UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2017~~2019



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-32190

NEWMARKET CORPORATION

(Exact name of registrant as specified in its charter)



~~VIRGINIA~~Virginia		20-0812170
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

330 ~~SOUTH FOURTH STREET~~ ~~RICHMOND, VIRGINIA~~ South Fourth Street		23219-4350
Richmond,	Virginia	23219-4350
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code - ~~(804)~~ (804) 788-5000

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	NEU	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x		Accelerated filer	¨
Non-accelerated filer	¨	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨☐
			Emerging growth company	¨☐

Table of Contents

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

~~Table of Contents~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ ☐No x

Number of shares of common stock, without par value, outstanding as of September 30, ~~2017~~2019: ~~11,853,107~~11,189,222

Table of Contents

NEWMARKET CORPORATION

INDEX



	Page Number
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Consolidated Statements of Income - Third Quarter and Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018	4
Consolidated Statements of Comprehensive Income - Third Quarter and Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018	5
Condensed Consolidated Balance Sheets - September 30, ~~2017~~2019 and December 31, ~~2016~~2018	6
Consolidated Statements of ~~Shareholders’~~Shareholders' Equity - Third Quarter and Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018	7
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018	8
Notes to Condensed Consolidated Financial Statements	9
Financial Statement Presentation	9
~~Acquisition~~Net Sales ~~of Business~~	9
Segment Information	10
Pension Plans and Other Postretirement Benefits	1011
Earnings Per Share	12
~~Intangibles (Net of Amortization) and Goodwill~~Inventories	12
~~Long-term Debt~~Intangibles (Net of Amortization) and Goodwill	13
~~Commitments and Contingencies~~Leases	1413
Long-term Debt	16
Commitments and Contingencies	17
Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss	1518
Fair Value Measurements	1518
Recent Accounting Pronouncements	1618
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1719
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	24
~~ITEM 4. Controls and Procedures~~	24
~~PART II. OTHER INFORMATION~~
~~ITEM 1. Legal Proceedings~~	25
ITEM ~~6. Exhibits~~4. Controls and Procedures	25
~~SIGNATURES~~PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	26
ITEM 6. Exhibits	26
SIGNATURES	27

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


(in thousands, except per-share amounts)	Third Quarter Ended September 30,				Nine Months Ended September 30,					Third Quarter Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016			2019		2018		2019		2018
Net sales	$	548,416	$	516,090	$	1,638,422	$	1,547,824		$	555,817	$	563,166	$	1,655,850	$	1,751,363
Cost of goods sold	388,111		338,689		1,142,996		1,016,473			393,090		422,283		1,169,421		1,307,838
Gross profit	160,305		177,401		495,426		531,351			162,727		140,883		486,429		443,525
Selling, general, and administrative expenses	42,806		38,848		121,551		120,176			38,122		37,741		109,916		120,653
Research, development, and testing expenses	35,070		36,715		107,356		116,651			36,387		34,994		106,748		106,018
Operating profit	82,429		101,838		266,519		294,524			88,218		68,148		269,765		216,854
Interest and financing expenses, net	5,564		4,320		16,496		12,462			6,987		7,807		22,740		18,536
Other income (expense), net	112		698		477		(2,828		)	6,227		7,973		17,932		20,872
Income before income tax expense	76,977		98,216		250,500		279,234			87,458		68,314		264,957		219,190
Income tax expense	17,205		26,767		64,063		81,465			19,653		9,833		60,773		47,259
Net income	$	59,772	$	71,449	$	186,437	$	197,769		$	67,805	$	58,481	$	204,184	$	171,931
Earnings per share - basic and diluted	$	5.04	$	6.03	$	15.73	$	16.68		$	6.06	$	5.12	$	18.26	$	14.78
Cash dividends declared per share	$	1.75	$	1.60	$	5.25	$	4.80		$	1.90	$	1.75	$	5.40	$	5.25

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(in thousands)	Third Quarter Ended September 30,						Nine Months Ended September 30,						Third Quarter Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Net income	$	59,772		$	71,449		$	186,437		$	197,769		$	67,805		$	58,481		$	204,184		$	171,931
Other comprehensive income (loss):
Pension plans and other postretirement benefits:
Prior service credit (cost) arising during the period, net of income tax expense (benefit) of $0 in third quarter and nine months 2017 and $(287) in third quarter and nine months 2016	0			(463		)	0			(463		)
Amortization of prior service cost (credit) included in net periodic benefit cost, net of income tax expense (benefit) of $(296) in third quarter 2017, $(232) in third quarter 2016, $(888) in nine months 2017 and $(842) in nine months 2016	(475		)	(373		)	(1,423		)	(1,352		)
Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $(841) in third quarter and nine months 2017 and $(1,448) in third quarter and nine months 2016	(1,335		)	(2,300		)	(1,335		)	(2,300		)
Amortization of actuarial net loss (gain) included in net periodic benefit cost, net of income tax expense (benefit) of $487 in third quarter 2017, $578 in third quarter 2016, $1,563 in nine months 2017 and $1,719 in nine months 2016	845			1,002			2,692			2,992
Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $(185) in third quarter 2019, $(180) in third quarter 2018, $(556) in nine months 2019 and $(541) in nine months 2018													(600		)	(591		)	(1,802		)	(1,773		)
Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $771 in third quarter and nine months 2019 and $(51) in third quarter and nine months 2018													2,501			(163		)	2,501			(163		)
Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $169 in third quarter 2019, $318 in third quarter 2018, $674 in nine months 2019 and $1,037 in nine months 2018													570			1,003			2,245			3,270
Total pension plans and other postretirement benefits	(965		)	(2,134		)	(66		)	(1,123		)	2,471			249			2,944			1,334
Foreign currency translation adjustments, net of income tax expense (benefit) of $712 in third quarter 2017, $197 in third quarter 2016, $632 in nine months 2017 and $1,797 in nine months 2016	5,642			(6,599		)	18,656			(16,922		)
Foreign currency translation adjustments, net of income tax expense (benefit) of $(324) in third quarter 2019, $(109) in third quarter 2018, $(317) in nine months 2019 and $(653) in nine months 2018													(9,819		)	(3,760		)	(9,239		)	(3,793		)
Other comprehensive income (loss)	4,677			(8,733		)	18,590			(18,045		)	(7,348		)	(3,511		)	(6,295		)	(2,459		)
Comprehensive income	$	64,449		$	62,716		$	205,027		$	179,724		$	60,457		$	54,970		$	197,889		$	169,472

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share amounts)	September 30, 2017			December 31, 2016			September 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	104,996		$	192,154		$	79,971		$	73,040
Trade and other accounts receivable, less allowance for doubtful accounts	325,216			306,916			340,752			314,860
Inventories:
Finished goods and work-in-process	311,817			254,068
Raw materials	59,994			45,581
Stores, supplies, and other	11,900			11,863
Total inventories	383,711			311,512
Inventories							370,934			396,341
Prepaid expenses and other current assets	33,853			26,301			35,276			29,179
Total current assets	847,776			836,883			826,933			813,420
Property, plant, and equipment, at cost	1,444,885			1,264,957
Less accumulated depreciation and amortization	808,248			761,212
Net property, plant, and equipment	636,637			503,745
Property, plant, and equipment, net							623,961			644,138
Intangibles (net of amortization) and goodwill							132,822			136,039
Prepaid pension cost	41,222			25,800			100,758			88,705
Operating lease right-of-use assets							58,377			0
Deferred income taxes	21,102			29,063			4,973			5,094
Intangibles (net of amortization) and goodwill	147,094			10,436
Deferred charges and other assets	11,362			10,509			23,171			9,878
Total assets	$	1,705,193		$	1,416,436		$	1,770,995		$	1,697,274
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	158,683		$	141,869		$	154,650		$	151,631
Accrued expenses	105,450			104,082			75,928			91,202
Dividends payable	19,129			17,478			19,441			17,923
Income taxes payable	18,336			17,573			12,348			6,431
Operating lease liabilities							13,811			0
Other current liabilities	7,832			13,588			4,300			4,114
Total current liabilities	309,430			294,590			280,478			271,301
Long-term debt	611,687			507,275			639,983			770,999
Operating lease liabilities-noncurrent							44,398			0
Other noncurrent liabilities	155,626			131,320			176,798			165,067
Total liabilities	1,076,743			933,185			1,141,657			1,207,367
Commitments and contingencies (Note 8)
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common stock and paid-in capital (without par value; authorized shares - 80,000,000; issued and outstanding shares - 11,853,107 at September 30, 2017 and 11,845,972 at December 31, 2016)	3,999			1,603
Common stock and paid-in capital (without par value; authorized shares - 80,000,000; issued and outstanding shares - 11,189,222 at September 30, 2019 and 11,184,482 at December 31, 2018)							1,914			0
Accumulated other comprehensive loss	(163,920		)	(182,510		)	(187,611		)	(181,316		)
Retained earnings	788,371			664,158			815,035			671,223
Total shareholders' equity	628,450			483,251			629,338			489,907
Total liabilities and shareholders’ equity	$	1,705,193		$	1,416,436		$	1,770,995		$	1,697,274

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


(in thousands, except share and per-share amounts)	Common Stock and Paid-in Capital					Accumulated Other Comprehensive Loss				Retained Earnings				Total Shareholders’ Equity				Common Stock and Paid-in Capital					Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
(in thousands, except share and per-share amounts)	Shares		Amount							Retained Earnings			Shares					Amount					Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
Balance at December 31, 2015	11,948,446		$	0		Accumulated Other Comprehensive Loss		$	(144,526	)		$	532,090	Total Shareholders’ Equity			$	387,564
Balance at June 30, 2018																		11,465,814		$	0		$	(144,942	)	$	697,423		$	552,481
Net income										197,769				197,769												58,481			58,481
Other comprehensive income (loss)						(18,045		)						(18,045		)							(3,511		)				(3,511		)
Cash dividends ($4.80 per share)										(56,875		)		(56,875		)
Cash dividends ($1.75 per share)																										(19,957		)	(19,957		)
Repurchases of common stock	(98,867	)	(252		)					(35,563		)		(35,815		)		(62,428	)	(1,141		)				(23,429		)	(24,570		)
Stock-based compensation	(925	)	2,348							17				2,365				645		1,141						7			1,148
Balance at September 30, 2016	11,848,654		$	2,096		$	(162,571	)		$	637,438			$	476,963
Balance at September 30, 2018																		11,404,031		$	0		$	(148,453	)	$	712,525		$	564,072

Balance at December 31, 2016	11,845,972		$	1,603		$	(182,510	)		$	664,158			$	483,251
Balance at June 30, 2019																		11,188,126		$	949		$	(180,263	)	$	768,490		$	589,176
Net income																										67,805			67,805
Other comprehensive income (loss)																							(7,348		)				(7,348		)
Cash dividends ($1.90 per share)																										(21,260		)	(21,260		)
Stock-based compensation																		1,096		965									965
Balance at September 30, 2019																		11,189,222		$	1,914		$	(187,611	)	$	815,035		$	629,338

