What changed in this filing

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Item 1. Financial Statements

2022-10-25 compared with 2022-08-03 · 76 added, 62 removed, 326 unchanged (30% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per-share amounts) Second Quarter Ended

June 30, Six Months Ended

(in thousands, except per-share amounts) Third Quarter Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

16 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands) Second Quarter Ended

June 30, Six Months Ended

(in thousands) Third Quarter Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

2 unchanged sentences

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

Prior service credit (cost) arising during the period, net of income tax expense (benefit) of $ 0 in third quarter and nine months 2022, $ 8 in third quarter and nine months 2021

Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $( 157 ) in third quarter 2022, $( 157 ) in third quarter 2021, $( 470 ) in nine months 2022, and $( 472 ) in nine months 2021

( 500 ) ( 496 ) ( 1,494 ) ( 1,481 )

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

Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $ 583 in third quarter 2022, $( 433 ) in third quarter 2021, $ 590 in nine months 2022, and $( 652 ) in nine months 2021

1,812 ( 1,363 ) 1,828 ( 2,020 )

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

Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $ 145 in third quarter 2022, $ 593 in third quarter 2021, $ 493 in nine months 2022, and $ 1,697 in nine months 2021

445 1,806 1,515 5,345

1 unchanged sentence

1,757 ( 26 ) 1,849 1,871

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

Foreign currency translation adjustments, net of income tax expense (benefit) of $( 194 ) in third quarter 2022, $( 535 ) in third quarter 2021, $ 279 in nine months 2022, and $( 214 ) in nine months 2021

( 35,973 ) ( 7,401 ) ( 68,251 ) ( 1,081 )

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts) June 30,

(in thousands, except share amounts) September 30,

2022 December 31,

10 unchanged sentences

Prepaid pension cost 254,695 242,604

Operating lease right-of-use assets 66,821 68,402

Operating lease right-of-use assets, net 64,213 68,402

Deferred charges and other assets 64,280 54,735

18 unchanged sentences

authorized shares - 80,000,000 ;

issued and outstanding shares - 10,079,643 at June 30, 2022 and 10,362,722 at December 31, 2021)

issued and outstanding shares - 9,871,440 at September 30, 2022 and 10,362,722 at December 31, 2021)

Accumulated other comprehensive loss ( 148,629 ) ( 82,227 )

9 unchanged sentences

Shares Amount

Balance at March 31, 2021 10,928,154 $ 1,190 $ ( 172,055 ) $ 981,220 $ 810,355

Balance at June 30, 2021 10,928,129 $ 1,748 $ ( 164,947 ) $ 1,012,409 $ 849,210

Net income 52,038 52,038

2 unchanged sentences

( 22,590 ) ( 22,590 )

Repurchases of common stock ( 292,392 ) ( 2,748 ) ( 96,712 ) ( 99,460 )

Stock-based compensation 1,310 1,000 2 1,002

Balance at September 30, 2021 10,637,047 $ 0 $ ( 172,374 ) $ 945,147 $ 772,773

Balance at June 30, 2022 10,079,643 $ 0 $ ( 114,413 ) $ 835,748 $ 721,335

Balance at March 31, 2022 10,254,703 $ 0 $ ( 85,270 ) $ 845,360 $ 760,090

Net income 63,226 63,226

4 unchanged sentences

Stock-based compensation 1,335 298 3 301

Balance at June 30, 2022 10,079,643 $ 0 $ ( 114,413 ) $ 835,748 $ 721,335

Balance at September 30, 2022 9,871,440 $ 0 $ ( 148,629 ) $ 816,005 $ 667,376

Balance at December 31, 2020 10,921,377 $ 717 $ ( 173,164 ) $ 932,271 $ 759,824

3 unchanged sentences

( 64,116 ) ( 64,116 )

Repurchases of common stock ( 292,392 ) ( 2,748 ) ( 96,712 ) ( 99,460 )

Stock-based compensation 8,062 2,031 2 2,033

Balance at June 30, 2021 10,928,129 $ 1,748 $ ( 164,947 ) $ 1,012,409 $ 849,210

Balance at September 30, 2021 10,637,047 $ 0 $ ( 172,374 ) $ 945,147 $ 772,773

Balance at December 31, 2021 10,362,722 $ 0 $ ( 82,227 ) $ 844,356 $ 762,129

5 unchanged sentences

Stock-based compensation 7,993 1,573 35 1,608

Balance at June 30, 2022 10,079,643 $ 0 $ ( 114,413 ) $ 835,748 $ 721,335

Balance at September 30, 2022 9,871,440 $ 0 $ ( 148,629 ) $ 816,005 $ 667,376

See accompanying Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) Six Months Ended

(in thousands) Nine Months Ended

September 30,

Cash and cash equivalents at beginning of year $ 83,304 $ 125,172

33 unchanged sentences

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.

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 September 30, 2022 and December 31, 2021, and our consolidated results of operations, comprehensive income, and changes in shareholders' equity for the third quarter and nine months ended September 30, 2022 and September 30, 2021, and our cash flows for the nine months ended September 30, 2022 and September 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 results of operations for the nine month period ended September 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.

11 unchanged sentences

Information on net sales by segment is in Note 3.

