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Delaware
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47-4027764
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(State or Other Jurisdiction
of Incorporation or Organization) |
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(I.R.S. Employer
Identification No.) |
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5255 Virginia Avenue
North Charleston, SC |
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29406
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
to be so registered |
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Name of each exchange on which
each class is to be registered |
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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| ☐ Large accelerated filer | | | ☐ Accelerated filer | |
| ☑ Non-accelerated filer | | |
☐ Smaller reporting company
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(Do not check if a smaller reporting company)
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Item No.
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Caption
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Location in Information Statement
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Item 1. | | | Business | | | The following sections of our information statement are hereby incorporated by reference: “Summary,” “Risk Factors,” “Cautionary Statement for the Purposes of the ‘Safe Harbor’ Provisions of the Private Securities Litigation Reform Act of 1995,” “The Separation,” “Capitalization,” “Business,” “Certain Relationships and Related Person Transactions,” “Where You Can Find More Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” | |
Item 1A. | | | Risk Factors | | | The following sections of our information statement are hereby incorporated by reference: “Risk Factors” and “Cautionary Statement for the Purposes of the ‘Safe Harbor’ Provisions of the Private Securities Litigation Reform Act of 1995.” | |
Item 2. | | | Financial Information | | | The following sections of our information statement are hereby incorporated by reference: “Summary,” “Selected Historical Combined Financial Information of Ingevity,” “Risk Factors,” “Capitalization,” “Unaudited Pro Forma Combined Financial Statements,” “Index to Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk.” | |
Item 3. | | | Properties | | | The following section of our information statement is hereby incorporated by reference: “Business — Properties.” | |
Item 4. | | | Security Ownership of Certain Beneficial Owners and Management | | | The following section of our information statement is hereby incorporated by reference: “Stock Ownership.” | |
Item 5. | | | Directors and Executive Officers | | | The following section of our information statement is hereby incorporated by reference: “Management.” | |
Item No.
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Caption
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Location in Information Statement
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Item 6. | | |
Executive Compensation
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| | The following sections of our information statement are hereby incorporated by reference: “Management,” “Compensation Discussion and Analysis,” “Executive Compensation,” and “Certain Relationships and Related Person Transactions.” | |
Item 7. | | | Certain Relationships and Related Person Transactions, and Director Independence | | | The following sections of our information statement are hereby incorporated by reference: “Certain Relationships and Related Person Transactions,” “Management” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” | |
Item 8. | | | Legal Proceedings | | | The following section of our information statement is hereby incorporated by reference: “Business — Legal Proceedings.” | |
Item 9. | | | Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters | | | The following sections of our information statement are hereby incorporated by reference: “Summary,” “The Separation,” “Dividend Policy,” “Capitalization” and “Description of Capital Stock.” | |
Item 10. | | | Recent Sales of Unregistered Securities | | | Not applicable. | |
Item 11. | | | Description of Registrant’s Securities to be Registered | | | The following sections of our information statement are hereby incorporated by reference: “Dividend Policy” and “Description of Capital Stock.” | |
Item 12. | | | Indemnification of Directors and Officers | | | The following sections of our information statement are hereby incorporated by reference: “Description of Capital Stock — Limitation on Liability of Directors and Indemnification of Directors and Officers.” | |
Item 13. | | | Financial Statements and Supplementary Data | | | The following sections of our information statement are hereby incorporated by reference: “Index to Financial Statements” and the statements referenced therein. | |
Item 14. | | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | | Not applicable. | |
Item 15. | | | Financial Statements and Exhibits | | | The following sections of our information statement are hereby incorporated by reference: “Unaudited Pro Forma Combined Financial Statements” and “Index to Financial Statements” and the statements referenced therein. | |
Exhibit No.
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| |
Exhibit Description
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|
2.1
|
| | Form of Separation and Distribution Agreement between Ingevity Corporation and WestRock Company.† | |
3.1
|
| | Form of Ingevity Corporation Amended and Restated Certificate of Incorporation.† | |
3.2
|
| | Form of Ingevity Corporation Amended and Restated Bylaws.† | |
10.1
|
| | Form of Tax Matters Agreement between Ingevity Corporation and WestRock Company.† | |
10.2
|
| | Form of Transition Services Agreement between Ingevity Corporation and WestRock Company.† | |
10.3
|
| | Form of Employee Matters Agreement between Ingevity Corporation and WestRock Company.† | |
10.4
|
| | Form of Covington Plant Services Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.† | |
10.5
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| | Form of Covington Plant Ground Lease Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.† | |
10.6
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| | Form of Crude Tall Oil and Black Liquor Soap Skimmings Agreement by and between Ingevity Corporation, WestRock Shared Services, LLC and WestRock MWV, LLC.† | |
10.7
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| | Form of Prospective Board Member Consulting Agreement.† | |
10.8
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| | Credit Agreement, dated as of March 7, 2016, among Ingevity Corporation, as U.S. borrower, the lenders from time to time party thereto and Wells Fargo Bank, N.A., as administrative agent.† | |
10.9
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| | Form of Intellectual Property Agreement by and between WestRock Company and Ingevity Corporation.† | |
10.10
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| | Employment Letter, dated September 18, 2015, between WestRock Company, Ingevity Corporation and John Fortson.† | |
10.11
|
| | Employment Letter, dated October 2, 2015, between WestRock Company, Ingevity Corporation and Katherine P. Burgeson.† | |
10.12
|
| | Employment Letter, dated July 24, 2015, between WestRock Company, Ingevity Corporation and Michael Wilson.† | |
10.13
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| | Form of Ingevity Corporation 2016 Omnibus Incentive Plan.† | |
10.14
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| | Form of Trust Agreement, between Ingevity Corporation, The Bank of New York Mellon Trust Company, N.A. and WestRock Company.† | |
21.1
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| | List of Subsidiaries of Ingevity Corporation.† | |
99.1
|
| | Preliminary Information Statement of Ingevity Corporation, subject to completion, dated March 7, 2016. | |
| | | | INGEVITY CORPORATION | | |||
| | | | By: | | | /s/ Katherine P. Burgeson | |
| | | | Name: | | | Katherine P. Burgeson | |
| | | | Title: | | | Senior Vice President, General Counsel and Secretary | |
Exhibit No.
|
| |
Exhibit Description
|
| | ||
2.1
|
| | Form of Separation and Distribution Agreement between Ingevity Corporation and WestRock Company.† | | | ||
3.1
|
| | Form of Ingevity Corporation Amended and Restated Certificate of Incorporation.† | | | ||
3.2
|
| | Form of Ingevity Corporation Amended and Restated Bylaws.† | | | ||
10.1
|
| | Form of Tax Matters Agreement between Ingevity Corporation and WestRock Company.† | | | ||
10.2
|
| | Form of Transition Services Agreement between Ingevity Corporation and WestRock Company.† | | | ||
10.3
|
| | Form of Employee Matters Agreement between Ingevity Corporation and WestRock Company.† | | | ||
10.4
|
| | Form of Covington Plant Services Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.† | | | ||
10.5
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| | Form of Covington Plant Ground Lease Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.† | | | | |
10.6
|
| | Form of Crude Tall Oil and Black Liquor Soap Skimmings Agreement by and between Ingevity Corporation, WestRock Shared Services, LLC and WestRock MWV, LLC.† | | | ||
10.7
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| | Form of Prospective Board Member Consulting Agreement.† | | | ||
