What changed in this filing

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Item 1. Financial Statements

2023-10-26 compared with 2023-07-27 · 70 added, 53 removed, 322 unchanged (28% 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 June 30,

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

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

16 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands) Second Quarter Ended June 30, Six Months Ended June 30,

(in thousands) Third Quarter Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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 $( 170 ) in second quarter 2023, $( 157 ) in second quarter 2022, $( 341 ) in six months 2023, and $( 313 ) in six months 2022

Prior service credit (cost) arising during the period, net of income tax expense (benefit) of $( 159 ) in third quarter 2023, $ 0 in third quarter 2022, $( 159 ) in nine months 2023, and $ 0 in nine months 2022

( 489 ) 0 ( 489 ) 0

Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $ 0 in second quarter 2023, $ 0 in second quarter 2022, $ 0 in six months 2023, and $ 7 in six months 2022

Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $( 119 ) in second quarter 2023, $ 173 in second quarter 2022, $( 237 ) in six months 2023, and $ 348 in six months 2022.

Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $( 141 ) in third quarter 2023, $( 157 ) in third quarter 2022, $( 482 ) in nine months 2023, and $( 470 ) in nine months 2022

( 454 ) ( 500 ) ( 1,547 ) ( 1,494 )

Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $( 239 ) in third quarter 2023, $ 583 in third quarter 2022, $( 239 ) in nine months 2023, and $ 590 in nine months 2022

( 784 ) 1,812 ( 784 ) 1,828

Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $( 105 ) in third quarter 2023, $ 145 in third quarter 2022, $( 342 ) in nine months 2023, and $ 493 in nine months 2022

( 332 ) 445 ( 1,081 ) 1,515

Total pension plans and other postretirement benefits

( 2,059 ) 1,757 ( 3,901 ) 1,849

Foreign currency translation adjustments, net of income tax expense (benefit) of $ 491 in second quarter 2023, $( 658 ) in second quarter 2022, $ 698 in six months 2023, and $ 473 in six months 2022.

Foreign currency translation adjustments, net of income tax expense (benefit) of $( 327 ) in third quarter 2023, $( 194 ) in third quarter 2022, $ 371 in nine months 2023, and $ 279 in nine months 2022

( 9,966 ) ( 35,973 ) 9,114 ( 68,251 )

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts) June 30,

(in thousands, except share amounts) September 30,

2023 December 31,

29 unchanged sentences

authorized shares - 80,000,000 ;

issued and outstanding shares - 9,589,239 at June 30, 2023 and 9,702,147 at December 31, 2022)

issued and outstanding shares - 9,590,151 at September 30, 2023 and 9,702,147 at December 31, 2022)

Accumulated other comprehensive loss ( 66,782 ) ( 71,995 )

9 unchanged sentences

Shares Amount

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

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

Net income 63,226 63,226

4 unchanged sentences

Stock-based compensation 1,335 298 3 301

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

Balance at June 30, 2023 9,589,239 $ 0 $ ( 54,757 ) $ 947,497 $ 892,740

Balance at March 31, 2023 9,625,959 $ 0 $ ( 61,551 ) $ 883,351 $ 821,800

Net income 111,247 111,247

2 unchanged sentences

( 21,578 ) ( 21,578 )

Repurchases of common stock ( 36,589 ) ( 634 ) ( 13,894 ) ( 14,528 )

Tax withholdings related to stock-based compensation ( 76 ) ( 33 ) ( 33 )

Stock-based compensation 988 1,590 2 1,592

Balance at June 30, 2023 9,589,239 $ 0 $ ( 54,757 ) $ 947,497 $ 892,740

Balance at September 30, 2023 9,590,151 $ 1,557 $ ( 66,782 ) $ 1,037,168 $ 971,943

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

Balance at December 31, 2022 9,702,147 $ 0 $ ( 71,995 ) $ 834,402 $ 762,407

7 unchanged sentences

Stock-based compensation 9,572 3,447 ( 9 ) 3,438

Balance at June 30, 2023 9,589,239 $ 0 $ ( 54,757 ) $ 947,497 $ 892,740

Balance at September 30, 2023 9,590,151 $ 1,557 $ ( 66,782 ) $ 1,037,168 $ 971,943

See accompanying Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) Six Months Ended June 30,

(in thousands) Nine Months Ended

September 30,

Cash and cash equivalents at beginning of year $ 68,712 $ 83,304

31 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, 2023 and December 31, 2022, and our consolidated results of operations, comprehensive income, and changes in shareholders' equity for the second quarter and six months ended June 30, 2023 and June 30, 2022, and our cash flows for the six months ended June 30, 2023 and June 30, 2022.

