What changed in this filing

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Item 1. Business

2025-02-14 compared with 2024-02-15 · 73 added, 55 removed, 228 unchanged (36% of the section changed)

NewMarket Corporation (NewMarket) (NYSE:

NEU) is a holding company and is the parent company of Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), NewMarket Services Corporation (NewMarket Services), and NewMarket Development Corporation (NewMarket Development).

NewMarket is also the ultimate parent company of American Pacific Corporation (AMPAC), which we acquired for approximately $700 million on January 16, 2024.

NEU) is a holding company and is the parent company of Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), American Pacific Corporation (AMPAC), NewMarket Services Corporation (NewMarket Services), and NewMarket Development Corporation (NewMarket Development).

We acquired AMPAC on January 16, 2024, for approximately $697 million.

Each of our subsidiaries manages its own assets and liabilities.

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

AMPAC is a manufacturer of specialty materials primarily used in solid rocket motors for the aerospace and defense industries.

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

AMPAC manufactures and sells critical performance additives used in solid rocket motors for space launch and military defense applications.

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

Going forward, NewMarket Services will also provide such services to AMPAC.

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

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

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This style has allowed Afton to develop long-term relationships with its customers in every major region of the world, which Afton serves through its manufacturing facilities across the globe.

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

Afton has operations in North America, Europe, Asia, Africa, and South America.

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.

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Dollar-denominated transactions, letters of credit, and prepaid transactions.

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

With almost 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 450 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 related services to Afton and to third parties and is a marketer of antiknock compounds in North America.

AMPAC has operations in the United States and manufactures and sells specialty materials used in solid rocket motors for space launch and military defense applications.

AMPAC has long-term relationships with customers and the ability to formulate products to meet the various specification requirements of its customers, resulting in AMPAC being a global leader in specialty materials for use in solid rocket motors.

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

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This effort is ongoing in nature.

AMPAC manufactures and sells critical performance additives used in solid rocket motors for space launch and military defense applications.

AMPAC also manufactures and sells Halotron BrX, a fire extinguishing agent that replaces legacy high ozone-depleting fire extinguishing agents.

We were incorporated in the Commonwealth of Virginia in 2004.

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Business Segments

For the periods presented in this Annual Report on Form 10-K, our business was composed of one segment, petroleum additives, which is primarily represented by Afton.

The antiknock compounds business of Ethyl is reflected in the “All

other” category.

For the periods presented in this Annual Report on Form 10-K, our business was composed of two segments, petroleum additives, which is primarily represented by Afton, and specialty materials, which is represented by AMPAC.

The antiknock compounds business of Ethyl is reflected in the “All other” category.

Each of these is discussed below.

We intend to present AMPAC as a separate segment beginning with the Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.

Petroleum Additives - Petroleum additives are used in lubricating oils and fuels to enhance their performance in machinery, vehicles, and other equipment.

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This submarket also shares in the 30% of the market not covered by engine oil additives.

These products must

conform to industry specifications, OEM requirements, and/or application and operating environment demands.

These products must conform to industry specifications, OEM requirements, and/or application and operating environment demands.

Industrial additives are generally sold to oil companies, service dealers for after-market servicing, and distributors.

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The competition among the participants in these industries is characterized by the need to provide customers with cost effective, technologically-capable products that meet or exceed industry specifications.

The need to continually increase

technology performance and lower cost through formulation technology and cost improvement programs is vital for success in this environment.

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

Specialty Materials - Our specialty materials segment is principally engaged in the production of perchlorates, which include several grades of ammonium perchlorate, sodium perchlorate, and potassium perchlorate.

Ammonium perchlorate is a key component of solid rocket motors, booster motors, and missiles that are utilized in U.S.

Department of Defense (DOD) tactical and strategic missile programs.

Currently, there is no alternative to the use of these solid rocket motors for national security applications, and due to the critical role of ammonium perchlorate in such motors, we believe that the U.S.

government views us as a strategic national resource.

Ammonium perchlorate is also used in space exploration programs for the National Aeronautics and Space Administration (NASA) and commercial space launch vehicles.

We supply ammonium perchlorate for use in a number of defense and space launch programs of the U.S.

allies via U.S.

government agencies, government contractors and foreign contractors.

Exporting ammonium perchlorate is subject to federal regulation that permits our foreign sales of ammonium perchlorate.

We obtain export licenses on a case-by-case basis, which are dependent upon the ultimate use of our product.

Customers of ammonium perchlorate primarily consist of rocket motor manufacturers supplying the DOD and NASA programs, as well as entities providing commercial space launch applications and foreign military applications.

Demand for ammonium perchlorate is program-specific and dependent upon, among other things, governmental appropriations.

The need for tactical rockets, strategic missiles, and solid rocket boosters is anticipated to provide the base demand over the coming five-year period and beyond.

