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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~March 31,~~June 30, 2021


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

330 South Fourth Street		23219-4350
Richmond,	Virginia
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code - (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, with no 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 every Interactive Data File required to be submitted 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 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

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

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. ¨

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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, with no par value, outstanding as of ~~March 31,~~June 30, 2021: ~~10,928,154~~10,928,129

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NEWMARKET CORPORATION

INDEX


			Page Number
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Consolidated Statements of Income - Th ~~ree~~ Second Quarter and Six Months Ended Ma ~~rch~~ 3 1 ~~, 202~~1 ~~and~~ ~~March~~June 3 10 , 2021 and June 3 200 20, 2020			4
Consolidated Statements of Comprehensive Income - Th ~~ree~~Secon d Qua rter and Six Months Ended ~~March~~June 3 0 , 2021 and June 3 10 , ~~202~~1 ~~and~~ ~~March~~ 3 1 ,20 202020			5
Condensed Consolidated Balance Sheets - ~~March~~ June 3 10 , ~~202~~1 2021 and December 31, 20 202020			6
Consolidated Statements of Shareholders' Equity - Th ~~ree~~Secon d Quarter and Six Months Ended ~~March~~ 3 1 ~~, 202~~1 ~~and~~ ~~March~~June 3 10 , 202021 and 20June 3 0 , 2020			7
Condensed Consolidated Statements of Cash Flows - ~~Three~~Six Months Ended ~~March~~June 3 10 , ~~202~~1 2021 and ~~March~~June 3 10 , 20 202020			8
Notes to Condensed Consolidated Financial Statements			9
Financial Statement Presentation			9
Net Sales			9
Segment Information			10
Pension Plans and Other Postretirement Benefits			11
Earnings Per Share			12
Marketable Securities			13
Inventories			1213
Intangibles (Net of Amortization) and Goodwill			1314
Long-term Debt			1415
Commitments and Contingencies			15
Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss			1516
Fair Value Measurements			16
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			22
ITEM 4. Controls and Procedures			2223
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			2324
ITEM 6. Exhibits			2324
SIGNATURES			2425

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


(in thousands, except per-share amounts)	(in thousands, except per-share amounts)	Three Months Ended March 31,			(in thousands, except per-share amounts)			Second Quarter Ended June 30,				Six Months Ended June 30,
			2021			2020				2021		2020		2021		2020
Net sales	Net sales		$	566,615		$	559,417		Net sales	$	590,721	$	410,864	$	1,157,336	$	970,281
Cost of goods sold	Cost of goods sold		404,862			378,510			Cost of goods sold	449,722		314,126		854,584		692,636
Gross profit	Gross profit		161,753			180,907			Gross profit	140,999		96,738		302,752		277,645
Selling, general, and administrative expenses	Selling, general, and administrative expenses		36,915			35,715			Selling, general, and administrative expenses	34,735		35,432		71,650		71,147
Research, development, and testing expenses	Research, development, and testing expenses		36,337			35,506			Research, development, and testing expenses	35,517		33,549		71,854		69,055
Operating profit	Operating profit		88,501			109,686			Operating profit	70,747		27,757		159,248		137,443
Interest and financing expenses, net	Interest and financing expenses, net		6,343			7,104			Interest and financing expenses, net	8,869		7,005		15,212		14,109

Other income (expense), net	Other income (expense), net		7,212			7,496			Other income (expense), net	5,180		6,516		12,392		14,012
Income before income tax expense	Income before income tax expense		89,370			110,078			Income before income tax expense	67,058		27,268		156,428		137,346
Income tax expense	Income tax expense		19,658			24,537			Income tax expense	15,106		4,919		34,764		29,456
Net income	Net income		$	69,712		$	85,541		Net income	$	51,952	$	22,349	$	121,664	$	107,890
Earnings per share - basic and diluted	Earnings per share - basic and diluted		$	6.38		$	7.67		Earnings per share - basic and diluted	$	4.75	$	2.05	$	11.13	$	9.78
Cash dividends declared per share	Cash dividends declared per share		$	1.90		$	1.90		Cash dividends declared per share	$	1.90	$	1.90	$	3.80	$	3.80

See accompanying Notes to Condensed Consolidated Financial Statements

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NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(in thousands)	(in thousands)	Three Months Ended March 31,			(in thousands)			Second Quarter Ended June 30,				Six Months Ended June 30,
			2021			2020				2021		2020		2021		2020
Net income	Net income		$	69,712		$	85,541		Net income	$	51,952	$	22,349	$	121,664	$	107,890
Other comprehensive income (loss):	Other comprehensive income (loss):								Other comprehensive income (loss):
Pension plans and other postretirement benefits:	Pension plans and other postretirement benefits:								Pension plans and other postretirement benefits:

Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $(159) in 2021 and $(170) in 2020			(491)			(531)
Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $(219) in 2021 and $0 in 2020			(657)			0
Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $529 in 2021 and $397 in 2020			1,790			1,267
Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $(156) in second quarter 2021, $(171) in second quarter 2020, $(315) in six months 2021, and $(341) in six months 2020									Amortization of prior service cost (credit) included in net periodic benefit cost (income), net of income tax expense (benefit) of $(156) in second quarter 2021, $(171) in second quarter 2020, $(315) in six months 2021, and $(341) in six months 2020	(494)		(531)		(985)		(1,062)
Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $0 in second quarter 2021, $0 in second quarter 2020, $(219) in six months 2021, and $0 in six months 2020									Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $0 in second quarter 2021, $0 in second quarter 2020, $(219) in six months 2021, and $0 in six months 2020	0		0		(657)		0
Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $575 in second quarter 2021, $396 in second quarter 2020, $1,104 in six months 2021, and $793 in six months 2020									Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $575 in second quarter 2021, $396 in second quarter 2020, $1,104 in six months 2021, and $793 in six months 2020	1,749		1,260		3,539		2,527
Total pension plans and other postretirement benefits	Total pension plans and other postretirement benefits		642			736			Total pension plans and other postretirement benefits	1,255		729		1,897		1,465

Foreign currency translation adjustments, net of income tax expense (benefit) of $(464) in 2021 and $(841) in 2020			467			(14,331)
Foreign currency translation adjustments, net of income tax expense (benefit) of $785 in second quarter 2021,$(151) in second quarter 2020, $321 in six months 2021, and $(992) in six months 2020									Foreign currency translation adjustments, net of income tax expense (benefit) of $785 in second quarter 2021,$(151) in second quarter 2020, $321 in six months 2021, and $(992) in six months 2020	5,853		(1,038)		6,320		(15,369)

Other comprehensive income (loss)	Other comprehensive income (loss)		1,109			(13,595)			Other comprehensive income (loss)	7,108		(309)		8,217		(13,904)
Comprehensive income	Comprehensive income		$	70,821		$	71,946		Comprehensive income	$	59,060	$	22,040	$	129,881	$	93,986

See accompanying Notes to Condensed Consolidated Financial Statements

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NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share amounts)	(in thousands, except share amounts)	March 31, 2021		December 31, 2020		(in thousands, except share amounts)	June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	522,405	$	125,172	Cash and cash equivalents	$	153,864	$	125,172
Marketable securities						Marketable securities	376,295		0
Trade and other accounts receivable, less allowance for credit losses	Trade and other accounts receivable, less allowance for credit losses	373,655		336,395		Trade and other accounts receivable, less allowance for credit losses	399,373		336,395
Inventories	Inventories	414,737		401,031		Inventories	457,957		401,031
Prepaid expenses and other current assets	Prepaid expenses and other current assets	41,670		35,480		Prepaid expenses and other current assets	35,982		35,480
Total current assets	Total current assets	1,352,467		898,078		Total current assets	1,423,471		898,078
Property, plant, and equipment, net	Property, plant, and equipment, net	671,955		665,147		Property, plant, and equipment, net	680,315		665,147
Intangibles (net of amortization) and goodwill	Intangibles (net of amortization) and goodwill	129,248		129,944		Intangibles (net of amortization) and goodwill	128,531		129,944
Prepaid pension cost	Prepaid pension cost	139,104		137,069		Prepaid pension cost	141,151		137,069
Operating lease right-of-use assets	Operating lease right-of-use assets	65,307		61,329		Operating lease right-of-use assets	64,980		61,329

