NEWMARKET CORP 10-Q

ITEM 1. Financial Statements NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per-share amounts) Second Quarter Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net sales $ 723,639 $ 590,721 $ 1,386,191 $ 1,157,336 Cost of goods sold 566,163 449,722 1,073,552 854,584 Gross profit 157,476 140,999 312,639 302,752 Selling, general, and administrative expenses 38,489 34,735 74,111 71,650 Research, development, and testing expenses 35,396 35,517 71,647 71,854 Operating profit 83,591 70,747 166,881 159,248 Interest and financing expenses, net 7,084 8,869 16,490 15,212 Loss on early extinguishment of debt 0 0 7,545 0 Other income (expense), net 9,101 5,180 16,269 12,392 Income before income tax expense 85,608 67,058 159,115 156,428 Income tax expense 19,136 15,106 33,325 34,764 Net income $ 66,472 $ 51,952 $ 125,790 $ 121,664 Earnings per share - basic and diluted $ 6.54 $ 4.75 $ 12.28 $ 11.13 Cash dividends declared per share $ 2.10 $ 1.90 $ 4.20 $ 3.80 See accompanying Notes to Condensed Consolidated Financial Statements 4 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Second Quarter Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income $ 66,472 $ 51,952 $ 125,790 $ 121,664 Other comprehensive income (loss): Pension plans and other postretirement benefits: Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $( 157 ) in second quarter 2022, $( 156 ) in second quarter 2021, $( 313 ) in six months 2022, and $( 315 ) in six months 2021 ( 498 ) ( 494 ) ( 994 ) ( 985 ) Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $ 0 in second quarter 2022, $ 0 in second quarter 2021, $ 7 in six months 2022, and $( 219 ) in six months 2021 0 0 16 ( 657 ) Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $ 173 in second quarter 2022, $ 575 in second quarter 2021, $ 348 in six months 2022, and $ 1,104 in six months 2021 531 1,749 1,070 3,539 Total pension plans and other postretirement benefits 33 1,255 92 1,897 Foreign currency translation adjustments, net of income tax expense (benefit) of $( 658 ) in second quarter 2022, $ 785 in second quarter 2021, $ 473 in six months 2022, and $ 321 in six months 2021 ( 29,176 ) 5,853 ( 32,278 ) 6,320 Other comprehensive income (loss) ( 29,143 ) 7,108 ( 32,186 ) 8,217 Comprehensive income $ 37,329 $ 59,060 $ 93,604 $ 129,881 See accompanying Notes to Condensed Consolidated Financial Statements 5 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share amounts) June 30, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 79,491 $ 83,304 Marketable securities 0 375,918 Trade and other accounts receivable, less allowance for credit losses 515,002 391,779 Inventories 530,186 498,539 Prepaid expenses and other current assets 36,282 38,633 Total current assets 1,160,961 1,388,173 Property, plant, and equipment, net 663,462 676,770 Intangibles (net of amortization) and goodwill 126,842 127,752 Prepaid pension cost 248,575 242,604 Operating lease right-of-use assets 66,821 68,402 Deferred charges and other assets 64,010 54,735 Total assets $ 2,330,671 $ 2,558,436 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 320,930 $ 246,097 Accrued expenses 76,177 85,103 Dividends payable 16,555 16,648 Income taxes payable 9,677 4,442 Operating lease liabilities 16,018 15,709 Current portion of long-term debt 0 349,434 Other current liabilities 7,277 7,654 Total current liabilities 446,634 725,087 Long-term debt 911,295 789,853 Operating lease liabilities-noncurrent 50,468 52,591 Other noncurrent liabilities 200,939 228,776 Total liabilities 1,609,336 1,796,307 Commitments and contingencies (Note 9) Shareholders’ equity: Common stock and paid-in capital (with no par value; authorized shares - 80,000,000 ; issued and outstanding shares - 10,079,643 at June 30, 2022 and 10,362,722 at December 31, 2021) 0 0 Accumulated other comprehensive loss ( 114,413 ) ( 82,227 ) Retained earnings 835,748 844,356 Total shareholders' equity 721,335 762,129 Total liabilities and shareholders’ equity $ 2,330,671 $ 2,558,436 See accompanying Notes to Condensed