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, 2023 and December 31, 2022, and our consolidated results of operations, comprehensive income, and changes in shareholders' equity for the third quarter and nine months ended September 30, 2023 and September 30, 2022, and our cash flows for the nine months ended September 30, 2023 and September 30, 2022.

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, 2022 (2022 Annual Report), as filed with the Securities and Exchange Commission (SEC).

The results of operations for the six month period ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

The results of operations for the nine month period ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

The December 31, 2022 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.

3 unchanged sentences

For those vendors who opt to participate in the program, we pay the finance provider the full amount of the invoices on the normal due date.

At June 30, 2023, the amount of confirmed invoices under the supplier finance program was not material.

At September 30, 2023, the amount of confirmed invoices under the supplier finance program was not material.

Our revenues are primarily derived from the manufacture and sale of petroleum additives products.

4 unchanged sentences

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 ship the product and recognize the revenue.

These prepayments from customers are recorded as a contract liability until we ship the product and recognize the revenue.

Some of our contracts include variable consideration in the form of rebates or business development funds.

2 unchanged sentences

Information on net sales by segment is presented in Note 3.

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

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

10 unchanged sentences

Net Sales by Segment

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

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

6 unchanged sentences

Segment Operating Profit

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

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

9 unchanged sentences

Pension Plans and Other Postretirement Benefits

The table below shows cash contributions made during the six months ended June 30, 2023, as well as the remaining cash contributions we expect to make during the year ending December 31, 2023, for our domestic and foreign pension plans and domestic postretirement benefit plan.

(in thousands) Actual Cash Contributions for Six Months Ended June 30, 2023 Expected Remaining Cash Contributions for Year Ending December 31, 2023

The table below shows cash contributions made during the nine months ended September 30, 2023, as well as the remaining cash contributions we expect to make during the year ending December 31, 2023, for our domestic and foreign pension plans and domestic postretirement benefit plan.

(in thousands) Actual Cash Contributions for Nine Months Ended September 30, 2023 Expected Remaining Cash Contributions for Year Ending December 31, 2023

Domestic plans

11 unchanged sentences

Pension Benefits Postretirement Benefits

Second Quarter Ended June 30,

Third Quarter Ended September 30,

(in thousands) 2023 2022 2023 2022

6 unchanged sentences

Pension Benefits Postretirement Benefits

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2023 2022 2023 2022

6 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) 2023 2022 2023 2022

6 unchanged sentences

Earnings Per Share

We had 34,448 shares of nonvested restricted stock at June 30, 2023 and 33,230 shares of nonvested restricted stock at June 30, 2022 that were excluded from the calculation of diluted earnings per share.

We had 34,071 shares of nonvested restricted stock at September 30, 2023 and 33,070 shares of nonvested restricted stock at September 30, 2022 that were excluded from the calculation of diluted earnings per share.

The nonvested restricted stock is considered a participating security since the restricted stock contains nonforfeitable rights to dividends.

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per-share amounts) 2023 2022 2023 2022

10 unchanged sentences

(in thousands)

September 30,

2023 December 31,

4 unchanged sentences

Intangibles (Net of Amortization) and Goodwill

The net carrying amount of intangibles and goodwill was $ 125 million at June 30, 2023 and $ 126 million at December 31, 2022.

The net carrying amount of intangibles and goodwill was $ 125 million at September 30, 2023 and $ 126 million at December 31, 2022.

The gross carrying amount and accumulated amortization of each type of intangible asset and goodwill are presented in the table below.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in thousands) Gross

9 unchanged sentences

All of the intangibles relate to the petroleum additives segment.

The change in the gross carrying amount of goodwill between December 31, 2022 and June 30, 2023 is due to foreign currency fluctuation.

