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YoY shift: Lean +
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.21pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.00pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.41pp
Lean +
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adverse+2
prolonged+2
conflicts+2
unable+2
unfairly+1
Positive rising
effective+2
favorable+2
gains+2
able+1
profitability+1
Risk Factors (Item 1A)
3,255 words
Item 1A. RISK FACTORS
There are a number of risks and uncertainties that could have a material adverse effect on the Company’s businesses and its consolidated financial condition, results of operations or cash flows. The following risk factors should be considered, in addition to the other information included in this Form 10-K, when evaluating Tredegar and its businesses.
Risks Related to All of Tredegar’s Businesses
• Trade policies and prolonged geopolitical conflicts could cause an increase in the cost of our products or otherwise negatively impact the Company. The primary raw materials used by Aluminum Extrusions consist of aluminum ingot, aluminum scrap and various alloys, which are purchased from domestic and foreign producers in open-market purchases and under short-term contracts. High Performance Film’s Surface Protection business involves imports to and from the U.S. and other countries where the Company produces and sells its products, including China. Trade tensions have been rising between the U.S. and other countries. An increase in tariffs and other trade barriers between the U.S. and other countries could cause disruption to supply chains and an increase in the cost of Aluminum Extrusions’ and High Performance Films’ products or otherwise impact the production and sale of the Company’s products in global markets. Furthermore, geopolitical , including recent increased tensions in the Middle East, could result in increased pricing of raw materials and supply chain constraints, which could affect our business, financial position, results of operations and cash flows. Refer to Risks Related to Aluminum Extrusions for additional information about traded imports of aluminum extrusions.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
claims+3
severe+2
unfavorable+1
terminated+1
unplanned+1
Positive rising
gain+6
greater+2
good+1
efficiency+1
MD&A (Item 7)
6,488 words
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations focuses on and is intended to clarify the results of our operations, certain changes in our financial position, liquidity, capital structure and business developments for the periods covered by the consolidated financial statements included in this Form 10-K. This discussion should be read in conjunction with, and is qualified by reference to, the other related information including, but not limited to, the audited consolidated financial statements (including the notes thereto) and the description of our business, all as set forth in this Form 10-K, as well as the risk factors discussed above in Item 1A.
This section provides discussion and a year-to-year comparison for the years ended December 31, 2025 and 2024.
Business Overview
General
Tredegar Corporation is an industrial manufacturer with two primary businesses: custom aluminum extrusions for the B&C, automotive and specialty end-use markets in the United States through its Aluminum Extrusions segment (with exports comprising less than 5% of total sales volume) and surface protection films for high-end technology applications in the global electronics industry and packaging films for consumer and industrial products through its High Performance Films segment. With approximately 1,700 employees, the Company operates manufacturing facilities in the U.S. and China.
EBITDA from ongoing operations is the measure of segment profit and used by Tredegar’s chief operating decision maker (“CODM”) for purposes of assessing financial performance. The Company uses sales less freight (“net sales”) as its measure of revenues from external customers at the segment level. This measure is separately included in the financial information regularly provided to the CODM.
• Ongoing macroeconomic factors, including inflation, high interest rates and recession risks could cause downturns in key markets and create other commercial disruptions, which could adversely impact our businesses. Products sold to key end-use markets, including the B&C and consumer electronics markets, represent a significant portion of our revenue. Because these markets are tied closely to overall economic performance, macroeconomic factors could cause changes to demand for our products. These factors include: (i) inflation; (ii) high interest rates; (iii) recession risks; and (iv) other interruptions of international and regional commerce. Price erosion may occur as competitors become more aggressive in pricing practices. To the extent that these factors reduce demand for our products, our business, financial position, results of operations and cash flows could be adversely impacted.
• Tredegar’s performance is influenced by costs incurred by its operating companies, including the cost of raw materials and energy. These costs include the cost of aluminum (the raw material on which Aluminum Extrusions primarily depends), resin (the raw material on which High Performance Films primarily depends), natural gas (the principal fuel necessary for Aluminum Extrusions’ plants to operate), electricity, diesel fuel, chemicals and paint. Aluminum, resin and natural gas prices are volatile as shown in the charts in Item 7A. The Company attempts to mitigate the effects of higher costs, which includes tariff driven cost increases, through price increases and contractual pass-through provisions, but there are no assurances that higher prices can effectively be passed through to customers or that Tredegar will be able to offset fully or on a timely basis the effects of higher costs. Further, the Company’s cost control efforts may not be sufficient to offset any increases in raw materials, energy or other input costs.
• Noncompliance with any of the covenants in the Company’s $125 million asset-based revolving credit facility (“ABL Facility”), which matures on May 6, 2030, could result in all debt outstanding thereunder becoming due and limiting the Company’s borrowing capacity, which could have a material adverse effect on its consolidated financial condition and liquidity. The credit agreement governing Tredegar’s ABL Facility contains restrictions and financial covenants that, if violated, could restrict the Company’s operational and financial flexibility. Failure to comply with these covenants could result in an event of default, which if not cured or waived, would result in all outstanding debt under the credit facility at such time becoming due, which could have a material adverse effect on the Company’s consolidated financial condition and liquidity.
• Our failure to continue to attract, develop and retain certain key officers or employees could adversely affect our businesses. Our success depends upon the efforts and abilities of key personnel, many of whom are longstanding employees. The loss of any of these key personnel could deplete our institutional knowledge base and negatively affect our ability to efficiently operate our businesses. Certain roles have experienced high turnover in recent years, and we are experiencing an increasingly competitive labor market. Increased employee turnover could hinder our ability to execute our business strategy and adversely affect our business, financial condition, results of operations and cash flows.
• Disruptions at one of the Company’s major manufacturing facilities could negatively impact financial results. Tredegar believes it has implemented measures to minimize the risks of disruption at its facilities. However, a disruption could occur as a result of any number of events: an equipment failure with repairs requiring long lead times, labor stoppages or shortages, cybersecurity attacks, utility disruptions, constraints on the supply or delivery of critical raw materials, and severe weather conditions, including potential flooding at the Aluminum Extrusions facility located in Carthage, TN, which is located in a 50-year flood plain. Refer to Risks Related to Aluminum Extrusions for additional information related to aging equipment and systems. A material disruption in one of the Company’s operating locations
could negatively impact production and the Company’s consolidated financial condition, results of operations and cash flows.