Consolidated Financial Statements 6 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (in thousands, except share and per-share amounts) Common Stock and Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders’ Equity Shares Amount Balance at March 31, 2021 10,928,154 $ 1,190 $ ( 172,055 ) $ 981,220 $ 810,355 Net income 51,952 51,952 Other comprehensive income (loss) 7,108 7,108 Cash dividends ($ 1.90 per share) ( 20,763 ) ( 20,763 ) Stock-based compensation ( 25 ) 558 558 Balance at June 30, 2021 10,928,129 $ 1,748 $ ( 164,947 ) $ 1,012,409 $ 849,210 Balance at March 31, 2022 10,254,703 $ 0 $ ( 85,270 ) $ 845,360 $ 760,090 Net income 66,472 66,472 Other comprehensive income (loss) ( 29,143 ) ( 29,143 ) Cash dividends ($ 2.10 per share) ( 21,290 ) ( 21,290 ) Repurchases of common stock ( 173,941 ) ( 678 ) ( 54,820 ) ( 55,498 ) Stock-based compensation ( 1,119 ) 678 26 704 Balance at June 30, 2022 10,079,643 $ 0 $ ( 114,413 ) $ 835,748 $ 721,335 Balance at December 31, 2020 10,921,377 $ 717 $ ( 173,164 ) $ 932,271 $ 759,824 Net income 121,664 121,664 Other comprehensive income (loss) 8,217 8,217 Cash dividends ($ 3.80 per share) ( 41,526 ) ( 41,526 ) Stock-based compensation 6,752 1,031 1,031 Balance at June 30, 2021 10,928,129 $ 1,748 $ ( 164,947 ) $ 1,012,409 $ 849,210 Balance at December 31, 2021 10,362,722 $ 0 $ ( 82,227 ) $ 844,356 $ 762,129 Net income 125,790 125,790 Other comprehensive income (loss) ( 32,186 ) ( 32,186 ) Cash dividends ($ 4.20 per share) ( 42,860 ) ( 42,860 ) Repurchases of common stock ( 289,737 ) ( 1,275 ) ( 91,570 ) ( 92,845 ) Stock-based compensation 6,658 1,275 32 1,307 Balance at June 30, 2022 10,079,643 $ 0 $ ( 114,413 ) $ 835,748 $ 721,335 See accompanying Notes to Condensed Consolidated Financial Statements 7 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 2022 2021 Cash and cash equivalents at beginning of year $ 83,304 $ 125,172 Cash flows from operating activities: Net income 125,790 121,664 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 41,670 41,719 Deferred income tax (benefit) expense ( 21,036 ) 6,654 Loss on early extinguishment of debt 7,545 0 Working capital changes ( 114,665 ) ( 59,484 ) Loss on marketable securities 2,977 2,314 Cash pension and postretirement contributions ( 4,863 ) ( 5,184 ) Other, net ( 13,052 ) ( 3,629 ) Cash provided from (used in) operating activities 24,366 104,054 Cash flows from investing activities: Capital expenditures ( 27,807 ) ( 44,394 ) Purchases of marketable securities ( 787 ) ( 387,653 ) Proceeds from sales and maturities of marketable securities 372,846 9,894 Cash provided from (used in) investing activities 344,252 ( 422,153 ) Cash flows from financing activities: Redemption of 4.10 % senior notes ( 350,000 ) 0 Net borrowings under revolving credit facility 121,000 0 Issuance of 2.70 % senior notes 0 395,052 Dividends paid ( 42,860 ) ( 41,526 ) Repurchases of common stock ( 90,782 ) 0 Cash costs of 4.10 % senior notes redemption ( 7,099 ) 0 Debt issuance costs 0 ( 3,897 ) Other, net ( 1,955 ) ( 3,544 ) Cash provided from (used in) financing activities ( 371,696 ) 346,085 Effect of foreign exchange on cash and cash equivalents ( 735 ) 706 (Decrease) increase in cash and cash equivalents ( 3,813 ) 28,692 Cash and cash equivalents at end of period $ 79,491 $ 153,864 See accompanying Notes to Condensed Consolidated Financial Statements 8 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Financial Statement Presentation In the opinion of management, the accompanying consolidated financial statements of NewMarket Corporation and its subsidiaries contain all necessary adjustments for the fair presentation of, in all material respects, our consolidated financial position as of June 30, 2022 and December 31, 2021, and our consolidated results of operations, comprehensive income, and changes in shareholders' equity for the second quarter and six months ended June 30, 2022 and June 30, 2021, and our cash flows for the six months ended June 30, 2022 and June 30, 2021. All adjustments are of a normal, recurring nature, unless otherwise disclosed. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the NewMarket Corporation Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report), as filed with the Securities and Exchange Commission (SEC). The results of operations for the six month period ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022. The December 31, 2021 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Unless the context otherwise indicates, all references to “we,” “us,” “our,” the “company,” and “NewMarket” are to NewMarket Corporation and its consolidated subsidiaries. 2. Net Sales Our revenues are primarily derived from the manufacture and sale of petroleum additives products. We sell petroleum additives products across the world to customers located in the North America (the United States and Canada), Latin America (Mexico, Central America, and South America), Asia Pacific, and EMEAI (Europe/Middle East/Africa/India) regions. Our customers primarily consist of global, national, and independent oil companies. Our contracts generally include one performance obligation, which is providing petroleum additives products. 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. In limited cases, we collect funds in advance of shipping product to our customers and recognizing the related revenue. These prepayments from customers are recorded as a contract liability to our customer until we recognize the revenue. Some of our contracts include variable consideration in the form of rebates or business development funds. We regularly review both rebates and business development funds and make adjustments when necessary, recognizing the full amount of any adjustment in the period identified. The following table provides information on our net sales by geographic area. Information on net sales by segment is in Note 3. Second Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Net sales United States $ 249,594 $ 190,563 $ 474,282 $ 360,887 China 61,727 72,065 114,430 146,053 Europe, Middle East, Africa, India 203,343 168,479 399,330 345,129 Asia Pacific, except China 113,998 83,804 218,839 166,401 Other foreign 94,977 75,810 179,310 138,866 Net sales $ 723,639 $ 590,721 $ 1,386,191 $ 1,157,336 9 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. Segment Information The tables below show our consolidated segment results. The “All other” category includes the operations of the antiknock compounds business, as well as certain contracted manufacturing and services associated with Ethyl Corporation (Ethyl). Net Sales by Segment Second Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Petroleum additives Lubricant additives $ 622,973 $ 498,777 $ 1,193,015 $ 993,333 Fuel additives 98,048 87,810 188,310 158,152 Total 721,021 586,587 1,381,325 1,151,485 All other 2,618 4,134 4,866 5,851 Net sales $ 723,639 $ 590,721 $ 1,386,191 $ 1,157,336 Segment Operating Profit Second Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Petroleum additives $ 91,185 $ 74,200 $ 178,107 $ 168,271 All other ( 262 ) 17 ( 164 ) ( 647 ) Segment operating profit 90,923 74,217 177,943 167,624 Corporate, general, and administrative expenses ( 7,332 ) ( 3,548 ) ( 11,222 ) ( 7,860 ) Interest and financing expenses, net ( 7,084 ) ( 8,869 ) ( 16,490 ) ( 15,212 ) Loss on early extinguishment of debt 0 0 ( 7,545 ) 0 Other income (expense), net 9,101 5,258 16,429 11,876 Income before income tax expense $ 85,608 $ 67,058 $ 159,115 $ 156,428 10 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 4. Pension Plans and Other Postretirement Benefits The table below shows cash contributions made during the six months ended June 30, 2022, as well as the remaining cash contributions we expect to make during the year ending December 31, 2022, for our domestic and foreign pension plans and domestic postretirement benefit plan. (in thousands) Actual Cash Contributions for Six Months Ended June 30, 2022 Expected Remaining Cash Contributions for Year Ending December 31, 2022 Domestic plans Pension benefits $ 