated as a "pass-through" entity for tax purposes. Although we consolidated 100 percent of PurCell, only 70 percent of PurCell's earnings were included in the calculation of Ingevity's provision for income taxes as presented on the Condensed Consolidated Statement of Operations. Post-acquisition, 100 percent of the earnings of the entity are now included in the tax calculation which when combined with other factors including the impact of U.S. Tax Reform resulted in a slight increase to our effective tax rate. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies Legal Proceedings We are from time to time, involved in routine litigation and other legal matters incidental to our operations. None of the litigation or other legal matters in which we are currently involved, individually or in the aggregate, is material to our consolidated financial condition, liquidity, or results of operations nor are we aware of any material pending or contemplated proceedings. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Operating Leases We lease a variety of assets for use in our operations that are classified as operating leases. At contract inception, we determine that a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, we recognize a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. As a majority of our leases do not provide an implicit rate within the lease, an incremental borrowing rate is used which is based on information available at the commencement date. Upon adoption of ASC 842, we used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date. The determination of the incremental borrowing rate for each individual lease was impacted by the following assumptions: lease term, currency, and the economic environment for the physical location of the leased asset. Our operating leases principally relate to the following leased asset classes: Leased Asset Class Expected Lease Term Administrative offices 1 to 10 years Manufacturing buildings 10 years Manufacturing and office equipment 3 to 6 years Warehousing and storage facilities 1 to 10 years Vehicles 3 to 5 years Rail cars 2 to 8 years Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the expected lease term. Some of our leases include options to extend the lease term at our sole discretion. We account for lease and non-lease components together as a single component for all lease asset classes. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain leases provide for escalation of the lease payments, as well as maintenance costs and taxes increase. Finance leases Our finance lease obligations consist of $80.0 million at March 31, 2019 and 2018, respectively, owed to the city of Wickliffe, Kentucky, associated with Performance Materials' Wickliffe, Kentucky manufacturing site, which is due at maturity in 2027. The interest rate on the $80.0 million finance lease obligation is 7.67% . Interest payments are payable semi-annually. We have a finance lease obligation due in 2031 for certain assets located at our Performance Materials' Waynesboro, Georgia manufacturing facility. The lease is with the Development Authority of Burke County (“Authority”). The Authority established the sale-leaseback of these assets by issuing an industrial development revenue bond. The bond was purchased by Ingevity and the obligations under the finance lease remain with Ingevity. Accordingly, we offset the finance lease obligation and bond on our condensed consolidated balance sheets. In millions Financial Statement Caption March 31, 2019 Assets Operating lease assets, net (1) Operating lease assets, net $ 59.7 Finance lease assets, net (2) Property, plant, and equipment, net 29.3 Finance lease assets, net (2) Other assets, net 1.2 Total lease assets $ 90.2 Liabilities Current Operating lease liabilities (3) Current operating lease liabilities $ 17.9 Finance lease liabilities Notes payable and current maturities of long-term debt — Noncurrent Operating lease liabilities Noncurrent operating lease liabilities 42.0 Finance lease liabilities Long-term debt including finance lease obligations 80.0 Total lease liabilities $ 139.9 _______________ (1) Operating lease assets, net are recorded net of accumulated amortization of $5.1 million as of March 31, 2019 . (2) Finance lease assets are recorded net of accumulated amortization in Property, plant, and equipment, net and Other assets, net of $63.4 million and $0.2 million , as of March 31, 2019 , respectively. (3) Operating lease liabilities includes $0.3 million of accrued interest. Lease cost In millions Financial Statement Caption Three Months Ended March 31, 2019 Operating lease cost (1) Cost of sales $ 5.5 Selling, general, and administrative expenses 0.6 Finance lease cost Amortization of leased assets Cost of sales $ 0.4 Interest on lease liabilities Interest expense, net 1.5 Net lease cost (2) $ 8.0 _______________ (1) Includes short-term leases and variable lease costs, which are immaterial. (2) Only on the rare occasion do we sublease our leased assets, as a result this amount excludes sublease income which is immaterial. Maturity of Lease Liabilities March 31, 2019 In millions Operating leases Finance leases Total 2019 $ 15.8 $ 3.1 $ 18.9 2020 17.0 6.1 23.1 2021 13.2 6.1 19.3 2022 9.8 6.1 15.9 2023 6.0 6.1 12.1 2024 and thereafter 6.0 101.6 107.6 Total lease payments $ 67.8 $ 129.1 $ 196.9 Less: interest 7.9 49.1 57.0 Present value of lease liabilities (1) $ 59.9 $ 80.0 $ 139.9 _______________ (1) As of March 31, 2019 , we have additional operating lease commitments that have not yet commenced of approximately $33.9 million for the relocation of our corporate headquarters. The lease is expected to commence in the first half of 2020 and the lease term is for 15 years with two 5 year extensions. Minimum lease payments pursuant to agreements as of December 31, 2018 , under operating leases that have non-cancelable lease terms in excess of 12 months and under capital leases presented in accordance with ASC 840 are as follows: In millions Operating leases Finance leases 2019 $ 21.9 $ 6.1 2020 17.2 6.1 2021 13.3 6.1 2022 9.7 6.1 2023 6.0 6.1 2024 and thereafter 5.9 101.5 Minimum lease payments $ 74.0 $ 132.0 Less: interest 52.0 Capital lease obligations $ 80.0 Lease Term and Discount Rate As of March 31, 2019 Weighted-average remaining lease term (years) Operating leases 4.3 Finance leases 8.9 Weighted-average discount rate Operating leases 5.66 % Finance leases 7.67 % Other Information In millions Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (6.1 ) Operating cash flows from finance leases (3.1 ) Financing cash flows from finance leases $ — |
Leases | Leases Operating Leases We lease a variety of assets for use in our operations that are classified as operating leases. At contract inception, we determine that a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, we recognize a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. As a majority of our leases do not provide an implicit rate within the lease, an incremental borrowing rate is used which is based on information available at the commencement date. Upon adoption of ASC 842, we used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date. The determination of the incremental borrowing rate for each individual lease was impacted by the following assumptions: lease term, currency, and the economic environment for the physical location of the leased asset. Our operating leases principally relate to the following leased asset classes: Leased Asset Class Expected Lease Term Administrative offices 1 to 10 years Manufacturing buildings 10 years Manufacturing and office equipment 3 to 6 years Warehousing and storage facilities 1 to 10 years Vehicles 3 to 5 years Rail cars 2 to 8 years Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the expected lease term. Some of our leases include options to extend the lease term at our sole discretion. We account for lease and non-lease components together as a single component for all lease asset classes. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain leases provide for escalation of the lease payments, as well as maintenance costs and taxes increase. Finance leases Our finance lease obligations consist of $80.0 million at March 31, 2019 and 2018, respectively, owed to the city of Wickliffe, Kentucky, associated with Performance Materials' Wickliffe, Kentucky manufacturing site, which is due at maturity in 2027. The interest rate on the $80.0 million finance lease obligation is 7.67% . Interest payments are payable semi-annually. We have a finance lease obligation due in 2031 for certain assets located at our Performance Materials' Waynesboro, Georgia manufacturing facility. The lease is with the Development Authority of Burke County (“Authority”). The Authority established the sale-leaseback of these assets by issuing an industrial development revenue bond. The bond was purchased by Ingevity and the obligations under the finance lease remain with Ingevity. Accordingly, we offset the finance lease obligation and bond on our condensed consolidated balance sheets. In millions Financial Statement Caption March 31, 2019 Assets Operating lease assets, net (1) Operating lease assets, net $ 59.7 Finance lease assets, net (2) Property, plant, and equipment, net 29.3 Finance lease assets, net (2) Other assets, net 1.2 Total lease assets $ 90.2 Liabilities Current Operating lease liabilities (3) Current operating lease liabilities $ 17.9 Finance lease liabilities Notes payable and current maturities of long-term debt — Noncurrent Operating lease liabilities Noncurrent operating lease liabilities 42.0 Finance lease liabilities Long-term debt including finance lease obligations 80.0 Total lease liabilities $ 139.9 _______________ (1) Operating lease assets, net are recorded net of accumulated amortization of $5.1 million as of March 31, 2019 . (2) Finance lease assets are recorded net of accumulated amortization in Property, plant, and equipment, net and Other assets, net of $63.4 million and $0.2 million , as of March 31, 2019 , respectively. (3) Operating lease liabilities includes $0.3 million of accrued interest. Lease cost In millions Financial Statement Caption Three Months Ended March 31, 2019 Operating lease cost (1) Cost of sales $ 5.5 Selling, general, and administrative expenses 0.6 Finance lease cost Amortization of leased assets Cost of sales $ 0.4 Interest on lease liabilities Interest expense, net 1.5 Net lease cost (2) $ 8.0 _______________ (1) Includes short-term leases and variable lease costs, which are immaterial. (2) Only on the rare occasion do we sublease our leased assets, as a result this amount excludes sublease income which is immaterial. Maturity of Lease Liabilities March 31, 2019 In millions Operating leases Finance leases Total 2019 $ 15.8 $ 3.1 $ 18.9 2020 17.0 6.1 23.1 2021 13.2 6.1 19.3 2022 9.8 6.1 15.9 2023 6.0 6.1 12.1 2024 and thereafter 6.0 101.6 107.6 Total lease payments $ 67.8 $ 129.1 $ 196.9 Less: interest 7.9 49.1 57.0 Present value of lease liabilities (1) $ 59.9 $ 80.0 $ 139.9 _______________ (1) As of March 31, 2019 , we have additional operating lease commitments that have not yet commenced of approximately $33.9 million for the relocation of our corporate headquarters. The lease is expected to commence in the first half of 2020 and the lease term is for 15 years with two 5 year extensions. Minimum lease payments pursuant to agreements as of December 31, 2018 , under operating leases that have non-cancelable lease terms in excess of 12 months and under capital leases presented in accordance with ASC 840 are as follows: In millions Operating leases Finance leases 2019 $ 21.9 $ 6.1 2020 17.2 6.1 2021 13.3 6.1 2022 9.7 6.1 2023 6.0 6.1 2024 and thereafter 5.9 101.5 Minimum lease payments $ 74.0 $ 132.0 Less: interest 52.0 Capital lease obligations $ 80.0 Lease Term and Discount Rate As of March 31, 2019 Weighted-average remaining lease term (years) Operating leases 4.3 Finance leases 8.9 Weighted-average discount rate Operating leases 5.66 % Finance leases 7.67 % Other Information In millions Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (6.1 ) Operating cash flows from finance leases (3.1 ) Financing cash flows from finance leases $ — |
Segment information
Segment information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment information | Segment Information Three Months Ended March 31, In millions 2019 2018 Net sales Performance Materials $ 109.1 $ 95.5 Performance Chemicals 167.7 139.7 Total net sales (1) $ 276.8 $ 235.2 Segment EBITDA (2) Performance Materials $ 51.2 $ 42.2 Performance Chemicals 32.3 24.9 Total segment EBITDA (2) $ 83.5 $ 67.1 Interest expense, net (11.1 ) (6.1 ) (Provision) benefit for income taxes — (9.7 ) Depreciation and amortization - Performance Materials (5.8 ) (5.3 ) Depreciation and amortization - Performance Chemicals (12.7 ) (6.2 ) Restructuring and other income (charges), net (3) — 0.6 Acquisition and other related costs (4) (31.2 ) (4.6 ) Net (income) loss attributable to noncontrolling interests — (5.0 ) Net income (loss) attributable to Ingevity stockholders $ 22.7 $ 30.8 _______________ (1) Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation. (2) Segment EBITDA is the primary measure used by the Company's chief operating decision maker to evaluate the performance of and allocate resources among our operating segments. Segment EBITDA is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, other (income) expense, net, excluding depreciation and amortization). We have excluded the following items from segment EBITDA: interest expense associated with corporate debt facilities, income taxes, depreciation, amortization, restructuring and other (income) charges, acquisition and other related costs, pension and postretirement settlement and curtailment (income) charge. (3) Income (charges) for all periods presented related to our Performance Chemicals segment. (4) Charges associated with the acquisition and integration of the Caprolactone Business and Pine Chemical Business. See below for more detail on the charges incurred and Note 4 within these Condensed Consolidated Financial Statements for more information. |
Earnings (loss) per share
Earnings (loss) per share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to Ingevity stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) attributable to Ingevity stockholders for the period by the weighted average number of common shares and potentially dilutive common shares outstanding for the period. The calculation of diluted net income per share excludes all anti-dilutive common shares. Three Months Ended March 31, In millions, except share and per share data 2019 2018 Net income (loss) attributable to Ingevity stockholders $ 22.7 $ 30.8 Basic and Diluted earnings (loss) per share Basic earnings (loss) per share attributable to Ingevity stockholders $ 0.54 $ 0.73 Diluted earnings (loss) per share attributable to Ingevity stockholders 0.54 0.72 Shares (in thousands) Weighted average number of common shares outstanding - Basic 41,695 42,091 Weighted average additional shares assuming conversion of potential common shares 542 510 Shares - diluted basis 42,237 42,601 The following average number of potential common shares were antidilutive and, therefore, were not included in the diluted earnings per share calculation: Three Months Ended March 31, In thousands 2019 2018 Average number of potential common shares - antidilutive 52 40 |
New Accounting Guidance (Polici
New Accounting Guidance (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
New accounting guidance | New Accounting Guidance The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 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. The Company considers the applicability and impact of all ASU's. ASU's 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 2018-13 "Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU eliminates, amends, and adds disclosure requirements for fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this standard on January 1, 2019. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 "Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting." This ASU provides for a single accounting model for all share-based payments, with the employee based guidance now applying to nonemployee share-based transactions. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We adopted this standard on January 1, 2019. The impact of adoption did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)." Under the new guidance, lessees are required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Since the issuance of ASU 2016-02, the FASB issued several amendments that clarify certain points in Topic 842, including ASU 2018-20 ("Lease (Topic 842): Narrow-Scope Improvements for Lessors"), ASU 2018-01 ("Land Easement Practical Expedient"), ASU 2018-10 ("Codification Improvements"), ASU 2018-11 ("Targeted Improvements") and ASU 2019-01 (“Codification Improvements”). ASU 2016-02 and all subsequent amendments will herein be referred to as ASC 842. We adopted ASC 842 utilizing the modified retrospective approach as of January 1, 2019. The modified retrospective approach we selected provides a method of transition allowing for the recognition of existing leases as of the beginning of the period of adoption (i.e. January 1, 2019), and which does not require the adjustment of comparative periods. We have elected the practical expedient package upon transition that does not require reassessment of prior conclusions related to contracts containing a lease, lease classification, and initial direct costs for any leases that existed at the period of adoption of ASC 842. We also adopted the practical expedient to apply hindsight in determining lease term; we chose to account for lease and non-lease components together as a single component for all lease asset classes; and we elected the practical expedient related to land easements allowing us to carry-forward our current accounting treatment for land easements on existing agreements. We include the option to extend or terminate a lease when it is reasonably certain that we will exercise the option. In addition, we elected the accounting policy to not apply the balance sheet recognition criteria required in ASC 842 to leases with an initial lease term of twelve months or less by class of underlying asset for all lease asset classes. Payments for these leases are recognized on a straight-line basis over the lease term. As a lessee, most of our leases under prior guidance ASC 840 “Leases” were classified as operating leases, and therefore, were not recorded on the condensed consolidated balance sheet but were recorded as expense in the condensed consolidated statement of operations as incurred. We cataloged our existing lease contracts and implemented changes to our systems to perform the lease accounting and reporting under the new guidance going forward. The adoption of ASC 842 resulted in the recognition of lease assets and liabilities. Our existing capital leases were accounted for as finance leases upon adoption of ASC 842. The impact of ASC 842 to our condensed consolidated statements of operations and condensed consolidated statement of cash flows for the period ended March 31, 2019 was not material. Additionally, we do not expect a significant impact in the timing of expense recognition based on the classification of leases as either operating or financing. In accordance with ASC 842, the impact of adoption on our condensed consolidated balance sheet was as follows: In millions Balance at December 31, 2018 Adjustments Balance at January 1, 2019 Assets Prepaid and other current assets $ 34.9 $ (0.2 ) (1) $ 34.7 Operating lease assets, net — 64.6 (2) 64.6 Liabilities Current operating lease liabilities — 18.4 (3) 18.4 Noncurrent operating lease liabilities — 46.0 (4) 46.0 _______________ (1) Represents prepaid rent reclassified to operating lease assets. (2) Represents capitalization of operating lease assets and straight-line rent accrual. (3) Represents recognition of the current portion of operating lease liabilities. (4) Represents recognition of the noncurrent operating lease liabilities. |
