NEWMARKET CORP 10-Q

ITEM 1. Financial Statements NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per-share amounts) Third Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales $ 667,150 $ 696,049 $ 2,055,069 $ 2,082,240 Cost of goods sold 465,445 547,742 1,459,682 1,621,294 Gross profit 201,705 148,307 595,387 460,946 Selling, general, and administrative expenses 37,386 35,192 114,671 109,303 Research, development, and testing expenses 31,894 34,388 99,008 106,035 Operating profit 132,425 78,727 381,708 245,608 Interest and financing expenses, net 9,221 8,369 30,249 24,859 Loss on early extinguishment of debt 0 0 0 7,545 Other income (expense), net 11,278 9,971 32,881 26,240 Income before income tax expense 134,482 80,329 384,340 239,444 Income tax expense 23,235 17,103 75,886 50,428 Net income $ 111,247 $ 63,226 $ 308,454 $ 189,016 Earnings per share - basic and diluted $ 11.60 $ 6.32 $ 32.05 $ 18.60 Cash dividends declared per share $ 2.25 $ 2.10 $ 6.60 $ 6.30 See accompanying Notes to Condensed Consolidated Financial Statements 4 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Third Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 111,247 $ 63,226 $ 308,454 $ 189,016 Other comprehensive income (loss): Pension plans and other postretirement benefits: 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 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 $( 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 ) Other comprehensive income (loss) ( 12,025 ) ( 34,216 ) 5,213 ( 66,402 ) Comprehensive income $ 99,222 $ 29,010 $ 313,667 $ 122,614 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) September 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 102,560 $ 68,712 Trade and other accounts receivable, less allowance for credit losses 427,764 453,692 Inventories 503,411 631,383 Prepaid expenses and other current assets 31,859 38,338 Total current assets 1,065,594 1,192,125 Property, plant, and equipment, net 649,968 659,998 Intangibles (net of amortization) and goodwill 124,620 126,069 Prepaid pension cost 323,055 302,584 Operating lease right-of-use assets, net 64,272 62,417 Deferred charges and other assets 62,886 63,625 Total assets $ 2,290,395 $ 2,406,818 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 215,108 $ 273,289 Accrued expenses 72,301 89,508 Dividends payable 18,894 17,850 Income taxes payable 6,058 16,109 Operating lease liabilities 13,963 15,569 Other current liabilities 5,880 11,562 Total current liabilities 332,204 423,887 Long-term debt 779,401 1,003,737 Operating lease liabilities-noncurrent 49,093 46,968 Other noncurrent liabilities 157,754 169,819 Total liabilities 1,318,452 1,644,411 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 - 9,590,151 at September 30, 2023 and 9,702,147 at December 31, 2022) 1,557 0 Accumulated other comprehensive loss ( 66,782 ) ( 71,995 ) Retained earnings 1,037,168 834,402 Total shareholders' equity 971,943 762,407 Total liabilities and shareholders’ equity $ 2,290,395 $ 2,406,818 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 June 30, 2022 10,079,643 $ 0 $ ( 114,413 ) $ 835,748 $ 721,335 Net income 63,226 63,226 Other comprehensive income (loss) ( 34,216 ) ( 34,216 ) Cash dividends ($ 2.10 per share) ( 20,930 ) ( 20,930 ) Repurchases of common stock ( 209,538 ) ( 298 ) ( 62,042 ) ( 62,340 ) 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 Net income 111,247 111,247 Other comprehensive income (loss) ( 12,025 ) ( 12,025 ) Cash dividends ($ 2.25 per share) ( 21,578 ) ( 21,578 ) Tax withholdings related to stock-based compensation ( 76 ) ( 33 ) ( 33 ) Stock-based compensation 988 1,590 2 1,592 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 Net income 189,016 189,016 Other comprehensive income (loss) ( 66,402 ) ( 66,402 ) Cash dividends ($ 6.30 per share) ( 63,790 ) ( 63,790 ) Repurchases of common stock ( 499,275 ) ( 1,573 ) ( 153,612 ) ( 155,185 ) Stock-based compensation 7,993 1,573 35 1,608 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 Net income 308,454 308,454 Other comprehensive income (loss) 5,213 5,213 Cash dividends ($ 6.60 per share) ( 63,457 ) ( 63,457 ) Repurchases of common stock ( 119,075 ) ( 1,857 ) ( 41,419 ) ( 43,276 ) Tax withholdings related to stock-based compensation ( 2,493 ) ( 33 ) ( 803 ) ( 836 ) Stock-based compensation 9,572 3,447 ( 9 ) 3,438 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 7 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 2023 2022 Cash and cash equivalents at beginning of year $ 68,712 $ 83,304 Cash flows from operating activities: Net income 308,454 189,016 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 57,665 62,160 Deferred income tax benefit ( 16,336 ) ( 33,685 ) Loss on early extinguishment of debt 0 7,545 Working capital changes 71,900 ( 198,637 ) Loss on marketable securities 0 2,977 Cash pension and postretirement contributions ( 7,132 ) ( 7,111 ) Other, net ( 9,335 ) ( 6,303 ) Cash provided from (used in) operating activities 405,216 15,962 Cash flows from investing activities: Capital expenditures ( 34,793 ) ( 40,402 ) Purchases of marketable securities 0 ( 787 ) Proceeds from sales and maturities of marketable securities 0 372,846 Cash provided from (used in) investing activities ( 34,793 ) 331,657 Cash flows from financing activities: Net (repayments) borrowings under revolving credit facility ( 225,000 ) 218,000 Dividends paid ( 63,457 ) ( 63,790 ) Repurchases of common stock ( 42,864 ) ( 150,754 ) Redemption of 4.10 % senior notes 0 ( 350,000 ) Cash costs of 4.10 % senior notes redemption 0 ( 7,099 ) Other, net ( 4,219 ) ( 2,496 ) Cash provided from (used in) financing activities ( 335,540 ) ( 356,139 ) Effect of foreign exchange on cash and cash equivalents ( 1,035 ) ( 2,812 ) Increase (decrease) in cash and cash equivalents 33,848 ( 11,332 ) Cash and cash equivalents at end of period $ 102,560 $ 71,972 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 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 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. Unless the context otherwise indicates, all references to “we,” “us,” “our,” the “company,” and “NewMarket” are to NewMarket Corporation and its consolidated subsidiaries. We offer our vendors a supplier finance program, which allows our vendors to receive payment from a third-party finance provider earlier than our normal payment terms would provide. NewMarket and its subsidiaries are not a party to the arrangement between our vendor and the finance provider, and there are no assets pledged as security or other forms of guarantees provided by NewMarket to the finance provider. 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 September 30, 2023, the amount of confirmed invoices under the supplier finance program was not material. 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 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. We regularly review both rebates and business development funds and make adjustments to estimated amounts 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 presented in Note 3. Third Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Net sales United States $ 246,462 $ 242,631 $ 745,470 $ 716,913 Europe, Middle East, Africa, India 200,843 217,108 607,913 616,438 Asia Pacific 129,717 150,144 433,905 483,413 Other foreign 90,128 86,166 267,781 265,476 Net sales $ 667,150 $ 696,049 $ 2,055,069 $ 2,082,240 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 related services associated with Ethyl Corporation (Ethyl). Net Sales by Segment Third Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Petroleum additives Lubricant additives $ 562,692 $ 582,559 $ 1,753,772 $ 1,775,574 Fuel additives 101,027 110,134 293,907 298,444 Total 663,719 692,693 2,047,679 2,074,018 All other 3,431 3,356 7,390 8,222 Net sales $ 667,150 $ 696,049 $ 2,055,069 $ 2,082,240 Segment Operating Profit Third Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Petroleum additives $ 139,820 $ 83,023 $ 404,026 $ 261,130 All other ( 764 ) ( 41 ) ( 2,761 ) ( 205 ) Segment operating profit 139,056 82,982 401,265 260,925 Corporate, general, and administrative expenses ( 6,389 ) ( 4,167 ) ( 19,690 ) ( 15,389 ) Interest and financing expenses, net ( 9,221 ) ( 8,369 ) ( 30,249 ) ( 24,859 ) Loss on early extinguishment of debt 0 0 0 ( 7,545 ) Other income (expense), net 11,036 9,883 33,014 26,312 Income before income tax expense $ 134,482 $ 80,329 $ 384,340 $ 239,444 4. Pension Plans and Other Postretirement Benefits 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 Pension benefits $ 1,793 $ 598 Postretirement benefits 831 277 Foreign plans Pension benefits 4,508 2,234 10 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 Third Quarter Ended September 30, (in thousands) 2023 2022 2023 2022 Service cost $ 2,482 $ 4,490 $ 130 $ 299 Interest cost 4,587 3,332 404 294 Expected return on plan assets ( 11,510 ) ( 10,945 ) ( 182 ) ( 185 ) Amortization of prior service cost (credit) 127 68 ( 757 ) ( 757 ) Amortization of actuarial net (gain) loss ( 376 ) 419 ( 55 ) 22 Net periodic benefit cost (income) $ ( 4,690 ) $ ( 2,636 ) $ ( 460 ) $ ( 327 ) Domestic Pension Benefits Postretirement Benefits Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Service cost $ 7,799 $ 14,202 $ 390 $ 820 Interest cost 13,659 10,109 1,186 872 Expected return on plan assets ( 34,529 ) ( 32,825 ) ( 585 ) ( 593 ) Amortization of prior service cost (credit) 139 204 ( 2,271 ) ( 2,271 ) Amortization of actuarial net (gain) loss ( 1,199 ) 1,491 ( 206 ) 39 Net periodic benefit cost (income) $ ( 14,131 ) $ ( 6,819 ) $ ( 1,486 ) $ ( 1,133 ) Foreign Pension Benefits Third Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Service cost $ 1,094 $ 2,123 $ 3,222 $ 6,735 Interest cost 1,615 993 4,736 3,141 Expected return on plan assets ( 2,973 ) ( 2,362 ) ( 8,713 ) ( 7,506 ) Amortization of prior service cost (credit) 36 33 104 105 Amortization of actuarial net (gain) loss ( 6 ) 152 ( 18 ) 483 Net periodic benefit cost (income) $ ( 234 ) $ 939 $ ( 669 ) $ 2,958 5. 