NEWMARKET CORP
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 14, 2025
NEU$694.31+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0001282637-24-000005
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-14.
0001282637-25-000004
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 122 current paragraphs.
49 unchanged; 60 reworded; 11 added; 7 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
We completed the acquisition of AMPAC for approximately $697 million on January 16, 2024. See Note 2 for further information on the acquisition. The operations of AMPAC since the date of acquisition are reflected in the specialty materials segment in the Results of Operations section below.
Current report
On January 22, 2024, we entered into a new $900 million revolving credit facility, as well as a $250 million unsecured term loan. Concurrently with the entry into the new revolving credit facility, we terminated our former revolving credit facility. See Note 14 for further information on our debt agreements.
Current report
When comparing petroleum additives net sales for 2024 with 2023, the primary driver was lower selling prices along with a small unfavorable foreign currency impact. Lubricant additives shipments were up slightly while fuel additives shipments were lower by the same amount.
Current report
Specialty Materials -The specialty materials segment comprises the operations of AMPAC, which operates predominantly in the North America region. Total net sales were $141 million for the period that we owned AMPAC during 2024.
Current report
Petroleum Additives - Petroleum additives segment gross profit increased $69 million, and segment operating profit increased $78 million when comparing 2024 to 2023. The following table presents petroleum additives cost of goods sold as a percentage of net sales and the operating profit margin.
Current report
Specialty Materials - The specialty materials segment reported operating profit of $17 million for the period from the AMPAC acquisition date of January 16, 2024 to December 31, 2024. The specialty materials results include the sale of AMPAC finished goods inventory that we acquired at closing. The acquired inventory, which was recorded at fair value on the acquisition date and was sold during 2024, generated no margin.
Current report
Term Loan - On January 22, 2024, we entered into a credit agreement for an unsecured $250 million term loan (the Term Loan Credit Agreement), which matures on January 22, 2026. We borrowed the entire $250 million available under the Term Loan Credit Agreement and paid financing costs of $0.4 million, which are being amortized over the term of the agreement. We are required to repay the principal amount borrowed under the term loan in full at maturity. We may, in our sole discretion and subject to the conditions set forth in the Term Loan Credit Agreement, prepay, without penalty, amounts borrowed under the term loan, together with any accrued and unpaid interest, prior to maturity. Any amounts prepaid prior to maturity are not available for additional borrowings by us.
Current report
Concurrently with entering into the Revolving Credit Agreement, we terminated our former revolving credit facility dated as of March 5, 2020. Upon termination, we repaid the amount then outstanding under the former revolving credit facility, plus accrued and unpaid interest.
Current report
We have certain identifiable intangibles amounting to $371 million and goodwill amounting to $379 million at December 31, 2024 that are discussed in Note 11. Of these intangibles and goodwill, $124 million is attributable to the petroleum additives segment and $626 million to the specialty materials segment. The identifiable intangibles are being amortized over periods with up to approximately 17 years of remaining life. The water rights are indefinite-lived and non-amortizing.
Current report
We estimate fair value for these identifiable intangibles using an income valuation approach for customer bases, formulas and technology, and trademarks and trade names. The cash flow projections included significant judgments and assumptions relating to revenue growth rates; earnings before interest, taxes, depreciation, and amortization; discount rate; contributory asset charges; and customer attrition rate for customer bases and revenue growth rates; royalty rates; and discount rate for formulas and technology and trademarks and trade names. We use a market valuation approach for estimating water rights and our significant judgements and assumptions included comparable sales data.
Current report
Pension Plans and Postretirement Benefits
Removed paragraphs (7)
Previous report
While we have experienced improvement in the supply chain disruptions which impacted the chemicals industry over the past several years, we remain challenged by the ongoing inflationary environment impacting us, including increased raw material and operating costs. During this period, we have remained focused on managing our operating costs, our inventory levels, and our portfolio profitability, while continuing our investment in technology.
Previous report
On January 22, 2024, we entered into a new five-year, $900 million revolving credit facility that replaced the facility discussed above and also entered into a two-year, $250 million unsecured term loan. This term loan gave us additional flexibility to repay borrowings under our revolving credit facility and support our business needs. See Note 23 for additional information.
