INNOSPEC INC. 10-K

Item 8 Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Innospec Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Innospec Inc. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 47 Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 48 Plant Closure Provisions - Asset Retirement Obligations As described in Notes 2 and 13 to the consolidated financial statements, at December 31, 2025, the Company recognized plant closure provisions of $65.1 million, the majority of which related to asset retirement obligations. The Company recognizes asset retirement obligations when there is an obligation based on a legal requirement, including those arising from a Company promise, and the costs can be reasonably estimated. The Company must comply with environmental legislation in the countries in which it operates or has operated in and annually reassesses the program of work required. This includes making significant judgments and estimating the credit-adjusted risk free rate and the timing and cost of performing the remediation work. Management receives input from specialists to develop these estimates and assumptions utilizing the latest information available together with experience of recent costs. The principal considerations for our determination that performing procedures relating to the plant closure provisions - asset retirement obligations is a critical audit matter are: (i) the significant judgment made by management, including the use of management's specialists, when developing the estimates; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions relating to the timing and cost of performing the remediation work; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the recognition and measurement of the asset retirement obligations. These procedures also included, among others (i) testing management’s process for developing the estimates of the asset retirement obligations; (ii) evaluating the appropriateness of the discounted cash flows model used by management; (iii) testing completeness and accuracy of the underlying data used in the calculation of the asset retirement obligations; (iv) evaluating the scope, competency, and objectivity of management’s specialists based on the work they were engaged to perform; (v) evaluating the reasonableness of significant assumptions related to the timing and cost of performing the remediation work. Evaluating management’s assumptions related to the timing and cost of performing the remediation work involved evaluating whether the assumptions used by management were reasonable considering management’s historical forecasting accuracy of past remediation work, relevant industry forecasts and macroeconomic conditions, and consistency with external market and industry data. Professionals with specialized skill and knowledge were used to assist in evaluating management’s method and the reasonableness of the significant assumptions in respect of the timing and cost of performing the remediation work. /s/ PricewaterhouseCoopers LLP Manchester, United Kingdom February 18, 2026 We have served as the Company’s auditor since 2019. 49 CONSOLIDATED STATEMENTS OF INCOME ( in millions, except share and per share data ) Years ended December 31, 2025 2024 2023 Net sales $ 1,778.0 $ 1,845.4 $ 1,948.8 Cost of goods sold ( 1,285.6 ) ( 1,302.5 ) ( 1,357.7 ) Gross profit 492.4 542.9 591.1 Operating expenses: Selling, general and administrative ( 285.1 ) ( 305.3 ) ( 380.5 ) Research and development ( 51.0 ) ( 56.5 ) ( 49.0 ) Adjustment to fair value of contingent consideration 15.9 ( 3.4 ) — Restructuring charge ( 0.9 ) — — Impairment of property, plant and equipment ( 22.9 ) — — Impairment of intangible assets ( 19.1 ) — — Profit on disposal of property, plant and equipment 0.2 0.2 — Total operating expenses ( 362.9 ) ( 365.0 ) ( 429.5 ) Operating income 129.5 177.9 161.6 Other income/(expense), net ( 0.6 ) 9.6 10.5 Pension scheme settlement charge — ( 155.6 ) — Interest income/(expense), net 9.2 9.3 2.3 Income before income tax expense 138.1 41.2 174.4 Income tax expense ( 21.5 ) ( 5.6 ) ( 35.3 ) Net income $ 116.6 $ 35.6 $ 139.1 Earnings per share: Basic $ 4.69 $ 1.43 $ 5.60 Diluted $ 4.67 $ 1.42 $ 5.56 Weighted average shares outstanding (in thousands): Basic 24,880 24,932 24,851 Diluted 24,993 25,119 25,022 The accompanying notes are an integral part of these statements. 50 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( in millions ) Total comprehensive income for the years ended December 31 2025 2024 2023 Net income $ 116.6 $ 35.6 $ 139.1 Changes in cumulative translation adjustment 53.4 ( 33.7 ) 18.3 Amortization of prior service cost — 8.4 0.5 Amortization of actuarial net losses/(gains) — ( 0.2 ) ( 2.1 ) Actuarial net gains/(losses) arising during the year 0.9 ( 28.3 ) ( 23.4 ) Pension scheme settlement — 138.1 — Other comprehensive income, before tax 170.9 119.9 132.4 Tax related to cumulative translation adjustment 2.0 13.6 ( 2.4 ) Tax related to other movements — ( 40.8 ) 6.2 Total comprehensive income $ 172.9 $ 92.7 $ 136.2 The accompanying notes are an integral part of these statements. 51 CONSOLIDATED BALANCE SHEETS ( in millions, except share and per share data ) At December 31 2025 2024 Assets Current assets: Cash and cash equivalents $ 292.5 $ 289.2 Trade and other accounts receivable (less allowances of $ 11.8 million and $ 11.9 million, respectively) 342.3 341.7 Inventories (less allowances of $ 40.4 million and $ 34.6 million, respectively): Finished goods 226.3 197.9 Raw materials 103.0 103.1 Total inventories 329.3 301.0 Prepaid expenses 20.1 21.0 Prepaid income taxes 13.1 3.1 Other current assets 7.3 0.6 Total current assets 1,004.6 956.6 Net property, plant and equipment 286.1 269.7 Operating leases right-of-use assets 52.7 44.8 Goodwill 399.0 382.5 Other intangible assets 67.7 65.4 Deferred tax assets 13.6 9.4 Pension asset — 2.4 Other non-current assets 8.7 3.9 Total assets $ 1,832.4 $ 1,734.7 Liabilities and Equity Current liabilities: Accounts payable $ 174.7 $ 163.8 Accrued liabilities 152.3 169.1 Current portion of operating lease liabilities 15.9 13.9 Current portion of plant closure provisions 4.9 5.0 Current portion of acquisition-related contingent consideration 7.0 — Current portion of accrued income taxes 5.3 19.6 Total current liabilities 360.1 371.4 Operating lease liabilities, net of current portion 36.8 31.0 Plant closure provisions, net of current portion 60.2 55.3 Deferred tax liabilities 19.1 23.5 Pension liabilities and post-employment benefits 13.2 13.1 Acquisition-related contingent consideration 1.3 20.1 Other non-current liabilities 8.8 4.2 Total liabilities 499.5 518.6 Equity: Common stock, $ 0.01 par value, authorized 40,000,000 shares, issued 29,554,500 shares 0.3 0.3 Additional paid-in capital 376.5 369.9 Treasury stock ( 4,776,918 and 4,594,943 shares at cost, respectively) ( 115.2 ) ( 93.0 ) Retained earnings 1,099.2 1,025.0 Accumulated other comprehensive loss ( 34.7 ) ( 91.0 ) Total Innospec stockholders’ equity 1,326.1 1,211.2 Non-controlling interest 6.8 4.9 Total equity 1,332.9 1,216.1 Total liabilities and equity $ 1,832.4 $ 1,734.7 The accompanying notes are an integral part of these statements. 52 CONSOLIDATED STATEMENTS OF CASH FLOWS ( in millions ) Years ended December 31, 2025 2024 2023 Cash Flows from Operating Activities Net income $ 116.6 $ 35.6 $ 139.1 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 43.6 43.5 39.3 Adjustment to fair value of contingent consideration ( 15.9 ) 3.4 — Impairment of property, plant and equipment 22.9 — — Impairment of intangible assets 19.1 — — Deferred taxes ( 10.2 ) ( 39.3 ) 3.6 Profit on disposal of property, plant and equipment ( 0.2 ) ( 0.2 ) — Non-cash movements of defined benefit pension plans 2.7 151.9 ( 3.3 ) Stock option compensation 8.1 8.5 8.0 Changes in assets and liabilities, net of effects of acquired and divested companies: Trade and other accounts receivable 21.6 4.3 ( 12.6 ) Inventories ( 6.6 ) ( 11.8 ) 83.0 Prepaid expenses 1.8 ( 2.8 ) ( 4.2 ) Accounts payable and accrued liabilities ( 32.8 ) ( 4.5 ) ( 26.9 ) Plant closure provisions ( 1.9 ) 0.9 4.0 Accrued income taxes ( 21.8 ) 6.3 ( 25.9 ) Unrecognized tax benefits — ( 14.8 ) 1.4 Other assets and liabilities ( 8.7 ) 3.5 1.8 Net cash provided by operating activities 138.3 184.5 207.3 Cash Flows from Investing Activities Capital expenditures ( 50.3 ) ( 41.4 ) ( 62.1 ) Proceeds on disposal of property, plant and equipment 1.1 0.5 0.1 Business combinations, net of cash acquired ( 0.7 ) ( 0.2 ) ( 34.7 ) Internally developed software ( 25.2 ) ( 20.9 ) ( 15.1 ) Net cash used in investing activities ( 75.1 ) ( 62.0 ) ( 111.8 ) Cash Flows from Financing Activities Non-controlling interest 1.9 2.4 — Repayment of term loan — — ( 2.3 ) Refinancing costs — ( 0.3 ) ( 1.4 ) Dividend paid ( 42.4 ) ( 38.8 ) ( 35.1 ) Issue of treasury stock 0.5 2.1 0.9 Repurchase of common stock ( 23.9 ) ( 0.7 ) ( 1.1 ) Net cash used in financing activities ( 63.9 ) ( 35.3 ) ( 39.0 ) Effect of foreign currency exchange rate changes on cash 4.0 ( 1.7 ) 0.1 Net change in cash and cash equivalents 3.3 85.5 56.6 Cash and cash equivalents at beginning of year 289.2 203.7 147.1 Cash and cash equivalents at end of year $ 292.5 $ 289.2 $ 203.7 The accompanying notes are an integral part of these statements. 53 CONSOLIDATED STATEMENTS OF EQUITY ( in millions ) Common Stock Additional Paid-In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Non- controlling Interest Total Equity Balance at December 31 2022 $ 0.3 $ 354.1 $ ( 95.4 ) $ 924.2 $ ( 145.2 ) $ 2.4 $ 1,040.4 Net income 139.1 139.1 Dividend paid ($ 1.41 per share) ( 35.1 ) ( 35.1 ) Changes in cumulative translation adjustment, net of tax 15.9 15.9 Share of net income 0.1 0.1 Treasury stock re-issued ( 1.1 ) 2.2 1.1 Treasury stock repurchased ( 1.1 ) ( 1.1 ) Stock option compensation 8.0 8.0 Amortization of prior service cost, net of tax 0.4 0.4 Amortization of actuarial net gains, net of tax ( 1.7 ) ( 1.7 ) Actuarial net losses arising during the year, net of tax ( 17.5 ) ( 17.5 ) Balance at December 31 2023 $ 0.3 $ 361.0 $ ( 94.3 ) $ 1,028.2 $ ( 148.1 ) $ 2.5 $ 1,149.6 Net income 35.6 35.6 Dividend paid ($ 1.55 per share) ( 38.8 ) ( 38.8 ) Changes in cumulative translation adjustment, net of tax ( 20.1 ) ( 20.1 ) Share of net income 2.4 2.4 Treasury stock re-issued 0.4 2.0 2.4 Treasury stock repurchased ( 0.7 ) ( 0.7 ) Stock option compensation 8.5 8.5 Amortization of prior service cost, net of tax 6.3 6.3 Amortization of actuarial net gains, net of tax ( 0.2 ) ( 0.2 ) Actuarial net losses arising during the year, net of tax ( 21.3 ) ( 21.3 ) Pension scheme settlement 92.4 92.4 Balance at December 31 2024 $ 0.3 $ 369.9 $ ( 93.0 ) $ 1,025.0 $ ( 91.0 ) $ 4.9 $ 1,216.1 Net income 116.6 116.6 Dividend paid ($ 1.71 per share) ( 42.4 ) ( 42.4 ) Changes in cumulative translation adjustment, net of tax 55.4 55.4 Share of net income 1.9 1.9 Treasury stock re-issued ( 1.5 ) 1.7 0.2 Treasury stock repurchased ( 23.9 ) ( 23.9 ) Stock option compensation 8.1 8.1 Actuarial net losses arising during the year, net of tax 0.9 0.9 Balance at December 31 2025 $ 0.3 $ 376.5 $ ( 115.2 ) $ 1,099.2 $ ( 34.7 ) $ 6.8 $ 1,332.9 The accompanying notes are an integral part of these statements. 