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Correction to previously issued financial statements | 6 Months Ended
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Jun. 30, 2017
Accounting Changes and Error Corrections [Abstract] |
Correction to previously issued financial statements | Correction to previously issued financial statements During 2016, we identified various errors related to our previously issued annual and interim Consolidated Financial Statements. Specifically, in the first quarter of 2016, we determined that $3.3 million of cumulative intercompany profit in inventory had not been eliminated in prior years. During the fourth quarter of 2016, we also identified errors related to the understatement of accruals for services rendered in prior years, as well as errors related to the timing for which revenue has been previously recognized. A cash flow reclassification error decreased 2014 cash flow from operating activities and increased cash flow from investing activities by $6.0 million and was also corrected as part of this revision. The cumulative impact of the errors identified in 2016 had resulted in the overstatement of pre-tax and net income of $1.6 million and $1.0 million in 2015 and $0.9 million and $0.6 million in 2014, and a cumulative impact to net parent investment of $2.5 million as of January 1, 2014. In addition, such errors resulted in the $9.4 million and $5.5 million overstatement of revenue in 2015 and 2014, respectively. Although Ingevity’s management has determined that the impact of such errors is immaterial to all previously issued financial statements, we revised the previously issued financial statements for the periods ended December 31, 2015 and 2014, as shown in our 2016 Annual Report, and those corrections are also reflected for the three and six months ended June 30, 2016 in the tables below.
| Three Months Ended June 30, 2016 |  | Six Months Ended June 30, 2016
In millions | As reported |  | Increase/(decrease) |  | Revised |  | As reported |  | Increase/(decrease) |  | Revised
Statement of Operations |  |  |  |  |  |  |  |  |  |  |
Net sales | $ | 248.7 |  |  | (3.3 | ) |  | $ | 245.4 |  |  | $ | 452.6 |  |  | (7.6 | ) |  | $ | 445.0 |
Cost of sales | 172.6 |  |  | (1.9 | ) |  | 170.7 |  |  | 316.5 |  |  | (9.2 | ) |  | 307.3 |
Gross profit | 76.1 |  |  | (1.4 | ) |  | 74.7 |  |  | 136.1 |  |  | 1.6 |  |  | 137.7 |
Selling, general and administrative costs | 24.3 |  |  | (1.5 | ) |  | 22.8 |  |  | 47.2 |  |  | (1.6 | ) |  | 45.6 |
Income before income taxes | 38.4 |  |  | 0.1 |  |  | 38.5 |  |  | 58.2 |  |  | 3.2 |  |  | 61.4 |
Provision for income taxes | 12.6 |  |  | — |  |  | 12.6 |  |  | 22.6 |  |  | 1.2 |  |  | 23.8 |
Net income (loss) | 25.8 |  |  | 0.1 |  |  | 25.9 |  |  | 35.6 |  |  | 2.0 |  |  | 37.6 |
Less: Net income (loss) attributable to noncontrolling interest | 2.1 |  |  | (0.3 | ) |  | 1.8 |  |  | 3.7 |  |  | 0.6 |  |  | 4.3 |
Net income (loss) attributable to Ingevity stockholders | $ | 23.7 |  |  | 0.4 |  |  | $ | 24.1 |  |  | $ | 31.9 |  |  | 1.4 |  |  | $ | 33.3 |
In millions | Three Months Ended June 30, 2016 |  | Six Months Ended June 30, 2016
Segment Information | As reported |  | Increase/(decrease) |  | Revised |  | As reported |  | Increase/(decrease) |  | Revised
Net sales |  |  |  |  |  |  |  |  |  |  |
Performance Materials | $ | 74.5 |  |  | (0.3 | ) |  | $ | 74.2 |  |  | $ | 145.3 |  |  | (1.0 | ) |  | $ | 144.3 |
Performance Chemicals | 174.2 |  |  | (3.0 | ) |  | 171.2 |  |  | 307.3 |  |  | (6.6 | ) |  | 300.7 |
Total net sales | $ | 248.7 |  |  | (3.3 | ) |  | $ | 245.4 |  |  | $ | 452.6 |  |  | (7.6 | ) |  | $ | 445.0 |
Segment operating profit |  |  |  |  |  |  |  |  |  |  |
Performance Materials | $ | 26.3 |  |  | (0.1 | ) |  | $ | 26.2 |  |  | $ | 53.9 |  |  | 3.0 |  |  | $ | 56.9 |
Performance Chemicals | 22.8 |  |  | 0.2 |  |  | 23.0 |  |  | 31.4 |  |  | 0.2 |  |  | 31.6 |
Total segment operating profit | $ | 49.1 |  |  | 0.1 |  |  | $ | 49.2 |  |  | $ | 85.3 |  |  | 3.2 |  |  | $ | 88.5 |
In millions | Six Months Ended June 30, 2016
Statement of Cash Flows | As reported |  | Increase/(decrease) |  | Revised
Net income (loss) | $ | 35.6 |  |  | 2.0 |  |  | $ | 37.6 |
Deferred income taxes | (10.6 | ) |  | 1.1 |  |  | (9.5 | )
Accounts receivable, net | (18.3 | ) |  | 2.1 |  |  | (16.2 | )
Inventories | (4.0 | ) |  | (5.1 | ) |  | (9.1 | )
Accrued expenses | (1.9 | ) |  | (0.5 | ) |  | (2.4 | )
Income taxes payable | 6.5 |  |  | 0.2 |  |  | 6.7 |
Changes in all other operating assets and liabilities, net | (0.7 | ) |  | (0.3 | ) |  | (1.0 | )
Net cash provided by (used in) operating activities | 36.7 |  |  | (0.5 | ) |  | 36.2 |
Transactions with WestRock, net | 51.4 |  |  | 0.5 |  |  | 51.9 |
Net cash provided by (used in) financing activities | $ | 78.3 |  |  | 0.5 |  |  | $ | 78.8 |

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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