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Item 8. Financial Statements and Supplementary Data

2025-02-14 compared with 2024-02-15 · 289 added, 207 removed, 1012 unchanged (33% of the section changed)

29 unchanged sentences

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Pension Benefit Obligation

As described in Note 17 to the consolidated financial statements, the Company’s consolidated pension benefit obligation, excluding other postretirement benefits, was $502 million as of December 31, 2023.

Management develops the actuarial assumptions used by the various US and foreign plans based upon the circumstances of each particular country and pension plan.

As disclosed by management, the determination of the pension benefit obligation requires the use of estimates and assumptions.

One of management’s assumptions in the determination of the pension benefit obligation is the discount rate.

The principal considerations for our determination that performing procedures relating to the valuation of the pension benefit obligation is a critical audit matter are (i) the significant judgment by management to determine the pension benefit obligation;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s significant assumption used in the valuation of the pension benefit obligation, specifically the discount rate;

As described in Note 18 to the consolidated financial statements, the Company’s consolidated pension benefit obligation, excluding other postretirement benefits, for its US and foreign retirement plans was $561 million as of December 31, 2024.

As disclosed by management, the pension benefit obligation is dependent upon utilizing actuarial methods and requires the use of estimates and assumptions.

Management’s assumptions include the discount rate, rate of projected compensation, and the expected long-term rate of return on plan assets.

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the discount rate;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of the pension benefit obligation, including controls over the Company’s methods, significant assumption, and data.

These procedures also included, among others, testing the completeness, accuracy, and relevance of underlying data used in the valuation of the pension benefit obligation.

With the involvement of professionals with specialized skill and knowledge to assist, these procedures also included testing management’s process for determining the pension benefit obligation, evaluating the appropriateness of the methods, and evaluating the reasonableness of the significant assumption, specifically the discount rate.

These procedures included testing the effectiveness of controls relating to management’s valuation of the pension benefit obligation.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the pension benefit obligation;

(ii) testing the completeness and accuracy of the underlying data used in the actuarial methods;

and the use of professionals with specialized skill and knowledge to assist in evaluating (i) the appropriateness of the actuarial methods and (ii) the reasonableness of the discount rate assumptions.

Acquisition of American Pacific Corporation – Valuation of Intangible Assets

As described in Note 2 to the consolidated financial statements, on January 16, 2024, the Company completed the acquisition of AMPAC Intermediate Holdings, LLC, the ultimate parent company of American Pacific Corporation (AMPAC) for approximately $697 million.

Of the acquired identifiable intangible assets, $275 million of customer base, $60 million of formulas and technology, $30 million of trademarks and trade names, and $29 million of water rights (collectively, the “intangible assets acquired”) were recorded.

As disclosed by management, fair value is estimated by management using an income valuation approach for (i) customer base, (ii) formulas and technology, and (iii) trademarks and trade names.

Management’s cash flow projections included significant judgments and assumptions relating to (i) revenue growth rates, earnings before interest, taxes, depreciation, and amortization (EBITDA), discount rate, contributory asset charges, and customer attrition rate for customer base, and (ii) revenue growth rates, royalty rates, and discount rate for formulas and technology and trademarks and trade names.

Fair value is estimated by management

using a market valuation approach for water rights, and management’s significant judgments and assumptions included comparable sales data.

The principal considerations for our determination that performing procedures relating to the valuation of intangible assets acquired in the acquisition of AMPAC is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the intangible assets acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) revenue growth rates, EBITDA, discount rate, contributory asset charges, and customer attrition rate for customer base, (b) revenue growth rates, royalty rates, and discount rate for formulas and technology and trademarks and trade names, and (c) comparable sales data for water rights;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the intangible assets acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the intangible assets acquired;

(iii) evaluating the appropriateness of the income and market valuation approaches used by management;

(iv) testing the completeness and accuracy of the underlying data used in the income and market valuation approaches;

and (v) evaluating the reasonableness of the significant assumptions used by management related to (a) revenue growth rates, EBITDA, discount rate, contributory asset charges, and customer attrition rate for customer base, (b) revenue growth rates, royalty rates, and discount rate for formulas and technology and trademarks and trade names, and (c) comparable sales data for water rights.

Evaluating management’s assumptions related to (a) revenue growth rates and EBITDA for customer base and (b) revenue growth rates for formulas and technology and trademarks and trade names involved considering (i) the current and past performance of the AMPAC business;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and market valuation approaches and (ii) the reasonableness of the (a) discount rate, contributory asset charges, and customer attrition rate assumptions for customer base, (b) royalty rates and discount rate assumptions for technology and formula and trademarks and trade names, and (c) comparable sales data assumption for water rights.

/s/ PricewaterhouseCoopers LLP

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Prepaid pension cost 490,418 370,882

Operating lease right-of-use assets 70,823 62,417

Operating lease right-of-use assets, net 71,253 70,823

Deferred charges and other assets 52,530 48,207

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issued and outstanding - 9,524,789 at December 31, 2024 and 9,590,086 at December 31, 2023)

Accumulated other comprehensive loss ( 21,071 ) ( 71,995 )

Accumulated other comprehensive income (loss) 32,870 ( 21,071 )

Retained earnings 1,428,713 1,096,002

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Common Stock and

Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders’ Equity

Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders’ Equity

(in thousands, except share and per-share amounts) Shares Amount

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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 9,507 4,020 ( 8 ) 4,012

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Depreciation and amortization 116,957 78,010 82,285

Deferred income tax (benefit) expense ( 14,750 ) ( 42,645 ) 1,978

Deferred income tax benefit ( 12,799 ) ( 14,750 ) ( 42,645 )

Loss on early extinguishment of debt 0 0 7,545

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Capital expenditures ( 57,319 ) ( 48,293 ) ( 56,169 )

Acquisition of business (net of $ 15,588 of cash acquired)

( 681,479 ) 0 0

Purchases of marketable securities 0 0 ( 787 )

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Cash flows from financing activities:

Net (repayments) borrowings under revolving credit facility ( 361,000 ) 213,000 148,000

Net borrowings (repayments) under revolving credit facility 77,000 ( 361,000 ) 213,000

Proceeds from term loan 250,000 0 0

Dividends paid ( 95,902 ) ( 85,034 ) ( 84,263 )

Repurchases of common stock ( 31,914 ) ( 42,864 ) ( 207,470 )

Debt issuance costs ( 2,251 ) 0 0

Redemption of 4.10 % senior notes

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0 0 ( 7,099 )

Issuance of 2.70 % senior notes

Debt issuance costs 0 0 ( 3,897 )

Other, net ( 11,128 ) 1,304 ( 3,525 )

1 unchanged sentence

Effect of foreign exchange on cash and cash equivalents ( 1,059 ) 2,288 255

Increase (decrease) in cash and cash equivalents 43,224 ( 14,592 ) ( 41,868 )

(Decrease) increase in cash and cash equivalents ( 34,460 ) 43,224 ( 14,592 )

Cash and cash equivalents at end of year $ 77,476 $ 111,936 $ 68,712

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Ethyl, representing certain contracted manufacturing and related services, as well as the antiknock compounds business;

and NewMarket Development, which manages the real property and improvements that we own in Virginia.