10.8
|
| | Credit Agreement, dated as of March 7, 2016, among Ingevity Corporation, as U.S. borrower, the lenders from time to time party thereto and Wells Fargo Bank, N.A., as administrative agent.† | | | ||
10.9
|
| | Form of Intellectual Property Agreement by and between WestRock Company and Ingevity Corporation.† | | | ||
10.10
|
| | Employment Letter, dated September 18, 2015, between WestRock Company, Ingevity Corporation and John Fortson.† | | | ||
10.11
|
| | Employment Letter, dated October 2, 2015, between WestRock Company, Ingevity Corporation and Katherine P. Burgeson.† | | | ||
10.12
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| | Employment Letter, dated July 24, 2015, between WestRock Company, Ingevity Corporation and Michael Wilson.† | | | ||
10.13
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| | Form of Ingevity Corporation 2016 Omnibus Incentive Plan.† | | | ||
10.14
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| | Form of Trust Agreement, between Ingevity Corporation, The Bank of New York Mellon Trust Company, N.A. and WestRock Company.† | | | ||
21.1
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| | List of Subsidiaries of Ingevity Corporation.† | | | ||
99.1
|
| | Preliminary Information Statement of Ingevity Corporation, subject to completion, dated March 7, 2016. | | |
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CAPITALIZATION | | | | | 42 | | |
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BUSINESS | | | | | 66 | | |
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MANAGEMENT | | | | | 83 | | |
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| | | | F-1 |
| | |
Years ended December 31,
|
| |||||||||||||||||||||
In millions
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| |
Pro Forma
2015 |
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2015
|
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2014
|
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2013
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| ||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||
Net sales
|
| | | $ | 968 | | | | | $ | 968 | | | | | $ | 1,041 | | | | | $ | 980 | | |
Cost of sales
|
| | | | 690 | | | | | | 687 | | | | | | 718 | | | | | | 685 | | |
Gross profit
|
| | | | 278 | | | | | | 281 | | | | | | 323 | | | | | | 295 | | |
Selling, general, and administrative expenses
|
| | | | 121 | | | | | | 114 | | | | | | 112 | | | | | | 103 | | |
Research and development(a)
|
| | | | 7 | | | | | | 7 | | | | | | 8 | | | | | | 11 | | |
Income before income taxes
|
| | | | 147 | | | | | | 138 | | | | | | 203 | | | | | | 184 | | |
Net income
|
| | | | 94 | | | | | | 85 | | | | | | 133 | | | | | | 118 | | |
Net income attributable to the company
|
| | | | 89 | | | | | | 80 | | | | | | 129 | | | | | | 119 | | |
Earnings per share: | | | | | | ||||||||||||||||||||
Basic
|
| | | $ | 2.12 | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | $ | 2.12 | | | | | | | | | | | | | | | | | | | | |
Balance Sheet Data (at period end): | | | | | | ||||||||||||||||||||
Cash and cash equivalents
|
| | | $ | 15 | | | | | $ | 32 | | | | | $ | 20 | | | | | $ | 12 | | |
Property, plant and equipment, net
|
| | | | 438 | | | | | | 438 | | | | | | 410 | | | | | | 326 | | |
Total assets
|
| | | | 850 | | | | | | 782 | | | | | | 718 | | | | | | 593 | | |
Long-term debt due after one year
|
| | | | 581 | | | | | | 80 | | | | | | 86 | | | | | | 86 | | |
Total equity
|
| | | | 63 | | | | | | 522 | | | | | | 420 | | | | | | 328 | | |
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
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2013
|
| |||||||||
Cash Flow Data: | | | | | |||||||||||||||
Cash provided by operating activities
|
| | | | 73 | | | | | | 143 | | | | | | 137 | | |
Cash used in investing activities
|
| | | | (90) | | | | | | (102) | | | | | | (64) | | |
Other Data: | | | | | |||||||||||||||
Capital expenditures
|
| | | | 102 | | | | | | 101 | | | | | | 63 | | |
Depreciation and amortization expense
|
| | | | 35 | | | | | | 33 | | | | | | 33 | | |
Combined Adjusted EBITDA(b)
|
| | | | 203 | | | | | | 247 | | | | | | 227 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net income
|
| | | $ | 85 | | | | | $ | 133 | | | | | $ | 118 | | |
Income tax provision
|
| | | | 53 | | | | | | 70 | | | | | | 66 | | |
Interest expense
|
| | | | 21 | | | | | | 16 | | | | | | 13 | | |
Depreciation and amortization
|
| | | | 35 | | | | | | 33 | | | | | | 33 | | |
Separation costs
|
| | | $ | 17 | | | | | $ | — | | | | | $ | — | | |
Restructuring and other (income) charges, net
|
| | | | (8) | | | | | | (5) | | | | | | (3) | | |
Combined Adjusted EBITDA
|
| | | $ | 203 | | | | | $ | 247 | | | | | $ | 227 | | |
|
| | |
As of December 31, 2015
|
| |||||||||
In millions
|
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Historical
|
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Pro Forma
|
| ||||||
Cash and cash equivalents
|
| | | $ | 32 | | | | | $ | 15 | | |
Debt, including current and long-term: | | | | | | | | | |||||
Notes payable and current maturities of long-term debt
|
| | | | 9 | | | | | | 9 | | |
Long-term debt due after one year
|
| | | | 80 | | | | | | 581 | | |
Total debt
|
| | | | 89 | | | | | | 590 | | |
Equity: | | | | ||||||||||
Common stock
|
| | | | — | | | | | | — | | |
Capital in excess of par value
|
| | | | — | | | | | | 75 | | |
Net parent investment
|
| | | | 534 | | | | | $ | — | | |
Accumulated other comprehensive (loss) income
|
| | | | (17) | | | | | | (17) | | |
Noncontrolling interests
|
| | | | 5 | | | | | | 5 | | |
Total equity
|
| | | | 522 | | | | | | 63 | | |
Total capitalization
|
| | | $ | 611 | | | | | $ | 753 | | |
|
| | |
Ingevity
|
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
|
| |||||||||
Net sales
|
| | | | 968 | | | | | $ | — | | | | | | | | $ | 968 | | |
Cost of sales
|
| | | | 687 | | | | | | 3 | | | |
(A)
|
| | | | 690 | | |
Gross profit
|
| | | | 281 | | | | | | (3) | | | | | | | | | 278 | | |
Selling, general and administrative expenses
|
| | | | 114 | | | | | | 7 | | | |
(A)
|
| | | | 121 | | |
Separation costs
|
| | | | 17 | | | | | | (17) | | | |
(B)
|
| | | | — | | |
Interest expense
|
| | | | 21 | | | | | | (2) | | | |
(C)
|
| | | | 19 | | |
Other (income) expense, net
|
| | | | (9) | | | | | | — | | | | | | | | | (9) | | |
Income before income taxes
|
| | | | 138 | | | | | | 9 | | | | | | | | | 147 | | |
Provision for income taxes
|
| | | | 53 | | | | | | — | | | |
(D)
|
| | | | 53 | | |
Net income
|
| | | | 85 | | | | | | 9 | | | | | | | | | 94 | | |
Less: Net income (loss) attributable to noncontrolling interests, net of taxes
|
| | | | 5 | | | | | | — | | | | | | | | | 5 | | |
Net income attributable to the company
|
| | | | 80 | | | | | $ | 9 | | | | | | | | $ | 89 | | |
Unaudited pro forma earnings per share: | | | | | | |||||||||||||||||
Basic
|
| | | | | | | | | | | | | |
(E)
|
| | | $ | 2.12 | | |
Diluted
|
| | | | | | | | | | | | | |
(E)
|
| | | $ | 2.12 | | |
Average number of shares used in calculating unaudited pro forma earnings per share:
|
| | | | | |||||||||||||||||
Basic
|
| | | | | | | | | | | | | |
(E)
|
| | | | 42,072,000 | | |
Diluted
|
| | | | | | | | | | | | | |
(E)
|
| | | | 42,072,000 | | |
In millions
|
| |
Year ended
December 31, 2015 |
| |||
Pro forma interest expense on assumed pro forma indebtedness within interest expense:
|
| | | $ | 19 | | |
| | |
Ingevity
|
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
|
| |||||||||
Assets | | | | | | |||||||||||||||||
Cash and cash equivalents
|
| | | $ | 32 | | | | | $ | (17) | | | |
(A), (D)
|
| | | $ | 15 | | |
Accounts receivable, net
|
| | | | 96 | | | | | | — | | | | | | | | | 96 | | |
Inventories, net
|
| | | | 151 | | | | | | — | | | | | | | | | 151 | | |
Prepaid and other current assets
|
| | | | 20 | | | | | | — | | | | | | | | | 20 | | |
Current assets
|
| | | | 299 | | | | | | (17) | | | | | | | | | 282 | | |
Property, plant and equipment, net
|
| | | | 438 | | | | | | — | | | | | | | | | 438 | | |
Goodwill
|
| | | | 12 | | | | | | — | | | | | | | | | 12 | | |
Other intangibles, net
|
| | | | 10 | | | | | | — | | | | | | | | | 10 | | |
Restricted cash
|
| | | | — | | | | | | 80 | | | | (D) | | | | | 80 | | |
Other assets
|
| | | | 23 | | | | | | 5 | | | | (E) | | | | | 28 | | |
Total assets
|
| | | $ | 782 | | | | | $ | 68 | | | | | | | | $ | 850 | | |
Liabilities and Equity | | | | | | |||||||||||||||||
Accounts payable
|
| | | $ | 65 | | | | | $ | — | | | | | | | | $ | 65 | | |
Accounts payable due to WestRock
|
| | | | — | | | | | | 20 | | | | (B) | | | | | 20 | | |
Accrued expenses
|
| | | | 13 | | | | | | — | | | | | | | | | 13 | | |
Accrued payroll and employee benefits
|
| | | | 10 | | | | | | — | | | | | | | | | 10 | | |
Notes payable
|
| | | | 9 | | | | | | — | | | | | | | | | 9 | | |
Current liabilities
|
| | | | 97 | | | | | | 20 | | | | | | | | | 117 | | |
Long-term debt
|
| | | | 80 | | | | | | 501 | | | | (D) | | | | | 581 | | |
Deferred income taxes
|
| | | | 76 | | | | | | 2 | | | | (C) | | | | | 78 | | |
Other liabilities
|
| | | | 7 | | | | | | 4 | | | | (E) | | | | | 11 | | |
Total liabilities
|
| | | | 260 | | | | | | 527 | | | | | | | | | 787 | | |
Commitments and contingencies | | | | | | |||||||||||||||||
Net parent investment/stockholders’ equity
|
| | | $ | 534 | | | | | $ | (534) | | | | (A), (B), (E), (F) |
| | | $ | — | | |
Common stock
|