Income tax | We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions. |
New Accounting Guidance (Tables
New Accounting Guidance (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | In accordance with ASC 842, the impact of adoption on our condensed consolidated balance sheet was as follows: In millions Balance at December 31, 2018 Adjustments Balance at January 1, 2019 Assets Prepaid and other current assets $ 34.9 $ (0.2 ) (1) $ 34.7 Operating lease assets, net — 64.6 (2) 64.6 Liabilities Current operating lease liabilities — 18.4 (3) 18.4 Noncurrent operating lease liabilities — 46.0 (4) 46.0 _______________ (1) Represents prepaid rent reclassified to operating lease assets. (2) Represents capitalization of operating lease assets and straight-line rent accrual. (3) Represents recognition of the current portion of operating lease liabilities. (4) Represents recognition of the noncurrent operating lease liabilities. Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. 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. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Preliminary Purchase Price Allocation In millions Weighted Average Amortization Period Fair Value Cash and cash equivalents $ 0.7 Accounts receivable, net 15.7 Inventories (1) 21.7 Prepaid and other current assets 1.3 Property, plant and equipment 88.8 Intangible assets (2) Customer relationships 17 years 159.0 Developed technology 12 years 64.8 Brands Indefinite 67.0 Non-compete agreement 3 years 0.5 Goodwill (3) 295.4 Other assets 1.3 Total fair value of assets acquired $ 716.2 Accounts payable 13.6 Accrued expenses 2.2 Long-term debt 113.1 Deferred income taxes 47.9 Total fair value of liabilities assumed $ 176.8 Cash and restricted cash acquired (4) 1.5 Total cash paid, less cash and restricted cash acquired $ 537.9 _______________ (1) Fair value of finished good 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 $1.9 million for the three months ended March 31, 2019. Estimated amortization expense is as follows: 2019 - $13.1 million, 2020 - $14.9 million, 2021 - $14.9 million, 2022 - $14.8 million and 2023 - $14.8 million. (3) Goodwill consists of estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. See Note 9 for further information regarding our allocation of goodwill among our reportable segments. None of the acquired goodwill will be deductible for income tax purposes. (4) 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. The following table summarizes the consideration paid for the Pine Chemical Business and the assets acquired and liabilities assumed: Purchase Price Allocation In millions Weighted Average Amortization Period Fair Value Accounts receivable $ 16.2 Inventories (1) 9.4 Property, plant and equipment 39.3 Intangible assets (2) Patents 12 years 1.9 Non-compete agreement 3 years 2.2 Customer relationships 11 years 129.0 Goodwill (3) 118.7 Other assets 0.1 Total fair value of assets acquired 316.8 Accounts payable 0.8 Accrued expenses 0.5 Total fair value of liabilities assumed $ 1.3 Total cash paid $ 315.5 _______________ (1) Fair value of finished goods inventories acquired included a step-up in the value of approximately $1.4 million, of which $0.8 million was expensed in the three months ended March 31, 2018. The expense is included in "Cost of sales" on the consolidated statement of operations. (2) The aggregate amortization expense for the three months ended March 31, 2019 and 2018 was $3.2 million and $0.7 million, respectively. Estimated amortization expense is as follows: 2019 - $12.7 million, 2020 - $12.7 million, 2021 - $12.0 million, 2022 - $11.8 million, and 2023 - $11.8 million. (3) Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination. We expect the full amount to be deductible for income tax purposes. |
Business Acquisition, Pro Forma Information | Three Months Ended March 31, In millions 2019 2018 Net sales $ 294.5 $ 301.9 Income (loss) before income taxes 53.5 59.2 Diluted earnings (loss) per share attributable to Ingevity stockholders $ 1.14 $ 0.98 |
Restructuring and Related Costs | Three Months Ended March 31, In millions 2019 2018 Legal and professional service fees $ 10.1 $ 3.8 Loss on hedging purchase price 12.7 — Acquisition-related costs $ 22.8 $ 3.8 Inventory fair value step-up amortization (1) 8.4 0.8 Acquisition and other-related costs $ 31.2 $ 4.6 _______________ (1) Included within "Cost of sales" on the condensed consolidated statement of operations. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present our Net sales disaggregated by product line and geography. In millions Three Months Ended March 31, 2019 2018 Automotive Technologies product line $ 99.7 $ 85.9 Process Purification product line 9.4 9.6 Performance Materials segment $ 109.1 $ 95.5 Oilfield Technologies product line 29.2 22.4 Pavement Technologies product line 18.5 18.5 Industrial Specialties product line 95.8 98.8 Engineered Polymers product line (1) 24.2 — Performance Chemicals segment $ 167.7 $ 139.7 Net sales $ 276.8 $ 235.2 _______________ (1) Engineered Polymers product line was acquired on February 13, 2019; see Note 4 for more information. The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer. In millions Three Months Ended March 31, 2019 2018 North America $ 171.7 $ 154.7 Asia Pacific 49.1 34.0 Europe, Middle East and Africa 51.2 40.4 South America 4.8 6.1 Net sales $ 276.8 $ 235.2 |
Contract with Customer, Asset and Liability | 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. In millions Contract Asset (1) March 31, 2019 March 31, 2018 Beginning balance $ 5.1 $ 4.4 Contract asset additions 4.7 2.2 Reclassification to accounts receivable, billed to customers (4.5 ) (2.3 ) Ending balance $ 5.3 $ 4.3 _______________ (1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheet. |
Financial Instruments, Risk M_2
Financial Instruments, Risk Management, and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring | 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 are recorded at fair value between Level 1 and Level 2 during the period reported. There were no non-recurring fair value measurements in the condensed consolidated balance sheets as of March 31, 2019 or December 31, 2018 . In millions Level 1 (1) Level 2 (2) Level 3 (3) Total March 31, 2019 Assets: Equity securities (4) $ 0.4 $ — $ — $ 0.4 Commodity hedging (4) — 0.1 — 0.1 Deferred compensation plan investments (5) 1.9 — — 1.9 Total assets $ 2.3 $ 0.1 $ — $ 2.4 Liabilities: Deferred compensation arrangement (5) $ 5.4 $ — $ — $ 5.4 Separation-related reimbursement awards (6) 0.1 — — 0.1 Total liabilities $ 5.5 $ — $ — $ 5.5 December 31, 2018 Assets: Equity securities (4) $ 0.4 $ — $ — $ 0.4 Foreign currency hedging (4) — 0.2 — 0.2 Commodity hedging (4) — 0.1 — 0.1 Deferred compensation plan investments (5) 1.3 — — 1.3 Total assets $ 1.7 $ 0.3 $ — $ 2.0 Liabilities: Deferred compensation arrangement (5) $ 4.6 $ — $ — $ 4.6 Separation-related reimbursement awards (6) 0.1 — — 0.1 Foreign currency hedging (7) — 3.9 — 3.9 Commodity hedging (6) — 0.1 — 0.1 Total liabilities $ 4.7 $ 4.0 $ — $ 8.7 ______________ (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. (7) At December 31, 2018, this amount represented a non-designated foreign currency derivative associated with the purchase price of our acquisition of the Caprolactone Business, which was settled at the closing of the acquisition for a loss of $16.6 million . The expense recognized during the three months ended March 31, 2019 was |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | In millions March 31, 2019 December 31, 2018 Raw materials $ 41.3 $ 36.5 Production materials, stores and supplies 20.1 17.5 Finished and in-process goods 177.4 144.7 Subtotal 238.8 198.7 Less: excess of cost over LIFO cost (9.5 ) (7.3 ) Inventories, net $ 229.3 $ 191.4 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | In millions March 31, 2019 December 31, 2018 Machinery and equipment $ 929.9 $ 857.2 Buildings and leasehold improvements 118.6 113.1 Land and land improvements 19.6 19.6 Construction in progress 107.8 71.2 Total cost 1,175.9 1,061.1 Less: accumulated depreciation (547.4 ) (537.3 ) Property, plant and equipment, net (1) $ 628.5 $ 523.8 _______________ (1) This includes finance leases related to machinery and equipment at our Wickliffe, Kentucky facility of $69.2 million and $69.2 million , and net book value of $6.6 million and $6.7 million at March 31, 2019 , and December 31, 2018 , respectively. This also includes finance leases related to our Waynesboro, Georgia manufacturing facility for (a) machinery and equipment of $9.3 million and $6.5 million and net book value of $8.5 million and $6.0 million , (b) construction in progress of $14.1 million and $13.7 million and (c) buildings and leasehold improvements of $0.1 million and $0.1 million at March 31, 2019 , and December 31, 2018 , respectively. Amortization expense associated with these capital leases is included within depreciation expense. The payments remaining under these capital leases obligations are included within Note 16. |
Goodwill and other intangible_2
Goodwill and other intangible assets, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Operating Segments In millions Performance Chemicals Performance Materials Total December 31, 2018 $ 126.4 $ 4.3 $ 130.7 Acquisitions (1) 295.4 — 295.4 Foreign currency translation 5.5 — 5.5 March 31, 2019 $ 427.3 $ 4.3 $ 431.6 ____________ (1) See Note 4 for more information regarding the Caprolactone Acquisition and related increase in goodwill. |