NewMarket is also the parent company of NewMarket Services, which provides various administrative services to NewMarket, Afton, Ethyl, and NewMarket Development.

AMPAC, which manufactures specialty materials products, and NewMarket Development, which manages the real property and improvements that we own in Virginia.

NewMarket is also the parent company of NewMarket Services, which provides various administrative services to NewMarket, Afton, Ethyl, AMPAC, and NewMarket Development.

Foreign Currency Translation - We translate the balance sheets of our foreign subsidiaries into U.S.

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We translate the statements of income using the weighted-average exchange rates for the period.

NewMarket includes translation adjustments in the Consolidated Balance Sheets as part of accumulated other comprehensive loss and transaction adjustments in the Consolidated Statements of Income as part of cost of goods sold.

Foreign currency transaction adjustments resulted in a net loss of $ 4 million in both 2023 and 2022 and $ 6 million in 2021.

NewMarket includes translation adjustments in the Consolidated Balance Sheets as part of accumulated other comprehensive income (loss) and transaction adjustments in the Consolidated Statements of Income as part of cost of goods sold.

Foreign currency transaction adjustments resulted in a net loss of $ 9 million in 2024 and $ 4 million in each of 2023 and 2022.

Revenue Recognition - We recognize revenue when control of the product is transferred to our customer and for an amount that reflects the consideration we expect to collect from the customer.

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Notes to Consolidated Financial Statements

Intangibles (Net of Amortization) and Goodwill - Identifiable intangibles include acquired contracts, formulas and technology, trademarks and trade names, and customer bases.

Intangibles (Net of Amortization) and Goodwill - Identifiable intangibles include acquired contracts, formulas and technology, trademarks and trade names, and customer bases, as well as non-amortizing water rights.

We assign a value to acquired identifiable intangibles based on independent third-party appraisals and management's assessment at the time of acquisition.

NewMarket amortizes the cost of the customer bases by an accelerated method and the cost of the remaining identifiable intangibles by the straight-line method over the estimated economic life of the intangible.

NewMarket amortizes the cost of definite-lived identifiable intangibles by the straight-line method over the estimated economic life of the intangible.

We test indefinite-lived intangible assets for impairment annually and between annual tests if events or circumstances indicate that it is more likely than not that the asset is impaired.

Goodwill arises from the excess of cost over the net assets of businesses acquired.

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A valuation allowance is recorded when it is more likely than not that a deferred tax asset will not be realized.

We typically remove a tax impact from accumulated other comprehensive loss when the underlying circumstance which gave rise to the tax impact no longer exists.

We typically remove a tax impact from accumulated other comprehensive income (loss) when the underlying circumstance which gave rise to the tax impact no longer exists.

The calculation of income tax liabilities involves uncertainties in the application of complex tax laws and regulations, which are subject to legal interpretation and management judgment.

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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 December 31, 2023, the amount of confirmed invoices under the supplier finance program was not material.

Estimates and Risks Due to Concentration of Business - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and

The amount of invoices confirmed and paid through the supplier finance program was not material during the year ended December 31, 2024.

Notes to Consolidated Financial Statements

assumptions that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

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• production of several of our products solely at one facility.

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

We sell petroleum additives products across the world including to customers located in our North America, Latin America, Asia Pacific, and EMEAI regions.

Our customers primarily consist of global, national, and independent oil companies.

Acquisition of Business

On January 16, 2024, we completed the acquisition of all issued and outstanding ownership units of AMPAC Intermediate Holdings, LLC, the ultimate parent company of American Pacific Corporation (AMPAC), for approximately $ 697 million.

Based in Cedar City, Utah, AMPAC has one operating facility from which it manufactures and sells critical specialty materials primarily used in solid rocket motors for space launch and military defense applications.

AMPAC is qualified on many NASA and Department of Defense programs and has been serving space launch and national defense programs for more than 60 years.

The acquisition of AMPAC expands our presence in mission-critical, resilient sectors.

It was funded by cash on hand and borrowings under our then existing revolving credit facility.

The purchase consideration was subject to a customary post-closing adjustment for working capital, which was finalized during the second quarter of 2024.

The fair values of the assets acquired and the liabilities assumed in the AMPAC acquisition are as follows (in millions):

Cash and cash equivalents $ 16

Trade and other accounts receivable, net 6

Inventories 25

Prepaid expenses and other current assets 3

Property, plant, and equipment, net 111

Intangibles and goodwill 650

Deferred charges and other assets 5

Accounts payable ( 3 )

Accrued expenses ( 5 )

Other noncurrent liabilities ( 111 )

Fair value of net assets acquired $ 697

Identified intangible assets acquired consisted of the following (in millions):

Fair Value Estimated Useful Lives (in years)

Customer base $ 275 17.5

Formulas and technology 60 8

Trademarks and trade names 30 15

Water rights 29 indefinite

Notes to Consolidated Financial Statements

As part of the acquisition, we recorded $ 256 million of goodwill.

The goodwill recognized is attributable to increased access to mission-critical, resilient sectors with a role in global safety, security, and space exploration, as well as the value of the skilled assembled workforce of AMPAC.

All of the goodwill recognized is part of the specialty materials segment, and none of the goodwill is deductible for income tax purposes.

The allocation of the purchase price of AMPAC to the tangible and intangible assets acquired and liabilities assumed was developed using estimates of fair value.

Acquisition-related charges of $ 1 million consisted primarily of legal and professional fees and are included in selling, general, and administrative expenses in our Consolidated Statement of Income for the year ended December 31, 2024.

We are accounting for this acquisition using the acquisition method of accounting for business combinations under the provisions of Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 805, Business Combinations (ASC 805) and have included the results of operations of the acquired business in our Consolidated Statement of Income from the date of acquisition, as well as in the specialty materials segment in Note 5.

These results include a charge related to the sale of finished goods inventory acquired, which was recorded at fair value on the acquisition date and sold to customers during 2024.

The following table presents the financial results for AMPAC from the date of acquisition through December 31, 2024 (in thousands):

January 16 to December 31, 2024

Net sales $ 141,243

Income before income tax expense 17,755

The following table presents our estimated unaudited pro forma consolidated results for the years ended December 31, 2024 and December 31, 2023, assuming the acquisition of AMPAC had occurred on January 1, 2023.

The unaudited pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been realized if the acquisition had been completed at the beginning of 2023, nor is it indicative of expected results for any future period.

In addition, no effect is given to any synergistic benefits resulting from the integration of AMPAC into NewMarket.

Unaudited pro forma information for the years ended December 31, 2024 and December 31, 2023 includes adjustments to depreciation and amortization based upon the fair value allocation of the purchase price to AMPAC's tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2023, as well as adjustments for debt-related costs and management fees.

The acquisition-related costs and the charge related to the fair value adjustment to acquisition-date inventory were recognized in actual results during the year ended December 31, 2024, but for the presentation below, these costs are excluded from 2024 unaudited pro forma income before income taxes and are instead reflected in 2023 pro forma income before income taxes as though they were incurred during the year ended December 31, 2023.

