☒
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2019
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or
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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98-0181725
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State or other jurisdiction of
incorporation or organization
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(I.R.S. Employer Identification No.)
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8310 South Valley Highway
Suite 350
Englewood
Colorado
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80112
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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IOSP
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NASDAQ
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Title of each class
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Name of each exchange on which registered
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N/A
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N/A
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated
filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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2
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||||||
Item 1
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2
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|||||
Item 1A
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8
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|||||
Item 1B
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17
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|||||
Item 2
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18
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|||||
Item 3
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19
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|||||
Item 4
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19
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20
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Item 5
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20
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Item 6
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22
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Item 7
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24
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|||||
Item 7A
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42
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|||||
Item 8
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45
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|||||
Item 9
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93
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|||||
Item 9A
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93
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|||||
Item 9B
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94
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|||||
95
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||||||
Item 10
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95
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|||||
Item 11
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95
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|||||
Item 12
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95
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|||||
Item 13
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96
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|||||
Item 14
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96
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|||||
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97
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|||||
Item 15
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97
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Item 16
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101
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|||||
102
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Item 1
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Business
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• | Fuel Specialties |
• | Performance Chemicals |
• | Oilfield Services |
• | Octane Additives |
Item 1A
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Risk Factors
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Item 1B
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Unresolved Staff Comments
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Item 2
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Properties
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Location
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Reporting Segment
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Operations
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Englewood, Colorado
(1)
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Fuel Specialties and Performance Chemicals
|
Corporate Headquarters
Business Teams
Sales/Administration
|
||
Newark, Delaware
(1)
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Fuel Specialties
|
Research & Development
|
||
Herne, Germany
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Fuel Specialties
|
Sales/Manufacturing/Administration
Research & Development
|
||
Vernon, France
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Fuel Specialties
|
Sales/Manufacturing/Administration
Research & Development
|
||
Moscow, Russia
(1)
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Fuel Specialties
|
Sales/Administration
|
||
Leuna, Germany
|
Fuel Specialties
|
Sales/Manufacturing/Administration
Research & Development
|
||
Ellesmere Port, United Kingdom
|
Fuel Specialties, Performance Chemicals and Octane Additives
|
European Headquarters
Business Teams
Sales/Manufacturing/Administration
Research & Development
Fuel Technology Center
|
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Beijing, China
(1)
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Fuel Specialties and Performance Chemicals
|
Sales/Administration
|
||
Singapore
(1)
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Fuel Specialties and Performance Chemicals
|
Asia-Pacific Headquarters
Business Teams
Sales/Administration
|
||
Milan, Italy
(1)
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Fuel Specialties and Performance Chemicals
|
Sales/Administration
|
||
Rio de Janeiro, Brazil
(1)
|
Fuel Specialties, Performance Chemicals and Oilfield Services
|
Sales/Administration
|
||
High Point, North Carolina
|
Performance Chemicals
|
Manufacturing/Administration
Research & Development
|
||
Salisbury, North Carolina
|
Performance Chemicals
|
Manufacturing/Administration
Research & Development
|
||
Chatsworth, California
(1)
|
Performance Chemicals
|
Sales/Manufacturing/Administration
|
||
Saint Mihiel, France
|
Performance Chemicals
|
Manufacturing/Administration/Research & Development
|
||
Castiglione, Italy
|
Performance Chemicals
|
Manufacturing/Administration/Research & Development
|
||
Barcelona, Spain
(1)
|
Performance Chemicals
|
Manufacturing/Administration/Research & Development
|
||
Oklahoma City, Oklahoma
|
Oilfield Services
|
Sales/Manufacturing/Administration
|
||
Midland, Texas
|
Oilfield Services
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Sales/Manufacturing/Administration
|
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Pleasanton, Texas
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Oilfield Services
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Sales/Manufacturing/Administration
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Location
|
Reporting Segment
|
Operations
|
||
Sugar Land, Texas
(1)
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Oilfield Services
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Sales/Administration/Research & Development
|
||
The Woodlands, Houston, Texas
(1)
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Oilfield Services
|
Sales/Administration/Research & Development
|
||
Williston, North Dakota
|
Oilfield Services
|
Sales/Warehouse
|
||
Casper, Wyoming
(1)
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Oilfield Services
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Warehouse
|
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Zug, Switzerland
(1)
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Octane Additives
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Sales/Administration
|
(1)
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Leased property
|
Item 3
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Legal Proceedings
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Item 4
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Mine Safety Disclosures
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Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Period
|
Total number
of shares purchased |
|
Average price
paid per share |
|
||||
November 1, 2019 through November 30, 2019
|
2,820
|
$ |
99.31
|
|||||
Total
|
2,820
|
$ |
99.31
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
||||||||||||
Innospec Inc.
|
$ |
100.00
|
$ |
128.62
|
$ |
163.81
|
$ |
170.67
|
$ |
151.45
|
$ |
256.17
|
||||||||||||
S&P 500 Index
|
100.00
|
99.27
|
108.74
|
129.86
|
121.76
|
156.93
|
||||||||||||||||||
NASDAQ Composite Index
|
100.00
|
105.73
|
113.66
|
145.76
|
140.10
|
189.46
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||||||||||||||||||
Russell 2000 Index
|
$ |
100.00
|
$ |
94.29
|
$ |
112.65
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$ |
127.46
|
$ |
111.94
|
$ |
138.46
|
Item 6
|
Selected Financial Data
|
(in millions, except financial ratios, share and
per share data)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
Summary of performance:
|
|
|
|
|
|
|
|
|
|
|
|
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|||||
Net sales
|
$ |
1,513.3
|
$ |
1,476.9
|
$ |
1,306.8
|
$ |
883.4
|
$ |
1,012.3
|
||||||||||
Operating income
|
149.9
|
133.5
|
125.0
|
98.2
|
156.3
|
|||||||||||||||
Income before income taxes
|
150.4
|
131.6
|
128.1
|
103.1
|
152.3
|
|||||||||||||||
Income taxes
|
(38.2
|
) |
(46.6
|
) |
(66.3
|
) |
(21.8
|
) |
(32.8
|
) | ||||||||||
Net income
|
112.2
|
85.0
|
61.8
|
81.3
|
119.5
|
|||||||||||||||
Net income attributable to Innospec Inc.
|
112.2
|
85.0
|
61.8
|
81.3
|
119.5
|
|||||||||||||||
Net cash provided by operating activities
|
$ |
161.6
|
$ |
104.9
|
$ |
82.7
|
$ |
105.5
|
$ |
118.2
|
||||||||||
Financial position at year end:
|
|
|
|
|
|
|||||||||||||||
Total assets
|
$ |
1,468.8
|
$ |
1,473.4
|
$ |
1,410.2
|
$ |
1,181.4
|
$ |
1,028.6
|
||||||||||
Long-term debt including finance leases
(including current portion) |
60.1
|
210.9
|
224.3
|
273.3
|
134.7
|
|||||||||||||||
Cash, cash equivalents, and short-term investments
|
75.7
|
123.1
|
90.2
|
101.9
|
141.7
|
|||||||||||||||
Total equity
|
$ |
918.9
|
$ |
825.5
|
$ |
794.3
|
$ |
653.8
|
$ |
605.3
|
||||||||||
Financial ratios:
|
|
|
|
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|
|||||||||||||||
Net income attributable to Innospec Inc. as a percentage of net sales
|
7.4
|
5.8
|
4.7
|
9.2
|
11.8
|
|||||||||||||||
Effective tax rate as a percentage
(1)
|
25.4
|
35.4
|
51.8
|
21.1
|
21.5
|
|||||||||||||||
Current ratio
(2)
|
2.1
|
2.2
|
2.1
|
2.4
|
2.2
|
|||||||||||||||
Share data:
|
|
|
|
|
|
|||||||||||||||
Earnings per share attributable to Innospec Inc.
|
|
|
|
|
|
|||||||||||||||
– Basic
|
$ |
4.58
|
$ |
3.48
|
$ |
2.56
|
$ |
3.39
|
$ |
4.96
|
||||||||||
– Diluted
|
$ |
4.54
|
$ |
3.45
|
$ |
2.52
|
$ |
3.33
|
$ |
4.86
|
||||||||||
Dividend paid per share
|
$ |
1.02
|
$ |
0.89
|
$ |
0.77
|
$ |
0.67
|
$ |
0.61
|
||||||||||
Shares outstanding (basic, thousands)
|
|
|
|
|
|
|||||||||||||||
– At year end
|
24,507
|
24,434
|
24,350
|
24,071
|
24,101
|
|||||||||||||||
– Average during year
|
24,482
|
24,401
|
24,148
|
23,998
|
24,107
|
(1)
|
The effective tax rate is calculated as income taxes as a percentage of income before income taxes. Income taxes are impacted in 2017 by the provisional estimates recorded in respect of the Tax Cuts and Jobs Act of 2017 (“Tax Act”), and in 2018 by the finalization and recording of additional taxes due as a consequence of the Tax Act. Income taxes in 2019 are calculated under the new legislation of the Tax Act.
|
(2)
|
Current ratio is defined as current assets divided by current liabilities.
