10-Q

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 September 30, 2019

OR

☐ 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, without par value	NEU	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically 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	x	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. ¨

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

Yes  ☐ No  x

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

NEWMARKET CORPORATION

INDEX

	Page Number
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Consolidated Statements of Income - Third Quarter and Nine Months Ended September 30, 2019 and September 30, 2018	4
Consolidated Statements of Comprehensive Income - Third Quarter and Nine Months Ended September 30, 2019 and September 30, 2018	5
Condensed Consolidated Balance Sheets - September 30, 2019 and December 31, 2018	6
Consolidated Statements of Shareholders' Equity - Third Quarter and Nine Months Ended September 30, 2019 and September 30, 2018	7
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2019 and September 30, 2018	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
Inventories	12
Intangibles (Net of Amortization) and Goodwill	13
Leases	13
Long-term Debt	16
Commitments and Contingencies	17
Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss	18
Fair Value Measurements	18
Recent Accounting Pronouncements	18
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	25
ITEM 4. Controls and Procedures	25
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	26
ITEM 6. Exhibits	26
SIGNATURES	27

3

PART I.        FINANCIAL INFORMATION

ITEM 1.     Financial Statements

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per-share amounts)	Third Quarter Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net sales	$	555,817	$	563,166	$	1,655,850	$	1,751,363
Cost of goods sold	393,090		422,283		1,169,421		1,307,838
Gross profit	162,727		140,883		486,429		443,525
Selling, general, and administrative expenses	38,122		37,741		109,916		120,653
Research, development, and testing expenses	36,387		34,994		106,748		106,018
Operating profit	88,218		68,148		269,765		216,854
Interest and financing expenses, net	6,987		7,807		22,740		18,536
Other income (expense), net	6,227		7,973		17,932		20,872
Income before income tax expense	87,458		68,314		264,957		219,190
Income tax expense	19,653		9,833		60,773		47,259
Net income	$	67,805	$	58,481	$	204,184	$	171,931
Earnings per share - basic and diluted	$	6.06	$	5.12	$	18.26	$	14.78
Cash dividends declared per share	$	1.90	$	1.75	$	5.40	$	5.25

See accompanying Notes to Condensed Consolidated Financial Statements

4

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)	Third Quarter Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	67,805		$	58,481		$	204,184		$	171,931
Other comprehensive income (loss):
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 $(185) in third quarter 2019, $(180) in third quarter 2018, $(556) in nine months 2019 and $(541) in nine months 2018	(600		)	(591		)	(1,802		)	(1,773		)
Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $771 in third quarter and nine months 2019 and $(51) in third quarter and nine months 2018	2,501			(163		)	2,501			(163		)
Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $169 in third quarter 2019, $318 in third quarter 2018, $674 in nine months 2019 and $1,037 in nine months 2018	570			1,003			2,245			3,270
Total pension plans and other postretirement benefits	2,471			249			2,944			1,334
Foreign currency translation adjustments, net of income tax expense (benefit) of $(324) in third quarter 2019, $(109) in third quarter 2018, $(317) in nine months 2019 and $(653) in nine months 2018	(9,819		)	(3,760		)	(9,239		)	(3,793		)
Other comprehensive income (loss)	(7,348		)	(3,511		)	(6,295		)	(2,459		)
Comprehensive income	$	60,457		$	54,970		$	197,889		$	169,472

See accompanying Notes to Condensed Consolidated Financial Statements

5

NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share amounts)	September 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	79,971		$	73,040
Trade and other accounts receivable, less allowance for doubtful accounts	340,752			314,860
Inventories	370,934			396,341
Prepaid expenses and other current assets	35,276			29,179
Total current assets	826,933			813,420
Property, plant, and equipment, net	623,961			644,138
Intangibles (net of amortization) and goodwill	132,822			136,039
Prepaid pension cost	100,758			88,705
Operating lease right-of-use assets	58,377			0
Deferred income taxes	4,973			5,094
Deferred charges and other assets	23,171			9,878
Total assets	$	1,770,995		$	1,697,274
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	154,650		$	151,631
Accrued expenses	75,928			91,202
Dividends payable	19,441			17,923
Income taxes payable	12,348			6,431
Operating lease liabilities	13,811			0
Other current liabilities	4,300			4,114
Total current liabilities	280,478			271,301
Long-term debt	639,983			770,999
Operating lease liabilities-noncurrent	44,398			0
Other noncurrent liabilities	176,798			165,067
Total liabilities	1,141,657			1,207,367
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common stock and paid-in capital (without par value; authorized shares - 80,000,000; issued and outstanding shares - 11,189,222 at September 30, 2019 and 11,184,482 at December 31, 2018)	1,914			0
Accumulated other comprehensive loss	(187,611		)	(181,316		)
Retained earnings	815,035			671,223
Total shareholders' equity	629,338			489,907
Total liabilities and shareholders’ equity	$	1,770,995		$	1,697,274

See accompanying Notes to Condensed Consolidated Financial Statements

6

NEWMARKET CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share and per-share amounts)	Common Stock and Paid-in Capital					Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
	Shares		Amount
Balance at June 30, 2018	11,465,814		$	0		$	(144,942	)	$	697,423		$	552,481
Net income									58,481			58,481
Other comprehensive income (loss)						(3,511		)				(3,511		)
Cash dividends ($1.75 per share)									(19,957		)	(19,957		)
Repurchases of common stock	(62,428	)	(1,141		)				(23,429		)	(24,570		)
Stock-based compensation	645		1,141						7			1,148
Balance at September 30, 2018	11,404,031		$	0		$	(148,453	)	$	712,525		$	564,072
Balance at June 30, 2019	11,188,126		$	949		$	(180,263	)	$	768,490		$	589,176
Net income									67,805			67,805
Other comprehensive income (loss)						(7,348		)				(7,348		)
Cash dividends ($1.90 per share)									(21,260		)	(21,260		)
Stock-based compensation	1,096		965									965
Balance at September 30, 2019	11,189,222		$	1,914		$	(187,611	)	$	815,035		$	629,338
Balance at December 31, 2017	11,779,978		$	0		$	(145,994	)	$	747,643		$	601,649
Net income									171,931			171,931
Other comprehensive income (loss)						(2,459		)				(2,459		)
Cash dividends ($5.25 per share)									(60,778		)	(60,778		)
Repurchases of common stock	(385,181	)	(2,366		)				(146,283		)	(148,649		)
Stock-based compensation	9,234		2,366						12			2,378
Balance at September 30, 2018	11,404,031		$	0		$	(148,453	)	$	712,525		$	564,072
Balance at December 31, 2018	11,184,482		$	0		$	(181,316	)	$	671,223		$	489,907
Net income									204,184			204,184
Other comprehensive income (loss)						(6,295		)				(6,295		)
Cash dividends ($5.40 per share)									(60,418		)	(60,418		)
Stock-based compensation	4,740		1,914						46			1,960
Balance at September 30, 2019	11,189,222		$	1,914		$	(187,611	)	$	815,035		$	629,338

See accompanying Notes to Condensed Consolidated Financial Statements

7

NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)	Nine Months Ended September 30,
	2019			2018
Cash and cash equivalents at beginning of year	$	73,040		$	84,166
Cash flows from operating activities:
Net income	204,184			171,931
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	65,500			53,463
Deferred income tax expense	3,982			10,257
Working capital changes	(35,997		)	(69,190		)
Cash pension and postretirement contributions	(7,308		)	(61,860		)
Other, net	2,886			(3,456		)
Cash provided from (used in) operating activities	233,247			101,145
Cash flows from investing activities:
Capital expenditures	(37,132		)	(55,136		)
Other, net	0			14,573
Cash provided from (used in) investing activities	(37,132		)	(40,563		)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facility	(126,262		)	215,619
Dividends paid	(60,418		)	(60,778		)
Repurchases of common stock	0			(148,649		)
Other, net	(1,899		)	(242		)
Cash provided from (used in) financing activities	(188,579		)	5,950
Effect of foreign exchange on cash and cash equivalents	(605		)	(2,763		)
Increase in cash and cash equivalents	6,931			63,769
Cash and cash equivalents at end of period	$	79,971		$	147,935

See accompanying Notes to Condensed Consolidated Financial Statements

8

NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    Financial Statement Presentation

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

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

We adopted Accounting Standard Update No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02) on January 1, 2019. ASU 2018-02 allows, but does not require, reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that resulted from the enactment of U.S. tax legislation commonly known as the Tax Cuts and Jobs Acts (Tax Reform Act) at the end of 2017. We elected not to reclassify those tax effects from accumulated other comprehensive income upon adoption of ASU 2018-02. We typically remove the tax impact from accumulated other comprehensive income when the underlying circumstance which gave rise to the tax impact no longer exists.