Previous report
We had long-term debt of $644 million at December 31, 2023 and $1.0 billion at December 31, 2022. The decrease resulted from the net repayments of $361 million on the revolving credit facility during 2023.
Previous report
OTHER MATTERS
Previous report
On January 16, 2024, we completed the acquisition of AMPAC Intermediate Holdings, LLC, the ultimate parent company of American Pacific Corporation (AMPAC), for approximately $700 million. AMPAC manufactures and sells critical performance additives used in solid rocket motors for space launch and military defense applications. The acquisition was funded by cash on hand and borrowings under our 2020 revolving credit facility. The additional borrowing associated with the AMPAC acquisition increased our leverage, but we anticipate that will be reduced by the end of 2024. See Note 23 for additional information.
Previous report
We anticipate continued strength in our petroleum additives segment in 2024 and also look forward to the integration of AMPAC into our business in the coming year. We expect AMPAC will be accretive to our net income in 2024.
Previous report
Pension Plans and Other Postretirement Benefits
Reworded paragraphs (60)
Previous wording
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, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the loss of significant customers; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, wars, and health-related epidemics; risks related to operating outside of the United States; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from acquisitions, or our inability to successfully integrate acquisitions into our business; and the underperformance of our pension assets resulting in additional cash contributions to our pension plans. Risk factors are discussed in Item 1A. “Risk Factors.”
Current wording
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 industries; failure to protect our intellectual property rights; sudden, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the loss of significant customers; termination or changes to contracts with contractors and subcontractors of the U.S. government or directly with the U.S. government; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, wars, and health-related epidemics; risks related to operating outside of the United States; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from acquisitions, or our inability to successfully integrate acquisitions into our business; and the underperformance of our pension assets resulting in additional cash contributions to our pension plans. Risk factors are discussed in Item 1A. “Risk Factors.”
Previous wording
When comparing the results of the petroleum additives segment for 2023 with 2022, net sales were 2.4% lower resulting from a decrease in product shipments and an unfavorable foreign currency impact, which were mostly offset by higher selling prices. Petroleum additives operating profit was 36.0% higher when comparing 2023 with 2022, primarily reflecting the selling prices, including favorable product mix, partially offset by lower product shipments and higher raw material and operating costs. During 2023, our shipments were impacted by the overall global economic weakness and inventory rationalization which persists in the chemical industry.
Current wording
When comparing the results of the petroleum additives segment for 2024 with 2023, net sales declined 2.0%, resulting primarily from a decrease in selling prices and a small unfavorable foreign currency impact. Product shipments were flat. Petroleum additives operating profit was 15.1% higher when comparing 2024 with 2023, primarily reflecting the favorable impact of lower raw material and operating costs, which were partially offset by the lower selling prices. The lower operating costs reflect our continued focus on operational efficiency.
Previous wording
Our operations generate cash that is in excess of the needs of the business. We continue to invest in and manage our 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.
Current wording
Our business typically generates significant amounts of cash beyond its operational needs. We continue to invest in and manage our 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.
Previous wording
Management's discussion and analysis of our results of operations is presented below for the comparative periods of 2023 versus 2022. The discussion and analysis of our results of operations for 2022 compared to 2021 is available in Item 7 of our 2022 Annual Report on Form 10-K.
Current wording
Management's discussion and analysis of our results of operations is presented below for the comparative periods of 2024 versus 2023. The discussion and analysis of our results of operations for 2023 compared to 2022 is available in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
Our consolidated net sales for 2023 amounted to $2.7 billion, a decrease of $66 million, or 2.4% from 2022.
Current wording
Our consolidated net sales for 2024 amounted to $2.8 billion, an increase of $88 million, or 3.3%, from 2023.
Previous wording
The following table shows net sales by segment and product line for each of the last three years.
Current wording
The following table shows net sales by segment and product line for each of the last three years. The net sales in the table below for the specialty materials segment include sales since the acquisition of AMPAC on January 16, 2024.