Schedule of Finite-Lived Intangible Assets | All of our other intangibles, net are related to the Performance Chemicals operating segment. The following table summarizes these assets: March 31, 2019 December 31, 2018 In millions Gross Accumulated amortization Net Gross Accumulated amortization Net Intangible assets subject to amortization (finite-lived) (1) Brands (2) $ 11.4 $ 9.8 $ 1.6 $ 11.4 $ 9.8 $ 1.6 Customer contracts and relationships 312.3 35.1 277.2 151.0 30.3 120.7 Developed technology 65.5 0.7 64.8 — — — Other 4.6 1.1 3.5 4.1 0.8 3.3 Total $ 393.8 $ 46.7 $ 347.1 $ 166.5 $ 40.9 $ 125.6 Intangible assets not subject to amortization (indefinite life) (1) Brands (2) $ 67.8 $ — $ 67.8 $ — $ — $ — Total $ 67.8 $ — $ 67.8 $ — $ — $ — Total Other intangibles, net $ 461.6 $ 46.7 $ 414.9 $ 166.5 $ 40.9 $ 125.6 _______________ (1) See Note 4 for more information regarding the Caprolactone Acquisition and related increase in intangible assets. (2) Represents trademarks, trade names and know-how. |
Finite-lived Intangible Assets Amortization Expense | The amortization expense related to our intangible assets in the table above is shown in the table below. Three Months Ended March 31, In millions 2019 2018 Cost of sales $ 0.2 $ 0.3 Selling, general and administrative expenses 5.3 1.0 Total amortization expense (1) $ 5.5 $ 1.3 _______________ (1) See Note 4 for more information about the Caprolactone Acquisition and Pine Chemicals Acquisition, and the related increase in Amortization expense. |
Debt including Finance Lease _2
Debt including Finance Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Current and long-term debt including finance lease obligations consisted of the following: March 31, 2019 In millions, except percentages Interest rate Maturity date March 31, 2019 December 31, 2018 Revolving Credit Facility (1) 3.75% 2023 $ 293.1 $ — Term Loan Facilities 3.49% 2022-2023 750.0 375.0 Senior Notes 4.50% 2026 300.0 300.0 Finance lease obligations 7.67% 2027 80.0 80.0 Other 4.95% 2019-2021 6.2 3.9 Total debt including finance lease obligations 1,429.3 758.9 Less: debt issuance costs 8.1 6.5 Total debt including finance lease obligations, net of debt issuance costs 1,421.2 752.4 Less: debt maturing within one year (2) 18.0 11.2 Long-term debt including finance lease obligations $ 1,403.2 $ 741.2 ______________ (1) Letters of credit outstanding under the revolving credit facility were $1.9 million and available funds under the facility were $455.0 million at March 31, 2019 . (2) Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets. |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity | The table provides a roll forward of equity, equity attributable to Ingevity stockholders, and equity attributable to noncontrolling interests. Ingevity Stockholders' Common Stock In millions, except per share data in thousands Shares Amount Additional paid in capital Retained earnings Accumulated Treasury stock Noncontrolling interest 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 Ingevity Stockholders' 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 Noncontrolling interest Total Equity Balance at December 31, 2017 42,209 $ 0.4 $ 140.1 $ 142.8 $ (11.7 ) $ (7.7 ) $ 14.0 $ 277.9 Net income (loss) — — — 30.8 — — 5.0 35.8 Other comprehensive income (loss) — — — — 4.0 — — 4.0 Common stock issued 56 — — — — — — — Exercise of stock options, net 5 — 0.1 — — — — 0.1 Tax payments related to vested restricted stock units — — — — — (1.5 ) — (1.5 ) Share repurchase program — — — — — (3.1 ) — (3.1 ) Noncontrolling interest distributions — — — — — — (5.3 ) (5.3 ) Share-based compensation plans — — 3.1 — — 0.4 — 3.5 Adoption of ASC 606 — — — 1.6 — — — 1.6 Balance at March 31, 2018 42,270 $ 0.4 $ 143.3 $ 175.2 $ (7.7 ) $ (11.9 ) $ 13.7 $ 313.0 Accumulated other comprehensive income (loss) Summarized below is the roll forward of accumulated other comprehensive income (loss), net of tax. In millions Foreign currency adjustments Derivative Instruments Pension and other postretirement benefits Total Accumulated other comprehensive income (loss), net of tax at December 31, 2018 $ (16.4 ) $ 0.4 $ (1.7 ) $ (17.7 ) 2019 Activity Other comprehensive income (loss) before reclassifications 9.4 0.1 — 9.5 Amounts reclassified from accumulated other comprehensive income (loss) — (0.4 ) — (0.4 ) Accumulated other comprehensive income (loss), net of tax at March 31, 2019 $ (7.0 ) $ 0.1 $ (1.7 ) $ (8.6 ) Foreign currency adjustments Derivative Instruments Pension and other postretirement benefits Total Accumulated other comprehensive income (loss), net of tax at December 31, 2017 $ (10.1 ) $ — $ (1.6 ) $ (11.7 ) 2018 Activity Other comprehensive income (loss) before reclassifications 3.9 0.1 — 4.0 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Accumulated other comprehensive income (loss), net of tax at March 31, 2018 $ (6.2 ) $ 0.1 $ (1.6 ) $ (7.7 ) |
Schedule of Accumulated Other Comprehensive Income (Loss) | Summarized below is the roll forward of accumulated other comprehensive income (loss), net of tax. In millions Foreign currency adjustments Derivative Instruments Pension and other postretirement benefits Total Accumulated other comprehensive income (loss), net of tax at December 31, 2018 $ (16.4 ) $ 0.4 $ (1.7 ) $ (17.7 ) 2019 Activity Other comprehensive income (loss) before reclassifications 9.4 0.1 — 9.5 Amounts reclassified from accumulated other comprehensive income (loss) — (0.4 ) — (0.4 ) Accumulated other comprehensive income (loss), net of tax at March 31, 2019 $ (7.0 ) $ 0.1 $ (1.7 ) $ (8.6 ) Foreign currency adjustments Derivative Instruments Pension and other postretirement benefits Total Accumulated other comprehensive income (loss), net of tax at December 31, 2017 $ (10.1 ) $ — $ (1.6 ) $ (11.7 ) 2018 Activity Other comprehensive income (loss) before reclassifications 3.9 0.1 — 4.0 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Accumulated other comprehensive income (loss), net of tax at March 31, 2018 $ (6.2 ) $ 0.1 $ (1.6 ) $ (7.7 ) |
Retirement plans (Tables)
Retirement plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Postemployment Benefits [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | The following table summarizes the components of net periodic benefit cost (income) for our defined benefit pension plans: Three Months Ended March 31, Pensions Other Benefits In millions 2019 2018 2019 2018 Components of net periodic benefit cost (income): Service cost (1) $ 0.3 $ 0.4 $ — $ — Interest cost (2) 0.3 0.2 — — Expected return on plan assets (2) (0.3 ) (0.2 ) — — Amortization of net actuarial and other (gain) loss (2) — — — — Net periodic benefit cost (income) $ 0.3 $ 0.4 $ — $ — (1) Amounts are recorded to "Cost of sales" on our condensed consolidated statements of operations consistent with the employee compensation costs that participate in the plan. (2) Amounts are recorded to "Other (income) expense, net" on our condensed consolidated statements of operations. |
Restructuring and other (inco_2
Restructuring and other (income) charges, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Detail on the restructuring charges and asset disposal activities is provided below. Three Months Ended March 31, In millions 2019 2018 Restructuring and other (income) charges, net Gain on sale of assets and businesses $ — $ (0.6 ) Total restructuring and other (income) charges, net $ — $ (0.6 ) |
Income taxes (Tables)
Income taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The below table provides a reconciliation between our reported effective tax rates and the EAETR. Three Months Ended March 31, 2019 2018 In millions, except percentages Before tax Tax Effective tax rate % impact Before tax Tax Effective tax rate % impact Consolidated operations $ 22.7 $ — — % $ 45.5 $ 9.7 21.3 % Discrete items: Restructuring and other (income) charges, net — — (0.6 ) — Acquisition and other-related costs (1) 31.2 5.3 4.6 1.1 Other tax only discrete items — 6.7 — (0.2 ) Total discrete items 31.2 12.0 4.0 0.9 Consolidated operations, before discrete items $ 53.9 $ 12.0 $ 49.5 $ 10.6 Quarterly effect of changes in the EAETR (2) 22.3 % 21.4 % _______________ (1) See Note 4 for more information on our acquisition and other-related costs. (2) Increase in EAETR for the three months ended March 31, 2019 , as compared to March 31, 2018 , is driven primarily by the 30 percent acquisition of our noncontrolling interest in Purifications Cellutions, LLC. ("PurCell") on August 1, 2018. PurCell, prior to the acquisition, was a limited liability company and was treated as a "pass-through" entity for tax purposes. Although we consolidated 100 percent of PurCell, only 70 percent of PurCell's earnings were included in the calculation of Ingevity's provision for income taxes as presented on the Condensed Consolidated Statement of Operations. Post-acquisition, 100 percent of the earnings of the entity are now included in the tax calculation which when combined with other factors including the impact of U.S. Tax Reform resulted in a slight increase to our effective tax rate. For the three months ended March 31, 2019 and 2018 , the effective tax rates, including discrete items, were as follows: Three Months Ended March 31, 2019 2018 Effective tax rate — % 21.3 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Maturity Terms | ur operating leases principally relate to the following leased asset classes: Leased Asset Class Expected Lease Term Administrative offices 1 to 10 years Manufacturing buildings 10 years Manufacturing and office equipment 3 to 6 years Warehousing and storage facilities 1 to 10 years Vehicles 3 to 5 years Rail cars 2 to 8 years |
Schedule Of Supplemental Balance Sheet Information Related To Leases | In millions Financial Statement Caption March 31, 2019 Assets Operating lease assets, net (1) Operating lease assets, net $ 59.7 Finance lease assets, net (2) Property, plant, and equipment, net 29.3 Finance lease assets, net (2) Other assets, net 1.2 Total lease assets $ 90.2 Liabilities Current Operating lease liabilities (3) Current operating lease liabilities $ 17.9 Finance lease liabilities Notes payable and current maturities of long-term debt — Noncurrent Operating lease liabilities Noncurrent operating lease liabilities 42.0 Finance lease liabilities Long-term debt including finance lease obligations 80.0 Total lease liabilities $ 139.9 _______________ (1) Operating lease assets, net are recorded net of accumulated amortization of $5.1 million as of March 31, 2019 . (2) Finance lease assets are recorded net of accumulated amortization in Property, plant, and equipment, net and Other assets, net of $63.4 million and $0.2 million , as of March 31, 2019 , respectively. (3) Operating lease liabilities includes $0.3 million of accrued interest. |