• A failure in the Company’s information technology systems as a result of cybersecurity attacks or other causes could negatively affect Tredegar’s business. The Company depends on information technology (“IT”) to record and process customer orders, manufacture and ship products in a timely manner, secure its production processes and know-how, maintain the financial accuracy of its business records and maintain personally identifiable information of its employees. An IT system failure due to computer viruses, internal or external security breaches, cybersecurity attacks or other malicious causes could disrupt our operations and prevent us from being able to process transactions with our customers, operate our manufacturing facilities and properly report transactions in a timely manner. Increased global IT security threats and cyber-crime pose a potential risk to the security and availability of the Company’s IT systems, networks and services, including those that are managed, hosted, provided or used by third parties, as well as to the confidentiality, availability and integrity of the Company’s data. Additionally, increased cybersecurity risk arises due to certain employees working remotely. To date, interruptions of the Company’s IT systems have been infrequent, and Tredegar has not experienced a material cybersecurity incident. A significant prolongedfailure of or security breach of the IT systems, networks or service providers the Company relies upon, or a loss or disclosure of business or other sensitive information, or personally identifiable information, as a result of a cybersecurity incident or other cause, could result in substantial costs to the Company, damage to the Company’s reputation, regulatory enforcement actions and lawsuits and could adversely affect the Company’s business, results of operations, financial condition or cash flows.
• The Company’s results of operations, financial condition and cash flows could be impacted by the macroeconomic effects of a pandemic. The outbreak of a public health emergency, such as a pandemic or epidemic, could have multiple adverse effects on the global economy, including short-term impacts affecting labor supply and causing supply chain disruptions which can lead to inflationary pressures. In addition, a pandemic may result in certain after-shocks and structural shifts, which could adversely impact Tredegar’s markets. Preventive or protective actions taken by governmental authorities could have a material adverse effect on our businesses, our suppliers, contractors and third-party logistic providers, including facility closures, labor constraints, supply chain disruptions and other challenges. These challenges could impact our ability to maintain sufficient inventory and to accurately predict demand or lead times, which could inhibit our ability to service customer demand. Additionally, a future pandemic could heighten other risks described herein.
• Tredegar is subject to current and future government regulations, including environmental laws and regulations, and could become exposed to liabilities and costs associated with such regulations. The Company is subject to regulation by local, state, federal and foreign governmental authorities. Additionally, some customers are requesting that the Company demonstrate alignment with the customer’s own sustainability commitments. New laws and regulations, or changes to existing laws, including those relating to environmental matters (including global climate change and plastic products), customer sustainability commitments and privacy matters, could subject Tredegar to significant additional capital expenditures, operating expenses or other compliance costs. Moreover, future developments in federal, state, local and international laws and regulations, including environmental laws, and future customer sustainability initiatives are difficult to predict. Environmental laws, customer sustainability initiatives and privacy restrictions have become and are expected to continue to become increasingly strict. As a result, Tredegar expects to be subject to new environmental and privacy laws and regulations and new customer sustainability commitments. However, any such changes are uncertain and, therefore, it is not possible for the Company to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.
The Company is subject to the U.S. Foreign Corrupt Practices Act, anti-corruption laws and similar anti-bribery laws in other jurisdictions, which generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business. Although we have policies and procedures designed to facilitate compliance with these laws and regulations, our employees, contractors and agents may take actions in violation of our policies. Any such violation, even if prohibited by our policies, could adversely affect our business and/or our reputation.
Risks Related to Aluminum Extrusions
• Unfairly traded imports of aluminum extrusions could injure or threaten with injury America’s domestic aluminum extrusions industry, which could have an adverse effect on the financial condition, results of operations and cash flows of Aluminum Extrusions.
Chinese and other foreign manufacturers continue to attempt to evade the antidumping and countervailing orders to avoid duties. In October 2022, the U.S. International Trade Commission extended the antidumping and countervailing duty orders against aluminum extrusions from China for a period of five years.
In March 2018, the U.S. imposed tariffs of 10% on aluminum ingot and semi-finished aluminum imported into the U.S. from certain countries (“Section 232 tariffs”). In December 2020, the Department of Commerce introduced general approved exclusions, allowing importers to bypass individual exclusion requests and import items without Section 232 tariffs. All general approved exclusions were terminatedeffective March 12, 2025.
Unfairly traded imports of aluminum extrusions continue to pose a significant threat to the U.S. aluminum extrusion industry and to our Aluminum Extrusions segment. Effective June 4, 2025, the Section 232 tariffs were increased to 50%, except for the United Kingdom, after previously being increased from 10% to 25%, effective March 12, 2025. These measures are in addition to existing antidumping and countervailing duties. There are no country-specific or product-specific exclusions occurring to date, except for an alternative arrangement with the United Kingdom.
Despite these actions, weekly net new orders declined approximately 23.6% after the tariff increase to 50%, from an average of 3.4 million pounds per week in the first half of 2025 to 2.6 million pounds per week in the period from June 2025 through early March 2026.
We believe this decline in net new orders after the step-up in the tariff to 50% is due to a combination of lower demand for extrusions in the U.S., tariffs not resulting in the expected favorable shift of market share to domestic producers due to the undervaluation of imported fabricated aluminum products and customers pausing orders to evaluate the permanency of the new higher tariff. Due to the persistent undervaluation problem, the Section 232 framework has created a tariff inversion and price distortions that has created a disadvantage for U.S. extruders and fabricators, allowing foreign finished goods to enter the market at prices domestic manufacturers cannot match. These domestic industry structural issues have reduced the effectiveness of recent tariff increases and have contributed to renewed import surges, despite the intended Section 232 measures.