1,193 $ 1,192 Postretirement benefits 670 669 Foreign plans Pension benefits 3,000 3,382 The tables below present information on net periodic benefit cost (income) for our domestic and foreign pension plans and domestic postretirement benefit plan. The service cost component of net periodic benefit cost (income) is reflected in cost of goods sold; selling, general, and administrative expenses; or research, development, and testing expenses, according to where other compensation costs arising from services rendered by the pertinent employee are recorded on the Consolidated Statements of Income. The remaining components of net periodic benefit cost (income) are recorded in other income (expense), net on the Consolidated Statements of Income. Domestic Pension Benefits Postretirement Benefits Second Quarter Ended June 30, (in thousands) 2022 2021 2022 2021 Service cost $ 4,856 $ 4,814 $ 261 $ 250 Interest cost 3,388 3,241 289 291 Expected return on plan assets ( 10,940 ) ( 9,670 ) ( 204 ) ( 234 ) Amortization of prior service cost (credit) 68 69 ( 757 ) ( 757 ) Amortization of actuarial net (gain) loss 536 1,390 9 13 Net periodic benefit cost (income) $ ( 2,092 ) $ ( 156 ) $ ( 402 ) $ ( 437 ) Domestic Pension Benefits Postretirement Benefits Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Service cost $ 9,712 $ 9,628 $ 521 $ 500 Interest cost 6,777 6,482 578 583 Expected return on plan assets ( 21,880 ) ( 19,340 ) ( 408 ) ( 467 ) Amortization of prior service cost (credit) 136 137 ( 1,514 ) ( 1,514 ) Amortization of actuarial net (gain) loss 1,072 2,780 17 25 Net periodic benefit cost (income) $ ( 4,183 ) $ ( 313 ) $ ( 806 ) $ ( 873 ) 11 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Foreign Pension Benefits Second Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Service cost $ 2,252 $ 2,769 $ 4,612 $ 5,526 Interest cost 1,050 834 2,148 1,661 Expected return on plan assets ( 2,509 ) ( 2,691 ) ( 5,144 ) ( 5,357 ) Amortization of prior service cost (credit) 35 38 72 76 Amortization of actuarial net (gain) loss 162 907 331 1,808 Net periodic benefit cost (income) $ 990 $ 1,857 $ 2,019 $ 3,714 5. Earnings Per Share We had 33,230 shares of nonvested restricted stock at June 30, 2022 and 26,703 shares of nonvested restricted stock at June 30, 2021 that were excluded from the calculation of diluted earnings per share, as their effect on earnings per share would be anti-dilutive. The nonvested restricted stock is considered a participating security since the restricted stock contains nonforfeitable rights to dividends. As such, we use the two-class method to compute basic and diluted earnings per share for all periods presented since this method yields the most dilutive result. The following table illustrates the earnings allocation method utilized in the calculation of basic and diluted earnings per share. Second Quarter Ended June 30, Six Months Ended June 30, (in thousands, except per-share amounts) 2022 2021 2022 2021 Earnings per share numerator: Net income attributable to common shareholders before allocation of earnings to participating securities $ 66,472 $ 51,952 $ 125,790 $ 121,664 Earnings allocated to participating securities 193 130 368 283 Net income attributable to common shareholders after allocation of earnings to participating securities $ 66,279 $ 51,822 $ 125,422 $ 121,381 Earnings per share denominator: Weighted-average number of shares of common stock outstanding - basic and diluted 10,136 10,901 10,213 10,901 Earnings per share - basic and diluted $ 6.54 $ 4.75 $ 12.28 $ 11.13 6. Inventories June 30, December 31, (in thousands) 2022 2021 Finished goods and work-in-process $ 421,493 $ 393,778 Raw materials 89,881 86,856 Stores, supplies, and other 18,812 17,905 $ 530,186 $ 498,539 12 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 7. Intangibles (Net of Amortization) and Goodwill The net carrying amount of intangibles and goodwill was $ 127 million at June 30, 2022 and $ 128 million at December 31, 2021. The gross carrying amount and accumulated amortization