|
(in millions, except per share data)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$ |
388.3
|
$ |
362.4
|
$ |
371.9
|
$ |
390.7
|
||||||||
Gross profit
|
117.8
|
111.1
|
119.1
|
118.2
|
||||||||||||
Operating income
|
36.2
|
31.7
|
38.2
|
43.8
|
||||||||||||
Net income
|
28.7
|
22.3
|
30.1
|
31.1
|
||||||||||||
Net cash provided by operating activities
|
$ |
13.2
|
$ |
50.0
|
$ |
40.0
|
$ |
58.4
|
||||||||
Per common share:
|
|
|
|
|
||||||||||||
Earnings – basic
|
$ |
1.17
|
$ |
0.91
|
$ |
1.23
|
$ |
1.27
|
||||||||
– diluted
|
$ |
1.17
|
$ |
0.90
|
$ |
1.22
|
$ |
1.26
|
||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$ |
360.7
|
$ |
358.1
|
$ |
363.1
|
$ |
395.0
|
||||||||
Gross profit
|
104.5
|
102.8
|
111.0
|
116.7
|
||||||||||||
Operating income
|
28.9
|
28.3
|
33.4
|
42.9
|
||||||||||||
Net income
|
22.2
|
21.8
|
20.6
|
20.4
|
||||||||||||
Net cash (used in)/provided by operating activities
|
$ |
(2.0
|
) | $ |
0.3
|
$ |
35.1
|
$ |
71.5
|
|||||||
Per common share:
|
|
|
|
|
||||||||||||
Earnings – basic
|
$ |
0.91
|
$ |
0.89
|
$ |
0.84
|
$ |
0.84
|
||||||||
– diluted
|
$ |
0.90
|
$ |
0.89
|
$ |
0.84
|
$ |
0.83
|
Item 7
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|||
Fuel Specialties
|
$ |
583.7
|
$ |
574.5
|
$ |
523.8
|
||||||
Performance Chemicals
|
428.7
|
468.1
|
419.5
|
|||||||||
Oilfield Services
|
479.9
|
400.6
|
304.4
|
|||||||||
Octane Additives
|
21.0
|
33.7
|
59.1
|
|||||||||
|
$ |
1,513.3
|
$ |
1,476.9
|
$ |
1,306.8
|
||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|||
Fuel Specialties
|
$ |
204.5
|
$ |
195.0
|
$ |
188.2
|
||||||
Performance Chemicals
|
100.1
|
97.5
|
75.8
|
|||||||||
Oilfield Services
|
159.9
|
130.4
|
109.3
|
|||||||||
Octane Additives
|
1.7
|
12.1
|
30.0
|
|||||||||
|
$ |
466.2
|
$ |
435.0
|
$ |
403.3
|
||||||
Operating income:
|
|
|
|
|
|
|
|
|
|
|||
Fuel Specialties
|
$ |
116.6
|
$ |
116.3
|
$ |
107.7
|
||||||
Performance Chemicals
|
48.7
|
44.7
|
32.6
|
|||||||||
Oilfield Services
|
39.7
|
22.1
|
9.5
|
|||||||||
Octane Additives
|
(0.7
|
) |
9.9
|
26.7
|
||||||||
Corporate costs
|
(54.4
|
) |
(52.4
|
) |
(48.8
|
) | ||||||
Restructuring charge
|
0.0
|
(7.1
|
) |
0.0
|
||||||||
Loss on disposal of subsidiary
|
0.0
|
0.0
|
(0.9
|
) | ||||||||
Foreign exchange loss on liquidation of subsidiary
|
0.0
|
0.0
|
(1.8
|
) | ||||||||
Total operating income
|
$ |
149.9
|
$ |
133.5
|
$ |
125.0
|
||||||
Other income, net
|
$ |
5.3
|
$ |
5.0
|
$ |
11.3
|
||||||
Interest expense, net
|
(4.8
|
) |
(6.9
|
) |
(8.2
|
) | ||||||
Income before income taxes
|
150.4
|
131.6
|
128.1
|
|||||||||
Income taxes
|
(38.2
|
) |
(46.6
|
) |
(66.3
|
) | ||||||
Net income
|
$ |
112.2
|
$ |
85.0
|
$ |
61.8
|
||||||
2019
|
|
2018
|
|
Change
|
|
|
|
|||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
$ |
583.7
|
$ |
574.5
|
$ |
9.2
|
+2
|
% | ||||||||
Performance Chemicals
|
428.7
|
468.1
|
(39.4
|
) |
-8
|
% | ||||||||||
Oilfield Services
|
479.9
|
400.6
|
79.3
|
+20
|
% | |||||||||||
Octane Additives
|
21.0
|
33.7
|
(12.7
|
) |
-38
|
% | ||||||||||
|
$ |
1,513.3
|
$ |
1,476.9
|
$ |
36.4
|
+2
|
% | ||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
$ |
204.5
|
$ |
195.0
|
$ |
9.5
|
+5
|
% | ||||||||
Performance Chemicals
|
100.1
|
97.5
|
2.6
|
+3
|
% | |||||||||||
Oilfield Services
|
159.9
|
130.4
|
29.5
|
+23
|
% | |||||||||||
Octane Additives
|
1.7
|
12.1
|
(10.4
|
) |
-86
|
% | ||||||||||
|
$ |
466.2
|
$ |
435.0
|
$ |
31.2
|
+7
|
% | ||||||||
Gross margin (%):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
|
35.0
|
|
|
33.9
|
|
|
+1.1
|
|
|
|
|
||||
Performance Chemicals
|
|
23.3
|
|
|
20.8
|
|
|
+2.5
|
|
|
|
|
||||
Oilfield Services
|
|
33.3
|
|
|
32.6
|
|
|
+0.7
|
|
|
|
|
||||
Octane Additives
|
|
8.1
|
|
|
35.9
|
|
|
-27.8
|
|
|
|
|
||||
Aggregate
|
|
30.8
|
|
|
29.5
|
|
|
+1.3
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
$ |
(87.9
|
) | $ |
(78.7
|
) | $ |
(9.2
|
) |
+12
|
% | |||||
Performance Chemicals
|
(51.4
|
) |
(52.8
|
) |
1.4
|
-3
|
% | |||||||||
Oilfield Services
|
(120.2
|
) |
(108.3
|
) |
(11.9
|
) |
+11
|
% | ||||||||
Octane Additives
|
(2.4
|
) |
(2.2
|
) |
(0.2
|
) |
+9
|
% | ||||||||
Corporate costs
|
(54.4
|
) |
(52.4
|
) |
(2.0
|
) |
+4
|
% | ||||||||
Restructuring charge
|
0.0
|
(7.1
|
) |
7.1
|
-100
|
% | ||||||||||
|
$ |
(316.3
|
) | $ |
(301.5
|
) | $ |
(14.8
|
) |
+5
|
% | |||||
Change (%)
|
Americas
|
|
EMEA
|
|
ASPAC
|
|
AvTel
|
|
Total
|
|
||||||||||
Volume
|
-8
|
+4
|
+3
|
+52
|
+3
|
|||||||||||||||
Price and product mix
|
+6
|
+4
|
+8
|
-37
|
+3
|
|||||||||||||||
Exchange rates
|
0
|
-8
|
-1
|
0
|
-4
|
|||||||||||||||
|
-2
|
0
|
+10
|
+15
|
+2
|
|||||||||||||||
Change (%)
|
Americas
|
|
EMEA
|
|
ASPAC
|
|
Total
|
|
||||||||
Volume
|
-3
|
-4
|
+16
|
-3
|
||||||||||||
Price and product mix
|
+4
|
-4
|
-9
|
-2
|
||||||||||||
Exchange rates
|
0
|
-5
|
-3
|
-3
|
||||||||||||
|
+1
|
-13
|
+4
|
-8
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
||||||
United Kingdom pension credit
|
$ |
7.7
|
$ |
6.3
|
$ |
1.4
|
||||||
German pension charge
|
(0.5
|
) |
(0.6
|
) |
0.1
|
|||||||
Foreign exchange losses on translation
|
(1.3
|
) |
(5.9
|
) |
4.6
|
|||||||
Foreign currency forward contracts (losses)/gains
|
(0.6
|
) |
5.2
|
(5.8
|
) | |||||||
|
$ |
5.3
|
$ |
5.0
|
$ |
0.3
|
||||||
2019
|
|
2018
|
|
|||||
Income before income taxes
|
$ |
150.4
|
$ |
131.6
|
||||
Adjustment for stock compensation
|
6.6
|
4.8
|
||||||
Indemnification asset regarding tax audit
|
(1.6
|
) |
(1.2
|
) | ||||
Site closure provision
|
0.0
|
6.8
|
||||||
|
$ |
155.4
|
$ |
142.0
|
||||
Income taxes
|
$ |
38.2
|
$ |
46.6
|
||||
Adjustment of income tax provisions
|
(2.5
|
) |
(1.8
|
) | ||||
Tax on stock compensation
|
0.9
|
0.2
|
||||||
Tax Cuts & Jobs Act 2017 impact
|
0.0
|
(12.3
|
) | |||||
Tax on site closure provision
|
(0.7
|
) |
1.9
|
|||||
Tax loss on distribution
|
1.2
|
0.0
|
||||||
Other discrete items
|
(2.0
|
) |
(0.9
|
) | ||||
|
$ |
35.1
|
$ |
33.7
|
||||
GAAP effective tax rate
|
25.4
|
% |
35.4
|
% | ||||
Adjusted effective tax rate
|
22.6
|
% |
23.7
|
% | ||||
2018
|
|
2017
|
|
Change
|
|
|
|
|||||||||
Net sales:
|
|
|
|
|
||||||||||||
Fuel Specialties
|
$ |
574.5
|
$ |
523.8
|
$ |
50.7
|
+10
|
% | ||||||||
Performance Chemicals
|
468.1
|
419.5
|
48.6
|
+12
|
% | |||||||||||
Oilfield Services
|
400.6
|
304.4
|
96.2
|
+32
|
% | |||||||||||
Octane Additives
|
33.7
|
59.1
|
(25.4
|
) |
-43
|
% | ||||||||||
|
$ |
1,476.9
|
$ |
1,306.8
|
$ |
170.1
|
+13
|
% | ||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
$ |
195.0
|
$ |
188.2
|
$ |
6.8
|
+4
|
% | ||||||||
Performance Chemicals
|
97.5
|
75.8
|
21.7
|
+29
|
% | |||||||||||
Oilfield Services
|
130.4
|
109.3
|
21.1
|
+19
|
% | |||||||||||
Octane Additives
|
12.1
|
30.0
|
(17.9
|
) |
-60
|
% | ||||||||||
|
$ |
435.0
|
$ |
403.3
|
$ |
31.7
|
+8
|
% | ||||||||
Gross margin (%):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
|
33.9
|
|
|
35.9
|
|
|
-2.0
|
|
|
||||||
Performance Chemicals
|
|
20.8
|
|
|
18.1
|
|
|
+2.7
|
|
|
||||||
Oilfield Services
|
|
32.6
|
|
|
35.9
|
|
|
-3.3
|
|
|
||||||
Octane Additives
|
|
35.9
|
|
|
50.8
|
|
|
-14.9
|
|
|
||||||
Aggregate
|
|
29.5
|
|
|
30.9
|
|
|
-1.4
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Specialties
|
$ |
(78.7
|
) | $ |
(80.5
|
) | $ |
1.8
|
-2
|
% | ||||||
Performance Chemicals
|
(52.8
|
) |
(43.2
|
) |
(9.6
|
) |
+22
|
% | ||||||||
Oilfield Services
|
(108.3
|
) |
(99.8
|
) |
(8.5
|
) |
+9
|
% | ||||||||
Octane Additives
|
(2.2
|
) |
(3.3
|
) |
1.1
|
-33
|
% | |||||||||
Corporate costs
|
(52.4
|
) |
(48.8
|
) |
(3.6
|
) |
+7
|
% | ||||||||
Restructuring charge
|
(7.1
|
) |
0.0
|
(7.1
|
) |
n/a
|
||||||||||
Loss on disposal of subsidiary
|
0.0
|
(0.9
|
) |
0.9
|
-100
|
% | ||||||||||
Foreign exchange loss on liquidation of subsidiary
|
0.0
|
(1.8
|
) |
1.8
|
-100
|
% | ||||||||||
|
$ |
(301.5
|
) | $ |
(278.3
|
) | $ |
(23.2
|
) |
-8
|
% | |||||
Change (%)
|
Americas
|
|
EMEA
|
|
ASPAC
|
|
AvTel
|
|
Total
|
|
||||||||||
Volume
|
+15
|
+3
|
+1
|
+1
|
+7
|
|||||||||||||||
Price and product mix
|
+1
|
0
|
0
|
0
|
0
|
|||||||||||||||
Exchange rates
|
0
|
+6
|
+1
|
0
|
+3
|
|||||||||||||||
|
+16
|
+9
|
+2
|
+1
|
+10
|
|||||||||||||||
Change (%)
|
Americas
|
|
EMEA
|
|
ASPAC
|
|
Total
|
|
||||||||
Volume
|
+14
|
+4
|
+9
|
+7
|
||||||||||||
Price and product mix
|
+4
|
0
|
-1
|
+1
|
||||||||||||
Exchange rates
|
0
|
+5
|
+2
|
+4
|
||||||||||||
|
+18
|
+9
|
+10
|
+12
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Change
|
|
||||||
United Kingdom pension credit
|
$ |
6.3
|
$ |
5.3
|
$ |
1.0
|
||||||
German pension charge
|
(0.6
|
) |
(0.6
|
) |
0.0
|
|||||||
Foreign exchange (losses)/gains on translation
|
(5.9
|
) |
7.5
|
(13.4
|
) | |||||||
Foreign currency forward contracts gains/(losses)
|
5.2
|
(0.9
|
) |
6.1
|
||||||||
|
$ |
5.0
|
$ |
11.3
|
$ |
(6.3
|
) | |||||
2018
|
|
2017
|
|
|||||
Income before income taxes
|
$ |
131.6
|
$ |
128.1
|
||||