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 United States, Europe, Asia Pacific (including China), Latin America, Canada, India, and the Middle East. Our customers primarily consist of global, national, and independent oil companies. Our contracts generally include one performance obligation, which is providing petroleum additives products. The performance obligation is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts.

In limited cases, we collect funds in advance of shipping product to our customers and recognizing the related revenue. These prepayments from customers are recorded as a contract liability to our customer until we recognize the revenue. Some of our contracts include variable consideration in the form of rebates or business development funds. We regularly review both rebates and business development funds and make adjustments when necessary, recognizing the full amount of 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.

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

9

NEWMARKET CORPORATION AND SUBSIDIARIES

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

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

Segment Operating Profit

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

10

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 nine months ended September 30, 2019, as well as the remaining cash contributions we expect to make during the year ending December 31, 2019, for our domestic and foreign pension plans and domestic postretirement benefit plan.

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

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

	Domestic
	Pension Benefits						Postretirement Benefits
	Third Quarter Ended September 30,
(in thousands)	2019			2018			2019			2018
Service cost	$	2,809		$	3,599		$	150		$	239
Interest cost	3,478			3,257			358			355
Expected return on plan assets	(8,661		)	(7,523		)	(223		)	(228		)
Amortization of prior service cost (credit)	(19		)	7			(757		)	(757		)
Amortization of actuarial net (gain) loss	507			1,172			0			0
Net periodic benefit cost (income)	$	(1,886	)	$	512		$	(472	)	$	(391	)

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

11

NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

5.    Earnings Per Share

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

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

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

6. Inventories

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

12

NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7.    Intangibles (Net of Amortization) and Goodwill

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

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

All of the intangibles relate to the petroleum additives segment. The change in the gross carrying amount between December 31, 2018 and September 30, 2019 is due to foreign currency fluctuation. There is no accumulated goodwill impairment.

Amortization expense was (in thousands):

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

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

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

We amortize the contract over 10 years; customer bases over 4 to 20 years; and formulas and technology over 3 to 6 years.

8.    Leases

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

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

13

NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

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

The components of lease expense were as follows:

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

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

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Balance Sheet Classification	September 30, 2019
Operating leases:
Operating lease right-of-use assets	Operating lease right-of-use assets	$	58,377
Current liability	Operating lease liabilities	$	13,811
Noncurrent liability	Operating lease liabilities-noncurrent	44,398
Total operating lease liabilities		$	58,209
Finance leases:
Finance lease right-of-use assets	Deferred charges and other assets	$	12,401
Current liability	Other current liabilities	$	2,814
Noncurrent liability	Other noncurrent liabilities	10,667
Total finance lease liabilities		$	13,481

	September 30, 2019
Weighted average remaining lease term (in years):
Operating leases	14
Finance leases	9
Weighted average incremental borrowing rate:
Operating leases	3.97	%
Finance leases	3.47	%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(in thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,374
Operating cash flows from finance leases	300
Financing cash flows from finance leases	1,899
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	12,820
Finance leases	9,345

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

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

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

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

9.    Long-term Debt

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

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 (Securities Act). 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 both issuances of the senior notes as of September 30, 2019 and December 31, 2018.

The revolving credit facility (the Credit Agreement) has a borrowing capacity of $850 million, a term of five years, and matures on September 22, 2022. The obligations under the Credit Agreement are unsecured and are fully and unconditionally guaranteed by NewMarket. The average interest rate for borrowings under the Credit Agreement was 3.2% during the first nine months of 2019 and 3.0% during the full year of 2018. We were in compliance with all covenants under the Credit Agreement as of September 30, 2019 and December 31, 2018.

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The outstanding borrowings under the Credit Agreement amounted to $42 million at September 30, 2019 and $168 million at December 31, 2018. Outstanding letters of credit approximate to $3 million at both September 30, 2019 and December 31, 2018 resulting in the unused portion of the credit facility amounting to $805 million at September 30, 2019 and $679 million at December 31, 2018.

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

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 $11 million at September 30, 2019 and $12 million at December 31, 2018. Of the total accrual, the current portion is included in accrued expenses and the noncurrent portion is included in other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

Our more significant environmental sites include a former plant site in Louisiana (the Louisiana site) and a Houston, Texas plant site (the Texas site). Together, the amounts accrued on a discounted basis related to these sites represented approximately $8 million of the total accrual above at both September 30, 2019 and December 31, 2018, using discount rates ranging from 3% to 9% for both periods. The aggregate undiscounted amount for these sites was $10 million at September 30, 2019 and $11 million at December 31, 2018. Of the total accrued for these two sites, the amount related to remediation of groundwater and soil for the Louisiana site was $4 million at both September 30, 2019 and December 31, 2018. The amount related to remediation of groundwater and soil for the Texas site was $4 million at both September 30, 2019 and December 31, 2018.

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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

(in thousands)	Pension Plans and Other Postretirement Benefits			Foreign Currency Translation Adjustments			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2017	$	(63,520	)	$	(82,474	)	$	(145,994	)
Other comprehensive income (loss) before reclassifications	(163		)	(3,793		)	(3,956		)
Amounts reclassified from accumulated other comprehensive loss (a)	1,497			0			1,497
Other comprehensive income (loss)	1,334			(3,793		)	(2,459		)
Balance at September 30, 2018	$	(62,186	)	$	(86,267	)	$	(148,453	)
Balance at December 31, 2018	$	(86,555	)	$	(94,761	)	$	(181,316	)
Other comprehensive income (loss) before reclassifications	2,501			(9,239		)	(6,738		)
Amounts reclassified from accumulated other comprehensive loss (a)	443			0			443
Other comprehensive income (loss)	2,944			(9,239		)	(6,295		)
Balance at September 30, 2019	$	(83,611	)	$	(104,000	)	$	(187,611	)

(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 18 in our 2018 Annual Report for further information.

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 $80 million at September 30, 2019 and $73 million at December 31, 2018. The fair value is categorized in Level 1 of the fair value hierarchy.

No material events occurred during the nine months ended September 30, 2019 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 the 4.10% 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 4.10% senior notes included in long-term debt in the table below is based on the last quoted price closest to September 30, 2019. The fair value of our debt instruments is categorized as Level 2.