Previous wording
Petroleum Additives - 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. The percentage of net sales being generated in the regions has remained fairly consistent over the past three years, with some limited fluctuation due to various factors, including the impact of regional economic trends. In 2023, North America represented approximately 40% of our petroleum additives net sales, while EMEAI contributed approximately 30%, Asia Pacific approximately 20%, and Latin America the remaining amount. As shown in the table above, lubricant additives net sales and fuel additives net sales compared to total petroleum additives net sales has remained substantially consistent over the past three years.
Current wording
Petroleum Additives - 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. The percentage of net sales being generated in the regions has remained fairly consistent over the past three years, with some limited fluctuation due to various factors, including the impact of regional economic trends. In 2024, North America represented approximately 40% of our petroleum additives net sales, while EMEAI contributed approximately 30%, Asia Pacific approximately 20%, and Latin America the remaining amount. As shown in the table above, lubricant additives net sales and fuel additives net sales compared to total petroleum additives net sales have remained substantially consistent over the past three years.
Previous wording
Petroleum additives net sales for 2023 of $2.7 billion were approximately 2.4% lower than 2022 levels. The decrease was across all regions. The Asia Pacific region represented approximately 62% of the petroleum additives decrease in net sales, EMEAI represented approximately 15%, the Latin America region represented approximately 13%, and the North America region represented approximately 10%.
Current wording
Petroleum additives net sales for 2024 of $2.6 billion were approximately 2.0% lower than 2023. The decrease was across all regions. The North America region represented approximately 35% of the decrease in petroleum additives net sales, EMEAI and Latin America represented approximately 22% each, and the Asia Pacific region represented approximately 21%.
Previous wording
The approximate components of the petroleum additives decrease in net sales of $64 million when comparing 2023 to 2022 are shown below in millions.
Current wording
The approximate components of the petroleum additives decrease in net sales of $54 million when comparing 2024 to 2023 are shown below in millions.
Previous wording
When comparing petroleum additives net sales for 2023 with 2022, both lubricant additives and fuel additives shipments were lower, along with an unfavorable foreign currency impact, which were mostly offset by higher selling prices. The United States Dollar strengthened against all of the major currencies in which we transact, except for the Euro, resulting in the unfavorable impact to net sales for the 2023 and 2022 comparison.
Current wording
The primary foreign currencies in which we transact include the Euro, Pound Sterling, Japanese Yen, Chinese Renminbi, and India Rupee. Comparing 2024 and 2023, the United States Dollar strengthened against all of the major currencies in which we transact, except for the Pound and Euro, resulting in the unfavorable impact to net sales for the 2024 and 2023 comparison. The unfavorable impact was primarily from the Japanese Yen and Chinese Renminbi, which was partially offset by a favorable impact from the Euro.
Previous wording
On a worldwide basis, the volume of product shipments for petroleum additives decreased 10.7% when comparing 2023 with 2022, with decreases in both lubricant additives and fuel additives shipments. Lubricant additives represented most of the decrease in petroleum additives shipments and was across all regions with North America, EMEAI, and Asia Pacific each contributing about 30% of the decrease, and Latin America contributing the remaining amount. The decrease in fuel additives shipments was across all regions except for EMEAI, which had a small increase. Most of the decrease in fuel additives shipments was in the North America region. During 2023, our shipments were impacted by the overall global economic weakness and inventory rationalization which persists in the chemical industry.
Current wording
On a worldwide basis, the volume of product shipments for petroleum additives was flat when comparing 2024 with 2023, with a small increase in lubricant additives offset by a decrease in fuel additives shipments. Both the North America and Asia Pacific regions reported increases in lubricant additives shipments, which were mostly offset by decreases in the EMEAI and Latin America regions. The EMEAI and Latin America regions reported increases in fuel additives shipments, which were more than offset by decreases in the North America and Asia Pacific regions.
Previous wording
NewMarket evaluates the performance of the petroleum additives business based on segment operating profit. NewMarket Services 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.
Current wording
NewMarket evaluates the performance of the petroleum additives and specialty materials businesses based on segment operating profit. NewMarket Services 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.
Previous wording
The following table reports segment operating profit for the last three years. A reconciliation of segment operating profit to income before income tax expense is in Note 4.