54 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature of Operations Innospec develops, manufactures, blends, markets and supplies a wide range of specialty chemicals to markets in the Americas, Europe, the Middle East, Africa and Asia-Pacific. Our Performance Chemicals business creates innovative technology-based solutions for our customers in the personal care, home care, agrochemical, construction, mining and other industrial markets. Our Fuel Specialties business specializes in manufacturing and supplying fuel additives that improve fuel efficiency, boost engine performance and reduce harmful emissions. Our Oilfield Services business supplies chemicals for drilling, completion, production and DRA which make exploration and production more effective, cost-efficient and environmentally friendly. Note 2. Accounting Policies Basis of preparation: The consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America on a going concern basis and include all subsidiaries of the Company where the Company has a controlling financial interest. All intercompany accounts and balances have been eliminated upon consolidation. In accordance with GAAP in the United States of America, the results of operations of an acquired or disposed business are included or excluded from the consolidated financial statements from the date of acquisition or disposal. During the year, the Company has reclassified prior period amounts to conform to the 2025 presentation relating to research and development expenditure. The reclassification had no impact on previously reported total net revenue, operating income or net income. For the year ended December 31, 2025, this has resulted in $ 6.9 million (2024 $ 8.7 million - 2023 $ 7.3 million) of costs that were previously disclosed within selling, general and administrative expenses, being moved to research and development expenses. Use of estimates: The preparation of the consolidated financial statements, in accordance with GAAP in the United States of America, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Revenue recognition: Our revenues are primarily derived from the manufacture and sale of specialty chemicals. We recognize revenue when control of the product is transferred to our customer and for an amount that reflects the consideration we expect to collect from the customer. Control is generally transferred to the customer when title transfers (which may include physical possession by the customer), we have a right to payment from the customer, the customer has accepted the product, and the customer has assumed the risks and rewards of ownership. We have supplier managed inventory arrangements with some of our customers to facilitate on-demand product availability. In some cases, the inventory resides at a customer site, although title has not transferred, we are not entitled to payment, and we have not invoiced for the product. We have evaluated the contract terms under these arrangements and have determined that control transfers when the customer uses the product, at which time revenue is recognized. Our contracts generally include one performance obligation, which is providing specialty chemicals. The performance obligation is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts. While some of our customers have payment terms beyond 30 days, we do not provide extended payment terms of a year or more, nor do our contracts include a financing component. Some of our contracts include variable consideration in the form of rebates. We record rebates at the point of sale as a reduction in sales 55 when we can reasonably estimate the amount of the rebate. The estimates are based on our best judgment at the time of sale, which includes anticipated as well as historical performance. Taxes assessed by a governmental authority which are concurrent with sales to our customers, including sales, use, value-added, and revenue-related excise taxes, are collected by us from the customer and are not included in net sales, but are reflected in accrued liabilities until remitted to the appropriate governmental authority. When we are responsible for shipping and handling costs after title has transferred, we account for those as fulfillment costs and include them in cost of goods sold. Components of net sales: All amounts billed to customers relating to shipping and handling are classified as net sales. Shipping and handling costs incurred by the Company are classified as cost of goods sold. Components of cost of goods sold: Cost of goods sold is comprised of raw material costs including inbound freight, duty and non-recoverable taxes, inbound handling costs associated with the receipt of raw materials, packaging materials, manufacturing costs including labor costs, maintenance and utility costs, plant and engineering overheads, amortization expense for certain other intangible assets, warehousing and outbound shipping costs and handling costs. Inventory losses and provisions and the costs of customer claims are also recognized in the cost of goods line item. Components of selling, general and administrative expenses: Selling expenses comprise the costs of the direct sales force, and the sales management and customer service departments required to support them. It also comprises commission charges, the costs of sales conferences and trade shows, the cost of advertising and promotions, amortization expense for certain other intangible assets, and the cost of bad and doubtful debts. General and administrative expenses comprise the cost of functions including accounting, human resources, information technology and the cost of group functions including corporate management, finance, tax, treasury, investor relations and legal departments. Provision of management’s best estimate of legal and settlement costs for litigation in which the Company is involved is accounted for in the administrative expense line item. Research and development expenses: Research, development and testing costs are expensed to the income statement as incurred. Earnings per share: Basic earnings per share is based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the effect of options that are dilutive and outstanding during the period. Foreign currencies: The Company’s policy is that foreign exchange differences arising on the translation of the balance sheets of entities that have functional currencies other than the U.S. dollar are taken to a separate equity reserve, the cumulative translation adjustment. In entities where the U.S. dollar is the functional currency no gains or losses on translation occur, and gains or losses on monetary assets relating to currencies other than the U.S. dollar are taken to the income statement in other income/(expense), net. Gains and losses on intercompany foreign currency loans which are long-term in nature, which the Company does not intend to settle in the foreseeable future, are also recorded in accumulated other comprehensive loss. Other foreign exchange gains or losses are also included in other income, net in the income statement. 56 Share-based compensation plans: The Company accounts for employee stock options and stock equivalent units under the fair value method. Stock options are fair valued at the grant date and the fair value is recognized straight-line over the vesting period of the option. Stock equivalent units are fair valued at each balance sheet date and the fair value is spread over the remaining vesting period of the unit. The Company operates an employee stock purchase plan, or ESPP, which enables employees to purchase Innospec's stock at a discount. Business combinations: The acquisition method of accounting requires that we recognize the assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of consideration transferred over the acquisition date net fair values of the assets acquired and the liabilities assumed. The determination of the fair values of certain assets and liabilities are usually based on significant estimates provided by management, such as forecast revenue or profit. In determining the fair value of intangible assets, an income approach is generally used and may incorporate the use of a discounted cash flow method. In applying the discounted cash flow method, the estimated future cash flows and residual values for each intangible asset are discounted to a present value using a discount rate appropriate to the business being acquired. These cash flow projections are based on management’s estimates of economic and market conditions including revenue growth rates, operating margins, capital expenditures and working capital requirements. Cash equivalents: Investment securities with maturities of three months or less when purchased are considered to be cash equivalents. Trade and other accounts receivable: The Company records trade and other accounts receivable at net realizable value and maintains allowances for customers not making required payments. The Company determines the adequacy of allowances by periodically evaluating each customer receivable considering our customer’s financial condition, credit history and current economic conditions. The Company is exposed to credit losses primarily through sales of products. The Company’s expected loss allowance methodology for trade and other accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers’ receivables. Due to the short-term nature of such receivables, the estimate of accounts receivable amounts that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, a further allowance is included to account for the Company’s historical track record of credit losses, for balances which are not aged sufficiently to be considered under the aging based approach. Inventories: Inventories are stated at the lower of cost (FIFO method) or market value. Cost includes materials, labor and an appropriate proportion of plant overheads. The Company accrues volume discounts where it is probable that the required volume will be attained and the amount can be reasonably estimated. The volume discounts are recorded as a reduction in the cost of materials based on projected purchases over the period of the agreement. Inventories are adjusted for estimated obsolescence and written down to market value based on estimates of future demand and market conditions. Acquisition-related contingent consideration: Contingent consideration payable in cash is discounted to its fair value at each balance sheet date using the Company’s credit-adjusted risk-free rate. Where contingent consideration is dependent upon pre-determined financial targets, an estimate of the fair value of the likely consideration payable is made at each balance sheet date. 57 Property, plant and equipment: Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets using the straight-line method and is allocated between cost of goods sold and operating expenses. The cost of additions and improvements are capitalized. Maintenance and repairs are charged to expenses as incurred. When assets are sold or retired the associated cost and accumulated depreciation are removed from the consolidated financial statements and any related gain or loss is included in earnings. The estimated useful lives of the major classes of depreciable assets are as follows: Buildings 7 to 25 years Equipment 3 to 10 years Goodwill: Goodwill is deemed to have an indefinite life