Deferred charges and other assets	Deferred charges and other assets	41,308		42,308		Deferred charges and other assets	40,264		42,308
Total assets	Total assets	$	2,399,389	$	1,933,875	Total assets	$	2,478,712	$	1,933,875
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	218,211	$	189,937	Accounts payable	$	259,209	$	189,937
Accrued expenses	Accrued expenses	73,264		78,422		Accrued expenses	69,185		78,422
Dividends payable	Dividends payable	18,612		15,184		Dividends payable	18,613		15,184
Income taxes payable	Income taxes payable	5,949		3,760		Income taxes payable	5,242		3,760
Operating lease liabilities	Operating lease liabilities	14,307		13,410		Operating lease liabilities	14,460		13,410
Other current liabilities	Other current liabilities	5,510		11,742		Other current liabilities	5,416		11,742
Total current liabilities	Total current liabilities	335,853		312,455		Total current liabilities	372,125		312,455
Long-term debt	Long-term debt	990,189		598,848		Long-term debt	990,551		598,848
Operating lease liabilities-noncurrent	Operating lease liabilities-noncurrent	50,928		48,324		Operating lease liabilities-noncurrent	50,489		48,324
Other noncurrent liabilities	Other noncurrent liabilities	212,064		214,424		Other noncurrent liabilities	216,337		214,424
Total liabilities	Total liabilities	1,589,034		1,174,051		Total liabilities	1,629,502		1,174,051
Commitments and contingencies (Note 9)		0		0
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)	0		0
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common stock and paid-in capital (with 0 par value; authorized shares - 80,000,000; issued and outstanding shares - 10,928,154 at March 31, 2021 and 10,921,377 at December 31, 2020)		1,190		717
Common stock and paid-in capital (with 0 par value; authorized shares - 80,000,000; issued and outstanding shares - 10,928,129 at June 30, 2021 and 10,921,377 at December 31, 2020)						Common stock and paid-in capital (with 0 par value; authorized shares - 80,000,000; issued and outstanding shares - 10,928,129 at June 30, 2021 and 10,921,377 at December 31, 2020)	1,748		717
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(172,055)		(173,164)		Accumulated other comprehensive loss	(164,947)		(173,164)
Retained earnings	Retained earnings	981,220		932,271		Retained earnings	1,012,409		932,271
Total shareholders' equity	Total shareholders' equity	810,355		759,824		Total shareholders' equity	849,210		759,824
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	2,399,389	$	1,933,875	Total liabilities and shareholders’ equity	$	2,478,712	$	1,933,875

See accompanying Notes to Condensed Consolidated Financial Statements

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NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


(in thousands, except share and per-share amounts)	(in thousands, except share and per-share amounts)	Common Stock and Paid-in Capital			Accumulated Other Comprehensive Loss				Retained Earnings				Total Shareholders’ Equity		(in thousands, except share and per-share amounts)			Common Stock and Paid-in Capital				Accumulated Other Comprehensive Loss				Retained Earnings				Total Shareholders’ Equity
		Shares	Amount														Shares		Amount

Balance at December 31, 2019		11,188,549	$	1,965			$	(162,748)			$	843,881			$	683,098
Balance at March 31, 2020															Balance at March 31, 2020			10,938,744		$	0			$	(176,343)			$	815,592			$	639,249
Net income	Net income								85,541				85,541		Net income											22,349				22,349
Other comprehensive income (loss)	Other comprehensive income (loss)				(13,595)								(13,595)		Other comprehensive income (loss)							(309)								(309)
Cash dividends ($1.90 per share)	Cash dividends ($1.90 per share)								(21,160)				(21,160)		Cash dividends ($1.90 per share)											(20,756)				(20,756)
Repurchases of common stock	Repurchases of common stock	(252,383)	(1,627)						(92,711)				(94,338)		Repurchases of common stock			(14,745)		(133)						(5,529)				(5,662)

Tax withholdings related to stock-based compensation	Tax withholdings related to stock-based compensation	(1,547)	(633)										(633)		Tax withholdings related to stock-based compensation					(8)										(8)
Stock-based compensation	Stock-based compensation	4,125	295						41				336		Stock-based compensation			0		422						0				422
Balance at March 31, 2020		10,938,744	$	0	$	(176,343)			$	815,592			$	639,249
Balance at June 30, 2020															Balance at June 30, 2020			10,923,999		$	281	$	(176,652)			$	811,656			$	635,285

Balance at December 31, 2020		10,921,377	$	717	$	(173,164)			$	932,271			$	759,824
Balance at March 31, 2021															Balance at March 31, 2021			10,928,154		$	1,190	$	(172,055)			$	981,220			$	810,355
Net income	Net income								69,712				69,712		Net income											51,952				51,952
Other comprehensive income (loss)	Other comprehensive income (loss)				1,109								1,109		Other comprehensive income (loss)							7,108								7,108
Cash dividends ($1.90 per share)	Cash dividends ($1.90 per share)								(20,763)				(20,763)		Cash dividends ($1.90 per share)											(20,763)				(20,763)

Stock-based compensation															Stock-based compensation			(25)		558						0				558
Balance at June 30, 2021															Balance at June 30, 2021			10,928,129		$	1,748	$	(164,947)			$	1,012,409			$	849,210

Balance at December 31, 2019															Balance at December 31, 2019			11,188,549		$	1,965	$	(162,748)			$	843,881			$	683,098
Net income															Net income											107,890				107,890
Other comprehensive income (loss)															Other comprehensive income (loss)							(13,904)								(13,904)
Cash dividends ($3.80 per share)															Cash dividends ($3.80 per share)											(41,916)				(41,916)
Repurchases of common stock															Repurchases of common stock			(267,128)		(1,760)						(98,240)				(100,000)

Tax withholdings related to stock-based compensation															Tax withholdings related to stock-based compensation			(1,547)		(641)										(641)
Stock-based compensation															Stock-based compensation			4,125		717						41				758
Balance at June 30, 2020															Balance at June 30, 2020			10,923,999		$	281	$	(176,652)			$	811,656			$	635,285

Balance at December 31, 2020															Balance at December 31, 2020			10,921,377		$	717	$	(173,164)			$	932,271			$	759,824
Net income															Net income											121,664				121,664
Other comprehensive income (loss)															Other comprehensive income (loss)							8,217								8,217
Cash dividends ($3.80 per share)															Cash dividends ($3.80 per share)											(41,526)				(41,526)

Stock-based compensation	Stock-based compensation	6,777	473						0				473		Stock-based compensation			6,752		1,031						0				1,031
Balance at March 31, 2021		10,928,154	$	1,190	$	(172,055)			$	981,220			$	810,355
Balance at June 30, 2021															Balance at June 30, 2021			10,928,129		$	1,748	$	(164,947)			$	1,012,409			$	849,210

See accompanying Notes to Condensed Consolidated Financial Statements

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NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(in thousands)	(in thousands)	Three Months Ended March 31,				(in thousands)	Six Months Ended June 30,
		2021		2020			2021		2020
Cash and cash equivalents at beginning of year	Cash and cash equivalents at beginning of year	$	125,172	$	144,397	Cash and cash equivalents at beginning of year	$	125,172	$	144,397
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	69,712		85,541		Net income	121,664		107,890
Adjustments to reconcile net income to cash flows from operating activities:	Adjustments to reconcile net income to cash flows from operating activities:					Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	Depreciation and amortization	20,631		21,369		Depreciation and amortization	41,719		42,356
Deferred income tax expense	Deferred income tax expense	2,455		3,379		Deferred income tax expense	6,654		3,322