Pro Forma Supplemental Information (unaudited) (in thousands)

Years Ended December 31,

Consolidated 2024 2023

Net sales $ 2,791,658 $ 2,823,753

Income before income tax expense 591,237 461,042

Notes to Consolidated Financial Statements

Our revenues are predominantly 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 petroleum additives customers primarily consist of global, national, and independent oil companies.

Our petroleum additives contracts generally include one performance obligation, which is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts.

Additionally, we have revenue from the manufacture and sale of critical specialty materials products used primarily in solid rocket motors for space launch and military defense applications.

The sale of specialty materials products is predominantly to customers located in the United States, with limited amounts to customers in other countries.

Our specialty materials customers are primarily contractors or subcontractors of the U.S.

Specialty materials contracts generally include one performance obligation, which is typically satisfied at a point in time when the products are shipped from the plant site.

While some of our customers have payment terms beyond 30 days, we do not provide extended payment terms of a year or more, nor do our contracts include a financing component.

3 unchanged sentences

Prepayments from our customers totaled $ 0.1 million at December 31, 2024 and $ 0.3 million at December 31, 2023.

Revenue recognized from funds collected in advance from customers in an earlier period was $ 1 million in both 2023 and 2022, and $ 2 million in 2021.

Revenue recognized from funds collected in advance from customers in an earlier period was $ 0.4 million in 2024 and $ 1 million in both 2023 and 2022 .

We recognize revenue when control of the product is transferred to our customer and for an amount that reflects the consideration we expect to collect from the customer.

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We have evaluated the contract terms under these arrangements and have determined that control transfers when the customer uses the product, at which time revenue is recognized.

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.

Taxes assessed by a governmental authority which are concurrent with sales to our customers, including sales, use, value-added, and revenue-related excise taxes, are collected by us from the customer and are not included in net sales, but are reflected in accrued expenses until remitted to the appropriate governmental authority.

1 unchanged sentence

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

We record rebates at the point of sale as contra-revenue when we can reasonably estimate the amount of the rebate.

We estimate rebates at the point of sale as contra-revenue.

The estimates are based on our best judgment at the time of sale, which includes anticipated as well as historical performance.

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United States $ 1,095,881 $ 972,954 $ 974,963

China 186,181 181,283 255,219

Europe, Middle East, Africa, India 786,764 791,744 807,782

Asia Pacific, except China 396,790 435,684 325,621

Asia Pacific 573,312 582,971 616,967

Other foreign 330,601 350,750 365,087

21 unchanged sentences

Segment and Geographic Area Information

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.

Segment Information -We have two reportable segments – petroleum additives and specialty materials.

The petroleum additives segment includes lubricant and fuel additives which are necessary for the efficient and reliable operation of vehicles and machinery.

The specialty materials segment includes critical materials used in solid rocket motors for space launch and military defense applications.

The petroleum additives and specialty materials segments are managed separately by the president of Afton and the president of AMPAC, respectively.

The “All other” category shown in the tables below includes the operations of the antiknock compounds business, as well as certain contracted manufacturing and related services associated with Ethyl.

We have determined that our chief executive officer is the chief operating decision maker (CODM) who makes key operating decisions and assesses the performance of the reportable segments.

The CODM evaluates performance based on segment operating profit and considers budgeted and forecasted variances to actual results in allocating resources to the segments.

Notes to Consolidated Financial Statements

The segment accounting policies are the same as those described in Note 1.

We evaluate the performance of the petroleum additives business based on segment operating profit.

NewMarket Services expenses are billed to Afton and Ethyl based on the services provided under the holding company structure.

Depreciation on segment property, plant, and equipment, as well as amortization of segment intangible assets and lease right-of-use assets are included in segment operating profit.

No transfers occurred between the petroleum additives segment and the “All other” category during the periods presented.

NewMarket Services expenses are billed to Afton, AMPAC, and Ethyl based on the services provided.

Depreciation on segment property, plant, and equipment, as well as amortization of segment definite-lived intangible assets and lease right-of-use assets are included in segment operating profit.

No transfers occurred between any of the petroleum additives segment, specialty materials segment, and the “All other” category during the periods presented.

The table below reports net sales and operating profit by segment, as well as a reconciliation to income before income tax expense, for the last three years.

Notes to Consolidated Financial Statements

No single customer accounted for 10% or more of our total net sales in 2024, 2023, or 2022.

Years Ended December 31,

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Total 2,636,242 2,689,709 2,754,310

Specialty materials 141,243 0 0

All other 9,073 8,710 10,489

Net sales (a) $ 2,698,419 $ 2,764,799 $ 2,356,110

Total net sales $ 2,786,558 $ 2,698,419 $ 2,764,799

Segment operating profit

Petroleum additives

Net Sales $ 2,636,242 $ 2,689,709 $ 2,754,310

Cost of goods sold ( 1,791,481 ) ( 1,914,337 ) ( 2,114,519 )

Research, development, and testing expenses ( 124,898 ) ( 137,998 ) ( 140,252 )

Other segment items ( 128,009 ) ( 122,946 ) ( 121,295 )

Petroleum additives segment operating profit 591,854 514,428 378,244

Specialty materials

Net Sales 141,243 0 0

Other segment items ( 123,791 ) 0 0

Specialty materials segment operating profit 17,452 0 0

Total segment operating profit 609,306 514,428 378,244

All other ( 2,283 ) ( 4,986 ) ( 1,782 )

Segment operating profit 509,442 376,462 279,530

Corporate, general, and administrative expenses ( 17,332 ) ( 26,147 ) ( 21,579 )

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Income before income tax expense $ 584,107 $ 488,962 $ 347,734

(a) No single customer accounted for 10% or more of our total net sales in 2023, 2022, or 2021.

The following tables show asset information by segment and the reconciliation to consolidated assets.

Segment assets consist of accounts receivable, inventory, and long-lived assets.

Long-lived assets included in the petroleum additives segment amounts in the table below include property, plant, and equipment (net of depreciation), intangibles (net of amortization) and goodwill, and lease right-of-use assets.

The additions to long-lived assets include property, plant, and equipment and lease right-of-use assets.

(in thousands) 2023 2022

Segment assets

Petroleum additives $ 1,728,397 $ 1,929,340

All other 10,098 18,738

1,738,495 1,948,078

Cash and cash equivalents 111,936 68,712

Non-segment other accounts receivable 3,083 2,220

Prepaid expenses and other current assets 39,051 38,338

Non-segment property, plant, and equipment, net

31,983 32,191

Prepaid pension cost 370,882 302,584

Non-segment lease right-of-use assets 5 26

Non-segment deferred charges and other assets 13,436 14,669

Total assets $ 2,308,871 $ 2,406,818

Notes to Consolidated Financial Statements

The significant expense categories of cost of goods sold and research, development, and testing expenses are shown in the above segment operating profit table for the petroleum additives segment and are regularly provided to the CODM.

The other segment items for the petroleum additives segment represent selling, general, and administrative expenses, as well as corporate services allocated to the reporting segment.