Although the initial strengthening of the Section 232 program resulted in market share gains for U.S. producers, those gains have diminished, and imports from certain countries have again begun to increase share at the expense of the domestic industry. If these conditions persist, particularly the tariff inversion and continued undervaluation of imported fabricated aluminum productions, they could have a material adverse effect on the financial condition, results of operations, and cash flows of our Aluminum Extrusions segment.
• Our business is capital intensive, and the inability to replace aging equipment could have an adverse effect on our growth and profitability. Our operations rely heavily on manufacturing equipment and information technology (“IT”) systems that, in certain cases, are aging or approaching obsolescence. Many of our production assets have been in service for decades and, while maintained, are more susceptible to mechanical failure, inefficiency, or downtime compared to modern equipment. Unexpectedbreakdowns or extended outages could disrupt production schedules, increase maintenance costs, and impair our ability to meet customer demand.
Similarly, portions of our IT infrastructure, including enterprise resource planning and manufacturing execution systems (ERP/MES), are based on legacy platforms that may lack the flexibility and scalability features of newer technologies. These limitations increase the risk of system failures, security and operational inefficiencies. In addition, reliance on outdated systems hinders our ability to integrate emerging technologies, automate processes, or respond quickly to evolving regulatory and market requirements. A new ERP/MES project for all locations of the Aluminum Extrusions business commenced in 2022, with capitalized spending to-date of approximately $21 million related to assets not yet placed in service. As the project progressed, certain implementation phases proved more complex and time‑consuming than originally anticipated, requiring a redesign of key elements of the system. During the second quarter of 2023, this project was reorganized to increase the utilization of existing dedicated internal resources for system design in lieu of more costly external consultants. The Company expects that in late 2026 the Board will evaluate the new project design and capital needed for implementation based on the Company’s earnings, financial position, expected cash needs, and other relevant considerations.
Furthermore, significant capital expenditures are required to modernize our infrastructure, and delays or difficulties in implementing such upgrades could exacerbate these risks. Although we currently finance most of our capital expenditures through cash provided by operations, we also may depend on increased borrowing or other financing arrangements to fund future capital expenditures. If we are unable to obtain suitable financing on favorable terms or at all, we may not be able to complete future capital projects and our ability to maintain or expand our operations may be limited. If we are unable to timely upgrade or replace aging equipment and obsolete IT systems, our business could face higher operating costs, reduced competitiveness, or experience non-cash asset impairments.
• Sales volume and profitability of Aluminum Extrusions is cyclical and seasonal and highly dependent on economic conditions of end-use markets in the U.S., particularly in the construction sector. Aluminum Extrusions’ end-use markets can be cyclical and subject to seasonal swings in volume. In addition, changes in architectural design, demographic, and remote work trends could negatively impact the overall commercial construction industry. Because of the capital-intensive nature and level of fixed costs inherent in the aluminum extrusions business, the percentage drop in
earnings before interest, taxes, depreciation and amortization (“EBITDA”) from ongoing operations in a cyclical downturn will likely exceed the percentage drop in volume. In addition, during an economic slowdown, excess industry capacity often drives increased pricing pressure in many end-use markets as competitors seek to maintain or increase their position with key customers. Benefits associated with cost reductions and productivity improvements may not be sufficient to offset the adverse effects on profitability from pricing and margin pressure and higher bad debts (including a greater chance of loss associated with customers defaulting on fixed-price forward sales contracts) that usually accompany a downturn.
• The markets for Aluminum Extrusions’ products are highly competitive with product quality, service, delivery performance and price being the principal competitive factors. Aluminum Extrusions has approximately 1,100 customers that are in a variety of end-use markets within the broad categories of building and construction, automotive, transportation, consumer durables, electrical, renewable energy, machinery and equipment, and distribution. No single Aluminum Extrusions’ customer exceeds 4% of consolidated net sales. Future success and prospects depend on Aluminum Extrusions’ ability to provide superior service, high quality products, timely delivery and competitive pricing to retain existing customers and participate in overall industry cross-cycle growth. Failure in any of these areas could lead to a loss of customers, which could have an adverse effect on the business, financial condition, results of operations and cash flows of Aluminum Extrusions.
Risks Related to High Performance Films
• High Performance Films is highly dependent on sales associated with relatively few large customers. High Performance Films’ top four customers comprised in total approximately 13%, 16% and 12% of Tredegar’s consolidated net sales in 2025, 2024 and 2023, respectively. The loss or significant reduction of sales associated with one or more of these customers without replacement by new business could have an adverse effect on the Company.
While High Performance Films is undertaking efforts to expand its customer base, there can be no assurance that such efforts will be successful, or that they will offset any loss of sales and profits associated with large customer declines.
• The failure of our customers to achievesuccess or maintain market share, shifts in customer strategies, and changes in consumer preferences could adversely impact High Performance Films’ sale and operating margins. Our specialized protection and thin-gauge advanced packaging films are used in the production of various consumer products sold worldwide. Our business relies heavily on a few large customers and the markets they operate in. Failure by a key customer to maintain market share or changes in customer strategies or preferences could reduce orders and significantly affect our operating results. Cyclical downturns, disruptive technologies, shifting consumer preferences, and operational decisions by a key customer that result in component substitution all pose risks to our business.
• The Company’s inability to protect its intellectual property rights or its infringement of the intellectual property rights of others could have an adverse impact on High Performance Films. The continued success of High Performance Films’ business depends on its ability not only to protect its own technologies and trade secrets, but also to develop and sell new products that do not infringe upon existing patents. Intellectual property litigation is very costly and could result in substantial expense and diversions of Company resources, both of which could adversely affect its consolidated financial condition, results of operations and cash flows. In addition, there may be no effective legal recourse againstinfringement of the Company’s intellectual property by third parties, whether due to limitations on enforcement of rights in foreign jurisdictions or as a result of other factors.
