NGVT 10-K & 10-Q changes, risk factors and insider trading

Our review of strategic alternatives for the industrialAPT specialtiesreportable segment and Performance Chemicals road markings product line and North Charleston, South Carolina crude tall oil (“CTO”) refinery may not result in a transaction and any transaction enteredwe intoenter into, including the completed sale of our North Charleston CTO refinery assets and the majority of the Performance Chemicals industrial specialties product line, may not yield the expected results or benefits.

On JanuaryDecember 16,8, 2025, we announced plans to explore strategic alternatives for our industrialAPT specialtiesreportable segment and Performance Chemicals road markings product line and North Charleston, South Carolina CTO refinery, including a potential divestiture of portions of the North Charleston site.line. While it is our intent to identify and pursue a transaction thatfor willeach strengthenof APT and the Performanceroad Chemicalsmarkings segmentproduct andline, that, in each case will improve the Company’sCompany's financial performance,performance and benefit our stockholders by enabling us to focus on higher growth and higher margin opportunities, there can be no guarantee that this strategic review will result in such a transactiontransactions or achieve such expected results or benefits.

We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.plants.

We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., steam, compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our plants in Covington, Virginia Performance Materials facilityVirginia, and Warrington, United Kingdom. We are co-located with third parties at each of the foregoing plants, and we face related risks of disruptions to our operations arising out of the acts or omissions of such third parties. We are also co-located with, and provide certain critical operating services to, a third party at our Warrington,North UnitedCharleston, KingdomSouth AdvancedCarolina Polymerplant. TechnologiesIf facility.we are unable to provide such services, we could face liability for disrupting such third party's operations.

The services provided by third parties would be at risk if any of the counterparties were to idle or permanently shut down the associated mill or plant, or if operations at the associated mill or plant were disrupted due to natural or other disaster, or by reason of strikes or other labor disruptions, or if there were a significant contractual dispute between the parties. The third party provider of critical and non-critical services at our location in Warrington, United Kingdom has announceddiscontinued plansmost toof discontinueits operations at its Warrington, United Kingdom plant, but continues to provide services to us. In the event that the applicable counterparty were to fail to provide the contracted services, we would be required to obtain these services from other third parties, most likely at an increased cost, or to expend capital to provide these services ourselves. The expenses associated with obtaining or providing these services, as well as any interruption in our operations as a result of the failure of the counterparty to provide these services, may be significant and may adversely affect our financial condition and results of operations.

Additionally, several of our manufacturing facilitiesplants are leased. In the event we were to have a dispute with the landlord regarding the terms of the relevant lease agreements, or we were otherwise unable to fully access or utilize the leased property, the associated business disruption may be significant and may adversely affect our financial condition and results of operations.

Disruptions at any of our facilitiesplants could negatively impact our production, financial condition and results of operations.

Disruptions to any of our manufacturing operations or other facilitiesplants due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood or fire, or other unanticipated problems such as labor difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, and planned or unplanned production slowdowns and shutdowns, turnarounds and outages, could cause operational disruptions of varied duration. Also, many of our production employees are governed by collective bargaining agreements (“CBAs”).agreements. The CBA at our Warrington, United Kingdom Advanced Polymer TechnologiesAPT manufacturing facilityplant with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed. The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers ("IBEW") on behalf of its affiliated Local Union 464 expired on January 15, 2025. TheA parties began negotiations in the fourth quarter of 2024 and will continue to operate under the same terms and conditions while negotiations are pending. Thenew CBA at our Crossett, Arkansas Performance Chemicals manufacturing facility with theIBEW Internationalwas Association of Machinists and Aerospace Workers Union ("IAM") expiresratified on MarchJune 1,24, 2025. The parties will begin contract renewal negotiations during the first quarter of 2025. Further, the CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers will expireexpired on December 1, 2025. It is anticipated that theThe parties will beginbegan contract renewal negotiations during the fourth quarter of 2025.2025 and negotiations are in process. The parties will continue to operate under the same terms and conditions while negotiations are pending.