Unrealized (gain) loss on marketable securities						Unrealized (gain) loss on marketable securities	2,314		0
Working capital changes	Working capital changes	(41,421)		(42,058)		Working capital changes	(59,484)		(60,072)
Cash pension and postretirement contributions	Cash pension and postretirement contributions	(2,577)		(2,557)		Cash pension and postretirement contributions	(5,184)		(5,152)
Other, net	Other, net	571		(1,213)		Other, net	(3,629)		5,953
Cash provided from (used in) operating activities	Cash provided from (used in) operating activities	49,371		64,461		Cash provided from (used in) operating activities	104,054		94,297
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(20,524)		(20,106)		Capital expenditures	(44,394)		(40,088)
Purchases of marketable securities						Purchases of marketable securities	(387,653)		0
Proceeds from sales and maturities of marketable securities						Proceeds from sales and maturities of marketable securities	9,894		0

Other, net						Other, net	0		(927)
Cash provided from (used in) investing activities	Cash provided from (used in) investing activities	(20,524)		(20,106)		Cash provided from (used in) investing activities	(422,153)		(41,015)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Net borrowings under revolving credit facility	Net borrowings under revolving credit facility	0		97,424		Net borrowings under revolving credit facility	0		47,059
Issuance of 2.70% senior notes	Issuance of 2.70% senior notes	395,052		0		Issuance of 2.70% senior notes	395,052		0
Dividends paid	Dividends paid	(20,763)		(21,160)		Dividends paid	(41,526)		(41,916)
Repurchases of common stock	Repurchases of common stock	0		(79,473)		Repurchases of common stock	0		(100,000)
Debt issuance costs	Debt issuance costs	(2,932)		(1,308)		Debt issuance costs	(3,897)		(1,348)
Other, net	Other, net	(1,915)		(1,377)		Other, net	(3,544)		3,565
Cash provided from (used in) financing activities	Cash provided from (used in) financing activities	369,442		(5,894)		Cash provided from (used in) financing activities	346,085		(92,640)
Effect of foreign exchange on cash and cash equivalents	Effect of foreign exchange on cash and cash equivalents	(1,056)		(4,196)		Effect of foreign exchange on cash and cash equivalents	706		(2,975)
Increase in cash and cash equivalents		397,233		34,265
Increase (decrease) in cash and cash equivalents						Increase (decrease) in cash and cash equivalents	28,692		(42,333)
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	522,405	$	178,662	Cash and cash equivalents at end of period	$	153,864	$	102,064

See accompanying Notes to Condensed Consolidated Financial Statements

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Financial Statement Presentation

In the opinion of management, the accompanying consolidated financial statements of NewMarket Corporation and its subsidiaries contain all necessary adjustments for the fair presentation of, in all material respects, our consolidated financial position as of ~~March 31,~~June 30, 2021 and December 31, 2020, and our consolidated results of operations, comprehensive income, and changes in shareholders' equity for the ~~three~~second quarter and six months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020, and our cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020. 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, 2020 (2020 Annual Report), as filed with the Securities and Exchange Commission (SEC). The results of operations for the ~~three~~six month period ended ~~March 31,~~June 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021. The December 31, 2020 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.

2. Net Sales

Our revenues are primarily derived from the manufacture and sale of petroleum additives products. We sell petroleum additives products across the world to customers located in the North America, Latin America, Asia Pacific, and Europe/Middle East/Africa/India (EMEAI) regions. Our customers primarily consist of global, national, and independent oil companies. Our contracts generally include one performance obligation, which is providing petroleum additives products. The performance obligation is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts.

In limited cases, we collect funds in advance of shipping product to our customers and recognizing the related revenue. These prepayments from customers are recorded as a contract liability 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 any adjustment in the period identified.

The following table provides information on our net sales by geographic area. Information on net sales by segment is in Note 3.


		Three Months Ended March 31,					Second Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)		2021		2020			(in thousands)	2021		2020		2021		2020
Net sales	Net sales							Net sales
United States	United States		$	170,324	$	181,844		United States	$	190,563	$	119,928	$	360,887	$	301,772
China	China		73,988		45,798			China	72,065		57,442		146,053		103,240
Europe, Middle East, Africa, India	Europe, Middle East, Africa, India		176,650		190,623			Europe, Middle East, Africa, India	168,479		130,944		345,129		321,567
Asia Pacific, except China	Asia Pacific, except China		82,597		79,413			Asia Pacific, except China	83,804		66,759		166,401		146,172
Other foreign	Other foreign		63,056		61,739			Other foreign	75,810		35,791		138,866		97,530
Net sales	Net sales		$	566,615	$	559,417		Net sales	$	590,721	$	410,864	$	1,157,336	$	970,281

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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 antiknock compounds business, as well as certain contracted manufacturing and services associated with Ethyl Corporation (Ethyl).

Net Sales by Segment


		Three Months Ended March 31,					Second Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)		2021		2020			(in thousands)	2021		2020		2021		2020
Petroleum additives	Petroleum additives							Petroleum additives
Lubricant additives	Lubricant additives		$	494,556	$	463,686		Lubricant additives	$	498,777	$	343,418	$	993,333	$	807,104
Fuel additives	Fuel additives		70,342		93,686			Fuel additives	87,810		65,285		158,152		158,971
Total	Total		564,898		557,372			Total	586,587		408,703		1,151,485		966,075
All other	All other		1,717		2,045			All other	4,134		2,161		5,851		4,206
Net sales	Net sales		$	566,615	$	559,417		Net sales	$	590,721	$	410,864	$	1,157,336	$	970,281

Segment Operating Profit


		Three Months Ended March 31,					Second Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)		2021		2020			(in thousands)	2021		2020		2021		2020
Petroleum additives	Petroleum additives		$	94,071	$	113,671		Petroleum additives	$	74,200	$	33,061	$	168,271	$	146,732
All other	All other		(664)		335			All other	17		(399)		(647)		(64)
Segment operating profit	Segment operating profit		93,407		114,006			Segment operating profit	74,217		32,662		167,624		146,668
Corporate, general, and administrative expenses	Corporate, general, and administrative expenses		(4,312)		(4,231)			Corporate, general, and administrative expenses	(3,548)		(5,467)		(7,860)		(9,698)
Interest and financing expenses, net	Interest and financing expenses, net		(6,343)		(7,104)			Interest and financing expenses, net	(8,869)		(7,005)		(15,212)		(14,109)

Other income (expense), net	Other income (expense), net		6,618		7,407			Other income (expense), net	5,258		7,078		11,876		14,485
Income before income tax expense	Income before income tax expense		$	89,370	$	110,078		Income before income tax expense	$	67,058	$	27,268	$	156,428	$	137,346

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. Pension Plans and Other Postretirement Benefits

The table below shows cash contributions made during the ~~three~~six months ended ~~March 31,~~June 30, 2021, as well as the remaining cash contributions we expect to make during the year ending December 31, 2021, for our domestic and foreign pension plans and domestic postretirement benefit plan.