• Our international operations expose us to risks associated with fluctuations in foreign currency exchange rates. Because we compete against protective films companies who produce and supply films within Japan and price their products in yen, changes in exchange rates, which result in a strong U.S. dollar versus the Japanese yen, can adversely affect the competitiveness of our products in foreign markets and our reported results of operations.
loss
Earnings before interest and taxes (“EBIT”) from ongoing operations is a non-GAAP financial measure included in the reconciliation of segment financial information to consolidated results for the Company in the Segment Operations Review section below. EBIT is not intended to represent the stand-alone results for Tredegar's ongoing operations under GAAP and should not be considered as an alternative to net income (loss) as defined by GAAP. We believe that EBIT is a widely understood and utilized metric that is meaningful to certain investors and that including this financial metric in the reconciliation of management’s performance metric, EBITDA from ongoing operations, provides useful information to those investors that primarily utilize EBIT to analyze the Company’s core operations.
Sales were $722.9 million in 2025 compared to $598.0 million in 2024. Net income (loss) from continuing operations was $24.1 million ($0.69 per diluted share) in 2025, compared with net income (loss) from continuing operations of $1.0 million ($0.03 per diluted share) in 2024.
2025 Financial Results Highlights
• EBITDA from ongoing operations for Aluminum Extrusions of $51.0 million was $9.6 million higher than the year of 2024.
• EBITDA from ongoing operations for High Performance Films of $27.1 million was $3.3 million lower than the year of 2024.
Gains and losses associated with exit and disposal activities, plant shutdowns, asset impairments, restructurings and other items are described in Results of Operations below.
Results of Operations
2025 versus 2024
The following table presents a bridge of consolidated net income (loss) from continuing operations from the year of 2024 to the year of 2025 with related management’s discussion and analysis below the table.
(In thousands)
Net income (loss) from continuing operations for the year ended December 31, 2024
Income tax expense (benefit)
Income (loss) from continuing operations before income taxes for the year ended December 31, 2024
Change in income (loss) from increases (decreases) in the following items:
Sales
Other income (expense), net
Total
Change in income (loss) from (increases) decreases in the following items:
Cost of goods sold
Freight
Selling, general and administrative
Interest expense
OPEB terminationgain
Goodwill impairment
Other
Total
Income (loss) from continuing operations before income taxes for the year ended December 31, 2025
Income tax expense (benefit)
Net income (loss) from continuing operations for the year ended December 31, 2025
Sales in 2025 increased by 20.9% compared with 2024. Net sales increased 27.0% in Aluminum Extrusions primarily due to higher sales volume and the pass-through of higher metal costs. Net sales decreased 5.2% in High Performance Films primarily due to lower net sales in Surface Protection and advanced packaging films. For more information on changes in net sales and volume, see the Segment Operations Review section below.
Other income (expense), net was $1.4 million in 2025 compared to $(1.0) million in 2024. The amount in other income (expense), net for 2025 was primarily related to a gain on the sale of corporate-owned land of $1.5 million. The amount in other income (expense), net for 2024 was primarily related to $1.3 million of deferred and discretionary incentive payments made in 2024 subsequent to the sale of Terphane.
Consolidated gross profit (sales minus cost of goods sold and freight) as a percentage of sales (gross profit margin) was 15.1% in 2025 versus 16.1% in 2024.
• The gross profit margin in Aluminum Extrusions remained flat primarily due to higher volume, favorable pricing and lower manufacturing costs associated with material yield, offset by higher labor rates, unfavorable productivity, higher maintenance and supply expense, partially due to the impact of tariffs and severe weather and downed equipment in the first half of 2025, higher expense for externally produced billet associated with the increase in volume and higher die expense associated with timing of purchases and increasing volume. Additionally, inventories accounted for under the last-in first-out (“LIFO”) inventory method resulted in a net benefit of $2.6 million in 2025 compared to a net benefit of $0.1 million in 2024 due to a favorable current cost adjustment associated with higher metal prices ($9.3 million benefit in 2025 and $1.3 million benefit 2024), partially offset by a corresponding increase in the LIFO reserve, which resulted in a charge of $6.7 million in the fourth quarter 2025 versus a charge of $1.2 million in the fourth quarter 2024. The timing of the flow-through under the first-in first-out (“FIFO”) method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $8.7 million in 2025 versus a benefit of $0.1 million in 2024.
• The gross profit margin in High Performance Films slightly decreased primarily due to lower contribution margin (net sales less variable costs) from Surface Protection associated with lower volume, unfavorable mix, partially offset by favorable pricing, variable cost savings and operating efficiencies. Inventories accounted for under the LIFO method
resulted in a charge of $0.2 million in 2025 versus a benefit of $0.2 million in 2024, and the pass-through lag associated with resin costs resulted in a charge of $0.3 million in 2025 versus a charge of $1.0 million in 2024.
For more information on changes in operating costs and expenses, see the Segment Operations Review section below.
As a percentage of sales, selling, general and administrative (“SG&A”) and research and development (“R&D”) expenses were 11.0% in 2025 compared with 12.3% in 2024. While SG&A expense increased 8.3% and R&D remained flat year-over-year, sales increased $124.8 million or 20.9% compared with the prior year period. Higher SG&A spending was primarily due to higher employee-related compensation and higher professional fees associated with business development activities.
During 2025, the Company terminated the Other Post-Retirement Benefits (“OPEB”) program. The OPEB total obligation and unrecognized pre-tax actuarial gain reported in the consolidated balance sheets was $5.0 million and $1.3 million, respectively, which was realized in the income statement during the fourth quarter of 2025. See Note 8 “Retirement Benefits and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15 for more information.
During 2024, a non-cash goodwill impairment of $13.3 million was recognized associated with the Clearfield, Utah operation reporting unit in Aluminum Extrusions. See Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for more information.
The effective tax rate from continuing operations for 2025 was 21.5%, compared to (18.8)% in 2024. The increase in the effective tax rate was primarily due to higher pre-tax income from continuing operations in 2025 than in 2024. The tax rate in 2024 was impacted by the release of valuation allowance on deferred taxes. See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.
Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items in 2025 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment in the Segment Operations Review below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the consolidated statements of income, unless otherwise noted.