Lease Cost | Other Information In millions Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (6.1 ) Operating cash flows from finance leases (3.1 ) Financing cash flows from finance leases $ — Lease cost In millions Financial Statement Caption Three Months Ended March 31, 2019 Operating lease cost (1) Cost of sales $ 5.5 Selling, general, and administrative expenses 0.6 Finance lease cost Amortization of leased assets Cost of sales $ 0.4 Interest on lease liabilities Interest expense, net 1.5 Net lease cost (2) $ 8.0 _______________ (1) Includes short-term leases and variable lease costs, which are immaterial. (2) Only on the rare occasion do we sublease our leased assets, as a result this amount excludes sublease income which is immaterial. |
Finance Lease, Liability, Maturity | Maturity of Lease Liabilities March 31, 2019 In millions Operating leases Finance leases Total 2019 $ 15.8 $ 3.1 $ 18.9 2020 17.0 6.1 23.1 2021 13.2 6.1 19.3 2022 9.8 6.1 15.9 2023 6.0 6.1 12.1 2024 and thereafter 6.0 101.6 107.6 Total lease payments $ 67.8 $ 129.1 $ 196.9 Less: interest 7.9 49.1 57.0 Present value of lease liabilities (1) $ 59.9 $ 80.0 $ 139.9 _______________ (1) As of March 31, 2019 , we have additional operating lease commitments that have not yet commenced of approximately $33.9 million for the relocation of our corporate headquarters. The lease is expected to commence in the first half of 2020 and the lease term is for 15 years with two 5 year extensions. Minimum lease payments pursuant to agreements as of December 31, 2018 , under operating leases that have non-cancelable lease terms in excess of 12 months and under capital leases presented in accordance with ASC 840 are as follows: In millions Operating leases Finance leases 2019 $ 21.9 $ 6.1 2020 17.2 6.1 2021 13.3 6.1 2022 9.7 6.1 2023 6.0 6.1 2024 and thereafter 5.9 101.5 Minimum lease payments $ 74.0 $ 132.0 Less: interest 52.0 Capital lease obligations $ 80.0 |
Lessee, Operating Lease, Liability, Maturity | Maturity of Lease Liabilities March 31, 2019 In millions Operating leases Finance leases Total 2019 $ 15.8 $ 3.1 $ 18.9 2020 17.0 6.1 23.1 2021 13.2 6.1 19.3 2022 9.8 6.1 15.9 2023 6.0 6.1 12.1 2024 and thereafter 6.0 101.6 107.6 Total lease payments $ 67.8 $ 129.1 $ 196.9 Less: interest 7.9 49.1 57.0 Present value of lease liabilities (1) $ 59.9 $ 80.0 $ 139.9 _______________ (1) As of March 31, 2019 , we have additional operating lease commitments that have not yet commenced of approximately $33.9 million for the relocation of our corporate headquarters. The lease is expected to commence in the first half of 2020 and the lease term is for 15 years with two 5 year extensions. Minimum lease payments pursuant to agreements as of December 31, 2018 , under operating leases that have non-cancelable lease terms in excess of 12 months and under capital leases presented in accordance with ASC 840 are as follows: In millions Operating leases Finance leases 2019 $ 21.9 $ 6.1 2020 17.2 6.1 2021 13.3 6.1 2022 9.7 6.1 2023 6.0 6.1 2024 and thereafter 5.9 101.5 Minimum lease payments $ 74.0 $ 132.0 Less: interest 52.0 Capital lease obligations $ 80.0 |
Lease Term and Discount Rate | Lease Term and Discount Rate As of March 31, 2019 Weighted-average remaining lease term (years) Operating leases 4.3 Finance leases 8.9 Weighted-average discount rate Operating leases 5.66 % Finance leases 7.67 % |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Three Months Ended March 31, In millions 2019 2018 Net sales Performance Materials $ 109.1 $ 95.5 Performance Chemicals 167.7 139.7 Total net sales (1) $ 276.8 $ 235.2 Segment EBITDA (2) Performance Materials $ 51.2 $ 42.2 Performance Chemicals 32.3 24.9 Total segment EBITDA (2) $ 83.5 $ 67.1 Interest expense, net (11.1 ) (6.1 ) (Provision) benefit for income taxes — (9.7 ) Depreciation and amortization - Performance Materials (5.8 ) (5.3 ) Depreciation and amortization - Performance Chemicals (12.7 ) (6.2 ) Restructuring and other income (charges), net (3) — 0.6 Acquisition and other related costs (4) (31.2 ) (4.6 ) Net (income) loss attributable to noncontrolling interests — (5.0 ) Net income (loss) attributable to Ingevity stockholders $ 22.7 $ 30.8 _______________ (1) Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation. (2) Segment EBITDA is the primary measure used by the Company's chief operating decision maker to evaluate the performance of and allocate resources among our operating segments. Segment EBITDA is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, other (income) expense, net, excluding depreciation and amortization). We have excluded the following items from segment EBITDA: interest expense associated with corporate debt facilities, income taxes, depreciation, amortization, restructuring and other (income) charges, acquisition and other related costs, pension and postretirement settlement and curtailment (income) charge. (3) Income (charges) for all periods presented related to our Performance Chemicals segment. (4) Charges associated with the acquisition and integration of the Caprolactone Business and Pine Chemical Business. See below for more detail on the charges incurred and Note 4 within these Condensed Consolidated Financial Statements for more information. |
Earnings (loss) per share (Tabl
Earnings (loss) per share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended March 31, In millions, except share and per share data 2019 2018 Net income (loss) attributable to Ingevity stockholders $ 22.7 $ 30.8 Basic and Diluted earnings (loss) per share Basic earnings (loss) per share attributable to Ingevity stockholders $ 0.54 $ 0.73 Diluted earnings (loss) per share attributable to Ingevity stockholders 0.54 0.72 Shares (in thousands) Weighted average number of common shares outstanding - Basic 41,695 42,091 Weighted average additional shares assuming conversion of potential common shares 542 510 Shares - diluted basis 42,237 42,601 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following average number of potential common shares were antidilutive and, therefore, were not included in the diluted earnings per share calculation: Three Months Ended March 31, In thousands 2019 2018 Average number of potential common shares - antidilutive 52 40 |
Background (Details)
Background (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
Basis of Consolidation and Pr_2
Basis of Consolidation and Presentation - Narrative (Details) | Aug. 01, 2018 |
Purification Cellutions LLC | |
Other Ownership Interests [Line Items] | |
Ownership interest | 30.00% |
New Accounting Guidance - Cumul
New Accounting Guidance - Cumulative effect of the changes (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Prepaid and other current assets | $ 36.3 | $ 34.7 | $ 34.9 |
Operating lease assets, net | 59.7 | 64.6 | 0 |
Liabilities | |||
Current operating lease liabilities | 17.9 | 18.4 | 0 |
Noncurrent operating lease liabilities | $ 42 | 46 | $ 0 |
Accounting Standards Update 2016-02 | |||
Assets | |||
Prepaid and other current assets | (0.2) | ||
Operating lease assets, net | 64.6 | ||
Liabilities | |||
Current operating lease liabilities | 18.4 | ||
Noncurrent operating lease liabilities | $ 46 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) € in Millions, $ in Millions | Feb. 13, 2019EUR (€) | Feb. 13, 2019USD ($) | Mar. 08, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Feb. 13, 2019USD ($) | Dec. 10, 2018USD ($) |
Business Acquisition [Line Items] | ||||||||||
Income before income taxes | $ 22.7 | $ 45.5 | ||||||||
Acquisition-related costs | $ 22.8 | $ 3.8 | ||||||||
Caprolactone Acquisition | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition price, net | $ 570.9 | |||||||||
Payments to acquire businesses, gross | € 578.9 | $ 652.5 | ||||||||
Total cash paid | € 100.4 | $ 113.1 | ||||||||
Revenues | $ 24.2 | |||||||||
Income before income taxes | $ (2.3) | |||||||||
Total cash paid, less cash and restricted cash acquired | $ 537.9 | |||||||||
Georgia-Pacific Chemicals LLC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Revenues | $ 4.8 | |||||||||
Income before income taxes | $ 0.3 | |||||||||
Total cash paid, less cash and restricted cash acquired | $ 315.5 | |||||||||
Final payment | $ 0.5 | |||||||||
Weighted Average Amortization Period | 20 years |
Acquisitions (Schedule of Recog
Acquisitions (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Feb. 13, 2019 | Dec. 10, 2018 | Mar. 08, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 431.6 | $ 130.7 | ||||
Amortization expense | 5.5 | $ 1.3 | ||||
2019 | 27.3 | |||||
2020 | 28.2 | |||||
2021 | 27.2 | |||||
2022 | 26.9 | |||||
2023 | 26.9 | |||||
Caprolactone | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 0.7 | $ 0.7 | ||||
Accounts receivable, net | 15.7 | |||||
Inventories | 21.7 | |||||
Prepaid and other current assets | 1.3 | |||||
Property, plant and equipment | 88.8 | |||||
Brands | 67 | |||||
Goodwill | 295.4 | |||||
Other assets | 1.3 | |||||
Total fair value of assets acquired | 716.2 | |||||
Accounts payable | 13.6 | |||||
Accrued expenses | 2.2 | |||||
Long-term debt | 113.1 | |||||
Deferred income taxes | 47.9 | |||||
Total fair value of liabilities assumed | 176.8 | |||||
Cash and restricted cash acquired | 1.5 | |||||
Total cash paid, less cash and restricted cash acquired | 537.9 | |||||
Inventory step up | 8.4 | |||||
Amortization expense | 1.9 | |||||
2019 | 13.1 | |||||
2020 | 14.9 | |||||
2021 | 14.9 | |||||
2022 | 14.8 | |||||
2023 | 14.8 | |||||
Restricted cash | $ 0.8 | |||||
Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 20 years | |||||