These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees depending upon the facility,plant, the duration of the disruption, and our ability to shift business to another facilityplant or find alternative sources of manufacturing capacity. Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles. In certain cases, we have products, such as our extruded honeycomb, caprolactone, pavement preservation products, road construction products, pavement reconstruction and recycling products, and industrial specialties products, that are only made at a single site, such as our Covington,Waynesboro, VirginiaGeorgia Performance Materials plant, North Charleston Performance Chemicals plant and Warrington, U.K. APT plant. While we have some redundancies within the facilitiesplants that are the sole manufacturer of certain products, we have limited ability to make these products at other facilities.plants.

The Company purchases a variety of raw materials from third parties for its manufacturing operations, including, but not limited to, CTO, hardwood sawdust, phosphoric acid, ethylene amines, blacktall liquor,oil fatty acid ("TOFA"), lignin, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates. Each raw material is subject to its own supply and demand dynamics which may, at times, limit availability and/or cause price volatility. The Company may be unable to procure the quantities of raw materials it needs which could negatively impact our operations or we may be unable to pass through price increases to our customers which could negatively impact our financial results. For example, our Performance Chemicals segment produces many products derived from CTOlignin and lignin, whichTOFA are co-products of the kraft pulping process. While we have taken aggressive action to limit the Company’s exposure to the volatility of the CTO market, its limited availability and competing demands for its use could again impact our financial results and results of operations if we are unable to source a sufficient supply at a reasonable cost. Lignin is also in limited supply and if we are unable to secure a sufficient amount of lignin or TOFA on a cost-effective basis we could suffer disruption to our roadpavement technologies product line, which could negatively impact our financial results and our results of operations.

Sales of our automotive activated carbon products are tied to global internal-combustion-engineinternal combustion engine (“"ICE”") and hybrid electric vehicle automobile (“"HEV”") production levels. ICE and HEV automotive production in the markets we serve can be affected by macro-economic and other outside factors such as interest rates, fuel prices, shifts in vehicle mix (including shifts toward alternative energy vehicles), consumer confidence, employment trends, regulatory and legislative oversight requirements, andtariffs, trade agreements.agreements, microchip shortages, and disruptions to the operations of suppliers within the automotive original equipment manufacturer ("OEM") supply chain.

The Company’sCompany's roadpavement technologies product line is heavily dependent on government infrastructure spending.

A significant portion of our customers’customers' revenues in our roadpavement technologies business is derived from contracts with various foreign and U.S. governmental agencies, and therefore, when government spending is reduced, our customers’customers' demand for our products is similarly reduced. While we do not do business directly with governmental agencies,agencies in our pavement technologies product line, our customers provide paving services to the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues. Government business is, in general, subject to special risks and challenges, including: delays in funding and uncertainty regarding the allocation of funds to federal, state and local agencies; delays in spending or reductions in other state and local funding dedicated for transportation projects; other government budgetary constraints, cutbacks, delays or reallocation of government funding; long purchase cycles or approval processes; our customers’customers' competitive bidding and qualification requirements; changes in government policies and political agendas; and international conflicts or other military operations that could cause the temporary or permanent diversion of government funding from transportation or other infrastructure projects.

In the Performance Materials segment, there is competition from other activated carbon and honeycomb manufacturers. These competitors are trying to develop more advanced and alternative activated carbon products that could more effectively compete with our products in automotive applications. There is also competition in automotive applications from non-activated carbon competitors and product offerings. For example, multiple OEMs are using sealed tanks in certain subsets of their vehicles to comply with the strict emission regulations (i.e., Tier 3/LEV III) in the U.S. While sealed tank fuel systems generally require an increased sized pelleted activated carbon canister to deal with refueling emissions, in most cases, they do not use an extruded honeycomb to meet current U.S. and California regulations. There is also emerging competition in the "honeycomb" space, which may impact sales of the Company's products. If a competitor were to succeed in developing products that are better suited than ours for automotive evaporative emissions capture applications and/or a competitive technology, such as, but not limited to, sealed gas tanks, our financial results could be negatively impacted.