| | | | — | | | | | | — | | | | (G) | | | | | — | | |
Capital in excess of par value
|
| | | | — | | | | | | 75 | | | | (G) | | | | | 75 | | |
Accumulated other comprehensive (loss) income
|
| | | | (17) | | | | | | — | | | | | | | | | (17) | | |
Total net parent investment/stockholders’ equity before noncontrolling interests
|
| | | | 517 | | | | | | (459) | | | | | | | | | 58 | | |
Noncontrolling interests
|
| | | | 5 | | | | | | — | | | | | | | | | 5 | | |
Total net parent investment/stockholders’ equity and noncontrolling interests
|
| | | | 522 | | | | | | (459) | | | | | | | | | 63 | | |
Total liabilities and net parent investment/stockholders’ equity
|
| | | $ | 782 | | | | | $ | 68 | | | | | | | | $ | 850 | | |
|
|
Reclassification of WestRock’s net investment
|
| | | $ | 534 | | |
|
Distribution of cash to WestRock as described in Note A
|
| | | | (438) | | |
|
Accounts payable due to WestRock under commercial agreement described in balance sheet Note B
|
| | | | (20) | | |
|
Additional deferred tax assets and liabilities described in balance sheet Note C
|
| | | | (2) | | |
|
Addition of net pension plan assets and retirement plan liability described in balance sheet Note E
|
| | | | 1 | | |
|
Total net parent investment/shareholders’ equity
|
| | | | 75 | | |
|
Shares of Ingevity common stock
|
| | | | — | | |
|
Total capital in excess of par value
|
| | | $ | 75 | | |
| | |
Years ended December 31,
|
| |||||||||||||||||||||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |
2012
|
| |
2011
|
| |
2010
|
| ||||||||||||||||||
Statement of Operations Data: | | | | | | | | ||||||||||||||||||||||||||||||
Net sales
|
| | | $ | 968 | | | | | $ | 1,041 | | | | | $ | 980 | | | | | $ | 939 | | | | | $ | 811 | | | | | $ | 676 | | |
Gross Profit
|
| | | | 281 | | | | | | 323 | | | | | | 295 | | | | | | 297 | | | | | | 260 | | | | | | 182 | | |
Interest Expense
|
| | | | 21 | | | | | | 16 | | | | | | 13 | | | | | | 12 | | | | | | 12 | | | | | | 12 | | |
Income before income taxes
|
| | | | 138 | | | | | | 203 | | | | | | 184 | | | | | | 189 | | | | | | 173 | | | | | | 114 | | |
Net income
|
| | | | 85 | | | | | | 133 | | | | | | 118 | | | | | | 122 | | | | | | 114 | | | | | | 76 | | |
Net income attributable to the company
|
| | | | 80 | | | | | | 129 | | | | | | 119 | | | | | | 119 | | | | | | 110 | | | | | | 73 | | |
Unaudited pro forma earnings per share:
|
| | | | | | | ||||||||||||||||||||||||||||||
Basic
|
| | | $ | 2.12 | | | | | | | | |||||||||||||||||||||||||
Diluted
|
| | | $ | 2.12 | | | | | | | | |||||||||||||||||||||||||
Balance Sheet Data (at period end): | | | | | | | | ||||||||||||||||||||||||||||||
Working capital (Current Assets Less Current Liabilities)
|
| | | $ | 202 | | | | | $ | 132 | | | | | $ | 122 | | | | | $ | 110 | | | | | $ | 85 | | | | | $ | 69 | | |
Current ratio
|
| | | | 3.1 | | | | | | 1.9 | | | | | | 2.2 | | | | | | 2.1 | | | | | | 2.0 | | | | | | 1.9 | | |
Property, plant and equipment, net
|
| | | | 438 | | | | | | 410 | | | | | | 326 | | | | | | 300 | | | | | | 265 | | | | | | 257 | | |
Total assets
|
| | | | 782 | | | | | | 718 | | | | | | 593 | | | | | | 550 | | | | | | 484 | | | | | | 451 | | |
Capital lease obligations due after one year
|
| | | | 80 | | | | | | 86 | | | | | | 86 | | | | | | 86 | | | | | | 86 | | | | | | 86 | | |
Total equity
|
| | | | 522 | | | | | | 420 | | | | | | 328 | | | | | | 294 | | | | | | 242 | | | | | | 213 | | |
Other Data: | | | | | | | | ||||||||||||||||||||||||||||||
Capital expenditures
|
| | | | 102 | | | | | | 101 | | | | | | 63 | | | | | | 40 | | | | | | 29 | | | | | | 22 | | |
Depreciation and amortization expense
|
| | | | 35 | | | | | | 33 | | | | | | 33 | | | | | | 32 | | | | | | 29 | | | | | | 30 | | |
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net income
|
| | | $ | 85 | | | | | $ | 133 | | | | | $ | 118 | | |
Provision for income taxes
|
| | | | 53 | | | | | | 70 | | | | | | 66 | | |
Interest expense
|
| | | | 21 | | | | | | 16 | | | | | | 13 | | |
Depreciation and amortization
|
| | | | 35 | | | | | | 33 | | | | | | 33 | | |
Separation costs
|
| | | | 17 | | | | | | — | | | | | | — | | |
Restructuring and other (income) charges
|
| | | | (8) | | | | | | (5) | | | | | | (3) | | |
Combined Adjusted EBITDA
|
| | | $ | 203 | | | | | $ | 247 | | | | | $ | 227 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
| | |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Segment Profit
|
| | | $ | 87 | | | | | $ | 124 | | | | | $ | 126 | | |
Depreciation and amortization
|
| | | | 24 | | | | | | 23 | | | | | | 23 | | |
Segment EBITDA
|
| | | $ | 111 | | | | | $ | 147 | | | | | $ | 149 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
| | |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Segment Profit
|
| | | $ | 81 | | | | | $ | 90 | | | | | $ | 68 | | |
Depreciation and amortization
|
| | | | 11 | | | | | | 10 | | | | | | 10 | | |
Segment EBITDA
|
| | | $ | 92 | | | | | $ | 100 | | | | | $ | 78 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net sales
|
| | | $ | 968 | | | | | $ | 1,041 | | | | | $ | 980 | | |
Cost of sales
|
| | | | 687 | | | | | | 718 | | | | | | 685 | | |
Gross Profit
|
| | | | 281 | | | | | | 323 | | | | | | 295 | | |
Selling, general and administrative expenses
|
| | | | 114 | | | | | | 112 | | | | | | 103 | | |
Separation costs
|
| | | | 17 | | | | | | — | | | | | | — | | |
Interest expense
|
| | | | 21 | | | | | | 16 | | | | | | 13 | | |
Other (income) expense, net
|
| | | | (9) | | | | | | (8) | | | | | | (5) | | |
Income before income taxes
|
| | | | 138 | | | | | | 203 | | | | | | 184 | | |
Provision for income taxes
|
| | | | 53 | | | | | | 70 | | | | | | 66 | | |
Net income
|
| | | | 85 | | | | | | 133 | | | | | | 118 | | |
Less: Net income (loss) attributable to noncontrolling interests, net of taxes
|
| | | | 5 | | | | | | 4 | | | | | | (1) | | |
Net income attributable to the company
|
| | | $ | 80 | | | | | $ | 129 | | | | | $ | 119 | | |
Combined Adjusted EBITDA(1)
|
| | | $ | 203 | | | | | $ | 247 | | | | | $ | 227 | | |
|
In millions
|
| |
2015
Net Sales |
| |
Percentage
change vs. prior year |
| |
Currency
effect |
| |
Price/Mix
|
| |
Volume
|
| |
Other
|
| ||||||||||||||||||
Combined
|
| | | $ | 968 | | | | | | (7)% | | | | | | (3)% | | | | | | (2)% | | | | | | (2)% | | | | | | —% | | |
| | |
Years ended December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Foreign currency exchange losses (income)
|
| | | $ | 1 | | | | | $ | 1 | | |
Royalty and sundry income(1)
|
| | | | (2) | | | | | | (4) | | |
Restructuring and other (income) charges, net(2)
|
| | | | (8) | | | | | | (5) | | |
Other (income) expense, net
|
| | | $ | (9) | | | | | $ | (8) | | |
|
| | |
Years ended December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Restructuring and other (income) charges, net | | | | ||||||||||
Gain on sale of assets and businesses
|
| | | $ | (12) | | | | | $ | (5) | | |
Insurance and legal settlements
|
| | | | — | | | | | | — | | |
Asset write-downs
|
| | | | 4 | | | | | | — | | |
Total restructuring and other (income) charges, net
|
| | | $ | (8) | | | | | $ | (5) | | |
|
In millions
|
| |
2014
Net Sales |
| |
Percentage
change vs. prior year |
| |
Currency
effect |
| |
Price/Mix
|
| |
Volume
|
| |
Other
|
| ||||||||||||||||||
Combined
|
| | | $ | 1,041 | | | | | | 6% | | | | | | (1)% | | | | | | 1% | | | | | | 6% | | | | | | —% | | |
| | |
Years ended December 31,
|
| |||||||||
In millions
|
| |
2014
|
| |
2013
|
| ||||||
Foreign currency exchange losses (income)
|
| | | $ | 1 | | | | | $ | — | | |
Royalty and sundry income(1)
|
| | | | (4) | | | | | | (2) | | |
Restructuring and other (income) charges, net(2)
|
| | | | (5) | | | | | | (3) | | |
Other (income) expense, net
|
| | | $ | (8) | | | | | $ | (5) | | |
|
| | |
Years ended December 31,
|
| |||||||||
In millions
|
| |
2014
|
| |
2013
|
| ||||||
Restructuring and other (income) charges, net | | | | ||||||||||
Gain on sale of assets and businesses
|
| | | $ | (5) | | | | | $ | — | | |
Insurance and legal settlements
|
| | | | — | | | | | | (13) | | |
Asset write-downs
|
| | | | — | | | | | | 10 | | |
Total restructuring and other (income) charges, net
|
| | | $ | (5) | | | | | $ | (3) | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net sales
|
| | | $ | 711 | | | | | $ | 792 | | | | | $ | 759 | | |
Segment profit
|
| | | | 87 | | | | | | 124 | | | | | | 126 | | |
Plus: Depreciation and amortization
|
| | | | 24 | | | | | | 23 | | | | | | 23 | | |
Segment EBITDA
|
| | | $ | 111 | | | | | $ | 147 | | | | | $ | 149 | | |
|
In millions
|
| |
2015
Net Sales |
| |
Percentage
change vs. prior year |
| |
Currency
effect |
| |
Price/Mix
|
| |
Volume
|
| |
Other
|
| ||||||||||||||||||
Performance Chemicals
|
| | | $ | 711 | | | | | | (10)% | | | | | | (3)% | | | | | | (3)% | | | | | | (4)% | | | | | | —% | | |
In millions
|
| |
2014
Net Sales |
| |
Percentage
change vs. prior year |
| |
Currency
effect |
| |
Price/Mix
|
| |
Volume
|
| |
Other
|
| ||||||||||||||||||
Performance Chemicals
|
| | | $ | 792 | | | | | | 4% | | | | | | —% | | | | | | —% | | | | | | 5% | | | | | | (1)% | | |
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net sales
|
| | | $ | 257 | | | | | $ | 249 | | | | | $ | 221 | | |
Segment profit
|
| | | | 81 | | | | | | 90 | | | | | | 68 | | |
Depreciation and Amortization
|
| | | | 11 | | | | | | 10 | | | | | | 10 | | |
Segment EBITDA
|
| | | $ | 92 | | | | | $ | 100 | | | | | $ | 78 | | |
|
In millions