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

13.    Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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

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

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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; the gain or loss of significant customers; current and future governmental regulations; failure to attract and retain a highly-qualified workforce; the occurrence or threat of extraordinary events, including natural disasters and terrorist attacks; risks related to operating outside of the United States; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; an information technology system failure or security breach; resolution of environmental liabilities or legal proceedings; political, economic, and regulatory factors concerning our products; 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 2018 Annual Report, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which 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 nine months of 2019 with the first nine months of 2018, net sales decreased 5.7% primarily due to lower product shipments and an unfavorable foreign currency impact, which was partially offset by increased selling prices. Petroleum additives operating profit was 23.4% higher when comparing the first nine months of 2019 with the first nine months of 2018, reflecting the improved selling prices and lower raw material costs, partially offset by the impact from the lower product shipments.

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

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Results of Operations

Net Sales

Consolidated net sales for the third quarter of 2019 totaled $555.8 million, representing a decrease of $7.3 million, or 1.3%, from the third quarter of 2018. Consolidated net sales for the first nine months of 2019 were $1.7 billion which was a decrease of $95.5 million, or 5.5%, from the first nine months of 2018. The following table shows net sales by segment and product line.

	Third Quarter Ended September 30,				Nine Months Ended September 30,
(in millions)	2019		2018		2019		2018
Petroleum additives
Lubricant additives	$	448.6	$	462.9	$	1,348.5	$	1,440.2
Fuel additives	102.0		97.6		295.6		303.4
Total	550.6		560.5		1,644.1		1,743.6
All other	5.2		2.7		11.8		7.8
Net sales	$	555.8	$	563.2	$	1,655.9	$	1,751.4

Petroleum Additives Segment

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

Petroleum additives net sales for the third quarter of 2019 were $550.6 million compared to $560.5 million for the third quarter of 2018, a decrease of 1.8%. Petroleum additives net sales for the first nine months of 2019 were $1.6 billion compared to $1.7 billion for the first nine months of 2018, a decrease of 5.7%. The decrease in net sales for the third quarter comparison was predominantly in the Asia Pacific region with smaller decreases in the Latin America and the EMEAI regions. An increase in the North America region partially offset the decreases in the other regions. For the nine months comparison, the decrease was across all regions, with most of the decrease in the EMEAI region, followed by the Latin America and Asia Pacific regions.

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

(in millions)	Third Quarter			Nine Months
Period ended September 30, 2018	$	560.5		$	1,743.6
Lubricant additives shipments	(13.3		)	(119.7		)
Fuel additives shipments	(2.6		)	(21.6		)
Selling prices	10.2			65.3
Foreign currency impact, net	(4.2		)	(23.5		)
Period ended September 30, 2019	$	550.6		$	1,644.1

When comparing both the third quarter and the nine months periods of 2019 and 2018, petroleum additives shipments accounted for a $15.9 million decrease in net sales for the third quarter comparison and a $141.3 million decrease in net sales for the nine months comparison. Improved selling prices, including an unfavorable foreign currency impact, resulted in an increase in net sales of $6.0 million for the third quarter comparison and $41.8 million for the nine months comparison, partially offsetting the unfavorable impact from product shipments. The United States Dollar strengthened against most of the major currencies in which we transact, resulting in an unfavorable impact to net sales for both the third quarter and nine months comparative periods. The unfavorable impact was predominantly from the Euro and the Chinese Renminbi.

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

20

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

All Other

The “All other” category includes the operations of the 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 third quarter and nine months ended September 30, 2019 and September 30, 2018.

	Third Quarter Ended September 30,						Nine Months Ended September 30,
(in millions)	2019			2018			2019		2018
Petroleum additives	$	94.8		$	75.8		$	285.6	$	231.5
All other	$	(0.1	)	$	(2.3	)	$	0.1	$	(2.0	)

Petroleum Additives Segment

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

The operating profit margin was 17.2% for the third quarter of 2019 as compared to 13.5% for the third quarter of 2018 and was 17.4% for the first nine months of 2019 as compared to 13.3% for the first nine months of 2018. For the rolling four quarters ended September 30, 2019, the operating profit margin for petroleum additives was 16.7%. While we saw improvement in the operating profit margin for the first nine months of 2019, we had experienced downward pressure on our margins during the past two years caused mainly by increases in raw material prices. We have made progress in adjusting our selling prices to allow for those increases in raw material costs, resulting in a favorable impact from selling prices. We will continue to monitor our margins closely. Operating profit margins will fluctuate from quarter to quarter due to multiple factors, but we believe the fundamentals of our business and industry as a whole are unchanged.

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

When comparing both the third quarters and first nine months of 2019 and 2018, the increase in gross profit resulted from an improvement in selling prices (excluding the unfavorable impact from foreign currency on net sales) and raw material costs, as well as a favorable impact from conversion costs (including a favorable foreign currency translation impact), which together contributed over 100% of the change in both comparative periods. These favorable factors were partially offset by an unfavorable impact from product shipments, as discussed in the Net Sales section above.

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

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Our investment in petroleum additives research, development, and testing (R&D) increased slightly when comparing both the third quarter and nine months periods of 2019 and 2018. As a percentage of net sales, R&D was 6.6% for the third quarter of 2019, 6.3% for the third quarter of 2018, 6.5% for the first nine months of 2019, and 6.1% for the first nine months of 2018. 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, as it is with SG&A, is one of purposeful spending on programs to support our current product base and to ensure that we develop products to support our customers' programs in the future. R&D investments include personnel-related costs, as well as internal and external testing of our products.

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

Interest and Financing Expenses

Interest and financing expenses were $7.0 million for the third quarter of 2019, $7.8 million for the third quarter of 2018, $22.7 million for the first nine months of 2019 and $18.5 million for the first nine months of 2018. The decrease in the third quarter comparison resulted primarily from lower average debt outstanding. For the first nine months comparative periods, higher average debt, along with lower capitalized interest, resulted in increased interest expense.

Other Income (Expense), Net

Other income (expense), net was income of $6.2 million for the third quarter of 2019, $8.0 million for the third quarter of 2018, $17.9 million for the first nine months of 2019 and $20.9 million for the first nine months of 2018. The amounts for both of the 2019 and 2018 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 million for the third quarter of 2019 and $9.8 million for the third quarter of 2018. The effective tax rate was 22.5% for the third quarter of 2019 and 14.4% for the third quarter of 2018. Income tax expense increased $7.1 million due to the higher effective tax rate. Higher income before income tax expense resulted in an increase of $2.8 million in income tax expense.

Income tax expense was $60.8 million for the first nine months of 2019 and $47.3 million for the first nine months of 2018. The effective tax rate was 22.9% for the first nine months of 2019 and 21.6% for the first nine months of 2018. Income tax expense increased $9.9 million due to higher income before income tax expense. The higher effective tax rate resulted in a $3.6 million increase in income tax.

The change in the effective tax rates for both the third quarter and first nine months comparison periods is primarily due to certain provisions of the Tax Reform Act.

Cash Flows, Financial Condition, and Liquidity

Cash and cash equivalents at September 30, 2019 were $80.0 million, which was an increase of $6.9 million since December 31, 2018.

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

A 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 nine months of 2019 were $233.2 million, which included the use of $36.0 million to fund higher working capital requirements. The $36.0 million excluded an unfavorable 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 and operating lease liabilities, as well as decreases in inventory and accrued expenses. The higher accounts receivable balance was primarily due to higher sales levels

22

in the EMEAI and North America regions comparing September 2019 with the end of 2018. The increase in operating lease liabilities reflects the adoption of ASC 842, "Leases". See Note 8 for additional information on our leases. The decrease in inventory primarily reflected plant downtime, while the decrease in accrued expenses reflected normal payments for customer costs and decreases in accruals for capital project-related costs due to completion of capital projects.