and is subject to at least annual impairment assessments at the reporting unit level. The Company considers that its reporting units are consistent with its reportable segments. The components in each segment (including products, markets and competitors) have similar economic characteristics and the segments, therefore, reflect the lowest level at which operations and cash flows can be sufficiently distinguished, operationally and for financial reporting purposes, from the rest of the Company. Initially we perform a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reportable segment is less than the carrying amount prior to performing a quantitative goodwill impairment test. The annual measurement date for impairment assessment of the goodwill relating to the Performance Chemicals, Fuel Specialties and Oilfield Services segments is December 31 each year. Factors utilized in the qualitative assessment process include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and Company specific events. If a quantitative test is required, we assess the fair value based on projected post-tax cash flows discounted at the Company’s weighted average cost of capital. These fair value techniques require management judgment and estimates including revenue growth rates, projected operating margins, changes in working capital and discount rates. We would develop these assumptions by considering recent financial performance and industry growth estimates. O ther intangible assets: Other intangible assets are deemed to have finite lives and are amortized using the straight-line method over their estimated useful lives. The Company capitalizes software development costs as intangible assets, including licenses, subsequent to the establishment of technological feasibility. These assets are tested for potential impairment when events occur or circumstances change, which suggest an impairment may have occurred. In order to facilitate testing for potential impairment the Company groups together assets at the lowest possible level for which cash flow information is available. Undiscounted future cash flows expected to result from the asset groups are compared with the carrying value of the assets and, if such cash flows are lower, an impairment loss may be recognized. The amount of the impairment loss is the difference between the fair value and the carrying value of the assets. Fair values are determined using post-tax cash flows discounted at the Company’s weighted average cost of capital. If events occur or circumstances change it may cause a reduction in the periods over which the assets are amortized or result in a non-cash impairment of their carrying value. A reduction in the amortization periods would have no impact on cash flows. 58 The estimated useful lives of the major classes of assets are as follows: Technology 10 to 17 years Customer lists 7 to 15 years Brand names 5 to 10 years Product rights 9 to 10 years Internally developed software 3 to 12 years Marketing related 11 years Leases: We determine if an arrangement is a lease at inception. The present value of the future lease payments for operating leases is included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities (current and non-current) on our consolidated balance sheet at the reporting date. The carrying value of assets under finance leases is included in property, plant and equipment and finance lease liabilities (current and non-current) on our consolidated balance sheet at the reporting date. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future lease payments over the remaining lease term. Very few of our leases have renewal options or early termination break clauses, but where they do, we have assessed the term of the lease based on any options being exercised only if they are reasonably certain. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at point of recognition in determining the present value of future payments. The operating lease ROU asset excludes lease incentives and initial direct costs incurred. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless payments are variable per the agreement. We do not separate related non-lease components from lease components. Where we have lease payments linked to an index or inflationary rate, this rate has been used to value the asset and liability at the inception of the lease. If the payments are not linked to a specific index or inflationary rate, but can vary during the term of the agreement, they have been included at their actual value for each future period. In some circumstances the future expected payments may be dependent on other factors, for example production volumes, in which case we have used the minimum future expected payments to value the asset. We do not recognize a ROU asset or operating lease liability for short-term leases (with a length of one year or less), and any associated cost is recognized, as incurred, through the income statement. Deferred finance costs: The costs relating to debt financing are capitalized and amortized using the effective interest method over the expected life of the debt financing facility. The amortization charge is included in interest expense in the income statement. Impairment of long-lived assets: The Company reviews the carrying value of its long-lived assets, including buildings and equipment, whenever changes in circumstances suggest that the carrying values may be impaired. In order to facilitate this test, the Company groups together assets at the lowest possible level for which cash flow information is available. Undiscounted future cash flows expected to result from the asset groups are compared with the carrying value of the asset groups and if they are lower an impairment loss may be recognized. The amount of the impairment loss is the difference between the fair value and the carrying value of the asset groups. Fair values are determined using post-tax cash flows discounted at the Company’s weighted average cost of capital. 59 Derivative instruments: From time to time, the Company uses various derivative instruments including forward currency contracts, options, interest rate swaps and commodity swaps to manage certain exposures. These instruments are entered into under the Company’s corporate risk management policy to minimize exposure and are not for speculative trading purposes. The Company recognizes all derivatives as either current or non-current assets or liabilities in the consolidated balance sheet and measures those instruments at fair value. Changes in the fair value of derivatives that are not designated as hedges, or do not meet the requirements for hedge accounting, are recognized in earnings. Derivatives which are designated as hedges are tested for effectiveness on a quarterly basis and marked to market. The ineffective portion of the derivative’s change in value is recognized in earnings. The effective portion is recognized in other comprehensive income until the hedged item is recognized in earnings. Plant closure provisions: This includes both environmental compliance and remediation costs. Environmental compliance costs include ongoing maintenance, monitoring and similar costs and extend to environmental liabilities that result from other-than-normal operation of long-lived assets, for example pollution. Remediation costs relate to asset retirement obligations at our current and former manufacturing sites following retirement of the long-lived assets, linked to their normal operation. We recognize environmental remediation liabilities when they are probable and the costs can be reasonably estimated, and asset retirement obligations when there is an obligation based on a legal requirement, including those arising from a Company promise, and the costs can be reasonably estimated. The vast majority of our plant closure provision relates to our Ellesmere Port site in the United Kingdom. The Company must comply with environmental legislation in the countries in which it operates or has operated in and annually reassesses the program of work required. This includes applying significant judgments and estimating the credit-adjusted risk-free rate and the timing and cost of performing the remediation work. Management receives input from specialists to develop these estimates and assumptions utilizing the latest information available together with experience of recent costs. While we believe our assumptions for the liabilities are reasonable, they are subjective estimates and it is possible that variations in any of the assumptions will result in materially different calculations to the liabilities we have reported. Costs of future obligations are discounted to their present values using the Company’s credit-adjusted risk-free rate. Pension plans and other post-employment benefits: The Company recognizes the funded status of defined benefit post-retirement plans on the consolidated balance sheets and changes in the funded status in comprehensive income. The measurement date of the plan’s funded status is the same as the Company’s fiscal year-end. The service costs are recognized as employees render the services necessary to earn the post-employment benefits. Prior service costs and credits and actuarial gains and losses are amortized over the average remaining life expectancy of the inactive participants using the corridor method. The insurance contracts are adjusted each reporting period to reflect the estimated fair value of the premium that would be paid for such contracts at that time. Movements in the Projected Benefit Obligation (“PBO”) are dependent on our assumptions in respect of the discount rate, annual member mortality rates, future return on assets and future inflation. Income taxes: The Company provides for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the relevant tax bases of the assets and liabilities. The Company then evaluates the need for a valuation allowance to reduce deferred tax assets to the amount more likely than not to be realized. The effect on deferred taxes of a change in tax rates is recognized in the period that includes the enactment date. The Company recognizes the tax benefit from a tax position only if it is more likely than 60 not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes accrued interest and penalties associated with unrecognized tax benefits as part of income taxes in our consolidated statements of income if required. Note 3. Segment Reporting and Geographical Area Data The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services. Our Performance Chemicals segment provides innovative technology-based solutions for our customers’ processes or products in personal care, home care, agrochemical, construction, mining and other industrial markets. Our Fuel Specialties segment develops, manufactures, blends, markets and supplies a range of specialty chemical products used as additives in diesel, jet, marine, fuel oil and other fuels. Our Oilfield Services segment develops and markets chemical solutions for drilling, completion, production, DRA and oil and gas applications. In 2025 and 2024, the net sales to any single customer did not exceed 10 % of the group's net sales. In 2023, the Company had a significant customer in the Oilfield Services segment which accounted for $ 265.2 million and 13.6 % of the group's net sales. 