Current wording
The following table reports segment operating profit for the last three years. The amount reported for specialty materials is for the period from January 16, 2024 to December 31, 2024. A reconciliation of segment operating profit to income before income tax expense is in Note 5.
Previous wording
Petroleum Additives - Petroleum additives segment gross profit, as well as segment operating profit, increased $136 million when comparing 2023 to 2022. Cost of goods sold as a percentage of net sales was 71.2% in 2023 and 76.8% in 2022. The operating profit margin was 19.1% in 2023 and 13.7% in 2022. While operating margins will fluctuate from quarter to quarter due to multiple factors, we believe the fundamentals of our business and industry as a whole are unchanged.
Current wording
While operating margins will fluctuate from quarter to quarter due to multiple factors, we believe the fundamentals of our business and industry as a whole are unchanged.
Previous wording
When comparing 2023 and 2022, both gross profit and operating profit included the favorable impact of significantly higher selling prices, including favorable product mix, which were partially offset by lower shipments, higher raw material costs, and higher operating costs. We remain challenged by the ongoing inflationary environment impacting us, including higher raw material and operating costs in the market compared to 2022. We are maintaining our focus on managing our operating costs, our inventory levels, and our portfolio profitability while continuing our investment in technology.
Current wording
When comparing 2024 and 2023, the increase in both gross profit and operating profit primarily includes the favorable impacts of lower raw material and operating costs, partially offset by lower selling prices. As shipment volumes were flat between the two years, the impact of shipments on gross profit and operating profit was negligible. We are maintaining our focus on managing our operating costs, optimizing inventory levels, and enhancing portfolio profitability while continuing our investment in technology to meet our customers' needs.
Previous wording
Petroleum additives selling, general, and administrative expenses (SG&A) increased by $2 million, or 1.6%, in 2023 compared to 2022. SG&A as a percentage of net sales was 4.6% in 2023 and 4.4% in 2022. Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce, including travel-related expenses. While personnel-related costs fluctuate from year to year, there were no significant changes in the drivers of these costs when comparing 2023 and 2022.
Current wording
Petroleum additives selling, general, and administrative expenses (SG&A) increased by $5 million, or 4.2%, in 2024 compared to 2023. SG&A as a percentage of net sales was 4.8% in 2024 and 4.6% in 2023. Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce, including travel-related expenses. While personnel-related costs fluctuate from year to year, there were no significant changes in the drivers of these costs when comparing 2024 and 2023.
Previous wording
Our investment in petroleum additives research, development, and testing (R&D) decreased approximately $2 million when comparing 2023 with 2022. As a percentage of net sales, R&D was 5.1% in both 2023 and 2022. 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 investments, as it is with SG&A, is one of purposeful spending on programs to support our current product base and to ensure that we develop products to support our customers' programs in the future. R&D investments include personnel-related costs, as well as costs for internal and external testing of our products. Substantially all investments in new product development are incurred in the United States and the United Kingdom (U.K.), with approximately 70% of total R&D attributable to the North America and EMEAI regions. The remaining R&D is attributable to the Asia Pacific and Latin America regions and represents customer technology support services in those regions. All of our R&D is related to the petroleum additives segment.
Current wording
Our investment in petroleum additives research, development, and testing (R&D) decreased approximately $13 million when comparing 2024 with 2023. As a percentage of net sales, R&D was 4.7% in 2024 and 5.1% in 2023. 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 investments, as it is with SG&A costs, is one of purposeful spending on programs to support our current product base and to ensure that we develop products to support our customers' programs in the future. R&D investments include personnel-related costs, as well as costs for internal and external testing of our products. Substantially all investments in new product development are incurred in the United States and the United Kingdom (U.K.), with approximately 70% of total R&D attributable to the North America and EMEAI regions. The remaining R&D is attributable to the Asia Pacific and Latin America regions and represents customer technology support services in those regions. Our R&D is related to the petroleum additives segment.
Previous wording
Interest and financing expenses were $37 million in 2023 and $35 million in 2022. The increase in interest and financing expense between 2023 and 2022 resulted primarily from a higher average interest rate, which was partially offset by lower average outstanding debt.