|
| |
2015
Net Sales |
| |
Percentage
change vs. prior year |
| |
Currency
effect |
| |
Price/Mix
|
| |
Volume
|
| |
Other
|
| ||||||||||||||||||
Performance Materials
|
| | | $ | 257 | | | | | | 3% | | | | | | (1)% | | | | | | 2% | | | | | | 2% | | | | | | —% | | |
In millions
|
| |
2014
Net Sales |
| |
Percentage
change vs. prior year |
| |
Currency
effect |
| |
Price/Mix
|
| |
Volume
|
| |
Other
|
| ||||||||||||||||||
Performance Materials
|
| | | $ | 249 | | | | | | 13% | | | | | | (1)% | | | | | | 4% | | | | | | 10% | | | | | | —% | | |
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net cash provided by operating activities
|
| | | $ | 73 | | | | | $ | 143 | | | | | $ | 137 | | |
Net cash used in investing activities
|
| | | | (90) | | | | | | (102) | | | | | | (64) | | |
Net cash provided by (used in) financing activities
|
| | | | 27 | | | | | | (31) | | | | | | (79) | | |
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Maintenance capital expenditures
|
| | | $ | 33 | | | | | $ | 28 | | |
Safety, health and environment
|
| | | | 12 | | | | | | 11 | | |
Growth and cost improvement capital expenditures
|
| | | | 57 | | | | | | 62 | | |
Total capital expenditures
|
| | | $ | 102 | | | | | $ | 101 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Cash and cash equivalents
|
| | | $ | 32 | | | | | $ | 20 | | |
Accounts receivable, net
|
| | | | 96 | | | | | | 108 | | |
Inventories
|
| | | | 151 | | | | | | 130 | | |
Prepaid and other current assets
|
| | | | 20 | | | | | | 13 | | |
Total current assets
|
| | | $ | 299 | | | | | $ | 271 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Accounts payable
|
| | | $ | 65 | | | | | $ | 105 | | |
Accrued expenses
|
| | | | 13 | | | | | | 13 | | |
Accrued payroll and employee benefits
|
| | | | 10 | | | | | | 18 | | |
Notes payable
|
| | | | 9 | | | | | | 3 | | |
Total current liabilities
|
| | | $ | 97 | | | | | $ | 139 | | |
|
| | |
Payments due by period
|
| |||||||||||||||||||||||||||
In millions
|
| |
Total
|
| |
Less than
1 yr – 2016 |
| |
1 – 3 yrs
2017 – 2018 |
| |
3 – 5 yrs
2019 – 2020 |
| |
More than
5 yrs 2021 and beyond |
| |||||||||||||||
Contractual obligations: | | | | | | | |||||||||||||||||||||||||
Capital lease obligations(1)
|
| | | $ | 150 | | | | | $ | 6 | | | | | $ | 12 | | | | | $ | 12 | | | | | $ | 120 | | |
Operating lease obligations
|
| | | | 33 | | | | | | 10 | | | | | | 14 | | | | | | 7 | | | | | | 2 | | |
Purchase obligations
|
| | | | 158 | | | | | | 158 | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 341 | | | | | $ | 174 | | | | | $ | 26 | | | | | $ | 19 | | | | | $ | 122 | | |
|
| | | |
Own / Lease
|
| |
Functional Use
|
|
| North Charleston, South Carolina | | |
Own
|
| |
Corporate Headquarters;
Application Labs; Performance Chemicals Manufacturing |
|
| Covington, Virginia | | |
Lease
|
| |
Performance Materials
Manufacturing |
|
| DeRidder, Louisiana | | |
Lease(1)
|
| |
Performance Chemicals
Manufacturing |
|
|
Duque de Caxias, Rio de Janeiro, Brazil(2)
|
| |
Own
|
| |
Performance Chemicals
Manufacturing |
|
| Palmeira, Santa Catarina, Brazil | | |
Own
|
| |
Performance Chemicals
Manufacturing |
|
| Waynesboro, Georgia | | |
Own (JV)
|
| |
Performance Materials
Manufacturing |
|
| Wickliffe, Kentucky | | |
Own
|
| |
Performance Materials
Manufacturing |
|
| Wujiang, People’s Republic of China | | |
Lease
|
| |
Performance Materials
Manufacturing |
|
| Zhuhai, People’s Republic of China | | |
Lease
|
| |
Performance Materials
Manufacturing |
|
Name
|
| |
Age
|
| |
Position
|
|
D. Michael Wilson | | |
53
|
| | President and Chief Executive Officer | |
John C. Fortson | | |
48
|
| | Executive Vice President, Chief Financial Officer and Treasurer | |
Edward A. Rose | | |
54
|
| | Executive Vice President and President of Performance Chemicals | |
S. Edward Woodcock, Jr. | | |
50
|
| | Senior Vice President and President of Performance Materials | |
Katherine Pryor Burgeson
|
| |
58
|
| | Senior Vice President, General Counsel and Secretary | |
Name
|
| |
Age
|
| |
Position
|
|
Richard B. Kelson | | |
69
|
| | Chairman of the Board of Directors | |
Jean S. Blackwell | | |
61
|
| | Director | |
Luis Fernandez-Moreno | | |
53
|
| | Director | |
J. Michael Fitzpatrick | | |
69
|
| | Director | |
Frederick J. Lynch | | |
50
|
| | Director | |
Daniel F. Sansone | | |
63
|
| | Director | |
D. Michael Wilson | | |
53
|
| | Director, Chief Executive Officer | |
|
Name and
Principal Position |
| |
Year
|
| |
Salary(1)
|
| |
Bonus(2)
|
| |
Stock
Awards(3) |
| |
Option
Awards(3) |
| |
Non-Equity
Incentive Plan Compensation(4) |
| |
Change in
Pension Value & Non-qualified Deferred Comp Earnings(5) |
| |
All
Other Compensation(6) |
| |
Total
|
| |||||||||||||||||||||||||||
| D. Michael Wilson President & CEO |
| | | | 2015 | | | | | $ | 266,667 | | | | | $ | 500,000 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 22,917 | | | | | $ | 789,584 | | |
| John C. Fortson EVP, CFO & Treasurer |
| | | | 2015 | | | | | $ | 95,000 | | | | | $ | 250,000 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 11,813 | | | | | $ | 356,813 | | |
|
Edward A. Rose
EVP & President of Perf. Chemicals |
| | | | 2015 | | | | | $ | 379,166 | | | | | $ | 0 | | | | | $ | 199,874 | | | | | $ | 0 | | | | | $ | 203,500 | | | | | $ | 378,846 | | | | | $ | 34,716 | | | | | $ | 1,196,102 | | |
| | | 2014 | | | | | $ | 326,000 | | | | | $ | 0 | | | | | $ | 209,957 | | | | | $ | 82,953 | | | | | $ | 284,625 | | | | | $ | 755,432 | | | | | $ | 20,185 | | | | | $ | 1,679,152 | | | |||
| | | 2013 | | | | | $ | 298,940 | | | | | $ | 0 | | | | | $ | 205,448 | | | | | $ | 90,036 | | | | | $ | 150,000 | | | | | $ | 144,004 | | | | | $ | 25,220 | | | | | $ | 913,648 | | | |||
|
Katherine Pryor Burgeson
SVP, Gen’l Counsel & Secretary |
| | | | 2015 | | | | | $ | 312,966 | | | | | $ | 50,000 | | | | | $ | 185,636 | | | | | $ | 77,322 | | | | | $ | 148,721 | | | | | $ | 159,025 | | | | | $ | 24,963 | | | | | $ | 958,812 | | |
| | | 2014 | | | | | $ | 312,966 | | | | | $ | 0 | | | | | $ | 192,370 | | | | | $ | 82,459 | | | | | $ | 122,526 | | | | | $ | 387,147 | | | | | $ | 14,713 | | | | | $ | 1,112,181 | | | |||
| | | 2013 | | | | | $ | 312,966 | | | | | $ | 0 | | | | | $ | 171,207 | | | | | $ | 69,132 | | | | | $ | 25,000 | | | | | $ | 0 | | | | | $ | 22,945 | | | | | $ | 601,250 | | | |||
|
S. Edward Woodcock, Jr.
SVP & President of Perf. Materials |
| | | | 2015 | | | | | $ | 243,127 | | | | | $ | 0 | | | | | $ | 87,616 | | | | | $ | 0 | | | | | $ | 98,929 | | | | | $ | 125,024 | | | | | $ | 18,159 | | | | | $ | 572,855 | | |
| | | 2014 | | | | | $ | 216,758 | | | | | $ | 0 | | | | | $ | 44,863 | | | | | $ | 0 | | | | | $ | 114,255 | | | | | $ | 331,445 | | | | | $ | 11,886 | | | | | $ | 719,207 | | | |||
| | | 2013 | | | | | $ | 206,855 | | | | | $ | 0 | | | | | $ | 61,433 | | | | | $ | 24,887 | | | | | $ | 60,617 | | | | | $ | 25,467 | | | | | $ | 13,802 | | | | | $ | 393,061 | | |
| | |
D. Michael
Wilson |
| |
John C.
Fortson |
| |
Edward
Rose |
| |
Katherine
Pryor Burgeson |
| |
S. Edward
Woodcock, Jr. |
| |||||||||||||||
Financial Planning/
Counseling(1) |
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 650 | | | | | $ | 0 | | | | | $ | 0 | | |
Qualified Savings Plan Contributions(2)
|
| | | $ | 13,333 | | | | | $ | 5,307 | | | | | $ | 10,600 | | | | | $ | 10,600 | | | | | $ | 10,600 | | |
Non-Qualified Savings Plan Contributions(3)
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 22,252 | | | | | $ | 13,169 | | | | | $ | 6,736 | | |
Life Insurance Premiums(4)
|
| | | $ | 1,018 | | | | | $ | 453 | | | | | $ | 1,214 | | | | | $ | 1,194 | | | | | $ | 823 | | |
Relocation Expenses
|
| | | $ | 8,566 | | | | | $ | 6,053 | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Total Other Compensation
|
| | | $ | 22,917 | | | | | $ | 11,813 | | | | | $ | 34,716 | | | | | $ | 24,963 | | | | | $ | 18,159 | | |
|
| | | | | | | | |
Estimated
Possible Payouts Under Non- Equity Incentive Plan Awards |
| |
Estimated
Future Payouts Under Equity Incentive Plan Awards |
| |
All
Other Stock Awards or Units (# of awards) |
| |
All
Other Option Awards (# of awards) |
| |
Exercise
or Base Price of Option Awards ($) |
| |
Grant
Date Fair Market Value of Stock & Option Awards ($) |
| ||||||||||||||||||||||||||||||||||||||||||
Name
|
| |
Grant
Date |
| |
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(# of awards) |
| |
Target
(# of awards) |
| |
Maximum
(# of awards) |
| |||||||||||||||||||||||||||||||||||||||||||||
D. Michael Wilson | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Spin-Off Bonus(1)
|
| | | | — | | | | | $ | 533,333 | | | | | | — | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
John C. Fortson | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Spin-Off Bonus(2)
|
| | | | — | | | | | $ | 182,875 | | | | | | — | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Edward A. Rose | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Perf.
Bonus(3) |
| | | | | | | | | $ | 125,000 | | | | | $ | 240,000 | | | | | $ | 480,000 | | | | | | | | | | |||||||||||||||||||||||||||||||||||
Incentive Comp. Award(4)
|
| | | | | | | | | | — | | | | | $ | 200,000 | | | | | | — | | | | | | | | | | |||||||||||||||||||||||||||||||||||
RSUs(5)
|
| | | | 2/23/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,861 | | | | | | | | | | | | | | | | | $ | 199,874 | | |
Katherine Pryor Burgeson | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Perf.