($ in millions)
Aluminum Extrusions:
(Gains) losses associated with plant shutdowns, asset impairments and restructurings:
Production equipment asset impairment
(Gains) losses from sale of assets, investment writedowns and other items:
Consulting expenses for ERP/MES project 1
Storm damage to the Newnan, Georgia plant 1
Legal fees associated with the Aluminum Extruders Trade Case and other matters 1
Aluminum extrusion press fire at Newnan, Georgia Plant 1
Aluminum premium charge as a result of unplanned maintenance interruptions 3
Total for Aluminum Extrusions
Corporate:
(Gain) losses from sale of assets, investment writedowns and other items:
Professional fees associated with business development activities 1
Professional fees associated with remediation activities related to internal control over financial reporting 1
Professional fees associated with the transition to the ABL Facility 1
Professional fees associated with the OPEB termination 4
Group annuity contract premium adjustment 2,4
Proceeds on the sale of corporate-owned land 2
OPEB terminationgain 4
Total for Corporate
1. Included in “Selling, general and administrative expenses” in the consolidated statements of income.
2. Included in “Other income (expense), net” in the consolidated statements of income.
3. Included in “Cost of good sold” in the consolidated statements of income.
4. For more information, see Note 8 “Retirement Plans and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15.
Average total debt outstanding and interest rates were as follows:
(In millions, except percentages)
Floating-rate debt with interest charged on a rollover basis plus a credit spread:
Average total outstanding debt balance
Average interest rate
Segment Operations Review
2025 versus 2024
A summary of operating results for 2025 versus 2024 for both of the Company’s reporting segments is shown below.
Aluminum Extrusions
A summary of results for Aluminum Extrusions is provided below:
Year Ended
Favorable/
(In thousands, except percentages)
December 31,
(Unfavorable)
% Change
Sales volume (lbs)
Net sales
Variable costs
Last-in first-out inventory adjustment
Manufacturing fixed costs 1
Selling, general and administrative costs 1
Other 2
EBITDA from ongoing operations
Depreciation & amortization
EBIT from ongoing operations 3
Capital expenditures
1. Excludes related depreciation and amortization
2. Includes segment allocated employee compensation benefit expenses
3. See the reconciliation below of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP.
*Not meaningful (“NM”)
Net sales in 2025 increased 27.0% versus 2024 primarily due to higher sales volume and the pass-through of higher metal costs. Sales volume increased 12.9% versus 2024.
EBITDA from ongoing operations increased $9.6 million in 2025 versus 2024, primarily due to:
• A $27.3 million increase in contribution margin associated with:
◦ Higher volume ($14.6 million), favorable pricing ($5.6 million) and lower manufacturing costs associated with material yield ($0.8 million favorable in 2025 versus $0.5 million favorable in 2024), partially offset by: higher labor rates ($3.1 million); unfavorable productivity ($1.2 million); higher maintenance and supply expense, partially due to the impact of tariffs and severe weather and downed equipment in the first half of 2025 ($2.2 million); higher expense for externally produced billet associated with the increase in volume ($0.9 million); higher die expense associated with timing of purchases and increasing volumes ($1.0 million), and higher utilities ($0.9 million); and
◦ The timing of the flow-through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $8.7 million in 2025 versus a benefit of $0.1 million in 2024.
• Inventories accounted for under the LIFO method resulted in a net benefit of $2.6 million in 2025 compared to a net benefit of $0.1 million in 2024 due to a favorable current cost adjustment associated with higher metal prices ($9.3 million benefit in 2025 and $1.3 million benefit in 2024), partially offset by a corresponding increase in the LIFO reserve, which resulted in a charge of $6.7 million in 2025 versus a charge of $1.2 million in 2024.
• Higher fixed costs primarily associated with wage increases and compensation-related costs ($2.9 million), higher maintenance and utilities expenses ($1.5 million) and added resources to support increasing volume ($1.2 million).
• Higher SG&A expenses primarily due to employee-related compensation ($3.2 million), employee training and onboarding expense ($0.5 million) and routine environmental compliance expense ($0.3 million).
• Higher other expense for employee-related medical costs caused by an increase in the number of high-cost medical claims versus favorable experience in recent years ($1.1 million). The Company is self-insured for medical claims with stop loss coverage for claims of over $0.3 million.
Given recent increased geopolitical tensions in the Middle East, Aluminum Extrusions is monitoring potential implications for the availability of certain aluminum‑related raw materials in 2026 and evaluating whether diversifying its sourcing may be warranted. Aluminum Extrusions maintains robust supply agreements that support the continuity of aluminum and other key cost components. See discussion of quantitative and qualitative disclosures about market risk in Item 7A in this Form 10-K for additional information on aluminum price trends.
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for Bonnell Aluminum are projected to be $20 million in 2026, including $7 million for productivity projects and $13 million for capital expenditures required to support continuity of operations. Depreciation expense is projected to be $14 million in 2026. Amortization expense is projected to be $2 million in 2026. The Company anticipates capital spending to increase from the levels of the past two years and return to a pattern more closely aligned with depreciation and amortization, consistent with long-term historical patterns. This approach supports ongoing maintenance and efficiency initiatives while maintaining disciplined capital allocation.
High Performance Films
A summary of results for High Performance Films is provided below:
Year Ended
Favorable/
(In thousands, except percentages)
December 31,
(Unfavorable)
% Change
Sales volume (lbs)
Net sales
Variable costs
LIFO inventory adjustment
Manufacturing fixed costs 1
Selling, general and administrative costs 1
Other 2
EBITDA from ongoing operations
Depreciation & amortization
EBIT from ongoing operations 3
Capital expenditures
1. Excludes related depreciation and amortization
2. Includes segment allocated employee compensation benefit expenses
3. See the reconciliation below of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP.
*Not meaningful (“NM”)
Net sales in 2025 decreased 5.2% versus 2024 due to a decrease of 4% in s ales volume in 2025 for surface protection films versus 2024. Advanced packaging films volume decreased 1%.