Current wording
Interest and financing expenses were $57 million in 2024 and $37 million in 2023. The increase in interest and financing expense between 2024 and 2023 resulted primarily from both higher average debt outstanding and a higher average interest rate.
Previous wording
Other income (expense), net was income of $43 million in 2023 and $35 million in 2022. The amounts for both periods included the components of net periodic benefit cost (income), except for service costs, from defined benefit pension and postretirement plans. See Note 17 for further information on total periodic benefit cost (income). The 2022 amount also included a loss on marketable securities of $3 million.
Current wording
Other income (expense), net was income of $51 million in 2024 and $43 million in 2023. The amounts for both periods included the components of net periodic benefit cost (income), except for service costs, from defined benefit pension and postretirement plans. See Note 18 for further information on total periodic benefit cost (income).
Previous wording
Income tax expense was $100 million in 2023 and $68 million in 2022. The effective tax rate was 20.5% in 2023 and 19.6% in 2022. When comparing 2023 and 2022, income tax expense increased $28 million due to the higher income before income taxes and $4 million from the higher effective tax rate. The increase in the effective tax rate for the year was primarily the result of an increase in our state tax expense.
Current wording
Income tax expense was $122 million in 2024 and $100 million in 2023. The effective tax rate was 20.8% in 2024 and 20.5% in 2023. When comparing 2024 and 2023, income tax expense increased $20 million due to the higher income before income taxes and $2 million from the slightly higher effective tax rate.
Previous wording
On October 8, 2021, almost all members of the Organisation for Economic Co-operation and Development (OECD) reached an agreement on a two-pillar approach to international tax reform, including the establishment of a 15% global minimum tax for large multinational entities. Several jurisdictions in which we operate have adopted or are in the process of adopting this global minimum tax, with planned effective dates in 2024 or 2025. We are continuing to monitor the legislation in these jurisdictions and any potential impact to our effective tax rate and related income tax liabilities in future years.
Current wording
On October 8, 2021, almost all members of the Organisation for Economic Co-operation and Development (OECD) reached an agreement on a two-pillar approach to international tax reform, including the establishment of a 15% global minimum tax for large multinational entities. Several jurisdictions in which we operate have adopted or are in the process of adopting this global minimum tax. We are continuing to monitor the legislation in these jurisdictions and have recognized an immaterial impact to our effective tax rate and income tax liabilities during the year ended December 31, 2024 related to the enactment of these rules.
Previous wording
We generated cash from operating activities of $577 million in 2023 and $109 million in 2022.
Current wording
We generated cash from operating activities of $520 million in 2024 and $577 million in 2023.
Previous wording
During 2022, we used the $109 million of cash generated from operations along with the proceeds of $373 million from the sale of marketable securities, $213 million of borrowings under the revolving credit facility, and $15 million of cash on hand to redeem $350 million of our 4.10% senior notes, repurchase $207 million of our common stock, pay dividends of $84 million, and fund $56 million of capital expenditures. Cash flows from operating activities included a decrease of $205 million from higher working capital requirements and a decrease of $10 million for cash contributions to our pension and postretirement plans.
Current wording
During 2024, we used the $520 million of cash generated from operating activities, along with proceeds from the term loan and net borrowings of $77 million on the revolving credit facility to acquire AMPAC for $681 million (net of $16 million cash acquired), pay dividends of $96 million, fund capital expenditures of $57 million, and repurchase shares of our common stock for $32 million. Cash flows from operating activities included a decrease of $23 million from higher working capital requirements, which is further discussed in the Working Capital section below, and a decrease of $12 million for cash contributions to our pension and postretirement plans.
Previous wording
During 2023, we used the $577 million of cash generated from operating activities to make net payments of $361 million on our revolving credit facility, pay dividends of $85 million, fund capital expenditures of $48 million, and repurchase 119,075 shares of our common stock for $43 million. Cash flows from operating activities included an increase of $134 million from lower working capital requirements, which is further discussed in the Working Capital section below, and a decrease of $10 million for cash contributions to our pension and postretirement plans.