Bonus(3) |
| | | | | | | | | $ | 72,000 | | | | | $ | 144,000 | | | | | $ | 288,000 | | | | | | | | | | |||||||||||||||||||||||||||||||||||
Spin-Off Bonus(6)
|
| | | | | | | | | | — | | | | | $ | 72,000 | | | | | | — | | | | | | | | | | |||||||||||||||||||||||||||||||||||
Options(7)
|
| | | | 2/23/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 624 | | | | | $ | 54.76 | | | | | $ | 17,959 | | |
Options(8)
|
| | | | 8/5/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,285 | | | | | $ | 62.75 | | | | | $ | 66,258 | | |
PSUs(9)
|
| | | | 2/23/2015 | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | 746 | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | $ | 46,812 | | |
PSUs(10)
|
| | | | 8/5/2015 | | | | | | | | | | | | | | | | | | | | | | | | 1,233 | | | | | | 2,465 | | | | | | 4,930 | | | | | | | | | | | | | | | | | | | | | | | $ | 154,679 | | |
S. Edward Woodcock, Jr. | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Perf.
Bonus(3) |
| | | | | | | | | $ | 68,750 | | | | | $ | 137,500 | | | | | $ | 275,000 | | | | | | | | | | |||||||||||||||||||||||||||||||||||
RSUs(5)
|
| | | | 2/23/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,255 | | | | | | | | | | | | | | | | | $ | 87,616 | | |
Incentive Comp. Award(4)
|
| | | | | | | | | | — | | | | | $ | 87,500 | | | | | | — | | | | | | | | | |
| | |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Number of
Securities Underlying Unexercised Options |
| |
Number of
Securities Underlying Unexercised Unearned Options (d) |
| |
Option
Exercise Price (e) |
| |
Option
Expiration Date (f) |
| |
Number of
Shares of Stock that Have Not Yet Vested (g) |
| |
Market
Value of Unvested Shares of Stock ($) (h) |
| |
Equity
Incentive Plan Awards: Number of Unearned, Unvested Units or Shares (i) |
| |
Plan
Awards Payout Value of Unearned, Unvested Units or Shares ($)(6) (j) |
| ||||||||||||||||||||||||||||||
Name
(a) |
| |
Exercisable
(b) |
| |
Unexercisable
(c) |
| ||||||||||||||||||||||||||||||||||||||||||||||||
D. Michael Wilson | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
John C. Fortson | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Edward A. Rose
|
| | | | 4,446 | | | | | | — | | | | | | — | | | | | $ | 35.04 | | | | | | 6/25/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 2,473 | | | | | | 2,473(1) | | | | | | — | | | | | $ | 43.04 | | | | | | 2/25/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 2,379 | | | | | | 4,758(2) | | | | | | — | | | | | $ | 46.02 | | | | | | 2/24/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,910(7) | | | | | $ | 588,954 | | | | | ||||||||||
Katherine Pryor Burgeson
|
| | | | 4,381 | | | | | | — | | | | | | — | | | | | $ | 26.48 | | | | | | 2/22/2020 | | | | | | | ||||||||||||||||||||
| | | 6,619 | | | | | | — | | | | | | — | | | | | $ | 32.62 | | | | | | 2/28/2021 | | | | | | | ||||||||||||||||||||||
| | | | | 12,224 | | | | | | — | | | | | | — | | | | | $ | 35.04 | | | | | | 6/25/2022 | | | | | | | ||||||||||||||||||||
| | | | | 6,183 | | | | | | — | | | | | | — | | | | | $ | 43.04 | | | | | | 2/25/2023 | | | | | | | ||||||||||||||||||||
| | | | | 6,536 | | | | | | — | | | | | | — | | | | | $ | 46.02 | | | | | | 2/24/2024 | | | | | | | ||||||||||||||||||||
| | | | | — | | | | | | 624(3) | | | | | | — | | | | | $ | 70.21 | | | | | | 2/23/2025 | | | | | | | ||||||||||||||||||||
| | | | | — | | | | | | 3,285(4) | | | | | | — | | | | | $ | 62.75 | | | | | | 2/23/2025 | | | | | | | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,185(8) | | | | | $ | 419,020 | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,500 | | | | | $ | 114,050 | | |
S. Edward Woodcock, Jr.
|
| | | | 4,396 | | | | | | | | | | | | | | | | | $ | 35.04 | | | | | | 6/22/2022 | | | | | | | ||||||||||||||||||||
| | | 1,485 | | | | | | 741(5) | | | | | | — | | | | | $ | 43.04 | | | | | | 2/25/2023 | | | | | | | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,860(9) | | | | | $ | 176,093 | | | | |
| | |
Option Awards
|
| |||||||||
Name
|
| |
Number of Shares
Acquired on Exercise (#) |
| |
Value Realized
Upon Exercise(1) ($) |
| ||||||
D. Michael Wilson
|
| | | | 0 | | | | | $ | 0 | | |
John C. Fortson
|
| | | | 0 | | | | | $ | 0 | | |
Edward A. Rose
|
| | | | 0 | | | | | $ | 0 | | |
Katherine Pryor Burgeson
|
| | | | 0 | | | | | $ | 0 | | |
S. Edward Woodcock, Jr.
|
| | | | 3,058 | | | | | $ | 77,796 | | |
|
Name
|
| |
Plan Name
|
| |
Number of
Years of Credited Service (#) |
| |
Present
Value of Accumulated Benefit(1) ($) |
| |
Payments
During Last Fiscal Year ($) |
| |||||||||
|
Edward A Rose
|
| |
MWV Pension Plan
|
| | | | 31.583 | | | | | $ | 1,258,251 | | | | | $ | 0 | | |
| | | |
Restoration Plan
|
| | | | 31.583 | | | | | $ | 1,999,477 | | | | | $ | 0 | | |
|
Katherine Pryor Burgeson
|
| |
MWV Pension Plan
|
| | | | 15.5 | | | | | $ | 784,066 | | | | | $ | 0 | | |
| | | |
Restoration Plan
|
| | | | 15.5 | | | | | $ | 1,145,351 | | | | | $ | 0 | | |
|
S. Edward Woodcock, Jr.
|
| |
MWV Pension Plan
|
| | | | 27.5 | | | | | $ | 923,239 | | | | | $ | 0 | | |
| | | |
Restoration Plan
|
| | | | 27.5 | | | | | $ | 314,399 | | | | | $ | 0 | | |
|
Name
|
| |
Executive
Contributions in 2015 |
| |
Registrant
Contributions in 2015(1) |
| |
Aggregate
Earnings in 2015 |
| |
Aggregate
Withdrawals/ Distributions |
| |
Aggregate
Balance at 2015 Year-End |
| |||||||||||||||
|
Edward A. Rose
|
| | | $ | 155,137 | | | | | $ | 22,252 | | | | | $ | (9,221) | | | | | $ | 0 | | | | | $ | 332,765 | | |
|
Katherine Pryor Burgeson
|
| | | $ | 40,584 | | | | | $ | 13,169 | | | | | $ | (54,322) | | | | | $ | 0 | | | | | $ | 1,182,200 | | |
|
S. Edward Woodcock, Jr.
|
| | | $ | 11,339 | | | | | $ | 6,734 | | | | | $ | (23) | | | | | $ | 0 | | | | | $ | 21,181 | | |
|
Name
|
| |
Benefit
|
| |
Before
Change of Control, Termination w/o Cause |
| |
After
Change of Control, Termination w/o Cause |
| ||||||
|
D. Michael Wilson
|
| |
Severance(1)(2)
|
| | | $ | 3,200,000 | | | | | $ | 4,800,000 | | |
| | | | Stock Options(3) | | | | | N/A | | | | | | N/A | | |
| | | | RSUs & PSUs(4) | | | | | N/A | | | | | | N/A | | |
| | | | Incentive Compensation Award(5) | | | | | N/A | | | | | | N/A | | |
| | | | Post-Termination Health Care(6) | | | | | N/A | | | | | | N/A | | |
| | | | Total value: | | | | $ | 3,200,000 | | | | | $$ | 4,800,000 | | |
|
John C. Fortson
|
| |
Severance(1)(2)
|
| | | $ | 1,211,250 | | | | | $ | 1,615,000 | | |
| | | | Stock Options(3) | | | | | N/A | | | | | | N/A | | |
| | | | RSUs & PSUs(4) | | | | | N/A | | | | | | N/A | | |
| | | | Incentive Compensation Award(5) | | | | | N/A | | | | | | N/A | | |
| | | | Post-Termination Health Care(6) | | | | $ | 0 | | | | | $ | 0 | | |
| | | | Total value: | | | | $ | 1,211,250 | | | | | $ | 1,615,000 | | |
|
Edward A. Rose
|
| |
Severance(1)(2)
|
| | | $ | 1,684,250 | | | | | $ | 1,684,250 | | |
| | | | Stock Options(3) | | | | $ | 4,477 | | | | | $ | 4,477 | | |
| | | | RSUs & PSUs(4) | | | | $ | 456,602 | | | | | $ | 456,602 | | |
| | | | Incentive Compensation Award(5) | | | | $ | 200,000 | | | | | $ | 200,000 | | |
| | | | Post-Termination Health Care(6) | | | | $ | 34,156 | | | | | $ | 34,156 | | |
| | | | Total value: | | | | $ | 2,379,485 | | | | | $ | 2,379,485 | | |
|
Katherine Pryor Burgeson
|
| |
Severance(1)(2)
|
| | | $ | 696,000 | | | | | $ | 928,000 | | |
| | | | Stock Options(3) | | | | $ | 0 | | | | | $ | 0 | | |
| | | | RSUs & PSUs(4) | | | | $ | 310,128 | | | | | $ | 546,787 | | |
| | | | Incentive Compensation Award(5) | | | | | N/A | | | | | | N/A | | |
| | | | Health Care(6) | | | | $ | 0 | | | | | $ | 0 | | |
| | | | Total value: | | | | $ | 1,006,128 | | | | | $ | 1,474,787 | | |
|
S. Edward Woodcock, Jr.
|
| |
Severance(1)(2)
|
| | | $ | 837,421 | | | | | $ | 837,421 | | |
| | | | Stock Options(3) | | | | $ | 1,912 | | | | | $ | 1,912 | | |
| | | | RSUs & PSUs(4) | | | | $ | 118,060 | | | | | $ | 118,060 | | |
| | | | Incentive Compensation Award(5) | | | | $ | 132,500 | | | | | $ | 132,500 | | |
| | | | Health care(6) | | | | $ | 18,441 | | | | | $ | 18,441 | | |
| | | | Total value: | | | | $ | 1,108,334 | | | | | $ | 1,108,334 | | |
| | |
D. Michael
Wilson |
| |
John C.