Accounts receivable, net | $ 16.2 | |||||
Inventories | 9.4 | |||||
Property, plant and equipment | 39.3 | |||||
Goodwill | 118.7 | |||||
Other assets | 0.1 | |||||
Total fair value of assets acquired | 316.8 | |||||
Accounts payable | 0.8 | |||||
Accrued expenses | 0.5 | |||||
Total fair value of liabilities assumed | 1.3 | |||||
Total cash paid, less cash and restricted cash acquired | $ 315.5 | |||||
Inventory step up | 1.4 | |||||
Inventory expense | 0.8 | |||||
Amortization expense | $ 3.2 | $ 0.7 | ||||
2019 | 12.7 | |||||
2020 | 12.7 | |||||
2021 | 12 | |||||
2022 | 11.8 | |||||
2023 | $ 11.8 | |||||
Patents | Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 12 years | |||||
Intangible assets | $ 1.9 | |||||
Non-compete | Caprolactone | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 3 years | |||||
Intangible assets | 0.5 | |||||
Non-compete | Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 3 years | |||||
Intangible assets | $ 2.2 | |||||
Customer relationships | Caprolactone | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 17 years | |||||
Intangible assets | 159 | |||||
Customer relationships | Georgia-Pacific Chemicals LLC | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 11 years | |||||
Intangible assets | $ 129 | |||||
Developed technology | Caprolactone | ||||||
Business Acquisition [Line Items] | ||||||
Weighted Average Amortization Period | 12 years | |||||
Intangible assets | $ 64.8 |
Acquisitions (Business Acquisit
Acquisitions (Business Acquisition, Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Combinations [Abstract] | ||
Net sales | $ 294.5 | $ 301.9 |
Income (loss) before income taxes | $ 53.5 | $ 59.2 |
Diluted earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 1.14 | $ 0.98 |
Acquisitions (Acquisition and o
Acquisitions (Acquisition and other related costs) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Acquisition [Line Items] | ||
Acquisition-related costs | $ 22.8 | $ 3.8 |
Acquisition and other related costs | 31.2 | 4.6 |
Performance Chemicals | ||
Business Acquisition [Line Items] | ||
Legal and professional service fees | 10.1 | 3.8 |
Purchase price hedge adjustment | 12.7 | 0 |
Acquisition-related costs | 22.8 | 3.8 |
Inventory fair value step-up amortization | 8.4 | 0.8 |
Acquisition and other related costs | $ 31.2 | $ 4.6 |
Revenues - Revenue by segment (
Revenues - Revenue by segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 276.8 | $ 235.2 |
Performance Materials segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 109.1 | 95.5 |
Performance Materials segment | Automotive Technologies product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 99.7 | 85.9 |
Performance Materials segment | Process Purification product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 9.4 | 9.6 |
Performance Chemicals segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 167.7 | 139.7 |
Performance Chemicals segment | Oilfield Technologies product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 29.2 | 22.4 |
Performance Chemicals segment | Oilfield Technologies product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 18.5 | 18.5 |
Performance Chemicals segment | Industrial Specialties product line | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 95.8 | 98.8 |
Performance Chemicals segment | Engineered Polymers product line(1) | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 24.2 | $ 0 |
Revenues - Revenue disaggregsat
Revenues - Revenue disaggregsated by geographic area (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 276.8 | $ 235.2 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 171.7 | 154.7 |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 49.1 | 34 |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 51.2 | 40.4 |
South America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4.8 | $ 6.1 |
Revenues - Contract assets (Det
Revenues - Contract assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with customer, liability | $ 0 | $ 0 | |
Change in Contract with Customer, Asset [Roll Forward] | |||
Beginning balance | 5,100,000 | $ 4,400,000 | |
Contract asset additions | 4,700,000 | 2,200,000 | |
Reclassification to accounts receivable, billed to customers | (4,500,000) | (2,300,000) | |
Ending balance | 5,300,000 | $ 4,300,000 | |
Customer asset acquired | $ 0 |
Financial Instruments, Risk M_3
Financial Instruments, Risk Management, and Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | $ 400,000 | $ 400,000 | |
Realized gains | 0 | $ (300,000) | |
Equity securities, unrealized gain (loss) | 0 | $ 0 | |
Equity Securities without readily determinable fair value | 1,500,000 | 1,500,000 | |
Level 1 to level 2 transfers | 0 | ||
Finance lease obligations | 80,000,000 | ||
Long-term debt, gross | 1,429,300,000 | 758,900,000 | |
Restricted investments | 71,700,000 | 71,200,000 | |
Restricted investments, at fair value | 70,300,000 | ||
Foreign currency hedging | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative, notional amount | 0 | ||
Commodity hedging | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative, fair value, net | 100,000 | 0 | |
Swap | Commodity hedging | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative, notional amount | 1,600,000 | ||
Zero Cost Collar | Commodity hedging | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative, notional amount | 1,200,000 | ||
Reported Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Finance lease obligations | 80,000,000 | ||
Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Finance lease obligations | 91,700,000 | ||
Variable Interest Rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, gross | 1,049,200,000 | ||
Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, fair value disclosure | $ 294,900,000 | ||
Level 2 | Foreign currency hedging | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative, fair value, net | $ 200,000 |
Financial Instruments, Risk M_4
Financial Instruments, Risk Management, and Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Assets: | |||
Equity securities | $ 0.4 | $ 0.4 | $ 0.4 |
Fair Value, Measurements, Recurring | |||
Assets: | |||
Equity securities | 0.4 | 0.4 | 0.4 |
Deferred compensation plan investments | 1.9 | 1.9 | 1.3 |
Total assets | 2.4 | 2.4 | 2 |
Liabilities: | |||
Deferred compensation arrangement | 5.4 | 5.4 | 4.6 |
Separation-related reimbursement awards | 0.1 | 0.1 | 0.1 |
Total liabilities | 5.5 | 5.5 | 8.7 |
Fair Value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Equity securities | 0.4 | 0.4 | 0.4 |
Deferred compensation plan investments | 1.9 | 1.9 | 1.3 |
Total assets | 2.3 | 2.3 | 1.7 |
Liabilities: | |||
Deferred compensation arrangement | 5.4 | 5.4 | 4.6 |
Separation-related reimbursement awards | 0.1 | 0.1 | 0.1 |
Total liabilities | 5.5 | 5.5 | 4.7 |
Fair Value, Measurements, Recurring | Level 2 | |||
Assets: | |||
Equity securities | 0 | 0 | 0 |
Deferred compensation plan investments | 0 | 0 | 0 |
Total assets | 0.1 | 0.1 | 0.3 |
Liabilities: | |||
Deferred compensation arrangement | 0 | 0 | 0 |
Separation-related reimbursement awards | 0 | 0 | 0 |
Total liabilities | 0 | 0 | 4 |
Fair Value, Measurements, Recurring | Level 3 | |||
Assets: | |||
Equity securities | 0 | 0 | 0 |
Deferred compensation plan investments | 0 | 0 | 0 |
Total assets | 0 | 0 | 0 |
Liabilities: | |||
Deferred compensation arrangement | 0 | 0 | 0 |
Separation-related reimbursement awards | 0 | 0 | 0 |
Total liabilities | 0 | 0 | 0 |
Foreign currency hedging | Fair Value, Measurements, Recurring | |||
Assets: | |||
Derivative Asset | 0.2 | ||
Liabilities: | |||
Derivative Liability | 3.9 | ||
Foreign currency hedging | Fair Value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Derivative Asset | 0 | ||
Liabilities: | |||
Derivative Liability | 0 | ||
Foreign currency hedging | Fair Value, Measurements, Recurring | Level 2 | |||
Assets: | |||
Derivative Asset | 0 | 0 | 0.2 |
Liabilities: | |||
Derivative Liability | 3.9 | ||
Foreign currency hedging | Fair Value, Measurements, Recurring | Level 3 | |||
Assets: | |||
Derivative Asset | 0 | ||
Liabilities: | |||
Derivative Liability | 0 | ||
Commodity hedging | Fair Value, Measurements, Recurring | |||
Assets: | |||
Derivative Asset | 0.1 | 0.1 | 0.1 |
Liabilities: | |||
Derivative Liability | 0.1 | ||
Commodity hedging | Fair Value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Derivative Asset | 0 | 0 | 0 |
Liabilities: | |||
Derivative Liability | 0 | ||
Commodity hedging | Fair Value, Measurements, Recurring | Level 2 | |||
Assets: | |||
Derivative Asset | 0.1 | 0.1 | 0.1 |
Liabilities: | |||
Derivative Liability | 0.1 | ||
Commodity hedging | Fair Value, Measurements, Recurring | Level 3 | |||
Assets: | |||
Derivative Asset | 0 | 0 | 0 |
Liabilities: | |||
Derivative Liability | $ 0 | ||
Caprolactone | |||
Liabilities: | |||
Loss on derivative | $ 12.7 | $ 16.6 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory, Net | ||
Raw materials | $ 41.3 | $ 36.5 |
Production materials, stores and supplies | 20.1 | 17.5 |
Finished and in-process goods | 177.4 | 144.7 |
Subtotal | 238.8 | 198.7 |
Less: excess of cost over LIFO cost | (9.5) | (7.3) |
Inventories, net | $ 229.3 | $ 191.4 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment | ||
Total cost | $ 1,175.9 | $ 1,061.1 |
Less: accumulated depreciation | (547.4) | (537.3) |
Property, plant and equipment, net | 628.5 | 523.8 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Total cost | 929.9 | 857.2 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment | ||
Total cost | 118.6 | 113.1 |
Land and land improvements | ||
Property, Plant and Equipment | ||
Total cost | 19.6 | 19.6 |
Construction in progress | ||
Property, Plant and Equipment | ||
Total cost | 107.8 | 71.2 |
Wickliffe, Kentucky Manufacturing Facility | Machinery and equipment | ||
Property, Plant and Equipment | ||
Finance lease, gross | 69.2 | 69.2 |
Finance lease, net | 6.6 | 6.7 |
Waynesboro, Georgia Manufacturing Facility | Machinery and equipment | ||