Current wording
During 2023, we used the $577 million of cash generated from operating activities to make net payments of $361 million on our revolving credit facility, pay dividends of $85 million, fund capital expenditures of $48 million, and repurchase shares of our common stock for $43 million. Cash flows from operating activities included an increase of $134 million from lower working capital requirements and a decrease of $10 million for cash contributions to our pension and postretirement plans.
Previous wording
At December 31, 2023, we had cash and cash equivalents of $112 million as compared to $69 million at the end of 2022.
Current wording
At December 31, 2024, we had cash and cash equivalents of $77 million as compared to $112 million at the end of 2023.
Previous wording
Cash and cash equivalents held by our foreign subsidiaries amounted to approximately $87 million at December 31, 2023 and $65 million at December 31, 2022. Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends and loans. We do not anticipate significant tax consequences of future distributions of foreign earnings.
Current wording
Cash and cash equivalents held by our foreign subsidiaries amounted to approximately $71 million at December 31, 2024 and $87 million at December 31, 2023. Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends and loans. We do not anticipate significant tax consequences of future distributions of foreign earnings.
Previous wording
2.70% Senior Notes - On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031 at an issue price of 98.763%. We used the net proceeds from the offering for the repayment or redemption of our 4.10% senior notes and for general corporate purposes. We incurred financing costs in 2021 of approximately $4 million related to the 2.70% senior notes, which are being amortized over the term of the notes. We were in compliance with all covenants under the indenture governing the 2.70% senior notes as of December 31, 2023 and December 31, 2022.
Current wording
2.70% Senior Notes - On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031 at an issue price of 98.763%. We used the net proceeds from the offering for the repayment and redemption of our 4.10% senior notes and for general corporate purposes. We incurred financing costs in 2021 of approximately $4 million related to the 2.70% senior notes, which are being amortized over the term of the notes. We were in compliance with all covenants under the indenture governing the 2.70% senior notes as of December 31, 2024 and December 31, 2023.
Previous wording
3.78% Senior Notes- On January 4, 2017, we issued $250 million in senior unsecured notes in a private placement with The Prudential Insurance Company of America and certain other purchasers. These notes bear interest at 3.78% and mature on January 4, 2029. Interest is payable semiannually. Principal payments of $50 million are payable annually beginning on January 4, 2025. We have the right to make optional prepayments on the notes at any time, subject to certain limitations. We were in compliance with all covenants under the 3.78% senior notes as of December 31, 2023 and December 31, 2022.
Current wording
3.78% Senior Notes- On January 4, 2017, we issued $250 million in senior unsecured notes in a private placement with The Prudential Insurance Company of America and certain other purchasers. These notes bear interest at 3.78% with interest payable semiannually. We made the first principal payment of $50 million on January 4, 2025 and have four remaining principal payments of $50 million due January 4 of each year through 2029. We have the right to make optional prepayments on the notes at any time, subject to certain limitations. We were in compliance with all covenants under the 3.78% senior notes as of December 31, 2024 and December 31, 2023.
Previous wording
Revolving Credit Facility - On March 5, 2020, NewMarket and certain foreign subsidiary borrowers entered into a Credit Agreement (the Credit Agreement) with a term of five years. The Credit Agreement provided for a $900 million, multicurrency revolving credit facility with a $500 million sublimit for foreign currency borrowings, a $50 million sublimit for letters of credit, and a $20 million sublimit for swingline loans. The Credit Agreement included an expansion feature which allowed us, subject to certain conditions, to request an increase in the aggregate amount of the revolving credit facility or obtain incremental term loans in an amount up to $425 million. NewMarket's obligations under the Credit Agreement were unsecured and the obligations of foreign subsidiary borrowers were fully and unconditionally guaranteed by NewMarket. The revolving credit facility was scheduled to mature on March 5, 2025. Effective January 11, 2023, the revolving credit facility was amended to eliminate the use of LIBOR on borrowings, replacing it with SOFR.