EBITDA from ongoing operations in 2025 decreased $3.3 million versus 2024 primarily due to:
• Lower contribution margin of $1.8 million resulting from:
◦ A $1.0 million decrease from Surface Protection associated with lower volume, unfavorable mix and favorable pricing ($4.5 million), partially offset by variable cost savings and operating efficiencies ($3.1 million) and the pass-through lag associated with resin costs (a charge of $0.2 million in 2025 versus a charge of $0.7 in 2024); and
◦ A $0.8 million decrease from advanced packaging films associated with lower volume, unfavorable shift in sales mix and unfavorable pricing ($1.0 million) and unfavorable operating efficiencies ($0.5 million), partially offset by variable cost savings ($0.5 million) and the pass-through lag associated with resin costs (a charge of $0.1 million in 2025 versus a charge of $0.3 million in 2024).
• Inventories accounted for under the LIFO method that resulted in a charge of $0.2 million in 2025 versus a benefit of $0.2 million in 2024.
• Higher fixed costs primarily associated with wage increases and compensation-related costs ($0.9 million).
• Lower SG&A of $0.2 million primarily due to lower administrative costs.
• A foreign currency transaction loss of $0.3 million in 2025 versus a gain of $0.3 million in 2024.
See discussion of quantitative and qualitative disclosures about market risk in Item 7A in this Form 10-K for additional information on resin price trends.
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for High Performance Films are projected to be $3 million in 2026, including $1 million for productivity projects and $2 million for capital expenditures required to support continuity of current operations. Depreciation expense is projected to be $4 million in 2026. There is no amortization expense for High Performance Films.
Corporate Expenses and Interest
Corporate expenses, net in 2025 increased by $0.9 million compared to 2024, primarily due to higher professional fees associated with business development activities ($5.9 million) and higher stock based compensation ($0.5 million), partially offset by lower employee-related incentive compensation ($2.1 million), a gain on the sale of corporate owned land ($1.5 million), lower internal and external audit fees ($0.9 million), lower professional fees associated with remediation activities related to internal control over financial reporting ($0.3 million) and lower professional fees associated with the transition to the ABL Facility (as defined below) ($0.2 million). The Company does not expect significant expenses from business development activities in 2026.
Interest expense was $4.0 million in 2025 in comparison to $4.7 million in 2024, primarily due to lower weighted average total debt outstanding and lower interest rates, partially offset by the write-off of deferred financing fees related to the May 2025 amendment to the ABL Facility of $0.8 million.
Reconciliation of Net Sales and EBITDA from Ongoing Operations by Segment
A reconciliation of segment financial information to consolidated results for the Company for the years ended December 31, 2025, 2024 and 2023 is shown below:
Year Ended
December 31,
(In thousands)
Net Sales
Aluminum Extrusions
High Performance Films
Total net sales
Add back freight
Sales as shown in the condensed consolidated statements of income
EBITDA from Ongoing Operations
Aluminum Extrusions:
Ongoing operations:
EBITDA
Depreciation & amortization
EBIT
Plant shutdowns, asset impairments, restructurings and other
Goodwill impairment
High Performance Films:
Ongoing operations:
EBITDA
Depreciation & amortization
EBIT
Plant shutdowns, asset impairments, restructurings and other
Goodwill impairment
Total
Interest income
Interest expense
Gain on investment in kaleo, Inc.
Stock option-based compensation costs
OPEB terminationgain
Pension settlement loss
Corporate expenses, net
Income (loss) from continuing operations before income taxes
Income tax expense (benefit)
Net income (loss) from continuing operations
Income (loss) from discontinued operations, net of tax
Net income (loss)
Liquidity and Capital Resources
The Company continues to focus on working capital management. Measures such as days sales outstanding (“DSO”), days inventory outstanding (“DIO”) and days payables outstanding (“DPO”) are used to evaluate changes in working capital. Changes in operating assets and liabilities from December 31, 2024 to December 31, 2025 are summarized below. Cash flows for discontinued operations have not been separately disclosed in the consolidated statements of cash flows.
• Accounts and other receivables increased $17.0 million or 26.2%.
◦ Accounts and other receivables in Aluminum Extrusions increased $17.3 million primarily due to higher sales volume and the pass-through of higher metal costs. DSO (computed using trailing 12 months net sales and a rolling 12-
month average of accounts and other receivables balances) was approximately 44.8 days in 2025 and 44.7 days in 2024.
◦ Accounts and other receivables in High Performance Films decreased $0.1 million primarily due to lower sales volume in surface protection films. DSO was approximately 25.4 days in 2025 and 24.9 days in 2024.
• Inventories increased $13.6 million or 26.4%.
◦ Inventories in Aluminum Extrusions increased $12.7 million primarily due to the timing of raw material purchases and higher metal costs. DIO (computed using trailing 12 months costs of goods sold calculated on a FIFO basis and a rolling 12-month average of inventory balances calculated on the FIFO basis) was approximately 48.8 days in 2025 and 47.4 days in 2024.
◦ Inventories in High Performance Films increased $0.9 million due to higher raw materials and finished goods. The DIO was approximately 54.6 days in 2025 and 50.3 days in 2024.
• Net property, plant and equipment decreased by $4.1 million or 3.0% primarily due to depreciation expense ($20.0 million) and production equipment impairment ($0.8 million), partially offset by capital expenditures ($17.1 million).
• Identifiable intangible assets, net decreased by $1.8 million or 24.0% primarily due to amortization expense.
• Deferred income tax assets, net decreased $6.2 million or 18.9% primarily due to a decrease in tax credit carryforwards and a decrease in deferred tax assets related to divestitures and employee benefits. The decrease in these deferred tax assets was partially offset by a decrease in deferred tax liabilities related to property, plant and equipment. See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.
• Accounts payable increased by $11.1 million or 17.1%.
◦ Accounts payable in Aluminum Extrusions increased $12.0 million, primarily due to the timing of payments and higher metal costs. DPO (computed using trailing 12 months costs of goods sold calculated on a FIFO basis and a rolling 12-month average of accounts payable balances) was approximately 46.6 days in 2025 and 44.5 days in 2024.