Fortson |
| |
Edward
Rose |
| |
Katherine
Pryor Burgeson |
| |
S. Edward
Woodcock, Jr. |
| |||||||||||||||
Stock Options(2)
|
| | | | N/A | | | | | | N/A | | | | | $ | 4,477 | | | | | $ | 0 | | | | | $ | 1,912 | | |
RSUs(3) | | | | | N/A | | | | | | N/A | | | | | $ | 493,248 | | | | | $ | 310,128 | | | | | $ | 118,060 | | |
Incentive Compensation (Cash) Awards(4)
|
| | | | N/A | | | | | | N/A | | | | | $ | 200,000 | | | | | | N/A | | | | | $ | 132,500 | | |
Name and Address of Beneficial Owner
|
| |
Shares
Beneficially Owned |
| |
Percent of
Class |
| ||||||
FMR LLC
|
| | | | 4,904,944 | | | | | | 11.5% | | |
The Vanguard Group, Inc.
|
| | | | 3,668,315 | | | | | | 8.6% | | |
BlackRock, Inc.
|
| | | | 3,139,757 | | | | | | 7.3% | | |
State Street
|
| | | | 2,708,883 | | | | | | 6.3% | | |
Name and Address of Beneficial Owner
|
| |
Shares
Beneficially Owned |
| |
Percent of
Class |
| ||||||
Richard B. Kelson
|
| | | | 1,683 | | | | | | * | | |
Jean S. Blackwell
|
| | | | 0 | | | | | | * | | |
Luis Fernandez-Moreno
|
| | | | 0 | | | | | | * | | |
J. Michael Fitzpatrick
|
| | | | 0 | | | | | | * | | |
Frederick J. Lynch
|
| | | | 0 | | | | | | * | | |
Daniel F. Sansone
|
| | | | 0 | | | | | | * | | |
D. Michael Wilson
|
| | | | 0 | | | | | | * | | |
John C. Fortson
|
| | | | 0 | | | | | | * | | |
Edward Rose
|
| | | | 1,462 | | | | | | * | | |
S. Edward Woodcock, Jr.
|
| | | | 437 | | | | | | * | | |
Katherine Pryor Burgeson
|
| | | | 726 | | | | | | * | | |
All directors and officers as a group (11 persons)
|
| | | | 4,308 | | | | | | * | | |
| Ingevity Corporation | | | |||||
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-8 | | |
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net sales
|
| | | $ | 968 | | | | | $ | 1,041 | | | | | $ | 980 | | |
Cost of sales
|
| | | | 687 | | | | | | 718 | | | | | | 685 | | |
Gross Profit
|
| | | | 281 | | | | | | 323 | | | | | | 295 | | |
Selling, general and administrative expenses
|
| | | | 114 | | | | | | 112 | | | | | | 103 | | |
Separation costs
|
| | | | 17 | | | | | | — | | | | | | — | | |
Interest expense
|
| | | | 21 | | | | | | 16 | | | | | | 13 | | |
Other (income) expense, net
|
| | | | (9) | | | | | | (8) | | | | | | (5) | | |
Income before income taxes
|
| | | | 138 | | | | | | 203 | | | | | | 184 | | |
Provision for income taxes
|
| | | | 53 | | | | | | 70 | | | | | | 66 | | |
Net income
|
| | | | 85 | | | | | | 133 | | | | | | 118 | | |
Less: Net income (loss) attributable to noncontrolling
interests, net of taxes |
| | | | 5 | | | | | | 4 | | | | | | (1) | | |
Net income attributable to the company
|
| | | $ | 80 | | | | | $ | 129 | | | | | $ | 119 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net income
|
| | | $ | 85 | | | | | $ | 133 | | | | | $ | 118 | | |
Other comprehensive income (loss), net of tax: | | | | | |||||||||||||||
Foreign currency translation adjustment(1)
|
| | | | (10) | | | | | | (6) | | | | | | (6) | | |
Derivative instruments:
|
| | | | |||||||||||||||
Unrealized gain (loss), net
|
| | | | (1) | | | | | | (1) | | | | | | 1 | | |
Reclassifications of deferred derivative instruments (gain) loss, included in net income(2)
|
| | | | 1 | | | | | | — | | | | | | — | | |
Net unrealized gain (loss) on derivative instruments
|
| | | | — | | | | | | (1) | | | | | | 1 | | |
Other comprehensive income (loss), net of tax
|
| | | | (10) | | | | | | (7) | | | | | | (5) | | |
Comprehensive income
|
| | | | 75 | | | | | | 126 | | | | | | 113 | | |
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of taxes
|
| | | | 5 | | | | | | 4 | | | | | | (1) | | |
Comprehensive income attributable to the company
|
| | | $ | 70 | | | | | $ | 122 | | | | | $ | 114 | | |
|
| | |
Unaudited Pro
Forma As of December 31, 2015 |
| |
December 31,
|
| ||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||||||||
Assets | | | | | |||||||||||||||
Cash and cash equivalents
|
| | | $ | 32 | | | | | $ | 32 | | | | | $ | 20 | | |
Accounts receivable, net
|
| | | | 96 | | | | | | 96 | | | | | | 108 | | |
Inventories, net
|
| | | | 151 | | | | | | 151 | | | | | | 130 | | |
Prepaid and other current assets
|
| | | | 20 | | | | | | 20 | | | | | | 13 | | |
Current assets
|
| | | | 299 | | | | | | 299 | | | | | | 271 | | |
Property, plant and equipment, net
|
| | | | 438 | | | | | | 438 | | | | | | 410 | | |
Goodwill
|
| | | | 12 | | | | | | 12 | | | | | | 13 | | |
Other intangibles, net
|
| | | | 10 | | | | | | 10 | | | | | | 13 | | |
Other assets
|
| | | | 23 | | | | | | 23 | | | | | | 11 | | |
Total assets
|
| | | $ | 782 | | | | | $ | 782 | | | | | $ | 718 | | |
Liabilities and Equity | | | | | |||||||||||||||
Accounts payable
|
| | | $ | 65 | | | | | $ | 65 | | | | | $ | 105 | | |
Accrued expenses
|
| | | | 13 | | | | | | 13 | | | | | | 13 | | |
Accrued payroll and employee benefits
|
| | | | 10 | | | | | | 10 | | | | | | 18 | | |
Notes payable
|
| | | | 9 | | | | | | 9 | | | | | | 3 | | |
Cash distribution to parent
|
| | | | 438 | | | | | | — | | | | | | — | | |
Current liabilities
|
| | | | 535 | | | | | | 97 | | | | | | 139 | | |
Capital lease obligations
|
| | | | 80 | | | | | | 80 | | | | | | 86 | | |
Deferred income taxes
|
| | | | 76 | | | | | | 76 | | | | | | 67 | | |
Other liabilities
|
| | | | 7 | | | | | | 7 | | | | | | 6 | | |
Total liabilities
|
| | | | 698 | | | | | | 260 | | | | | | 298 | | |
Commitments and contingencies (Note 11) | | | | | |||||||||||||||
Net parent investment: | | | | | |||||||||||||||
Net parent investment
|
| | | | 96 | | | | | | 534 | | | | | | 424 | | |
Accumulated other comprehensive loss
|
| | | | (17) | | | | | | (17) | | | | | | (7) | | |
Total net parent investment before noncontrolling interests
|
| | | | 79 | | | | | | 517 | | | | | | 417 | | |
Noncontrolling interests
|
| | | | 5 | | | | | | 5 | | | | | | 3 | | |
Total net parent investment and noncontrolling interests
|
| | | | 84 | | | | | | 522 | | | | | | 420 | | |
Total liabilities and net parent investment
|
| | | $ | 782 | | | | | $ | 782 | | | | | $ | 718 | | |
|
In millions
|
| |
Net Parent
Investment |
| |
Accumulated
other comprehensive income (loss) |
| |
Noncontrolling
interests |
| |
Total
|
| ||||||||||||
Balance at December 31, 2012
|
| | | $ | 277 | | | | | $ | 5 | | | | | $ | 12 | | | | | $ | 294 | | |
Net income
|
| | | | 119 | | | | | | — | | | | | | (1) | | | | | | 118 | | |
Other comprehensive income, net of tax
|
| | | | — | | | | | | (5) | | | | | | — | | | | | | (5) | | |
Noncontrolling interest distributions
|
| | | | — | | | | | | — | | | | | | (8) | | | | | | (8) | | |
Purchase of noncontrolling interest
|
| | | | — | | | | | | — | | | | | | (1) | | | | | | (1) | | |
Transactions with parent
|
| | | | (70) | | | | | | — | | | | | | — | | | | | | (70) | | |
Balance at December 31, 2013
|
| | | $ | 326 | | | | | $ | — | | | | | $ | 2 | | | | | $ | 328 | | |
Net income
|
| | | | 129 | | | | | | — | | | | | | 4 | | | | | | 133 | | |
Other comprehensive income, net of tax
|
| | | | — | | | | | | (7) | | | | | | — | | | | | | (7) | | |
Noncontrolling interest distributions
|
| | | | — | | | | | | — | | | | | | (3) | | | | | | (3) | | |
Transactions with parent
|
| | | | (31) | | | | | | — | | | | | | — | | | | | | (31) | | |
Balance at December 31, 2014
|
| | | $ | 424 | | | | | $ | (7) | | | | | $ | 3 | | | | | $ | 420 | | |
Net income
|
| | | | 80 | | | | | | — | | | | | | 5 | | | | | | 85 | | |
Other comprehensive income, net of tax
|
| | | | — | | | | | | (10) | | | | | | — | | | | | | (10) | | |
Noncontrolling interest distributions
|
| | | | — | | | | | | — | | | | | | (3) | | | | | | (3) | | |
Transactions with parent
|
| | | | 30 | | | | | | — | | | | | | — | | | | | | 30 | | |
Balance at December 31, 2015
|
| | | $ | 534 | | | | | $ | (17) | | | | | $ | 5 | | | | | $ | 522 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Operating activities: | | | | | |||||||||||||||
Net income
|
| | | $ | 85 | | | | | $ | 133 | | | | | $ | 118 | | |
Adjustments to reconcile net income to cash provided by
operating activities: |
| | | | |||||||||||||||
Depreciation and amortization
|
| | | | 35 | | | | | | 33 | | | | | | 33 | | |
Deferred income taxes
|
| | | | 10 | | | | | | 2 | | | | | | 2 | | |
Impairment/loss on sale of assets
|
| | | | 4 | | | | | | 1 | | | | | | 11 | | |
Changes in operating assets and liabilities:
|
| | | | |||||||||||||||
Accounts receivable, net
|
| | | | 9 | | | | | | (9) | | | | | | (11) | | |
Inventories, net
|
| | | | (25) | | | | | | (29) | | | | | | (20) | | |
Prepaid and other current assets
|
| | | | (7) | | | | | | — | | | | | | 2 | | |
Accounts payable
|
| | | | (22) | | | | | | 10 | | | | | | 14 | | |
Accrued expenses
|
| | | | — | | | | | | 6 | | | | | | (4) | | |
Accrued payroll and employee benefit costs
|
| | | | (8) | | | | | | 5 | | | | | | 2 | | |
Changes in other operating assets and liabilities, net
|
| | | | (8) | | | | | | (9) | | | | | | (10) | | |
Net cash provided by operating activities
|
| | | | 73 | | | | | | 143 | | | | | | 137 | | |
Investing activities: | | | | | |||||||||||||||