Second Quarter Ended

June 30, Six Months Ended

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

9 unchanged sentences

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).

The “All other” category includes the operations of the antiknock compounds business, as well as certain contract manufacturing and services associated with Ethyl Corporation (Ethyl).

Net Sales by Segment

Second Quarter Ended

June 30, Six Months Ended

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

6 unchanged sentences

Segment Operating Profit

Second Quarter Ended

June 30, Six Months Ended

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

11 unchanged sentences

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

The table below shows cash contributions made during the nine months ended September 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 Nine Months Ended September 30, 2022 Expected Remaining Cash Contributions for Year Ending December 31, 2022

Domestic plans

9 unchanged sentences

Pension Benefits Postretirement Benefits

Second Quarter Ended June 30,

Third Quarter Ended September 30,

(in thousands) 2022 2021 2022 2021

6 unchanged sentences

Pension Benefits Postretirement Benefits

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

8 unchanged sentences

Pension Benefits

Second Quarter Ended June 30, Six Months Ended June 30,

Third Quarter Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

6 unchanged sentences

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.

We had 33,070 shares of nonvested restricted stock at September 30, 2022 and 26,618 shares of nonvested restricted stock at September 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.

1 unchanged sentence

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

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per-share amounts) 2022 2021 2022 2021

10 unchanged sentences

Earnings per share - basic and diluted $ 6.32 $ 4.80 $ 18.60 $ 15.94

June 30, December 31,

September 30, December 31,

(in thousands)

6 unchanged sentences

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 net carrying amount of intangibles and goodwill was $ 126 million at September 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

September 30, 2022 December 31, 2021

(in thousands) Gross

5 unchanged sentences

Contract 2,000 1,150 2,000 1,000

Customer bases 5,440 4,254 5,440 4,160

Customer base 5,440 4,302 5,440 4,160

Goodwill 123,560 123,922

1 unchanged sentence

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.

The change in the gross carrying amount between December 31, 2021 and September 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

Third quarter ended September 30, 2022 $ 356

Nine months ended September 30, 2022 1,067

Third quarter ended September 30, 2021 356

Nine months ended September 30, 2021 1,800

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):

We amortize the contract over 10 years;

the customer base over 20 years;

and formulas and technology over 6 years.

We amortize formulas and technology over 6 years, the contract over 10 years, and the customer base over 20 years .

Long-term Debt

(in thousands) June 30,

(in thousands) September 30,

2022 December 31,

16 unchanged sentences

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.

We were in compliance with all covenants under all issuances of outstanding senior notes as of September 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.

The average interest rate for borrowings under the credit agreement was 2.7 % during the first nine 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 September 30, 2022 and December 31, 2021.

Outstanding borrowings under the revolving credit facility amounted to $ 366 million at September 30, 2022 and $ 148 million at December 31, 2021.

Outstanding letters of credit amounted to approximately $ 2 million at both September 30, 2022 and December 31, 2021.

The unused portion of the credit facility amounted to $ 532 million at September 30, 2022 and $ 750 million at December 31, 2021.

Commitments and Contingencies

7 unchanged sentences

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.

Our total accruals for environmental remediation, dismantling, and decontamination were approximately $ 10 million at September 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.

Together, the amounts accrued on a discounted basis related to these sites represented approximately $ 7 million of the total accrual above at September 30, 2022 and $ 8 million at December 31, 2021, using discount rates ranging from 3 % to 9 % for both periods.

The aggregate undiscounted amount for these sites were $ 9 million at September 30, 2022 and $ 10 million at December 31, 2021.

NEWMARKET CORPORATION AND SUBSIDIARIES

12 unchanged sentences

1,871 ( 1,081 ) 790

Balance at June 30, 2021 $ ( 90,874 ) $ ( 74,073 ) $ ( 164,947 )

Balance at September 30, 2021 $ ( 90,900 ) $ ( 81,474 ) $ ( 172,374 )

Balance at December 31, 2021 $ 1,522 $ ( 83,749 ) $ ( 82,227 )

4 unchanged sentences

1,849 ( 68,251 ) ( 66,402 )

Balance at June 30, 2022 $ 1,614 $ ( 116,027 ) $ ( 114,413 )

Balance at September 30, 2022 $ 3,371 $ ( 152,000 ) $ ( 148,629 )

(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).

1 unchanged sentence

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 carrying amount of cash and cash equivalents in the Consolidated Balance Sheets, as well as the fair value, was $ 72 million at September 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.

No material events occurred during the nine months ended September 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 estimated fair value of our registered senior notes included in the table below is based on the last quoted price closest to September 30, 2022.

The fair value of our debt instruments are classified as Level 2.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(in thousands) Carrying

1 unchanged sentence

Long-term debt, including current maturities $ 1,008,516 $ 896,982 $ 1,139,287 $ 1,178,066

Recent Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.

2022-04, "Liabilities - Supplier Finance Programs - Disclosure of Supplier Finance Program Obligations" (ASU 2022-04).

FASB issued ASU 2022-04 to enhance the transparency of supplier finance programs by requiring disclosures surrounding the programs be included in the financial statements.

ASU 2022-04 is effective for our reporting period beginning January 1, 2023.

We are evaluating the impact of ASU 2022-04 on our consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements