Plant Closure Provisions

9 Months Ended

Sep. 30, 2013

Restructuring And Related Activities [Abstract]

Plant Closure Provisions

NOTE 9 – PLANT CLOSURE PROVISIONS

The principal site giving rise to environmental remediation liabilities is the manufacturing site at Ellesmere Port in the United Kingdom. There are also environmental remediation liabilities on a much smaller scale in respect of our other manufacturing sites in the U.S. and Europe. The liability for estimated closure costs of Innospec’s manufacturing facilities includes costs for decontamination and environmental remediation activities (“remediation”).

Movements in the provisions for the nine months ended September 30 are summarized as follows:

	2013									2012
(in millions)	Severance			Remediation			Total			Total
Total at January 1	$	1.1		$	29.3		$	30.4		$	28.6
Charge for the period		0.0			2.0			2.0			2.1
Utilized in the period		(0.1	)		(1.3	)		(1.4	)		(2.2	)
Exchange effect		0.0			0.1			0.1			0.0
Closing balance at September 30		1.0			30.1			31.1			28.5
Due within one year		0.0			(3.7	)		(3.7	)		(3.6	)
Due after one year	$	1.0		$	26.4		$	27.4		$	24.9

Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date. Severance charges are recognized in the income statement as restructuring costs along with other restructuring costs. Remediation costs are recognized in cost of goods sold.

Remediation

The remediation provision represents the Company’s liability for environmental liabilities and asset retirement obligations. The charge for the period above, of $2.0 million, represents the accretion expense recognized in the first nine months of 2013.

We recognize environmental liabilities when they are probable and costs can be reasonably estimated, and asset retirement obligations when there is a legal obligation and costs can be reasonably estimated. The Company has to anticipate the program of work required and the associated future expected costs, and comply with environmental legislation in the countries in which it operates or has operated in. The Company views the costs of vacating our Ellesmere Port site as contingent upon if and when it vacates the site because there is no present intention to do so. The Company has further determined that, due to the uncertain product life of TEL particularly in the market for aviation gasoline and other products being manufactured on the site, there are uncertainties as to the probability and timing of the expected costs. Such uncertainties have been considered in estimating the provision.