What changed in this filing

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Item 1. Business

2023-02-15 compared with 2022-02-15 · 75 added, 77 removed, 203 unchanged (43% of the section changed)

2 unchanged sentences

Each of our subsidiaries manages its own assets and liabilities.

Afton manufactures and sells petroleum additives, while Ethyl represents the sale of antiknock compounds in North America, as well as contract manufacturing and services.

Afton manufactures and sells petroleum additives, while Ethyl markets antiknock compounds in North America and performs contracted manufacturing and related services.

NewMarket Development manages the real property that we own in Virginia.

NewMarket Services provides various administrative services to NewMarket, Afton, Ethyl, and NewMarket Development.

NewMarket Services departmental expenses and other expenses are billed to each subsidiary pursuant to services agreements between the companies.

NewMarket Services departmental and other expenses are billed to each subsidiary pursuant to services agreements between the companies.

References in this Annual Report on Form 10-K to “we,” “us,” “our,” and “NewMarket” are to NewMarket Corporation and its consolidated subsidiaries, unless the context indicates otherwise.

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We have operations in North America, Europe, Asia, and South America.

The economies are generally stable in the countries where we do most of our business, although many of those countries have experienced economic challenges in the past.

The economies are generally stable in the countries where we do most of our business, although many of those countries experience economic challenges from time to time.

In countries with more political or economic uncertainty, we generally minimize our risk of loss by utilizing U.S.

1 unchanged sentence

Further information on our operations in the various geographic areas is in Note 4 of the Notes to Consolidated Financial Statements.

With over 500 employees in research, development, and testing, Afton is dedicated to developing additive formulations that are tailored to our customers’ and the end-users’ specific needs.

With approximately 500 employees in research, development, and testing, Afton is dedicated to developing additive formulations that are tailored to our customers’ and the end-users’ specific needs.

Afton’s portfolio of technologically-advanced, value-added products allows it to provide a full range of products, services, and solutions to its customers.

Ethyl provides contracted manufacturing and services to Afton and to third parties, and is a marketer of antiknock compounds in North America.

Ethyl provides contracted manufacturing and related services to Afton and to third parties and is a marketer of antiknock compounds in North America.

NewMarket Development manages the real property we own in Richmond, Virginia consisting of approximately 50 acres.

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We are exploring various development opportunities for portions of the property as the demand warrants.

This effort is ongoing in nature, as we have no specific timeline for any future developments.

This effort is ongoing in nature.

We were incorporated in the Commonwealth of Virginia in 2004.

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We believe our success in the petroleum additives market is largely due to our ability to deliver value to our customers through our products and our open, flexible, and collaborative working style.

We accomplish this by understanding what our customers value and by applying our technical capabilities, formulation expertise, broadly differentiated product solutions, and global supply capabilities to satisfy the customers' needs.

We invest significantly in research and development in order to meet our customers’ needs and to adapt to the rapidly changing environment for new and improved products and services.

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We anticipated and are responding to the need for future lubricants to consider conductivity, the effect of electric fields, low friction/high speed, noise, and battery cooling or copper wire drawing.

All of these products must conform to highly prescribed specifications developed by vehicle OEMs for specific models or designs.

These additives are generally sold to oil companies for ultimate sale to vehicle OEMs for new vehicles (factory-fill), service dealers for aftermarket servicing (service-fill), retailers, and distributors.

All driveline additives products must conform to highly prescribed specifications developed by vehicle OEMs for specific models or designs.

Driveline additives are generally sold to oil companies for ultimate sale to vehicle OEMs for new vehicles (factory-fill), service dealers for aftermarket servicing (service-fill), retailers, and distributors.

Key drivers of the driveline additives marketplace are the number of vehicles manufactured, total number of vehicles in operation, drain intervals for transmission fluids and axle fluids, changes in engine and transmission design and temperatures, and specification changes driven by the OEMs.

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While we participate in many facets of the fuel additives market, our competitors tend to be more narrowly focused.

In the gasoline detergent market, we compete mainly against BASF, Chevron Oronite Company LLC, and The Lubrizol Corporation.

In the gasoline detergent market, we compete mainly against BASF, Chevron Oronite Company LLC, Innospec Inc., and The Lubrizol Corporation.