Adjustment to acquisition accounting for inventory fair valuation
|
0.0
|
1.7
|
||||||
Loss on disposal of subsidiary
|
0.0
|
0.9
|
||||||
Foreign exchange loss on liquidation of subsidiary
|
0.0
|
1.8
|
||||||
Adjustment for stock compensation
|
4.8
|
4.0
|
||||||
Indemnification asset regarding tax audit
|
(1.2
|
) |
0.0
|
|||||
Site closure provision
|
6.8
|
0.0
|
||||||
|
$ |
142.0
|
$ |
136.5
|
||||
Income taxes
|
$ |
46.6
|
$ |
66.3
|
||||
Adjustment of income tax provisions
|
(1.8
|
) |
0.5
|
|||||
Tax on stock compensation
|
0.2
|
3.1
|
||||||
Tax on adjustment to fair value accounting
|
0.0
|
0.3
|
||||||
Tax Cuts & Jobs Act 2017 impact
|
(12.3
|
) |
(40.6
|
) | ||||
Tax on site closure provision
|
1.9
|
0.0
|
||||||
Other discrete items
|
(0.9
|
) |
(2.0
|
) | ||||
|
$ |
33.7
|
$ |
27.6
|
||||
GAAP effective tax rate
|
35.4
|
% |
51.8
|
% | ||||
Adjusted effective tax rate
|
23.7
|
% |
20.2
|
% | ||||
2019
|
|
2018
|
|
|||||
Total current assets
|
$ |
630.3
|
$ |
663.9
|
||||
Total current liabilities
|
(303.5
|
) |
(296.6
|
) | ||||
Working capital
|
326.8
|
367.3
|
||||||
Less cash and cash equivalents
|
(75.7
|
) |
(123.1
|
) | ||||
Less prepaid income taxes
|
(2.5
|
) |
(1.5
|
) | ||||
Less other current assets
|
(0.8
|
) |
0.0
|
|||||
Add back current portion of accrued income taxes
|
10.3
|
8.6
|
||||||
Add back current portion of long-term debt
|
0.0
|
21.4
|
||||||
Add back current portion of finance leases
|
1.0
|
1.8
|
||||||
Add back current portion of plant closure provisions
|
5.6
|
5.9
|
||||||
Add back current portion of operating lease liabilities
|
10.6
|
0.0
|
||||||
Adjusted working capital
|
$ |
275.3
|
$ |
280.4
|
||||
|
|
|||
2020
|
$ |
1.0
|
||
2021
|
0.4
|
|||
2022
|
0.1
|
|||
2023
|
58.6
|
|||
Total debt
|
60.1
|
|||
Current portion of long-term debt and finance leases
|
(1.0
|
) | ||
Long-term debt and finance leases, net of current portion
|
$ |
59.1
|
||
Total
|
|
2020
|
|
2021-22
|
|
2023-24
|
|
Thereafter
|
|
|||||||||||
Operating activities
|
|
|
|
|
|
|||||||||||||||
Remediation payments
|
49.3
|
5.6
|
7.8
|
4.2
|
31.7
|
|||||||||||||||
Operating lease commitments
|
32.5
|
10.6
|
14.1
|
5.9
|
1.9
|
|||||||||||||||
Raw material purchase obligations
|
21.3
|
6.3
|
7.3
|
7.7
|
0.0
|
|||||||||||||||
Interest payments on debt
|
9.0
|
2.4
|
4.8
|
1.8
|
0.0
|
|||||||||||||||
Investing activities
|
|
|
|
|
|
|||||||||||||||
Capital commitments
|
4.0
|
4.0
|
0.0
|
0.0
|
0.0
|
|||||||||||||||
Financing activities
|
|
|
|
|
|
|||||||||||||||
Long-term debt obligations
|
58.6
|
0.0
|
0.0
|
58.6
|
0.0
|
|||||||||||||||
Finance leases
|
1.5
|
1.0
|
0.5
|
0.0
|
0.0
|
|||||||||||||||
Total
|
$ |
176.2
|
$ |
29.9
|
$ |
34.5
|
$ |
78.2
|
$ |
33.6
|
||||||||||
Item 7A
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8
|
Financial Statements and Supplementary Data
|
|
Years ended December 31
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Net sales
|
$ |
1,513.3
|
$ |
1,476.9
|
$ |
1,306.8
|
||||||
Cost of goods sold
|
(1,047.1
|
) |
(1,041.9
|
) |
(903.5
|
) | ||||||
Gross profit
|
466.2
|
435.0
|
403.3
|
|||||||||
Operating expenses:
|
|
|
|
|||||||||
Selling, general and administrative
|
(280.9
|
) |
(261.0
|
) |
(244.2
|
) | ||||||
Research and development
|
(35.4
|
) |
(33.4
|
) |
(31.4
|
) | ||||||
Restructuring charge
|
0.0
|
(7.1
|
) |
0.0
|
||||||||
Loss on disposal of subsidiary
|
0.0
|
0.0
|
(0.9
|
) | ||||||||
Foreign exchange loss on liquidation of subsidiary
|
0.0
|
0.0
|
(1.8
|
) | ||||||||
Total operating expenses
|
(316.3
|
) |
(301.5
|
) |
(278.3
|
) | ||||||
Operating income
|
149.9
|
133.5
|
125.0
|
|||||||||
Other income, net
|
5.3
|
5.0
|
11.3
|
|||||||||
Interest expense, net
|
(4.8
|
) |
(6.9
|
) |
(8.2
|
) | ||||||
Income before income tax expense
|
150.4
|
131.6
|
128.1
|
|||||||||
Income tax expense
|
(38.2
|
) |
(46.6
|
) |
(66.3
|
) | ||||||
Net income
|
$ |
112.2
|
$ |
85.0
|
$ |
61.8
|
||||||
Earnings per share:
|
|
|
|
|||||||||
Basic
|
$ |
4.58
|
$ |
3.48
|
$ |
2.56
|
||||||
Diluted
|
$ |
4.54
|
$ |
3.45
|
$ |
2.52
|
||||||
Weighted average shares outstanding (in thousands):
|
|
|
|
|||||||||
Basic
|
24,482
|
24,401
|
24,148
|
|||||||||
Diluted
|
24,728
|
24,603
|
24,486
|
|||||||||
Total comprehensive income for the years ended December 31
|
|
|
2019
|
|
2018
|
|
2017
|
|
||||||||
Net income
|
|
$ |
112.2
|
$ |
85.0
|
$ |
61.8
|
|||||||||
Changes in cumulative translation adjustment, net of tax of $(0.3
)
million, $2.7 million and $(3.3) million, respectively
|
|
(6.0
|
) |
(22.6
|
) |
44.0
|
||||||||||
R
ealized
(losses)
|
|
(1.5
|
) |
0.3
|
0.9
|
|||||||||||
Amortization of prior service credit, net of tax of $0.2 million,
$
0.2 million and $0.2 million, respectively
|
|
(0.7
|
) |
(0.9
|
) |
(0.8
|
) | |||||||||
Amortization of actuarial net losses, net of tax of $0.0 million, $(0.3) million and $(0.9) million, respectively
|
|
0.0
|
1.7
|
4.1
|
||||||||||||
Actuarial net gains/(losses) arising during the year, net of tax of $
(
2.2
)
million, $3.3 million and $(8.8) million, respectively
|
|
9.5
|
(15.7
|
) |
39.5
|
|||||||||||
Total comprehensive income
|
|
$ |
113.5
|
$ |
47.8
|
$ |
149.5
|
|||||||||
|
|
At December 31
|
|
|||||
|
|
2019
|
|
|
2018
|
|
||
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
75.7
|
|
|
$
|
123.1
|
|
Trade and other accounts receivable (less allowances of $3.8
million and $2.9
million, respectively)
|
|
|
292.0
|
|
|
|
279.7
|
|
Inventories (less allowances of $14.5
million and $13.6
million, respectively):
|
|
|
|
|
|
|
|
|
Finished goods
|
|
|
173.9
|
|
|
|
180.2
|
|
Raw materials
|
|
|
70.7
|
|
|
|
67.8
|
|
Total inventories
|
|
|
244.6
|
|
|
|
248.0
|
|
Prepaid expenses
|
|
|
14.7
|
|
|
|
11.6
|
|
Prepaid income taxes
|
|
|
2.5
|
|
|
|
1.5
|
|
Other current assets
|
|
|
0.8
|
|
|
|
0.0
|
|
Total current assets
|
|
|
630.3
|
|
|
|
663.9
|
|
Net property, plant and equipment
|
|
|
198.7
|
|
|
|
196.4
|
|
Operating leases
right-of-use
assets
|
|
|
32.4
|
|
|
|
0.0
|
|
Goodwill
|
|
|
363.0
|
|
|
|
364.9
|
|
Other intangible assets
|
|
|
113.5
|
|
|
|
136.3
|
|
Deferred tax assets
|
|
|
9.1
|
|
|
|
8.8
|
|
Pension asset
|
|
|
115.9
|
|
|
|
95.9
|
|
Other
non-current
assets
|
|
|
5.9
|
|
|
|
7.2
|
|
Total assets
|
|
$
|
1,468.8
|
|
|
$
|
1,473.4
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
122.0
|
|
|
$
|
126.8
|
|
Accrued liabilities
|
|
|
154.0
|
|
|
|
132.1
|
|
Current portion of long-term debt
|
|
|
0.0
|
|
|
|
21.4
|
|
Current portion of finance leases
|
|
|
1.0
|
|
|
|
1.8
|
|
Current portion of plant closure provisions
|
|
|
5.6
|
|
|
|
5.9
|
|
Current portion of accrued income taxes
|
|
|
10.3
|
|
|
|
8.6
|
|
Current portion of operating lease liabilities
|
|
|
10.6
|
|
|
|
0.0
|
|
Total current liabilities
|
|
|
303.5
|
|
|
|
296.6
|
|
Long-term debt, net of current portion
|
|
|
58.6
|
|
|
|
186.2
|
|
Finance leases, net of current portion
|
|
|
0.5
|
|
|
|
1.5
|
|
Operating lease liabilities, net of current portion
|
|
|
21.9
|
|
|
|
0.0
|
|
Plant closure provisions, net of current portion
|
|
|
43.7
|
|
|
|
43.6
|
|
Accrued income taxes, net of current portion
|
|
|
36.2
|
|
|
|
40.0
|
|
Unrecognized tax benefits, net of current portion
|
|
|
16.4
|
|
|
|
14.0
|
|
Deferred tax liabilities
|
|
|
49.6
|
|
|
|
48.2
|
|
Pension liabilities and post-employment benefits
|
|
|
17.8
|
|
|
|
15.7
|
|
Other
non-current
liabilities
|
|
|
1.7
|
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common stock, $0.01
par value, authorized 40,000,000
shares, issued 29,554,500
shares
|
|
|
0.3
|
|
|
|
0.3
|
|
Additional
paid-in
capital
|
|
|
330.4
|
|
|
|
324.9
|
|
Treasury stock (
5,047,278
and 5,120,799
shares at cost, respectively)
|
|
|
(93.3
|
)
|
|
|
(92.8
|
)
|
Retained earnings
|
|
|
755.5
|
|
|
|
668.3
|
|
Accumulated other comprehensive loss
|
|
|
(74.4
|
)
|
|
|
(75.7
|
)
|
Total Innospec stockholders’ equity
|
|
|
918.5
|
|
|
|
825.0
|
|
Non-controlling
interest
|
|
|
0.4
|
|
|
|
0.5
|
|
Total equity
|
|
|
918.9
|
|
|
|
825.5
|
|
Total liabilities and equity
|
|
$
|
1,468.8
|
|
|
$
|
1,473.4
|
|
|
|
Years ended December 31
|
|
|||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
112.2
|
|
|
$
|
85.0
|
|
|
$
|
61.8
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
47.6
|
|
|
|
49.6
|
|
|
|
50.4
|
|
Loss on disposal of subsidiary
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.9
|
|
Foreign exchange loss on liquidation of subsidiary
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.8
|
|
Deferred tax (benefit)/expense
|
|
|
(0.8
|
)
|
|
|
5.5
|
|
|
|
(6.7
|
)
|
Cash contributions to defined benefit pension plans
|
|
|
(0.4
|
)
|
|
|
(1.0
|
)
|
|
|
(1.0
|
)
|
Non-cash
income of defined benefit pension plans
|
|
|
(6.1
|
)
|
|
|
(4.3
|
)
|
|
|
(3.6
|
)
|
Stock option compensation
|
|
|
6.6
|
|
|
|
4.9
|
|
|
|
4.1
|
|
Changes in assets and liabilities, net of effects of acquired and divested companies:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other accounts receivable