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

Cash Flows – Investing Activities

Cash used in investing activities totaled $37.1 million during the first nine months of 2019 for capital expenditures. We currently expect that our total capital spending during 2019 will be in the $60 million to $70 million range and will include several improvements to our manufacturing and R&D infrastructure around the world. We expect to continue to finance capital spending through cash on hand and cash provided from operations, together with borrowing available under our $850 million revolving credit facility.

Cash Flows – Financing Activities

Cash used in financing activities during the first nine months of 2019 amounted to $188.6 million. We paid dividends of $60.4 million and repaid $126.3 million on our revolving credit facility.

Our long-term debt was $640.0 million at September 30, 2019 compared to $771.0 million at December 31, 2018. See Note 9 for additional information on the 4.10% senior notes, 3.78% senior notes, and revolving credit facility, including the unused portion of our revolving credit facility.

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

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

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

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

At September 30, 2019, the Leverage Ratio was 1.5 and the Interest Coverage Ratio was 11.87 under the revolving credit facility. We were in compliance with all covenants under the 4.10% senior notes, the 3.78% senior notes, and the revolving credit facility at September 30, 2019 and December 31, 2018.

As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage decreased from 61.1% at December 31, 2018 to 50.4% at September 30, 2019. The change in the percentage was primarily the result of the increase in shareholders' equity, along with the decrease in long-term debt. The change in shareholders’ equity reflects our earnings and the impact of foreign currency translation adjustments, offset by dividend payments. 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 2018 Annual Report include discussions of our accounting policies, as well as methods and estimates used in the preparation of our financial statements. We also provided a discussion of Critical Accounting Policies and Estimates in our 2018 Annual Report.

There have been no significant changes in our critical accounting policies and estimates from those reported in our 2018 Annual Report.

Recent Accounting Pronouncements

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

23

Other Matters

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

Outlook

Our 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 dividends), although we may not necessarily achieve a 10% return each year. We continue to have confidence in our customer-focused strategy and approach to the market. We believe the fundamentals of how we run our business - a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability - will continue to be beneficial for all of our stakeholders over the long term.

We expect our petroleum additives segment to deliver another year of solid performance in 2019. We expect that the petroleum additives market will grow in the 1% to 2% range annually for the foreseeable future, and we plan to exceed that growth rate over the long-term.

In 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 what is necessary for the expansion and growth of our current offerings. 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.

24

ITEM 3.     Quantitative and Qualitative Disclosures About Market Risk

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

ITEM 4.     Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain a system of internal control over financial reporting to provide reasonable, but not absolute, assurance of the reliability of the financial records and the protection of assets. 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 September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

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 1 of the 2018 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 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)

26

SIGNATURES

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

	NEWMARKET CORPORATION
	(Registrant)
Date: October 24, 2019	By: /s/ Brian D. Paliotti
	Brian D. Paliotti
	Vice President and
	Chief Financial Officer
	(Principal Financial Officer)
Date: October 24, 2019	By: /s/ William J. Skrobacz
	William J. Skrobacz
	Controller
	(Principal Accounting Officer)

27

EX-31.A

Exhibit 31(a)

CERTIFICATION

I, Thomas E. Gottwald, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 of NewMarket Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 24, 2019
	By:	/s/ Thomas E. Gottwald
	Thomas E. Gottwald
	Chairman of the Board, President, and Chief Executive Officer

EX-31.B

Exhibit 31(b)

CERTIFICATION

I, Brian D. Paliotti, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 of NewMarket Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 24, 2019
	By:	/s/ Brian D. Paliotti
	Brian D. Paliotti
	Vice President and Chief Financial Officer

EX-32.A

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

In connection with the Quarterly Report on Form 10-Q of NewMarket Corporation (the “Company”) for the period ending September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas E. Gottwald, chief executive officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Thomas E. Gottwald
Thomas E. Gottwald
Chairman of the Board, President, and Chief Executive Officer
October 24, 2019

EX-32.B

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

In connection with the Quarterly Report on Form 10-Q of NewMarket Corporation (the “Company”) for the period ending September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian D. Paliotti, chief financial officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Brian D. Paliotti
Brian D. Paliotti
Vice President and Chief Financial Officer
October 24, 2019

XML

Commitments and Contingencies (Environmental) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Site Contingency [Line Items]
Accruals for environmental remediation, dismantling, and decontamination	$ 11	$ 12
Former TEL Plant Site Louisiana And Houston Texas Plant Site [Member]
Site Contingency [Line Items]
Accruals for environmental remediation, dismantling, and decontamination	8	8
Accruals for environmental remediation, dismantling, and decontamination, undiscounted	10	11
Former TEL Plant Site, Louisiana [Member]
Site Contingency [Line Items]
Accrual for remediation of groundwater and soil	4	4
Houston, Texas Plant Site [Member]
Site Contingency [Line Items]
Accrual for remediation of groundwater and soil	$ 4	$ 4
Minimum [Member] | Former TEL Plant Site Louisiana And Houston Texas Plant Site [Member]
Site Contingency [Line Items]
Discount rate	3.00%	3.00%
Maximum [Member] | Former TEL Plant Site Louisiana And Houston Texas Plant Site [Member]
Site Contingency [Line Items]
Discount rate	9.00%	9.00%

XML

Financial Statement Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Statement Presentation

Financial Statement Presentation

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

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

We adopted Accounting Standard Update No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02) on January 1, 2019. ASU 2018-02 allows, but does not require, reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that resulted from the enactment of U.S. tax legislation commonly known as the Tax Cuts and Jobs Acts (Tax Reform Act) at the end of 2017. We elected not to reclassify those tax effects from accumulated other comprehensive income upon adoption of ASU 2018-02. We typically remove the tax impact from accumulated other comprehensive income when the underlying circumstance which gave rise to the tax impact no longer exists.

XML

Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

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

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

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

XML

Long-term Debt

9 Months Ended

Sep. 30, 2019

Long-term Debt and Lease Obligation [Abstract]

Long-term Debt

Long-term Debt

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

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 (Securities Act). 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 both issuances of the senior notes as of September 30, 2019 and December 31, 2018.

The revolving credit facility (the Credit Agreement) has a borrowing capacity of $850 million, a term of five years, and matures on September 22, 2022. The obligations under the Credit Agreement are unsecured and are fully and unconditionally guaranteed by NewMarket. The average interest rate for borrowings under the Credit Agreement was 3.2% during the first nine months of 2019 and 3.0% during the full year of 2018. We were in compliance with all covenants under the Credit Agreement as of September 30, 2019 and December 31, 2018.

The outstanding borrowings under the Credit Agreement amounted to $42 million at September 30, 2019 and $168 million at December 31, 2018. Outstanding letters of credit approximate to $3 million at both September 30, 2019 and December 31, 2018 resulting in the unused portion of the credit facility amounting to $805 million at September 30, 2019 and $679 million at December 31, 2018.