Balance at December 31, 2017																		11,779,978		$	0		$	(145,994	)	$	747,643		$	601,649
Net income										186,437				186,437												171,931			171,931
Other comprehensive income (loss)						18,590								18,590									(2,459		)				(2,459		)
Cash dividends ($5.25 per share)										(62,227		)		(62,227		)										(60,778		)	(60,778		)
Repurchases of common stock																		(385,181	)	(2,366		)				(146,283		)	(148,649		)
Stock-based compensation	7,135		2,396							3				2,399				9,234		2,366						12			2,378
Balance at September 30, 2017	11,853,107		$	3,999		$	(163,920	)		$	788,371			$	628,450
Balance at September 30, 2018																		11,404,031		$	0		$	(148,453	)	$	712,525		$	564,072

Balance at December 31, 2018																		11,184,482		$	0		$	(181,316	)	$	671,223		$	489,907
Net income																										204,184			204,184
Other comprehensive income (loss)																							(6,295		)				(6,295		)
Cash dividends ($5.40 per share)																										(60,418		)	(60,418		)
Stock-based compensation																		4,740		1,914						46			1,960
Balance at September 30, 2019																		11,189,222		$	1,914		$	(187,611	)	$	815,035		$	629,338

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(in thousands)	Nine Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2019			2018
Cash and cash equivalents at beginning of year	$	192,154		$	93,424		$	73,040		$	84,166
Cash flows from operating activities:
Net income	186,437			197,769			204,184			171,931
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	39,196			32,739			65,500			53,463
Noncash pension and postretirement expense	5,976			9,609
Deferred income tax expense	8,639			14,661			3,982			10,257
Working capital changes	(34,945		)	890			(35,997		)	(69,190		)
Cash pension and postretirement contributions	(19,566		)	(19,432		)	(7,308		)	(61,860		)
Realized loss on derivative instruments, net	0			4,825
Other, net	(7,986		)	18,429			2,886			(3,456		)
Cash provided from (used in) operating activities	177,751			259,490			233,247			101,145
Cash flows from investing activities:
Capital expenditures	(120,973		)	(101,706		)	(37,132		)	(55,136		)
Acquisition of business (net of $1,131 cash acquired)	(183,930		)	0
Deposits for interest rate swap	0			(7,570		)
Return of deposits for interest rate swap	0			11,832
Other, net	(2,000		)	(4,749		)	0			14,573
Cash provided from (used in) investing activities	(306,903		)	(102,193		)	(37,132		)	(40,563		)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facility	(146,000		)	35,000			(126,262		)	215,619
Issuance of 3.78% senior notes	250,000			0
Dividends paid	(62,227		)	(56,875		)	(60,418		)	(60,778		)
Repurchases of common stock	0			(35,815		)	0			(148,649		)
Other, net	(3,048		)	(3,079		)	(1,899		)	(242		)
Cash provided from (used in) financing activities	38,725			(60,769		)	(188,579		)	5,950
Effect of foreign exchange on cash and cash equivalents	3,269			(2,044		)	(605		)	(2,763		)
(Decrease) increase in cash and cash equivalents	(87,158		)	94,484
Increase in cash and cash equivalents							6,931			63,769
Cash and cash equivalents at end of period	$	104,996		$	187,908		$	79,971		$	147,935

Supplemental disclosure of non-cash transactions:
Release of deposit account funds to terminate interest rate swap	$	0		$	21,868
Non-cash additions to property, plant, and equipment	$	6,443		$	20,732
Non-cash obligation under capital lease	$	0		$	5,068

See accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Financial Statement Presentation

In the opinion of management, the accompanying consolidated financial statements of NewMarket Corporation and its subsidiaries contain all necessary adjustments for the fair statement of, in all material respects, our consolidated financial position as of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, our consolidated results of operations, ~~and~~ comprehensive income, and changes in shareholders' equity for the third quarter and nine months ended September 30, ~~2017~~2019 and September 30, ~~2016,~~2018, and our ~~changes in shareholders' equity, and~~ cash flows for the nine months ended September 30, ~~2017~~2019 and September 30, ~~2016.~~2018. All adjustments are of a normal, recurring nature, unless otherwise disclosed. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the NewMarket Corporation Annual Report on Form 10-K for the year ended December 31, ~~2016 (2016~~2018 (2018 Annual Report), as filed with the Securities and Exchange Commission (SEC). The results of operations for the nine month period ended September 30, ~~2017~~2019 are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2017.~~2019. The December 31, ~~2016~~2018 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

Unless the context otherwise indicates, all references to “we,” “us,” “our,” the “company,” and “NewMarket” are to NewMarket Corporation and its consolidated subsidiaries.

~~Non-cash additions~~We adopted Accounting Standard Update No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02) on January 1, 2019. ASU 2018-02 allows, but does not require, reclassification from accumulated other comprehensive income to ~~property, plant~~retained earnings for stranded tax effects that resulted from the enactment of U.S. tax legislation commonly known as the Tax Cuts and ~~equipment for~~Jobs Acts (Tax Reform Act) at the ~~nine months ended September 30, 2016 were revised from $5 million to $21 million for comparative purposes in the supplemental disclosure~~end of ~~non-cash transactions for the nine months ended September 30,~~ 2017. We ~~have concluded that this change is~~elected not ~~material~~ to ~~our consolidated financial statements and that it is appropriate~~reclassify those tax effects from accumulated other comprehensive income upon adoption of ASU 2018-02. We typically remove the tax impact from accumulated other comprehensive income when the underlying circumstance which gave rise to ~~revise~~ the ~~amount.~~tax impact no longer exists.

2. ~~Acquisition~~Net Sales

Our revenues are primarily derived from the manufacture and sale of ~~Business~~

On July 3, 2017, Afton Chemical de Mexico, S.A. de C.V., an indirect, wholly-owned subsidiary of NewMarket Corporation, acquired approximately 99.5% of the outstanding capital stock of Aditivos Mexicanos, S.A. de C.V. (AMSA) for $185 million in cash. AMSA is a petroleum additives ~~manufacturing, sales and distribution company based~~products. We sell petroleum additives products across the world to customers located in ~~Mexico City, Mexico. The results of AMSA's operations have been included in our consolidated financial statements since~~ the ~~date of acquisition and are not material. The noncontrolling interest is also not material. The acquisition agreement included all physical assets of AMSA.~~

~~We have initiated a purchase price valuation to determine the fair values of the tangible and intangible assets acquired and liabilities assumed~~United States, Europe, Asia Pacific (including China), Latin America, Canada, India, and the Middle East. Our customers primarily consist of global, national, and independent oil companies. Our contracts generally include one performance obligation, which is providing petroleum additives products. The performance obligation is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts.

In limited cases, we collect funds in advance of shipping product to our customers and recognizing the related revenue. These prepayments from customers are recorded as a contract liability to our customer until we recognize the revenue. Some of our contracts include variable consideration in the form of rebates or business development funds. We regularly review both rebates and business development funds and make adjustments when necessary, recognizing the full amount of ~~goodwill to be recognized as of~~any adjustment in the acquisition date. The amounts recorded for certain assets and liabilities are preliminary and are subject to adjustment if additional information is obtained about facts that existed as of the acquisition date. The final determination of the fair values of certain assets and liabilities will be completed within the measurement period ~~of up to one year from the acquisition date.~~identified.

The ~~preliminary purchase price valuation resulted~~following table provides information on our net sales by geographic area. Information on net sales by segment is in the recognition of $22 million of identifiable intangible assets, of which $13 million related to formulas and technology and $9 million related to a customer base. The identifiable intangible assets are being amortized over their useful lives of 5 years for formulas and technology and 4 years for the customer base. We also acquired property, plant, and equipment of $53 million and working capital of $17 million, including accounts receivable of $16 million and inventory of $7 million, as well as cash of $1 million. We acquired a liability related to future employee payments of $5 million and set up a deferred tax liability of $19 million.Note 3.



	Third Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Net sales
United States	$	191,830	$	180,142	$	551,875	$	547,005
China	49,219		57,891		170,627		183,980
Europe, Middle East, Africa, India	179,685		180,850		526,597		588,248
Asia Pacific, except China	77,823		87,661		240,653		254,350
Other foreign	57,260		56,622		166,098		177,780
Net sales	$	555,817	$	563,166	$	1,655,850	$	1,751,363

As part of the acquisition, we recorded $115 million of goodwill. The goodwill recognized is attributable to expected synergies, including a secure supply source for certain raw materials, as well as the skilled assembled workforce of AMSA. All of the goodwill recognized is part of the petroleum additives segment, and none is deductible for Mexican tax purposes.

~~Pro forma results of operations are not presented as the acquisition was not considered material to our consolidated results.~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3. Segment Information

The tables below show our consolidated segment results. The “All other” category includes the operations of the ~~tetraethyl lead (TEL)~~antiknock compounds business, as well as certain contracted manufacturing and services associated with Ethyl Corporation (Ethyl). ~~The results of AMSA's operations are reflected in the petroleum additives segment. See Note 2 for further information on AMSA.~~

Net Sales by Segment



	Third Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Petroleum additives
Lubricant additives	$	448,629	$	462,865	$	1,348,508	$	1,440,227
Fuel additives	101,997		97,657		295,621		303,405
Total	550,626		560,522		1,644,129		1,743,632
All other	5,191		2,644		11,721		7,731
Net sales	$	555,817	$	563,166	$	1,655,850	$	1,751,363

Third Quarter Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2017 2016 2017 2016
Petroleum additives
     Lubricant additives $ 443,355
$ 420,412
$ 1,340,693
$ 1,271,447
     Fuel additives 102,804
91,993
289,652
263,213
          Total 546,159
512,405
1,630,345
1,534,660
All other 2,257
3,685
8,077
13,164
Net sales $ 548,416
$ 516,090
$ 1,638,422
$ 1,547,824

Segment Operating Profit



	Third Quarter Ended September 30,						Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
Petroleum additives	$	94,765		$	75,824		$	285,620		$	231,494
All other	(77		)	(2,295		)	92			(1,966		)
Segment operating profit	94,688			73,529			285,712			229,528
Corporate, general, and administrative expenses	(6,473		)	(5,402		)	(15,842		)	(16,033		)
Interest and financing expenses, net	(6,987		)	(7,807		)	(22,740		)	(18,536		)
Other income (expense), net	6,230			7,994			17,827			24,231
Income before income tax expense	$	87,458		$	68,314		$	264,957		$	219,190

Third Quarter Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2017 2016 2017 2016
Petroleum additives $ 87,933
$ 106,385
$ 281,935
$ 309,305
All other 1,141
373
3,081
1,964
Segment operating profit 89,074
106,758
285,016
311,269
Corporate, general, and administrative expenses (6,612 ) (4,990 ) (18,284 ) (16,396 )
Interest and financing expenses, net (5,564 ) (4,320 ) (16,496 ) (12,462 )
Other income (expense), net 79
768
264
(3,177 )
Income before income tax expense $ 76,977
$ 98,216
$ 250,500
$ 279,234

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. Pension Plans and Other Postretirement Benefits

The table below shows cash contributions made during the nine months ended September 30, ~~2017,~~2019, as well as the remaining cash contributions we expect to make during the year endingDecember 31, ~~2017,~~2019, for our domestic and foreign pension plans and domestic postretirement benefit plan.