|
|
|
(18.2
|
)
|
|
|
(40.1
|
)
|
|
|
(83.2
|
)
|
Inventories
|
|
|
2.4
|
|
|
|
(42.2
|
)
|
|
|
(30.8
|
)
|
Prepaid expenses
|
|
|
(3.1
|
)
|
|
|
0.5
|
|
|
|
(6.8
|
)
|
Accounts payable and accrued liabilities
|
|
|
23.2
|
|
|
|
38.4
|
|
|
|
48.6
|
|
Accrued income taxes
|
|
|
(2.4
|
)
|
|
|
(6.1
|
)
|
|
|
47.5
|
|
Plant closure provisions
|
|
|
0.0
|
|
|
|
3.6
|
|
|
|
3.8
|
|
Unrecognized tax benefits
|
|
|
2.5
|
|
|
|
11.5
|
|
|
|
(0.5
|
)
|
Other assets and liabilities
|
|
|
(1.9
|
)
|
|
|
(0.4
|
)
|
|
|
(3.6
|
)
|
Net cash provided by operating activities
|
|
|
161.6
|
|
|
|
104.9
|
|
|
|
82.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(29.9
|
)
|
|
|
(28.9
|
)
|
|
|
(23.3
|
)
|
Business combinations, net of cash acquired
|
|
|
0.0
|
|
|
|
(5.4
|
)
|
|
|
2.6
|
|
Acquisition of intangible asset
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
(4.2
|
)
|
Internally developed software
|
|
|
(1.1
|
)
|
|
|
(1.2
|
)
|
|
|
(4.7
|
)
|
Net cash used in investing activities
|
|
|
(31.0
|
)
|
|
|
(35.5
|
)
|
|
|
(29.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving credit facility
|
|
|
105.5
|
|
|
|
10.0
|
|
|
|
10.0
|
|
Repayments of revolving credit facility
|
|
|
(171.5
|
)
|
|
|
(5.0
|
)
|
|
|
(50.0
|
)
|
Repayment of term loans
|
|
|
(82.5
|
)
|
|
|
(16.5
|
)
|
|
|
(11.0
|
)
|
Repayment of finance leases and term loans
|
|
|
(1.7
|
)
|
|
|
(2.7
|
)
|
|
|
(2.5
|
)
|
Refinancing costs
|
|
|
(1.5
|
)
|
|
|
0.0
|
|
|
|
0.0
|
|
Dividend paid
|
|
|
(25.0
|
)
|
|
|
(21.7
|
)
|
|
|
(18.6
|
)
|
Issue of treasury stock
|
|
|
1.2
|
|
|
|
1.1
|
|
|
|
6.8
|
|
Repurchase of common stock
|
|
|
(2.4
|
)
|
|
|
(1.4
|
)
|
|
|
(1.1
|
)
|
Net cash used in financing activities
|
|
|
(177.9
|
)
|
|
|
(36.2
|
)
|
|
|
(66.4
|
)
|
Effect of foreign currency exchange rate changes on cash
|
|
|
(0.1
|
)
|
|
|
(0.3
|
)
|
|
|
1.6
|
|
Net change in cash and cash equivalents
|
|
|
(47.4
|
)
|
|
|
32.9
|
|
|
|
(11.7
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
123.1
|
|
|
|
90.2
|
|
|
|
101.9
|
|
Cash and cash equivalents at end of year
|
|
$
|
75.7
|
|
|
$
|
123.1
|
|
|
$
|
90.2
|
|
|
|
Common
Stock
|
|
|
Additional
Paid-In
Capital
|
|
|
Treasury
Stock
|
|
|
Retained
Earnings
|
|
|
Accumulated
Other
Comprehensive
Loss |
|
|
Non-
controlling Interest |
|
|
Total
Equity |
|
|||||||
Balance at December 31, 2016
|
|
$
|
0.3
|
|
|
$
|
315.1
|
|
|
$
|
(97.5
|
)
|
|
$
|
561.8
|
|
|
$
|
(126.2
|
)
|
|
$
|
0.3
|
|
|
$
|
653.8
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61.8
|
|
|
|
|
|
|
|
|
|
|
|
61.8
|
|
Dividend paid ($0.77 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18.6
|
)
|
|
|
|
|
|
|
|
|
|
|
(18.6
|
)
|
Changes in cumulative translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44.0
|
|
|
|
|
|
|
|
44.0
|
|
Share of net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Unrealized gains on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
0.9
|
|
Treasury stock
re-issued
|
|
|
|
|
|
|
1.1
|
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.4
|
|
Treasury stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.1
|
)
|
Stock option compensation
|
|
|
|
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
Amortization of prior service credit, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
(0.8
|
)
|
Amortization of actuarial net losses, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
|
|
|
|
|
4.1
|
|
Actuarial net gains arising during the year, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39.5
|
|
|
|
|
|
|
|
39.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2017
|
|
$
|
0.3
|
|
|
$
|
320.4
|
|
|
$
|
(93.3
|
)
|
|
$
|
605.0
|
|
|
$
|
(38.5
|
)
|
|
$
|
0.4
|
|
|
$
|
794.3
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85.0
|
|
|
|
|
|
|
|
|
|
|
|
85.0
|
|
Dividend paid ($0.89 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(21.7
|
)
|
Changes in cumulative translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22.6
|
)
|
|
|
|
|
|
|
(22.6
|
)
|
Share of net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Unrealized gains on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
0.3
|
|
Treasury stock
re-issued
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.5
|
|
Treasury stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.4
|
)
|
Stock option compensation
|
|
|
|
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.9
|
|
Amortization of prior service credit, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
(0.9
|
)
|
Amortization of actuarial net losses, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.7
|
|
|
|
|
|
|
|
1.7
|
|
Actuarial net losses arising during the year, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15.7
|
)
|
|
|
|
|
|
|
(15.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2018
|
|
$
|
0.3
|
|
|
$
|
324.9
|
|
|
$
|
(92.8
|
)
|
|
$
|
668.3
|
|
|
$
|
(75.7
|
)
|
|
$
|
0.5
|
|
|
$
|
825.5
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112.2
|
|
|
|
|
|
|
|
|
|
|
|
112.2
|
|
Dividend paid ($1.02 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(25.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(25.0
|
)
|
Changes in cumulative translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6.0
|
)
|
|
|
|
|
|
|
(6.0
|
)
|
Share of net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
Realized losses on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
(1.5
|
)
|
Treasury stock
re-issued
|
|
|
|
|
|
|
(1.1
|
)
|
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
|
Treasury stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.4
|
)
|
Stock option compensation
|
|
|
|
|
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.6
|
|
Amortization of prior service credit, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
(0.7
|
)
|
Actuarial net gains arising during the year, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.5
|
|
|
|
|
|
|
|
9.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2019
|
|
$
|
0.3
|
|
|
$
|
330.4
|
|
|
$
|
(93.3
|
)
|
|
$
|
755.5
|
|
|
$
|
(74.4
|
)
|
|
$
|
0.4
|
|
|
$
|
918.9
|
|
Buildings
|
7 to 25 years
|
|||
Equipment
|
3 to 10 years
|
Technology
|
10 to 17 years
|
|||
Customer lists
|
10 to 15 years
|
|||
Brand names
|
5 to 10 years
|
|||
Product rights
|
9 to 10 years
|
|||
Internally developed software
|
3 to 5 years
|
|||
Marketing related
|
11 years
|
(in millions)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net Sales:
|
|
|
|
|
|
|
|
|
|
|||
Refinery and Performance
|
$ |
427.9
|
$ |
432.1
|
$ |
397.0
|
||||||
Other
|
155.8
|
142.4
|
126.8
|
|||||||||
Fuel Specialties
|
583.7
|
574.5
|
523.8
|
|||||||||
Personal Care
|
228.0
|
241.4
|
206.5
|
|||||||||
Home Care
|
93.4
|
109.1
|
103.4
|
|||||||||
Other
|
107.3
|
117.6
|
109.6
|
|||||||||
Performance Chemicals
|
428.7
|
468.1
|
419.5
|
|||||||||
Oilfield Services
|
479.9
|
400.6
|
304.4
|
|||||||||
Octane Additives
|
21.0
|
33.7
|
59.1
|
|||||||||
|
$ |
1,513.3
|
$ |
1,476.9
|
$ |
1,306.8
|
||||||
2019
|
|
2018
|
|
2017
|
|
|||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|||
Fuel Specialties
|
$ |
204.5
|
$ |
195.0
|
$ |
188.2
|
||||||
Performance Chemicals
|
100.1
|
97.5
|
75.8
|
|||||||||
Oilfield Services
|
159.9
|
130.4
|
109.3
|
|||||||||
Octane Additives
|
1.7
|
12.1
|
30.0
|
|||||||||
|
$ |
466.2
|
$ |
435.0
|
$ |
403.3
|
||||||
Operating income/(expense):
|
|
|
|
|
|
|
|
|
|
|||
Fuel Specialties
|
$ |
116.6
|
$ |
116.3
|
$ |
107.7
|
||||||
Performance Chemicals
|
48.7
|
44.7
|
32.6
|
|||||||||
Oilfield Services
|
39.7
|
22.1
|
9.5
|
|||||||||
Octane Additives
|
(0.7
|
) |
9.9
|
26.7
|
||||||||
Corporate costs
|
(54.4
|
) |
(52.4
|
) |
(48.8
|
) | ||||||
Restructuring charge
|
0.0
|
(7.1
|
) |
0.0
|
||||||||
Loss on disposal of subsidiary
|
0.0
|
0.0
|
(0.9
|
) | ||||||||
Foreign exchange loss on liquidation of subsidiary
|
0.0
|
0.0
|
(1.8
|
) | ||||||||
Total operating income
|
$ |
149.9
|
$ |
133.5
|
$ |
125.0
|
||||||
Identifiable assets at year end:
|
|
|
|
|
|
|
|
|
|
|||
Fuel Specialties
|
$ |
499.7
|
$ |
470.5
|
$ |
437.0
|
||||||
Performance Chemicals
|
383.3
|
463.9
|
480.8
|
|||||||||
Oilfield Services
|
316.8
|
296.1
|
256.6
|
|||||||||
Octane Additives
|
24.2
|
39.6
|
41.7
|
|||||||||
Corporate
|
244.8
|
203.3
|
194.1
|
|||||||||
|
$ |
1,468.8
|
$ |
1,473.4
|
$ |
1,410.2
|
||||||
|
•
|
managing the Group as a company with securities listed on the NASDAQ and registered with the SEC;
|
|
•
|
the President/CEO’s office, group finance, group human resources, group legal and compliance counsel, and investor relations;
|
|
•
|
running the corporate offices in the U.S. and Europe;
|
|
•
|
the corporate development function since they do not relate to the current trading activities of our other reporting segments; and
|
•
|
the corporate share of the information technology, production technology, safety, health, environment, accounting and human resources departments.