(in thousands)	(in thousands)	Actual Cash Contributions for Three Months Ended March 31, 2021		Expected Remaining Cash Contributions for Year Ending December 31, 2021		(in thousands)	Actual Cash Contributions for Six Months Ended June 30, 2021		Expected Remaining Cash Contributions for Year Ending December 31, 2021
Domestic plans	Domestic plans					Domestic plans
Pension benefits	Pension benefits	$	716	$	2,148	Pension benefits	$	1,428	$	1,428
Postretirement benefits	Postretirement benefits	287		861		Postretirement benefits	607		607
Foreign plans	Foreign plans					Foreign plans
Pension benefits	Pension benefits	1,574		4,797		Pension benefits	3,149		2,979

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


	Domestic
	Pension Benefits				Postretirement Benefits
	Second Quarter Ended June 30,
(in thousands)	2021		2020		2021		2020
Service cost	$	4,814	$	4,198	$	250	$	217
Interest cost	3,241		3,509		291		346
Expected return on plan assets	(9,670)		(9,306)		(234)		(241)
Amortization of prior service cost (credit)	69		67		(757)		(757)
Amortization of actuarial net (gain) loss	1,390		1,316		13		0
Net periodic benefit cost (income)	$	(156)	$	(216)	$	(437)	$	(435)

Domestic
Pension Benefits Postretirement Benefits
Three Months Ended March 31,
(in thousands) 2021 2020 2021 2020
Service cost $ 4,814 $ 4,197 $ 250 $ 217
Interest cost 3,241 3,508 292 345
Expected return on plan assets (9,670) (9,305) (233) (241)
Amortization of prior service cost (credit) 68 66 (757) (757)
Amortization of actuarial net (gain) loss 1,390 1,316 12 0
Net periodic benefit cost (income) $ (157) $ (218) $ (436) $ (436)

Foreign
Pension Benefits
Three Months Ended March 31,
(in thousands) 2021 2020
Service cost $ 2,757 $ 2,146
Interest cost 827 984
Expected return on plan assets (2,666) (2,461)
Amortization of prior service cost (credit) 38 (11)
Amortization of actuarial net (gain) loss 901 353
Net periodic benefit cost (income) $ 1,857 $ 1,011


	Domestic
	Pension Benefits				Postretirement Benefits
	Six Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Service cost	$	9,628	$	8,395	$	500	$	434
Interest cost	6,482		7,017		583		691
Expected return on plan assets	(19,340)		(18,611)		(467)		(482)
Amortization of prior service cost (credit)	137		133		(1,514)		(1,514)
Amortization of actuarial net (gain) loss	2,780		2,632		25		0
Net periodic benefit cost (income)	$	(313)	$	(434)	$	(873)	$	(871)

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


	Foreign
	Pension Benefits
	Second Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Service cost	$	2,769	$	2,061	$	5,526	$	4,207
Interest cost	834		929		1,661		1,913
Expected return on plan assets	(2,691)		(2,334)		(5,357)		(4,795)
Amortization of prior service cost (credit)	38		(10)		76		(21)
Amortization of actuarial net (gain) loss	907		339		1,808		692
Net periodic benefit cost (income)	$	1,857	$	985	$	3,714	$	1,996

5. Earnings Per Share

We had ~~26,728~~26,703 shares of nonvested restricted stock at ~~March 31,~~June 30, 2021 and 19,858 shares of nonvested restricted stock at ~~March 31,~~June 30, 2020 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 the most dilutive result. The following table illustrates the earnings allocation method utilized in the calculation of basic and diluted earnings per share.

Three Months Ended
March 31,
(in thousands, except per-share amounts) 2021 2020
Earnings per share numerator:
Net income attributable to common shareholders before allocation of earnings to participating securities $ 69,712 $ 85,541
Earnings allocated to participating securities 153 112
Net income attributable to common shareholders after allocation of earnings to participating securities $ 69,559 $ 85,429
Earnings per share denominator:
Weighted-average number of shares of common stock outstanding - basic and diluted 10,901 11,136
Earnings per share - basic and diluted $ 6.38 $ 7.67

~~6. Inventories~~

March 31, December 31,
(in thousands) 2021 2020
Finished goods and work-in-process $ 333,192 $ 325,588
Raw materials 65,080 59,413
Stores, supplies, and other 16,465 16,030
$ 414,737 $ 401,031


	Second Quarter Ended June 30,				Six Months Ended June 30,
(in thousands, except per-share amounts)	2021		2020		2021		2020
Earnings per share numerator:
Net income attributable to common shareholders before allocation of earnings to participating securities	$	51,952	$	22,349	$	121,664	$	107,890
Earnings allocated to participating securities	130		42		283		154
Net income attributable to common shareholders after allocation of earnings to participating securities	$	51,822	$	22,307	$	121,381	$	107,736
Earnings per share denominator:
Weighted-average number of shares of common stock outstanding - basic and diluted	10,901		10,904		10,901		11,020


Earnings per share - basic and diluted	$	4.75	$	2.05	$	11.13	$	9.78

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. Marketable Securities

~~7. Intangibles (Net~~During May 2021, NewMarket invested in both debt and equity marketable securities. The debt securities are designated as trading. The marketable securities are recorded on a settlement date basis at estimated fair value and are classified as current assets in the Consolidated Balance Sheets. Unrealized gains and losses, as well as the investment income attributable to the debt and equity securities, are reported in Other income (expense), net in the Consolidated Statements of ~~Amortization)~~Income. The debt securities have a cost basis of $48 million and ~~Goodwill~~the equity securities have a cost basis of $331 million at June 30, 2021. The fair value of both the debt and equity securities are shown in the second table below.

The ~~net carrying amount~~portion of ~~intangibles~~unrealized gains and ~~goodwill was $129 million~~losses for the period related to both the debt and equity securities still held at ~~March 31, 2021 and $130 million at December 31, 2020. The gross carrying amount and accumulated amortization of each type of intangible asset and goodwill~~the reporting date are ~~presented in the table below.~~as follows:

March 31, 2021 December 31, 2020
(in thousands) Gross
Carrying
Amount Accumulated
Amortization Gross
Carrying
Amount Accumulated
Amortization
Amortizing intangible assets
Formulas and technology $ 6,200 $ 3,875 $ 6,200 $ 3,617
Contract 2,000 850 2,000 800
Customer bases 14,240 12,450 14,240 12,037
Goodwill 123,983 123,958
$ 146,423 $ 17,175 $ 146,398 $ 16,454


	Second Quarter Ended June 30,		Six Months Ended June 30,
(in thousands)	2021			2021
Unrealized gains and (losses) recognized during the reporting period on debt securities still held at the reporting date	$	56		$	56
Unrealized gains and (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(2,370)		$	(2,370)

~~All~~The following table provides information on the fair value of the intangibles relate to the petroleum additives segment. The change in the gross carrying amount between December 31, 2020 and March 31, 2021 is due to foreign currency fluctuation. There is 0 accumulated goodwill impairment.

~~Amortization expense was (in thousands):~~



~~Three months ended March 31, 2021~~	$	~~721~~

~~Three months ended March 31, 2020~~	~~727~~

~~Estimated amortization expense for the remainder of 2021,~~marketable securities, as well as the related level within the fair value hierarchy. The estimated ~~annual amortization expense related~~fair value of debt securities is based on reported trades of the debt security adjusted for other observable market data including, but not limited to, ~~our intangible~~benchmark yield curves, market-based quotes of similar assets, ~~for the next five years,~~and other market-corroborated inputs. The estimated fair value of equity securities is ~~expected to be (in thousands):~~

2021 $ 1,435
2022 1,423
2023 907
2024 390
2025 390
2026 390

~~We amortize the contract over 10 years; customer bases over 4 to 20 years; and formulas and technology over 6 years.~~based on actively quoted market prices.


	June 30, 2021
			Fair Value Measurements Using
(in thousands)	Fair Value		Level 1		Level 2		Level 3
Debt securities:
Corporate bonds	$	47,837	$	0	$	47,837	$	0

Equity securities:
U.S. government income mutual fund	328,458		328,458		0		0
Total marketable securities	$	376,295	$	328,458	$	47,837	$	0

7. Inventories


	June 30,		December 31,
(in thousands)	2021		2020
Finished goods and work-in-process	$	364,773	$	325,588
Raw materials	76,080		59,413
Stores, supplies, and other	17,104		16,030
	$	457,957	$	401,031

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8. Intangibles (Net of Amortization) and Goodwill

The net carrying amount of intangibles and goodwill was $129 million at June 30, 2021 and $130 million at December 31, 2020. The gross carrying amount and accumulated amortization of each type of intangible asset and goodwill are presented in the table below.