61 The Chief Operating Decision Maker (“CODM”) is the President and Chief Executive Officer (the Principal Executive Officer). The CODM evaluates the performance of the Company’s segments and makes strategic decisions relating to the Company's allocation of resources, based on the segments' monthly gross profit and operating income. The following table analyzes financial information by the Company’s reportable segments: (in millions) 2025 2024 2023 Net Sales: Personal Care $ 409.2 $ 390.0 $ 352.7 Home Care 109.0 106.6 86.8 Other 163.2 157.1 122.1 Performance Chemicals 681.4 653.7 561.6 Refinery and Performance 509.4 517.4 540.6 Other 192.1 183.7 155.3 Fuel Specialties 701.5 701.1 695.9 Oilfield Services 395.1 490.6 691.3 Total net sales $ 1,778.0 $ 1,845.4 $ 1,948.8 Gross profit: Performance Chemicals 122.0 148.4 105.6 Fuel Specialties 252.2 239.9 215.1 Oilfield Services 118.2 154.6 270.4 Total gross profit $ 492.4 $ 542.9 $ 591.1 Operating income/(expense): Performance Chemicals $ 61.0 $ 82.9 $ 54.5 Fuel Specialties 144.8 129.6 109.7 Oilfield Services 23.3 38.8 78.6 Corporate costs ( 72.8 ) ( 70.2 ) ( 81.2 ) Adjustment to fair value of contingent consideration 15.9 ( 3.4 ) — Restructuring charge ( 0.9 ) — — Impairment of property, plant and equipment ( 22.9 ) — — Impairment of intangible assets ( 19.1 ) — — Profit on disposal of property, plant and equipment 0.2 0.2 — Total operating income $ 129.5 $ 177.9 $ 161.6 Identifiable assets at year-end: Performance Chemicals $ 602.0 $ 598.3 Fuel Specialties 625.5 553.8 Oilfield Services 212.2 272.5 Corporate 392.7 310.1 Total assets $ 1,832.4 $ 1,734.7 The identifiable assets analysis between the Company's reportable segments and Corporate has been updated in 2025, to align with changes made to the information provided to the CODM. The prior year comparatives have not been adjusted to conform to the current period presentation. 62 The difference between net sales and gross profit is defined as cost of goods sold. For further information see the relevant accounting policy within Note 2 of the Notes to the Financial Statements. The difference between segmental gross profit and operating income/(expense) is split between selling, general and administrative expenses and research and development expenses. For further information see the relevant accounting policies within Note 2 of the Notes to the Financial Statements. The following table analyzes cost of goods sold by the Company’s reportable segments: (in millions) 2025 2024 2023 Performance Chemicals $ 559.4 $ 505.3 $ 456.0 Fuel Specialties 449.3 461.2 480.8 Oilfield Services 276.9 336.0 420.9 Total cost of goods sold $ 1,285.6 $ 1,302.5 $ 1,357.7 The following table analyzes selling, general and administrative expenses and research and development expenses by the Company’s reportable segments: (in millions) 2025 2024 2023 Performance Chemicals $ 61.0 $ 65.5 $ 51.1 Fuel Specialties 107.4 110.3 105.4 Oilfield Services 94.9 115.8 191.8 Corporate 72.8 70.2 81.2 Total selling, general and administrative expenses and research and development expenses $ 336.1 $ 361.8 $ 429.5 The Company includes within the Corporate line item the following costs: • executive offices for the CEO, finance, human resources, legal and compliance counsel, corporate development and investor relations • centralized functions for product strategy, regulatory, ESG, health and safety, tax, treasury, business assurance and credit control • group-wide costs related to asset retirement obligations and information technology 63 The following tables analyze sales and other financial information by location: (in millions) 2025 2024 2023 Net sales by source: United States $ 951.7 $ 1,039.7 $ 1,227.2 United Kingdom 793.2 823.4 857.7 Rest of World 379.0 288.9 199.4 Sales between areas ( 345.9 ) ( 306.6 ) ( 335.5 ) $ 1,778.0 $ 1,845.4 $ 1,948.8 Income before income taxes: United States $ 25.9 $ 90.2 $ 95.2 United Kingdom 67.3 ( 24.6 ) 59.1 Rest of World 44.9 ( 24.4 ) 20.1 $ 138.1 $ 41.2 $ 174.4 Long-lived assets at year-end: United States $ 132.6 $ 156.2 United Kingdom 121.3 88.0 Rest of World 150.4 133.6 $ 404.3 $ 377.8 Identifiable assets at year-end: United States $ 555.9 $ 593.6 United Kingdom 579.1 488.2 Rest of World 298.4 270.4 Goodwill 399.0 382.5 $ 1,832.4 $ 1,734.7 Sales by geographical area are reported by source, being where the transactions originated. Intercompany sales are priced using an appropriate pricing methodology and are eliminated in the consolidated financial statements. Long-lived assets are related to property, plant and equipment, other intangibles and operating leases. Identifiable assets are those directly associated with the operations of the geographical area. Goodwill has not been allocated by geographical location on the grounds that it would be impracticable to do so. 64 Note 4. Earnings per Share Basic earnings per share is based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the effect of options that are dilutive and outstanding during the period. Per share amounts are computed as follows: 2025 2024 2023 Numerator (in millions): Net income available to common stockholders $ 116.6 $ 35.6 $ 139.1 Denominator (in thousands): Weighted average common shares outstanding 24,880 24,932 24,851 Dilutive effect of stock options and awards 113 187 171 Denominator for diluted earnings per share 24,993 25,119 25,022 Net income per share, basic: $ 4.69 $ 1.43 $ 5.60 Net income per share, diluted: $ 4.67 $ 1.42 $ 5.56 In 2025, 2024 and 2023 the average number of anti-dilutive options excluded from the calculation of diluted earnings per share were 23,414 , 10,413 and 20,334 respectively. Note 5. Acquisition of QGP Química Geral On December 8, 2023, the Company acquired QGP Química Geral (“QGP”). A portion of the consideration is deferred and payable in cash by December 7, 2026, and contingent on the financial performance of QGP for the 12 months ended June 30, 2026. In the third quarter of 2025, the Company recorded an $ 18.5 million reduction in the fair value of the expected contingent consideration payable relating to the acquisition of QGP, based on the information available at that time. The fair value of this deferred, contingent consideration at December 31, 2025 and 2024 was $ 7.0 million and $ 20.1 million, respectively. See Note 14 of the Notes to the Consolidated Financial Statements for additional information relating to the fair value calculation. Note 6. Property, Plant and Equipment Property, plant and equipment consists of the following: (in millions) 2025 2024 Land $ 23.6 $ 21.6 Buildings 109.7 88.7 Equipment 508.9 439.6 Work in progress 70.0 62.1 Total gross cost 712.2 612.0 Less accumulated depreciation and impairment ( 426.1 ) ( 342.3 ) Total net book value $ 286.1 $ 269.7 Of the total net book value of equipment at December 31, 2025, $ 0.0 million are in respect of assets held under finance leases (2024 – $ 0.0 million). 65 Depreciation charges were $ 32.1 million, $ 31.0 million and $ 27.9 million in 2025, 2024 and 2023, respectively. During the quarter ended September 30, 2025, the Company impaired property, plant and equipment assets within its Oilfield Services segment. The impaired assets totaled $ 22.9 million and relate largely to plant and equipment, which are no longer expected to generate sufficient discounted cash flows to support the valuations due to an expected lack of near-term recovery in our oilfield production business in Mexico and our stimulation business in the U.S.. Note 7. Leases We have operating leases for toll manufacturing facilities, warehouse storage, land, buildings, plant and equipment. Our leases have remaining lease terms of up to 20 years , some of which include options to terminate the leases within 1 year . The components of lease expense were as follows: (in millions) Twelve Months Ended December 31 Twelve Months Ended December 31 Twelve Months Ended December 31 2025 2024 2023 Operating lease cost 18.2 17.1 17.9 Short-term lease cost 7.7 8.7 8.1 Total lease cost $ 25.9 $ 25.8 $ 26.0 Supplemental cash flow information related to leases is as follows: (in millions) Twelve Months Ended December 31 Twelve Months Ended December 31 Twelve Months Ended December 31 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 25.9 $ 25.9 $ 26.1 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 15.1 $ 14.0 $ 11.0 66 Supplemental balance sheet information related to leases is as follows: (in millions except lease term and discount rate) December 31, 2025 December 31, 2024 Operating leases: Operating lease right-of-use assets $ 52.7 $ 44.8 Current portion of operating lease liabilities $ 15.9 $ 13.9 Operating lease liabilities, net of current portion 36.8 31.0 Total operating lease liabilities $ 52.7 $ 44.9 Weighted average remaining lease term: Operating leases 6.3 years 5.6 years Weighted average discount rate: Operating leases 4.1 % 3.8 % Maturities of lease liabilities were as follows as at December 31, 2025: (in millions) Operating Leases Within one year $ 16.3 Year two 10.0 Year three 8.1 Year four 6.4 Year five 4.9 Thereafter 15.3 Total lease payments 61.0 Less imputed interest ( 8.3 ) Total $ 52.7 As of December 31, 2025, additional operating and finance leases that have not yet commenced are $ 0.7 million. Maturities of lease liabilities were as follows as at December 31, 2024: (in millions) Operating Leases Within one year $ 14.3 Year two 9.8 Year three 5.7 Year four 5.1 Year five 3.9 Thereafter 11.7 Total lease payments 50.5 Less imputed interest ( 5.6 ) Total $ 44.9 As of December 31, 2024, additional operating and finance leases that have not yet commenced are $ 0.3 million. 67 Note 8. Goodwill The following table analyzes goodwill movement for 2025 and 2024. (in millions) Performance Chemicals Fuel Specialties Oilfield Services Total At December 31, 2023 Gross cost $ 146.9 $ 207.6 $ 44.8 $ 399.3 Accumulated impairment losses — — — — Net book amount $ 146.9 $ 207.6 $ 44.8 $ 399.3 Adjustment to the acquired fair values ( 3.1 ) — — ( 3.1 ) Exchange effect ( 13.7 ) ( 0.1 ) 0.1 ( 13.7 ) At December 31, 2024 Gross cost $ 130.1 $ 207.5 $ 44.9 $ 382.5 Accumulated impairment losses — — — — Net book amount $ 130.1 $ 207.5 $ 44.9 $ 382.5 Additions — — 2.0 2.0 Exchange effect 14.4 0.2 ( 0.1 ) 14.5 At December 31, 2025 Gross cost $ 144.5 $ 207.7 $ 46.8 $ 399.0 Accumulated impairment losses — — — — Net book amount $ 144.5 $ 207.7 $ 46.8 $ 399.0 The Company’s reporting units, the level at which goodwill is tested for impairment, are consistent with the reportable segments: Performance Chemicals, Fuel Specialties and Oilfield Services. On December 8, 2023, the Company acquired QGP. This resulted in goodwill of $ 37.4 million being recognized within our Performance Chemicals segment. In the second quarter of 2024, the fair value of the acquired net assets was revised. As a result of these remeasurement period adjustments, there was an increase of $ 3.1 million to the fair value of the net assets acquired, with a corresponding decrease to the acquired goodwill. On July 31, 2025 the Company completed the acquisition of the trade and net assets of Biotechnology Solutions LLC. Biotechnology Solutions LLC is a manufacturer and supplier of biology-based solutions for completion, production and stimulation within Oilfield Services and is based in Oklahoma, USA. The trade and net assets and goodwill has been consolidated into our Oilfield Services business segment. The consideration includes a deferred portion, contingent on future results. The fair value of the consideration is immaterial and has initially resulted in recognition of goodwill of $ 2.0 million. The goodwill recognized is expected to be deductible for income tax purposes. We have completed our alignment of accounting policies and fair value review on the other net assets acquired. The components in each segment (including products, markets and competitors) have similar economic characteristics and the segments, therefore, reflect the lowest level at which operations and cash flows can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company. The Company assesses goodwill for impairment on at least an annual basis, initially based on a qualitative assessment to determine whether it is more likely than not that the fair value of a segment is less than the carrying amount. If a potential impairment is identified, then an impairment test is performed. 