of each type of intangible asset and goodwill are presented in the table below. June 30, 2022 December 31, 2021 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortizing intangible assets Formulas and technology $ 6,200 $ 5,167 $ 6,200 $ 4,650 Contract 2,000 1,100 2,000 1,000 Customer bases 5,440 4,254 5,440 4,160 Goodwill 123,723 123,922 $ 137,363 $ 10,521 $ 137,562 $ 9,810 All of the intangibles relate to the petroleum additives segment. The change in the gross carrying amount between December 31, 2021 and June 30, 2022 is due to foreign currency fluctuation. There is no accumulated goodwill impairment. Amortization expense was (in thousands): Second quarter ended June 30, 2022 $ 356 Six months ended June 30, 2022 711 Second quarter ended June 30, 2021 723 Six months ended June 30, 2021 1,444 Estimated amortization expense for the remainder of 2022, as well as estimated annual amortization expense related to our intangible assets for the next five years, is expected to be (in thousands): 2022 $ 712 2023 907 2024 390 2025 390 2026 390 2027 190 We amortize the contract over 10 years; the customer base over 20 years; and formulas and technology over 6 years. 8. Long-term Debt (in thousands) June 30, 2022 December 31, 2021 Senior notes - 2.70 % due 2031 (net of related deferred financing costs) $ 392,295 $ 391,853 Senior notes - 3.78 % due 2029 250,000 250,000 Senior notes - 4.10 % due 2022 (net of related deferred financing costs) 0 349,434 Revolving credit facility 269,000 148,000 911,295 1,139,287 Less: Current maturity of 4.10 % senior notes 0 349,434 $ 911,295 $ 789,853 Senior Notes - The outstanding 2.70 % senior notes, which were issued in 2021, are unsecured with an aggregate principal amount of $ 400 million. The offer and sale of the notes were registered under the Securities Act of 1933, as amended. 13 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The outstanding 3.78 % senior notes are unsecured and were issued in a 2017 private placement with The Prudential Insurance Company of America and certain other purchasers. On March 15, 2022, we redeemed the 4.10 % senior notes at a redemption price of 100 % of the principal amount of $ 350 million plus the accrued and unpaid interest on the notes and the applicable premium as outlined in the Indenture dated December 20, 2012. The 4.10 % senior notes were due December 2022. We recognized a loss of $ 7.5 million on the early extinguishment including cash paid of $ 7.1 million for the premium on the early redemption and a write-off of $ 0.4 million of unamortized deferred financing costs. We were in compliance with all covenants under all issuances of outstanding senior notes as of June 30, 2022 and December 31, 2021. Revolving Credit Facility - The revolving credit facility has a borrowing capacity of $ 900 million, a term of five years , and matures on March 5, 2025. The obligations under the revolving credit facility are unsecured. The average interest rate for borrowings under the credit agreement was 2.1 % during the first six months of 2022 and 1.6 % during the full year of 2021. We were in compliance with all covenants under the revolving credit facility as of June 30, 2022 and December 31, 2021. Outstanding borrowings under the revolving credit facility amounted to $ 269 million at June 30, 2022 and $ 148 million at December 31, 2021. Outstanding letters of credit amounted to approximately $ 2 million at both June 30, 2022 and December 31, 2021. The unused portion of the credit facility amounted to $ 629 million as of June 30, 2022 and $ 750 million at December 31, 2021. 