Capital expenditures
|
| | | | (102) | | | | | | (101) | | | | | | (63) | | |
Proceeds from sale of subsidiary
|
| | | | 11 | | | | | | — | | | | | | — | | |
Other investing activities, net
|
| | | | 1 | | | | | | (1) | | | | | | (1) | | |
Net cash used in investing activities
|
| | | | (90) | | | | | | (102) | | | | | | (64) | | |
Financing activities: | | | | | |||||||||||||||
Termination of capital lease obligations
|
| | | | (6) | | | | | | — | | | | | | — | | |
Changes in notes payable and other short-term borrowings, net
|
| | | | 6 | | | | | | 3 | | | | | | — | | |
Purchase of noncontrolling interests
|
| | | | — | | | | | | — | | | | | | (1) | | |
Noncontrolling interest distributions
|
| | | | (3) | | | | | | (3) | | | | | | (8) | | |
Transactions with Parent, net
|
| | | | 30 | | | | | | (31) | | | | | | (70) | | |
Net cash provided (used) in financing activities
|
| | | | 27 | | | | | | (31) | | | | | | (79) | | |
Increase (decrease) in cash and cash equivalents
|
| | | | 10 | | | | | | 10 | | | | | | (6) | | |
Effect of exchange rate changes on cash
|
| | | | 2 | | | | | | (2) | | | | | | 2 | | |
Cash and cash equivalents | | | | | |||||||||||||||
At beginning of period
|
| | | | 20 | | | | | | 12 | | | | | | 16 | | |
At end of period
|
| | | $ | 32 | | | | | $ | 20 | | | | | $ | 12 | | |
Supplemental cash flow information: | | | | | |||||||||||||||
Cash paid for interest
|
| | | $ | 7 | | | | | $ | 7 | | | | | $ | 7 | | |
Purchases of property, plant and equipment in accounts payable
|
| | | $ | 2 | | | | | $ | 16 | | | | | $ | — | | |
|
Percent of
M&E Cost |
| |
Depreciable
Life in Years |
| |
Types of Assets
|
|
|
68%
|
| |
20
|
| | Production vessels and kilns, storage tanks, piping | |
|
10%
|
| |
15
|
| | Control systems, instrumentation, metering equipment | |
|
9%
|
| |
25 to 30
|
| | Blending equipment, storage tanks, piping, shipping equipment and platforms, safety equipment | |
|
7%
|
| |
5 to 10
|
| | Production control system equipment and hardware, laboratory testing equipment | |
|
6%
|
| |
40
|
| | Machinery & equipment support structures and foundations | |
In millions
|
| |
Level 1(1)
|
| |
Level 2(2)
|
| |
Level 3(3)
|
| |
Total
|
| ||||||||||||
December 31, 2015 | | | | | | ||||||||||||||||||||
Recurring fair value measurements: | | | | | | ||||||||||||||||||||
Cash equivalents
|
| | | $ | 10 | | | | | $ | — | | | | | $ | — | | | | | $ | 10 | | |
December 31, 2014 | | | | | | ||||||||||||||||||||
Recurring fair value measurements: | | | | | | ||||||||||||||||||||
Natural gas hedge liability(a)
|
| | | $ | — | | | | | $ | (2) | | | | | $ | — | | | | | $ | (2) | | |
Cash equivalents
|
| | | | 6 | | | | | | — | | | | | | — | | | | | | 6 | | |
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Raw materials
|
| | | $ | 41 | | | | | $ | 36 | | |
Production materials, stores and supplies
|
| | | | 11 | | | | | | 10 | | |
Finished and in process goods
|
| | | | 119 | | | | | | 112 | | |
Inventories valued at current costs
|
| | | | 171 | | | | | | 158 | | |
Less: Excess of cost over LIFO cost
|
| | | | (20) | | | | | | (28) | | |
Inventories, net
|
| | | $ | 151 | | | | | $ | 130 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Machinery and equipment
|
| | | $ | 658 | | | | | $ | 637 | | |
Buildings and leasehold equipment
|
| | | | 64 | | | | | | 67 | | |
Land and land improvements
|
| | | | 18 | | | | | | 24 | | |
Construction in progress
|
| | | | 143 | | | | | | 122 | | |
Total cost
|
| | | | 883 | | | | | | 850 | | |
Less: accumulated depreciation
|
| | | | (445) | | | | | | (440) | | |
Property, plant and equipment, net(1)
|
| | | $ | 438 | | | | | $ | 410 | | |
|
| | |
Operating Segments
|
| | | | | | | |||||||||
In millions
|
| |
Performance
Chemicals |
| |
Performance
Materials |
| |
Total
|
| |||||||||
Balance, December 31, 2013
|
| | | $ | 9 | | | | | $ | 4 | | | | | $ | 13 | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | |
Balance, December 31, 2014
|
| | | $ | 9 | | | | | $ | 4 | | | | | $ | 13 | | |
Foreign currency translation
|
| | | | (1) | | | | | | — | | | | | | (1) | | |
Balance, December 31, 2015
|
| | | $ | 8 | | | | | $ | 4 | | | | | $ | 12 | | |
|
| | |
December 31, 2015
|
| |
December 31, 2014
|
| ||||||||||||||||||||||||||||||
In millions
|
| |
Gross
carrying amount |
| |
Accumulated
amortization |
| |
Net
|
| |
Gross
carrying amount |
| |
Accumulated
amortization |
| |
Net
|
| ||||||||||||||||||
Brands(1) | | | | $ | 14 | | | | | $ | 11 | | | | | $ | 3 | | | | | $ | 14 | | | | | $ | 10 | | | | | $ | 4 | | |
Customer contracts and relationships
|
| | | | 28 | | | | | | 21 | | | | | | 7 | | | | | | 28 | | | | | | 19 | | | | | | 9 | | |
Other
|
| | | | 1 | | | | | | 1 | | | | | | — | | | | | | 1 | | | | | | 1 | | | | | | — | | |
| | | | $ | 43 | | | | | $ | 33 | | | | | $ | 10 | | | | | $ | 43 | | | | | $ | 30 | | | | | $ | 13 | | |
|
| | |
December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Cost of sales
|
| | | $ | 10 | | | | | $ | 10 | | | | | $ | 11 | | |
Selling, general and administrative expenses
|
| | | | 17 | | | | | | 18 | | | | | | 17 | | |
Interest expense
|
| | | | 13 | | | | | | 10 | | | | | | 6 | | |
Total allocated cost(1)
|
| | | $ | 40 | | | | | $ | 38 | | | | | $ | 34 | | |
|
In millions
|
| |
Operating leases
|
| |
Capital leases
|
| ||||||
2016
|
| | | $ | 10 | | | | | $ | 6 | | |
2017
|
| | | | 8 | | | | | | 6 | | |
2018
|
| | | | 6 | | | | | | 6 | | |
2019
|
| | | | 4 | | | | | | 6 | | |
2020
|
| | | | 3 | | | | | | 6 | | |
Later years
|
| | | | 2 | | | | | | 120 | | |
Minimum lease payments
|
| | | $ | 33 | | | | | | 150 | | |
Less: amount representing interest
|
| | | | | | | | | | (70) | | |
Capital lease obligations
|
| | | | | | | | | $ | 80 | | |
|
Lattice-based option valuation assumptions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Weighted-average fair value of stock options granted during the period
|
| | | | 29.4 | | | | | | 9.8 | | | | | | 8.7 | | |
Weighted-average fair value of SARs granted during the period
|
| | | | — | | | | | | — | | | | | | — | | |
Expected dividend yield for stock options
|
| | | | 2.40% | | | | | | 2.79% | | | | | | 2.91% | | |
Expected dividend yield for SARs
|
| | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | |
Expected volatility
|
| | | | 23.50% | | | | | | 32.00% | | | | | | 32.00% | | |
Average risk-free interest rate for stock options
|
| | | | 1.30% | | | | | | 1.57% | | | | | | 0.94% | | |
Average risk-free interest rate for SARs
|
| | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | |
Average expected term for stock options and SARs
(in years) |
| | | | 3.7 | | | | | | 7.2 | | | | | | 6.9 | | |
Shares in thousands
|
| |
Options
|
| |
Weighted
average exercise price |
| |
SARs
|
| |
Weighted
average exercise price |
| |
Weighted
average remaining contractual term |
| |
Aggregate
intrinsic value (in millions) |
| |||||||||||||||
Outstanding at December 31, 2012
|
| | | | 309 | | | | | $ | 22.57 | | | | | | 7 | | | | | $ | 28.76 | | | | | | | | $ | 3 | | |
Granted
|
| | | | 26 | | | | | | 34.34 | | | | | | — | | | | | | — | | | | | | | | | | | |
Exercised
|
| | | | (133) | | | | | | 18.39 | | | | | | (3) | | | | | | 29.33 | | | | | | | | | 2 | | |
Canceled
|
| | | | (1) | | | | | | 27.39 | | | | | | — | | | | | | — | | | | | | | | | | | |
Outstanding at December 31, 2013
|
| | | | 201 | | | | | | 26.85 | | | | | | 4 | | | | | | 28.40 | | | | | | | | | 2 | | |
Granted
|
| | | | 18 | | | | | | 35.89 | | | | | | — | | | | | | — | | | | | | | | | | | |
Exercised
|
| | | | (70) | | | | | | 25.84 | | | | | | (1) | | | | | | 27.33 | | | | | | | | | 1 | | |
Canceled
|
| | | | (1) | | | | | | 27.95 | | | | | | — | | | | | | — | | | | | | | | | | | |
Adjustment due to special dividend
|
| | | | 5 | | | | | | n/a | | | | | | — | | | | | | n/a | | | | | | | | | | | |
Outstanding at December 31, 2014
|
| | | | 153 | | | | | | 27.55 | | | | | | 3 | | | | | | 32.43 | | | | | | | | | 3 | | |
Granted
|
| | | | 14 | | | | | | 54.76 | | | | | | — | | | | | | — | | | | | | | | | | | |
Exercised
|
| | | | (47) | | | | | | 25.26 | | | | | | (2) | | | | | | 32.22 | | | | | | | | | | | |
Cancelled
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | |
Outstanding at December 31, 2015
|
| | | | 120 | | | | | | 37.92 | | | | | | 1 | | | | | | 35.04 | | | |
6.6 years
|
| | | | 1 | | |
Exercisable at December 31, 2015
|
| | | | 100 | | | | | | 35.81 | | | | | | 1 | | | | | | 35.04 | | | |
6.4 years
|
| | | | 1 | | |
Exercisable at December 31, 2014
|
| | | | 80 | | | | | | 24.45 | | | | | | 2 | | | | | | 31.55 | | | |
6.5 years
|
| | | | 2 | | |
Shares in thousands
|
| |
Shares
|
| |
Average grant date
fair market value |
| ||||||
Outstanding at December 31, 2012
|
| | | | 59 | | | | | $ | 25.18 | | |
Granted
|
| | | | 34 | | | | | | 34.34 | | |
Forfeited
|
| | | | (1) | | | | | | 29.43 | | |
Released
|
| | | | (12) | | | | | | 21.43 | | |
Net adjustment for performance-based units
|
| | | | (29) | | | | | | 26.97 | | |
Outstanding at December 31, 2013
|