68 The Company performed its annual impairment assessment in respect of goodwill as at December 31, 2025, 2024 and 2023. Our impairment assessment concluded that there had been no impairment of goodwill in respect of those reporting units. We believe that where appropriate the assumptions used in our impairment assessments are reasonable, but that they are judgmental, and variations in any of the assumptions may result in materially different calculations of any potential impairment charges. Note 9. Other Intangible Assets The following table analyzes other intangible assets movement for 2025 and 2024. (in millions) 2025 2024 Gross cost at January 1 $ 331.9 $ 315.1 Additions 23.6 24.3 Exchange effect 17.8 ( 7.5 ) Gross cost at December 31 373.3 331.9 Accumulated amortization at January 1 ( 266.5 ) ( 257.8 ) Amortization expense ( 11.6 ) ( 12.6 ) Impairment ( 19.0 ) — Exchange effect ( 8.5 ) 3.9 Accumulated amortization at December 31 ( 305.6 ) ( 266.5 ) Net book amount at December 31 $ 67.7 $ 65.4 Amortization expense The amortization expense was $ 11.6 million, $ 12.6 million and $ 10.6 million in 2025, 2024 and 2023, respectively. Excluding the impact of foreign exchange translation on the balance sheet, $ 1.7 million, $ 2.3 million and $ 2.3 million of amortization, respectively, was recognized in cost of goods sold, and the remainder was recognized in selling, general and administrative expenses. In 2025, we capitalized $ 23.6 million (2024 - $ 20.8 million) in relation to our internal-use developed software for a new Enterprise Resource Planning (“ERP”) system covering all our regions. The expenses capitalized include the acquisition costs for the software as well as the external consultancy costs and the internal employee costs relating to software development. The additional completion costs are currently expected to be approximately $ 4.2 million. Our current plan is to complete the implementation of the new ERP system by the middle of 2026. We have determined the useful economic life of the ERP system to be up to 12 years . In 2024, within the remeasurement period, we finalized the valuation of customer lists in relation to the acquisition of QGP in December 2023. This increased the intangible asset capitalized by $ 3.5 million in the second quarter of 2024. Management also revised the expected useful life of the customer lists from 10 years to 7 years . During the quarter ended September 30, 2025, the Company impaired the intangible assets arising from the acquisition of QGP, within its Performance Chemicals segment, and Independence Oilfield Chemicals LLC and Bachman Services LLC., within its Oilfield Services segment. The impaired assets totaled $ 19.1 million and relate to product technology and customer relationships, which are no longer expected to generate sufficient discounted cash flows to support the valuations due to an expected lack of near-term 69 recovery in QGP, our oilfield production business in Mexico and our stimulation business in the U.S.. Other intangible assets at December 31, 2025 were: (in millions) Gross carrying amount Accumulated amortization Product rights $ 34.0 $ ( 34.0 ) Brand names 8.9 ( 8.9 ) Technology 55.1 ( 55.1 ) Customer relationships 137.3 ( 129.2 ) Internally developed software 113.4 ( 53.8 ) Other 24.6 ( 24.6 ) $ 373.3 $ ( 305.6 ) Other intangible assets at December 31, 2024 were: (in millions) Gross carrying amount Accumulated amortization Product rights $ 34.0 $ ( 34.0 ) Brand names 8.9 ( 8.9 ) Technology 55.1 ( 44.6 ) Customer relationships 130.6 ( 111.9 ) Internally developed software 78.7 ( 42.5 ) Other 24.6 ( 24.6 ) $ 331.9 $ ( 266.5 ) Future amortization expense is estimated to be as follows for the next five years: (in millions) 2026 $ 9.9 2027 $ 6.5 2028 $ 6.2 2029 $ 6.2 2030 $ 6.2 Note 10. Pension and Post-Employment Benefits United Kingdom plan The Company previously maintained a defined benefit pension plan covering certain current and former employees in the United Kingdom (the “UK Plan”). In 2024, the Company completed a buy-out of the UK Plan. The buy-out meant that the Company was no longer responsible for the future obligation for retirement benefits payable to current and former employees. As a consequence, the Company recognized a one-off, non-cash settlement charge of $ 155.6 million in the income statement relating to the updated valuations at the time of the buy-out and the recycling of historical pension costs previously held in the statement of comprehensive income. 70 As of December 31, 2024, the remaining asset on the balance sheet was $ 2.5 million, relating to cash held to cover the remaining expenses of the scheme, being partly offset by the remaining Projected Benefit Obligation ("PBO") of $ 0.1 million, reflecting the UK Plan’s residual liabilities in respect of Guaranteed Minimum Pension equalization top-up payments due to former members of the UK Plan. On July 29, 2025, the UK Plan was fully wound up. As of December 31, 2025, there were no remaining assets on the balance sheet (December 31, 2024 $ 2.4 million). Following the UK Plan buy-out, the Company is no longer required to make future cash contributions to the UK Plan. In 2024, the Company contributed $ 0.0 million in cash to the UK Plan in accordance with an agreement with the trustees. In September 2024, the Company received $ 8.4 million from the UK Plan as recovery of pension related costs previously incurred, which has been credited against the service cost in 2024, resulting in an associated income tax expense of $ 2.1 million. (in millions) 2025 2024 2023 Service cost/(credit) $ 1.5 $ ( 4.9 ) $ 3.4 Interest cost on PBO — 18.6 19.6 Expected return on plan assets — ( 25.9 ) ( 25.2 ) Amortization of prior service cost — 16.8 0.5 Amortization of actuarial net losses — — ( 1.6 ) Recycling of residual reserves — 138.8 — Net periodic cost/(benefit) $ 1.5 $ 143.4 $ ( 3.3 ) The income statement captions are shown here: Selling, general and administrative 2025 2024 2023 Service cost/(credit) $ 1.5 $ ( 4.9 ) $ 3.4 Other expense/(income), net 2025 2024 2023 Interest cost on PBO $ — 18.6 19.6 Expected return on plan assets — ( 25.9 ) ( 25.2 ) Amortization of prior service cost — — 0.5 Amortization of actuarial net losses — — ( 1.6 ) $ — $ ( 7.3 ) $ ( 6.7 ) Pension scheme settlement charge 2025 2024 2023 Amortization of prior service cost $ — 16.8 — Recycling of residual reserves — 138.8 — — 155.6 — Tax relating to the amortization of prior service cost — ( 4.2 ) — Tax relating to the recycling of residual reserves — ( 34.7 ) — $ — $ 116.7 $ — 71 The other financial statement captions relating to the buy-out settlement are shown here: Recognized in Other Comprehensive Income 2025 2024 2023 Recycling of residual reserves $ — 138.8 — Release of historic cumulative translation adjustments — ( 0.7 ) — — 138.1 — Tax relating to the recycling of residual reserves — ( 34.7 ) — Tax relating to historic cumulative translation adjustments — ( 11.0 ) — $ — $ 92.4 $ — Recognized in Reclassifications out of Accumulated Other Comprehensive Loss 2025 2024 2023 Recycling of residual reserves $ — 138.8 — Release of historic cumulative translation adjustments — ( 0.7 ) — — 138.1 — Tax relating to the recycling of residual reserves — ( 34.7 ) — Tax relating to historic cumulative translation adjustments — ( 11.0 ) — $ — $ 92.4 $ — Plan assumptions at December 31, (%): 2025 2024 2023 Discount rate n/a 5.18 4.59 Inflation rate n/a 2.85 2.70 Rate of return on plan assets – overall on bid-value n/a 4.20 4.25 Plan asset allocation by category (%): 2025 2024 2023 Debt securities and insurance contracts n/a — 96 Cash n/a 100 4 n/a 100 100 Following the buy-out, the UK Plan does not need to follow an investment strategy. Movements in PBO and fair value of UK Plan assets are as follows: 72 (in millions) 2025 2024 Change in PBO: Opening balance $ 0.1 $ 424.1 Interest cost — 18.6 Service cost/(credit) 1.5 ( 4.9 ) Benefits paid — ( 32.9 ) Plan amendments — 8.4 Scheme closure expenses ( 1.6 ) — Actuarial losses/(gains) — 3.7 Settlements — ( 419.2 ) Exchange effect — 2.3 Closing balance $ — $ 0.1 Fair value of plan assets: Opening balance $ 2.5 $ 459.2 Return of funds to cover historic expenses ( 0.9 ) ( 8.4 ) Scheme closure expenses ( 1.6 ) — Benefits paid — ( 32.9 ) Actual return on assets — 1.5 Settlements — ( 419.2 ) Exchange effect — 2.3 Closing balance $ — $ 2.5 Net pension asset $ — $ 2.4 The fair values of pension assets by level of input were as follows: (in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total At December 31, 2024 Cash 2.5 2.5 Total plan assets $ 2.5 $ — $ — $ 2.5 73 The reconciliation of the fair value of the UK Plan assets measured using significant unobservable inputs was as follows: (in millions) Other Assets Balance at December 31, 2023 $ 438.7 Realized/unrealized gains/(losses): Relating to assets still held at the reporting date ( 2.2 ) Purchases, issuances and settlements ( 438.8 ) Exchange effect 2.3 Balance at December 31, 2024 $ — German plan The Company also maintains an unfunded defined benefit pension plan covering certain current and former employees in Germany (the “German plan”), which is reported within our Fuel Specialties segment. The German plan is closed to new entrants and has no assets. The service cost shown in the table below has been recognized in selling, general and administrative expenses within Corporate costs and the other items recognized within other income, net. (in millions) 2025 2024 2023 Service cost $ — $ — $ 0.1 Interest cost on PBO 0.3 0.3 0.3 Amortization of actuarial net loss/(gain) — ( 0.2 ) ( 0.5 ) Net periodic cost/(benefit) $ 0.3 $ 0.1 $ ( 0.1 ) Plan assumptions at December 31, (%): Discount rate 3.80 3.20 3.70 Inflation rate 2.25 2.25 2.25 Rate of increase in compensation levels 2.75 2.75 2.75 Movements in PBO of the German plan are as follows: (in millions) 2025 2024 Change in PBO: Opening balance $ 9.0 $ 9.1 Service cost — — Interest cost 0.3 0.3 Benefits paid ( 0.5 ) ( 0.4 ) Actuarial losses/(gains) ( 0.6 ) 0.5 Exchange effect 1.2 ( 0.5 ) Closing balance $ 9.4 $ 9.0 Other plans As at December 31, 2025, we have post-employment obligations in our Performance Chemicals European businesses with a liability of $ 3.8 million (December 31, 2024 – $ 4.1 million). For the year ended 74 December 31, 2025, we have recognized an actuarial gain of $ 0.1 million in other comprehensive loss in relation to the Performance Chemicals pension in France (December 31, 2024 – $ 0.2 million). Company contributions to defined contribution schemes during 2025 were $ 15.3 million (2024 – $ 13.9 million), across all of our reporting segments. 