(in thousands)	Actual Cash Contributions for Nine Months Ended September 30, 2019		Expected Remaining Cash Contributions for Year Ending December 31, 2019
Domestic plans
Pension benefits	$	2,227	$	742
Postretirement benefits	934		311
Foreign plans
Pension benefits	4,147		1,505

(in thousands) Actual Cash Contributions for Nine Months Ended September 30, 2017 Expected Remaining Cash Contributions for Year Ending December 31, 2017
Domestic plans
Pension benefits $ 14,473
$ 4,825
Postretirement benefits 931
311
Foreign plans
Pension benefits 4,162
1,417

~~Table of Contents~~

The tables below present information on net periodic benefit cost (income) for our domestic and foreign pension plans and domestic postretirement benefit plan. The service cost component of net periodic benefit cost (income) is reflected in cost of goods sold; selling, general, and administrative expenses; or research, development, and testing expenses, to reflect where other compensation costs arising from services rendered by the pertinent employee are recorded on the Consolidated Statements of Income. The remaining components of net periodic benefit cost (income) are recorded in other income (expense), net on the Consolidated Statements of Income.


	Domestic												Domestic
	Pension Benefits						Postretirement Benefits						Pension Benefits						Postretirement Benefits
	Third Quarter Ended September 30,												Third Quarter Ended September 30,
(in thousands)	2017			2016			2017			2016			2019			2018			2019			2018
Service cost	$	3,501		$	3,432		$	208		$	208		$	2,809		$	3,599		$	150		$	239
Interest cost	3,248			3,347			400			398			3,478			3,257			358			355
Expected return on plan assets	(6,604		)	(5,848		)	(281		)	(292		)	(8,661		)	(7,523		)	(223		)	(228		)
Amortization of prior service cost (credit)	7			173			(757		)	(757		)	(19		)	7			(757		)	(757		)
Amortization of actuarial net (gain) loss	1,085			1,325			0			0			507			1,172			0			0
Net periodic benefit cost (income)	$	1,237		$	2,429		$	(430	)	$	(443	)	$	(1,886	)	$	512		$	(472	)	$	(391	)



	Domestic
	Pension Benefits						Postretirement Benefits
	Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
Service cost	$	10,056		$	11,543		$	538		$	672
Interest cost	10,849			9,942			1,136			1,094
Expected return on plan assets	(25,975		)	(22,413		)	(711		)	(726		)
Amortization of prior service cost (credit)	(57		)	20			(2,271		)	(2,271		)
Amortization of actuarial net (gain) loss	2,214			3,854			0			0
Net periodic benefit cost (income)	$	(2,913	)	$	2,946		$	(1,308	)	$	(1,231	)

Domestic
Pension Benefits Postretirement Benefits
Nine Months Ended September 30,
(in thousands) 2017 2016 2017 2016
Service cost $ 10,259
$ 9,646
$ 581
$ 529
Interest cost 9,966
9,881
1,186
1,239
Expected return on plan assets (19,609 ) (17,354 ) (898 ) (929 )
Amortization of prior service cost (credit) 20
141
(2,271 ) (2,271 )
Amortization of actuarial net (gain) loss 3,544
3,932
0
0
Net periodic benefit cost (income) $ 4,180
$ 6,246
$ (1,402 ) $ (1,432 )

Foreign
Pension Benefits
Third Quarter Ended September 30, Nine Months Ended September 30,
(in thousands) 2017 2016 2017 2016
Service cost $ 1,942
$ 1,612
$ 5,645
$ 5,332
Interest cost 1,076
1,110
3,141
3,678
Expected return on plan assets (2,127 ) (1,420 ) (6,229 ) (4,911 )
Amortization of prior service cost (credit) (20 ) (20 ) (58 ) (64 )
Amortization of actuarial net (gain) loss 243
230
699
760
Net periodic benefit cost (income) $ 1,114
$ 1,512
$ 3,198
$ 4,795

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	Foreign
	Pension Benefits
	Third Quarter Ended September 30,						Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
Service cost	$	1,575		$	1,975		$	4,833		$	6,114
Interest cost	1,166			1,105			3,593			3,425
Expected return on plan assets	(2,238		)	(2,423		)	(6,918		)	(7,519		)
Amortization of prior service cost (credit)	(11		)	(20		)	(32		)	(62		)
Amortization of actuarial net (gain) loss	230			148			704			456
Net periodic benefit cost (income)	$	722		$	785		$	2,180		$	2,414

5. Earnings Per Share

We had ~~23,615~~22,512 shares of nonvested restricted stock at September 30, ~~2017~~2019 and ~~24,805~~24,832 shares of nonvested restricted stock at September 30, ~~2016~~2018 that were excluded from the calculation of diluted earnings per share, as their effect on earnings per share would be anti-dilutive.

The nonvested restricted stock is considered a participating security since the restricted stock contains nonforfeitable rights to dividends. As such, we use the two-class method to compute basic and diluted earnings per share for all periods presented since this method yields a more dilutive result than the treasury-stock method. The following table illustrates the earnings allocation method utilized in the calculation of basic and diluted earnings per share.



	Third Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per-share amounts)	2019		2018		2019		2018
Earnings per share numerator:
Net income attributable to common shareholders before allocation of earnings to participating securities	$	67,805	$	58,481	$	204,184	$	171,931
Earnings allocated to participating securities	137		121		348		340
Net income attributable to common shareholders after allocation of earnings to participating securities	$	67,668	$	58,360	$	203,836	$	171,591
Earnings per share denominator:
Weighted-average number of shares of common stock outstanding - basic and diluted	11,167		11,409		11,166		11,606
Earnings per share - basic and diluted	$	6.06	$	5.12	$	18.26	$	14.78

Third Quarter Ended
September 30, Nine Months Ended
September 30,
(in thousands, except per-share amounts) 2017 2016 2017 2016
Earnings per share numerator:
Net income attributable to common shareholders before allocation of earnings to participating securities $ 59,772
$ 71,449
$ 186,437
$ 197,769
Earnings allocated to participating securities 118
146
370
411
Net income attributable to common shareholders after allocation of earnings to participating securities $ 59,654
$ 71,303
$ 186,067
$ 197,358
Earnings per share denominator:
Weighted-average number of shares of common stock outstanding - basic and diluted 11,829
11,823
11,829
11,829
Earnings per share - basic and diluted $ 5.04
$ 6.03
$ 15.73
$ 16.68


6.	Inventories



	September 30,		December 31,
(in thousands)	2019		2018
Finished goods and work-in-process	$	297,515	$	319,120
Raw materials	58,982		63,403
Stores, supplies, and other	14,437		13,818
	$	370,934	$	396,341

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7. Intangibles (Net of Amortization) and Goodwill

The net carrying amount of intangibles and goodwill was ~~$147~~$133 million at September 30, ~~2017~~2019 and ~~$10~~$136 million at December 31, ~~2016.~~2018. The gross carrying amount and accumulated amortization of each type of intangible asset and goodwill are presented in the table below.



	September 30, 2019				December 31, 2018
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets
Formulas and technology	$	9,600	$	4,875	$	9,600	$	3,250
Contract	2,000		550		2,000		400
Customer bases	14,240		10,470		14,240		9,091
Goodwill	122,877				122,940
	$	148,717	$	15,895	$	148,780	$	12,741

September 30, 2017 December 31, 2016
(in thousands)
Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization
Amortizing intangible assets
Formulas and technology $ 16,340
$ 2,290
$ 2,678
$ 1,958
Contracts 2,000
151
2,000
0
Customer bases 15,758
4,735
6,938
3,961
Trademarks and trade names 1,530
1,176
1,513
1,069
Goodwill 119,818
4,295

$ 155,446
$ 8,352
$ 17,424
$ 6,988

All of the intangibles relate to the petroleum additives segment. The change in the gross carrying amount between December 31, ~~2016~~2018 and September 30, ~~2017~~2019 is ~~primarily~~ due to ~~additional goodwill and identifiable intangibles from the acquisition of AMSA, as well as~~ foreign currency fluctuation. The additional goodwill and identifiable intangibles from the acquisition of AMSA are preliminary and are subject to adjustment if additional information is obtained about facts that existed as of the acquisition date. The final determination of the fair values will be completed within the measurement period of up to one year from the acquisition date. See Note 2 for more information. There is no accumulated goodwill impairment.

Amortization expense was (in thousands):



Third quarter ended September 30, 2019	$	1,051
Nine months ended September 30, 2019	3,154
Third quarter ended September 30, 2018	1,470
Nine months ended September 30, 2018	5,944

Third quarter ended September 30, 2017 $ 928
Nine months ended September 30, 2017 1,364
Third quarter ended September 30, 2016 291
Nine months ended September 30, 2016 1,645

~~Table of Contents~~

Estimated amortization expense for the remainder of ~~2017,~~2019, as well as estimated annual amortization expense related to our intangible assets for the next five years, is expected to be (in thousands):



2019	$	1,052
2020	2,907
2021	2,156
2022	1,423
2023	907
2024	390

2017 $ 1,777
2018 6,487
2019 6,008
2020 4,874
2021 3,985
2022 1,800

We amortize ~~contracts~~the contract over 10 years; customer bases over 4 to 20 years; and formulas and technology over 53 to ~~10 years; and trademarks and trade names over 10~~6 years.

7.8. Leases

On January 1, 2019, we adopted Accounting Standards Update No. 2016-02, "Leases (Topic 842)" (ASU 2016-02) using the modified retrospective transition method allowing us to apply the new standard at the adoption date and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Under this transition method, the prior comparative period continues to be reported under the accounting standards in effect for that period.

We elected the package of practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward the historical lease classification of existing leases. In addition, we elected the hindsight practical expedient to determine the lease term for existing leases and also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. Except for the railcar lease class, we made an accounting policy election to adopt the short-term lease exception, which allows us to not recognize on the balance sheet

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

those leases with terms of 12 months or less resulting in short-term lease payments being recognized in the consolidated statements of income on a straight-line basis over the lease term. We also elected a practical expedient to not separate lease and nonlease components in determining the right-of-use assets and lease liabilities for all lease classes.

Adoption of the new standard resulted in recognition of both right-of-use assets and lease liabilities of approximately $70 million as of January 1, 2019. As the right-of-use assets and lease liabilities were substantially the same at adoption, we did not record a cumulative effect adjustment to the opening balance of retained earnings.