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

XML

Pension Plans and Other Postretirement Benefits (Cash Contributions Made And Expected Remaining Contributions For Pension And Postretirement Benefit Plans) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Pension Plan [Member] | Domestic Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Actual Cash Contributions	$ 2,227
Expected Remaining Cash Contributions	742
Pension Plan [Member] | Foreign Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Actual Cash Contributions	4,147
Expected Remaining Cash Contributions	1,505
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Actual Cash Contributions	934
Expected Remaining Cash Contributions	$ 311

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Value Of Long-Term Debt

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

XML

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Statement of Cash Flows [Abstract]
Cash and cash equivalents at beginning of year	$ 73,040	$ 84,166
Cash flows from operating activities:
Net income	204,184	171,931
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	65,500	53,463
Deferred income tax expense	3,982	10,257
Working capital changes	(35,997)	(69,190)
Cash pension and postretirement contributions	(7,308)	(61,860)
Other, net	2,886	(3,456)
Net Cash Provided by (Used in) Operating Activities	233,247	101,145
Cash flows from investing activities:
Capital expenditures	(37,132)	(55,136)
Other, net	0	14,573
Net Cash Provided by (Used in) Investing Activities	(37,132)	(40,563)
Cash flows from financing activities:
Net (repayments) borrowings under revolving credit facility	(126,262)	215,619
Dividends paid	(60,418)	(60,778)
Repurchases of common stock	0	(148,649)
Other, net	(1,899)	(242)
Net Cash Provided by (Used in) Financing Activities	(188,579)	5,950
Effect of foreign exchange on cash and cash equivalents	(605)	(2,763)
Increase in cash and cash equivalents	6,931	63,769
Cash and cash equivalents at end of period	$ 79,971	$ 147,935

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2019 shares
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	1-32190
Entity Registrant Name	NEWMARKET CORPORATION
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	20-0812170
Entity Address, Address Line One	330 South Fourth Street
Entity Address, City or Town	Richmond,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23219-4350
City Area Code	804
Local Phone Number	788-5000
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	NEU
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Small Business Company	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	11,189,222
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001282637
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 79,971	$ 73,040
Trade and other accounts receivable, less allowance for doubtful accounts	340,752	314,860
Inventories	370,934	396,341
Prepaid expenses and other current assets	35,276	29,179
Total current assets	826,933	813,420
Property, plant, and equipment, net	623,961	644,138
Intangibles (net of amortization) and goodwill	132,822	136,039
Prepaid pension cost	100,758	88,705
Operating lease right-of-use assets	58,377	0
Deferred income taxes	4,973	5,094
Deferred charges and other assets	23,171	9,878
Total assets	1,770,995	1,697,274
Current liabilities:
Accounts payable	154,650	151,631
Accrued expenses	75,928	91,202
Dividends payable	19,441	17,923
Income taxes payable	12,348	6,431
Operating lease liabilities	13,811	0
Other current liabilities	4,300	4,114
Total current liabilities	280,478	271,301
Long-term debt	639,983	770,999
Operating lease liabilities-noncurrent	44,398	0
Other noncurrent liabilities	176,798	165,067
Total liabilities	1,141,657	1,207,367
Commitments and contingencies
Shareholders’ equity:
Common stock and paid-in capital (without par value; authorized shares - 80,000,000; issued and outstanding shares - 11,189,222 at September 30, 2019 and 11,184,482 at December 31, 2018)	1,914	0
Accumulated other comprehensive loss	(187,611)	(181,316)
Retained earnings	815,035	671,223
Total shareholders' equity	629,338	489,907
Total liabilities and shareholders’ equity	$ 1,770,995	$ 1,697,274

XML

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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

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

XML

Pension Plans and Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Cash Contributions Made And Expected Remaining Contributions For Pension And Postretirement Benefit Plans

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

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

Net Periodic Benefit Cost (Income) For Pension And Postretirement Benefit Plans

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

	Domestic
	Pension Benefits						Postretirement Benefits
	Third Quarter Ended September 30,
(in thousands)	2019			2018			2019			2018
Service cost	$	2,809		$	3,599		$	150		$	239
Interest cost	3,478			3,257			358			355
Expected return on plan assets	(8,661		)	(7,523		)	(223		)	(228		)
Amortization of prior service cost (credit)	(19		)	7			(757		)	(757		)
Amortization of actuarial net (gain) loss	507			1,172			0			0
Net periodic benefit cost (income)	$	(1,886	)	$	512		$	(472	)	$	(391	)

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

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

XML

Leases Supplemental Cash Flow and Other Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 12,374
Operating cash flows from finance leases	300
Financing cash flows from finance leases	1,899
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	12,820
Finance leases	$ 9,345

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Intangibles (Net of Amortization) and Goodwill (Schedule Of Amortization Expense And Estimated Annual Amortization Expense Related To Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1,051	$ 1,470	$ 3,154	$ 5,944
2019	1,052		1,052
2020	2,907		2,907
2021	2,156		2,156
2022	1,423		1,423
2023	907		907
2024	$ 390		$ 390

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Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Amortization of prior service cost (credit) included in net periodic benefit cost (income), income tax expense (benefit)	$ (185)	$ (180)	$ (556)	$ (541)
Actuarial net gain (loss) arising during the period, income tax expense (benefit)	771	(51)	771	(51)
Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), income tax expense (benefit)	169	318	674	1,037
Foreign currency translation adjustments, income tax expense (benefit)	$ (324)	$ (109)	$ (317)	$ (653)

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Consolidated Statements Of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 1.90	$ 1.75	$ 5.40	$ 5.25

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements Policy

We adopted Accounting Standard Update No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02) on January 1, 2019. ASU 2018-02 allows, but does not require, reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that resulted from the enactment of U.S. tax legislation commonly known as the Tax Cuts and Jobs Acts (Tax Reform Act) at the end of 2017. We elected not to reclassify those tax effects from accumulated other comprehensive income upon adoption of ASU 2018-02. We typically remove the tax impact from accumulated other comprehensive income when the underlying circumstance which gave rise to the tax impact no longer exists.

Long-Term Debt

We record the carrying amount of our long-term debt at historical cost, less deferred financing costs related to the 4.10% senior notes.

Leases

Except for the railcar lease class, we made an accounting policy election to adopt the short-term lease exception, which allows us to not recognize on the balance sheet

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

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

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

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

The following table illustrates the earnings allocation method utilized in the calculation of basic and diluted earnings per share.

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

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Leases Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating leases:
Operating lease right-of-use assets	$ 58,377	$ 0
Current liability	13,811	0
Noncurrent liability	44,398	$ 0
Total operating lease liabilities	58,209
Finance leases:
Finance lease right-of-use assets	12,401
Current liability	2,814
Noncurrent liability	10,667
Total finance lease liabilities	$ 13,481
Weighted average remaining lease term (in years):
Operating leases	14 years
Finance leases	9 years
Weighted average incremental borrowing rate:
Operating leases	3.97%
Finance leases	3.47%

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Intangibles (Net of Amortization) and Goodwill (Schedule Of Information Related To Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, Accumulated Amortization	$ 15,895	$ 12,741
Goodwill, Gross Carrying Amount	122,877	122,940
Amortizing intangible assets and Goodwill, Gross Carrying Amount	148,717	148,780
Formulas And Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, Gross Carrying Amount	9,600	9,600
Amortizing intangible assets, Accumulated Amortization	4,875	3,250
Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, Gross Carrying Amount	2,000	2,000
Amortizing intangible assets, Accumulated Amortization	550	400
Customer Bases [Member]
Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets, Gross Carrying Amount	14,240	14,240
Amortizing intangible assets, Accumulated Amortization	$ 10,470	$ 9,091

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Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss (Schedule of Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Pension Plans and Other Postretirement Benefits, Beginning Balance				$ (86,555)	$ (63,520)
Foreign Currency Translation Adjustments, Beginning Balance				(94,761)	(82,474)
Accumulated Other Comprehensive (Loss) Income, Beginning Balance				(181,316)	(145,994)
Other comprehensive income (loss) before reclassifications, Pension Plans and Other Postretirement Benefits				2,501	(163)
Other comprehensive income (loss) before reclassifications, Foreign Currency Translation Adjustments				(9,239)	(3,793)
Other comprehensive income (loss) before reclassifications, Accumulated Other Comprehensive (Loss) Income				(6,738)	(3,956)
Amounts reclassified from accumulated other comprehensive loss, Pension Plans and Other Postretirement Benefits	[1]			443	1,497
Amounts reclassified from accumulated other comprehensive loss, Foreign Currency Translation Adjustments				0	0
Amounts reclassified from accumulated other comprehensive loss, Accumulated Other Comprehensive (Loss) Income				443	1,497
Total pension plans and other postretirement benefits		$ 2,471	$ 249	2,944	1,334
Other comprehensive income (loss), Foreign Currency Translation Adjustments		(9,819)	(3,760)	(9,239)	(3,793)
Other comprehensive income (loss)		(7,348)	(3,511)	(6,295)	(2,459)
Pension Plans and Other Postretirement Benefits, Ending Balance		(83,611)	(62,186)	(83,611)	(62,186)
Foreign Currency Translation Adjustments, Ending Balance		(104,000)	(86,267)	(104,000)	(86,267)
Accumulated Other Comprehensive (Loss) Income, Ending Balance		$ (187,611)	$ (148,453)	$ (187,611)	$ (148,453)