In the Advanced Polymer Technologies segment, there is competition from other caprolactone manufacturers, including new market entrants. IfThis weincreased are unable to successfully competecompetition in our end-use markets, has impacted and may continue to impact, our financial condition and results of operations could be adversely affected.operations.

The price of gum rosin has a significant impact on the market price for TOR and rosin derivatives and is driven by labor rates for harvesting, land leasing costs, and various other factors that are not within our control. Hydrocarbon resins, for example, C5 resins, are co-products from the manufacture of isoprene (synthetic rubber). Availability and pricing are determined by the supply/demand dynamics for synthetic rubber as well as the price of crude oil as the feedstock for isoprene and various other factors that are not within our control. Animal and plant based fatty acids compete with TOFA products in industrial specialties. The market price for our TOFA and oleochemical products are impacted by the prices of other fats and oils, and the prices for other fats and oils are driven by actual and expected harvest rates, petroleum oil prices, and the biofuel market. Other monomers, thermoplastics, and polyols compete with our caprolactone-based products. The price for our products is impacted by the prices of competitive substitutes which are influenced by oil prices as well as other supply and demand factors. We may not be able to pass through raw material cost increases, or we may lose market share if we do not effectively manage our pricing, which in either case could negatively impact our financial results.

We rely on our information technology systems, some of which are managed by third parties, to support, manage and maintain the day-to-day operations and activities of our business, including our manufacturing facilities,plants, customer and vendor transactions, and financial, accounting, and business records. In addition, we collect and store certain data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws and regulations.

The secure processing, storage, and transmission of sensitive, confidential, and personal data is critical to our operations and business strategy. We have instituted a system of security policies, procedures, capabilities, internal controls and audits aligned with our ISO 27001 certification, designed to protect this information. Additionally, we engage third-party threat detection, penetration testing, and monitoring services which includes a global cybersecurity incident response team. Despite our security architecture and controls, and those of our third-party providers, we may be vulnerable to cyber-attacks, computer viruses, security breaches, ransomware attacks, inadvertent or intentional employee actions, system failures, and other risks that could potentially lead to the compromising of sensitive, confidential or personal data, improper use of our, or our third-party provider systems, solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, and operational disruptions. Further, the widespread availability, adoption and rapid evolution of artificial intelligence ("AI") technologies may increase our cybersecurity risk, including the use of generative artificial intelligence to augment existing or to create new malware, and additional vulnerabilities may be introduced from the use of artificial intelligence by our customers or third parties. We also maintain an information security risk insurance policy to help mitigate the financial consequences of these risks, however, there is no guarantee that such a policy will be sufficient to address such costs. In addition, the global regulatory environment pertaining to information security and privacy is increasingly complex, with new and changing requirements, such as the European Union’sUnion's General Data Protection Regulation (“"GDPR”"), California Consumer Privacy Act (“"CCPA”"), and the China Cybersecurity Law and Personal Information Protection Law. GDPR, which applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries, mandates new compliance obligations and imposes significant fines and sanctions for violations. CCPA requires companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California. Implementing and complying with these laws and regulations may be more costly or take longer than we anticipate, or could otherwise affect our business operations. Information security breaches, cyber incidents, and disruptions, or failure to comply with laws and regulations related to information security or privacy, could result in legal claims or proceedings against us by governmental entities or individuals, significant fines, penalties or judgements, disruption of our operations, remediation requirements, changes to our business practices, and damage to our reputation, which could adversely affect our business, financial condition or results of operations.

Intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and trade dress, are important to our business. See “"Intellectual Property”" included within Part I. Item 1 of this Form 10-K for more information on the 844 Patent. We endeavor to protect our intellectual property rights in key jurisdictions in which our products are produced or used, in jurisdictions into which our products are imported, and in jurisdictions where our competitors have significant manufacturing capabilities. Our success will depend to a significant degree upon our ability to protect and preserve our intellectual property rights. However, we may be unable to obtain or maintain protection for our intellectual property in key jurisdictions and the Company’sCompany's patents and other intellectual property may not prevent competitors from independently developing or selling similar or duplicative products and services. Although we own and have applied for numerous patents and trademarks throughout the world, we may have to rely on judicial enforcement of our patents and other proprietary rights. Our patents and other intellectual property rights may be challenged, invalidated, circumvented, and rendered unenforceable or otherwise compromised. We are currently involved in severala legal actionsaction related to the intellectual property associated with the 844 Patent. On September 15, 2021, a jury in the lawsuit filed by the Company against BASF Corporation for patent infringement in the U.S. District Court for the District of Delaware (the “"Delaware Proceeding”") issued a verdict in favor of BASF on certain counterclaims filed by BASF in the Delaware Proceeding. The jury awarded BASF damages of approximately $28.3 million, which will be trebled under U.S. antitrust law to approximately $85.0 million when the court enters judgment. On May 18, 2023, the court in the Delaware Proceeding entered judgment on the jury’sjury's verdict, which commenced the post-trial briefing stage. On February 13, 2024, the court in the Delaware Proceeding denied BASF’sBASF's motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative. In addition, BASF may seek post-judgment interest and attorneys’ fees and costs in amounts that they will have to prove at a future date. Earlier in the Delaware Proceeding, the U.S. District Court dismissed the Company’sCompany's patent infringement claims against BASF alleging BASF infringed the 844 Patent and invalidated some, but not all, of the claims in our 844 patent, which expired in March 2022.

The Company disagrees with the verdict, including the court’s application of the law and entry of judgment. Therefore, onOn March 13, 2024, we appealed the verdict as well as the U.S. District Court’sCourt's November 2020 dismissal of our patent infringement claims against BASF.BASF Asto the U.S. Federal Circuit Court of DecemberAppeals. 31,On 2024,February 11, 2026, the finalU.S. resolutionFederal Circuit Court of theseAppeals mattersruled couldagainst takeIngevity upon our appeal and we have decided to 15 months and there can be no assurancelonger thatpursue theany Companyfurther willappeals. prevailWe inexpect its attempts to challenge the verdict. Because the outcomepayment of the Company’sjudgment, post-trialplus motionspost-judgment and possible appeal is difficultinterest, to predict,be asmade in the second quarter of December2026. 31, 2024, theThe Company hascontinues accruedto accrue a total of $85.0 million, the full amount of the jury’sjury's verdict (including treble damages). The amount accrued for this matter is included within OtherAccrued liabilitiesexpenses on the consolidated balance sheetsheets as of December 31, 2024,2025, and the charge iswas included within Other (income) expense, net on the consolidated statement of operations for the twelve months ended December 31, 2021. In addition, as a result of the judgment being officially entered on May 18, 2023, we have started accruing for post-judgment interest at the legally mandated interest rate. As of December 31, 20242025 and 2023,2024, the total amount accrued, inclusive of post-judgement interest, was $91.4$95.4 million and $87.4$91.4 million, respectively. The amount of any liability the Company may ultimately incur related to the Delaware Proceeding could be more or less than the amount accrued. BASF has indicated it will seek attorneys' fees and costs in amounts that they will allege and have to demonstrate at a future date. The Company has and may continue to incur additional fees, costs and expenses for as long as the post-trial motions and possible appeal are ongoing. If the Company is required to pay the entire jury verdict (together with any associated fees, costs, and expenses), or the Company must make certain changes to its business when the matters associated with the Delaware Proceeding are eventually resolved,expenses, such outcomes could have an adverse effect on the Company’sCompany's business, financial condition, and operating results.

The Delaware Proceeding and other legal actions to protect, defend or enforce our intellectual property rights could result in significant costs and diversion of our resources and our management’smanagement's attention, and we may not prevail in any such suitsother or proceedings,actions, which could have an adverse effect on our financial condition and results of operations. Similarly, third parties may assert claims against us and our customers and distributors alleging our products infringe upon third-party intellectual property rights. If the Company is found to infringe any third-party rights, it could be required to pay substantial damages, or it could be enjoined from offering some of its products and services.