◦ Accounts payable in High Performance Films decreased $1.2 million, primarily due to the timing of payments. The DPO was approximately 40.6 days in 2025 and 41.3 days in 2024.
Net cash provided by operating activities was $33.0 million in 2025 compared to net cash provided by operating activities of $25.5 million in 2024. The change in operating activities is primarily due to an increase in EBITDA from ongoing operations of the Company’s continuing business segments, partially offset by higher working capital.
Net cash used in investing activities was $5.5 million in 2025 compared to net cash provided by investing activities of $40.5 million in 2024. The change in investing activities is primarily due to lower net cash proceeds received for the sale of Terphane ($44.8 million) and higher capital expenditures ($2.9 million), partially offset by higher proceeds from the sale of assets ($1.9 million).
Net cash used in financing activities was $28.2 million in 2025 compared to net cash used in financing activities of $65.0 million in 2024. The change in financing activities is primarily due to lower debt principal payments, net of borrowings ($37.5 million) under the ABL Facility, partially offset by higher debt financing fees ($0.7 million).
At December 31, 2025, Tredegar had cash and cash equivalents of $6.7 million, including funds held in locations outside the U.S. of $1.9 million.
Debt and Credit Agreements
ABL Facility
In May 2025, the Company entered into Amendment No. 5 (“Amendment No. 5”) to the Second Amended and Restated Credit Agreement (the "ABL Facility"), which provides the Company with a $125 million senior secured asset-based revolving credit facility. The ABL Facility is secured by substantially all assets of the Company and its domestic subsidiaries, including equity in certain material first-tier foreign subsidiaries. Availability for borrowings under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including a portion of trade accounts receivable, inventory, cash and cash equivalents, and owned machinery and equipment. Amendment No. 5 extended the maturity date of the ABL Facility to May 6, 2030. As of December 31, 2025, funds available to borrow under the ABL Facility was $87.5 million, or 70.0% of the aggregate commitment of $125 million. During 2025, the Company's letters of credit have been reduced from approximately $12 million to $3 million, which directly increases the Company's borrowing availability.
The financial covenant is a minimum fixed charge coverage ratio (as defined in the ABL Facility) of 1.00:1.00 that will be triggered in the event that availability is less than the greater of (x) 10% of the Line Cap (as defined in the ABL Facility) and
(y) $10 million and will continue until availability is equal to or greater than the greater of (x) 10% of the Line Cap and (y) $10 million for 30 consecutive days, as long as no events of default are continuing.
The computation of Credit EBITDA and fixed charge coverage ratio, as defined in the ABL Facility, is presented below.
Computations of Credit EBITDA (as defined in the ABL Facility) as of and for the
Twelve Months Ended December 31, 2025 *
Computations of Credit EBITDA for the twelve months ended December 31, 2025 (in thousands):
Net income (loss)
Plus:
After-tax losses related to discontinued operations
Total income tax expense for continuing operations
Interest expense
Depreciation and amortization expense for continuing operations
All non-cash losses and expenses, plus cash losses and expenses not to exceed $10,000, for continuing operations that are classified as unusual, extraordinary or which are related to plant shutdowns, asset impairments and/or restructurings (cash-related of $8,913)
Charges related to stock option grants and awards accounted for under the fair value-based method
Losses related to the application of the equity method of accounting
Losses related to adjustments in the estimated fair value of assets accounted for under the fair value method of accounting
Fees, costs and expenses incurred in connection with the amendment process (Amendment No. 3 “ABL Transition”)
Fees, costs and expenses incurred in connection with the amendment process (Amendment No. 5)
Minus:
After-tax income related to discontinued operations
Total income tax benefits for continuing operations
Interest income
All non-cash gains and income, plus cash gains and income in excess of $10,000, for continuing operations that are classified as unusual, extraordinary or which are related to plant shutdowns, asset impairments and/or restructurings
Income related to changes in estimates for stock option grants and awards accounted for under the fair value-based method
Income related to the application of the equity method of accounting
Income related to adjustments in the estimated fair value of assets accounted for under the fair value method of accounting
Plus or minus, as applicable, pro forma EBITDA adjustments associated with acquisitions and asset dispositions
Credit EBITDA
Fixed charge coverage ratio**:
Credit EBITDA
Unfinanced capital expenditures
Fixed charges
Fixed charge coverage ratio
* Credit EBITDA is not intended to represent net income (loss) or cash flow from operations as defined by GAAP and should not be considered as an alternative to either net income (loss) or to cash flow.
** Fixed Charge Coverage Ratio is computed as the ratio of (a) Credit EBITDA minus Unfinanced Capital Expenditures to (b) Fixed Charges.
High Performance Films Guangzhou Loan
In October 2025, High Performance Films' business location in Guangzhou, China, Guangzhou Tredegar Film Products Co., Ltd. (“Guangzhou Tredegar”), entered into a 3.5 million Chinese Yuan, which is equivalent to $0.5 million as of December 31, 2025, unsecured revolving loan with the Industrial and Commercial Bank of China. The loan matures on October 20, 2026. The interest rate is the one-year loan prime rate published by the National Interbank Funding Center for the working day immediately preceding the drawdown date, minus 0.55%. As of December 31, 2025, the National Interbank Funding Center rate was 3.00%. The financial covenants require that the total amount of Guangzhou Tredegar’s current liabilities cannot exceed 50% of the total amount of current assets and the short-term financing amount cannot exceed 50% of Guangzhou Tredegar’s total sales.
In June 2024, Guangzhou Tredegar entered into a 9.5 million Chinese Yuan revolving loan with the Industrial and Commercial Bank of China. This loan matured on July 3, 2025. The interest rate was the one year loan prime rate published by the National Interbank Funding Center for the working day immediately preceding the drawdown date, minus 0.45%. As of December 31, 2025, there was no outstanding loan balance. The revolving loan was secured by a mortgage contract listing the Guangzhou Tredegar factory building as collateral. The mortgage was cancelled during the fourth quarter of 2025.