[1] 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 18 in our 2018 Annual Report for further information.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 $11 million at September 30, 2019 and $12 million at December 31, 2018. Of the total accrual, the current portion is included in accrued expenses and the noncurrent portion is included in other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

Our more significant environmental sites include a former plant site in Louisiana (the Louisiana site) and a Houston, Texas plant site (the Texas site). Together, the amounts accrued on a discounted basis related to these sites represented approximately $8 million of the total accrual above at both September 30, 2019 and December 31, 2018, using discount rates ranging from 3% to 9% for both periods. The aggregate undiscounted amount for these sites was $10 million at September 30, 2019 and $11 million at December 31, 2018. Of the total accrued for these two sites, the amount related to remediation of groundwater and soil for the Louisiana site was $4 million at both September 30, 2019 and December 31, 2018. The amount related to remediation of groundwater and soil for the Texas site was $4 million at both September 30, 2019 and December 31, 2018.

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Net Sales

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Net Sales

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 United States, Europe, Asia Pacific (including China), Latin America, Canada, India, and the Middle East. Our customers primarily consist of global, national, and independent oil companies. Our contracts generally include one performance obligation, which is providing petroleum additives products. The performance obligation is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts.

In limited cases, we collect funds in advance of shipping product to our customers and recognizing the related revenue. These prepayments from customers are recorded as a contract liability to our customer until we recognize the revenue. Some of our contracts include variable consideration in the form of rebates or business development funds. We regularly review both rebates and business development funds and make adjustments when necessary, recognizing the full amount of 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.

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

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Inventories

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

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

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Segment Information (Segment Operating Profit) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Information [Line Items]
Segment operating profit	$ 88,218	$ 68,148	$ 269,765	$ 216,854
Corporate, general, and administrative expenses	(38,122)	(37,741)	(109,916)	(120,653)
Interest and financing expenses, net	(6,987)	(7,807)	(22,740)	(18,536)
Other income (expense), net	6,227	7,973	17,932	20,872
Income before income tax expense	87,458	68,314	264,957	219,190
Operating Segments [Member]
Segment Information [Line Items]
Segment operating profit	94,688	73,529	285,712	229,528
Operating Segments [Member] | Petroleum Additives [Member]
Segment Information [Line Items]
Segment operating profit	94,765	75,824	285,620	231,494
Operating Segments [Member] | All Other [Member]
Segment Information [Line Items]
Segment operating profit	(77)	(2,295)	92	(1,966)
Corporate, Non-Segment [Member]
Segment Information [Line Items]
Corporate, general, and administrative expenses	(6,473)	(5,402)	(15,842)	(16,033)
Other income (expense), net	$ 6,230	$ 7,994	$ 17,827	$ 24,231

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

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Components of Accumulated Other Comprehensive Loss, Net of Tax

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

(in thousands)	Pension Plans and Other Postretirement Benefits			Foreign Currency Translation Adjustments			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2017	$	(63,520	)	$	(82,474	)	$	(145,994	)
Other comprehensive income (loss) before reclassifications	(163		)	(3,793		)	(3,956		)
Amounts reclassified from accumulated other comprehensive loss (a)	1,497			0			1,497
Other comprehensive income (loss)	1,334			(3,793		)	(2,459		)
Balance at September 30, 2018	$	(62,186	)	$	(86,267	)	$	(148,453	)
Balance at December 31, 2018	$	(86,555	)	$	(94,761	)	$	(181,316	)
Other comprehensive income (loss) before reclassifications	2,501			(9,239		)	(6,738		)
Amounts reclassified from accumulated other comprehensive loss (a)	443			0			443
Other comprehensive income (loss)	2,944			(9,239		)	(6,295		)
Balance at September 30, 2019	$	(83,611	)	$	(104,000	)	$	(187,611	)

(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 18 in our 2018 Annual Report for further information.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

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

No material events occurred during the nine months ended September 30, 2019 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 the 4.10% 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 4.10% senior notes included in long-term debt in the table below is based on the last quoted price closest to September 30, 2019. The fair value of our debt instruments is categorized as Level 2.

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

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Net Sales by Segment

Net Sales by Segment

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

Segment Operating Profit

Segment Operating Profit

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

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Intangibles (Net of Amortization) and Goodwill (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Information Related to Intangible Assets and Goodwill

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

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

Schedule Of Amortization Expense

Amortization expense was (in thousands):

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

Schedule Of Estimated Annual Amortization Expense Related To Intangible Assets

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

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

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Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Net sales	$ 555,817	$ 563,166	$ 1,655,850	$ 1,751,363
Cost of Goods Sold	393,090	422,283	1,169,421	1,307,838
Gross profit	162,727	140,883	486,429	443,525
Selling, general, and administrative expenses	38,122	37,741	109,916	120,653
Research, development, and testing expenses	36,387	34,994	106,748	106,018
Operating profit	88,218	68,148	269,765	216,854
Interest and financing expenses, net	6,987	7,807	22,740	18,536
Other income (expense), net	6,227	7,973	17,932	20,872
Income before income tax expense	87,458	68,314	264,957	219,190
Income tax expense	19,653	9,833	60,773	47,259
Net income	$ 67,805	$ 58,481	$ 204,184	$ 171,931
Earnings per share - basic and diluted (in dollars per share)	$ 6.06	$ 5.12	$ 18.26	$ 14.78
Cash dividends declared per share (in dollars per share)	$ 1.90	$ 1.75	$ 5.40	$ 5.25

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, no par value
Common stock, authorized shares	80,000,000	80,000,000
Common stock, issued shares	11,189,222	11,184,482
Common stock, outstanding shares	11,189,222	11,184,482

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Leases Maturities of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Operating Leases
2019 (remainder)	$ 4,099
2020	14,891
2021	10,580
2022	8,012
2023	6,490
Thereafter	34,819
Total lease payments	78,891
Less: imputed interest	20,682
Total lease obligations	58,209
Finance Leases
2019 (remainder)	807
2020	3,228
2021	2,208
2022	1,175
2023	965
Thereafter	7,226
Total lease payments	15,609
Less: imputed interest	2,128
Total lease obligations	$ 13,481

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Leases Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
ROU assets recorded		$ 70
Lease liabilities recorded		$ 70
Lessee Operating Lease Option to Extend Reasonably Certain	$ 16
Lease commitments that have not yet commenced	$ 40
Lessee, Operating Lease, Existence of Option to Extend	true
Lease, Practical Expedients, Package	true
Lease, Practical Expedient, Use of Hindsight	true
Short-term Lease, Commitment	false
Minimum [Member]
Lessee, Lease, Description [Line Items]
Operating and finance leases remaining terms	1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Operating and finance leases remaining terms	52 years

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Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Finished goods and work-in-process	$ 297,515	$ 319,120
Raw materials	58,982	63,403
Stores, supplies, and other	14,437	13,818
Inventories	$ 370,934	$ 396,341