	June 30, 2021				December 31, 2020
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets
Formulas and technology	$	6,200	$	4,133	$	6,200	$	3,617
Contract	2,000		900		2,000		800
Customer bases	5,440		4,065		14,240		12,037

Goodwill	123,989				123,958
	$	137,629	$	9,098	$	146,398	$	16,454

All of the intangibles relate to the petroleum additives segment. The change in the gross carrying amount between December 31, 2020 and June 30, 2021 is due to a customer base becoming fully amortized and foreign currency fluctuation. There is 0 accumulated goodwill impairment.

Amortization expense was (in thousands):


Second quarter ended June 30, 2021	$	723
Six months ended June 30, 2021	1,444
Second quarter ended June 30, 2020	1,009
Six months ended June 30, 2020	1,736

Estimated amortization expense for the remainder of 2021, as well as estimated annual amortization expense related to our intangible assets for the next five years, is expected to be (in thousands):


2021	$	712
2022	1,423
2023	907
2024	390
2025	390
2026	390

We amortize the contract over 10 years; the customer base over 20 years; and formulas and technology over 6 years.

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

9. Long-term Debt


(in thousands)	(in thousands)	March 31, 2021		December 31, 2020		(in thousands)	June 30, 2021		December 31, 2020
Senior notes - 2.70% due 2031 (net of related deferred financing costs)	Senior notes - 2.70% due 2031 (net of related deferred financing costs)	$	391,194	$	0	Senior notes - 2.70% due 2031 (net of related deferred financing costs)	$	391,410	$	0
Senior notes - 4.10% due 2022 (net of related deferred financing costs)	Senior notes - 4.10% due 2022 (net of related deferred financing costs)	348,995		348,848		Senior notes - 4.10% due 2022 (net of related deferred financing costs)	349,141		348,848
Senior notes - 3.78% due 2029	Senior notes - 3.78% due 2029	250,000		250,000		Senior notes - 3.78% due 2029	250,000		250,000

		$	990,189	$	598,848		$	990,551	$	598,848

Senior Notes - On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031. The 2.70% senior notes are general unsecured senior obligations and rank equally with our other unsecured senior indebtedness. The offer and sale of the notes were registered under the Securities Act of 1933, as amended. We incurred financing costs in ~~the first three months of~~ 2021 of approximately $4 million related to the 2.70% senior notes, which are being amortized over the term of the notes.

The indenture governing the 2.70% senior notes includes certain customary covenants that, among other things and subject to certain qualifications and exceptions, limit our ability and the ability of our subsidiaries to:

•grant liens to secure indebtedness;

•engage in sale and lease back transactions;

•merge or consolidate with, or convey, transfer or lease all or substantially all of our assets to a third party.

The outstanding 4.10% senior notes are unsecured, with an aggregate principal amount of $350 million and are registered under the Securities Act of 1933, as amended. The outstanding 3.78% senior notes are unsecured and were issued in a 2017 private placement with The Prudential Insurance Company of America and certain other purchasers.

We were in compliance with all covenants under all issuances of outstanding senior notes as of ~~March 31,~~June 30, 2021 and December 31, 2020.

Revolving Credit Facility - The revolving credit facility has a borrowing capacity of $900 million, a term of five years, and matures on March 5, 2025. The obligations under the revolving credit facility are unsecured and are fully and unconditionally guaranteed by NewMarket. ~~We were in compliance with all covenants under the credit facility as of March 31, 2021 and December 31, 2020.~~

There were 0 outstanding borrowings under the revolving credit facility at ~~March 31,~~June 30, 2021 or December 31, 2020. As of ~~March 31,~~June 30, 2021 and December 31, 2020 outstanding letters of credit were approximately $2 million resulting in the unused portion of the credit facility amounting to $898 million.

We were in compliance with all covenants under the revolving credit facility as of June 30, 2021 and December 31, 2020.

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~~NEWMARKET CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

9.10. 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.

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 $10 million at both ~~March 31,~~June 30, 2021 and December 31, 2020. 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.

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Our more significant environmental sites include a former plant site in Louisiana (the Louisiana site) and a Houston, Texas plant site (the Texas site). Together, the amounts accrued on a discounted basis related to these sites represented approximately $7 million of the total accrual above at ~~March 31,~~June 30, 2021 and $8 million at December 31, 2020, using discount rates ranging from 3% to 9% for both periods. The aggregate undiscounted amount for these sites was $9 million at both ~~March 31,~~June 30, 2021 and December 31, 2020.

~~10.~~

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)	(in thousands)	Pension Plans and Other Postretirement Benefits		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive (Loss) Income		(in thousands)	Pension Plans and Other Postretirement Benefits		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2019	Balance at December 31, 2019	$	(69,795)	$	(92,953)	$	(162,748)	Balance at December 31, 2019	$	(69,795)	$	(92,953)	$	(162,748)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	0		(14,331)		(14,331)		Other comprehensive income (loss) before reclassifications	0		(15,369)		(15,369)
Amounts reclassified from accumulated other comprehensive loss (a)	Amounts reclassified from accumulated other comprehensive loss (a)	736		0		736		Amounts reclassified from accumulated other comprehensive loss (a)	1,465		0		1,465
Other comprehensive income (loss)	Other comprehensive income (loss)	736		(14,331)		(13,595)		Other comprehensive income (loss)	1,465		(15,369)		(13,904)
Balance at March 31, 2020		$	(69,059)	$	(107,284)	$	(176,343)
Balance at June 30, 2020								Balance at June 30, 2020	$	(68,330)	$	(108,322)	$	(176,652)

Balance at December 31, 2020	Balance at December 31, 2020	$	(92,771)	$	(80,393)	$	(173,164)	Balance at December 31, 2020	$	(92,771)	$	(80,393)	$	(173,164)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(657)		467		(190)		Other comprehensive income (loss) before reclassifications	(657)		6,320		5,663
Amounts reclassified from accumulated other comprehensive loss (a)	Amounts reclassified from accumulated other comprehensive loss (a)	1,299		0		1,299		Amounts reclassified from accumulated other comprehensive loss (a)	2,554		0		2,554
Other comprehensive income (loss)	Other comprehensive income (loss)	642		467		1,109		Other comprehensive income (loss)	1,897		6,320		8,217
Balance at March 31, 2021		$	(92,129)	$	(79,926)	$	(172,055)
Balance at June 30, 2021								Balance at June 30, 2021	$	(90,874)	$	(74,073)	$	(164,947)

(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 17 in our 2020 Annual Report for further information.

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~~NEWMARKET CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~11.~~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 ~~$522~~$154 million at ~~March 31,~~June 30, 2021 and $125 million at December 31, 2020. The fair value is classified as Level 1 in the fair value hierarchy.

No material events occurred during the ~~three~~six months ended ~~March 31,~~June 30, 2021 requiring adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.

Long-term debt – We record the carrying amount of our long-term debt at historical cost, less deferred financing costs related to our publicly traded senior notes. The estimated fair value of our long-term debt is shown in the table below and is based primarily on estimated current rates available to us for debt of the same remaining duration and adjusted for nonperformance risk and credit risk. The estimated fair value of our publicly-traded senior notes included in the table below is based on the last quoted price closest to ~~March 31,~~June 30, 2021. The fair value of our debt instruments are classified as Level 2.