The other segment items for the specialty materials segment include costs of goods sold;

selling, general, and administrative expenses;

and corporate services allocated to the reporting segment.

Significant expense categories of the specialty materials segment are not regularly provided to the CODM.

Asset information by segment is not reported internally or otherwise regularly provided to the CODM.

The following tables show additions to long-lived assets by segment and depreciation and amortization by segment and the reconciliation to both consolidated amounts.

The additions to long-lived assets include property, plant, and equipment and lease right-of-use assets.

Years Ended December 31,

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Petroleum additives $ 72,126 $ 72,038 $ 64,456

Specialty materials 4,144 0 0

All other 2 1 147

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Petroleum additives $ 79,241 $ 74,471 $ 78,744

Specialty materials 33,849 0 0

All other 46 45 51

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Our foreign customers consist primarily of global, national, and independent oil companies.

The tables below report net sales, total assets, and long-lived assets by geographic area, as well as by country for those countries with significant net sales or long-lived assets.

The tables below report net sales and long-lived assets by geographic area, as well as by country for those countries with significant net sales or long-lived assets.

Since our foreign operations are significant to our overall business, we are also presenting net sales in the table below by the major regions in which we operate.

1 unchanged sentence

Long-lived assets in the table below include property, plant, and equipment, net of depreciation, and lease right-of-use assets.

Notes to Consolidated Financial Statements

Years Ended December 31,

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United States $ 1,095,881 $ 972,954 $ 974,963

China 186,181 181,283 255,219

Europe, Middle East, Africa, India 786,764 791,744 807,782

Asia Pacific, except China 396,790 435,684 325,621

Asia Pacific 573,312 582,971 616,967

Other foreign 330,601 350,750 365,087

Net sales $ 2,698,419 $ 2,764,799 $ 2,356,110

Total net sales $ 2,786,558 $ 2,698,419 $ 2,764,799

(in thousands) 2024 2023

United States $ 1,016,449 $ 990,037

Foreign 1,292,422 1,416,781

Total assets $ 2,308,871 $ 2,406,818

Long-lived assets

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Total long-lived assets $ 839,756 $ 760,341

Notes to Consolidated Financial Statements

Supplemental Cash Flow Information

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$ 505,426 $ 456,234

Notes to Consolidated Financial Statements

petroleum additives finished goods, work-in-process, and raw materials inventories, which are stated on the LIFO basis, amounted to $ 142 million at December 31, 2024 and were below replacement cost by approximately $ 93 million.

8 unchanged sentences

$ 51,203 $ 39,051

Notes to Consolidated Financial Statements

Property, Plant, and Equipment, at Cost

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

Notes to Consolidated Financial Statements

(in thousands)

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Contract 0 0 2,000 2,000

Customer base 5,440 4,539 5,440 4,350

Customer bases 280,440 19,856 5,440 4,539

Trademarks and trade names 30,000 1,925 0 0

Water Rights 29,392 0

Goodwill 379,593 123,741

$ 779,425 $ 29,001 $ 137,381 $ 12,739

Aggregate amortization expense $ 1,506 $ 1,423

Aggregate amortization expense was $ 2 million in 2021.

All of the intangibles and goodwill relate to the petroleum additives segment.

The change in the gross carrying amount between 2022 and 2023 was due to foreign currency fluctuations.

Amortization expense $ 24,462 $ 1,506

Amortization expense was $ 1 million in 2022.

Of the total intangibles (net of amortization) and goodwill, $ 124 million is attributable to the petroleum additives segment and $ 626 million is attributable to the specialty materials segment.

The change in the gross carrying amount between 2023 and 2024 is due to the identifiable intangible assets and goodwill from the acquisition of AMPAC, as well as the write-off of fully amortized identifiable intangible assets and the foreign currency fluctuation on goodwill in the petroleum additives segment.

See Note 2 for further information on the intangibles and goodwill obtained with the AMPAC acquisition.

There is no accumulated goodwill impairment.

Notes to Consolidated Financial Statements

Estimated annual amortization expense related to our intangible assets for the next five years is expected to be (in thousands):

We amortize the customer base over 20 years.

Estimated annual amortization expense related to our intangible assets for the next five years is shown in the table below (in thousands).

2025 $ 25,404

We amortize the formulas and technology over 8 years, the customer bases over 17.5 to 20 years, and the trademarks and trade names over 15 years.

Deferred Charges and Other Assets

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Deferred financing costs, net of amortization 1,792 611

Deposit on future leased plant and equipment 0 12,063

Other 12,781 7,216

1 unchanged sentence

Deferred financing costs, net of amortization, in the table above include only those costs associated with the revolving credit facility.

The amount of deferred financing costs, net of amortization, related to the 2.70 % senior notes is reported as a component of long-term debt.

The amount of deferred financing costs, net of amortization, related to the 2.70 % senior notes and the term loan is reported as a component of long-term debt.

See Note 14 for further information on our long-term debt.

Notes to Consolidated Financial Statements

Accrued Expenses

6 unchanged sentences

$ 89,277 $ 76,546

Notes to Consolidated Financial Statements

Long-term Debt

4 unchanged sentences

250,000 250,000

Term Loan (net of related deferred financing costs) 249,775 0

Revolving credit facility 77,000 0

10 unchanged sentences

3.78% Senior Notes - On January 4, 2017, we issued $ 250 million in senior unsecured notes in a private placement with The Prudential Insurance Company of America and certain other purchasers.

These notes bear interest at 3.78 % and mature on January 4, 2029.

Interest is payable semiannually.

Principal payments of $ 50 million are payable annually beginning on January 4, 2025.

These notes bear interest at 3.78 % with interest payable semiannually.

We made the first principal payment of $ 50 million on January 4, 2025 and have four remaining principal payments of $ 50 million due January 4 of each year through 2029.

We have the right to make optional prepayments on the notes at any time, subject to certain limitations.

2 unchanged sentences

We were in compliance with all covenants under the 3.78 % senior notes as of December 31, 2024 and December 31, 2023.

Revolving Credit Facility - On March 5, 2020, NewMarket and certain foreign subsidiary borrowers entered into a Credit Agreement (the Credit Agreement) with a term of five years .

The Credit Agreement provided for a $ 900 million, multicurrency revolving credit facility with a $ 500 million sublimit for foreign currency borrowings, a $ 50 million sublimit for letters of credit, and a $ 20 million sublimit for swingline loans.

The Credit Agreement included an expansion feature which allowed us, subject to certain conditions, to request an increase in the aggregate amount of the revolving credit facility or obtain incremental term loans in an amount up to $ 425 million.

NewMarket's obligations under the Credit Agreement were unsecured and the obligations of foreign subsidiary borrowers were fully and unconditionally guaranteed by NewMarket.

The revolving credit facility was scheduled to mature on March 5, 2025.

Borrowings made under the revolving credit facility bore interest at a variable rate determined, at our option, at an annual rate equal to (i) the Alternate Base Rate (ABR), (ii) the Adjusted Term SOFR Rate (SOFR), or (iii) the Adjusted EURIBO Rate (EURIBO), each plus the Applicable Rate and all as defined in the Credit Agreement.