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Net sales by source:
|
|
|
|
|
|
|
|
|
|
|||
United States & North America
|
$ |
897.2
|
$ |
803.1
|
$ |
615.7
|
||||||
United Kingdom
|
810.9
|
797.5
|
730.9
|
|||||||||
Rest of Europe
|
115.7
|
143.7
|
143.4
|
|||||||||
Rest of World
|
47.8
|
29.5
|
39.2
|
|||||||||
Sales between areas
|
(358.3
|
) |
(296.9
|
) |
(222.4
|
) | ||||||
|
$ |
1,513.3
|
$ |
1,476.9
|
$ |
1,306.8
|
||||||
Income before income taxes:
|
|
|
|
|
|
|
|
|
|
|||
United States & North America
|
$ |
53.9
|
$ |
37.1
|
$ |
11.5
|
||||||
United Kingdom
|
67.0
|
59.5
|
51.9
|
|||||||||
Rest of Europe
|
27.2
|
32.8
|
63.1
|
|||||||||
Rest of World
|
2.3
|
2.2
|
1.6
|
|||||||||
|
$ |
150.4
|
$ |
131.6
|
$ |
128.1
|
||||||
Long-lived assets at year end:
|
|
|
|
|
|
|
|
|
|
|||
United States & North America
|
$ |
156.0
|
$ |
148.6
|
$ |
149.7
|
||||||
United Kingdom
|
70.4
|
71.6
|
45.7
|
|||||||||
Rest of Europe
|
116.6
|
112.2
|
163.5
|
|||||||||
Rest of World
|
0.3
|
0.3
|
0.3
|
|||||||||
|
$ |
343.3
|
$ |
332.7
|
$ |
359.2
|
||||||
Identifiable assets at year end:
|
|
|
|
|
|
|
|
|
|
|||
United States & North America
|
$ |
419.5
|
$ |
402.5
|
$ |
452.2
|
||||||
United Kingdom
|
487.2
|
504.7
|
258.4
|
|||||||||
Rest of Europe
|
163.2
|
173.1
|
317.5
|
|||||||||
Rest of World
|
35.9
|
28.2
|
20.3
|
|||||||||
Goodwill
|
363.0
|
364.9
|
361.8
|
|||||||||
|
$ |
1,468.8
|
$ |
1,473.4
|
$ |
1,410.2
|
||||||
|
|
2019
|
|
2018
|
|
2017
|
|
|||||
Numerator (in millions):
|
|
|
|
|
|
|
|
|
|
|
||
Net income available to common stockholders
|
|
$
|
112.2
|
|
|
$
|
85.0
|
|
|
$
|
61.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Denominator (in thousands):
|
|
|
|
|
|
|
|
|
|
|
||
Weighted average common shares outstanding
|
24,482
|
24,401
|
24,148
|
|||||||||
Dilutive effect of stock options and awards
|
246
|
202
|
338
|
|||||||||
Denominator for diluted earnings per share
|
24,728
|
24,603
|
24,486
|
|||||||||
Net income per share, basic:
|
$ |
4.58
|
$ |
3.48
|
$ |
2.56
|
||||||
Net income per share, diluted:
|
$ |
4.54
|
$ |
3.45
|
$ |
2.52
|
||||||
2019
|
|
2018
|
|
|||||
Land
|
$ |
19.8
|
$ |
18.6
|
||||
Buildings
|
60.0
|
57.0
|
||||||
Equipment
|
330.7
|
311.7
|
||||||
Work in progress
|
19.0
|
16.0
|
||||||
|
429.5
|
403.3
|
||||||
Less accumulated depreciation
|
(230.8
|
) |
(206.9
|
) | ||||
|
$ |
198.7
|
$ |
196.4
|
||||
(in millions)
|
Twelve Months
Ended December 31 |
|
||
|
|
2019
|
|
|
Finance lease cost:
|
|
|
|
|
Amortization of
right-of-use
assets
|
$ |
1.7
|
||
Interest on lease liabilities
|
0.0
|
|||
Total finance lease cost
|
1.7
|
|||
Operating lease cost
|
12.1
|
|||
Short-term lease cost
|
2.5
|
|||
Variable lease cost
|
0.3
|
|||
Total lease cost
|
$ |
16.6
|
||
(in millions)
|
|
Twelve Months
Ended December 31 |
|
|
|
|
2019
|
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
Operating cash flows from operating leases
|
|
$
|
14.3
|
|
Operating cash flows from finance leases
|
|
|
2.1
|
|
Finance cash flows from finance leases
|
|
|
0.0
|
|
Right-of-use
assets obtained in exchange for new lease obligations:
|
|
|
|
|
Operating leases
|
|
$
|
4.3
|
|
Finance leases
|
|
|
0.0
|
|
(in millions except lease term and discount rate)
|
December 31
|
|
||
|
2019
|
|
||
Operating leases:
|
|
|
|
|
Operating lease
right-of-use
assets
|
$ |
32.4
|
||
Current portion of operating lease liabilities
|
$
|
10.6
|
||
Operating lease liabilities, net of current portion
|
21.9
|
|||
Total operating lease liabilities
|
$ |
32.5
|
||
Finance leases:
|
|
|
|
|
Property, plant and equipment at cost
|
$ |
9.9
|
||
Accumulated depreciation
|
(8.1
|
) | ||
Net property, plant and equipment, net
|
$ |
1.8
|
||
Current portion of finance leases
|
$ |
1.0
|
||
Finance leases, net of current portion
|
0.5
|
|||
Total finance lease liabilities
|
$ |
1.5
|
||
Weighted average remaining lease term:
|
|
|
|
|
Operating leases
|
3.3
years
|
|||
Finance leases
|
1.7
years
|
|||
Weighted average discount rate:
|
|
|
|
|
Operating leases
|
3.1
|
% | ||
Finance leases
|
2.4
|
% |
Operating
Leases |
|
Finance
Leases |
|
|||||
Within one year
|
$ |
10.8
|
$ |
1.1
|
||||
Year two
|
9.1
|
0.4
|
||||||
Year three
|
5.8
|
0.1
|
||||||
Year four
|
4.4
|
0.0
|
||||||
Year five
|
2.1
|
0.0
|
||||||
Thereafter
|
2.5
|
0.0
|
||||||
Total lease payments
|
34.7
|
1.6
|
||||||
Less imputed interest
|
(2.2
|
) |
(0.1
|
) | ||||
Total
|
$ |
32.5
|
$ |
1.5
|
||||
Operating
Leases |
|
Finance
Leases |
|
|||||
Within one year
|
$ |
6.5
|
$ |
1.8
|
||||
Year two
|
4.5
|
1.0
|
||||||
Year three
|
3.2
|
0.4
|
||||||
Year four
|
2.3
|
0.1
|
||||||
Year five
|
2.1
|
0.0
|
||||||
Thereafter
|
4.4
|
0.0
|
||||||
Total lease payments
|
$ |
23.0
|
$ |
3.3
|
||||
(
in millions
)
|
Fuel
Specialties |
|
Performance
Chemicals |
|
Oilfield
Services |
|
Octane
Additives |
|
Total
|
|
||||||||||
At December 31, 2017
|
|
|
|
|
|
|||||||||||||||
Gross cost
(1)
|
$ |
207.9
|
$ |
116.6
|
$ |
37.3
|
$ |
236.5
|
$ |
598.3
|
||||||||||
Accumulated impairment losses
|
0.0
|
0.0
|
0.0
|
(236.5
|
) |
(236.5
|
) | |||||||||||||
Net book amount
|
$ |
207.9
|
$ |
116.6
|
$ |
37.3
|
$ |
0.0
|
$ |
361.8
|
||||||||||
Exchange effect
|
0.0
|
(4.4
|
) |
0.0
|
0.0
|
(4.4
|
) | |||||||||||||
Acquisition
|
0.0
|
0.0
|
7.5
|
0.0
|
7.5
|
|||||||||||||||
At December 31, 2018
|
|
|
|
|
|
|||||||||||||||
Gross cost
(1)
|
$ |
207.9
|
$ |
112.2
|
$ |
44.8
|
$ |
236.5
|
$ |
601.4
|
||||||||||
Accumulated impairment losses
|
0.0
|
0.0
|
0.0
|
(236.5
|
) |
(236.5
|
) | |||||||||||||
Net book amount
|
$ |
207.9
|
$ |
112.2
|
$ |
44.8
|
$ |
0.0
|
$ |
364.9
|
||||||||||
Exchange effect
|
(0.2
|
) |
(1.7
|
) |
0.0
|
0.0
|
(1.9
|
) | ||||||||||||
At December 31, 2019
|
|
|
|
|
|
|||||||||||||||
Gross cost
(1)
|
$ |
207.7
|
$
|
110.5
|
$
|
44.8
|
$
|
236.5
|
$
|
599.5
|
||||||||||
Accumulated impairment losses
|
0.0
|
0.0
|
0.0
|
(236.5
|
) |
(236.5
|
) | |||||||||||||
Net book amount
|
$ |
207.7
|
$
|
110.5
|
$
|
44.8
|
$
|
0.0
|
$
|
363.0
|
||||||||||
(1)
|
Gross cost is net of $8.7
million, $0.3
million and $289.5
million of historical accumulated amortization in respect of the Fuel Specialties, Performance Chemicals and Octane Additives reporting segments, respectively
|
(
in millions
)
|
|
2019
|
|
|
2018
|
|
||
Gross cost:
|
|
|
|
|
|
|
|
|
– Product rights
|
|
$
|
34.0
|
|
|
$
|
34.0
|
|
– Brand names
|
|
|
8.9
|
|
|
|
8.9
|
|
– Technology
|
|
|
55.1
|
|
|
|
55.1
|
|
– Customer and distributor relationships
|
|
|
124.7
|
|
|
|
125.6
|
|
– Patents
|
|
|
2.9
|
|
|
|
2.9
|
|
–
Non-compete
agreements
|
|
|
4.1
|
|
|
|
4.1
|
|
– Marketing related
|
|
|
22.1
|
|
|
|
22.1
|
|
– Internally developed software
|
|
|
43.0
|
|
|
|
41.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
294.8
|
|
|
|
294.6
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
– Product rights
|
|
|
(23.9
|
)
|
|
|
(20.1
|
)
|
– Brand names
|
|
|
(6.0
|
)
|
|
|
(5.4
|
)
|
– Technology
|
|
|
(22.5
|
)
|
|
|
(19.1
|
)
|
– Customer and distributor relationships
|
|
|
(63.9
|
)
|
|
|
(53.5
|
)
|
– Patents
|
|
|
(2.9
|
)
|
|
|
(2.9
|
)
|
–
Non-compete
agreements
|
|
|
(4.1
|
)
|
|
|
(4.1
|
)
|
– Marketing related
|
|
|
(22.1
|
)
|
|
|
(22.1
|
)
|
– Internally developed software
|
|
|
(35.9
|
)
|
|
|
(31.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(181.3
|
)
|
|
|
(158.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
113.5
|
|
|
$
|
136.3
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
||
2020
|
$ |
22.7
|
||
2021
|
$ |
19.5
|
||
2022
|
$ |
17.9
|
||
2023
|
$ |
14.5
|
||
2024
|
$ |
12.5
|
(
in millions
)
|
2019
|
|
2018
|
|
2017
|
|
||||||
Plan net pension (credit)/charge:
|
|
|
|
|||||||||
Interest cost on PBO
|
$ |
15.2
|
$ |
15.0
|
$ |
15.2
|
||||||
Expected return on plan assets
|
(22.0
|
) |
(22.2
|
) |
(24.5
|
) | ||||||
Amortization of prior service credit
|
(0.9
|
) |
(1.1
|
) |
(1.0
|
) | ||||||
Amortization of actuarial net losses
|
0.0
|
2.0
|
5.0
|
|||||||||
|
$ |
(7.7
|
) | $ |
(6.3
|
) | $ |
(5.3
|
) | |||
Plan assumptions at December 31, (%):
|
|
|
|
|||||||||
Discount rate
|
1.95
|
2.78
|
2.56
|
|||||||||
Inflation rate
|
2.25
|
2.25
|
2.20
|
|||||||||
Rate of return on plan assets – overall on
bid-value
|
2.50
|
3.05
|
2.75
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan asset allocation by category (%):
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
securities
and insura
nce contracts
|
|
|
86
|
|
|
|
83
|
|
|
|
53
|
|
Equity
securities
and real estate
|
|
|
10
|
|
|
|
12
|
|
|
|
38
|
|
Cash
|
|
|
4
|
|
|
|
5
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
in millions
)
|
2019
|
|
2018
|
|
||||
Change in PBO:
|
|
|
||||||
Opening balance
|
$ |
643.2
|
$ |
721.4
|
||||
Interest cost
|
15.2
|
15.0
|
||||||
Service cost
|
0.9
|
1.2
|
||||||
Benefits paid
|
(42.1
|
) |
(43.7
|
) | ||||
Actuarial
losses/(
gains
)
|
57.7
|
(14.6
|
) | |||||
Plan amendments
|
0.0
|
3.3
|
||||||
Exchange effect
|
26.1
|
(39.4
|
) | |||||
Closing balance
|
$ |
701.0
|
$ |
643.2
|
||||
Fair value of plan assets:
|
|
|
||||||
Opening balance
|
$ |
739.1
|
$ |
837.4
|
||||
B
enefits paid
|
(42.1
|
) |
(43.7
|
) | ||||
Actual contributions by employer
|
0.4
|
1.1
|
||||||
Actual return on assets
|
89.1
|
(10.3
|
) | |||||
Exchange effect
|
30.4
|
(45.4
|
) | |||||
Closing balance
|
$ |
816.9
|
$ |
739.1
|
||||
(in millions)
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable Inputs
(Level 3)
|
|
|
Total
|
|
||||
At December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities issued by
non-U.S.