		March 31, 2021				December 31, 2020					June 30, 2021				December 31, 2020
(in thousands)	(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt	Long-term debt	$	990,189	$	1,036,673	$	598,848	$	648,671	Long-term debt	$	990,551	$	1,044,582	$	598,848	$	648,671

Table of Contents

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 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; current and future governmental regulations; the gain or loss of significant customers; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, and health-related epidemics such as the COVID-19 pandemic; risks related to operating outside of the United States; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of 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 2020 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 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, 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 ~~three~~six months of 2021 with the first ~~three~~six months of 2020, net sales increased ~~1.4%~~19.2% primarily due to higher lubricant additives product shipments and a favorable foreign currency impact, partially offset by decreased selling prices and lower fuel additives product shipments. Petroleum additives operating profit was ~~17.2% lower~~14.7% higher when comparing the first ~~three~~six months of 2021 with the first ~~three~~six months of 2020, reflecting ~~lower selling prices~~improved product shipments and ~~higher~~favorable conversion ~~and~~costs mostly offset by higher raw material ~~costs, partially offset by increased product shipments.~~costs.

On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031. Subsequently, in May 2021, we invested most of the proceeds in marketable securities.

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 intent 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.

Impact of the COVID-19 Pandemic and Current Economic Environment

While to a lesser extent than during 2020, petroleum additives operating results for the first ~~three~~six months of 2021 include an unfavorable impact from the economic uncertainty resulting from the ongoing effects of the COVID-19 pandemic and the related restrictions on the movement of people, goods and ~~services resulting in fewer miles driven than during the first three months of 2020.~~services. The pace and stability of improvement in demand for our products will continue to depend heavily on economic recovery and the rate at which government restrictions are lifted and remain lifted. We will continue to monitor the government restrictions, as well as the status of the vaccination programs that are being implemented globally. ~~We expect successful vaccination efforts will help provide more stability in the global economy in 2021.~~

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~~With only a very few government-ordered, short-term exceptions, all~~All of our locations around the world, including our manufacturing and research and development facilities, have continued to operate safely and without interruption during the pandemic, with only a very few government-ordered, short-term exceptions, and we expect them to continue to do so. ~~Raw~~Both our raw material ~~sourcing has not been significantly impacted~~supply and the transportation network have experienced some disruptions, but we have managed through these challenges and expect to continue to do ~~not expect that to change over the coming months. The transportation industry continues to operate and our~~so. Our products are ~~currently~~ being delivered to our customers.

Our financial position remains strong. We have sufficient access to capital if needed and do not anticipate any issues with meeting the covenants for all our debt agreements. Our major capital projects are continuing to progress substantially as planned.

As we operate in the chemical industry, we continue to be focused on protecting the health and safety of our employees and have procedures in place at each of our operating facilities to help ensure their well-being.

The chemical industry and our products are recognized as essential for transportation of goods and services. Our business continuity planning process focuses our efforts on managing through this challenging time and helping our customers do the same. As we are a global company and can leverage the knowledge and experience of our personnel in facilities across the world, we do not expect to experience negative impacts related to short-term travel and border restrictions.

Results of Operations

Net Sales

Consolidated net sales for the ~~first three months~~second quarter of 2021 totaled ~~$566.6~~$590.7 million, representing an increase of ~~$7.2~~$179.9 million, or ~~1.3%~~43.8% from the second quarter of 2020. Consolidated net sales for the first six months of 2021 totaled $1.2 billion, representing an increase of $187.1 million, or 19.3%, from the first ~~three~~six months of 2020. The following table shows net sales by segment and product line.


		Three Months Ended March 31,					Second Quarter Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)		2021		2020			(in millions)	2021		2020		2021		2020
Petroleum additives	Petroleum additives							Petroleum additives
Lubricant additives	Lubricant additives		$	494.6	$	463.7		Lubricant additives	$	498.8	$	343.4	$	993.3	$	807.1
Fuel additives	Fuel additives		70.3		93.7			Fuel additives	87.8		65.3		158.2		159.0
Total	Total		564.9		557.4			Total	586.6		408.7		1,151.5		966.1
All other	All other		1.7		2.0			All other	4.1		2.2		5.8		4.2
Net sales	Net sales		$	566.6	$	559.4		Net sales	$	590.7	$	410.9	$	1,157.3	$	970.3

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 EMEAI region. While there is some fluctuation, the percentage of net sales generated in the regions remained fairly consistent when comparing the first ~~three~~six months of 2021 with the same period in 2020, as well as with the full year in 2020.

Petroleum additives net sales for the second quarter of 2021 were $586.6 million compared to $408.7 million for the second quarter of 2020, an increase of 43.5%. Petroleum additives net sales for the first ~~three~~six months of 2021 were ~~$564.9 million~~$1.2 billion compared to ~~$557.4~~$966.1 million for the first ~~three~~six months of 2020, an increase of ~~1.4%~~19.2%. ~~Both~~For both the second quarter and six months comparative periods, the increases were across all regions with North America representing around 40% of the increase in both comparative periods. The remaining regions each contributed approximately 20% of the increase in net sales for the second quarter comparison. For the six month comparison, the Asia Pacific region reflected an approximate 35% increase with the EMEAI and Latin America regions ~~reflected~~reflecting the remaining increases in petroleum additives net ~~sales, which were mostly offset by decreases in~~sales. While 2021 results continue to include the ~~EMEAI and North America regions. The reductions in the EMEAI region reflects some continuing~~ impact ~~as a result~~ of ~~the economic disruption due to~~ the COVID-19 pandemic ~~including lower demand for petroleum additives products reflecting~~to a lesser extent, the ~~restrictions on the movement of people, goods,~~second quarter and ~~services. In addition to some~~six months 2020 periods include a more significant impact from the ~~COVID-19 pandemic when comparing the first three months~~pandemic.

Table of ~~2021 and 2020, the North America region also reflected the impact of weather-related reductions in net sales.~~Contents

The following table details the approximate components of the increase in petroleum additives net sales between the second quarter and first ~~three~~six months of 2021 and 2020.

~~(in millions)~~

~~Three Months~~

~~Period ended March 31, 2020~~

~~557.4~~

~~Lubricant additives shipments~~

~~39.7~~

~~Fuel additives shipments~~

~~(21.1)~~

~~Selling prices~~

~~(22.7)~~

~~Foreign currency impact, net~~

~~11.6~~

~~Period ended March 31, 2021~~

~~564.9~~

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(in millions)	Second Quarter		Six Months
Period ended June 30, 2020	$	408.7	$	966.1
Lubricant additives shipments	142.3		183.9
Fuel additives shipments	18.5		(1.4)
Selling prices	7.2		(18.6)
Foreign currency impact, net	9.9		21.5
Period ended June 30, 2021	$	586.6	$	1,151.5

When comparing both the ~~first three~~second quarter and the six months periods of 2021 and 2020, petroleum additives shipments accounted for ~~an $18.6~~a $160.8 million increase in net ~~sales.~~sales for the second quarter comparison and a $182.5 million increase in net sales for the six month comparison. Selling prices improved some during the second quarter of 2021, but remained as an unfavorable impact on net sales for the six months comparison. The impact from ~~improved shipments was partially offset by lower~~ selling prices was net of a favorable impact from foreign currency exchange ~~rates.~~rates in both comparative periods. The United States Dollar weakened against most of the major currencies in which we transact when comparing the first ~~three~~six months of 2021 and 2020 resulting in a favorable impact to petroleum additives net sales for both the ~~three~~second quarter and six months comparative periods. The favorable impact was predominantly due to changes in the Euro and Chinese Renminbi exchange ~~rate.~~rates.