In the diesel and refinery markets, we compete mainly against The Lubrizol Corporation, Infineum, BASF, Clariant Ltd., Dorf Ketal, and Innospec Inc.

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The need to continually increase technology performance and lower cost through formulation technology and cost improvement programs is vital for success in this environment.

All Other —The “All other” category includes the operations of the antiknock compounds business (primarily sales of antiknock compounds in North America), as well as certain contracted manufacturing and services performed by Ethyl.

All Other - The “All other” category includes the operations of the antiknock compounds business (primarily sales of antiknock compounds in North America), as well as certain contracted manufacturing and related services performed by Ethyl.

The Ethyl facility is located in Houston, Texas and is substantially dedicated to terminal operations related to antiknock compounds and other fuel additives.

1 unchanged sentence

The “All other” category financial results include a service fee charged by Ethyl for its production services to Afton.

Human Capital

Our Values are the foundation of our company and support the inclusive and respectful culture we have established in all of our locations around the world.

Our Values include:

• unquestioned integrity,

• respect for people,

• safety and environmental responsibility,

• partners with customers and suppliers,

• continuously improving quality,

• citizenship, and

• economic viability.

We place the highest level of commitment on safety and strive to operate our business every day focused on its importance.

Keeping our employees safe is a management priority, and the past two years were particularly challenging in that regard because of the COVID-19 pandemic.

While many of our employees were required to work from home due to government mandates, all of our facilities continued to be operational throughout 2020 and 2021 since the chemical industry and our products are considered essential for the transportation of goods and services.

For employees working onsite at our facilities, management invested significant time and effort to ensure the safety of our employees, above and beyond local government requirements and guidance, and to help mitigate risk.

We have a diverse workforce, representative of the geographic regions in which we do business.

We place a high value on diverse thoughts, skills, perspectives, cultures, and knowledge because we believe that such diversity results in better business decision making.

We employed 2,104 people at the end of 2021.

Approximately 1,100 were located in the United States, 500 were in the Europe/Middle East/Africa/India region, 300 were in the Asia Pacific region, and 200 were in the Latin America region.

Approximately 22% of our workforce is represented by unions.

When we hire new employees, our goal is that they stay with our company for the remainder of their career.

Hiring the right people for the long-term and developing them for key roles is something we focus on.

In order to be successful, we must attract and retain a highly qualified and technically competent workforce, including key employees in leadership positions.

As technology changes in the petroleum additives industry are ongoing, the success of our business is very dependent upon our ability to attract and retain highly qualified scientific and technical personnel.

In addition to utilizing our internal network, contacts, and specialized recruiters to identify and attract qualified personnel, we have established relationships with a number of universities globally and have intern and co-op programs in many of our locations.

Globally, approximately 17% of our employees have 20 years or more of service, and over the three year period from 2019 to 2021, our resignation rate was approximately 3.7%.

We believe these measures demonstrate our success in hiring the right employees for the long-term and establishing a culture where respect for people is an everyday value.

Raw Materials and Product Supply

3 unchanged sentences

In some cases, we source from a single supplier.

In cases where we decide to source from a single supplier, we manage our risk by maintaining safety stock of the raw material or qualifying alternate suppliers.

The backup position could take additional time to implement, but we are confident we can ensure continued supply for our customers.

During 2021, global supply chain disruptions negatively affected both supply, as well as distribution and transportation networks.

While many of these challenges continue into 2022, we continuously monitor our raw material supply situation and adjust our procurement strategies as conditions require.

In cases where we decide to source from a single supplier, we manage our risk by maintaining safety stock of the raw material or qualifying alternate suppliers, which could take additional time to implement, but we are confident we can ensure continued supply for our customers.

During the past three years, global supply chain disruptions negatively affected both supply, as well as distribution and transportation networks.

We continuously monitor our raw material supply situation and adjust our procurement strategies as conditions require.

Research, Development, and Testing

5 unchanged sentences

In 2022, we continued to invest in and progress our technology plans.

Afton continues to develop new products and technology to meet evolving OEM requirements, including specific demands of hybrid and electric vehicles, industry specifications, and environmental regulations, and to keep our customers well-positioned for the future.