Current wording
Revolving Credit Facility - On January 22, 2024, we entered into a credit agreement for a $900 million revolving credit facility (the Revolving Credit Agreement). The revolving credit facility matures on January 22, 2029 and includes a $500 million sublimit for multicurrency borrowings, an initial letter of credit sublimit of $25 million, and a $20 million sublimit for swingline loans. The Revolving Credit Agreement includes an expansion feature allowing us, subject to certain conditions, to request an increase in the aggregate amount of the revolving credit facility or obtain incremental term loans in an amount up to $450 million. We may also request an extension of the maturity date as provided for in the Revolving Credit Agreement. Certain of our foreign subsidiaries may, from time to time, become borrowers under the Revolving Credit Agreement. The obligations under the Revolving Credit Agreement are unsecured and are fully and unconditionally guaranteed by NewMarket.
Previous wording
There were no outstanding borrowings under the revolving credit facility at December 31, 2023, compared to $361 million outstanding borrowings at December 31, 2022. Outstanding letters of credit amounted to $2 million at both December 31, 2023 and December 31, 2022, resulting in the unused portion of the credit facility amounting to $898 million at December 31, 2023 and $537 million at December 31, 2022.
Current wording
Outstanding borrowings under the revolving credit facility amounted to $77 million at December 31, 2024. There were no outstanding borrowings under the former revolving credit facility at December 31, 2023. Outstanding letters of credit under the applicable revolving credit facility amounted to approximately $4 million at December 31, 2024 and $2 million at December 31, 2023. The unused portion of the applicable revolving credit facility amounted to $819 million at December 31, 2024 and $898 million at December 31, 2023.
Previous wording
The average interest rate for borrowings under the credit facility was 6.2% during 2023 and 3.5% during 2022.
Current wording
The average interest rate for borrowings under the applicable credit facility was 6.5% during 2024 and 6.2% during 2023.
Previous wording
The Credit Agreement contained financial covenants that required NewMarket to maintain a consolidated Leverage Ratio (as defined in the Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Credit Agreement). At December 31, 2023, the Leverage Ratio was 1.13. We were in compliance with all covenants under the revolving credit facility at December 31, 2023 and at December 31, 2022.
Current wording
The Revolving Credit Agreement contains certain customary covenants, including financial covenants, which require us to maintain a consolidated Leverage Ratio (as defined in the Revolving Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Revolving Credit Agreement). At December 31, 2024, the Leverage Ratio was 1.33. We were in compliance with all covenants under the applicable revolving credit facility as of December 31, 2024 and December 31, 2023.
Previous wording
Other Borrowings- Three of our subsidiaries, one each in the U.K., Singapore, and China, have access to separate short-term lines of credit of $10 million. There was no activity on these lines of credit in 2023 or 2022.
Current wording
Other Borrowings- Two of our subsidiaries, one in Singapore and one China, have access to separate short-term lines of credit of $10 million each. There was no activity on these lines of credit in 2024 or 2023.
Previous wording
As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage decreased from 56.8% at the end of 2022 to 37.4% at the end of 2023. The change in the percentage was primarily the result of the decrease in outstanding revolving credit facility borrowings, along with an increase in shareholders' equity. The change in shareholders’ equity primarily reflects our earnings, an increase in the funded position of our defined benefit plans, and the impact of the foreign currency translation adjustment partially offset by stock repurchases and dividend payments. Normally, we repay any outstanding long-term debt with cash from operations or refinancing activities.
Current wording
We had long-term debt of $971 million at December 31, 2024 and $644 million at December 31, 2023. As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage increased from 37.4% at the end of 2023 to 39.9% at the end of 2024. The change resulted primarily from the increase in outstanding term loan and revolving credit facility borrowings, partially offset by an increase in shareholders’ equity. The increase in shareholders' equity primarily reflects our earnings and an increase in the funded position of our retirement plans, partially offset by dividend payments, repurchases of shares of our common stock, and an unfavorable change in the impact from foreign currency translation adjustments. Generally, we repay any outstanding long-term debt with cash from operations or refinancing activities.
Previous wording
Including cash and cash equivalents and the impact of foreign currency on the balance sheet, at December 31, 2023, we had working capital of $675 million, resulting in a current ratio of 2.85 to 1. Our working capital at December 31, 2022 on the same basis was $768 million, resulting in a current ratio of 2.81 to 1.