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Long-term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 639,983	$ 770,999
4.10% Senior Notes [Member]
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 348,116	$ 347,677
Senior notes, interest rate	4.10%	4.10%
Debt instruments maturity date	2022	2022
3.78% Senior Notes [Member]
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 250,000	$ 250,000
Senior notes, interest rate	3.78%	3.78%
Debt instruments maturity date	2029	2029
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 41,867	$ 168,129
Capital Lease Obligation [Member]
Debt Instrument [Line Items]
Long-term Debt and Lease Obligation	$ 0	$ 5,193

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Fair Value Measurements (Estimated Fair Value Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt (excluding capital lease obligations)	$ 639,983	$ 765,806
Fair Value, Inputs, Level 2 [Member]
Debt Instrument [Line Items]
Long-term debt (excluding capital lease obligations), Fair Value	$ 675,398	$ 757,414

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Pension Plans and Other Postretirement Benefits (Net Periodic Benefit Cost (Income) For Pension And Postretirement Benefit Plans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Pension Plan [Member] | Domestic Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 2,809	$ 3,599	$ 10,056	$ 11,543
Interest cost	3,478	3,257	10,849	9,942
Expected return on plan assets	(8,661)	(7,523)	(25,975)	(22,413)
Amortization of prior service cost (credit)	(19)	7	(57)	20
Amortization of actuarial net (gain) loss	507	1,172	2,214	3,854
Net periodic benefit cost (income)	(1,886)	512	(2,913)	2,946
Pension Plan [Member] | Foreign Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	1,575	1,975	4,833	6,114
Interest cost	1,166	1,105	3,593	3,425
Expected return on plan assets	(2,238)	(2,423)	(6,918)	(7,519)
Amortization of prior service cost (credit)	(11)	(20)	(32)	(62)
Amortization of actuarial net (gain) loss	230	148	704	456
Net periodic benefit cost (income)	722	785	2,180	2,414
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	150	239	538	672
Interest cost	358	355	1,136	1,094
Expected return on plan assets	(223)	(228)	(711)	(726)
Amortization of prior service cost (credit)	(757)	(757)	(2,271)	(2,271)
Amortization of actuarial net (gain) loss	0	0	0	0
Net periodic benefit cost (income)	$ (472)	$ (391)	$ (1,308)	$ (1,231)

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Net Sales (Schedule of Net Sales by Geographical Area) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Net sales	$ 555,817	$ 563,166	$ 1,655,850	$ 1,751,363
United States
Disaggregation of Revenue [Line Items]
Net sales	191,830	180,142	551,875	547,005
China
Disaggregation of Revenue [Line Items]
Net sales	49,219	57,891	170,627	183,980
Europe, Middle East, Africa, India [Member]
Disaggregation of Revenue [Line Items]
Net sales	179,685	180,850	526,597	588,248
Asia Pacfic excl China [Member]
Disaggregation of Revenue [Line Items]
Net sales	77,823	87,661	240,653	254,350
Other Foreign [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 57,260	$ 56,622	$ 166,098	$ 177,780

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows:

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

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Balance Sheet Classification	September 30, 2019
Operating leases:
Operating lease right-of-use assets	Operating lease right-of-use assets	$	58,377
Current liability	Operating lease liabilities	$	13,811
Noncurrent liability	Operating lease liabilities-noncurrent	44,398
Total operating lease liabilities		$	58,209
Finance leases:
Finance lease right-of-use assets	Deferred charges and other assets	$	12,401
Current liability	Other current liabilities	$	2,814
Noncurrent liability	Other noncurrent liabilities	10,667
Total finance lease liabilities		$	13,481

	September 30, 2019
Weighted average remaining lease term (in years):
Operating leases	14
Finance leases	9
Weighted average incremental borrowing rate:
Operating leases	3.97	%
Finance leases	3.47	%

Supplemental Cash Flow and Other Information

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(in thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,374
Operating cash flows from finance leases	300
Financing cash flows from finance leases	1,899
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	12,820
Finance leases	9,345

Maturities of Operating And Finance Lease Liabilities

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

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

Schedule of Future Lease Payments for Noncancelable Operating Leases

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

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

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Pension Plans and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Pension Plans and Other Postretirement Benefits

Pension Plans and Other Postretirement Benefits

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

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

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

	Domestic
	Pension Benefits						Postretirement Benefits
	Third Quarter Ended September 30,
(in thousands)	2019			2018			2019			2018
Service cost	$	2,809		$	3,599		$	150		$	239
Interest cost	3,478			3,257			358			355
Expected return on plan assets	(8,661		)	(7,523		)	(223		)	(228		)
Amortization of prior service cost (credit)	(19		)	7			(757		)	(757		)
Amortization of actuarial net (gain) loss	507			1,172			0			0
Net periodic benefit cost (income)	$	(1,886	)	$	512		$	(472	)	$	(391	)

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

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

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

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

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

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

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

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

The components of lease expense were as follows:

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

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

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Balance Sheet Classification	September 30, 2019
Operating leases:
Operating lease right-of-use assets	Operating lease right-of-use assets	$	58,377
Current liability	Operating lease liabilities	$	13,811
Noncurrent liability	Operating lease liabilities-noncurrent	44,398
Total operating lease liabilities		$	58,209
Finance leases:
Finance lease right-of-use assets	Deferred charges and other assets	$	12,401
Current liability	Other current liabilities	$	2,814
Noncurrent liability	Other noncurrent liabilities	10,667
Total finance lease liabilities		$	13,481

	September 30, 2019
Weighted average remaining lease term (in years):
Operating leases	14
Finance leases	9
Weighted average incremental borrowing rate:
Operating leases	3.97	%
Finance leases	3.47	%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(in thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,374
Operating cash flows from finance leases	300
Financing cash flows from finance leases	1,899
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	12,820
Finance leases	9,345

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

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

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

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

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

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Long-term Debt (Narrative) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Outstanding borrowings	$ 639,983,000	$ 770,999,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 850,000,000
Term of credit facility, years	5 years
Revolving credit facility, maturity date	Sep. 22, 2022
Average interest rate during the period	3.20%	3.00%
Outstanding borrowings	$ 41,867,000	$ 168,129,000
Outstanding letters of credit	3,000,000	3,000,000
Unused portion of revolving credit facility	805,000,000	$ 679,000,000
4.10% Senior Notes [Member]
Debt Instrument [Line Items]
Principal amount of debt	$ 350,000,000
Senior notes, interest rate	4.10%	4.10%
Outstanding borrowings	$ 348,116,000	$ 347,677,000
3.78% Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes, interest rate	3.78%	3.78%
Outstanding borrowings	$ 250,000,000	$ 250,000,000

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 79,971	$ 73,040
4.10% Senior Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior notes, interest rate	4.10%	4.10%
Carrying Amount in Consolidated Balance Sheets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 80,000	$ 73,000
Fair Value, Inputs, Level 1 [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	$ 79,971	$ 73,040

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Segment Information (Net Sales By Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Information [Line Items]
Net sales	$ 555,817	$ 563,166	$ 1,655,850	$ 1,751,363
Operating Segments [Member] | Petroleum Additives [Member]
Segment Information [Line Items]
Net sales	550,626	560,522	1,644,129	1,743,632
Operating Segments [Member] | All Other [Member]
Segment Information [Line Items]
Net sales	5,191	2,644	11,721	7,731
Operating Segments [Member] | Lubricant Additives [Member] | Petroleum Additives [Member]
Segment Information [Line Items]
Net sales	448,629	462,865	1,348,508	1,440,227
Operating Segments [Member] | Fuel Additives [Member] | Petroleum Additives [Member]
Segment Information [Line Items]
Net sales	$ 101,997	$ 97,657	$ 295,621	$ 303,405