Afton continues to develop new products and technology to keep our customers well-positioned for the future by meeting evolving OEM requirements, including specific demands of hybrid and electric vehicles, industry specifications, and environmental regulations.

A significant portion of our R&D investment is dedicated to the development of products that are differentiated by their ability to deliver improved fuel efficiency in addition to robust performance in a wide range of new vehicle and industrial equipment designs.

Afton’s state-of-the art testing capabilities enable customized research in all areas of performance needed by both OEMs and tier one suppliers.

Our leading-edge capabilities and fundamental understanding in the areas of combustion, friction control, energy efficiency, and wear prevention are used to set the stage for next-generation products in all areas.

In line with Afton’s vision, we continue to focus our technology to make the world a better place by reducing the use of chemicals of concern, using more raw materials from sustainable sources, developing additives that enable some of the world’s most fuel-efficient fluids, creating fuel additives that enable engines to be more efficient, and being a market leader in transmission fluids for full battery electric vehicles.

In 2021, we successfully launched new technologies across all our lubricant additive and fuel additive product areas.

Our leading-edge capabilities and fundamental understanding in the areas of combustion, friction control, energy efficiency, electric motor compatibility, and wear prevention are used to set the stage for next-generation products in all areas.

In line with Afton’s vision, we continue to focus our technology to make the world a better place by reducing the use of chemicals of concern, using more raw materials from sustainable sources, developing additives that enable some of the world’s most fuel efficient fluids, creating fuels additives that enable engines to be more efficient, and being a market leader in transmission fluids for full battery electric vehicles.

In addition, we are continuing to see benefits from our waste minimization efforts with a 33% reduction in hazardous waste generation from R&D operations in Richmond, Virginia when compared to last year.

In 2022, we successfully launched new technologies across all our lubricant additives and fuel additives product areas.

We developed new engine oil products for passenger cars and commercial trucks in support of our customers in all the major regions of the world in which we operate, including engine oil technology designed for the latest fuel-efficient passenger car specifications, as well as solutions for commercial vehicles.

We continued to develop new products in multiple application areas in the industrial additive sector, including hydraulic, industrial gear, turbine, slideway, and grease additives.

Research is focused on the development of technologies that will provide differentiation to our customers in multiple performance areas including equipment life, reliability, and energy efficiency.

We continued to develop new products in multiple application areas in the industrial additives sector, including hydraulic, industrial gear, turbine, slideway, and grease additives.

Research is focused on the development of technologies that will provide differentiation to our customers in multiple performance areas including equipment life, reliability, and energy efficiency, as well as eliminating or reducing chemicals of concern.

This includes focusing on our wind turbine technology to maintain our technology leadership in this important and growing market.

Research continued in our transmission fluid, axle oil, and tractor fluid product lines.

This included the development of new OEM-specific additives used in factory-fill fluids installed during automotive component and vehicle assembly in the United States, Germany, Japan, India, and China.

We launched new OEM-specific technology for battery electric passenger and commercial vehicles and are a leading supplier in this new and growing market.

We also developed new

products for the service-fill sector to provide our customers with the latest additive technology available, including some first-to-market capability enabling our customers to differentiate their offerings to the retail market.

We launched new OEM specific technology for full battery electric passenger and commercial vehicles for industry-leading OEMs and are a top supplier in this new and growing market.

We also developed new products for the service-fill sector to provide our customers with the latest additives technology available, with specific focus on the Asia Pacific region.

We continue to provide leading technology in the fuel additives area.

In 2022, we developed new technology in both gasoline performance additives and diesel performance additives.

Many of these products use new technology specifically designed to perform well in new, modern engine designs and changing fuel properties, as well as addressing the growing need for increased fuel economy and emissions reduction.

In addition, we continue to maintain close interactions with regulatory, industry, and OEM leaders to guide our development of future fuel additive technologies based on well-defined market needs.

This includes launching a new technology platform that is both more efficient and better performing.

In addition, we continue to maintain close interactions with regulatory, industry, and OEM leaders to guide our development of future fuel additives technologies based on well-defined market needs.

Afton remains committed to providing the most advanced products, comprehensive testing programs, and superior technical solutions tailored to the needs of our customers and OEMs worldwide.

Intellectual Property

7 unchanged sentences

We also have several hundred trademark registrations throughout the world for our marks, including NewMarket ® , Afton Chemical ® , Ethyl ® , mmt ® , HiTEC ® , GREENBURN ® , Passion for Solutions ® , CleanStart ® , Microbotz ® , DriveMore ® , and Axcel ® .

Human Capital

Our Values are the foundation of our company and support the inclusive and respectful culture we have established in all of our locations around the world.

Our Values include:

• unquestioned integrity,

• respect for people,

• safety and environmental responsibility,

• partners with customers and suppliers,

• continuously improving quality,

• citizenship, and

• economic viability.

We place the highest level of commitment on safety and strive to operate our business every day focused on its importance.

Keeping our employees safe is a management priority, and the past three years were particularly challenging in that regard because of the COVID-19 pandemic.

While some of our employees were required to work from home due to government mandates, all of our facilities continued to be operational throughout 2020 to 2022 since the chemical industry and our products are considered essential for the transportation of people, goods, and services.

We have a diverse workforce, representative of the geographic regions in which we do business.

We place a high value on diverse thoughts, skills, perspectives, cultures, and knowledge because we believe that such diversity results in better business decision making.

We employed 2,058 people at the end of 2022.

Approximately 1,000 were located in the United States, 500 were in the Europe/Middle East/Africa/India region, 300 were in the Asia Pacific region, and 250 were in the Latin America region.

Approximately 22% of our workforce is represented by unions.

When we hire new employees, our goal is that they stay with our company for the remainder of their career.

Hiring the right people for the long-term and developing them for key roles is a critical focus area.

To be successful, we must attract and retain a highly qualified and technically competent workforce, including key employees in leadership positions.

Globally, approximately 17% of our employees have 20 years or more of service, and over the three-year period from 2020 to 2022, our resignation rate was approximately 4.6%.

We believe these measures demonstrate our success in hiring the right employees for the long-term and establishing a culture where respect for people is an everyday value.

Commitment to Environmental and Safety Excellence

14 unchanged sentences

and Singapore facilities are all certified to the environmental standard ISO 14001.

Suzhou is also certified to OHSAS 18001, a global occupational health and safety standard.

Our Singapore site recently transitioned their OHSAS 45001 certification to the latest ISO 45001.

Afton’s Sauget, Illinois plant continues to be an OSHA VPP (Voluntary Protection Program) “Star” worksite, and our San Juan del Rio, Mexico site was formally certified to RC 14001 in 2021.

The Suzhou and Singapore sites are also certified to ISO 45001, a global occupational health and safety standard.

Our San Juan del Rio, Mexico site is formally certified to RC 14001/ISO14001.

Afton’s Sauget, Illinois plant continues to be an OSHA VPP (Voluntary Protection Program) “Star” worksite.

In 2022, we continued to enhance our “Actively Caring” safety program, where people look out for the safety and welfare of others with courage and compassion, enabling the achievement of an injury-free environment.

Both Afton and Ethyl were top performers among their industry peers with our worldwide injury/illness recordable rate (which is the number of injuries per 200,000 hours worked) in 2022 at 0.44.

Additionally, during 2021 we had zero serious injuries across all sites, as well as zero recordable injuries at our Bracknell, Feluy, Richmond, Rio de Janeiro, Singapore, Suzhou, and Tsukuba facilities.

Additionally, during 2022 we had zero serious injuries across all sites, as well as zero recordable injuries at our Houston, Port Arthur, Ashland, Bracknell, Feluy, Rio de

Janeiro, San Juan del Rio, Singapore, Suzhou, and Tsukuba facilities.

The safety performance affirmed our Vision of Zero Improvement plans and actions across the sites, as well as the importance placed on our safety-first culture.

We continue to leverage site-level Safety Improvement

plans at key sites, and emphasize reporting "good catches" and "near misses" to help reduce risk and drive improved performance.

We continue to leverage site-level safety improvement plans at key sites and emphasize reporting "good catches" and "near misses" to help reduce risk and drive improved performance.

We are committed to achieving our aspiration of zero injuries and incidents.