The change in the gross carrying amount of goodwill between December 31, 2022 and September 30, 2023 is due to foreign currency fluctuation.

There is no accumulated goodwill impairment.

Amortization expense was (in thousands):

Second quarter ended June 30, 2023 $ 355

Six months ended June 30, 2023 711

Second quarter ended June 30, 2022 356

Six months ended June 30, 2022 711

Third quarter ended September 30, 2023 $ 748

Nine months ended September 30, 2023 1,459

Third quarter ended September 30, 2022 356

Nine months ended September 30, 2022 1,067

NEWMARKET CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Estimated amortization expense for the remainder of 2023, 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 formulas and technology over 6 years, the contract over 10 years, and the customer base over 20 years.

We amortize the customer base over 20 years.

Long-term Debt

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

8 unchanged sentences

The 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.

We were in compliance with all covenants under all issuances of senior notes as of June 30, 2023 and December 31, 2022.

We were in compliance with all covenants under all issuances of senior notes as of September 30, 2023 and December 31, 2022.

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 6.0 % during the first six months of 2023 and 3.5 % during the year ended December 31, 2022.

We were in compliance with all covenants under the revolving credit facility as of June 30, 2023 and December 31, 2022.

Outstanding borrowings under the revolving credit facility amounted to $ 273 million at June 30, 2023 and $ 361 million at December 31, 2022.

Outstanding letters of credit amounted to approximately $ 2 million at both June 30, 2023 and December 31, 2022.

The unused portion of the credit facility amounted to $ 625 million at June 30, 2023 and $ 537 million at December 31, 2022.

The average interest rate for borrowings under the credit agreement was 6.1 % during the first nine months of 2023 and 3.5 % during the year ended December 31, 2022.

We were in compliance with all covenants under the revolving credit facility as of September 30, 2023 and December 31, 2022.

Outstanding borrowings under the revolving credit facility amounted to $ 136 million at September 30, 2023 and $ 361 million at December 31, 2022.

Outstanding letters of credit amounted to approximately $ 2 million at both September 30, 2023 and December 31, 2022.

The unused portion of the credit facility amounted to $ 762 million at September 30, 2023 and $ 537 million at December 31, 2022.

Commitments and Contingencies

9 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 both June 30, 2023 and December 31, 2022.

Our total accruals for environmental remediation, dismantling, and decontamination were approximately $ 10 million at both September 30, 2023 and December 31, 2022.

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 $ 7 million of the total accrual above at June 30, 2023 and $ 8 million at December 31, 2022, using discount rates ranging from 3 % to 9 % for both periods.

The aggregate undiscounted amount for these sites were $ 10 million at both June 30, 2023 and December 31, 2022.

Together, the amounts accrued on a discounted basis related to these sites represented approximately $ 8 million of the total accrual above at both September 30, 2023 and December 31, 2022, using discount rates ranging from 3 % to 9 % for both periods.

The aggregate undiscounted amount for these sites was $ 10 million at both September 30, 2023 and December 31, 2022.

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

9 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 )

Balance at December 31, 2022 $ 54,562 $ ( 126,557 ) $ ( 71,995 )

5 unchanged sentences

( 3,901 ) 9,114 5,213

Balance at June 30, 2023 $ 52,720 $ ( 107,477 ) $ ( 54,757 )

Balance at September 30, 2023 $ 50,661 $ ( 117,443 ) $ ( 66,782 )

(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 $ 131 million at June 30, 2023 and $ 69 million at December 31, 2022.

The carrying amount of cash and cash equivalents in the Consolidated Balance Sheets, as well as the fair value, was $ 103 million at September 30, 2023 and $ 69 million at December 31, 2022.

The fair value is classified as Level 1 in the fair value hierarchy.

No material events occurred during the six months ended June 30, 2023 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, 2023 requiring adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.

NEWMARKET CORPORATION AND SUBSIDIARIES

2 unchanged sentences

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 2.70% senior notes included in the table below is based on the last quoted price closest to June 30, 2023.

The estimated fair value of our 2.70% senior notes included in the table below is based on the last quoted price closest to September 30, 2023.

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in thousands) Carrying

2 unchanged sentences

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