The Applicable Rate was based, at our option, on our Leverage Ratio (as defined in the Credit Agreement) or credit rating.

Prior to January 11, 2023, when we amended our revolving credit facility, LIBOR was utilized instead of SOFR as an option to establish interest rates on the revolving credit facility.

We paid financing costs in 2020 of approximately $ 1.3 million related to this revolving credit facility and carried over deferred financing costs from our previous revolving credit facility of approximately $ 1.2 million, resulting in total deferred financing costs of $ 2.5 million, which we were amortizing over the term of the Credit Agreement.

Notes to Consolidated Financial Statements

There were no outstanding borrowings under the revolving credit facility at December 31, 2023 compared to $ 361 million outstanding borrowings at December 31, 2022.

Outstanding letters of credit amounted to $ 2 million at both December 31, 2023 and December 31, 2022, resulting in the unused portion of the credit facility amounting to $ 898 million at December 31, 2023 and $ 537 million at December 31, 2022.

The average interest rate for borrowings under the credit facility was 6.2 % during 2023 and 3.5 % during 2022.

The Credit Agreement contained certain customary covenants, including financial covenants that required NewMarket to maintain a consolidated Leverage Ratio (as defined in the Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Credit Agreement).

We were in compliance with all covenants under the revolving credit facility in effect at December 31, 2023 and at December 31, 2022.

Credit Agreements Entered into in 2024 - On January 22, 2024, we entered into a new five -year, $ 900 million revolving credit facility that replaced the facility discussed above and also entered into a new two -year, $ 250 million unsecured term loan.

This term loan gave us additional flexibility to repay borrowings under our revolving credit facility and support our business needs.

See Note 23 for additional information.

Term Loan - On January 22, 2024, we entered into a credit agreement for an unsecured $ 250 million term loan (the Term Loan Credit Agreement), which matures on January 22, 2026.

We borrowed the entire $ 250 million available under the Term Loan Credit Agreement and paid financing costs of $ 0.4 million, which are being amortized over the term of the agreement.

We are required to repay the principal amount borrowed under the term loan in full at maturity.

We may, in our sole discretion and subject to the conditions set forth in the Term Loan Credit Agreement, prepay, without penalty, amounts borrowed under the term loan, together with any accrued and unpaid interest, prior to maturity.

Any amounts prepaid prior to maturity are not available for additional borrowings by us.

The principal amount borrowed under the term loan initially bears interest at a variable rate equal to Term SOFR plus the Applicable Rate.

We may, at our option, elect for outstanding portions of the principal amount to instead bear interest at a variable rate equal to the Base Rate or Weekly Adjusted Term SOFR, plus, in each case, the Applicable Rate, subject to the conditions set forth in the Term Loan Credit Agreement.

The Applicable Rate is based, at our option, on either our Leverage Ratio or Ratings Level.

All capitalized terms are as defined in the Term Loan Credit Agreement.

The Term Loan Credit Agreement contains certain customary covenants, including financial covenants, which require us to maintain a consolidated Leverage Ratio (as defined in the Term Loan Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Term Loan Credit Agreement).

We were in compliance with all covenants under the term loan as of December 31, 2024.

Revolving Credit Facility - On January 22, 2024, we entered into a credit agreement for a new $ 900 million revolving credit facility (the Revolving Credit Agreement).

The revolving credit facility matures on January 22, 2029 and includes a $ 500 million sublimit for multicurrency borrowings, an initial letter of credit sublimit of $ 25 million, and a $ 20 million sublimit for swingline loans.

The Revolving Credit Agreement includes an expansion feature allowing us, subject to certain conditions, to request an increase in the aggregate amount of the revolving credit facility or obtain incremental term loans in an amount up to $ 450 million.

We may also request an extension of the maturity date as provided for in the Revolving Credit Agreement.

Certain of our foreign subsidiaries may, from time to time, become borrowers under the Revolving Credit Agreement.

The obligations under the Revolving Credit Agreement are unsecured and are fully and unconditionally guaranteed by NewMarket.

Concurrently with entering into the Revolving Credit Agreement, we terminated our former revolving credit facility entered into on March 5, 2020.

Upon termination, we repaid the amount then outstanding under the former revolving credit facility, plus accrued and unpaid interest.

Borrowings made under the revolving credit facility bear interest at a variable rate determined, at our option, at an annual rate equal to (i) the Base Rate, (ii) Term SOFR, (iii) the Weekly Adjusted Term SOFR, (iv) the Alternative Currency Term Rate, or (v) the Alternative Currency Daily Rate, each plus the Applicable Rate and all as defined in the Revolving Credit Agreement.

The Applicable Rate is based, at our option, on either our Leverage Ratio or Ratings Level.

All capitalized terms are as defined in the Revolving Credit Agreement.

We paid financing costs in 2024 of approximately $ 1.8 million related to this revolving credit facility and carried over deferred financing costs from the former revolving credit facility of approximately $ 0.4 million, resulting in total gross deferred financing costs of $ 2.2 million, which we are amortizing over the term of the Revolving Credit Agreement.

Outstanding borrowings under the applicable revolving credit facility amounted to $ 77 million at December 31, 2024 and none at December 31, 2023.

Outstanding letters of credit amounted to approximately $ 4 million at December 31, 2024 and $ 2 million at December 31, 2023.

The unused portion of the applicable revolving credit facility amounted to $ 819 million at December 31, 2024 and $ 898 million at December 31, 2023.

The average interest rate for borrowings under the applicable revolving credit agreement was 6.5 % during the year ended December 31, 2024 and 6.2 % during the year ended December 31, 2023.

The Revolving Credit Agreement contains certain customary covenants, including financial covenants, which require us to maintain a consolidated Leverage Ratio (as defined in the Revolving Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Revolving Credit Agreement).

We were in compliance with all covenants under the applicable revolving credit facility as of December 31, 2024 and December 31, 2023.

Notes to Consolidated Financial Statements

Other Noncurrent Liabilities

12 unchanged sentences

Awards outstanding under the Prior Plan will remain in effect until vested or forfeited under their terms.

Any employee of our company or an affiliate or a person who is a member of our Board of Directors or the board of directors of an affiliate is eligible to participate in the Plan if the Compensation Committee of the Board of Directors (the Administrator), in its sole discretion, determines that such person has contributed or can be expected to contribute to the profits or growth of our company or its affiliates (each, a participant).

Under the terms of the Plan, we may grant participants stock awards, incentive awards, stock units, or options (which may be either incentive stock options or nonqualified stock options), or stock appreciation rights (SARs), which may be granted with a related option.

6 unchanged sentences

A non-employee director may not be granted an incentive award and may not be granted more than 1,000 shares of common stock in a calendar year.

Notes to Consolidated Financial Statements

The maximum aggregate number of shares of our common stock that may be issued under the Plan is 250,000 .

8 unchanged sentences

Unvested stock awards at December 31, 2024 36,460 410.00

Notes to Consolidated Financial Statements

The weighted average grant-date fair value was $ 341.93 for stock awards granted in 2023 and $ 312.49 for stock awards granted in 2022.

The fair value of shares vested was $ 3 million in 2023.