| | | | 51 | | | | | | 31.07 | | |
Granted
|
| | | | 36 | | | | | | 35.89 | | |
Forfeited
|
| | | | (1) | | | | | | 34.24 | | |
Released
|
| | | | (10) | | | | | | 27.90 | | |
Net adjustment for performance-based units
|
| | | | 8 | | | | | | 28.65 | | |
Outstanding at December 31, 2014
|
| | | | 84 | | | | | | 33.21 | | |
Granted
|
| | | | 33 | | | | | | 61.58 | | |
Forfeited
|
| | | | — | | | | | | — | | |
Released
|
| | | | (21) | | | | | | 50.96 | | |
Outstanding at December 31, 2015
|
| | | | 96 | | | | | $ | 61.62 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Foreign currency exchange losses (income)
|
| | | $ | 1 | | | | | $ | 1 | | | | | $ | — | | |
Royalty and sundry income(1)
|
| | | | (2) | | | | | | (4) | | | | | | (2) | | |
Restructuring and other (income) charges, net(2)
|
| | | | (8) | | | | | | (5) | | | | | | (3) | | |
Other (income) expense, net
|
| | | $ | (9) | | | | | $ | (8) | | | | | $ | (5) | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Restructuring and other (income) charges, net
|
| | | | |||||||||||||||
Gain on sale of assets and businesses
|
| | | $ | (12) | | | | | $ | (5) | | | | | $ | — | | |
Insurance and legal settlements
|
| | | | — | | | | | | — | | | | | | (13) | | |
Asset write-downs
|
| | | | 4 | | | | | | — | | | | | | 10 | | |
Total restructuring and other (income) charges, net
|
| | | $ | (8) | | | | | $ | (5) | | | | | $ | (3) | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
U.S. Earnings
|
| | | $ | 146 | | | | | $ | 202 | | | | | $ | 185 | | |
Foreign Earnings
|
| | | | (8) | | | | | | 1 | | | | | | (1) | | |
| | | | $ | 138 | | | | | $ | 203 | | | | | $ | 184 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Current | | | | | |||||||||||||||
U.S. federal
|
| | | $ | 35 | | | | | $ | 59 | | | | | $ | 54 | | |
State and local
|
| | | | 5 | | | | | | 8 | | | | | | 7 | | |
Foreign
|
| | | | 3 | | | | | | 1 | | | | | | 3 | | |
| | | | | 43 | | | | | | 68 | | | | | | 64 | | |
Deferred | | | | | |||||||||||||||
U.S. federal
|
| | | | 8 | | | | | | 2 | | | | | | 2 | | |
State and local
|
| | | | 2 | | | | | | — | | | | | | — | | |
Foreign
|
| | | | — | | | | | | — | | | | | | — | | |
Provision for deferred income taxes
|
| | | | 10 | | | | | | 2 | | | | | | 2 | | |
Income tax deferral attributable to continuing operations
|
| | | $ | 53 | | | | | $ | 70 | | | | | $ | 66 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Income tax provision computed at the U.S. federal statutory
rate of 35 percent |
| | | $ | 49 | | | | | $ | 71 | | | | | $ | 64 | | |
State and local income taxes, net of federal benefit
|
| | | | 5 | | | | | | 5 | | | | | | 4 | | |
Foreign income tax rate differential
|
| | | | — | | | | | | — | | | | | | — | | |
Changes in valuation allowance
|
| | | | 1 | | | | | | 1 | | | | | | 3 | | |
IRC Section 199 deduction
|
| | | | (3) | | | | | | (6) | | | | | | (4) | | |
Noncontrolling interest in consolidated partnership
|
| | | | (2) | | | | | | (1) | | | | | | (1) | | |
Nondeductible expenses & other adjustments
|
| | | | 3 | | | | | | — | | | | | | — | | |
Income tax provision attributable to continuing
operations |
| | | $ | 53 | | | | | $ | 70 | | | | | $ | 66 | | |
Effective tax rate attributable to continuing operations
|
| | | | 38% | | | | | | 35% | | | | | | 36% | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Deferred tax assets: | | | | ||||||||||
Accounts receivable
|
| | | $ | — | | | | | $ | 1 | | |
Accrued restructuring
|
| | | | 2 | | | | | | 3 | | |
Employee benefits
|
| | | | 3 | | | | | | 3 | | |
Intangibles
|
| | | | 3 | | | | | | 3 | | |
Investment in partnership
|
| | | | — | | | | | | 1 | | |
Net operating losses
|
| | | | 5 | | | | | | 1 | | |
Other
|
| | | | 1 | | | | | | 2 | | |
Deferred tax assets
|
| | | | 14 | | | | | | 14 | | |
Valuation allowance
|
| | | | (7) | | | | | | (5) | | |
Total net deferred tax assets
|
| | | $ | 7 | | | | | $ | 9 | | |
Deferred tax liabilities: | | | | ||||||||||
Fixed assets
|
| | | $ | (82) | | | | | $ | (72) | | |
Inventory
|
| | | | (1) | | | | | | (2) | | |
Total deferred tax liabilities
|
| | | $ | (83) | | | | | $ | (74) | | |
Net deferred tax liability
|
| | | $ | (76) | | | | | $ | (65) | | |
Included in the combined balance sheets: | | | | ||||||||||
Current net deferred tax asset
|
| | | $ | — | | | | | $ | 1 | | |
Non-current net deferred tax asset
|
| | | | — | | | | | | 1 | | |
Non-current net deferred tax liability
|
| | | | (76) | | | | | | (67) | | |
Net deferred liability
|
| | | $ | (76) | | | | | $ | (65) | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net sales | | | | | |||||||||||||||
Performance Chemicals
|
| | | $ | 711 | | | | | $ | 792 | | | | | $ | 759 | | |
Performance Materials
|
| | | | 257 | | | | | | 249 | | | | | | 221 | | |
Total net sales
|
| | | $ | 968 | | | | | $ | 1,041 | | | | | $ | 980 | | |
Segment operating profit(1) | | | | | |||||||||||||||
Performance Chemicals
|
| | | | 87 | | | | | | 124 | | | | | | 126 | | |
Performance Materials
|
| | | | 81 | | | | | | 90 | | | | | | 68 | | |
Total segment operating profit
|
| | | | 168 | | | | | | 214 | | | | | | 194 | | |
Separation costs(2)
|
| | | | (17) | | | | | | — | | | | | | — | | |
Restructuring and other income (charges)(3)
|
| | | | 8 | | | | | | 5 | | | | | | 3 | | |
Interest expense
|
| | | | (21) | | | | | | (16) | | | | | | (13) | | |
Provision for income taxes
|
| | | | (53) | | | | | | (70) | | | | | | (66) | | |
Net income attributable to noncontrolling interests
|
| | | | (5) | | | | | | (4) | | | | | | 1 | | |
Net income attributable to the Company
|
| | | $ | 80 | | | | | $ | 129 | | | | | $ | 119 | | |
|
| | |
Depreciation and amortization
|
| |
Capital expenditures
|
| ||||||||||||||||||||||||||||||
| | |
Years ended December 31,
|
| |
Years ended December 31,
|
| ||||||||||||||||||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |
2015
|
| |
2014
|
| |
2013
|
| ||||||||||||||||||
Performance Chemicals
|
| | | $ | 24 | | | | | $ | 23 | | | | | $ | 23 | | | | | $ | 37 | | | | | $ | 35 | | | | | $ | 26 | | |
Performance Materials
|
| | | | 11 | | | | | | 10 | | | | | | 10 | | | | | | 65 | | | | | | 66 | | | | | | 37 | | |
Total
|
| | | $ | 35 | | | | | $ | 33 | | | | | $ | 33 | | | | | $ | 102 | | | | | $ | 101 | | | | | $ | 63 | | |
|
| | |
Years ended December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Net Sales(1) | | | | | |||||||||||||||
North America
|
| | | $ | 633 | | | | | $ | 695 | | | | | $ | 678 | | |
Asia Pacific
|
| | | | 149 | | | | | | 151 | | | | | | 122 | | |
Europe, Middle East and Africa
|
| | | | 156 | | | | | | 154 | | | | | | 132 | | |
South America
|
| | | | 30 | | | | | | 41 | | | | | | 48 | | |
Net sales
|
| | | $ | 968 | | | | | $ | 1,041 | | | | | $ | 980 | | |
|
| | |
December 31,
|
| |||||||||||||||
In millions
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Property, plant and equipment, net | | | | | |||||||||||||||
North America
|
| | | $ | 339 | | | | | $ | 295 | | | | | $ | 268 | | |
Asia Pacific
|
| | | | 77 | | | | | | 94 | | | | | | 40 | | |
Europe, Middle East and Africa
|
| | | | 1 | | | | | | 1 | | | | | | 1 | | |
South America
|
| | | | 21 | | | | | | 20 | | | | | | 17 | | |
Property, plant and equipment, net
|
| | | $ | 438 | | | | | $ | 410 | | | | | $ | 326 | | |
|
| | |
December 31,
|
| |||||||||||||||
| | |
2015
|
| |
2014
|
| |
2013
|
| |||||||||
Total assets | | | | | |||||||||||||||
Performance Chemicals
|
| | | | 421 | | | | | | 414 | | | | | | 374 | | |
Performance Materials
|
| | | | 358 | | | | | | 300 | | | | | | 216 | | |
Total segment assets(2)
|
| | | | 779 | | | | | | 714 | | | | | | 590 | | |
Corporate and other
|
| | | | 3 | | | | | | 4 | | | | | | 3 | | |
Total assets
|
| | | | 782 | | | | | | 718 | | | | | | 593 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Income and value added tax receivables
|
| | | | 9 | | | | | | 1 | | |
Prepaid freight and supply agreements
|
| | | | 2 | | | | | | 2 | | |
Non-trade receivables
|
| | | | 3 | | | | | | 6 | | |
Advances to suppliers
|
| | | | 1 | | | | | | 1 | | |
Other
|
| | | | 5 | | | | | | 3 | | |
| | | | $ | 20 | | | | | $ | 13 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Deferred compensation arrangements
|
| | | | 3 | | | | | | 2 | | |
Capitalized software, net
|
| | | | 5 | | | | | | — | | |
Prepaid supply agreements
|
| | | | 3 | | | | | | 6 | | |
Land-use rights
|
| | | | 6 | | | | | | — | | |
Other
|
| | | | 6 | | | | | | 3 | | |
| | | | $ | 23 | | | | | $ | 11 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Accrued interest
|
| | | | 3 | | | | | | 4 | | |
Income and value added tax payables
|
| | | | 1 | | | | | | 1 | | |
Accrued freight
|
| | | | 2 | | | | | | 2 | | |
Other
|
| | | | 7 | | | | | | 6 | | |
| | | | $ | 13 | | | | | $ | 13 | | |
|
| | |
December 31,
|
| |||||||||
In millions
|
| |
2015
|
| |
2014
|
| ||||||
Deferred compensation arrangements
|
| | | | 3 | | | | | | 2 | | |
Other
|
| | | | 4 | | | | | | 4 | | |
| | | | $ | 7 | | | | | $ | 6 | | |
|
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