75 Note 11. Income Taxes The sources of income before income taxes were as follows: (in millions) 2025 2024 2023 Domestic $ 25.9 $ 90.2 $ 95.2 Foreign 112.2 ( 49.0 ) 79.2 $ 138.1 $ 41.2 $ 174.4 The components of income tax expense are summarized as follows: (in millions) 2025 2024 2023 Current: Federal $ 4.5 $ 16.9 $ 12.4 State and local 1.7 2.9 0.2 Foreign 24.3 26.2 18.6 30.5 46.0 31.2 Deferred: Federal ( 7.7 ) ( 4.1 ) 5.2 State and local ( 0.3 ) ( 0.5 ) 0.3 Foreign ( 1.0 ) ( 35.8 ) ( 1.4 ) ( 9.0 ) ( 40.4 ) 4.1 Total: Federal ( 3.2 ) 12.8 17.6 State and local 1.4 2.4 0.5 Foreign 23.3 ( 9.6 ) 17.2 $ 21.5 $ 5.6 $ 35.3 The effective tax rate varies from the U.S. federal statutory rate because of the factors indicated below. In considering the items that create variances when compared to the U.S. federal statutory rate, it is worth noting that the percentage impact of a given item in the table below would be higher in 2024 because income before income taxes in 2024 is significantly lower than in 2025 and 2023. 76 (in millions) 2025 2024 2023 in Dollars in Percent in Dollars in Percent in Dollars in Percent U.S. federal statutory tax rate $ 29.0 21.0 % $ 8.7 21.0 % $ 36.6 21.0 % State and local income taxes, net of federal income tax effect* 1.7 1.2 % 2.7 6.6 % 1.0 0.6 % Foreign tax effects: Brazil: Changes in valuation allowance ** ** 2.7 6.6 % ** ** Adjustment to contingent consideration ( 3.2 ) - 2.3 % 0.7 1.7 % ** ** Foreign tax rate differential ** ** ** ** ( 1.8 ) - 1.0 % Other ( 1.2 ) - 0.8 % 0.8 1.9 % 0.3 0.2 % Germany: Foreign tax rate differential ** ** 0.7 1.7 % ** ** Other ** ** ( 0.1 ) - 0.2 % ** ** Italy ** ** 0.6 1.5 % ** ** U.K.: Foreign tax rate differential 2.1 1.5 % ( 3.4 ) - 8.3 % 1.3 0.7 % Foreign currency transactions ** ** ** ** ( 2.6 ) - 1.5 % Innovation incentives ( 3.2 ) - 2.3 % ( 3.2 ) - 7.8 % ( 1.5 ) - 0.9 % Other 0.4 0.3 % 0.4 1.0 % 0.5 0.3 % Other foreign jurisdictions 2.7 2.0 % 0.2 0.5 % 1.7 1.0 % Effect of cross-border tax laws: Global intangible low-taxed income, net of foreign tax credit 0.8 0.6 % 4.3 10.4 % ( 0.2 ) - 0.1 % Subpart F income, net of foreign tax credit — 0.0 % 1.2 2.9 % 0.2 0.1 % Incentive for foreign derived intangible income ( 0.5 ) - 0.4 % ( 1.9 ) - 4.6 % ( 4.5 ) - 2.6 % Tax on unremitted foreign earnings 2.1 1.5 % 0.8 1.9 % 2.4 1.4 % Other 0.1 0.1 % 0.3 0.7 % — 0.0 % Tax credits ( 0.5 ) - 0.4 % ( 0.9 ) - 2.2 % ( 1.0 ) - 0.6 % Nontaxable or nondeductible items: Nondeductible officer compensation ** ** 2.0 4.9 % 1.8 1.0 % Other 0.7 0.5 % ( 0.9 ) - 2.1 % ( 0.2 ) - 0.1 % Changes in unrecognized tax benefits — 0.0 % ( 10.1 ) - 24.5 % 1.3 0.7 % Tax impact of internal reorganizations ( 9.5 ) - 6.9 % — 0.0 % — 0.0 % $ 21.5 15.6 % $ 5.6 13.6 % $ 35.3 20.2 % * State taxes in Texas, Louisiana and Oklahoma made up the majority (greater than 50 %) of the tax effect in this category in 2025 (2024 and 2023: Texas, California and Oklahoma). ** The amount of income tax during the year does not meet the required threshold and is included in relevant 'Other' category. 77 The effective tax rate has been positively impacted in 2025 by the tax impact of internal reorganizations. This item arose due to the allocation of a partnership basis difference which was recognized in 2025, following the finalization of our estimate of the tax impact of the dissolution of the partnership on December 31, 2024. While the change in estimate had no impact on pre-tax income, it has resulted in the recognition of a deferred tax asset of $ 9.5 million and a credit to net income of $ 9.5 million for the twelve months ended December 31, 2025. In addition, the effective tax rate has been positively impacted in 2025 by an adjustment of $ 15.9 million to the fair value of contingent consideration associated with the acquisition of QGP in Brazil. This adjustment has no impact on the Company’s current or future tax liabilities and therefore impacts on the effective tax rate. The Company benefits from innovation reliefs in relation to relevant research and development expenditure in certain jurisdictions, notably the U.K. and the U.S., which have a positive impact on the effective tax rate. The level of foreign-derived intangible income benefit that the Company is entitled to has had a positive impact on the effective tax rate in 2025 and the disclosed prior years, although the benefit has declined in 2025 due to a decrease in U.S. export sales. The Company is subject to state taxes and local taxes primarily in the U.S. in addition to federal taxes. The effective tax rate in 2025 and the disclosed prior years has been negatively impacted by these taxes. Cash paid for income taxes (net of refunds) consisted of the following: (in millions) 2025 2024 2023 Federal $ 26.1 $ 27.5 $ 27.5 State and local 3.1 1.4 4.7 Foreign: Brazil 2.9 2.9 * Canada * 3.7 * Germany 3.3 4.2 7.4 Italy 3.9 3.9 * U.K. 6.8 6.7 8.6 Other Foreign 4.9 1.4 6.1 21.8 22.8 22.1 $ 51.0 $ 51.7 $ 54.3 *The amount of income taxes paid during the year does not meet the required threshold and is included in 'Other Foreign'. 78 Details of deferred tax assets and liabilities are analyzed as follows: (in millions) 2025 2024 Deferred tax assets: Stock compensation $ 3.3 $ 3.7 Net operating loss carry forwards 8.2 8.8 Other intangible assets 15.6 4.8 Accretion expense 3.2 3.2 Restructuring provision 1.4 1.5 Employee related liabilities 4.6 9.2 Foreign tax credits 3.0 2.1 Operating lease liabilities 12.9 11.1 Inventory provisions 9.4 9.0 Pensions 1.2 0.5 Carried forward interest deductions 2.7 1.4 Bad debt reserves 1.1 1.4 Research and experimental expenditure 6.1 8.3 Other 5.7 3.4 Subtotal 78.4 68.4 Less valuation allowance ( 2.8 ) ( 2.4 ) Total net deferred tax assets $ 75.6 $ 66.0 Deferred tax liabilities: Property, plant and equipment $ ( 27.0 ) $ ( 29.5 ) Intangible assets including goodwill ( 31.2 ) ( 31.6 ) Customer relationships ( 1.0 ) ( 1.7 ) Unremitted overseas earnings ( 7.2 ) ( 5.1 ) Right-of-use assets ( 12.9 ) ( 10.7 ) Other ( 1.8 ) ( 1.5 ) Total deferred tax liabilities $ ( 81.1 ) $ ( 80.1 ) Net deferred tax liability $ ( 5.5 ) $ ( 14.1 ) Deferred tax assets $ 13.6 $ 9.4 Deferred tax liabilities ( 19.1 ) ( 23.5 ) $ ( 5.5 ) $ ( 14.1 ) The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. Available evidence considered in determining the use of deferred tax assets includes, but is not limited to, cumulative losses arising in recent accounting periods, the Company’s estimate of future taxable income and any applicable tax-planning strategies. Based on such evidence, if it is more likely than not that some portion or all of such deferred tax assets will not be realized, a valuation allowance is recorded to reduce the Company’s deferred tax assets. On the basis of this evaluation, as of December 31, 2025, a valuation allowance of $ 2.8 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be 79 adjusted if estimates of future taxable income during the carry forward period are reduced or increased or if other evidence becomes available. As of December 31, 2025, the Company has approximately $ 6.8 million of tax-effected foreign net operating loss carryforwards, net of valuation allowance, across three of the Company’s foreign subsidiaries, which can be carried forward indefinitely. A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows: (in millions) Unrecognized Tax Benefits Interest and Penalties Total Opening balance at January 1, 2023 $ 10.2 $ 3.2 $ 13.4 Reductions for tax positions of prior periods — — — Additions for tax positions of prior periods 0.3 1.1 1.4 Closing balance at December 31, 2023 10.5 4.3 14.8 Current ( 1.0 ) ( 0.2 ) ( 1.2 ) Non-current $ 9.5 $ 4.1 $ 13.6 Opening balance at January 1, 2024 $ 10.5 $ 4.3 $ 14.8 Reductions for tax positions of prior periods ( 10.5 ) ( 5.1 ) ( 15.6 ) Additions for tax positions of prior periods — 0.8 0.8 Closing balance at December 31, 2024 — — — Current — — — Non-current $ — $ — $ — Opening balance at January 1, 2025 $ — $ — $ — Reductions for tax positions of prior periods — — Additions for tax positions of prior periods — — Closing balance at December 31, 2025 — — — Current — — — Non-current $ — $ — $ — As at December 31, 2025, the Company has no unrecognized tax benefits. Note 12. Long-Term Debt As at December 31, 2025 and 2024, the Company has no t drawn down on its revolving credit facility. During 2025, 2024 and 2023, the Company did no t draw down or repay any borrowing on its revolving credit facility. On May 31, 2023, Innospec Inc. and certain subsidiaries of the Company (together with the Company, the “Borrowers”) entered into a Multicurrency Revolving Facility Agreement with various lenders (the “Agreement”) which replaces the Company’s credit facility agreement dated September 26, 2019 . The Agreement provides for a $ 250.0 million four-year multicurrency revolving loan facility available to the Borrowers (the “Facility”). The Agreement also contains an accordion feature whereby the Company may elect to increase the total available borrowings by an aggregate amount of up to $ 125.0 million. The termination date of the Facility is May 30, 2027 , but the Agreement includes an option for the Company to request an extension of the Facility for a further year. 80 Effective as of May 20, 2024, the termination date of the Facility was extended from May 30, 2027 to May 31, 2028 in accordance with the terms of the Company’s multicurrency revolving facility agreement (the “Facility Agreement”). No other terms of the Facility Agreement or the Facility were modified. The Company paid a customary extension fee in connection with the extension of the Facility as contemplated by the Facility Agreement. As a consequence, the Company has capitalized a further $ 0.3 million of costs relating to the new Agreement which are to be amortized over the period to May 31, 2028 . The deferred finance costs of $ 0.7 million (December 31, 2024 – $ 1.1 million) related to the arrangement of the credit facility, are included within other current and non-current assets at the balance sheet dates. (in millions) 2025 2024 Gross cost at January 1 $ 1.7 $ 1.4 Capitalized in the year — 0.3 1.7 1.7 Accumulated amortization at January 1 $ ( 0.6 ) $ ( 0.2 ) Amortization in the year ( 0.4 ) ( 0.4 ) $ ( 1.0 ) $ ( 0.6 ) Net book value at December 31 $ 0.7 $ 1.1 Amortization expense was $ 0.4 million, $ 0.4 million and $ 0.4 million in 2025, 2024 and 2023, respectively. The charge is included in interest expense, see Note 2 of the Notes to the Consolidated Financial Statements. The obligations of the Company under the credit facility are secured obligations and guaranteed by certain subsidiaries of the Company. Amounts available under the revolving facility may be borrowed in U.S. dollars, Euros, British pounds and other freely convertible currencies. The Company’s credit facility contains restrictive clauses which may constrain our activities and limit our operational and financial flexibility. The facility obliges the lenders to comply with a request for utilization of finance unless there is an event of default outstanding. Events of default are defined in the credit facility and include a material adverse change to our assets, operations or financial condition. The facility contains a number of restrictions that limit our ability, among other things, and subject to certain limited exceptions, to incur additional indebtedness, pledge our assets as security, guarantee obligations of third parties, make investments, undergo a merger or consolidation, dispose of assets, or materially change our line of business. In addition, the credit facility contains terms which, if breached, would result in it becoming repayable on demand. It requires, among other matters, compliance with the following financial covenant ratios measured on a quarterly basis: (1) the ratio of net debt to EBITDA shall not be greater than 3.5:1 and (2) the ratio of EBITDA to net interest shall not be less than 4.0:1. Management has determined that the Company has not breached these covenants throughout the period to December 31, 2025 and does not expect to breach these covenants for the next 12 months. The weighted average rate of interest on borrowings was 0.00 % at December 31, 2025 and 0.00 % at December 31, 2024. Payments of interest on long-term debt were $ 0.0 million, $ 0.0 million and $ 0.0 million in 2025, 2024 and 2023, respectively. 