No shares vested in 2022 and 2021.

We recognized compensation expense of $ 4 million in 2023, and $ 2 million in both 2022 and 2021 related to stock awards.

The fair value of shares vested was $ 2 million in 2024 and $ 3 million in 2023.

No shares vested in 2022.

We recognized compensation expense of $ 2 million in 2024, $ 4 million in 2023 and $ 2 million in 2022 related to stock awards.

At December 31, 2024, total unrecognized compensation expense related to stock awards was $ 7 million, which is expected to be recognized over a period of 2.3 years.

2 unchanged sentences

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease cost were as follows:

The components of lease cost are shown in the table below.

Years Ended December 31,

2 unchanged sentences

Finance lease cost:

Amortization of assets 2,547 2,771 2,795

Amortization of right-of-use assets 2,610 2,547 2,771

Interest on lease liabilities 621 657 712

3 unchanged sentences

Variable lease costs also include leases that do not have a right-of-use asset or lease liability but are capitalized as part of inventory.

Notes to Consolidated Financial Statements

Supplemental balance sheet information related to leases was as follows:

Supplemental balance sheet information related to leases follow.

(in thousands) Balance Sheet Classification 2024 2023

Operating leases

Right-of-use assets Operating lease right-of-use assets $ 70,823 $ 62,417

Right-of-use assets Operating lease right-of-use assets, net $ 71,253 $ 70,823

Current liability Operating lease liabilities $ 15,337 $ 15,074

6 unchanged sentences

$ 20,613 $ 22,598

Notes to Consolidated Financial Statements

2024 2023 2022

5 unchanged sentences

Finance leases 3.01 % 2.92 % 2.72 %

Notes to Consolidated Financial Statements

Supplemental cash flow information related to leases was as follows:

Supplemental cash flow information related to leases follow.

Years Ended December 31,

7 unchanged sentences

Finance leases 992 425 84

Maturities of lease liabilities at December 31, 2023 were as follows:

Maturities of lease liabilities at December 31, 2024 follow.

(in thousands) Operating Leases Finance Leases

9 unchanged sentences

Operating lease payments in the table above include approximately $ 15 million related to options to extend lease terms that are reasonably certain of being exercised.

At December 31, 2023, we had commitments of approximately $ 0.2 million related to railcar leases that have not yet commenced and are not included in the above table.

At December 31, 2024, we had operating lease commitments of approximately $ 3.6 million and finance lease commitments of approximately $ 2.2 million, which are not included in the above table.

Most of the commitments relate to equipment that is being constructed or procured by the future lessors and office space.

These leases are expected to commence in 2025.

Pension Plans and Other Postretirement Benefits

Notes to Consolidated Financial Statements

Pension Plans and Postretirement Benefits

NewMarket uses a December 31 measurement date for all of our plans.

8 unchanged sentences

The plans are as follows:

• Salaried employees pension plan;

• NewMarket salaried employees pension plan (the Salaried Plan);

• Afton pension plan for union employees (the Sauget Plan);

• NewMarket retirement income plan for union employees in Houston, Texas (the Houston Plan);

Notes to Consolidated Financial Statements

• Afton Chemical Additives pension plan for union employees in Port Arthur, Texas (the Port Arthur Plan).

34 unchanged sentences

Actuarial net (gain) loss ( 25,961 ) 12,039 ( 313 ) 1,204

Acquisition 91,872 0 0 0

Plan amendment 0 648 0 0

5 unchanged sentences

Actual return on plan assets 108,487 93,075 1,389 1,067

Acquisition 75,834 0 0 0

Employer contributions 4,971 2,401 1,207 962

8 unchanged sentences

$ 358,059 $ 269,346 $ ( 8,807 ) $ ( 9,457 )

Amounts recognized in accumulated other comprehensive loss

Amounts recognized in accumulated other comprehensive income (loss)

Actuarial net (gain) loss $ ( 153,088 ) $ ( 74,212 ) $ ( 7,416 ) $ ( 6,618 )

1 unchanged sentence

$ ( 152,667 ) $ ( 73,605 ) $ ( 14,921 ) $ ( 17,151 )

The AMPAC defined benefit plan was merged with and into the Salaried Plan during 2024.

Further information on the acquisition is in Note 2.

The accumulated benefit obligation for all domestic defined benefit pension plans was $ 400 million at December 31, 2024 and $ 320 million at December 31, 2023.

2 unchanged sentences

The net liability position of plans in which the projected benefit obligation exceeded assets is included in other noncurrent liabilities on the Consolidated Balance Sheets.

Notes to Consolidated Financial Statements

A portion of the accrued benefit cost for the nonqualified plan is included in current liabilities at both December 31, 2024 and December 31, 2023.

As the nonqualified plan is unfunded, the amount reflected in current liabilities represents the expected benefit payments related to the nonqualified plan during the following year.

Notes to Consolidated Financial Statements

The table below shows selected information on domestic defined benefit pension and postretirement plans.

25 unchanged sentences

3.50 % 3.50 % 3.50 %

Notes to Consolidated Financial Statements

For pension plans, we base the assumed expected long-term rate of return for plan assets on an analysis of our actual investments, including our asset allocation, as well as an analysis of expected returns.

6 unchanged sentences

As a result of that evaluation, we have maintained the expected long-term rate of return at 4.0 % for the year beginning January 1, 2025.

Notes to Consolidated Financial Statements

Plan Assets - Pension plan assets are held and distributed by trusts and consist principally of equity securities and investment-grade fixed income securities.

12 unchanged sentences

No NewMarket common stock is included in these assets.

Notes to Consolidated Financial Statements

The following table provides information on the fair value of our pension and postretirement benefit plans assets, as well as the related level within the fair value hierarchy.

14 unchanged sentences

Equities—mutual fund 236,024 236,024 0 0 74,099 74,099 0 0

Common collective trusts measured at net asset value

Real estate value added fund measured at net asset value 1,549 0

$ 791,993 $ 790,444 $ 0 $ 0 $ 625,259 $ 625,259 $ 0 $ 0

6 unchanged sentences

• The mutual funds in pooled investment funds are valued at the closing price reported on a national exchange.

Notes to Consolidated Financial Statements

• The common collective trusts (the trusts) are valued at the net asset value of units held based on the quoted market value of the underlying investments held by the funds.

One of the trusts invests primarily in a diversified portfolio of equity securities included in the S&P 500 index and the other trust invests primarily in a diversified portfolio of equity securities included in the Russell 1000 Value index.

There are no restrictions on redemption for the index trusts and there were no unfunded commitments.

We sold our interest in these trusts during 2023.

• The real estate value added fund targets the U.S.

real estate services sector focusing on the multi-family asset class.

The fund is not publicly traded on an exchange, but the units are valued at net asset value based on the value of underlying assets of the respective fund.

This fund is a closed-end vehicle with no standard mechanism for early liquidity except for a sale in the secondary market at a probable significant discount.

The fund was established in 2018 with a primary fund life of eight years with options for two, one-year extensions.

There is a $ 47 thousand unfunded commitment.