On a worldwide basis, the volume of product shipments for petroleum additives increased ~~2.6%~~41.1% when comparing the ~~first three~~two second quarter periods and 19.1% when comparing the six months of 2021 and 2020. Shipments of lubricant additives increased ~~mostly~~across all regions in both the ~~Asia Pacific region,~~second quarter and six months comparisons with ~~smaller~~most of the increases in the North America ~~and Latin America~~region but significant increases across the other regions, ~~and a decrease in the EMEAI region.~~as well. Fuel additives shipment volumes ~~decreased~~increased for the ~~three~~second quarter comparison and were substantially unchanged for the six months ~~comparative period across all regions except~~comparison. The improvement in the ~~Asia Pacific region. The decrease in~~second quarter fuel additives shipments was ~~predominantly in~~across all regions, while the six months comparison reflected improved fuel additives product shipments for the North America and Asia Pacific regions with substantially offsetting decreases in the Latin America and EMEAI ~~regions, substantially~~regions. Similar to the discussion on net sales above, the volume of product shipments in the second quarter of 2020 include the impact from unusually low shipments due to the ~~impact of the restrictions on movement of people, goods, and services, as well as weather-related impacts in North America.~~COVID-19 pandemic.

All Other

The “All other” category includes the operations of the antiknock compounds business and certain contracted manufacturing and 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 ~~three~~second quarter and six months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020.


		Three Months Ended March 31,					Second Quarter Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)		2021		2020			(in millions)	2021		2020		2021		2020
Petroleum additives	Petroleum additives		$	94.1	$	113.7		Petroleum additives	$	74.2	$	33.1	$	168.3	$	146.7
All other	All other		$	(0.7)	$	0.3		All other	$	0.0	$	(0.4)	$	(0.7)	$	0.0

Petroleum Additives Segment

The petroleum additives segment operating profit ~~decreased $19.6~~increased $41.1 million when comparing the second quarter of 2021 to the second quarter of 2020 and $21.6 million when comparing the first ~~three~~six months of 2021 to the first ~~three~~six months of 2020. Both comparative periods included the impact of the same factors that affected gross profit (see discussion below).

The operating profit margin was ~~16.7%~~12.7% for the second quarter of 2021 as compared to 8.1% for the second quarter of 2020 and was 14.6% for the first ~~three~~six months of 2021 as compared to ~~20.4%~~15.2% for the first ~~three~~six months of 2020. For the rolling four quarters ended ~~March 31,~~June 30, 2021, the operating profit margin for petroleum additives was ~~15.6%~~16.2%. ~~The economic disruption from COVID-19 impacted the rolling four quarter operating profit margins and continues to have~~Increasing raw material costs during 2021

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are having a ~~more limited~~negative impact on our operating profit margins. While we have successfully raised selling prices to allow for the higher raw material costs, the favorable impact of increased selling prices on our operating results ~~during 2021.~~lags the impact of higher raw material costs. Operating profit margins remain a priority, and while they will fluctuate from quarter to quarter due to multiple factors, we believe the fundamentals of our business and industry as a whole are unchanged.

Petroleum additives gross profit ~~decreased $18.2~~increased $44.2 million when comparing the two second quarter periods and $26.0 million when comparing the first ~~three~~six months of 2021 and 2020. Cost of goods sold as a percentage of net sales was ~~71.3%~~76.1% for the second quarter of 2021, down slightly from 76.5% for the second quarter of 2020 and 73.8% for the first ~~three~~six months of 2021, increasing from ~~67.7%~~71.4% for the first ~~three~~six months of 2020.

When comparing both the second quarters and first ~~three~~six months of 2021 and 2020, the ~~decrease~~increase in gross profit resulted from ~~unfavorable impacts from lower selling prices (as discussed in the Net Sales section above) and higher raw material costs,~~improved product shipments, as well as a favorable impact from conversions costs. Selling prices were higher for the second quarter comparison, but remained unfavorable ~~conversion costs, including an unfavorable foreign currency translation~~for the six month comparison reflecting some price increases beginning to impact ~~which together~~our results during the second quarter of 2021. These factors combined contributed over 100% of the ~~change~~improvement in gross profit for both comparative periods. Raw material costs were significantly unfavorable for both the ~~three~~second quarter and six months ~~comparative period. These unfavorable factors for the three months comparison were partially offset by improved product shipments (also as discussed in the Net Sales section above).~~comparison.

Petroleum additives selling, general, and administrative expenses (SG&A) ~~increased $0.6~~for the second quarter of 2021 were $1.2 million higher as compared to the second quarter of 2020, and $1.8 million higher when comparing the first ~~three~~six months of 2021 to the same 2020 period. SG&A as a percentage of net sales was ~~5.6%~~5.2% for the second quarter of 2021, 7.2% for the second quarter of 2020, 5.4% for the first ~~three~~six months of 2021 and ~~5.5%~~6.2% for the first ~~three~~six months of 2020. Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce, including travel expenses. While personnel-related costs fluctuate from period to 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) increased ~~$0.8~~$2.0 million when comparing the second quarter of 2021 with the second quarter of 2020 and $2.8 million when comparing the first ~~three~~six months periods of 2021 and 2020. As a percentage of net sales, R&D was ~~6.4%~~6.1% for ~~both~~the second quarter of 2021, 8.2% for the second quarter of 2020, 6.2% for the first ~~three~~six months of 2021, and 7.2% for the first ~~three~~six months of 2020. Our R&D investments reflect our efforts to support the development of solutions that meet our customers' needs, meet new and evolving standards, and support our expansion into new product areas. Our approach to R&D ~~investment,~~investments, 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 costs for 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 ~~$6.3~~$8.9 million for the second quarter of 2021, $7.0 million for the second quarter of 2020, $15.2 million for the first ~~three~~six months of 2021 and ~~$7.1~~$14.1 million for the first ~~three~~six months of 2020. The ~~decrease~~increase for both the ~~three~~second quarter and the six months comparison resulted primarily from ~~lower amortization and fees, as well as~~ higher outstanding debt during the 2021 periods, along with higher average interest rate in both 2021 periods. Higher capitalized interest during the 2021 ~~period.~~period partially offset the average rate and debt impact.

Other Income (Expense), Net

Other income (expense), net was income of ~~$7.2~~$5.2 million for the second quarter of 2021, $6.5 million for the second quarter of 2020, $12.4 million for the first ~~three~~six months of 2021 and ~~$7.5~~$14.0 million for the first ~~three~~six months of 2020. The amounts for both of the 2021 and 2020 periods primarily reflect the components of net periodic benefit cost (income), except for service cost, from 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 ~~$19.7~~$15.1 million for the second quarter of 2021 and $4.9 million for the second quarter of 2020. The effective income tax rate was 22.5% for the second quarter of 2021 and 18.0% for the second quarter of 2020. Income tax expense increased $7.2 million due to higher income before income tax expense and $3.0 million resulting from the higher effective income tax rate.

Income tax expense was $34.8 million for the first ~~three~~six months of 2021 and ~~$24.5~~$29.5 million for the first ~~three~~six months of 2020. The effective tax rate was ~~22.0%~~22.2% for the first ~~three~~six months of 2021 and ~~22.3%~~21.4% for the first ~~three~~six months of 2020. Income tax expense ~~decreased $4.6~~increased $4.1 million due to ~~the lower~~higher income before income tax expense. The ~~lower~~higher effective income tax rate resulted in a ~~$0.2~~$1.2 million ~~decrease~~increase in income tax.

~~There were no significant drivers~~

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The increase in the ~~effective~~ tax ~~rates between the first three months of 2021 and 2020.~~rate for both periods is primarily driven by income from our foreign operations.

Cash Flows, Financial Condition, and Liquidity

Cash and cash equivalents at ~~March 31,~~June 30, 2021 were ~~$522.4~~$153.9 million, which was an increase of ~~$397.2~~$28.7 million since December 31, 2020.

Cash and cash equivalents held by our foreign subsidiaries amounted to ~~$116.3~~$117.4 million at ~~March 31,~~June 30, 2021 and $97.3 million at December 31, 2020. Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends and loans. We do not anticipate significant tax consequences from future distributions of foreign earnings.

