Company: NGVT
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001653477-25-000091
Chunk: 85

Company: Ingevity Corp
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 85
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 sales" on the condensed consolidated statements of operations.(2) See Note 4 for further information. (3) See Note 14 for further information. (4) Decrease in EAETR for the three months ended March 31, 2025, as compared to March 31, 2024, is due to an overall change in the mix of forecasted earnings in various tax jurisdictions with varying rates, most notably in the U.S. Additionally, the foreign-derived intangible income deduction, which was significantly decreased in 2024 due to reductions in taxable income in the U.S., is driving notable benefit to the EAETR in 2025. The EAETR tax percentage shown for three months ended March 31, 2024 may not precisely recalculate due to rounding.At March 31, 2025 and December 31, 2024, we had deferred tax assets of $11.6 million and $11.0 million, respectively, resulting from certain historical net operating losses from our Brazil and China operations and U.S. state tax credits for which a valuation allowance has been established. The ultimate realization of these deferred tax assets depends on the generation of future taxable income during the periods in which these net operating losses and tax credits are available to be used. In evaluating the realizability of these deferred tax assets, we consider projected future taxable income and tax planning strategies in making our assessment. As of March 31, 2025, we cannot objectively assert that these deferred tax assets are more likely than not to be realized and therefore we have maintained a valuation allowance. We intend to continue maintaining a valuation allowance on these deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. A release of all or a portion of the valuation allowance could be possible if we determine that sufficient positive evidence becomes available to allow us to reach a conclusion that the valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a reduction to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve.Pillar Two, released by the Organisation for Economic Cooperation and Development (OECD), went into effect on January 1, 2024. Pillar Two’s intent is to create a 15% global minimum tax for all jurisdictions in which multinational enterprises operate. To date, fourteen