• The insurance contracts are unallocated funds deposited with an insurance company and are stated at an amount equal to the sum of all amounts deposited less the sum of all amounts withdrawn, adjusted for investment return.

Notes to Consolidated Financial Statements

Cash Flows - For U.S.

61 unchanged sentences

$ 82,313 $ 54,595

Amounts recognized in accumulated other comprehensive loss

Amounts recognized in accumulated other comprehensive income (loss)

Actuarial net (gain) loss $ ( 23,230 ) $ ( 3,413 )

3 unchanged sentences

The accumulated benefit obligation for all foreign defined benefit pension plans was $ 118 million at December 31, 2024 and $ 134 million at December 31, 2023.

Notes to Consolidated Financial Statements

The fair market value of plan assets exceeded both the accumulated benefit obligation and projected benefit obligation for the Canada and U.K.

4 unchanged sentences

The accrued benefit cost of these plans is included in other noncurrent liabilities on the Consolidated Balance Sheets for both years.

Notes to Consolidated Financial Statements

As the Germany plan is unfunded, a portion of the accrued benefit cost is included in current liabilities at year-end 2024 and 2023, reflecting the expected benefit payments related to the plan for the following year.

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While the pension obligation is long-term in nature for each of our foreign plans, the investment strategies followed by each plan vary to some degree based upon the laws of a particular country, as well as the provisions of the specific pension trust.

and Canada plans are invested predominantly in equity securities funds, diversified funds, and

Notes to Consolidated Financial Statements

debt securities funds.

and Canada plans are invested predominantly in equity securities funds, diversified funds, and debt securities funds.

The funds of these plans are managed by various trustees and investment companies whose performance is reviewed throughout the year.

The Belgium plan is invested in an insurance contract.

The Mexico plans are invested in mutual funds, equities, and debt securities.

The Mexico plans are invested primarily in mutual funds and debt securities.

The Germany plan has no assets.

There are no significant concentrations of risk within plan assets, nor do the equity securities include any NewMarket common stock for any year presented.

Notes to Consolidated Financial Statements

The following table provides information on the fair value of our foreign defined benefit pension plans assets, as well as the related level within the fair value hierarchy.

12 unchanged sentences

Pooled investment funds (measured at net asset value):

Equity securities—U.S.

companies 3,168 0

Equity securities—international companies

9 unchanged sentences

• Equity securities are valued at the closing price reported on a national exchange.

• Debt securities are valued by quoted market prices or valued based on yields currently available on comparable securities of issuers with similar credit ratings.

• Debt securities are valued by quoted market prices.

• Pooled investment mutual funds are valued at the closing price reported on a national exchange.

6 unchanged sentences

pension plan funds.

The Canada pension plan is invested in a pooled Canadian equity fund and a pooled diversified fund.

The Canada pension plan is invested in a pooled Canadian equity fund, pooled U.S.

equity fund, and a pooled diversified fund.

The Canadian equity fund invests in a diversification (sector and industry) of equities listed on a recognized Canadian exchange.

The diversified fund invests in a diversified mix of equities, fixed income securities, cash,

The pooled U.S.

equity fund invests in equities located in the U.S.

and recognized on a national exchange.

The diversified fund invests in a diversified mix of equities, fixed income securities, cash, and cash equivalent securities.

There are no redemption restrictions on the pooled Canadian funds or the pooled U.S.

equity fund, and there were no unfunded commitments.

Notes to Consolidated Financial Statements

and cash equivalent securities.

There are no redemption restrictions on the pooled Canadian funds, and there were no unfunded commitments.

Cash Flows - For foreign defined benefit pension plans, NewMarket expects to contribute $ 5 million to the plans in 2025.

33 unchanged sentences

Foreign-derived intangible tax benefit ( 2.2 ) ( 2.0 ) ( 3.0 )

minimum tax on foreign income 1.1 0.4 0.4

Taxes applicable to prior years ( 0.8 ) ( 1.4 ) ( 0.1 )

6 unchanged sentences

Lease liabilities 14,277 14,511

Operating loss and credit carryforwards 15,952 15,336

Operating loss and other carryforwards 30,804 15,952

Foreign currency translation adjustments 6,450 4,567

4 unchanged sentences

Deferred income tax liabilities

Depreciation and amortization 81,767 78,058

Depreciation 101,538 81,767

Future employee benefits 102,174 71,822

Intangibles 85,727 172

Lease assets 14,737 14,965

6 unchanged sentences

Our deferred taxes are in a net liability position at December 31, 2024.

Our deferred tax assets include $ 16 million of foreign operating loss carryforwards, foreign capital loss carryforwards, foreign non-trading deficit carryforwards, and foreign and state tax credits.

Our deferred tax assets include $ 31 million of federal and foreign operating loss carryforwards, foreign capital loss carryforwards, U.S.

interest expense carryforwards, and foreign and state tax credits.

The operating loss carryforwards expire in 2027 through 2042, and certain tax credits expire in 2026 through 2034.

1 unchanged sentence

Therefore, as of December 31, 2024, we have recorded a valuation allowance of $ 23 million.

During 2022 and 2023, we did not release any valuation allowances.

During 2024, we released a valuation allowance in the amount of $ 0.5 million for losses utilized.

During 2023, we did not release any valuation allowances.

Notes to Consolidated Financial Statements

6 unchanged sentences

Determination of the amount of unrecognized deferred income tax liability is not practicable due to the complexity associated with the hypothetical calculation.

A reconciliation of the beginning and ending balances of the unrecognized tax benefits from uncertain positions is as follows:

A reconciliation of the beginning and ending balances of the unrecognized tax benefits from uncertain positions follows.

(in thousands) 2024 2023 2022

13 unchanged sentences

We are no longer subject to U.S.

federal income examination for years before 2020, with the exception of 2017.

federal income examination for years before 2021.

Foreign and U.S.

9 unchanged sentences

No material events occurred during 2024 requiring adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.

Long-term debt - We record the carrying amount of our long-term debt at historical cost, less deferred financing costs related to our outstanding senior notes.

Long-term debt - We record the carrying amount of our long-term debt at historical cost, less deferred financing costs related to our outstanding senior notes and term loan.

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 publicly traded outstanding senior notes included in long-term debt in the following table is based on the last quoted price closest to December 31 of each year.

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

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

Notes to Consolidated Financial Statements

13 unchanged sentences

Any amounts for which we are liable under purchase orders are reflected in our Consolidated Balance Sheets as accounts payable or accrued expenses.

Future payments for purchase obligations as of December 31, 2023 are (in thousands):

Future payments for purchase obligations as of December 31, 2024 are shown in the table below (in thousands).

2025 $ 12,538

7 unchanged sentences

We have never manufactured, sold, or distributed products that contain asbestos.

Nearly all of these cases are pending in Texas, Louisiana, or Illinois and involve multiple defendants.

Nearly all of these cases are pending in Texas, Louisiana, or Illinois and most involve multiple defendants.

We maintain an accrual for these proceedings, as well as a receivable for expected insurance recoveries.

15 unchanged sentences

The noncurrent portion is included in deferred charges and other assets.

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 PRP.

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 financial statements.

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

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 $ 11 million at both December 31, 2024 and December 31, 2023.

