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Glossary of Financial Measures

Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP on the following pages. These financial measures are not meant to be considered in isolation nor as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. Investors should consider the limitations associated with these non-GAAP measures, including the potential lack of comparability of these measures from one company to another.

We believe these non-GAAP financial measures provide management as well as investors, potential investors, securities analysts, and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance, liquidity measures, and projected future results.

Ingevity uses the following non-GAAP measures:

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A

  • Adjusted earnings (loss) from continuing operations

    is defined as net income (loss) from continuing operations plus restructuring and other (income) charges, net, goodwill impairment charges, long lived asset impairment charge, acquisition and other-related (income) costs, pension and postretirement settlement and curtailment (income) charges, (gain) loss on strategic investments, debt refinancing fees, litigation verdict charges, proxy contest charges, portfolio realignment costs, and the income tax expense (benefit) on those items, less the provision (benefit) from certain discrete tax items.

  • Adjusted earnings (loss) from discontinued operations

    is defined as net income (loss) from discontinued operations plus restructuring and other (income) charges, net, goodwill impairment charges, loss on CTO resales, CTO supply contract termination charges, (gain) loss on strategic investments, and the income tax expense (benefit) on those items, less the provision (benefit) from certain discrete tax items.

  • Adjusted EBITDA from continuing operations

    is defined as net income (loss) from continuing operations plus interest expense, net, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, goodwill impairment charges, long lived asset impairment charge, acquisition and other-related (income) costs, litigation verdict charges, (gain) loss on strategic investments, proxy contest charges, portfolio realignment costs, and pension and postretirement settlement and curtailment (income) charges, net.

  • Adjusted EBITDA from discontinued operations

    is defined as net income (loss) from discontinued operations plus interest expense, net, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, goodwill impairment charges, (gain) loss on strategic investments, loss on CTO resales, and CTO supply contract termination charges.

  • Adjusted EBITDA margin from continuing operations

    is defined as Adjusted EBITDA from continuing operations divided by Net sales from continuing operations.

  • Adjusted EBITDA margin from discontinued operations

    is defined as Adjusted EBITDA from discontinued operations divided by Net sales from discontinued operations.

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C

  • Combined Net sales

    Performance Chemicals Net sales from continuing operations plus Performance Chemicals Net sales from discontinued operations.

  • Combined Segment EBITDA

    Performance Chemicals Segment EBITDA from continuing operations plus EBITDA from discontinued operations.

  • Combined Segment EBITDA Margin

    Combined Segment EBITDA divided by Combined Net sales.

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D

  • Diluted adjusted earnings (loss) from continuing operations per share

    is defined as diluted earnings (loss) from continuing operations per share plus restructuring and other (income) charges, net, per share, goodwill impairment charges per share, long lived asset impairment charge per share, acquisition and other-related (income) costs per share, pension and postretirement settlement and curtailment (income) charges per share, (gain) loss on strategic investments per share, debt refinancing fees per share, litigation verdict charge per share, proxy contest charges per share, portfolio realignment costs per share, and the income tax expense (benefit) per share on those items, less the provision (benefit) from certain discrete tax items per share.

  • Diluted adjusted earnings (loss) from discontinued operations per share

    is defined as diluted earnings (loss) from discontinued operations per share plus restructuring and other (income) charges, net, per share, goodwill impairment charges per share, acquisition and other-related (income) costs per share, loss on CTO resales per share, CTO supply contract termination charges per share, (gain) loss on strategic investments per share, and the income tax expense (benefit) per share on those items, less the provision (benefit) from certain discrete tax items per share.

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F

  • Free Cash Flow

    is defined as the sum of net cash provided by (used in) the following items: operating activities less capital expenditures.

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N

  • Net Debt

    is defined as the sum of notes payable, short-term debt, current maturities of long-term debt and long-term debt including finance lease obligations less the sum of cash and cash equivalents, restricted cash associated with our new market tax credit financing arrangement, and restricted investment associated with certain finance lease obligations, excluding the allowance for credit losses on held-to-maturity debt securities held within the restricted investment.

  • Net Debt Ratio

    is defined as Net Debt divided by the last twelve months Total Adjusted EBITDA.

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T

  • Total adjusted earnings (loss)

    is defined as Adjusted earnings (loss) from continuing operations and Adjusted earnings (loss) from discontinued operations.

  • Total Adjusted EBITDA

    is defined as Adjusted EBITDA from continuing operations and Adjusted EBITDA from discontinued operations.

  • Total Adjusted EBITDA margin

    is defined as Total Adjusted EBITDA divided by Total net sales.

  • Total adjusted gross margin

    Total adjusted gross profit divided by Total net sales.

  • Total adjusted gross profit

    Gross profit from continuing operations plus gross profit from discontinued operations plus depreciation and amortization.

  • Total adjusted other (income) expense, net

    Other (income) expense, net from continuing operations plus other (income) expense, net from discontinued operations less (gain) loss on strategic investments, loss on CTO resales, CTO supply contract termination charges, proxy contest charges, portfolio review expenses, depreciation and amortization.

  • Total adjusted other (income) expense, net as a percent of sales

    Total adjusted other (income) expense, net divided by Total Net sales.

  • Total adjusted SG&A

    Selling, general, and administrative costs from continuing operations plus research and technical expenses from continuing operations plus selling, general, and administrative costs from discontinued operations plus research and technical expenses from discontinued operations less depreciation and amortization.

  • Total adjusted SG&A as a percent of sales

    Total adjusted SG&A divided by Total Net sales.

  • Total diluted adjusted earnings (loss) per share

    is defined as diluted adjusted earnings (loss) from continuing operations per share and diluted adjusted earnings (loss) from discontinued operations per share.

  • Total Net Sales

    is defined as Net sales from continuing operations and Net sales from discontinued operations.

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