81 The net cash outflows in respect of refinancing costs were $ 0.0 million, $ 0.3 million and $ 1.4 million in 2025, 2024 and 2023, respectively. Note 13. Plant Closure Provisions The Company has continuing plans to remediate manufacturing facilities at sites around the world as and when those operations are expected to cease or we are required to decommission the sites according to local laws and regulations. The liability for estimated plant closure costs includes costs for asset retirement obligations and environmental remediation liabilities. The principal site giving rise to asset retirement obligations is the site at Ellesmere Port in the United Kingdom. There are also asset retirement obligations on a much smaller scale in respect of other sites. Environmental remediation liabilities are insignificant. Movements in the provisions are summarized as follows: (in millions) 2025 2024 2023 Total at January 1 $ 60.3 $ 61.6 $ 57.2 Charge for the period 5.6 4.7 8.9 Utilized in the period ( 5.8 ) ( 3.8 ) ( 4.9 ) Exchange effect 5.0 ( 2.2 ) 0.4 Total at December 31 65.1 60.3 61.6 Due within one year ( 4.9 ) ( 5.0 ) ( 4.6 ) Due after one year $ 60.2 $ 55.3 $ 57.0 Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date. The charge for the period in 2025 represents the accretion expense recognized of $ 3.6 million and a further $ 2.0 million primarily in respect of changes in the expected cost, scope and timing of future obligations. The charges for plant closure provisions are recognized in cost of goods sold for our reporting segments and within selling, general and administrative expenses for Corporate costs. We recognize environmental remediation liabilities when they are probable and the costs can be reasonably estimated, and asset retirement obligations when there is an obligation based on a legal requirement, including those arising from a Company promise, and the costs can be reasonably estimated. The Company has to make significant judgments when anticipating the program of work required and the associated future expected costs, and comply with environmental legislation in the countries in which it operates or has operated in. Expenditure utilizing plant closure provisions was $ 5.8 million, $ 3.8 million and $ 4.9 million in 2025, 2024 and 2023, respectively. Note 14. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes a mid-market pricing convention for valuing the majority of its assets and liabilities measured and reported at fair value. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation 82 technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The Company gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy Levels. In 2025, the Company evaluated the fair value hierarchy levels assigned to its assets and liabilities, and concluded that there should be no transfers into or out of Levels 1, 2 and 3. The following table presents the carrying amount and fair values of the Company’s assets and liabilities measured on a recurring basis: December 31, 2025 December 31, 2024 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Assets Derivatives (Level 1 measurement): Other current and non-current assets: Emissions Trading Scheme credits $ 3.2 $ 3.2 $ 3.9 $ 3.9 Foreign currency forward exchange contracts 3.4 3.4 1.5 1.5 Liabilities Derivatives (Level 1 measurement): Non-financial liabilities (Level 3 measurement): Acquisition-related contingent consideration 8.3 8.3 20.1 20.1 The following methods and assumptions were used to estimate the fair values: Emissions Trading Scheme credits: The fair value is determined by the open market pricing at the end of the reporting period. Derivatives: The fair value of derivatives relating to foreign currency forward exchange contracts and interest rate swaps are derived from current settlement prices and comparable contracts using current assumptions. Foreign currency forward exchange contracts primarily relate to contracts entered into to hedge future known transactions or hedge balance sheet net cash positions. The movements in the carrying amounts and fair values of these contracts are largely due to changes in exchange rates against the U.S. dollar. Acquisition-related contingent consideration: Contingent consideration payable in cash is discounted to its fair value at each balance sheet date. Where contingent consideration is dependent upon pre-determined financial target s, an estimate of the fair value of the likely consideration payable is made at each balance sheet date. The contingent consideration payable at December 31, 2025 has been calculated 83 based on the latest forecast. The movement in the current year relates to an $ 18.5 million reduction in the fair value of the expected payable relating to the acquisition of QGP, partially offset by an accretion charge of $ 2.6 million, the impact of foreign exchange of $ 2.8 million and a $ 1.3 million increase relating to the acquisition of the trade and net assets of Biotechnology Solutions LLC which has not been discounted to its fair value on the basis of materiality (see Note 8 of the Notes to the Consolidated Financial Statements for additional information). Note 15. Derivative Instruments and Risk Management The Company has limited involvement with derivative instruments and does not trade them. The Company does use derivatives to manage certain interest rate, foreign currency exchange rate, raw material cost exposures and greenhouse gases emission allowances, as the need arises. The Company has previously entered into interest rate swap contracts to reduce interest rate risk on its core debt. As at December 31, 2025 and 2024, there were no interest rate swaps in place. Interest rate swaps were previously in place to hedge interest rate risk on the term loan for a notional value that matched the repayment profile of the term loan. The Company enters into various foreign currency forward exchange contracts to minimize currency exchange rate exposure from expected future cash flows. As at December 31, 2025, foreign currency forward exchange contracts with a notional value of $ 238.9 million were in place (December 31, 2024 $ 212.8 million), with maturity dates of up to twelve months from the date of inception. These foreign currency forward exchange contracts have not been designated as hedging instruments, and their impact on the income statement for 2025 was a loss of $ 3.1 million (2024 – gain $ 5.3 million). As at December 31, 2025 and 2024, the Company did not hold any raw material derivatives. The Company participates in the new United Kingdom Emissions Trading Scheme (“UK ETS”) which was launched on January 1, 2021. Emissions trading schemes work on the ‘cap and trade’ principle, where a cap is set on the total amount of certain greenhouse gases that can be emitted by sectors covered by the scheme. This limits the total amount of carbon that can be emitted. Within this cap, participants receive free allowances and/or buy emission allowances at auction or on the secondary market which they can trade with other participants as needed. As at December 31, 2025, the Company held UK ETS credits of $ 3.2 million (December 31, 2024 – $ 3.9 million). The Company sells a range of specialty chemicals to major oil refiners and chemical companies throughout the world. Credit limits, ongoing credit evaluation and account monitoring procedures are intended to minimize bad debt risk. Collateral is not generally required. Note 16. Commitments and Contingencies Asset retirement obligations and environmental remediation liabilities Commitments in respect of asset retirement obligations and environmental remediation liabilities are disclosed in Note 13 of the Notes to the Consolidated Financial Statements. Capital commitments The estimated additional cost to complete work in progress at December 31, 2025 is $ 55.0 million (2024 – $ 35.4 million). 84 Internally developed software The estimated additional cost to complete work in progress at December 31, 2025 is $ 4.2 million (2024 – $ 29.5 million). Contingencies Legal matters We are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, employee and product liability claims. As reported in the 2023 Form 10-K, we have incurred financial losses and lodged a civil and criminal legal claim related to a misappropriation of inventory in Brazil. At the time of filing, there have been no significant developments to report in relation to the claims being made. Consistent with prior quarters, a corresponding asset for the potential legal or insurance recoveries has not been recorded for the resulting financial losses arising from this matter. In addition, unrelated to the Brazil matter, in the unlikely event there are an unexpectedly large number of individual claims or proceedings with an adverse resolution, this could in the aggregate have a material adverse effect on the results of operations for a particular year or quarter. Guarantees The Company and certain of the Company’s consolidated subsidiaries are contingently liable for certain obligations of affiliated companies primarily in the form of guarantees of debt and performance under contracts entered into as a normal business practice. This includes guarantees of non-U.S. excise taxes and customs duties. As at December 31, 2025, such guarantees which are not recognized as liabilities in the consolidated financial statements amounted to $ 6.0 million (December 31, 2024 – $ 6.8 million). The remaining terms of the fixed maturity guarantees vary from approximately 3 months to 7 years, with some further guarantees having no fixed expiry date. Under the terms of the guarantee arrangements, generally the Company would be required to perform should the affiliated company fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements have recourse provisions that would enable the Company to recover any payments