Current wording
Including cash and cash equivalents and the impact of foreign currency on the balance sheet, at December 31, 2024, we had working capital of $655 million, resulting in a current ratio of 2.75 to 1. Our working capital at December 31, 2023 on the same basis was $675 million, resulting in a current ratio of 2.85 to 1.
Previous wording
The most significant change in working capital since December 31, 2022 included decreases in trade and other accounts receivable, inventories, accounts payable, and accrued expenses. In addition to these items, cash and cash equivalents increased as outlined in the cash flows discussion above.
Current wording
The working capital of AMPAC is included in our consolidated balance sheet at December 31, 2024. Other than the impact of AMPAC working capital, the most significant change in working capital since December 31, 2023 included a decrease in trade and other accounts receivable offset by an increase in inventories. In addition to these items, cash and cash equivalents decreased as outlined in the cash flows discussion above.
Previous wording
The decrease in trade and other accounts receivable primarily represents lower sales levels along with the refund of value added taxes at some of our foreign subsidiaries. The decrease in inventories reflects our planned inventory rationalization in response to lower demand and inventory rationalization by our customers. The decrease in accounts payable is primarily the result of the same inventory rationalization and lower production levels. The change in accrued expenses reflects normal adjustments for rebate payments to customers.
Current wording
The decrease in trade and other accounts receivable primarily represents lower sales levels along with the collection of value added taxes at one of our foreign subsidiaries. The increase in inventories reflects planned increased production to allow for normal maintenance outages and changes in production units as compared to our planned inventory rationalization that took place in 2023.
Previous wording
Capital expenditures were $48 million for 2023 and $56 million for 2022. We estimate capital expenditures in 2024 will be in the range of $50 million to $60 million as we anticipate spending on several improvements to our manufacturing and R&D infrastructure around the world. We expect to continue to finance capital spending through cash provided from operations, as well as with borrowing available under our revolving credit facility.
Current wording
Capital expenditures were $57 million for 2024 and $48 million for 2023. We estimate capital expenditures in 2025 will be in the range of $60 million to $70 million as we anticipate spending on several improvements to our manufacturing and R&D infrastructure around the world. We expect to continue to finance capital spending through cash provided from operations, as well as with borrowing available under our revolving credit facility.
Previous wording
We spent approximately $41 million in 2023 and $37 million in 2022 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures. These environmental operating and clean-up expenses are included in cost of goods sold. We expect to continue to fund these costs through cash provided by operations.
Current wording
We spent approximately $37 million in 2024 and $41 million in 2023 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures. These environmental operating and clean-up expenses are included in cost of goods sold. We expect to continue to fund these costs through cash provided by operations.
Previous wording
The debt-related contractual obligations include both principal payments on outstanding long-term debt and the related interest payments. The maturity dates and interest rates, as well as information on the repayment of the principal on our long-term debt is detailed above in the Debt section, as well as in Note 13. At December 31, 2023, all of our long-term debt was at fixed rates, except for the revolving credit facility which had no outstanding borrowings. Interest is paid semi-annually on our fixed rate long-term debt agreements. See Note 23 for additional information on our debt structure in 2024.
Current wording
The debt-related contractual obligations include both principal payments on outstanding long-term debt and the related interest payments. The maturity dates and interest rates, as well as information on the repayment of the principal on our long-term debt is detailed above in the Debt section, as well as in Note 14. At December 31, 2024, all of our long-term debt was at fixed rates, except for the revolving credit facility and the term loan agreement. A discussion of interest rate sensitivity is in Item 7A. Interest is paid semi-annually on our fixed rate long-term debt agreements.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We remain challenged by the uncertain global economic environment, but continue to focus on managing our operating costs, our inventory levels, and our portfolio profitability, while continuing our investment in technology.
Current report — wording carried from elsewhere
The Term Loan Credit Agreement contains certain customary covenants, including financial covenants, which require NewMarket to maintain a consolidated Leverage Ratio (as defined in the Term Loan Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Term Loan Credit Agreement). At December 31, 2024, the Leverage Ratio was 1.33. We were in compliance with all covenants under the term loan as of December 31, 2024.