Each Guangzhou Tredegar loan, as applicable, was presented as current debt on the consolidated balance sheet for the years ended December 31, 2025 and 2024.
For more information on the ABL Facility and the High Performance Films Guangzhou Loan, see Note 7 “Debt and Credit Agreements” to the consolidated Financial Statements in Item 15.
As of December 31, 2025, the Company was in compliance with all debt covenants.
The Company believes that existing borrowing availability, current cash balances and cash flow from operations will be sufficient to satisfy short term material cash requirements related to working capital, capital expenditure, and debt repayments for at least the next 12 months. In the longer term, liquidity will depend on many factors, including the results of operations, the timing and extent of capital expenditures, changes in operating plans, or other events that would cause the Company to seek additional financing in future periods.
Material Cash Requirements for Known Contractual and Other Obligations
The Company’s material cash requirements from known contractual and other obligations as of December 31, 2025 were as follows:
Debt and interest payments
As of December 31, 2025, the Company had outstanding debt under the ABL Facility of $34.6 million with contractual payments due in May 2030. Estimated future interest payments associated with the ABL Facility total $8.4 million, with $1.9 million payable within the next 12 months.
As of December 31, 2025, High Performance Films had outstanding debt of $0.5 million under the High Performance Films Guangzhou Loan. Estimated future interest payments associated with the High Performance Films Guangzhou Loan payable within the next 12 months are immaterial.
Capital expenditure commitments
See “ Projected Capital Expenditures and Depreciation & Amortization ” within “ Segment Operations Overview ” above in this Item 7 for discussion of the Company’s planned investment in capital expenditures in 2025, of which $15.8 million are contractual commitments that existed as of December 31, 2025.
Operating Leases
The Company enters into various operating leases primarily for real estate, office equipment and vehicles. See Note 4 “Leases” to the Consolidated Financial Statements in Item 15 for additional information.
Uncertain Tax Positions
As of December 31, 2025, there were no unrecognized tax benefits on uncertain tax positions. See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.
Off-Balance Sheet Arrangements
The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
From time to time, the Company enters into transactions with third parties in connection with the sale of assets or businesses in which it agrees to indemnify the buyers or third parties involved in the transaction, or the sellers or third parties
involved in the transaction agree to indemnify Tredegar, for certain liabilities or risks related to the assets or business. Also, in the ordinary course of business, the Company may enter into agreements with third parties for the sale of goods or services that may contain indemnification provisions. In the event that an indemnification claim is asserted, liability for indemnification would be subject to an assessment of the underlying facts and circumstances under the terms of the applicable agreement. Further, any indemnification payments may be limited or barred by a monetary cap, a time limitation, or a deductible or basket. For these reasons, the Company is unable to estimate the maximum potential amount of the potential future liability under the indemnity provisions of these agreements. Tredegar does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable and the amount is reasonably estimable. The Company discloses contingent liabilities if the probability of loss is reasonably possible and material.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Certain accounting policies, as described below, are considered "critical accounting policies" because they are particularly dependent on estimates made by management about matters that are inherently uncertain and could have a material impact on the Company’s consolidated financial statements. Estimates and judgments are based on historical experience, forecasted events and various other assumptions that management believes are reasonable under the circumstances. Actual results could differ significantly from those estimates under different assumptions and conditions. A summary of all of our significant accounting policies is included in Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15.
Impairment of Goodwill
The Company assesses goodwill for impairment when events or circumstances indicate that the carrying value may not be recoverable, or, at a minimum, on an annual basis (December 1st of each year). When assessing goodwill for impairment, accounting guidance allows the Company to first perform a qualitative assessment (“Step 0 analysis”), which evaluates certain qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, as well as company and reporting unit factors. If the Company's Step 0 analysis indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company would perform a quantitative impairment test (“Step 1 analysis”).
As of December 31, 2025, the Company’s reporting unit with goodwill was Surface Protection in High Performance Films. The Company’s Step 0 analysis as of December 1, 2025 of this reporting unit concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount. Therefore, the Step 1 quantitative goodwill impairment test for this reporting unit was not necessary as of December 1, 2025.
As of December 31, 2025 and 2024, Surface Protection had goodwill of $22.4 million.
During 2024, customers of the Aluminum Extrusions’ Clearfield, Utah operation ("Clearfield") acquired as “Futura” in February 2017 continued to seek supply from other sources to meet their demand, including imports. However, in 2024, Clearfield continued to experience a resurgence in customer volumes that had declined due to the pandemic, albeit not at the speed and profit level that was previously projected. The recovery has been slower than previously anticipated, and is not trending back to previous Company expectations to replicate the EBITDA and net cash flow generation that existed prior to the pandemic-related disruptions and influx of imports.
As a consequence, the Company performed a goodwill impairment analysis during the fourth quarter of 2024 using Clearfield projections that assume the continuation of lower margin business. Since the estimated fair value of Clearfield fell below its carrying value by more than the amount of goodwill, the Company recognized a non-cash write-off of goodwill of $13.3 million ($10.4 million after deferred income tax benefits) associated with Clearfield.
The Company estimated the fair value of Clearfield by: (i) computing an estimated enterprise value (“EV”) utilizing the discounted cash flow method (the “DCF Method”), and (ii) adding cash and cash equivalents. Key financial assumptions utilized to determine the fair value of the reporting unit include sales volume and sales price growth projections.
See Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for additional information on the analysis of goodwill impairment.
Income Taxes
A valuation allowance is recorded in the period when the Company determines that it is more likely than not that all or a portion of deferred income tax assets may not be realized. The establishment and removal of a valuation allowance requires the Company to consider all positive and negative evidence and make a judgmental decision regarding the amount of valuation allowance required as of a reporting date.
Tredegar may be required to change its provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change, or when new information indicates the need for adjustment in valuation allowances. Additionally, future events, such as changes in tax laws, tax regulations, or interpretations of such laws or regulations, could have an impact on the provision for income tax and the effective tax rate. Any such changes could significantly affect the amounts reported in the financial statements in the year these changes occur.
See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information on income taxes.