We have both operating and finance leases with remaining terms ranging from less than one year to 52 years. Our leases are for land, real estate, railcars, vehicles, pipelines, plant equipment, and office equipment. We determine if an arrangement includes a lease at the inception of the agreement. The right-of-use asset and lease liability is determined at the lease commencement date and is based on the present value of estimated lease payments. Our lease agreements contain both fixed and variable lease payments. In some cases, variable lease payments are based on a rate or an index. Fixed lease payments, as well as variable lease payments which are based on a rate or index, are included in the determination of the right-of-use asset and lease liability. Variable lease payments that are not based on a rate or index are expensed when incurred. The present value of estimated lease payments is determined utilizing the rate implicit in the lease agreement, if that rate can be determined. If the implicit rate cannot be determined, the present value of estimated lease payments is determined utilizing our incremental borrowing rate. The incremental borrowing rate is determined at the lease commencement date and is developed utilizing a readily available market interest rate curve adjusted for our credit quality. Some of our leases include an option to renew that can extend the lease term. For those leases which are reasonably certain to be renewed, we included the renewal term in the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense were as follows:



	Third Quarter Ended September 30,		Nine Months Ended September 30,
(in thousands)	2019		2019
Operating lease cost	$	4,293	$	12,821
Finance lease cost:
Amortization of assets	684		1,953
Interest on lease liabilities	108		300
Short-term lease cost	812		2,776
Variable lease cost	611		1,653
Total lease cost	$	6,508	$	19,503

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Supplemental balance sheet information related to leases was as follows:



(in thousands)	Balance Sheet Classification	September 30, 2019
Operating leases:
Operating lease right-of-use assets	Operating lease right-of-use assets	$	58,377

Current liability	Operating lease liabilities	$	13,811
Noncurrent liability	Operating lease liabilities-noncurrent	44,398
Total operating lease liabilities		$	58,209

Finance leases:
Finance lease right-of-use assets	Deferred charges and other assets	$	12,401

Current liability	Other current liabilities	$	2,814
Noncurrent liability	Other noncurrent liabilities	10,667
Total finance lease liabilities		$	13,481



	September 30, 2019
Weighted average remaining lease term (in years):
Operating leases	14
Finance leases	9

Weighted average incremental borrowing rate:
Operating leases	3.97	%
Finance leases	3.47	%

Supplemental cash flow information related to leases was as follows:



	Nine Months Ended September 30,
(in thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,374
Operating cash flows from finance leases	300
Financing cash flows from finance leases	1,899

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	12,820
Finance leases	9,345

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Maturities of lease liabilities as of September 30, 2019 were as follows:



(in thousands)	Operating Leases		Finance Leases
2019 (remainder)	$	4,099	$	807
2020	14,891		3,228
2021	10,580		2,208
2022	8,012		1,175
2023	6,490		965
Thereafter	34,819		7,226
Total lease payments	78,891		15,609
Less: imputed interest	20,682		2,128
Total lease obligations	$	58,209	$	13,481

Operating lease payments in the table above include approximately $16 million related to options to extend lease terms that are reasonably certain of being exercised. At September 30, 2019, we had commitments of approximately $40 million related to leases that have not yet commenced and are not included in the above table. Most of the commitments relate to plant and equipment that is being constructed or procured by the future lessors. These leases are expected to commence in 2020 and 2021.

Future lease payments for all noncancelable operating leases as of December 31, 2018 were (in thousands):



2019	$	17,223
2020	15,035
2021	10,502
2022	7,957
2023	6,810
After 2023	24,490

9. Long-term Debt



(in thousands)	September 30, 2019		December 31, 2018
Senior notes - 4.10% due 2022 (net of related deferred financing costs)	$	348,116	$	347,677
Senior notes - 3.78% due 2029	250,000		250,000
Revolving credit facility	41,867		168,129
Capital lease obligations	0		5,193
	$	639,983	$	770,999

(in thousands) September 30,
2017 December 31,
2016
Senior notes - 4.10% due 2022 (net of related deferred financing costs) $ 346,945
$ 346,505
Senior notes - 3.78% due 2029 250,000
0
Revolving credit facility 10,000
156,000
Capital lease obligation 4,742
4,770
$ 611,687
$ 507,275

~~Senior Notes~~ – The outstanding 4.10% senior notes ~~have~~are unsecured, with an aggregate principal amount of $350 million and are registered under the Securities Act of 1933, as amended (Securities Act).

~~On January 4, 2017, we~~ The outstanding 3.78% senior notes are unsecured and were issued ~~$250 million in senior unsecured notes~~ in a 2017 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 and principal payments of $50 million are payable annually beginning on January 4, 2025. We have the right to make optional prepayments on the notes at any time, subject to certain limitations. The note purchase agreement contains representations, warranties, terms and conditions customary for transactions of this type. These include negative covenants, certain financial covenants, and events of default which are substantially similar to the covenants and events of default in our revolving credit facility. The proceeds from the 3.78% senior notes were used in part to pay off the outstanding amount on our revolving credit facility.

We were in compliance with all covenants under both issuances of the senior notes as of September 30, ~~2017~~2019 and December 31, ~~2016.~~2018.

~~Revolving~~The revolving credit facility (the Credit ~~Facility~~ ~~– On September 22, 2017, we entered into~~Agreement) has a ~~Credit Agreement (Credit Agreement) with~~borrowing capacity of $850 million, a term of five years. The Credit Agreement provides for an $850 million, multicurrency revolving credit facility, with a $150 million sublimit for multicurrency borrowings, a $75 million sublimit for letters of credit,years, and a $20 million sublimit for swingline loans. The Credit Agreement includes an expansion feature which allows 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. In addition, the Credit Agreement includes provisions that allow certain of our foreign subsidiaries to borrow under the agreement. Concurrent with entering into the Credit Agreement, we terminated our former revolving credit facility that we had entered into in 2014.

We paid financing costs in 2017 of approximately $1.8 million related to this revolving credit facility and carried over deferred financing costs from our previous revolving credit facility of approximately $0.9 million, resulting in total deferred financing costs of $2.7 million as of matures on September ~~30, 2017, which we are amortizing over the term of the Credit Agreement.~~

22, 2022. The obligations under the Credit Agreement are unsecured and are fully and unconditionally guaranteed by NewMarket. The ~~revolving credit facility matures on September 22, 2022.~~

~~Borrowings made~~average interest rate for borrowings under the revolving credit facility bear interest, at our option, at an annual rate equal to either (1) the Alternate Base Rate (ABR) plus the Applicable Rate (as defined in the Credit Agreement) (solely in the case of loans denominated in U.S. dollars to NewMarket) or (2) the Adjusted LIBO Rate plus the Applicable Rate. ABR is the greatest of (i) the rate of interest publicly announced by the Administrative Agent as its prime rate, (ii) the NYFRB Rate (as defined in the Credit Agreement) from time to time plus 0.5%, and (iii) the Adjusted LIBO Rate for a one month interest period plus 1%. The Adjusted LIBO Rate means the rate at which Eurocurrency deposits in the London interbank market for certain periods (as

~~Table of Contents~~

selected by NewMarket) are quoted, as adjusted for statutory reserve requirements for Eurocurrency liabilities and other applicable mandatory costs. The Applicable Rate ranges from 0.00% to 0.625% (depending on our consolidated Leverage Ratio or Credit Ratings) for loans bearing interest based on the ABR. The Applicable Rate ranges from 1.00% to 1.625% (depending on our Leverage Ratio or Credit Ratings) for loans bearing interest based on the Adjusted LIBO Rate.

~~The~~ Credit Agreement ~~contains financial covenants that require NewMarket to maintain a consolidated Leverage Ratio (as defined in~~was 3.2% during the ~~Credit Agreement)~~first nine months of ~~no more than 3.50 to 1.00 except~~2019 and 3.0% during ~~an Increased Leverage Period (as defined in~~ the ~~Credit Agreement), and a consolidated Interest Coverage Ratio (as defined in the Credit Agreement)~~full year of ~~no less than 3.00 to 1.00, calculated on a rolling four quarter basis, as of the end of each fiscal quarter ending on and after September 30, 2017.~~2018. We were in compliance with all covenants under the ~~revolving credit facility in effect~~Credit Agreement as of September 30, 2019 and December 31, 2018.

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(Unaudited)

The outstanding borrowings under the Credit Agreement amounted to $42 million at September 30, ~~2017~~2019 and $168 million at December 31, ~~2016.~~

~~The following table provides information related~~2018. Outstanding letters of credit approximate to $3 million at both September 30, 2019 and December 31, 2018 resulting in the unused portion of ~~our then outstanding revolving credit facility:~~

(in thousands) September 30,
2017 December 31,
2016
Maximum borrowing capacity under the revolving credit facility $ 850,000
$ 650,000
Outstanding borrowings under the revolving credit facility 10,000
156,000
Outstanding letters of credit 3,550
3,483
Unused portion of revolving credit facility $ 836,450
$ 490,517

~~The average interest rate for borrowings under our then existing revolving~~the credit facility ~~was 2.5% during the first nine months of 2017~~amounting to $805 million at September 30, 2019 and ~~1.9% during the full year of 2016.~~$679 million at December 31, 2018.

~~Other Debt~~ – The capital lease ~~obligation is~~obligations were related to the Singapore manufacturing ~~facility.~~facility and were reclassified to finance lease liabilities on the Consolidated Balance Sheets with the adoption of ASU 2016-02 on January 1, 2019. See Note 8.

8.10. Commitments and Contingencies

Legal Matters

We are involved in legal proceedings that are incidental to our business and may include administrative or judicial actions. Some of these legal proceedings involve governmental authorities and relate to environmental matters. For further information, see Environmental below.

While it is not possible to predict or determine with certainty the outcome of any legal proceeding, we believe the outcome of any of these proceedings, or all of them combined, will not result in a material adverse effect on our consolidated results of operations, financial condition, or cash flows.

In late 2013, Afton Chemical Corporation (Afton) initiated a voluntary self-audit of its compliance with certain sections of the Toxic Substances Control Act (TSCA) under the Environmental Protection Agency's (EPA) audit policy (Audit Policy). If any potential TSCA violations are discovered during the audit, we would voluntarily disclose them to the EPA under the Audit Policy. In August 2014, the EPA staff began its own TSCA inspection of both Afton and Ethyl. While it is not possible to predict or determine with certainty the outcome, we do not believe that any findings identified as a result of our audit or the EPA’s TSCA inspection will have a material adverse effect on our consolidated results of operations, financial condition, or cash flows.

Environmental

We are involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination, disposal of hazardous waste, and other environmental matters at several of our current or former facilities, or at third-party sites where we have been designated as a potentially responsible party (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 consolidated financial position, results of operations, and cash flows. Our total accruals for environmental remediation, dismantling, and decontamination were approximately ~~$14~~$11 million at September 30, ~~2017~~2019 and ~~$16~~$12 million at December 31, ~~2016.~~2018. Of the total accrual, the current portion is included in accrued expenses and the noncurrent portion is included in other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

Our more significant environmental sites include a former ~~TEL~~ 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 $8 million of the total accrual above at both September 30, ~~2017~~2019 and ~~$10 million of the total accrual above at~~ December 31, ~~2016,~~2018, using discount rates ranging from 4%3% to 9% for both periods. The aggregate undiscounted amount for these sites was $10 million at September 30, ~~2017~~2019 and ~~$13~~$11 million at December 31, ~~2016.~~2018. Of the total accrued for these two sites, the amount related to remediation of groundwater and soil for the Louisiana site was $4 million at both September 30, ~~2017~~2019 and

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December 31, ~~2016.~~2018. The amount related to remediation of groundwater and soil for the Texas site was $4 million at both September 30, ~~2017~~2019 and ~~$5 million at~~ December 31, ~~2016.~~2018.

In 2000, the EPA named us as a PRP under Superfund law for the clean-up of soil and groundwater contamination at the five grouped disposal sites known as "Sauget Area 2 Sites" in Sauget, Illinois. Without admitting any fact, responsibility, fault, or liability in connection with this site, we are participating with other PRPs in site investigations and feasibility studies. In December 2013, the EPA issued its Record of Decision (ROD) confirming its remedies for the selected Sauget Area 2 Sites. In August 2017, the EPA issued a Special Notice Letter to over 75 PRPs notifying them of potential liability and encouraging the PRPs to voluntarily perform or finance the response actions detailed in the ROD. We have accrued our estimated proportional share of the remedial costs and expenses addressed in the ROD. We do not believe any additional information is available that would require revision of the liability that we have established at September 30, 2017. The amount accrued for this site is not material.