governments and government agencies
|
|
$
|
98.4
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
98.4
|
|
Corporate debt securities
|
|
|
|
|
|
|
445.9
|
|
|
|
|
|
|
|
445.9
|
|
Equity backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial derivatives
|
|
|
|
|
|
|
(3.7
|
)
|
|
|
|
|
|
|
(3.7
|
)
|
Investments measured at net asset value
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46.8
|
|
Other asset backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance contracts
|
|
|
|
|
|
|
|
|
|
|
157.9
|
|
|
|
157.9
|
|
Real estate
|
|
|
41.7
|
|
|
|
|
|
|
|
|
|
|
|
41.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
|
140.1
|
|
|
|
442.2
|
|
|
|
157.9
|
|
|
|
787.0
|
|
Cash
|
|
|
29.9
|
|
|
|
|
|
|
|
|
|
|
|
29.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total plan assets
|
|
$
|
170.0
|
|
|
$
|
442.2
|
|
|
$
|
157.9
|
|
|
$
|
816.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities issued by
non-U.S.
governments and government agencies
|
|
$
|
67.2
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
67.2
|
|
Corporate debt securities
|
|
|
|
|
|
|
406.4
|
|
|
|
|
|
|
|
406.4
|
|
Equity backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial derivatives
|
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
0.5
|
|
Investments measured at net asset value
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53.0
|
|
Other asset backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance contracts
|
|
|
|
|
|
|
|
|
|
|
142.5
|
|
|
|
142.5
|
|
Real estate
|
|
|
31.4
|
|
|
|
|
|
|
|
|
|
|
31.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
|
98.6
|
|
|
|
406.9
|
|
|
|
142.5
|
|
|
|
701.0
|
|
Cash
|
|
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total plan assets
|
|
$
|
136.7
|
|
|
$
|
406.9
|
|
|
$
|
142.5
|
|
|
$
|
739.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) have not been categorized in the fair value
tab
hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
le with a
|
(in millions)
|
Other
Assets |
|
||
Balance at December 31, 2017
|
162.8
|
|||
Realized/unrealized gains/(losses):
|
|
|||
Relating to assets still held at the reporting date
|
(4.8
|
) | ||
Purchases, issuances and settlements
|
(6.7
|
) | ||
Exchange effect
|
(8.8
|
) | ||
Balance at December 31, 2018
|
$
|
142.5
|
||
Realized/unrealized gains/(losses):
|
|
|||
Relating to assets still held at the reporting date
|
16.0
|
|||
Purchases, issuances and settlements
|
(6.5
|
) | ||
Exchange effect
|
5.9
|
|||
Balance at December 31, 2019
|
$ |
157.9
|
||
|
|
|||
Interest cost on PBO
|
$ |
11.5
|
||
Expected return on plan assets
|
(18.3
|
) | ||
Amortization of prior service credit
|
(0.9
|
) | ||
Amortization of actuarial net losses
|
|
|
0.9
|
|
|
$ |
(6.8
|
) | |
|
|
|||
2020
|
$ |
42.4
|
||
2021
|
$ |
36.2
|
||
2022
|
$ |
35.5
|
||
2023
|
$ |
34.6
|
||
2024
|
$ |
34.8
|
||
2025-2029
|
$ |
167.1
|
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
||||||
Plan net pension charge:
|
|
|
|
|||||||||
Interest cost on PBO
|
$ |
0.2
|
$ |
0.2
|
$ |
0.2
|
||||||
Amortization of actuarial net loss
|
0.3
|
0.4
|
0.4
|
|||||||||
|
$ |
0.5
|
$ |
0.6
|
$ |
0.6
|
||||||
Plan assumptions at December 31, (%):
|
|
|
|
|||||||||
Discount rate
|
0.80
|
1.90
|
1.70
|
|||||||||
Inflation rate
|
1.75
|
1.75
|
1.75
|
|||||||||
Rate of increase in compensation levels
|
2.75
|
2.75
|
2.75
|
(in millions)
|
2019
|
|
2018
|
|
||||
Change in PBO:
|
|
|
||||||
Opening balance
|
$ |
11.3
|
$ |
11.8
|
||||
Service cost
|
0.1
|
0.2
|
||||||
Interest cost
|
0.2
|
0.2
|
||||||
Benefits paid
|
(0.3
|
) |
(0.3
|
) | ||||
Actuarial losses
|
2.2
|
0.0
|
||||||
Exchange effect
|
(0.2
|
) |
(0.6
|
) | ||||
Closing balance
|
$ |
13.3
|
$ |
11.3
|
||||
(in millions)
|
Unrecognised
Tax Benefits
|
|
Interest
and Penalties |
|
Total
|
|
||||||
Opening balance at January 1, 2017
|
$ |
2.2
|
$ |
0.1
|
$ |
2.3
|
||||||
Additions
for tax positions of prior periods
|
0.5
|
0.2
|
0.7
|
|||||||||
Reductions due to lapsed statute of limitations
|
(0.5
|
) |
0.0
|
(0.5
|
) | |||||||
Closing balance at 31 December
, 2017
|
|
|
2.2
|
|
|
|
0.3
|
|
|
|
2.5
|
|
C
urren
t
|
0.0
|
0.0
|
0.0
|
|||||||||
Non-cur
rent
|
|
$
|
2.2
|
|
|
$
|
0.3
|
|
|
$
|
2.5
|
|
Ope
ning balance at January 1, 2018
|
|
$
|
2.2
|
|
|
$
|
0.3
|
|
|
$
|
2.5
|
|
Addition
s for tax positions of p
rior periods
|
|
|
11.7
|
|
|
|
0.4
|
|
|
|
12.1
|
|
Reductions due to lapsed statute of limitations
|
(0.5
|
) |
(0.1
|
) |
(0.6
|
) | ||||||
Closing balance at 31 December, 201
8
|
13.4
|
0.6
|
14.0
|
|||||||||
Current
|
0.0
|
0.0
|
0.0
|
|||||||||
Non-
current
|
$
|
13.4
|
$
|
0.6
|
$
|
14.0
|
||||||
Opening balance at January 1, 2019
|
$ |
13.4
|
$ |
0.6
|
$ |
14.0
|
||||||
Additions for tax positions of prior periods
|
1.0
|
1.4
|
2.4
|
|||||||||
Closing balance at 31 December, 2019
|
14.4
|
2.0
|
16.4
|
|||||||||
Current
|
0.0
|
0.0
|
0.0
|
|||||||||
Non-current
|
$ |
14.4
|
$ |
2.0
|
$ |
16.4
|
||||||
2019
|
|
2018
|
|
2017
|
|
|||||||
Domestic
|
$ |
52.4
|
$ |
37.1
|
$ |
3.1
|
||||||
Foreign
|
98.0
|
94.5
|
125.0
|
|||||||||
|
$ |
150.4
|
$ |
131.6
|
$ |
128.1
|
||||||
2019
|
|
2018
|
|
2017
|
|
|||||||
Current:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
$ |
13.8
|
$ |
12.5
|
$ |
51.2
|
||||||
State and local
|
2.3
|
2.0
|
0.9
|
|||||||||
Foreign
|
22.9
|
26.6
|
21.0
|
|||||||||
|
39.0
|
41.1
|
73.1
|
|||||||||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
(3.0
|
) |
4.2
|
(8.1
|
) | |||||||
State and local
|
(0.5
|
) |
0.3
|
0.7
|
||||||||
Foreign
|
2.7
|
1.0
|
0.6
|
|||||||||
|
(0.8
|
) |
5.5
|
(6.8
|
) | |||||||
|
$ |
38.2
|
$ |
46.6
|
$ |
66.3
|
||||||
(in percent)
|
2019
|
|
2018
|
|
2017
|
|
||||||
Statutory rate
|
21.0
|
% |
21.0
|
% |
35.0
|
% | ||||||
Foreign income inclusions
|
0.3
|
0.7
|
2.1
|
|||||||||
Foreign tax rate differential
|
(0.2
|
) |
(0.5
|
) |
(13.7
|
) | ||||||
Tax charge from previous years
|
1.8
|
0.7
|
1.1
|
|||||||||
Net charge/(credit) from unrecognized tax benefits
|
1.1
|
0.3
|
(0.4
|
) | ||||||||
Foreign currency transactions
|
(0.3
|
) |
1.4
|
(0.9
|
) | |||||||
Effect of U.S. tax law change
|
0.6
|
9.3
|
31.7
|
|||||||||
Tax on unremitted earning
s
|
(0.1
|
) |
0.9
|
0.0
|
||||||||
Non-deductible
foreign interest
|
0.8
|
1.3
|
1.1
|
|||||||||
Other items and adjustments, ne
t
|
0.4
|
0.3
|
(4.2
|
) | ||||||||
|
25.4
|
% |
35.4
|
% |
51.8
|
% | ||||||
(
in millions
)
|
2019
|
|
2018
|
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Stock compensation
|
$ |
6.7
|
$ |
4.9
|
||||
Net operating loss carry forwards
|
7.3
|
8.8
|
||||||
Other intangible assets
|
6.0
|
5.6
|
||||||
Accretion expense
|
3.3
|
3.3
|
||||||
Restructuring provision
|
0.0
|
1.9
|
||||||
Foreign t
ax credits
|
|
|
3.6
|
|
|
|
0.0
|
|
Other
|
5.9
|
4.8
|
||||||
Subtotal
|
32.8
|
29.3
|
||||||
Less valuation allowance
|
(0.8
|
) |
0.0
|
|||||
Total net deferred tax assets
|
$ |
32.0
|
$ |
29.3
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Property, plant and equipment
|
$ |
(19.5
|
) | $ |
(17.1
|
) | ||
Intangible assets including goodwill
|
(28.1
|
) |
(28.1
|
) | ||||
Pension asset
|
(18.2
|
) |
(15.0
|
) | ||||
Investment impairment recapture
|
(1.0
|
) |
(2.0
|
) | ||||
Customer relationships
|
(4.2
|
) |
(4.9
|
) | ||||
Unremitted overseas earnings
|
(1.0
|
) |
(1.1
|
) | ||||
Other
|
(0.5
|
) |
(0.5
|
) | ||||
Total deferred tax liabilities
|
$ |
(72.5
|
) | $ |
(68.7
|
) | ||
Net deferred tax liability
|
$ |
(40.5
|
) | $ |
(39.4
|
) | ||
Deferred tax assets
|
$ |
9.1
|
$ |
8.8
|
||||
Deferred tax liabilities
|
(49.6
|
) |
(48.2
|
) | ||||
|
$ |
(40.5
|
) | $ |
(39.4
|
) | ||
2019
|
|
2018
|
|
|||||
Revolving credit facility
|
$ |
60.0
|
$ |
126.0
|
||||
Term loan
|
0.0
|
82.5
|
||||||
Deferred finance costs
|
(1.4
|
) |
(0.9
|
) | ||||
|
58.6
|
207.6
|
||||||
Less current portion
|
0.0
|
(21.4
|
) | |||||
|
$ |
58.6
|
$ |
186.2
|
||||
(
in millions
)
|
2019
|
|
2018
|
|
||||
Gross cost at January 1
|
$ |
2.7
|
$ |
2.7
|
||||
Capitalized in the year
|
1.5
|
0.0
|
||||||
Written down in the year
|
(2.7
|
) |
0.0
|
|||||
|
1.5
|
2.7
|
||||||
Accumulated amortization at January 1
|
$ |
(1.8
|
) | $ |
(1.1
|
) | ||
Amortization in the year
|
(1.0
|
) |
(0.7
|
) | ||||
Amortization written down in the year
|
2.7
|
0.0
|
||||||
|