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. 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. 11 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Third Quarter Ended September 30, Nine Months Ended September 30, (in thousands, except per-share amounts) 2023 2022 2023 2022 Earnings per share numerator: Net income attributable to common shareholders before allocation of earnings to participating securities $ 111,247 $ 63,226 $ 308,454 $ 189,016 Earnings allocated to participating securities ( 393 ) ( 207 ) ( 1,055 ) ( 575 ) Net income attributable to common shareholders after allocation of earnings to participating securities $ 110,854 $ 63,019 $ 307,399 $ 188,441 Earnings per share denominator: Weighted-average number of shares of common stock outstanding - basic and diluted 9,556 9,965 9,592 10,130 Earnings per share - basic and diluted $ 11.60 $ 6.32 $ 32.05 $ 18.60 6. Inventories (in thousands) September 30, 2023 December 31, 2022 Finished goods and work-in-process $ 399,647 $ 497,652 Raw materials 82,696 113,484 Stores, supplies, and other 21,068 20,247 $ 503,411 $ 631,383 7. Intangibles (Net of Amortization) and Goodwill 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. September 30, 2023 December 31, 2022 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortizing intangible assets Formulas and technology $ 6,200 $ 6,200 $ 6,200 $ 5,683 Contract 2,000 2,000 2,000 1,200 Customer base 5,440 4,492 5,440 4,350 Goodwill 123,672 123,662 $ 137,312 $ 12,692 $ 137,302 $ 11,233 All of the intangibles relate to the petroleum additives segment. 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): 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 12 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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): 2023 $ 48 2024 190 2025 190 2026 190 2027 190 2028 140 We amortize the customer base over 20 years. 8. Long-term Debt (in thousands) September 30, 2023 December 31, 2022 Senior notes - 2.70 % due 2031 (net of related deferred financing costs) $ 393,401 $ 392,737 Senior notes - 3.78 % due 2029 250,000 250,000 Revolving credit facility 136,000 361,000 $ 779,401 $ 1,003,737 Senior Notes - The 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. 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 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 6.1 % 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. 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. 13 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 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 $ 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. 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, 2021 $ 1,522 $ ( 83,749 ) $ ( 82,227 ) Other comprehensive income (loss) before reclassifications 1,828 ( 68,251 ) ( 66,423 ) Amounts reclassified from accumulated other comprehensive loss (a) 21 0 21 Other comprehensive income (loss) 1,849 ( 68,251 ) ( 66,402 ) Balance at September 30, 2022 $ 3,371 $ ( 152,000 ) $ ( 148,629 ) Balance at December 31, 2022 $ 54,562 $ ( 126,557 ) $ ( 71,995 ) Other comprehensive income (loss) before reclassifications ( 1,273 ) 9,114 7,841 Amounts reclassified from accumulated other comprehensive loss (a) ( 2,628 ) 0 ( 2,628 ) Other comprehensive income (loss) ( 3,901 ) 9,114 5,213 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). See Note 4 in this Quarterly Report on Form 10-Q and Note 18 in our 2022 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 $ 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 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. 14 Table of Contents NEWMARKET CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Long-term debt – We record the carrying amount of our long-term debt at historical cost, less deferred financing costs related to our 2.70% 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 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. September 30, 2023 December 31, 2022 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt $ 779,401 $ 669,526 $ 1,003,737 $ 906,891 15 Table of Contents