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

The balances of, and changes in, the components of accumulated other comprehensive loss, net of tax, consist of the following:



(in thousands)	Pension Plans and Other Postretirement Benefits			Foreign Currency Translation Adjustments			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2017	$	(63,520	)	$	(82,474	)	$	(145,994	)
Other comprehensive income (loss) before reclassifications	(163		)	(3,793		)	(3,956		)
Amounts reclassified from accumulated other comprehensive loss (a)	1,497			0			1,497
Other comprehensive income (loss)	1,334			(3,793		)	(2,459		)
Balance at September 30, 2018	$	(62,186	)	$	(86,267	)	$	(148,453	)

Balance at December 31, 2018	$	(86,555	)	$	(94,761	)	$	(181,316	)
Other comprehensive income (loss) before reclassifications	2,501			(9,239		)	(6,738		)
Amounts reclassified from accumulated other comprehensive loss (a)	443			0			443
Other comprehensive income (loss)	2,944			(9,239		)	(6,295		)
Balance at September 30, 2019	$	(83,611	)	$	(104,000	)	$	(187,611	)

(in thousands)
Pension Plans
and Other Postretirement Benefits
Foreign Currency Translation Adjustments
Accumulated Other
Comprehensive (Loss) Income
Balance at December 31, 2015 $ (69,798 ) $ (74,728 ) $ (144,526 )
Other comprehensive income (loss) before reclassifications (2,763 ) (16,922 ) (19,685 )
Amounts reclassified from accumulated other comprehensive loss (a) 1,640
0
1,640
Other comprehensive income (loss) (1,123 ) (16,922 ) (18,045 )
Balance at September 30, 2016 $ (70,921 ) $ (91,650 ) $ (162,571 )

Balance at December 31, 2016 $ (76,187 ) $ (106,323 ) $ (182,510 )
Other comprehensive income (loss) before reclassifications (1,335 ) 18,656
17,321
Amounts reclassified from accumulated other comprehensive loss (a) 1,269
0
1,269
Other comprehensive income (loss) (66 ) 18,656
18,590
Balance at September 30, 2017 $ (76,253 ) $ (87,667 ) $ (163,920 )

(a) The pension plan and other postretirement benefit components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost (income). See Note 4 in this Quarterly Report on Form 10-Q and Note 1718 in our ~~2016~~2018 Annual Report for further information.

~~10.~~12. Fair Value Measurements

The carrying amount of cash and cash equivalents in the Condensed Consolidated Balance Sheets, as well as the fair value, was ~~$105~~$80 million at September 30, ~~2017~~2019 and ~~$192~~$73 million at December 31, ~~2016.~~2018. The fair value is categorized in Level 1 of the fair value hierarchy.

~~Except for the acquisition of AMSA, no~~No material events occurred during the nine months ended September 30, ~~2017~~2019 requiring adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis. ~~See Note 2 for further information on the preliminary impact of the AMSA acquisition on balances of assets and liabilities.~~

Long-term debt – We record the carrying amount of our long-term debt ~~related to the 4.10% senior notes~~ at historical cost, less deferred financing ~~costs. We record the carrying amount of our long-term debt~~costs related to the ~~3.78%~~4.10% senior ~~notes at historical cost.~~notes. The estimated fair value of our long-term debt is shown in the table below and is based primarily on estimated current rates available to us for debt of the same remaining duration and adjusted for nonperformance risk and credit risk. The estimated fair value of our publicly-traded 4.10% senior notes included in long-term debt in the table below is ~~also~~ based on the last quoted price closest to September 30, ~~2017.~~2019. The fair value of our debt instruments is categorized as Level 2.



	September 30, 2019				December 31, 2018
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (excluding capital lease obligations)	$	639,983	$	675,398	$	765,806	$	757,414

September 30, 2017 December 31, 2016
(in thousands)
Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value
Long-term debt (excluding capital lease obligation) $ 606,945
$ 623,962
$ 502,505
$ 507,925

13. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

On January 1, 2019, we adopted ASU 2016-02, "Leases." Further information on the adoption is in Note 8.

Also on January 1, 2019, we adopted ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". Further information on the adoption is in Note 1.

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~~11. Recent Accounting Pronouncements~~

~~Recently Issued Accounting Pronouncements~~

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09). ASU 2014-09 replaces the previous guidance and clarifies the principles for revenue recognition. It requires a five-step process for revenue recognition that represents the transfer of goods or services to customers in an amount that reflects the consideration expected to be received by a company. ASU 2014-09 also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. ASU 2014-09 is effective for our reporting period beginning January 1, 2018. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We currently anticipate adopting the standard as a cumulative-effect adjustment. We expect to continue the evaluation, analysis, and documentation of our adoption of ASU 2014-09 (including those subsequently issued updates that clarify the provisions), throughout most of this year as we work towards implementation and finalize the impact the adoption will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" (ASU 2016-02). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring disclosures related to certain information about leasing arrangements. Under the new guidance, operating leases are, in most cases, required to be recognized on the balance sheet as a lease asset and liability. A modified retrospective approach is required for the adoption of ASU 2016-02, which is effective for our reporting period beginning January 1, 2019. Early adoption is permitted. We are currently assessing the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07), which requires that an employer report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement outside of operating profit. ASU 2017-07 also allows only the service cost component to be eligible for capitalization in assets. There will be no change to net income as a result of ASU 2017-07, which is effective for our reporting period beginning January 1, 2018. Retrospective application is required for the income statement presentation and prospective application is required for the capitalization of the service cost component in assets. The adoption of ASU 2017-07 will result in a change within operating profit with a corresponding change in other income (expense), net to reflect the impact of presenting all components of net benefit cost, except for service cost, outside of operating income. See Note 4 for the components of our net benefit costs. We do not expect a material impact to our consolidated balance sheets or consolidated statements of cash flows.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains forward-looking statements about future events and expectations within the meaning of the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future results. When we use words in this document such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “projects,” “expects,” “should,” “could,” “may,” “will,” and similar expressions, we do so to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding future prospects of growth in the petroleum additives market, other trends in the petroleum additives market, our ability to maintain or increase our market share, and our future capital expenditure levels.

We believe our forward-looking statements are based on reasonable expectations and assumptions, within the bounds of what we know about our business and operations. However, we offer no assurance that actual results will not differ materially from our expectations due to uncertainties and factors that are difficult to predict and beyond our control.

Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at ~~manufacturing~~production facilities, including single-sourced facilities; hazards common to chemical businesses; the ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights; sudden or sharp raw material price increases; competition from other manufacturers; the gain or loss of significant customers; current and future governmental regulations; failure to attract and retain a highly-qualified workforce; ~~hazards common to chemical businesses; competition from other manufacturers; sudden or sharp raw material price increases; the gain or loss of significant customers;~~ the occurrence or threat of extraordinary events, including natural disasters and terrorist attacks; risks related to operating outside of the United States; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; an information technology system failure or security breach; resolution of environmental liabilities or legal proceedings; political, economic, and regulatory factors concerning our products; ~~future governmental regulation; resolution~~limitation of ~~environmental liabilities or legal proceedings;~~our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from recent or future acquisitions, or our inability to successfully integrate recent or future acquisitions into our business; the underperformance of our pension assets resulting in additional cash contributions to our pension plans; and other factors detailed from time to time in the reports that NewMarket files with the SEC, including the risk factors in Item 1A. “Risk Factors” of our ~~2016~~2018 Annual Report, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which ~~such forward-looking statement is made.~~we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, ~~you should keep in mind that the events described in~~ any forward-looking statement made in this report or elsewhere, might not occur.

Overview

When comparing the results of the petroleum additives segment for the first nine months of ~~2017~~2019 with the first nine months of ~~2016,~~2018, net sales ~~increased 6.2%~~decreased 5.7% primarily due to ~~increased shipment volumes,~~lower product shipments and an unfavorable foreign currency impact, which was partially offset by ~~lower~~increased selling prices. ~~The lower selling prices, along with increased raw material costs, resulted in petroleum~~Petroleum additives operating profit ~~being 8.9% lower~~was 23.4% higher when comparing the first nine months of ~~2017~~2019 with the first nine months of ~~2016. The operating profit margin of 17.3% for~~2018, reflecting the ~~first nine months of 2017 remained in line with our expectations.~~improved selling prices and lower raw material costs, partially offset by the impact from the lower product shipments.

Our operations generate cash that is in excess of the needs of the business. We continue to invest in and manage the business for the long-term with the goal of helping our customers succeed in their marketplaces. Our investments continue to be in organizational talent, technology development and processes, and global infrastructure, consisting of technical centers, production capability, and geographic expansion.

On July 3, 2017, we completed our acquisition of Aditivos Mexicanos S.A. de C.V. (AMSA), a petroleum additives manufacturing, sales and distribution company based in Mexico City, Mexico. The acquisition complements and expands our existing presence in the Latin America region, and also improves our supply capabilities to better serve our customers. See Note 2 for further information on the acquisition.

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Results of Operations

Net Sales

Consolidated net sales for the third quarter of ~~2017~~2019 totaled ~~$548.4~~$555.8 million, representing ~~an increase~~a decrease of ~~6.3%~~$7.3 million, or 1.3%, from the third quarter of ~~2016 of $516.1 million.~~2018. Consolidated net sales for the first nine months of ~~2017~~2019 were ~~$1.6~~$1.7 billion which was ~~an increase~~a decrease of ~~5.9%~~$95.5 million, or 5.5%, from the first nine months of ~~2016 of $1.5 billion.~~2018. The following table shows net sales by segment and product line.


	Third Quarter Ended September 30,				Nine Months Ended September 30,				Third Quarter Ended September 30,				Nine Months Ended September 30,
(in millions)	2017		2016		2017		2016		2019		2018		2019		2018
Petroleum additives
Lubricant additives	$	443.4	$	420.4	$	1,340.7	$	1,271.4	$	448.6	$	462.9	$	1,348.5	$	1,440.2
Fuel additives	102.8		92.0		289.6		263.2		102.0		97.6		295.6		303.4
Total	546.2		512.4		1,630.3		1,534.6		550.6		560.5		1,644.1		1,743.6
All other	2.2		3.7		8.1		13.2		5.2		2.7		11.8		7.8
Net sales	$	548.4	$	516.1	$	1,638.4	$	1,547.8	$	555.8	$	563.2	$	1,655.9	$	1,751.4

Petroleum Additives Segment

The regions in which we operate include North America (the United States and Canada), Latin America (Mexico, Central America, and South America), Asia Pacific, and the Europe/Middle East/Africa/India (EMEAI) region. While there is some fluctuation, the percentage of net sales generated in the regions remained fairly consistent when comparing the first nine months of ~~2017~~2019 with the same period in ~~2016,~~2018, as well as with the full year in ~~2016.~~2018.