We also produce and sell different types and grades of sodium and potassium perchlorates, which have a wide variety of applications, including munitions, explosives, propellants, perchloric acid, initiators, electronics, batteries, plastics, electro-machining, and porcelain.

We believe we are the largest manufacturer and seller of ammonium perchlorate globally.

We are aware of other production capacity in the United States for perchlorate chemicals, including ammonium perchlorate, as well as production capacity in France, Japan, Brazil, China, India, and Taiwan.

While we have limited information with respect to these facilities, we believe that these producers are not qualified as ammonium perchlorate suppliers for most DOD and NASA programs, which represents the majority of domestic ammonium perchlorate demand.

Competition among producers of ammonium perchlorate is characterized by the ability to meet customer specifications including unique particle size requirements, reasonable lead times, and qualification of a given production process.

The need to maintain a qualified production process and meet changing demand requirements 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 related services performed by Ethyl.

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Raw Materials and Product Supply

We use a variety of raw materials and chemicals in our manufacturing and blending processes and believe the sources of these are adequate for our current operations.

Petroleum Additives - We use a variety of raw materials and chemicals in our manufacturing and blending processes and believe the sources of these are adequate for our current operations.

The primary raw materials for Afton are base oil, polyisobutylene, antioxidants, alcohols, solvents, detergents, friction modifiers, olefins, and copolymers.

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While we have experienced improvement in the supply chain disruptions which impacted the petrochemicals industry over the past several years, we continuously monitor our raw material supply situation and adjust our procurement strategies as conditions require.

Specialty Materials - The primary raw materials for AMPAC are electricity, sodium chlorate, ammonia, and hydrochloric acid.

Graphite is utilized in the fabrication of the electrolytic cells used in the manufacturing process and which are replaced on a periodic basis.

All of the raw materials used in the manufacturing process are available in commercial quantities from multiple sources.

Research, Development, and Testing

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Afton continues to successfully implement techniques to drive efficiency in technology discovery and development, while aligning our internal testing to market changes, research, customer support, and predictive capabilities around the world in support of our goals of providing market-driven technical leadership and performance-based differentiation.

In 2023, we continued to invest in and progress our technology plans and established a new team to focus on adjacent spaces that can utilize our chemistry and technology.

In 2024, we continued to invest in and progress our technology plans and have a team focused on adjacent spaces that can utilize our chemistry and technology.

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.

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 and durability 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, including the latest advancements in e-mobility.

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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.

We continue to have strong results in our environmental initiatives.

For example, a year over year comparison (2023 versus 2022) of our Richmond site shows a 24% reduction

in hazardous waste generation and an energy usage decrease of over 8% due to LED light installations and changes in laboratory operating procedures.

We continue to operate our laboratories safely, and for the second year in a row, we achieved zero injuries across our R&D team globally.

In 2024, 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 hybrid vehicles, as well as solutions for commercial vehicles.

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 passenger cars specifications such as GF-7.

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 next generation wind turbine technology to maintain our technology leadership in this important and growing market.

This includes launching our next generation wind turbine technology which maintains our technology leadership in this important and growing market, as well as important new industrial gear products.

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.

We continue to launch new OEM-specific technology for full battery electric passenger and commercial vehicles and are a top supplier in this new and growing market.

Our market-leading battery electric vehicle transmission fluid promotes efficiency, and we developed new products for the service-fill sector to provide our customers with the latest additive technology available.

We continue to launch new OEM-specific technology for full battery electric passenger and commercial vehicles and are a top supplier in this growing market.

We developed new products for the service-fill sector to provide our customers with

the latest additive technology available and continue to advance our market-leading and technology-leading battery electric vehicle transmission fluid which pushes the forefront of efficiency.

We also provide leading technology in the fuel additives area.

In 2024, we developed new technology in both gasoline performance additives and diesel performance additives.

This includes launching a new technology platform designed for gasoline direct injection engines that is both more efficient and better-performing.

This includes launching new products related to our next generation diesel technology that is designed for not only conventional, but also renewable diesel.

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.

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We believe our patent position is strong, aggressively managed, and sufficient for the conduct of our business.

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

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

Human Capital

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• safety and environmental responsibility,

• partners with customers and suppliers,

• partnership with customers and suppliers,

• continuously improving quality,

• citizenship, and

• good citizenship, and

• economic viability.

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Approximately 20% 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.

When we hire new employees, our goal is that they stay with us 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.

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.

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

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.

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Additionally, in pursuit of our vision of zero incidents, we work with our employees and other key stakeholders to establish appropriate goals, objectives, and targets.

Both Afton and Ethyl have implemented Responsible Care ® Management Systems (RC14001 ® ) at North American facilities ("Responsible Care" is a registered service mark of the American Chemistry Council (ACC)).