9. Commitments and Contingencies Legal Matters We are involved in legal proceedings that are incidental to our business and may include administrative or judicial actions. Some of these legal proceedings involve governmental authorities and relate to environmental matters. For further information, see Environmental below. While it is not possible to predict or determine with certainty the outcome of any legal proceeding, we believe the outcome of any of these proceedings, or all of them combined, will not result in a material adverse effect on our consolidated results of operations, financial condition, or cash flows. Environmental We are involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination, disposal of hazardous waste, and other environmental matters at several of our current or former facilities, or at third-party sites where we have been designated as a potentially responsible party. While we believe we are currently adequately accrued for known environmental issues, it is possible that unexpected future costs could have a significant impact on our consolidated financial position, results of operations, and cash flows. Our total accruals for environmental remediation, dismantling, and decontamination were approximately $ 10 million at June 30, 2022 and $ 11 million at December 31, 2021. Of the total accrual, the current portion is included in accrued expenses and the noncurrent portion is included in other noncurrent liabilities on the Condensed Consolidated Balance Sheets. Our more significant environmental sites include a former plant site in Louisiana and a Houston, Texas plant site. Together, the amounts accrued on a discounted basis related to these sites represented approximately $ 8 million of the total accrual above at both June 30, 2022 and December 31, 2021, using discount rates ranging from 3 % to 9 % for both periods. The aggregate undiscounted amount for these sites was $ 10 million at both June 30, 2022 and December 31, 2021. 14 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 10. Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss The balances of, and changes in, the components of accumulated other comprehensive loss, net of tax, consist of the following: (in thousands) Pension Plans and Other Postretirement Benefits Foreign Currency Translation Adjustments Accumulated Other Comprehensive (Loss) Income Balance at December 31, 2020 $ ( 92,771 ) $ ( 80,393 ) $ ( 173,164 ) Other comprehensive income (loss) before reclassifications ( 657 ) 6,320 5,663 Amounts reclassified from accumulated other comprehensive loss (a) 2,554 0 2,554 Other comprehensive income (loss) 1,897 6,320 8,217 Balance at June 30, 2021 $ ( 90,874 ) $ ( 74,073 ) $ ( 164,947 ) Balance at December 31, 2021 $ 1,522 $ ( 83,749 ) $ ( 82,227 ) Other comprehensive income (loss) before reclassifications 16 ( 32,278 ) ( 32,262 ) Amounts reclassified from accumulated other comprehensive loss (a) 76 0 76 Other comprehensive income (loss) 92 ( 32,278 ) ( 32,186 ) Balance at June 30, 2022 $ 1,614 $ ( 116,027 ) $ ( 114,413 ) (a) The pension plan and other postretirement benefit components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost (income). See Note 4 in this Quarterly Report on Form 10-Q and Note 18 in our 2021 Annual Report for further information. 11. Fair Value Measurements The carrying amount of cash and cash equivalents in the Consolidated Balance Sheets, as well as the fair value, was $ 79 million at June 30, 2022 and $ 83 million at December 31, 2021. The fair value is classified as Level 1 in the fair value hierarchy. No material events occurred during the six months ended June 30, 2022 requiring adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis. Long-term debt – We record the carrying amount of our long-term debt at historical cost, less deferred financing costs related to our registered senior notes. The estimated fair value of our long-term debt is shown in the table below and is based primarily on estimated current rates available to us for debt of the same remaining duration and adjusted for nonperformance risk and credit risk. The estimated fair value of our registered senior notes included in the table below is based on the last quoted price closest to June 30, 2022. The fair value of our debt instruments are classified as Level 2. June 30, 2022 December 31, 2021 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current maturities $ 911,295 $ 830,756 $ 1,139,287 $ 1,178,066 15 Table of Contents