Petroleum additives net sales for the third quarter of ~~2017~~2019 were ~~$546.2~~$550.6 million compared to ~~$512.4~~$560.5 million for the third quarter of ~~2016, an increase~~2018, a decrease of ~~6.6%~~1.8%. The increase was predominantly attributable to the EMEAI region, with some increase in the Latin America region partially due to the acquisition of AMSA. The Asia Pacific region experienced a small decrease during the ~~third quarter~~ ~~of 2017, while North America was flat compared to the~~ ~~third quarter~~ ~~of 2016.~~ Petroleum additives net sales for the first nine months of ~~2017~~2019 were $1.6 billion compared to ~~$1.5~~$1.7 billion for the first nine months of ~~2016, an increase~~2018, a decrease of ~~6.2%~~5.7%. The ~~increase between~~decrease in net sales for the ~~2017 and 2016~~ ~~nine month~~ ~~periods~~third quarter comparison was predominantly in the Asia Pacific region with smaller decreases in the Latin America and the EMEAI regions. An increase in the North America region partially offset the decreases in the other regions. For the nine months comparison, the decrease was across all regions, with most of the decrease in the EMEAI region, followed by the Latin America and Asia Pacific ~~regions with a small increase in Latin America and a small decrease in North America.~~regions.

The following table details the approximate components of the ~~increase~~decrease in petroleum additives net sales between the third quarter and first nine months of ~~2017~~2019 and ~~2016.~~2018.


(in millions)	Third Quarter			Nine Months			Third Quarter			Nine Months
Period ended September 30, 2016	$	512.4		$	1,534.6
Period ended September 30, 2018							$	560.5		$	1,743.6
Lubricant additives shipments	23.4			105.0			(13.3		)	(119.7		)
Fuel additives shipments	10.6			25.3			(2.6		)	(21.6		)
Selling prices	(4.2		)	(30.3		)	10.2			65.3
Foreign currency impact, net	4.0			(4.3		)	(4.2		)	(23.5		)
Period ended September 30, 2017	$	546.2		$	1,630.3
Period ended September 30, 2019							$	550.6		$	1,644.1

When comparing both the third quarter ~~periods~~ and the nine ~~month~~months periods ~~higher volumes shipped was the predominant factor in the increase in~~of 2019 and 2018, petroleum additives shipments accounted for a $15.9 million decrease in net sales ~~with unfavorable selling prices partially offsetting the favorable increase in shipments. Foreign currency contributed a favorable impact~~ for the third quarter comparison ~~but~~and a $141.3 million decrease in net sales for the nine months comparison. Improved selling prices, including an unfavorable foreign currency impact, resulted in an increase in net sales of $6.0 million for the third quarter comparison and $41.8 million for the nine months comparison, partially offsetting the unfavorable impact ~~to net sales in the nine month comparison. When comparing the two third quarter periods, the U.S. Dollar weakened against the Euro, resulting in a favorable impact to net sales.~~from product shipments. The ~~U.S.~~United States Dollar strengthened against most of the major currencies in which we transact, ~~when comparing nine months 2017~~resulting in an unfavorable impact to ~~nine months 2016, with most of the impact on~~ net sales ~~resulting from the change in the Chinese Renminbi and the Euro.~~

~~The volume of product shipments for petroleum additives on a worldwide basis increased approximately 4.7% when comparing the two~~ ~~third quarter~~ ~~periods and 8.3% when comparing the first~~ ~~nine months~~ ~~of 2017 and 2016. For both the~~ ~~third quarter~~ ~~and nine month comparative periods, shipments of both lubricant additives and fuel additives products increased. Lubricant additives product shipments for the~~ ~~third quarter~~ ~~comparative periods increased in the EMEAI and Latin America regions, but decreased slightly in North America and Asia Pacific. For the nine months comparative periods, lubricant additives shipments~~

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~~increased across all regions except North America, which showed a small decrease. The increase in fuel additives shipments for both the~~ ~~third quarter~~ ~~and nine month comparative periods was predominantly in the EMEAI region. The other regions~~ for both the third quarter and nine months comparative periods. The unfavorable impact was predominantly from the Euro and the Chinese Renminbi.

On a worldwide basis, the volume of product shipments for petroleum additives decreased 1.6% when comparing the two third quarter periods ~~experienced relatively~~and 7.6% when comparing the nine months of 2019 and 2018. For the third quarter comparative period, shipments of lubricant additives decreased in the Asia Pacific and Latin America regions, partially offset by increases in the North America and EMEAI regions. Fuel additives were substantially unchanged for the third quarter comparative period with small ~~changes~~increases in ~~product shipments.~~the North America and Latin America regions partially offset by small decreases in the EMEAI and Asia Pacific regions. For the nine months comparative period, lubricant additives were lower across all regions with most of the decrease in the EMEAI region, followed by the Latin America and Asia Pacific regions. Fuel additives decreased for the nine

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months comparative periods with decreases in the EMEAI and North America regions partially offset by an increase in Asia Pacific.

All Other

The “All other” category includes the operations of the ~~TEL~~antiknock compounds business and certain contracted manufacturing and ~~services associated with Ethyl.~~services.

Segment Operating Profit

NewMarket evaluates the performance of the petroleum additives business based on segment operating profit. NewMarket Services Corporation expenses are charged to NewMarket and each subsidiary pursuant to services agreements between the companies. Depreciation on segment property, plant, and equipment, as well as amortization of segment intangible assets and lease right-of-use assets, is included in segment operating profit.

The following table reports segment operating profit for the third quarter and nine months ended September 30, ~~2017~~2019 and September 30, ~~2016.~~2018.


	Third Quarter Ended September 30,				Nine Months Ended September 30,				Third Quarter Ended September 30,						Nine Months Ended September 30,
(in millions)	2017		2016		2017		2016		2019			2018			2019		2018
Petroleum additives	$	87.9	$	106.4	$	281.9	$	309.3	$	94.8		$	75.8		$	285.6	$	231.5
All other	$	1.1	$	0.4	$	3.1	$	2.0	$	(0.1	)	$	(2.3	)	$	0.1	$	(2.0	)

Petroleum Additives Segment

The petroleum additives segment operating profit ~~decreased $18.5~~increased $19.0 million when comparing the third quarter of ~~2017~~2019 to the third quarter of ~~2016~~2018 and ~~$27.4~~$54.1 million when comparing the first nine months of ~~2017~~2019 to the same period in ~~2016.~~2018. Both comparative periods included the impact of the same factors that affected gross profit (see discussion below) including a ~~small~~ favorable foreign currency translation impact when comparing the third quarter and first nine months of ~~2017~~2019 with the same periods in 2018.

The operating profit margin was 17.2% for the third quarter of ~~2016, but a small unfavorable impact when comparing~~2019 as compared to 13.5% for the third quarter of 2018 and was 17.4% for the first nine months of ~~2017 with~~2019 as compared to 13.3% for the first nine months of ~~2016.~~

~~The operating profit margin was 16.1% for the third quarter of 2017 as compared to 20.8% for the third quarter of 2016 and was 17.3% for the first~~ ~~nine months~~ ~~of 2017 as compared to 20.2% for the first~~ ~~nine months~~ ~~of 2016.~~2018. For the rolling four quarters ended September 30, ~~2017,~~2019, the operating profit margin for petroleum additives was ~~16.8%~~16.7%. ~~Multiple~~While we saw improvement in the operating profit margin for the first nine months of 2019, we had experienced downward pressure on our margins during the past two years caused mainly by increases in raw material prices. We have made progress in adjusting our selling prices to allow for those increases in raw material costs, ~~have continued~~resulting in a favorable impact from selling prices. We will continue to ~~put downward pressure on margins, and our actions with regard to pricing have not kept pace. Given this environment, our ongoing focus will be to strengthen~~monitor our margins ~~so that they continue to be in line with our expectations for the performance of our business over the long-term. While operating~~closely. Operating profit margins will fluctuate from quarter to quarter due to multiple factors, but we believe the fundamentals of our business and industry as a whole are unchanged.

Petroleum additives gross profit ~~decreased $17.6~~increased $19.7 million when comparing the two third quarter periods and ~~$36.9~~$44.5 million when comparing the first nine months periods of ~~2017~~2019 and ~~2016~~2018. Cost of goods sold as a percentage of net sales was ~~70.9%~~70.5% for the third quarter and nine months of 2019, down from 74.6% for the third quarter of ~~2017, up from 65.6% for the third quarter of 2016~~2018 and ~~69.9%~~74.7% for the first nine months of ~~2017, up from 65.6% for the~~ ~~first~~ ~~nine months~~ ~~of 2016~~.2018.

When comparing both the third quarters and first nine ~~month periods~~months of ~~2017~~2019 and ~~2016,~~2018, the ~~decrease~~increase in gross profit resulted ~~predominantly~~ from an improvement in selling prices (excluding the unfavorable impact from foreign currency on net sales) and raw material costs, ~~and selling prices~~as well as a favorable impact from conversion costs (including ~~product mix)~~a favorable foreign currency translation impact), which together contributed over 100% of the ~~changes, as well as unfavorable conversion costs. Conversion costs were unfavorably impacted by the hurricanes~~change in ~~the third quarter 2017 in the United States and planned plant shutdowns.~~both comparative periods. These ~~unfavorable~~favorable factors were partially offset by ~~increases in~~an unfavorable impact from product ~~shipments (as~~shipments, as discussed in the Net Sales section ~~above).~~above.

Petroleum additives selling, general, and administrative expenses (SG&A) for the third quarter of ~~2017~~2019 were ~~$2.4~~$0.6 million, or ~~7.4% higher~~1.9% lower as compared to the third quarter of ~~2016,~~2018, and ~~$0.3~~$10.2 million, or ~~0.3%~~9.9% lower for the first nine months of ~~2017~~2019 as compared to the ~~first nine months of 2016.~~same 2018 period. SG&A as a percentage of net sales was ~~6.5%~~5.7% for both the third quarter of ~~2017, 6.4% for the third quarter of 2016, 6.2%~~2019 and 2018, and 5.6% for the first nine months of ~~2017,~~2019 and ~~6.6%~~5.9% for the first nine months of ~~2016.~~2018. Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce. ~~There~~While personnel costs were lower in the 2019 period, there were no significant changes in the drivers of these costs when comparing the periods.

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Our investment in petroleum additives research, development, and testing (R&D) ~~decreased $1.6 million in~~increased slightly when comparing both the third quarter ~~of 2017 from the third quarter of 2016~~ and ~~$9.3 million in the first~~ nine months periods of ~~2017 from the first~~ ~~nine months~~ ~~of 2016. The decrease for both comparative periods was primarily in the lubricant additives product lines.~~2019 and 2018. As a percentage of net sales, R&D was ~~6.5%~~6.6% for the third quarter ~~2017, 7.2%~~of 2019, 6.3% for the third quarter ~~2016, 6.6%~~of 2018, 6.5% for the first nine months of ~~2017,~~2019, and ~~7.6%~~6.1% for the first nine months of ~~2016.~~2018. Our R&D investments reflect our efforts to support the development of solutions that meet our customers' needs, ~~as well as~~meet new and evolving standards, and to support our expansion into new product areas. Our approach to R&D investment, as it is with SG&A, is one of purposeful spending on programs to support our current product base and to ensure that we develop products to support our customers' programs in the future. R&D investments include personnel-related costs, as well as internal and external testing of our products.

The following discussion references certain captions on the Consolidated Statements of Income.