A portion of our foreign cash balances 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.

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 ~~three~~six months of 2021 were ~~$49.4~~$104.1 million, including the use of ~~$41.4~~$59.5 million to fund higher working capital requirements. The ~~$41.4~~$59.5 million used for working capital excluded a ~~small unfavorable~~favorable foreign currency impact to the components of working capital on the balance sheet.

The most significant changes in working capital included increases in accounts receivable, inventory, and accounts payable. The increase in accounts receivable balances when comparing ~~March 31,~~June 30, 2021 with the end of 2020 was primarily the result of higher sales in certain regions, as well as slightly slower customer ~~payments due to the impacts of COVID-19.~~payments. The increase in inventory was primarily in response to higher forecasted demand in some regions, ~~and the~~as well as increased raw material costs. The increase in accounts payable reflected normal fluctuations across the regions due to timing, ~~and~~ increased purchases of raw materials to meet customer ~~demand.~~demand, and higher raw material costs.

Including cash and cash equivalents, as well as the impact of changes in foreign currency exchange rates on the balance sheet, we had total working capital of ~~$1.0~~$1.1 billion at ~~March 31,~~June 30, 2021 and $585.6 million at December 31, 2020. The current ratio was ~~4.03~~3.83 to 1 at ~~March 31,~~June 30, 2021 and 2.87 to 1 at December 31, 2020.

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Cash Flows – Investing Activities

Cash used in investing activities totaled ~~$20.5~~$422.2 million during the first ~~three~~six months of 2021 and represented the purchases (net of proceeds from sales and maturities) of marketable securities of $377.8 million and capital ~~expenditures.~~expenditures of $44.4 million. We currently expect that our total capital spending during 2021 will be in the $75 million to $85 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 revolving credit facility.

Cash Flows – Financing Activities

Cash provided from financing activities during the first ~~three~~six months of 2021 amounted to ~~$369.4~~$346.1 million. These cash flows included $395.1 million of proceeds from the issuance of our $400 million 2.70% senior notes. Cash flows from financing activities also included cash dividend payments of ~~$20.8~~$41.5 million.

Debt

Our long-term debt was ~~$990.2~~$990.6 million at ~~March 31,~~June 30, 2021 compared to $598.8 million at December 31, 2020.

On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031 at an issue price of 98.763%. We intend to use the net proceeds from the offering for the repayment or redemption of our 4.10% senior notes and for general corporate purposes. We incurred financing costs in 2021 of approximately $4 million related to the 2.70% senior notes, which are being amortized over the term of the notes.

See Note 89 for additional information on the 2.70% senior notes, 4.10% senior notes, 3.78% senior notes, and revolving credit facility, including the unused portion of our revolving credit facility.

All of our 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.

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The revolving credit facility contains financial covenants that require NewMarket to maintain a consolidated Leverage Ratio (as defined in the agreement) of no more than 3.75 to 1.00, except during an Increased Leverage Period (as defined in the agreement) at the end of each quarter. At ~~March 31,~~June 30, 2021, the Leverage Ratio was ~~2.51~~2.28 under the revolving credit facility.

At ~~March 31,~~June 30, 2021, we were in compliance with all covenants under the 4.10% senior notes, 3.78% senior notes, 2.70% senior notes, and revolving credit facility.

As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage increased from 44.1% at December 31, 2020 to ~~55.0%~~53.8% at ~~March 31,~~June 30, 2021. The change in the percentage resulted primarily from the issuance of the 2.70% senior notes, partially offset by the increase in shareholders' equity. The change in shareholders’ equity primarily reflects our earnings offset by dividend payments, and the impact of foreign currency translation adjustments along with the changes in the funded position of our defined benefit plans. 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 2020 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 2020 Annual Report.

There have been no significant changes in our critical accounting policies and estimates from those reported in our 2020 Annual Report.

Recent Accounting Pronouncements

There are no new significant recent accounting pronouncements which may materially impact our financial statements.

Outlook

Our stated goal is to provide a 10% compounded return per year for our shareholders over any five-year period (defined by earnings per share growth plus dividend yield), 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 over the long term.

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We expect our petroleum additives segment will continue to experience impacts to its operating performance due to the current economic environment. Our global business will see varying effects on demand that will differ by region based on our product portfolio and geographic coverage. The global market should stabilize when government restrictions on the movement of people, goods, and services are lifted, as modern transportation and machinery cannot function without our products. We expect that the petroleum additives market will grow in the 1% to 2% range annually for the foreseeable future. We plan to exceed that growth rate over the long-term.

Over the past several years we have made significant investments in our business as the 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 investments to improve our ability to deliver the solutions that our customers value, expand our global reach, and enhance our operating results. We will continue to invest in our capabilities to provide even better value, service, technology, and customer solutions.

Our business generates significant amounts of cash beyond its operational needs. We regularly review our many internal opportunities to utilize excess cash from technological, geographic, production capability, and product line 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. We will continue to evaluate all alternative uses of cash to enhance shareholder value, including stock repurchases and dividends.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

At ~~March 31,~~June 30, 2021, there were no material changes in our market risk from the information provided in the 2020 Annual Report except for a change in interest rate risk due to the issuance of the $400 million 2.70% senior ~~notes.~~notes and the market risk

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associated with our investment in marketable securities. See Note 9 for information on the 2.70% senior notes and Note 6 for information on the marketable securities.

A hypothetical 100 basis point decrease in interest rates, holding all other variables constant, would have resulted in a change of $59 million in the fair value of our debt at ~~March 31,~~June 30, 2021.

A hypothetical 10% decrease in the trading prices of our marketable securities would have resulted in a $38 million decrease in the fair market value of our marketable securities.

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. Under Rule 13a-15(b) 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) 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 were effective at the reasonable assurance level.

There has been no change in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act, that occurred during the quarter ended ~~March 31,~~June 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

2223

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

There have been no material changes to our legal proceedings as disclosed in "Legal Proceedings" in Item 3 of Part I of the 2020 Annual Report.

ITEM 6. Exhibits


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 4.1~~			Indenture, dated as of March 18, 2021, between NewMarket Corporation and Wells Fargo Bank, National Association, as trustee (incorporated by reference to exhibit 4.1 to Form 8-K (File No. 1- 32190) filed March 18, 2021)
~~Exhibit 4.2~~			First Supplemental Indenture, dated as of March 18, 2021, between NewMarket Corporation and Wells Fargo Bank, National Association, as trustee (incorporated by reference to exhibit 4.2 to Form 8-K (File No. 1- 32190) filed March 18, 2021)
~~Exhibit 4.3~~			~~Form of 2.70% Senior Notes due 2031 (form included as Exhibit A to the First Supplemental Indenture (incorporated by reference to exhibit 4.3 to Form 8-K (File No. 1- 32190) filed March 18, 2021)~~
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)

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Table of Contents

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: ~~April 22,~~July 29, 2021			By: /s/ Brian D. Paliotti
			Brian D. Paliotti
			Vice President and
			Chief Financial Officer
			(Principal Financial Officer)

Date: ~~April 22,~~July 29, 2021			By: /s/ William J. Skrobacz
			William J. Skrobacz
			Controller
			(Principal Accounting Officer)

2425


		Foreign
		Pension Benefits
	Three Months Ended March 31,
(in thousands)			2021		2020
Service cost			$	2,757	$	2,146
Interest cost			827		984
Expected return on plan assets			(2,666)		(2,461)
Amortization of prior service cost (credit)			38		(11)
Amortization of actuarial net (gain) loss			901		353
Net periodic benefit cost (income)			$	1,857	$	1,011


	March 31,		December 31,
(in thousands)	2021		2020
Finished goods and work-in-process	$	333,192	$	325,588
Raw materials	65,080		59,413
Stores, supplies, and other	16,465		16,030
	$	414,737	$	401,031