As members of the ACC, Afton and Ethyl provide data on twelve metrics used to track environmental impact, safety, energy use, community outreach and emergency preparedness, greenhouse gas intensity, and product stewardship performance of the ACC member companies.

These can be viewed at http://responsiblecare.americanchemistry.com/Performance-Results.

These can be viewed at https://www.americanchemistry.com/chemistry-in-america/responsible-care-driving-safety-industry-performance/metrics-transparent-reporting/individual-member-company-performance-reporting.

The information on this website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated by reference in this Annual Report on Form 10-K or any other filings we make with the Securities and Exchange Commission (SEC).

12 unchanged sentences

The costs of complying with existing environmental, health, and safety laws and regulations as they pertain to our products and operations, including remediation, closure, and postclosure costs, are primarily included in cost of goods sold.

We spent approximately $35 million in 2021 and $29 million in both 2020 and 2019 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures.

In addition to the ongoing environmental compliance costs and the costs to remediate contaminated sites, worldwide capital expenditures for pollution prevention and safety projects were $17 million in both 2021 and 2020 and $8 million in 2019.

We spent approximately $37 million in 2022, $35 million in 2021, and $29 million in 2020 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures.

In addition to the ongoing environmental compliance costs and the costs to remediate contaminated sites, worldwide capital expenditures for pollution prevention and safety projects were $11 million in 2022 and $17 million in both 2021 and 2020.

The costs of complying with governmental pollution prevention and safety regulations are subject to:

13 unchanged sentences

Name Age Positions

Gottwald 61 Chairman of the Board, President, and Chief Executive Officer (Principal Executive Officer)

Paliotti 45 Chief Financial Officer and Vice President (Principal Financial Officer)

Gottwald 62 Chairman of the Board, President, and Chief Executive Officer

(Principal Executive Officer)

Skrobacz 63 Chief Financial Officer and Vice President (Principal Financial Officer)

Hazelgrove, III 62 Executive Vice President and Chief Administrative Officer

Jewett, III 48 Vice President and General Counsel

Skrobacz 62 Controller (Principal Accounting Officer)

Rudolph West 68 Vice President, Special Counsel

Harm 57 President, Afton Chemical Corporation

Ridgeway 48 Controller (Principal Accounting Officer)

Paliotti 46 President, Afton Chemical Corporation

Our officers, at the discretion of the Board of Directors, hold office until the meeting of the Board of Directors following the next annual shareholders’ meeting.

Gottwald, Mr.

Paliotti, Mr.

Hazelgrove, Mr.

Skrobacz, and Mr.

Hazelgrove, and Mr.

Warner have served in their capacity for at least the last five years.

West, and Mrs.

Harm have served in their capacities for less than five years.

Skrobacz, Mr.

Ridgeway, and Mr.

Paliotti have served in their capacities for less than five years.

Skrobacz joined the company in May 2011 as Senior Manager, Business Assurance, was appointed Controller Designate in September 2012, appointed Principal Accounting Officer and Controller on May 1, 2013, and appointed Chief Financial Officer and Vice President on January 1, 2023.

Jewett joined NewMarket Corporation in July 2020 as Vice President and General Counsel.

Prior to his employment at NewMarket, he was a partner at McGuireWoods LLP.

West was named Vice President, Special Counsel in July 2020.

Prior to that date, Mr.

West served as Vice President, General Counsel, and Secretary since January 2016.

Harm has been employed by Afton since 2007.

Prior to being named President of Afton Chemical Corporation in May 2018, Mrs.

Harm was Senior Vice President and Chief Operating Officer of Afton since October 2015.

Ridgeway joined the company in December 2011 as Tax Compliance Manager, became Tax Director in April 2017, Assistant Controller in March 2021, and Controller on January 1, 2023.

Paliotti joined NewMarket in June 2008 as Financial Officer for Afton Chemical Corporation, was appointed Senior Financial Officer of NewMarket Services Corporation in October 2011, promoted to Vice President, Finance of NewMarket Services Corporation in May 2013, and promoted to Vice President and Chief Financial Officer in January 2015.

He became President of Afton Chemical Corporation on January 1, 2023.

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-K

Item 1. Business