There are hazards associated with the chemicals we manufacture and the related storage and transportation of our raw materials, including common solvents, such as toluene and methanol, and reactive chemicals, such as acrylic acid, all of which fall under the OSHA Process Safety Management Code. These hazards could lead to an interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing facilityplant or on us as a whole. While we endeavor to provide adequate protection for the safe handling of these materials, issues could be created by various events, including natural disasters, severe weather events, acts of sabotage and performance by third parties, and as a result we could face potential hazards, including the following: piping and storage tank leaks and ruptures; mechanical failure; employee exposure to hazardous substances; and chemical spills and other discharges or releases of toxic or hazardous substances or gases. These hazards may cause personal injury and loss of life, damage to property, and contamination of the environment, which could lead to government fines, work stoppage injunctions, lawsuits by injured persons, damage to our public reputation and brand, and diminished product acceptance. While we have insurance coverage intended to assist with any financial impactsimpacts, the financial resources of the Company could be impacted. If such actions are determined adversely to us, or there is an associated economic impact on our business, we may have inadequate insurance or cash flow to offset any associated costs.

Increased focus by governmental entities on environmental issues and sustainability have resulted in a complex landscape of new or increased regulations. Changes in environmental laws and regulations, or their application, could subject Ingevity to significant additional capital expenditures and operating expenses. Additionally, changes in the regulation of greenhouse gases, as well as future climate change laws and regulations, depending on their nature and scope, could subject our operations to significant additional costs or limits on operations. Our manufacturing facilitiesplants use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gasses that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions. Potential consequences could include increased energy, transportation, and raw material costs and may require us to make additional investments in facilitiesplants and equipment or limit our ability to grow. Any such changes are uncertain and, therefore, it is not possible for Ingevity to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.

Our pavement technologies and road technologiesmarkings product linelines isare seasonal in nature, with roughly 70 to 75 percent of revenue generated between April and September each year. Adverse weather conditions, which directly affect the ability to engage in paving and/or road marking activity, have had, and going forward may have, an adverse effect on sales in the roadpavement technologies and road markings product linelines if such conditions result in lower customer demand due to a shortened season.

Ingevity Corporation ("Ingevity," "the "Company," "we," "us," or "our") provides products and technologies that purify, protect, and enhance the world around us. Through a diverse team of talented and experienced people, we develop, manufacture, and bring to market solutions that are largely renewably sourced and help customers solve complex problems while making the world more sustainable. Our products are used in a variety of demanding applications, including adhesives,automotive agrochemicals,gasoline vapor emissions control systems, food, water and chemical filtration, asphalt paving, agrochemical dispersants, bioplastics, coatings, elastomers, lubricants,and paint for road markings, oil drilling, and automotive components.markings. We operate in three reportable segments: Performance Materials, Performance Chemicals, and Advanced Polymer Technologies.

InterestStrategic Rate Risk ManagementInvestments

ForDuring the year ended December 31, 2024,2025, the Company identified triggering events indicating that investments being accounted for under the measurement alternative may be impairedimpaired, and recognized impairment charges of $11.5$11.9 million, recorded in "Other (income) expense, net" on the consolidated statement of operations.operations for the twelve months ended December 31, 2025.

Part I, Item 1A, Risk Factors of our 2025 Annual Report sets forth information relating to important risks and uncertainties that could materially adversely affect the company's business, financial condition and operating results. Except as set forth below, there have been no material changes in Ingevity's risk factors disclosed in Part I, Item 1A, Risk Factors of our 2025 Annual Report for the quarter ended MarchJune 31,30, 2026.

Management's discussion and analysis of Ingevity Corporation's ("Ingevity," "the company," "we," "us," or "our") financial condition and results of operations ("MD&A") is provided as a supplement to the Condensed Consolidated Financial Statements and related notes included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. The following discussion should be read in conjunction with Ingevity's consolidated financial statements as of and for the year ended December 31, 2025, filed on February 26, 2026, with the Securities and Exchange Commission ("SEC") as part of the company's Annual ReportingReport on Form 10-K ("2025 Annual Report") and the unaudited interim Condensed Consolidated Financial Statements and notes to the unaudited interim Condensed Consolidated Financial Statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Unless otherwise indicated, the information in MD&A refers only to our continuing operations. SeeRefer Noteto Notes 1 and 16 for more information.

•any transaction we enter into, including the sale of our road markings product line and our North Charleston crude tall oil ("CTO") refinery assets and the majority of theour former Performance Chemicals industrial specialties product line, may not yield the expected results or benefits;

Ingevity Corporation provides products and technologies that purify, protect, and enhance the world around us. Through a diverse team of talented and experienced people, we develop, manufacture, and bring to market solutions that are largely renewably sourced and help customers solve complex problems while making the world more sustainable. Our products are used in a variety of demanding applications, including automotive gasoline vapor emissions control systems, food, water and chemical filtration, asphalt paving, agrochemical dispersants, bioplastics, coatings, elastomers, and paint for road markings.elastomers. We operate in three reportable segments: Performance Materials, PerformancePavement ChemicalsTechnologies and Advanced Polymer Technologies.

On April 15, 2026, we completed the sale of our former Performance Chemicals' road markings product line to PPG Industries Inc. (the "Disposition"). We received all-cash proceeds of $93.1$63.2 million, inclusive of preliminary traditional working capital adjustments, and recorded a gain of $55.6$8.6 million within "Other (Gainincome) lossexpense, net" on salethe Condensed Consolidated Statement of business" within discontinued operations. See Note 16Operations for morethe information.three and six months ended June 30, 2026.

Net sales increaseddecreased fourfive percent from the prior year driven by priceour former Performance Chemicals' road markings product line disposition on April 15, 2026, which more than offset increases inwithin the Performance Materials and Advanced Polymer Technologies reportable segment and pavement technologies product line and favorable foreign exchange.segments.

The Net sales increasedecrease of $10.1$17.4 million in 2026 was driven by a volume decrease of $28.2 million (nine percent), partially offset by favorable pricing and sales mix of $6.5$10.0 million (three percent), and favorable foreign currency exchange of $3.2 million (one percent), and a volume increase of $0.4$0.8 million (zero percent).

Gross profit increase of $4.5$11.2 million in 2026 was driven by favorable pricing and sales mix of $6.5 million, favorable sales volume of $2.2$10.0 million, and LIFOdecreased impactsmanufacturing costs of $0.7$9.1 million. This increase was partially offset by increasedunfavorable manufacturingsales costsvolume of $4.7$6.6 million, and unfavorable foreign currency exchange of $0.2$1.3 million.

SG&A was $40.7$39.0 million (1612 percent of Net sales) and $41.9$43.6 million (1713 percent of Net sales) for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Overall, SG&A decreased by $1.2$4.6 million (three11 percent), driven by decreased intangible amortization expense of $2.3$3.3 million, and decreased spending on commercial activities of $0.4$1.2 million, partiallyand offset by increaseddecreased variable incentive compensation of $1.5$0.1 million.

Research and technical expenses as a percentage of Net sales wasremained 2.6relatively consistent period over period, totaling 1.9 percent and 2.82.1 percent for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Research and technical expenses as a percentage of Net sales decreased due to higher sales. Overall, Research and technical expenses decreased by $0.3$0.9 million, compared to the prior year, primarily driven by a decrease within our Performance Materials reportable segment.

(1) SeeRefer to Note 13 for more information.

(2) SeeRefer to Note 14 for more information.

(1) SeeRefer to Note 9 for more information.

(2) SeeRefer to Note 8 for more information.

(3) SeeRefer to Note 13 for more information.

Provision (benefit) for income taxes on continuing operations For the three months ended MarchJune 31,30, 2026 and 2025, our effective tax rate was 22.5 percent21.5% and 22.6 percent,(3.5)%, respectively. Excluding discrete items, the effective rate was 26.0 percent26.0% compared to 21.9 percent21.3% in the three months ended MarchJune 31,30, 2026 and 2025, respectively. SeeRefer to Note 12 for more information.