Of the total accrual, the current portion is included in accrued expenses and the noncurrent portion is included in other noncurrent liabilities on the Consolidated Balance Sheets .

Our more significant environmental sites include a former plant site in Louisiana (the Louisiana site) and a Houston, Texas plant site (the Texas site).

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

The aggregate undiscounted amount for these sites was $ 11 million at December 31, 2023 and $ 10 million at December 31, 2022.

Of the total accrued for these two sites, the amount related to remediation of groundwater and soil was $ 4 million for each of the Louisiana site and Texas site at December 31, 2023 and $ 3 million for the Louisiana site and $ 4 million for the Texas site at December 31, 2022.

Our more significant environmental sites include a former plant site in Baton Rouge, Louisiana and a Houston, Texas plant site.

Together, the amounts accrued on a discounted basis related to these sites represented approximately $ 9 million of the total accrual at both December 31, 2024 and December 31, 2023, using discount rates ranging from 3 % to 9 % for both periods.

The aggregate, undiscounted amount for these sites was $ 11 million at both December 31, 2024 and December 31, 2023.

Of the total accrued for these two sites, the amount related to remediation of groundwater and soil was $ 4 million for each of the Louisiana site and Texas site at both December 31, 2024 and December 31, 2023.

Notes to Consolidated Financial Statements

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:

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

The balances of, and changes in, the components of accumulated other comprehensive income (loss), net of tax, are shown in the table below.

(in thousands) Pension Plans

and Other Postretirement Benefits Foreign Currency Translation Adjustments Accumulated Other

Comprehensive (Loss) Income

Comprehensive Income (Loss)

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

1 unchanged sentence

53,019 ( 42,808 ) 10,211

Amounts reclassified from accumulated other comprehensive loss (a)

5,099 0 5,099

Amounts reclassified from accumulated other comprehensive income (loss) (a) 21 0 21

Other comprehensive income (loss) 53,040 ( 42,808 ) 10,232

2 unchanged sentences

28,907 25,520 54,427

Amounts reclassified from accumulated other comprehensive loss (a)

Amounts reclassified from accumulated other comprehensive income (loss) (a) ( 3,503 ) 0 ( 3,503 )

Other comprehensive income (loss) 25,404 25,520 50,924

2 unchanged sentences

75,382 ( 18,051 ) 57,331

Amounts reclassified from accumulated other comprehensive loss (a)

( 3,503 ) 0 ( 3,503 )

Amounts reclassified from accumulated other comprehensive income (loss) (a) ( 3,390 ) 0 ( 3,390 )

Other comprehensive income (loss) 71,992 ( 18,051 ) 53,941

Balance at December 31, 2024 $ 151,958 $ ( 119,088 ) $ 32,870

(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).

(a) The pension plan and other postretirement benefit components of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (income).

See Note 18 for further information.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" (ASU 2023-07).

ASU 2023-07 requires expanded disclosures about reportable segments including additional information on segment expenses, expanded interim period disclosures, and an explanation of how the chief operating decision maker utilizes segment information in evaluating segment performance.

ASU 2023-07 is effective for our reporting period beginning January 1, 2024 with the interim period requirements effective for our reporting period beginning January 1, 2025.

We are currently assessing the impact that the adoption of ASU 2023-07 will have on the disclosures in our consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.

2023-09, "Income Taxes (Topic 740):

1 unchanged sentence

The FASB issued ASU 2023-09 to enhance the transparency and decision-making usefulness of income tax disclosures by requiring additional information on an entity's tax rate reconciliation, as well as income taxes paid.

ASU 2023-09 is effective for our reporting period beginning January 1, 2025.

ASU 2023-09 is effective for our annual reporting period beginning January 1, 2025.

We are currently assessing the impact that the adoption of ASU 2023-09 will have on the disclosures in our consolidated financial statements.

Notes to Consolidated Financial Statements

Subsequent Events

AMPAC Acquisition

On January 16, 2024, we completed the acquisition of AMPAC Intermediate Holdings, LLC, the ultimate parent company of American Pacific Corporation (AMPAC), for approximately $ 700 million.

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.

The acquisition was funded by cash on hand and borrowings under our revolving credit facility.

A preliminary purchase price allocation and any required pro forma financial disclosures required by Accounting Standards Codification 805 - Business Combinations will be included in the Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.

Debt Agreements

On January 22, 2024, NewMarket and certain foreign subsidiary borrowers entered into a credit agreement for a new $ 900 million revolving credit facility (the Revolving Credit Agreement).

We may also request an extension of the maturity date as provided for in the Revolving Credit Agreement.

The Applicable Rate is based, at our option, on either our Leverage Ratio or Ratings Level.

All capitalized terms are as defined in the Revolving Credit Agreement.

Also on January 22, 2024, NewMarket entered into a credit agreement for a $ 250 million term loan (the Term Loan Credit Agreement).

The term loan matures on January 22, 2026.

NewMarket is required to repay the principal amount borrowed under the term loan in full at maturity.

We may, in our sole discretion and subject to the conditions set forth in the Term Loan Credit Agreement, prepay amounts borrowed under the term loan, together with any accrued and unpaid interest, prior to maturity.

Any amounts prepaid prior to maturity are not available for additional borrowings by NewMarket.

The principal amount borrowed under the term loan initially bears interest at a variable rate equal to Term SOFR plus the Applicable Rate.

Similar to the revolving credit facility, the Applicable Rate is based, at our option, on either our Leverage Ratio or Ratings Level.

All capitalized terms are as defined in the Term Loan Credit Agreement.

The obligations under the revolving credit facility and the term loan are unsecured and the obligations under the revolving credit facility are fully and unconditionally guaranteed by NewMarket.

Both the revolving credit facility and the term loan contain certain customary covenants, including financial covenants that require NewMarket to maintain a consolidated Leverage Ratio (as defined in each of the agreements) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in each of the agreements).

Concurrently with our entry into the Revolving Credit Agreement and the Term Loan Credit Agreement, we terminated our former revolving credit facility dated as of March 5, 2020.

Upon termination, we repaid the amount outstanding under the former revolving credit facility, plus accrued and unpaid interest.

NewMarket borrowed the entire $ 250 million available under the Term Loan Credit Agreement and approximately $ 465 million under the Revolving Credit Agreement to repay the amounts outstanding under the former revolving credit facility.

In November 2024, the FASB issued Accounting Standards Update No.

2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses" (ASU 2024-03).

The FASB issued ASU 2024-03 to improve disclosures surrounding expenses in commonly presented captions including Cost of goods sold;

Selling, general, and administrative expenses;

and Research, development, and testing expenses.

The additional expense information required to be disclosed includes purchases of inventory, employee compensation, depreciation, intangible assets amortization, and total selling expenses, as well as a qualitative description of amounts remaining that have not been separately presented.

ASU 2024-03 is effective for our annual reporting period beginning January 1, 2027, and our quarterly reporting periods beginning January 1, 2028.

Early adoption is permitted.

We are currently assessing the impact that the adoption of ASU 2024-03 will have on the disclosures in our consolidated financial statements.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data