Property, Plant and Equipment | ||
Finance lease, gross | 9.3 | 6.5 |
Finance lease, net | 8.5 | 6 |
Waynesboro, Georgia Manufacturing Facility | Building and Building Improvements [Member] | ||
Property, Plant and Equipment | ||
Finance lease, net | 0.1 | 0.1 |
Waynesboro, Georgia Manufacturing Facility | Construction in progress | ||
Property, Plant and Equipment | ||
Finance lease, gross | $ 14.1 | $ 13.7 |
Goodwill and other intangible_3
Goodwill and other intangible assets, net - Carrying Amount (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 130.7 |
Acquisitions | 295.4 |
Foreign currency translation | 5.5 |
Goodwill, ending balance | 431.6 |
Performance Chemicals | |
Goodwill | |
Goodwill, beginning balance | 126.4 |
Acquisitions | 295.4 |
Foreign currency translation | 5.5 |
Goodwill, ending balance | 427.3 |
Performance Materials | |
Goodwill | |
Goodwill, beginning balance | 4.3 |
Acquisitions | 0 |
Foreign currency translation | 0 |
Goodwill, ending balance | $ 4.3 |
Goodwill and other intangible_4
Goodwill and other intangible assets, net - Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Net | $ 414.9 | $ 125.6 |
Performance Chemicals | ||
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Gross | 393.8 | 166.5 |
Accumulated amortization | 46.7 | 40.9 |
Net | 347.1 | 125.6 |
Intangible assets not subject to amortization (indefinite life) | 67.8 | |
Intangible Assets, Gross (Excluding Goodwill) | 461.6 | 166.5 |
Intangible Assets, Net (Excluding Goodwill) | 414.9 | 125.6 |
Performance Chemicals | Brands | ||
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Intangible assets not subject to amortization (indefinite life) | 67.8 | |
Brands | Performance Chemicals | ||
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Gross | 11.4 | 11.4 |
Accumulated amortization | 9.8 | 9.8 |
Net | 1.6 | 1.6 |
Customer contracts and relationships | Performance Chemicals | ||
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Gross | 312.3 | 151 |
Accumulated amortization | 35.1 | 30.3 |
Net | 277.2 | 120.7 |
Developed technology | Performance Chemicals | ||
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Gross | 65.5 | 0 |
Accumulated amortization | 0.7 | 0 |
Net | 64.8 | 0 |
Other | Performance Chemicals | ||
Schedule of Finite-Lived and Indefinite Intangible Assets [Table] [Line Items] | ||
Gross | 4.6 | 4.1 |
Accumulated amortization | 1.1 | 0.8 |
Net | $ 3.5 | $ 3.3 |
Goodwill and other intangible_5
Goodwill and other intangible assets, net - Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 5.5 | $ 1.3 |
Cost of sales | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | 0.2 | 0.3 |
Selling, general and administrative expenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 5.3 | $ 1 |
Goodwill and other intangible_6
Goodwill and other intangible assets, net - Maturity (Details) $ in Millions | Mar. 31, 2019USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2019 | $ 27.3 |
2020 | 28.2 |
2021 | 27.2 |
2022 | 26.9 |
2023 | $ 26.9 |
Debt including Finance Lease _3
Debt including Finance Lease Obligations - Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Line of Credit Facility | ||
Long-term debt, gross | $ 1,429.3 | $ 758.9 |
Less: debt issuance costs | 8.1 | 6.5 |
Total debt including finance lease obligations, net of debt issuance costs | 1,421.2 | 752.4 |
Less: debt maturing within one year | 18 | 11.2 |
Long-term debt including finance lease obligations | $ 1,403.2 | 741.2 |
Revolving credit facility | ||
Line of Credit Facility | ||
Interest Rate | 3.75% | |
Long-term debt, gross | $ 293.1 | 0 |
Letters of credit outstanding | 1.9 | |
Available under the facility | $ 455 | |
Term Loan Facilities | ||
Line of Credit Facility | ||
Interest Rate | 3.49% | |
Long-term debt, gross | $ 750 | 375 |
Senior Notes | ||
Line of Credit Facility | ||
Interest Rate | 4.50% | |
Long-term debt, gross | $ 300 | 300 |
Capital lease obligations | ||
Line of Credit Facility | ||
Interest Rate | 7.67% | |
Long-term debt, gross | $ 80 | 80 |
Other | ||
Line of Credit Facility | ||
Interest Rate | 4.95% | |
Long-term debt, gross | $ 6.2 | $ 3.9 |
Debt including Finance Lease _4
Debt including Finance Lease Obligations - Narrative (Details) | Mar. 07, 2019USD ($) | Mar. 31, 2019 |
Line of Credit Facility | ||
Leverage ratio | 3.5 | |
Leverage ratio, interest | 11.3 | |
Senior Notes | ||
Line of Credit Facility | ||
Principal amount | $ 375,000,000 | |
Credit Agreement - Amendment | ||
Line of Credit Facility | ||
Commitment fee rate | 0.05% | |
Commitment fee amount | $ 1,800,000 | |
Revolving Credit Facility | ||
Line of Credit Facility | ||
Leverage ratio | 4 | |
Leverage ratio potential increase | 4.5 | |
Leverage ratio, interest | 3 | |
Minimum | Base Rate | Credit Agreement - Amendment | ||
Line of Credit Facility | ||
Basis spread rate | 0.00% | |
Minimum | LIBOR | Credit Agreement - Amendment | ||
Line of Credit Facility | ||
Basis spread rate | 0.75% | |
Maximum | Base Rate | Credit Agreement - Amendment | ||
Line of Credit Facility | ||
Basis spread rate | 0.25% | |
Maximum | LIBOR | Credit Agreement - Amendment | ||
Line of Credit Facility | ||
Basis spread rate | 1.25% |
Equity - Rollforward (Details)
Equity - Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2018 | |
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance (shares) | 41,693,261 | ||
Beginning balance | $ 338.7 | ||
Beginning balance, value | 338.7 | $ 277.9 | |
Net income (loss) | 22.7 | 30.8 | |
Net income (loss) | 22.7 | 35.8 | |
Other comprehensive income (loss) | 9.1 | 4 | |
Exercise of stock options, net | 1.4 | 0.1 | |
Tax payments related to vested restricted stock units | (14.3) | (1.5) | |
Share repurchase program | (3.3) | (3.1) | |
Share-based compensation plans | $ 4.4 | 3.5 | |
Noncontrolling interest distributions | (5.3) | ||
Adoption of ASC 606 | $ 1.6 | ||
Ending balance (shares) | 42,331,913 | ||
Ending balance, value | $ 358.7 | $ 313 | |
Ending balance | $ 358.7 | ||
Common Stock | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance (shares) | 42,332,000 | 42,209,000 | |
Beginning balance | $ 0.4 | ||
Beginning balance, value | $ 0.4 | ||
Common stock issued (shares) | 276,000 | 56,000 | |
Exercise of stock options, net (shares) | 51,000 | 5,000 | |
Ending balance (shares) | 42,659,000 | 42,270,000 | |
Ending balance, value | $ 0.4 | ||
Ending balance | $ 0.4 | ||
Additional paid in capital | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | 98.3 | ||
Beginning balance, value | 140.1 | ||
Exercise of stock options, net | 1.4 | 0.1 | |
Share-based compensation plans | 4.1 | 3.1 | |
Ending balance, value | 143.3 | ||
Ending balance | 103.8 | ||
Retained earnings | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | 313.5 | ||
Beginning balance, value | 142.8 | ||
Net income (loss) | 22.7 | ||
Net income (loss) | 30.8 | ||
Adoption of ASC 606 | $ 1.6 | ||
Ending balance, value | 175.2 | ||
Ending balance | 336.2 | ||
Accumulated other comprehensive income (loss) | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (17.7) | ||
Beginning balance, value | (11.7) | ||
Other comprehensive income (loss) | 9.1 | 4 | |
Ending balance, value | (7.7) | ||
Ending balance | (8.6) | ||
Treasury stock | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (55.8) | ||
Beginning balance, value | (7.7) | ||
Tax payments related to vested restricted stock units | (14.3) | (1.5) | |
Share repurchase program | (3.3) | (3.1) | |
Share-based compensation plans | 0.3 | 0.4 | |
Ending balance, value | (11.9) | ||
Ending balance | $ (73.1) | ||
Noncontrolling Interest [Member] | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance, value | 14 | ||
Net income (loss) | 5 | ||
Noncontrolling interest distributions | (5.3) | ||
Ending balance, value | $ 13.7 |
Equity - Rollforward of Accumla
Equity - Rollforward of Accumlated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance, value | $ 338.7 | $ 277.9 |
Other comprehensive income (loss) before reclassifications | 9.1 | 4 |
Ending balance, value | 358.7 | 313 |
Foreign currency adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance, value | (16.4) | (10.1) |
Other comprehensive income (loss) before reclassifications | 9.4 | 3.9 |
Ending balance, value | (7) | (6.2) |
Derivative Instruments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance, value | 0.4 | 0 |
Other comprehensive income (loss) before reclassifications | 0.1 | 0.1 |
Amounts reclassified from accumulated other comprehensive income (loss) | (0.4) | 0 |
Ending balance, value | 0.1 | 0.1 |
Pension and other postretirement benefits | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance, value | (1.7) | (1.6) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Ending balance, value | (1.7) | (1.6) |
Accumulated other comprehensive income (loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance, value | (17.7) | (11.7) |
Other comprehensive income (loss) before reclassifications | 9.5 | 4 |
Amounts reclassified from accumulated other comprehensive income (loss) | (0.4) | 0 |
Ending balance, value | $ (8.6) | $ (7.7) |
Equity - Noncontrolling Interes
Equity - Noncontrolling Interest Narrative (Details) - Purification Cellutions LLC $ in Millions | Aug. 01, 2018USD ($) |
Business Acquisition [Line Items] | |
Ownership interest | 30.00% |
Payments to acquire additional interest | $ 80 |
Acquisition of noncontrolling interest | 11.4 |
Deferred tax assets assumed | 14.3 |
Acquisition of noncontrolling interest | $ 54.3 |
Equity - Share Repurchases (Det
Equity - Share Repurchases (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Nov. 01, 2018 | Feb. 20, 2017 | |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock amount authorized to be repurchased | $ 100,000,000 | ||
Shares repurchased during period (in shares) | 40,000 | ||
Weighted average cost per share (in dollars per share) | $ 82.76 | ||
Amount remained unused under repurchase program | $ 392,700,000 | ||
Common Stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Common stock amount authorized to be repurchased | $ 350,000,000 |