made under the terms of the guarantees from securities held of the guaranteed parties’ assets. The Company and its affiliates have numerous long-term sales and purchase commitments in their various business activities, which are expected to be fulfilled with no adverse consequences material to the Company. Note 17. Stockholders’ Equity Common Stock Treasury Stock (number of shares in thousands) 2025 2024 2023 2025 2024 2023 At January 1 29,554.5 29,554.5 29,554.5 4,595 4,687 4,789 Exercise of options — — — ( 82 ) ( 97 ) ( 113 ) Stock purchases — — — 264 5 11 At December 31 29,554.5 29,554.5 29,554.5 4,777 4,595 4,687 85 At December 31, 2025, the Company had authorized common stock of 40,000,000 shares (2024 - 40,000,000 ). Note 18. Share-Based Compensation Plans Stock option plans The Company has two stock option plans, the Omnibus Long-Term Incentive Plan and the ShareSave Plan 2008 under which it currently grants awards. Innospec's ShareSave plan is an employee stock purchase plan, or ESPP. The stock options have vesting periods ranging from 2 to 5 years and in all cases stock options granted expire within 10 years of the date of grant. All grants are at the sole discretion of the Compensation Committee of the Board of Directors. Grants may be priced at market value or at a premium or discount. The aggregate number of shares of common stock reserved for issuance which can be granted under the plans is 2,550,000 . The fair value of stock options is measured on the grant date using either a fair market value methodology, or in cases where performance criteria are dependent upon external factors such as the Company’s stock price, using a Monte Carlo model. The Company’s policy is to issue shares from treasury stock to holders of stock options who exercise those options, but if sufficient treasury stock is not available, the Company will issue previously unissued shares of stock to holders of stock options who exercise options. Stock equivalent units The Company awards Stock Equivalent Units (“SEUs”) from time to time as a long-term performance incentive. SEUs are cash settled equity instruments conditional on certain performance criteria and the fair value is linked to the Innospec Inc. share price. SEUs have vesting periods ranging from six months to 5 years and in all cases SEUs granted expire within 10 years of the date of grant. Grants may be priced at market value or at a premium or discount. There is no limit to the number of SEUs that can be granted. As at December 31, 2025 the liability for SEUs of $ 12.5 million is included in accrued liabilities in the consolidated balance sheet, where they will remain until they are cash settled. The fair value of SEUs is re-measured at each balance sheet reporting date using either a fair market value methodology, or in cases where performance criteria are dependent upon external factors such as the Company’s stock price, using a Monte Carlo model. Compensation cost The compensation cost recorded for stock options was $ 8.1 million, $ 8.5 million and $ 8.0 million for 2025, 2024 and 2023, respectively. The compensation cost for stock options is based on the grant-date fair value and spread evenly over the vesting period. The compensation cost recorded for SEUs was $ 1.8 million, $ 6.5 million and $ 13.5 million for 2025, 2024 and 2023, respectively. The compensation cost for SEUs is spread over the life of the award subject to a revaluation to the fair value at each quarter end. The revaluation may result in a charge or a credit to the income statement in each quarter dependent upon our share price movements and other performance criteria. 86 Forfeits are accounted for as an adjustment to the charge in the period in which the forfeits occur. Transactions in the period The fair value of each stock option or SEU granted in the year was calculated with the following weighted average assumptions to determine the grant-date fair values of the share-based compensation: 2025 2024 2023 Dividend yield 1.51 % 1.13 % 1.16 % Expected life 3 years 3 years 4 years Volatility 27.0 % 25.5 % 39.7 % Risk free interest rate 4.16 % 4.38 % 4.47 % The dividend yield was based on our recent history of dividend payouts. The expected life was determined based upon historical exercise experience. The volatility was determined based upon the historical daily stock price volatilities. The risk free interest rate was based on the U.S. Federal Reserve 3 year interest rate at the grant dates, which approximates to the expected term of the options. The following tables summarizes the transactions of the Company’s share-based compensation plans for the year ended December 31, 2025. Number of shares Weighted Average Grant-Date Fair Value Nonvested at December 31, 2024 574,671 $ 86.2 Granted 166,337 $ 107.1 Vested ( 210,227 ) $ 77.8 Forfeited ( 11,831 ) $ 72.5 Cancelled ( 87,653 ) $ 31.3 Nonvested at December 31, 2025 431,297 $ 109.5 Number of shares Weighted Average Exercise price Weighted-Average Remaining Contractual Term (years) Outstanding at December 31, 2024 619,705 $ 23.5 Granted 166,337 $ — Exercised ( 139,904 ) $ 3.5 Forfeited ( 17,281 ) $ 34.0 Cancelled ( 87,653 ) $ 75.7 Outstanding at December 31, 2025 541,204 $ 12.7 2.1 Exercisable at December 31, 2025 109,907 $ 49.1 2.7 For the awards granted with market conditions, a Monte Carlo model has been used to calculate the grant-date fair value. For all other awards granted, a fair market value methodology has been used to calculate the grant-date fair value. The awards granted with market and non-market conditions include performance measures that can result 87 in a maximum 200 % vesting for the number of stock options granted. The predicted vesting has been reflected in the grant-date fair value calculation, but has not been reflected for the number of awards granted, as shown in the table above. Other disclosures As at December 31, 2025, there was $ 17.7 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 1.8 years. The total intrinsic value of share-based compensation plans outstanding at December 31, 2025 was $ 34.4 million. The total intrinsic value of share-based compensation plans exercisable at December 31, 2025 was $ 3.0 million. The total intrinsic value of share-based compensation plans exercised, was approximately $ 13.5 million in 2025 and $ 22.4 million in 2024. The total cash paid for SEUs exercised was approximately $ 6.2 million in 2025 and $ 12.8 million in 2024. The total fair value of share-based compensation that vested was $ 16.4 million in 2025 and $ 16.4 million in 2024. The weighted-average grant-date fair value of share-based compensation plans granted during 2025, 2024, and 2023 was $ 107.1 , $ 130.3 , and $ 94.4 , respectively. The Company recorded a current tax charge of $ 1.0 million in 2025, a current tax charge of $ 0.1 million in 2024 and a current tax charge of $ 0.3 million in 2023, in relation to stock option compensation. This amount is inclusive of excess tax benefits. Note 19. Reclassifications out of Accumulated Other Comprehensive Loss Reclassifications out of accumulated other comprehensive loss (“AOCL”) for 2025 were: (in millions) Details about AOCL Components Amount Reclassified from AOCL Affected Line Item in the Statement where Net Income is Presented Defined benefit pension plan items: Amortization of prior service cost $ — See (1) below Amortization of actuarial net losses — See (1) below — Total before tax — Income tax expense Total reclassifications $ — Net of tax (1) These items are included in the computation of net periodic pension cost. See Note 10 of the Notes to the Consolidated Financial Statements for additional information. 88 Changes in AOCL for 2025, net of tax, were: (in millions) Defined Benefit Pension Plan Items Cumulative Translation Adjustments Total Balance at December 31, 2024 $ — $ ( 91.0 ) $ ( 91.0 ) Other comprehensive income/(losses) before reclassifications — 55.4 55.4 Amounts reclassified from AOCL — — — Actuarial net losses arising during the year 0.9 — 0.9 Net current period other comprehensive income/(losses) 0.9 55.4 56.3 Balance at December 31, 2025 $ 0.9 $ ( 35.6 ) $ ( 34.7 ) Reclassifications out of AOCL for 2024 were: (in millions) Details about AOCL Components Amount Reclassified from AOCL Affected Line Item in the Statement where Net Income is Presented Defined benefit pension plan items: Amortization of prior service cost $ 8.4 See (1) below Amortization of actuarial net losses ( 0.2 ) See (1) below Pension scheme settlement 138.1 See (1) below 146.3 Total before tax ( 47.8 ) Income tax expense Total reclassifications $ 98.5 Net of tax (1) These items are included in the computation of net periodic pension cost. See Note 10 of the Notes to the Consolidated Financial Statements for additional information. Changes in AOCL for 2024, net of tax, were: (in millions) Defined Benefit Pension Plan Items Cumulative Translation Adjustments Total Balance at December 31, 2023 $ ( 77.2 ) $ ( 70.9 ) $ ( 148.1 ) Other comprehensive income/(losses) before reclassifications — ( 20.1 ) ( 20.1 ) Amounts reclassified from AOCL 98.5 — 98.5 Actuarial net losses arising during the year ( 21.3 ) — ( 21.3 ) Net current period other comprehensive income/(losses) 77.2 ( 20.1 ) 57.1 Balance at December 31, 2024 $ — $ ( 91.0 ) $ ( 91.0 ) 89 Note 20. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). This guidance establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing guidance. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. This ASU was effective for fiscal years beginning after December 15, 2024. Early adoption was permitted. The Company adopted the guidance on a retrospective basis for the period ending December 31, 2025, and the adoption of this ASU is demonstrated within Note 11 of the Notes to the Consolidated Financial Statements. Note 21. Related Party Transactions Mr. Patrick S. Williams has been an executive director of the Company since April 2009 and has been a non-executive director of AdvanSix, a chemicals manufacturer, since February 2020. In 2025, the Company did no t purchase any product from AdvanSix (2024 – nil ; 2023 - $ 0.4 million). As at December 31, 2025, the Company owed nil to AdvanSix (December 31, 2024 – nil ). Mr. Robert I. Paller was a non-executive director of the Company since November 1, 2009 until May 10, 2024, when he did not stand for re-election to the board. The Company has retained and continues to retain Smith, Gambrell & Russell, LLP (“SGR”), a law firm with which Mr. Paller holds a position. From January 1, 2024 until May 10, 2024 the Company incurred fees from SGR of $ 0.2 million (2023 – $ 0.3 million). As at December 31, 2024, the Company owed nil to SGR. Mr. David F. Landless has been a non-executive director of the Company since January 1, 2016 and is a non-executive director of Ausurus Group Limited which owns European Metal Recycling Limited (“EMR”). The Company has sold scrap metal to EMR in 2025 for a value of less than $ 0.1 million (2024 - less than $ 0.1 million; 2023 – $ 0.1 million). A tendering process is operated periodically to select the best buyer for the sale of scrap metal by the Company. As at December 31, 2025, EMR owed nil for scrap metal purchased from the Company (December 31, 2024 – nil ). 90 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.