$ |
(0.1
|
) | $ |
(1.8
|
) | ||
Net book value at December 31
|
$ |
1.4
|
$ |
0.9
|
||||
2019
|
|
2018
|
|
2017
|
|
|||||||
Total at January 1
|
$ |
49.5
|
$ |
46.1
|
$ |
39.5
|
||||||
Charge for the period
|
4.4
|
6.8
|
5.9
|
|||||||||
Measurement period adjustment on acquisition
|
0.0
|
0.0
|
2.8
|
|||||||||
Utilized in the period
|
(4.4
|
) |
(3.1
|
) |
(2.4
|
) | ||||||
Exchange effect
|
(0.2
|
) |
(0.3
|
) |
0.3
|
|||||||
Total at December 31
|
49.3
|
49.5
|
46.1
|
|||||||||
Due within one year
|
(5.6
|
) |
(5.9
|
) |
(5.2
|
) | ||||||
Due after one year
|
$ |
43.7
|
$ |
43.6
|
$ |
40.9
|
||||||
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||
(
in millions
)
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$ |
75.7
|
$ |
75.7
|
$ |
123.1
|
$ |
123.1
|
||||||||
Derivatives (Level 1 measurement):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current and
non-current
assets:
|
|
|
|
|
||||||||||||
Foreign currency forward exchange contracts
|
0.8
|
0.8
|
0.0
|
0.0
|
||||||||||||
Interest rate swaps
|
0.0
|
0.0
|
1.9
|
1.9
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt (including current portion)
|
$ |
58.6
|
$ |
58.6
|
$ |
207.6
|
$ |
207.6
|
||||||||
Finance leases (including current portion)
|
1.5
|
1.5
|
3.3
|
3.3
|
||||||||||||
Derivatives (Level 1 measurement):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other
non-current
liabilities:
|
|
|
|
|
||||||||||||
Foreign currency forward exchange contracts
|
0.0
|
0.0
|
0.7
|
0.7
|
||||||||||||
Non-financial
liabilities (Level 3 measurement):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock equivalent units
|
24.6
|
|
24.6
|
15.1
|
15.1
|
|
Common Stock
|
Treasury Stock
|
||||||||||||||||||||||
(
number of shares in thousands
)
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
||||||||||||
At January 1
|
29,555
|
29,555
|
29,555
|
5,121
|
5,204
|
5,483
|
||||||||||||||||||
Exercise of options
|
0
|
0
|
0
|
(104
|
) |
(103
|
) |
(296
|
) | |||||||||||||||
Stock purchases
|
0
|
0
|
0
|
30
|
20
|
17
|
||||||||||||||||||
At December 31
|
29,555
|
29,555
|
29,555
|
5,047
|
5,121
|
5,204
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Dividend yield
|
1.09
|
% |
1.11
|
% |
0.96
|
% | ||||||
Expected life
|
5 years
|
5 years
|
5 years
|
|||||||||
Volatility
|
26.8
|
% |
25.6
|
% |
25.3
|
% | ||||||
Risk free interest rate
|
2.48
|
% |
2.74
|
% |
1.50
|
% |
|
Number of
Options |
|
Weighted
Average Exercise Price |
|
Weighted
Average
Grant-Date
Fair Value |
|
||||||
Outstanding at December 31, 2018
|
545,249
|
$ |
32.46
|
$ |
36.06
|
|||||||
Granted – at discount
|
67,230
|
$ |
0.00
|
$ |
71.54
|
|||||||
– at market value
|
12,539
|
$ |
81.07
|
$ |
22.69
|
|||||||
Exercised
|
(103,633
|
) | $ |
11.92
|
$ |
32.12
|
||||||
Forfeited
|
(16,926
|
) | $ |
47.69
|
$ |
33.50
|
||||||
Outstanding at December 31, 2019
|
504,459
|
$ |
33.05
|
$ |
41.35
|
|||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Dividend yield
|
0.99
|
% |
1.44
|
% |
1.09
|
% | ||||||
Ex
pected life
|
|
|
5
years
|
|
|
|
5
years
|
|
|
|
5
years
|
|
Volatility
|
26.6
|
% |
27.2
|
% |
25.4
|
% | ||||||
Risk free interest rate
|
1.62
|
% |
2.46
|
% |
1.98
|
% |
|
Number
of SEUs |
|
Weighted
Average Exercise
Price
|
|
Weighted
Average
Grant-Date
Fair Value |
|
||||||
Outstanding at December 31, 2018
|
418,936
|
$ |
3.47
|
$ |
52.45
|
|||||||
Granted – at discount
|
123,815
|
$ |
0.00
|
$ |
71.47
|
|||||||
– at market value
|
4,359
|
$ |
81.07
|
$ |
22.69
|
|||||||
Exercised
|
(142,035
|
) | $ |
2.22
|
$ |
46.45
|
||||||
Forfeited
|
(14,259
|
) | $ |
3.42
|
$ |
63.76
|
||||||
Outstanding at December 31, 2019
|
390,816
|
$ |
3.69
|
$ |
59.91
|
|||||||
(in millions)
|
Amount
Reclassified from AOCL |
|
Affected Line Item in the
Statement where Net Income is Presented |
|
||||
Details about AOCL Components
|
||||||||
Defined benefit pension plan items:
|
|
|
|
|
|
|
||
Amortization of prior service credit
|
$ |
(0.9
|
) |
See (1) below
|
||||
Amortization of actuarial net losses
|
0.0
|
See (1) below
|
||||||
|
(0.9
|
) |
Total before tax
|
|||||
|
0.2
|
Income tax expense
|
||||||
Total reclassifications
|
$ |
(0.7
|
) |
Net of tax
|
||||
(1)
These items are included in the computation of net periodic pension cost. See Note 9 of the Notes to the Consolidated Financial Statements for additional information.
|
(in millions)
|
|
Derivative
Instruments |
|
|
Defined
Benefit Pension Plan Items |
|
|
Cumulative
Translation Adjustments |
|
|
Total
|
|
||||
Balance at December 31, 2018
|
$ |
1.5
|
$ |
(18.1
|
) | $ |
(59.1
|
) | $ |
(75.7
|
) | |||||
Other comprehensive income before reclassifications
|
(1.5
|
) |
0.0
|
(6.0
|
) |
(7.5
|
) | |||||||||
Amounts reclassified from AOCL
|
0.0
|
(0.7
|
) |
0.0
|
(0.7
|
) | ||||||||||
Actuarial net gains arising during the year
|
0.0
|
9.5
|
0.0
|
9.5
|
||||||||||||
Net current period other comprehensive income
|
(1.5
|
) |
8.8
|
(6.0
|
) |
1.3
|
||||||||||
Balance at December 31, 2019
|
$ |
0.0
|
$ |
(9.3
|
) | $ |
(65.1
|
) | $ |
(74.4
|
) | |||||
Item 9
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A
|
Controls and Procedures
|
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements. |
Item 9B
|
Other Information
|
Item 10
|
Directors, Executive Officers and Corporate Governance
|
Item 11
|
Executive Compensation
|
Item 12
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14
|
Principal Accountant Fees and Services
|
|
|
(1)
|
|
Financial Statements
|
||||||
|
|
|
|
|
The Consolidated Financial Statements (including notes) of Innospec Inc. and its subsidiaries, together with the report of PricewaterhouseCoopers LLP dated February 19, 2020, are set forth in Item 8.
|
|||||
|
|
(2)
|
|
Financial Statement Schedules
|
||||||
|
|
|
|
|
Financial statement schedules have been omitted since they are either included in the financial statements, not applicable or not required.
|
|||||
|
|
(3)
|
|
Exhibits
|
||||||
|
|
|
|
2.1
|
||||||
|
|
|
|
3.1
|
||||||
|
|
|
|
3.2
|
||||||
|
|
|
|
3.3
|
||||||
|
|
|
|
3.4
|
||||||
|
|
|
|
4.1
|
Description of Common Stock (filed herewith).
|
|||||
|
|
|
|
10.1
|
||||||
|
|
|
|
10.2
|
||||||
|
|
|
|
10.3
|
|
|
|
|
32.2
|
||||||
|
|
|
|
101
|
XBRL Instance Document and Related Items.
|
|||||
|
|
|
|
104
|
Cover Page Interactive Data File – The cover page XBRL tags are embedded within the inline XBRL document.
|
* | Denotes a management contract or compensatory plan. |
Item 16
|
Form
10-K
Summary
|
INNOSPEC INC.
|
By:
|
/s/ PATRICK S. WILLIAMS
|
||
(Registrant)
|
|
Patrick S. Williams
|
||
Date:
|
|
President and Chief Executive Officer
|
||
February 19, 2020
|
|
|
/s/ MILTON C. BLACKMORE
Milton C. Blackmore
|
|
Chairman and Director
|
||
/s/ PATRICK S. WILLIAMS
Patrick S. Williams
|
|
President and Chief Executive Officer (Principal Executive Officer); Director
|
||
/s/ IAN P. CLEMINSON
Ian P. Cleminson
|
|
Executive Vice President and Chief Financial Officer
|
||
/s/ CHRISTOPHER J. PARSONS
Christopher J. Parsons
|
|
Head of Group Finance (Principal Accounting Officer)
|
||
/s/ HUGH G. C. ALDOUS
Hugh G. C. Aldous
|
|
Director
|
||
/s/ DAVID F. LANDLESS
David F. Landless
|
|
Director
|
||
/s/ LAWRENCE J. PADFIELD
Lawrence J. Padfield
|
|
Director
|
||
/s/ ROBERT I. PALLER
Robert I. Paller
|
|
Director
|
||
/s/ CLAUDIA POCCIA
Claudia Poccia
|
|
Director
|
||
/s/ JOACHIM ROESER
Joachim Roeser
|
|
Director
|
Exhibit 3.1
Delaware |
Page 1 |
The First State
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS FILED FROM AND INCLUDING THE RESTATED CERTIFICATE OR A MERGER WITH A RESTATED CERTIFICATE ATTACHED OF INNOSPEC INC. AS RECEIVED AND FILED IN THIS OFFICE.
THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:
RESTATED CERTIFICATE, FILED THE SECOND DAY OF FEBRUARY, A.D. 2006, AT 10:50 OCLOCK A.M.
CERTIFICATE OF DESIGNATION, FILED THE TWELFTH DAY OF JUNE, A.D. 2009, AT 12:53 OCLOCK P.M.
Jeffrey W. Bullock, Secretary of State |
||||
2851532 8100X SR# 20200492100 |
|
Authentication: 202242695 Date: 01-23-20 |
You may verify this certificate online at corp.delaware.gov/authver.shtml
State of Delaware
Secretary of State
Division of Corporations
Delivered 10:59 AM 02/02/2006
FILED 10:50 AM 02/02/2006
SRV 060099370 2851532 FILE
CERTIFICATE OF
RESTATED CERTIFICATE OF INCORPORATION
OF
INNOSPEC INC.