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Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2019

Long-term Debt and Lease Obligation [Abstract]

Schedule Of Long-Term Debt

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

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Anti-dilutive shares of nonvested restricted stock that were excluded from the calculation of diluted earnings per share (in shares)			22,512	24,832
Earnings per share numerator:
Net income attributable to common shareholders before allocation of earnings to participating securities	$ 67,805	$ 58,481	$ 204,184	$ 171,931
Earnings allocated to participating securities	137	121	348	340
Net income attributable to common shareholders after allocation of earnings to participating securities	$ 67,668	$ 58,360	$ 203,836	$ 171,591
Earnings per share denominator:
Weighted-average number of shares of common stock outstanding - basic and diluted (in shares)	11,167,000	11,409,000	11,166,000	11,606,000
Earnings per share - basic and diluted (in dollars per share)	$ 6.06	$ 5.12	$ 18.26	$ 14.78

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Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

The tables below show our consolidated segment results. The “All other” category includes the operations of the antiknock compounds business, as well as certain contracted manufacturing and services associated with Ethyl Corporation (Ethyl).

Net Sales by Segment

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

Segment Operating Profit

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

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Intangibles (Net of Amortization) and Goodwill

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles (Net of Amortization) and Goodwill

Intangibles (Net of Amortization) and Goodwill

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

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

All of the intangibles relate to the petroleum additives segment. The change in the gross carrying amount between December 31, 2018 and September 30, 2019 is due to foreign currency fluctuation. There is no accumulated goodwill impairment.

Amortization expense was (in thousands):

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

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

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

We amortize the contract over 10 years; customer bases over 4 to 20 years; and formulas and technology over 3 to 6 years.

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Inventories (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventories

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

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Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

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

(in thousands)	Pension Plans and Other Postretirement Benefits			Foreign Currency Translation Adjustments			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2017	$	(63,520	)	$	(82,474	)	$	(145,994	)
Other comprehensive income (loss) before reclassifications	(163		)	(3,793		)	(3,956		)
Amounts reclassified from accumulated other comprehensive loss (a)	1,497			0			1,497
Other comprehensive income (loss)	1,334			(3,793		)	(2,459		)
Balance at September 30, 2018	$	(62,186	)	$	(86,267	)	$	(148,453	)
Balance at December 31, 2018	$	(86,555	)	$	(94,761	)	$	(181,316	)
Other comprehensive income (loss) before reclassifications	2,501			(9,239		)	(6,738		)
Amounts reclassified from accumulated other comprehensive loss (a)	443			0			443
Other comprehensive income (loss)	2,944			(9,239		)	(6,295		)
Balance at September 30, 2019	$	(83,611	)	$	(104,000	)	$	(187,611	)

(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 18 in our 2018 Annual Report for further information.

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Net Sales (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Net Sales by Geographic Area

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

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

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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 67,805	$ 58,481	$ 204,184	$ 171,931
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 $(185) in third quarter 2019, $(180) in third quarter 2018, $(556) in nine months 2019 and $(541) in nine months 2018	(600)	(591)	(1,802)	(1,773)
Actuarial net gain (loss) arising during the period, net of income tax expense (benefit) of $771 in third quarter and nine months 2019 and $(51) in third quarter and nine months 2018	2,501	(163)	2,501	(163)
Amortization of actuarial net loss (gain) included in net periodic benefit cost (income), net of income tax expense (benefit) of $169 in third quarter 2019, $318 in third quarter 2018, $674 in nine months 2019 and $1,037 in nine months 2018	570	1,003	2,245	3,270
Total pension plans and other postretirement benefits	2,471	249	2,944	1,334
Foreign currency translation adjustments, net of income tax expense (benefit) of $(324) in third quarter 2019, $(109) in third quarter 2018, $(317) in nine months 2019 and $(653) in nine months 2018	(9,819)	(3,760)	(9,239)	(3,793)
Other comprehensive income (loss)	(7,348)	(3,511)	(6,295)	(2,459)
Comprehensive income	$ 60,457	$ 54,970	$ 197,889	$ 169,472

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Consolidated Statements Of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock and Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]
Balance (in shares) at Dec. 31, 2017		11,779,978
Balance at Dec. 31, 2017	$ 601,649	$ 0	$ (145,994)	$ 747,643
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	171,931			171,931
Other comprehensive income (loss)	(2,459)		(2,459)
Cash dividends	(60,778)			(60,778)
Repurchases of common stock (in shares)		(385,181)
Repurchases of common stock	(148,649)	$ (2,366)		(146,283)
Stock-based compensation (in shares)		9,234
Stock-based compensation	2,378	$ 2,366		12
Balance (in shares) at Sep. 30, 2018		11,404,031
Balance at Sep. 30, 2018	564,072	$ 0	(148,453)	712,525
Balance (in shares) at Jun. 30, 2018		11,465,814
Balance at Jun. 30, 2018	552,481	$ 0	(144,942)	697,423
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	58,481			58,481
Other comprehensive income (loss)	(3,511)		(3,511)
Cash dividends	(19,957)			(19,957)
Repurchases of common stock (in shares)		(62,428)
Repurchases of common stock	(24,570)	$ (1,141)		(23,429)
Stock-based compensation (in shares)		645
Stock-based compensation	1,148	$ 1,141		7
Balance (in shares) at Sep. 30, 2018		11,404,031
Balance at Sep. 30, 2018	$ 564,072	$ 0	(148,453)	712,525
Balance (in shares) at Dec. 31, 2018	11,184,482	11,184,482
Balance at Dec. 31, 2018	$ 489,907	$ 0	(181,316)	671,223
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	204,184			204,184
Other comprehensive income (loss)	(6,295)		(6,295)
Cash dividends	(60,418)			(60,418)
Stock-based compensation (in shares)		4,740
Stock-based compensation	$ 1,960	$ 1,914		46
Balance (in shares) at Sep. 30, 2019	11,189,222	11,189,222
Balance at Sep. 30, 2019	$ 629,338	$ 1,914	(187,611)	815,035
Balance (in shares) at Jun. 30, 2019		11,188,126
Balance at Jun. 30, 2019	589,176	$ 949	(180,263)	768,490
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	67,805			67,805
Other comprehensive income (loss)	(7,348)		(7,348)
Cash dividends	(21,260)			(21,260)
Stock-based compensation (in shares)		1,096
Stock-based compensation	$ 965	$ 965
Balance (in shares) at Sep. 30, 2019	11,189,222	11,189,222
Balance at Sep. 30, 2019	$ 629,338	$ 1,914	$ (187,611)	$ 815,035

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Leases Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 4,293	$ 12,821
Finance lease cost:
Amortization of assets	684	1,953
Interest on lease liabilities	108	300
Short-term lease cost	812	2,776
Variable lease cost	611	1,653
Total lease cost	$ 6,508	$ 19,503

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Intangibles (Net of Amortization) and Goodwill (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Net carrying amount of intangibles and goodwill	$ 132,822,000	$ 136,039,000
Accumulated goodwill impairment	$ 0	$ 0
Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated economic life, in years	10 years
Minimum [Member] | Customer Bases [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated economic life, in years	4 years
Minimum [Member] | Formulas And Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated economic life, in years	3 years
Maximum [Member] | Customer Bases [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated economic life, in years	20 years
Maximum [Member] | Formulas And Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated economic life, in years	6 years

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Leases Future Operating Lease Payments (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 17,223
2020	15,035
2021	10,502
2022	7,957
2023	6,810
After 2023	$ 24,490