Interest and Financing Expenses

Interest and financing expenses were ~~$5.6~~$7.0 million for the third quarter of ~~2017, $4.3~~2019, $7.8 million for the third quarter of ~~2016, $16.5~~2018, $22.7 million for the first nine months of ~~2017,~~2019 and ~~$12.5~~$18.5 million for the first nine months of ~~2016.~~2018. The ~~increase~~decrease in ~~interest and financing expenses between both~~ the third quarter ~~and~~comparison resulted primarily from lower average debt outstanding. For the first nine ~~month~~months comparative periods, ~~of 2017 and 2016 resulted from a~~ higher average debt, along with lower capitalized interest, ~~rate, as well as higher average debt.~~resulted in increased interest expense.

Other Income (Expense), Net

Other income (expense), net was income of ~~$0.1~~$6.2 million for the third quarter of ~~2017, income of $0.7~~2019, $8.0 million for the third quarter of ~~2016, income of $0.5~~2018, $17.9 million for the first nine months of ~~2017,~~2019 and ~~expense of $2.8~~$20.9 million for the first nine months of ~~2016.~~2018. The ~~amount~~amounts for both of the ~~two 2016~~2019 and 2018 periods ~~included~~primarily reflect the ~~impact~~components of net periodic benefit cost (income), except for service cost, from ~~a derivative instrument representing an interest rate swap recorded at fair value through earnings.~~defined benefit pension and postretirement plans. See Note 4 for further information on total periodic benefit cost (income).

Income Tax Expense

Income tax expense was ~~$17.2~~$19.7 million for the third quarter of ~~2017~~2019 and ~~$26.8~~$9.8 million for the third quarter of ~~2016.~~2018. The effective tax rate was ~~22.4%~~22.5% for the third quarter of ~~2017~~2019 and ~~27.3%~~14.4% for the third quarter of ~~2016.~~2018. Income tax expense ~~decreased $3.8~~increased $7.1 million due to the ~~lower~~higher effective tax ~~rate, while the decrease in~~rate. Higher income before income tax expense resulted in ~~a $5.8~~an increase of $2.8 million ~~decrease~~ in income tax expense.

Income tax expense was ~~$64.1~~$60.8 million for the first nine months of ~~2017~~2019 and ~~$81.5~~$47.3 million for the first nine months of ~~2016.~~2018. The effective tax rate was ~~25.6%~~22.9% for the first nine months of ~~2017~~2019 and ~~29.2%~~21.6% for the first nine months of ~~2016.~~2018. Income tax expense ~~decreased $9.0~~increased $9.9 million due to ~~the lower effective tax rate, with the remaining $8.4 million of the change due to lower~~higher income before income tax expense. The higher effective tax rate resulted in a $3.6 million increase in income tax.

The change in the effective tax rates for both the third quarter and first nine ~~month comparative~~months comparison periods ~~included~~is primarily due to certain provisions of the benefit of income in foreign jurisdictions with lower tax rates than the United States tax rate. During the 2017 periods, a higher percentage of our income before income taxes resulted from operations in foreign locations than during the 2016 periods.Tax Reform Act.

Cash Flows, Financial Condition, and Liquidity

Cash and cash equivalents at September 30, ~~2017~~2019 were ~~$105.0~~$80.0 million, which was ~~a decrease~~an increase of ~~$87.2~~$6.9 million since December 31, ~~2016.~~2018.

Cash and cash equivalents held by our foreign subsidiaries amounted to ~~$92.1~~$76.5 million at September 30, ~~2017~~2019 and ~~$189.2~~$70.9 million at December 31, ~~2016.~~ 2018. Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends. As a result of the United States tax reform act enacted in 2017, we do not anticipate significant tax consequences from future distributions of foreign earnings.

A ~~significant amount, but not all,~~portion of ~~these~~our foreign cash balances ~~are~~is associated with earnings that we have asserted are indefinitely reinvested. We plan to use these indefinitely reinvested earnings to support growth outside of the United States through funding of operating expenses, research and development expenses, capital expenditures, and other cash needs of our foreign subsidiaries. ~~The decrease in cash balances held by our foreign subsidiaries since December 31, 2016 is primarily the result of the purchase of AMSA.~~

Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends. These intercompany dividends are paid only by subsidiaries whose earnings we have not asserted are indefinitely reinvested or whose earnings qualify as previously taxed income, as defined by the United States Internal Revenue Code. If circumstances were to change that would cause these indefinitely reinvested earnings to be repatriated, an incremental U.S. tax liability would be incurred. Dividends received from foreign subsidiaries during the nine months ended September 30, 2017 and September 30, 2016 were not material. The amount of cash that we repatriate from foreign subsidiaries in any given year is dependent upon many factors including utilization of available cash in the foreign locations for working capital, capital investments, and other needs.

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We expect that cash from operations, together with borrowing available under our revolving credit facility, will continue to be sufficient to cover our operating needs and planned capital expenditures for at least the next twelve months.

Cash Flows – Operating Activities

Cash flows provided from operating activities for the first nine months of ~~2017~~2019 were ~~$177.8~~$233.2 million, which included ~~a decrease~~the use of ~~$34.9~~$36.0 million ~~from~~to fund higher working capital requirements. The ~~$34.9~~$36.0 million excluded ~~a favorable~~an unfavorable foreign currency impact to the components of working capital on the balance sheet.

~~Other than the decrease in cash and cash equivalents, the~~The most significant changes in working capital ~~resulted from an increase~~included increases in accounts receivable and ~~inventories, which were partially offset by an increase~~operating lease liabilities, as well as decreases in ~~accounts payable.~~inventory and accrued expenses. The higher accounts receivable balance was primarily due to higher sales levels

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in ~~most~~the EMEAI and North America regions ~~when~~ comparing ~~the third quarter of 2017~~September 2019 with the ~~fourth quarter~~end of ~~2016.~~2018. The increase in operating lease liabilities reflects the adoption of ASC 842, "Leases". See Note 8 for additional information on our leases. The decrease in inventory ~~was across all regions with most of~~primarily reflected plant downtime, while the ~~increase~~decrease in ~~the EMEAI region. The increase resulted from higher demand, timing of shipments, higher raw material~~accrued expenses reflected normal payments for customer costs and ~~the additional inventory from our acquisition of AMSA. The increase~~decreases in ~~accounts payable was across our major subsidiaries~~accruals for capital project-related costs due to ~~higher raw material costs and the timing~~completion of ~~payments.~~capital projects.

Including cash and cash equivalents, as well as the impact of foreign currency on the balance sheet, we had total working capital of ~~$538.3~~$546.5 million at September 30, ~~2017~~2019 and ~~$542.3~~$542.1 million at December 31, ~~2016.~~2018. The current ratio was ~~2.74~~2.95 to 1 at September 30, ~~2017~~2019 and ~~2.84~~3.00 to 1 at December 31, ~~2016.~~2018.

Cash Flows – Investing Activities

Cash used in investing activities ~~was $306.9~~totaled $37.1 million during the first nine months of ~~2017 and included $183.9 million (net of cash acquired) for the purchase of AMSA. In addition, we spent $121.0 million~~2019 for capital expenditures. We currently expect that our total capital spending during ~~2017~~2019 will ~~exceed~~be in the ~~$143~~$60 million ~~incurred in 2016, including anticipated spending on phase two of the new manufacturing facility in Singapore~~to $70 million range and will include several improvements to our manufacturing and R&D infrastructure around the world. We expect to continue to finance capital spending through cash on hand and cash provided from operations, together with borrowing available under our $850 million revolving credit facility.

Cash Flows – Financing Activities

Cash ~~provided from~~used in financing activities during the first nine months of ~~2017~~2019 amounted to ~~$38.7~~$188.6 million. ~~The issuance of our 3.78% senior notes (see discussion below) resulted in an inflow of $250 million, and we repaid $146.0 million of amounts outstanding under the revolving credit facility.~~ We ~~also~~ paid dividends of ~~$62.2 million.~~ $60.4 million and repaid $126.3 million on our revolving credit facility.

Our long-term debt was ~~$611.7~~$640.0 million at September 30, ~~2017, increasing $104.4 million since December 31, 2016.~~

~~Debt~~

~~At September 30, 2017, our debt included senior notes in the amount of $350 million, senior notes in the amount of $250 million, and a revolving credit facility.~~

~~The $350 million senior notes bear interest at a fixed rate of 4.10% and are due in 2022. These senior notes are registered under the Securities Act.~~

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 and principal payments of $50 million are payable annually beginning on January 4, 2025. We have the right2019 compared to ~~make optional prepayments on the notes at any time, subject to certain limitations.~~

~~Revolving Credit Facility~~ – On September 22, 2017, we entered into a Credit Agreement with a term of five years. The Credit Agreement provides for an $850 million, multicurrency revolving credit facility, with a $150 million sublimit for multicurrency borrowings, a $75 million sublimit for letters of credit, and a $20 million sublimit for swingline loans. The Credit Agreement includes an expansion feature which allows 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. In addition, the Credit Agreement includes provisions that allow certain of our foreign subsidiaries to borrow under the agreement. Concurrent with entering into the Credit Agreement, we terminated our former revolving credit facility that we had entered into in 2014.

We paid financing costs in 2017 of approximately $1.8 million related to this revolving credit facility and carried over deferred financing costs from our previous revolving credit facility of approximately $0.9 million, resulting in total deferred financing costs of $2.7 million as of September 30, 2017, which we are amortizing over the term of the Credit Agreement.

~~The obligations under the Credit Agreement are unsecured and are fully and unconditionally guaranteed by NewMarket. The revolving credit facility matures on September 22, 2022.~~

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Borrowings made under the revolving credit facility bear interest, at our option, at an annual rate equal to either (1) the ABR plus the Applicable Rate (as defined in the Credit Agreement) (solely in the case of loans denominated in U.S. dollars to NewMarket) or (2) the Adjusted LIBO Rate plus the Applicable Rate. ABR is the greatest of (i) the rate of interest publicly announced by the Administrative Agent as its prime rate, (ii) the NYFRB Rate (as defined in the Credit Agreement) from time to time plus 0.5%, and (iii) the Adjusted LIBO Rate for a one month interest period plus 1%. The Adjusted LIBO Rate means the rate at which Eurocurrency deposits in the London interbank market for certain periods (as selected by NewMarket) are quoted, as adjusted for statutory reserve requirements for Eurocurrency liabilities and other applicable mandatory costs. The Applicable Rate ranges from 0.00% to 0.625% (depending on our consolidated Leverage Ratio or Credit Ratings) for loans bearing interest based on the ABR. The Applicable Rate ranges from 1.00% to 1.625% (depending on our Leverage Ratio or Credit Ratings) for loans bearing interest based on the Adjusted LIBO Rate.

~~The unused portion of the then existing revolving credit facility was $836.5 million at September 30, 2017 and $490.5~~$771.0 million at December 31, ~~2016.~~2018. See Note 79 for additional ~~information.~~

information on the 4.10% senior notes, 3.78% senior notes, and revolving credit facility, including the unused portion of our revolving credit facility.

The 4.10% senior notes, 3.78% senior notes, and the revolving credit facility contain covenants, representations, and events of default that management considers typical of credit arrangements of this nature. The covenants under the 3.78% senior notes include negative covenants, certain financial covenants, and events of default which are substantially similar to the covenants and events of default in our revolving credit facility.