Both Afton and Ethyl have implemented Responsible Care ® Management Systems (RCMS) (RC14001 ® ) at North American facilities ("Responsible Care" is a registered service mark of the American Chemistry Council (ACC)).

Our Responsible Care ® management systems are certified by an independent third-party auditing process.

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

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

The Singapore site is 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/ISO 14001.

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

The AMPAC site in Cedar City, Utah has officially joined the ACC and embarked on its journey to RCMS certification.

In 2024, 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.

The NewMarket worldwide injury/illness recordable rate (which is the number of injuries per 200,000 hours worked) in 2023 was 0.45.

Additionally, during 2023 we had zero serious injuries across all sites, as well as zero recordable injuries at our Port Arthur, Ashland, Richmond R&D, Rio de Janeiro, San Juan del Rio, Singapore, Suzhou, and Tsukuba facilities.

The NewMarket worldwide injury/illness recordable rate (which is the number of injuries per 200,000 hours worked) was 0.77 in 2024.

While we had one serious injury from a trip at the Sauget site in 2024, there were zero recordable injuries at our Port Arthur, Ashland, Richmond R&D, Houston, 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 have organized to provide increased environmental, health, and safety support at key sites and emphasize accountability, as well as 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.

As members of the ACC, we provide data on 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 https://www.americanchemistry.com/chemistry-in-america/responsible-care-driving-safety-industry-performance/metrics-transparent-reporting/individual-member-company-performance-reporting.

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As a chemical company, we are subject to regulation by local, state, federal, and foreign governmental authorities specific to the production, distribution, management, and stewardship of chemicals.

Our specialty materials segment is subject to the International Traffic in Arms Regulations, a set of U.S.

government regulations that controls the export of defense and military technologies, and its international sales require export licenses on a case-by-case basis.

In addition, in the United States and under similar foreign and state laws, we are subject to a variety of environmental laws and regulations, as well as environmental liabilities associated with the investigation and cleanup of hazardous substances.

These liabilities may include personal injury, property damage, or natural resource damages arising from the release of, or exposure to, hazardous substances.

They may be imposed on us in a range of situations without regard to violation of law or regulations.

They may be imposed on us in a range of situations without regard to

violation of law or regulations.

They may also be imposed jointly and severally, where one party may be held liable for a disproportionate share of the damages, up to and including the entire loss.

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We believe we comply, in all material respects, with laws, regulations, statutes, and ordinances, including, but not limited to, those protecting the environment, as well as those related to the management and stewardship of chemicals.

We have policies and procedures in place that establish regular reviews of our regulatory and environmental compliance and product stewardship, and actively monitor any significant existing or potential regulatory changes or environmental issues that could materially affect the company.

Our total accruals for environmental remediation, dismantling, and decontamination were approximately $11 million at December 31, 2023 and $10 million at December 31, 2022.

Our total accruals for environmental remediation, dismantling, and decontamination were approximately $11 million at both December 31, 2024 and December 31, 2023.

As new technology becomes available, it may be possible to reduce accrued amounts.

While we believe that we are currently fully accrued for known environmental issues, it is possible that unexpected future costs could have a significant financial impact on our financial position, results of operations, and cash flows.

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.

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 post-closure costs, are primarily included in cost of goods sold.

We spent approximately $37 million in 2024, $41 million in 2023, and $37 million in 2022 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures.

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Availability of Reports Filed with the Securities and Exchange Commission and Corporate Governance Documents

Our internet website address is www.newmarket.com.

Our website address is www.newmarket.com.

We make available, free of charge through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the SEC.

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(Principal Executive Officer)

Skrobacz 64 Vice President and Chief Financial Officer (Principal Financial Officer)

Fitzgerald 48 Vice President and Chief Financial Officer (Principal Financial Officer)

Hazelgrove, III 64 Executive Vice President and Chief Administrative Officer

Jewett, III 49 Vice President and General Counsel

Ridgeway 49 Controller (Principal Accounting Officer)

Jewett, III 50 Executive Vice President and General Counsel

Pietrantoni 46 Controller (Principal Accounting Officer)

Paliotti 48 President, Afton Chemical Corporation

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

Skrobacz, Mr.

Ridgeway, and Mr.

Fitzgerald, Mr.

Pietrantoni, 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.

Fitzgerald joined the company in November 2014 as Operations Finance Director, became Treasurer and Finance Director on January 1, 2024, and was appointed Vice President and Chief Financial Officer on January 1, 2025.

Jewett joined NewMarket Corporation in July 2020 as Vice President and General Counsel and was appointed Executive Vice President and General Counsel on January 1, 2025.

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

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.

Pietrantoni joined the company in September 2022 as Accounting Director, became Assistant Controller on January 1, 2023, and was appointed Controller on January 1, 2025.

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.

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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