Retirement plans - Summary of C
Retirement plans - Summary of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Pensions | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 0.3 | $ 0.4 |
Interest cost | 0.3 | 0.2 |
Expected return on plan assets | (0.3) | (0.2) |
Amortization of net actuarial and other (gain) loss | 0 | 0 |
Net periodic benefit cost (income) | 0.3 | 0.4 |
Other Benefits | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 0 | 0 |
Interest cost | 0 | 0 |
Expected return on plan assets | 0 | 0 |
Amortization of net actuarial and other (gain) loss | 0 | 0 |
Net periodic benefit cost (income) | $ 0 | $ 0 |
Retirement plans - Narrative (D
Retirement plans - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Postemployment Benefits [Abstract] | |
Discretionary contribution amount | $ 0 |
Restructuring and other (inco_3
Restructuring and other (income) charges, net - Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | ||
Gain on sale of assets and businesses | $ 0 | $ (0.6) |
Total restructuring and other (income) charges, net | $ 0 | $ (0.6) |
Restructuring and other (inco_4
Restructuring and other (income) charges, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | ||
Gain on sale of assets and businesses | $ 0 | $ 0.6 |
Income taxes - Effective tax ra
Income taxes - Effective tax rate (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Effective Income Tax Rate Reconciliation, Percent | ||
Effective tax rate | 0.00% | 21.30% |
Income taxes - Tax Reconciliati
Income taxes - Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Before tax | ||
Income (loss) before income taxes | $ 22.7 | $ 45.5 |
Restructuring and other (income) charges, net | 0 | (0.6) |
Acquisition and other related costs | 31.2 | 4.6 |
Total discrete items | 31.2 | 4 |
Consolidated and combined operations, before discrete items | 53.9 | 49.5 |
Tax | ||
Tax | 0 | 9.7 |
Restructuring & other (income) charges, tax | 0 | 0 |
Acquisition costs, tax | 5.3 | 1.1 |
Other tax only discrete items | 6.7 | (0.2) |
Total discrete items, tax | 12 | 0.9 |
Combined operations, before discrete items, tax | $ 12 | $ 10.6 |
Effective tax rate | 0.00% | 21.30% |
EAETR | 22.30% | 21.40% |
Performance Chemicals | ||
Before tax | ||
Acquisition and other related costs | $ 31.2 | $ 4.6 |
Tax | ||
Purchase price hedge adjustment | 12.7 | 0 |
Legal and professional service fees | 10.1 | 3.8 |
Inventory fair value step-up amortization | $ 8.4 | $ 0.8 |
Leases - Operating Lease Terms
Leases - Operating Lease Terms (Details) | Mar. 31, 2019 |
Administrative offices | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 1 year |
Administrative offices | Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 10 years |
Manufacturing buildings | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 10 years |
Manufacturing and office equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 3 years |
Manufacturing and office equipment | Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 6 years |
Warehousing and storage facilities | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 1 year |
Warehousing and storage facilities | Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 10 years |
Vehicles | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 3 years |
Vehicles | Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 5 years |
Rail cars | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 2 years |
Rail cars | Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 8 years |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Mar. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
Capital lease obligations | $ 80 |
Capital Lease Obligations | |
Lessee, Lease, Description [Line Items] | |
Stated rate | 7.67% |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information related to leases (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease assets, net | $ 59.7 | $ 64.6 | $ 0 |
Total lease assets | 90.2 | ||
Current operating lease liabilities | 17.9 | 18.4 | 0 |
Finance lease liabilities | 0 | ||
Operating lease liabilities | 42 | $ 46 | $ 0 |
Finance lease liabilities | 80 | ||
Total lease liabilities | 139.9 | ||
Operating lease amortization | 5.1 | ||
Accrued interest | 0.3 | ||
Property, Plant and Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Finance lease assets, net | 29.3 | ||
Finance lease assets | 63.4 | ||
Other Assets | |||
Lessee, Lease, Description [Line Items] | |||
Finance lease assets, net | 1.2 | ||
Finance lease assets | $ 0.2 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Finance lease, Interest on leases liabilities | $ 1.5 |
Net lease cost | 8 |
Cost of sales | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | 5.5 |
Finance lease amortization | 0.4 |
Selling, general and administrative expenses | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | $ 0.6 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Millions | Mar. 31, 2019USD ($) |
Operating leases | |
2019 | $ 15.8 |
2020 | 17 |
2021 | 13.2 |
2022 | 9.8 |
2023 | 6 |
2024 and thereafter | 6 |
Total lease payments | 67.8 |
Less: interest | 7.9 |
Present value of lease liabilities | 59.9 |
Financing leases | |
2019 | 3.1 |
2020 | 6.1 |
2021 | 6.1 |
2022 | 6.1 |
2023 | 6.1 |
2024 and thereafter | 101.6 |
Total lease payments | 129.1 |
Less: interest | (49.1) |
Present value of lease liabilities | 80 |
2019 | 18.9 |
2020 | 23.1 |
2021 | 19.3 |
2022 | 15.9 |
2023 | 12.1 |
2024 and thereafter | 107.6 |
Total lease payments | 196.9 |
Less: interest | 57 |
Present value of lease liabilities | 139.9 |
Operating lease commitments that have not yet commenced | $ 33.9 |
Leases - Capital Leases Prior t
Leases - Capital Leases Prior to Adoption of ASC 842 (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | ||
2019 | $ 18.9 | |
2020 | 23.1 | |
2021 | 19.3 | |
2022 | 15.9 | |
2023 | 12.1 | |
2024 and thereafter | 107.6 | |
Total lease payments | 196.9 | |
Less: interest | 57 | |
Capital lease obligations | 80 | |
Capital lease obligations | $ 139.9 | |
Noncancelable Lease | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases, 2019 | $ 21.9 | |
Capital Leases, 2019 | 6.1 | |
Operating Leases, 2020 | 17.2 | |
Capital Leases, 2020 | 6.1 | |
Operating Leases, 2021 | 13.3 | |
Capital Leases, 2021 | 6.1 | |
Operating Leases, 2022 | 9.7 | |
Capital Leases, 2022 | 6.1 | |
Operating Leases, 2023 | 6 | |
Capital Leases, 2023 | 6.1 | |
Operating Leases, 2024 and thereafter | 5.9 | |
Capital Leases, 2024 and thereafter | 101.5 | |
Operating leases, Minimum lease payments | 74 | |
Capital leases, Minimum lease payments | 132 | |
Less: interest | 52 | |
Capital lease obligations | $ 80 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Mar. 31, 2019 |
Leases [Abstract] | |
Operating Lease, Weighted-average remaining lease term | 4 years 4 months |
Finance Lease, Weighted-average remaining lease term | 8 years 10 months 27 days |
Operating Lease, Weighted-average discount rate | 5.66% |
Finance Lease, Weighted-average discount rate | 7.67% |
Leases - Schedule Of Supplement
Leases - Schedule Of Supplemental Cash Flow Information Related To Leases (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ (6.1) |
Operating cash flows from finance leases | (3.1) |
Financing cash flows from finance leases | $ 0 |
Segment information (Net Sales
Segment information (Net Sales and Segment Operating Profit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 276.8 | $ 235.2 |
Segment Reporting Information, Profit (Loss) | ||
Segment operating profits | 83.5 | 67.1 |
Interest expense, net | (11.1) | (6.1) |
(Provision) benefit for income taxes | 0 | (9.7) |
Depreciation and amortization - Performance Chemicals | (18.5) | (11.5) |
Restructuring and other income (charges), net(3) | 0 | 0.6 |
Acquisition and other related costs(4) | (31.2) | (4.6) |
Net (income) loss attributable to noncontrolling interests | 0 | (5) |
Net income (loss) attributable to Ingevity stockholders | 22.7 | 30.8 |
Performance Materials | ||
Segment Reporting Information [Line Items] | ||
Net sales | 109.1 | 95.5 |
Segment Reporting Information, Profit (Loss) | ||
Segment operating profits | 51.2 | 42.2 |
Depreciation and amortization - Performance Chemicals | (5.8) | (5.3) |
Performance Materials | Automotive Technologies product line | ||
Segment Reporting Information [Line Items] | ||
Net sales | 99.7 | 85.9 |
Performance Materials | Process Purification product line | ||
Segment Reporting Information [Line Items] | ||
Net sales | 9.4 | 9.6 |
Performance Chemicals | ||
Segment Reporting Information [Line Items] | ||
Net sales | 167.7 | 139.7 |
Segment Reporting Information, Profit (Loss) | ||
Segment operating profits | 32.3 | 24.9 |
Depreciation and amortization - Performance Chemicals | (12.7) | (6.2) |
Performance Chemicals | Oilfield Technologies product line | ||
Segment Reporting Information [Line Items] | ||
Net sales | 18.5 | 18.5 |
Performance Chemicals | Oilfield Technologies product line | ||
Segment Reporting Information [Line Items] | ||
Net sales | 29.2 | 22.4 |
Performance Chemicals | Industrial Specialties product line | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 95.8 | $ 98.8 |
Earnings (loss) per share - Ear
Earnings (loss) per share - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share Reconciliation | ||
Net income (loss) attributable to Ingevity stockholders | $ 22.7 | $ 30.8 |
Basic and Diluted earnings (loss) per share | ||
Basic earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 0.54 | $ 0.73 |
Diluted earnings (loss) per share attributable to Ingevity stockholders (usd per share) | $ 0.54 | $ 0.72 |
Shares | ||
Weighted average number of common shares outstanding - Basic | 41,695 | 42,091 |
Weighted average additional shares assuming conversion of potential common shares | 542 | 510 |
Shares - diluted basis | 42,237 | 42,601 |
Earnings (loss) per share - Ant
Earnings (loss) per share - Antidilutive (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Potentially anti-dilutive shares (shares) | 52 | 40 |