Company: NGVT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001653477-25-000015
Chunk: 1225

Company: Ingevity Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 1225
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4 Other4.9 3.8 Total deferred tax liabilities$116.4 $167.4 Net deferred tax asset (liability) (1)$61.7 $(59.3)_______________(1) Presentation in the table above is on a gross basis, however, due to jurisdictional netting, our net deferred tax asset and liability recorded on the consolidated balance sheets were $117.9 million and $56.2 million, respectively, as of December 31, 2024, and $11.6 million and $70.9 million, respectively, as of December 31, 2023.Our net deferred tax liability changed to an overall net deferred tax asset in 2024 compared to 2023, with a total change of $121.0 million. The pre-tax Performance Chemicals reporting unit goodwill impairment charge of $349.1 million (refer to Note 8 for more detail) and additional Performance Chemicals repositioning restructuring spending (refer to Note 15 for more detail) during 2024 resulted in a change from a deferred liability to an asset. Due to taxable losses in the U.S. in 2024, additional net operating losses were generated, further increasing the deferred tax asset for the year. As part of Tax Cuts and Jobs Act ("TCJA") enacted in December 2017 under Internal Revenue Code ("IRC") Section 174, we were required to capitalize and amortize research and experimental expenditures. This requirement continued to increase the deferred tax asset for 2024. Also, as modified by TCJA, IRC Section 163(j) limits U.S. business interest expense deductions as a function of adjusted taxable income. In 2024 due to overall taxable losses, Ingevity's interest expense deduction was fully limited, increasing the deferred tax asset for 2024. We have deferred tax assets, including net operating loss and state tax credit carryforwards, which are available to offset future taxable income. A valuation allowance has been provided where management has determined that it is more likely than not that the deferred tax assets will not be realized. In 2024, we recognized tax expense of $1.4 million due to our expected inability to recognize the benefit associated with state tax credits prior to their expiration.At December 31, 2024, net operating loss carryforwards totaled $64.4 million of which we have recorded deferred tax assets of $18.6 million. Of this total,