Income (loss) from discontinued operations, net of income taxes Income (loss) from discontinued operations, net of income taxes was $36.4$(4.5) million and $31.9 million for the three and six months ended June 30, 2026, respectively. Income (loss) from discontinued operations, net of income taxes was $(5.1) million and $(8.613.7) million for the three and six months ended MarchJune 31, 2026 and30, 2025, respectively. IncreaseFor the six months ended June 30, 2026, the increase was driven by the gain on sale. SeeRefer to Note 16 for more information.

In addition to the information discussed above, the following sections discuss the results of operations for Ingevity's reportable segments. Our segments are (i) Performance Materials, (ii) PerformancePavement ChemicalsTechnologies and (iii) Advanced Polymer Technologies. Segment Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") is the primary measure used by the company's chief operating decision maker to evaluate the performance of and allocate resources among our reportable segments. Segment EBITDA is defined as segment net sales less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, research and technical 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, interest income, income taxes, depreciation, amortization, restructuring and other income (charges), net, gain on sale of business, goodwill impairment charges, long-lived asset impairment charges, acquisition and other-related income (costs), gain (loss) on strategic investments, impairment of license agreement, proxy contest charges, portfolio realignment costs, pension and postretirement settlement and curtailment income (charges), net, litigation charge, indirect costs allocated to Divestiture, and Corporate and other costs.

Performance Materials Net sales increased sixfour percent compared to the$160.6 prior year quartermillion driven by annualhigher pricing actionsvolumes and a favorable mix asdriven by a continued shift in consumer preferences from battery electric vehicles to hybridshybrids, continued.further supported by annual pricing actions. Segment EBITDA was up 10six percent to $92.0$86.1 million driven by higher volumes, improved price and mix, higher volume, and higher plant utilization in the quarter to build inventory ahead of planned outages in the second quarter,utilization, which more than offset higher SG&A and other expenses. Segment EBITDA margin improved 230100 basis pointpoints to 59.2%53.6% compared to 56.9%52.6% in the prior year.

Net Sales Comparison of Three and Six Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025:

Segment net sales. The increase of $8.6$6.7 million in 2026 was driven by favorable pricing and sales mix of $5.2$3.7 million (fourtwo percent), volume growth of $2.8$2.6 million (two percent), and favorable foreign currency exchange of $0.6$0.4 million (zero percent).

Segment EBITDA. The increase of $8.5$5.1 million in 2026 was driven by decreased manufacturing costs of $5.3 million, favorable pricing and sales mix of $5.2$3.7 million, and volume growth of $2.9$1.6 million.million, Thedecreased increasemanufacturing wascosts partiallyof offset$0.3 bymillion, unfavorableand favorable foreign currency exchange and other charges of $3.3$1.5 million,million. andThe increase was partially offset by increased SG&A and research and technical expenses of $1.6$2.0 million.

Segment net sales. The decreaseincrease of $0.6$15.3 million in 2026 was driven by a volume decline of $2.9 million (five percent), as a result of a decrease in pavement technologies ($2.0 million) and road markings ($0.9 million), partially offset by favorable pricing and sales mix of $1.8$8.9 million (three percent), drivenvolume bygrowth pavementof technologies$5.4 million ($1.8two millionpercent), and favorable foreign currency exchange of $0.5$1.0 million (onezero percent).

Segment EBITDA. The decreaseincrease of $5.2$13.6 million in 2026 was driven by increasedfavorable pricing and sales mix of $8.9 million, decreased manufacturing costs of $5.4$5.6 million, aand volume declinegrowth of $0.9$4.5 million,million. The increase was partially offset by increased SG&A and research and technical expenses of $0.4$3.6 million, and unfavorable foreign currency exchange and other charges of $0.3 million. The decrease was partially offset by favorable pricing and sales mix of $1.8 million.