The more restrictive and significant financial covenants under the revolving credit facility include:

•A consolidated Leverage Ratio (as defined in the ~~Credit Agreement)~~agreement) of no more than 3.50 to 1.00, except during an Increased Leverage Period (as defined in the ~~Credit Agreement)~~agreement) at the end of each fiscal quarter; and

•A consolidated Interest Coverage Ratio (as defined in the ~~Credit Agreement)~~agreement) of no less than 3.00 to 1.00, calculated on a rolling four quarter ~~basis.~~basis, as of the end of each quarter.

At September 30, ~~2017,~~2019, the Leverage Ratio was ~~1.56~~1.5 and the Interest Coverage Ratio was ~~16.07~~11.87 under the ~~revolving credit facility, while at December 31, 2016 the Leverage Ratio was 1.28 and the Interest Coverage Ratio was 21.45 under the then existing~~ revolving credit facility. We were in compliance with all covenants under the ~~applicable revolving credit facility and the~~ 4.10% senior notes, ~~at September 30, 2017 and December 31, 2016. We were in compliance with all covenants under~~ the 3.78% senior notes, and the revolving credit facility at September 30, ~~2017.~~2019 and December 31, 2018.

As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage decreased from ~~51.2%~~61.1% at December 31, ~~2016~~2018 to ~~49.3%~~50.4% at September 30, ~~2017.~~2019. The change in the percentage was primarily the result of the increase in shareholders' equity, ~~partially offset by~~along with the ~~increase~~decrease in long-term debt. The change in shareholders’ equity reflects our earnings and the impact of ~~the~~ foreign currency translation ~~adjustment~~adjustments, offset by ~~the impact of~~ dividend payments. ~~Normally,~~Generally, we repay any outstanding long-term debt with cash from operations or refinancing activities.

Critical Accounting Policies and Estimates

This Form 10-Q and our ~~2016~~2018 Annual Report include discussions of our accounting policies, as well as methods and estimates used in the preparation of our financial statements. We also provided a discussion of Critical Accounting Policies and Estimates in our ~~2016~~2018 Annual Report.

~~Other than the addition of certain intangibles (net of amortization) and goodwill due to the acquisition of AMSA, there~~There have been no significant changes in our critical accounting policies and estimates from those reported in our ~~2016~~2018 Annual Report. ~~See Note 2 for further information on the acquisition.~~

Recent Accounting Pronouncements

For a full discussion of the significant recent accounting pronouncements which may impact our financial statements, see Note ~~11.~~13.

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Other Matters

The United Kingdom’s June 2016 referendum decision to withdraw from the European Union (EU), commonly known as Brexit, has resulted in uncertainty for our European operations regarding the extent to which our operations and financial performance will be affected immediately and in the longer term. Our key manufacturing facilities in the current EU are not in the United Kingdom. Therefore, goods movements will continue to be predominantly within the EU post-Brexit which means that existing key trade agreements will continue to apply. However, because the UK has not finalized a transition plan, there continues to be significant uncertainty related to Brexit and its impact, with a number of regulatory and logistical challenges remaining. We are continuing to monitor and evaluate changes in legislation and trading practices in order to mitigate any potential risks to our operations associated with the changing commercial landscape.

Outlook

~~Our business has performed well through the first nine months of 2017.~~ Our stated goal is to provide a 10% compounded return per year for our shareholders over any ~~five year~~five-year period (defined by earnings per share growth plus dividends), although we may not necessarily achieve a 10% return each year. We continue to have confidence in our customer-focused strategy and approach to the market. We believe the fundamentals of how we run our business - a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability - will continue to be beneficial for all of our ~~stakeholders.~~

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stakeholders over the long term.

We expect our petroleum additives segment to deliver another year of solid performance in ~~2017, after having posted strong operating results over the past several years.~~2019. We expect that the petroleum additives ~~industry shipment demand~~market will grow ~~at an average annual rate of~~in the 1% to 2% ~~over~~range annually for the ~~long-term, as there have been no significant changes in the positive fundamentals of the industry. Over the long-term,~~foreseeable future, and we plan to exceed that growth rate over the ~~industry growth rate.~~long-term.

WeIn the past several years we have made significant investments ~~to expand~~in our ~~capabilities around~~business as the ~~world over the last few years, which are continuing in 2017.~~industry fundamentals remain positive. These investments have been and will continue to be in organizational talent, technology development and processes, and global infrastructure, consisting of technical centers, production capability and geographic expansion. We intend to utilize these ~~new capabilities~~investments to improve our ability to deliver the solutions that our customers value, ~~and to~~ expand our global reach, and ~~improve profits.~~enhance our operating results. We will continue to invest in our capabilities to provide even better value, service, technology, and customer solutions.

On July 3, 2017, we completed our acquisition of AMSA, a petroleum additives manufacturing, sales and distribution company based in Mexico City, Mexico. In addition, construction continues on phase two of our manufacturing facility in Singapore, which is expected to be completed in the second half of 2017 and will more than double our investment there.

Our business generates significant amounts of cash beyond what is necessary for the expansion and growth of our current offerings. We ~~are making investments to position ourselves for the future. We~~ regularly review our many internal opportunities to utilize ~~this~~excess cash from a technological, geographic, production capability, and product line ~~perspective.~~perspectives. We believe our capital spending is creating the capability we need to grow and support our customers worldwide, and our research and development investments are positioning us well to provide added value to our customers. Our primary focus in the acquisition area remains on the petroleum additives industry. It is our view that this industry segment will provide the greatest opportunity for solid returns on our investments while minimizing risk. We remain focused on this strategy and will evaluate any future opportunities. ~~Nonetheless, we are patient in this pursuit and intend to make the right acquisition when the opportunity arises.~~ We will continue to evaluate all alternative uses of cash to enhance shareholder value, including stock repurchases and dividends.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

At September 30, ~~2017,~~2019, there were no material changes in our market risk from the information provided in the ~~2016~~2018 Annual Report.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain a system of internal control over financial reporting to provide reasonable, but not absolute, assurance of the reliability of the financial records and the protection of assets. Our controls and procedures include written policies and procedures, careful selection and training of qualified personnel, and an internal audit program. We use third-party firms, separate from our independent registered public accounting firm, to assist with internal audit services.

We work closely with the business groups, operations personnel, and information technology to ensure transactions are recorded properly. Environmental and legal staff are consulted to determine the appropriateness of our environmental and legal liabilities for each reporting period. We regularly review the regulations and rule changes that affect our financial disclosures.

~~Our disclosure controls and procedures include signed representation letters from our regional officers, as well as senior management.~~

We have a Financial Disclosure Committee (the committee), which is made up of the president of Afton, the general counsel of NewMarket, and the controller of NewMarket. The committee makes representations with regard to the financial statements that, to the best of their knowledge, the statements do not contain any misstatement of a material fact or omit a material fact that is necessary to make the statements not misleading with respect to the periods covered by the report. They also represent that, to the best of their knowledge, the financial statements fairly present, in all material respects, our financial condition, results of operations, and cash flows as of and for the periods presented in the report.

Management personnel from our geographic regions also represent that, to the best of their knowledge, the financial statements and other financial information from their respective regions, which are included in our consolidated financial statements, fairly present, in all material respects, the financial condition and results of operations of their respective regions as of and for the periods presented in the report.

~~Pursuant to~~Under Rule 13a-15(b) ~~under~~of the Securities Exchange Act of 1934 (the Exchange Act), we carried out an evaluation, with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) ~~under~~of the Exchange Act, as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures ~~are~~were effective at the reasonable assurance level.

~~Changes in Internal Control over Financial Reporting~~

There has been no change in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) ~~under~~of the Exchange Act, that occurred during the quarter ended September 30, ~~2017,~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

~~We are involved in~~There have been no material changes to our legal proceedings ~~that are incidental to our business and may include administrative or judicial actions. Some~~as disclosed in "Legal Proceedings" in Item 3 of ~~these legal proceedings involve governmental authorities and relate to environmental matters. For further information, see “Environmental” in Note 8.~~Part 1 of the 2018 Annual Report.

In late 2013, Afton initiated a voluntary self-audit of its compliance with certain sections of TSCA under the EPA’s Audit Policy. If any potential TSCA violations are discovered during the audit, we would voluntarily disclose them to the EPA under the Audit Policy. In August 2014, the EPA staff began its own TSCA inspection of both Afton and Ethyl. While it is not possible to predict or determine with certainty the outcome, we do not believe that any findings identified as a result of our audit or the EPA’s TSCA inspection will have a material adverse effect on our consolidated results of operations, financial condition, or cash flows.

ITEM 6. Exhibits



~~Exhibit 2.1~~	First Amendment to Share Sale Agreement, dated as of June 30, 2017, by and among Afton Chemical de Mexico, S.A. de C.V., Chevron Oronite Company LLC, the individual Local Sellers referred to therein, the Local Sellers' Representative referred to therein, Aditivos Mexicanos, S.A. de C.V., NewMarket Corporation, as Buyer Guarantor, and Afton Chemical Corporation (incorporated by reference to Exhibit 2.1 to Form 8-K (File No. 1-32190) filed July 3, 2017)
Exhibit 3.1	Articles of Incorporation Amended and Restated effective April 27, 2012 (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 1-32190) filed April 30, 2012)
Exhibit 3.2	NewMarket Corporation Bylaws Amended and Restated effective August 6, 2015 (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 1- 32190) filed August 6, 2015)
~~Exhibit 10.1~~	Summary of Directors’ Compensation*
~~Exhibit 10.2~~	First Amendment, dated as of October 10, 2017, to Note Purchase Agreement dated January 4, 2017, by and among NewMarket Corporation, The Prudential Insurance Company of America, The Gibraltar Life Insurance Co., Ltd, The Lincoln National Life Insurance Company and The Prudential Life Insurance Company, Ltd.
~~Exhibit 10.3~~	Credit Agreement, dated as of September 22, 2017, by and among the Company and the Foreign Subsidiary Borrowers party thereto; the Lenders party thereto; JPMorgan Chase Bank, N.A. as Administrative Agent; Bank of America, N.A. and PNC Bank, National Association as Co-Syndication Agents and Citibank, N.A., DBS Bank, Ltd. and US Bank, National Association as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 1-32190) filed September 26, 2017)
Exhibit 31(a)	Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald
Exhibit 31(b)	Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Brian D. Paliotti
Exhibit 32(a)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald
Exhibit 32(b)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Brian D. Paliotti
Exhibit 101	Inline XBRL Instance Document and Related Items (the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document)
Exhibit 104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*	~~Indicates management contracts, compensatory plans or arrangements of the company required to be filed as an exhibit~~

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	NEWMARKET CORPORATION
	(Registrant)

Date: October ~~26, 2017~~24, 2019	By: /s/ Brian D. Paliotti
	Brian D. Paliotti
	Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

Date: October ~~26, 2017~~24, 2019	By: /s/ William J. Skrobacz
	William J. Skrobacz
	Controller
	(Principal Accounting Officer)

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	September 30, 2017				December 31, 2016
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets
Formulas and technology	$	16,340	$	2,290	$	2,678	$	1,958
Contracts	2,000		151		2,000		0
Customer bases	15,758		4,735		6,938		3,961
Trademarks and trade names	1,530		1,176		1,513		1,069
Goodwill	119,818				4,295
	$	155,446	$	8,352	$	17,424	$	6,988



Third quarter ended September 30, 2017	$	928
Nine months ended September 30, 2017	1,364
Third quarter ended September 30, 2016	291
Nine months ended September 30, 2016	1,645