The undersigned, being a duly elected officer of Innospec Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the Corporation), does hereby certify as follows:
1. |
That the Corporation filed its original Certificate of Incorporation with the Delaware Secretary of State on January 27, 1998. |
2. |
That the original name of the Corporation was Octel Corp. |
3. |
That the Board of Directors of the Corporation, pursuant to Sections 141 and 245 of the General Corporation Law of the State of Delaware, adopted resolutions authorizing the Corporation to restate the Corporations Certificate of Incorporation in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the Restated Certificate). |
4. |
The Restated Certificate only restates and integrates the Corporations Certificate of Incorporation and does not further amend the provisions of the Certificate of Incorporation as heretofore amended or supplemented and there is no discrepancy between these provisions and the provisions of the Restated Certificate. |
IN WITNESS WHEREOF, the undersigned, being a duly elected officer of the Corporation, for the purpose of restating the Certificate of Incorporation of the Corporation pursuant to the General Corporation Law of the State of Delaware, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate of Restated Certificate of Incorporation this 31st day of January, 2006.
By: |
|
|
Name: ANDREW HARTLEY | ||
Title: GENERAL COUNSEL & VICE PRESIDENT |
Exhibit A
RESTATED
CERTIFICATE OF INCORPORATION
FIRST: The name of the Corporation is Innospec Inc.(the Corporation).
SECOND: The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the DGCL).
FOURTH: (a) The total number of shares of stock which the Corporation shall have authority to issue is 50,000,000 shares of capital stock (the Capital Stock), consisting of (i) 40,000,000 shares of common stock, par value $0.01 per share (the Common Stock) and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share (the Preferred Stock).
(b) The holders of the Common Stock shall have no preemptive rights to subscribe for any shares of any class of stock of the Corporation whether now or hereafter authorized. The holders of the Common Stock shall not have cumulative voting rights.
(c) The Board of Directors is hereby expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non- cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.
FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(b) The number of directors of the Corporation shall be as from time to time fixed by, or in the manner provided in, the By-Laws of the Corporation. Election of directors need not be by written ballot unless the By-Laws so provide.
(c) The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into classes shall be made by the decision of the affirmative vote of a majority of the entire Board of Directors. The term of the initial Class I directors shall terminate on the date of the 1999 annual meeting; the term of the initial Class II directors shall terminate on the date of the 2000 annual meeting; and the term of the initial Class III directors shall terminate on the date of the 2001 annual meeting. At each succeeding annual meeting of stockholders beginning in 1999, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.
(d) A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.
(e) Subject to the terms of anyone or more classes or series of Preferred Stock, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that shall coincide with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of the Corporation may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the Corporations then outstanding capital stock entitled to vote generally in the election of directors. Notwithstanding the foregoing, whenever the holders of anyone or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article SIXTH unless expressly provided by such terms.
(f) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.
2
SIXTH: (a) In addition to any affirmative vote required by law or this Certificate of Incorporation or the By-laws of the Corporation, and except as otherwise expressly provided in Section (b) of this Article SIXTH, any Business Combination shall require the affirmative vote of at least eighty percent (80%) of the Voting Shares. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise.
(b) The provisions of Section (a) of this Article SIXTH shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this Certificate of Incorporation, if all of the conditions specified in either of the following Subparagraphs (i) or (ii) are met:
(i) The Business Combination has been approved by two- thirds of the whole Board; or
(ii) The aggregate amount of the cash and Fair Market Value of consideration other than cash to be received per share by holders of the Common Stock in such Business Combination shall be in the same form and of the same kind as the consideration paid by the Interested Stockholder in acquiring the initial 10% of the Common Stock owned by it and shall be at least equal to the highest of the following:
(A) the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers fees) paid by such Interested Stockholder for any shares of Common Stock acquired by it within the two-year period prior to the Business Combination;
(B) the per share book value of the Common Stock as reported at the end of the fiscal quarter immediately preceding the announcement of such Business Combination; and
(C) if applicable, the price per share equal to the earnings per share of Common Stock for the four full consecutive quarters immediately preceding the record date for solicitation of votes on such Business Combination, multiplied by the ratio (if any) of the highest price of the Interested Stockholders stock during its most recent four fiscal quarters, to the earnings per share of the Interested Stockholders stock for such four full consecutive quarters.
(c) For purposes of this Article SIXTH:
(i) The term Business Combination shall mean any transaction which is referred to in anyone or more of the following clauses (A) through (E):
(A) any merger or consolidation of the Corporation or any Subsidiary with or into (1) any Interested Stockholder or (2) any other corporation (whether or not itself an Interested Stockholder) which, after such merger or consolidation, would be an Affiliate or Associate of an Interested Stockholder;
3
(B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition or any security arrangement, investment, loan advance, guarantee, agreement to purchase, agreement to pay, extension of credit, joint venture participation or other similar arrangement (in one transaction or a series of related transactions), with or for the benefit of any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder, involving any assets, securities or commitments of the Corporation or any Subsidiary which, including all contemplated future events, have an aggregate Fair Market Value of $10,000,000 or more or constituting more than five percent (5%) of the book value of the total assets (in the case of transactions involving assets or commitments other than Capital Stock) or more than five percent (5%) of the stockholders equity (in the case of transactions in capital Stock) of the entity in question (each, a Substantial Part), as reflected in the most recent fiscal year-end consolidated balance sheet of such entity existing at the time the stockholders of the Corporation would be required to approve or authorize the Business Combination involving a Substantial Part of the assets, securities and/or commitments of the Corporation;
(C) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation or for any amendment to the By-Laws or to this Certificate of Incorporation proposed by or on behalf of an Interested Stockholder or any Affiliate or Associate of any Interested Stockholder;
(D) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series of Capital Stock, or any securities convertible into Capital Stock or equity securities of any Subsidiary, which is beneficially owned by any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(E) any agreement, contract or arrangement providing for any one or more of the actions specified in the foregoing clauses (A) through (D).
(ii) The term person shall mean any individual, firm, corporation or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Capital Stock.
(iii) The term Interested Stockholder shall mean any person (other than the Corporation or any Subsidiary and other than any profit-sharing, employee stock ownership or other employee benefit plan of the Corporation or any Subsidiary or any trustee or fiduciary with respect to any such plan when acting in such capacity) who or which, as of the record date for the determination of stockholders entitled to notice of and to vote on such Business Combination, or immediately prior to the consummation of any such transaction:
(A) is, or has announced or publicly disclosed a plan or intention to become, the beneficial owner of ten percent (10%) or more of the Voting Shares; or
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(B) is an Affiliate or Associate of the Corporation and at any time within the two year period prior to the date in question was the beneficial owner of ten percent (10%) or more of the Voting Shares.
For purposes of determining whether a person is an Interested Stockholder pursuant to this Subparagraph (c) (iii) of this Article SIXTH, the number of Voting Shares shall include shares deemed beneficially owned through application of Subparagraph (c) (iv) of this Article SIXTH, but shall not include any other Voting Shares which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
(iv) A person shall be a beneficial owner of any Voting Shares:
(A) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; or
(B) which such person or any of its Affiliates or Associates has (1) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; (2) the right to vote pursuant to any agreement, arrangement or understanding; or (3) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purposes of acquiring, holding, voting or disposing of any shares of Capital Stock of the Corporation.
(v) The terms Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act as in effect on the date of filing this Certificate of Incorporation with the Secretary of State of the State of Delaware (the term registrant in such Rule 12b-2 meaning in this case the Corporation).
(vi) The term Subsidiary means any company of which a majority of any class of equity security is beneficially owned by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in Subparagraph (c) (iii) of this Article SIXTH, the term Subsidiary shall mean only a company of which a majority of each class of equity security is beneficially owned by the Corporation.
(vii) The term Continuing Director means a person who was a member of the Board of Directors of the Corporation elected by the public stockholders prior to the date as of which the Interested Stockholder became an Interested Stockholder and who remains a member of the Board of Directors of the Corporation as of the date in question, or a person designated (before his initial election as a director) as a Continuing Director by a majority of the then Continuing Directors and who remains a member of the Board of Directors of the Corporation as of the date in question.
(viii) The term Fair Market Value shall mean (A) in the case of cash, the amount of such cash; (B) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not
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quoted on such Composite Tape, on the New York Stock Exchange, or if such stock is not listed on such exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any similar system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by a majority of the Continuing Directors in good faith; and (C) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by a majority of the Continuing Directors in good faith.
(ix) The term Voting Shares shall mean the outstanding shares of Capital Stock of the Corporation entitled to vote generally in the election of directors, considered for the purpose of this Article SIXTH as one class.
(d) A majority of the directors shall have the power and the duty to determine for purposes of this Article SIXTH on the basis of information known to them, (i) the number of Voting Shares beneficially owned by any person, (ii) whether a person is an Affiliate or Associate of another, (iii) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in Subparagraphs (c) (iii) and (c) (iv), or (iv) for purposes of Subparagraph (c) (i) (B), whether the assets, securities or commitments subject to any Business Combination constitute a Substantial Part of the Corporation or any of its Subsidiaries.
(e) Nothing in this Article SIXTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.
SEVENTH: No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same currently exists or may hereafter be amended. If the DGCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or modification of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
EIGHTH: (a) The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article EIGHTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.
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(b) The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article EIGHTH to directors and officers of the Corporation.
(c) The rights to indemnification and to the advancement of expenses conferred in this Article EIGHTH shall not be exclusive of any other right which any person may have or may hereafter acquire under this Certificate of Incorporation, the By-Laws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise.
(d) Any repeal or modification of this Article EIGHTH by the stockholders of the Corporation shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
NINTH: Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation, and the ability of the stockholders to consent in writing to the taking of any action is hereby specifically denied.
TENTH: Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
ELEVENTH: In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware and by this Certificate of Incorporation, the Board of Directors shall have the power to adopt, amend, alter or repeal the Corporations By-Laws. The affirmative vote of at least a majority of the entire Board of Directors shall be required to adopt, amend, alter or repeal the Corporations By-Laws. The Corporations By-Laws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the shares entitled to vote at an election of directors.
TWELFTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed in this Certificate of Incorporation, the Corporations By-Laws or the DGCL, and all rights herein conferred upon stockholders are granted subject to such reservation; provided, however, that, notwithstanding any other provision of this Certificate of Incorporation (and in addition to any other vote that may be required by law), the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the shares entitled to vote at an election of directors shall be required to amend, alter, change or repeal, or to adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of Articles FIFTH, SIXTH, EIGHTH and ELEVENTH of this Certificate of Incorporation or this Article TWELFTH.
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State of Delaware
Secretary of State
Division of Corporations
Delivered 12:58 PM 06/12/2009
FILED 12:53 PM 06/12/2009
SRV 090612825 2851532 FILE
CERTIFICATE OF DESIGNATION
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK OF
INNOSPEC INC.
Pursuant to Section 151 of the Delaware General Corporation Law
The undersigned duly authorized officers of Innospec Inc. (the Corporation), a Delaware corporation, in accordance with the provisions of Section 103 of the Delaware General Corporation Law (the DGCL), DO HEREBY CERTIFY:
That the Board of Directors of the Corporation on June 12, 2009, at a meeting duly called and held, adopted the following resolution creating a series of 40,000 shares of Preferred Stock, par value $0.01 per share, designated as Series B Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time, the Certificate of Incorporation), the Board of Directors hereby authorizes that a series of Preferred Stock, par value $0.01 per share, of the Corporation be, and hereby is, created and approved for issuance out of the Preferred Stock authorized in the Certificate of Incorporation, and hereby fixes the designation and amount thereof and the voting powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as follows:
1. Designation and Amount. There shall be a series of Preferred Stock of the Corporation which shall be designated as Series B Junior Participating Preferred Stock, par value $0.01 per share, (hereinafter called Series B Preferred Stock), and the number of shares constituting such series shall be 40,000. Such number of shares may be increased or decreased by resolution of the Board of Directors and by the filing of a certificate pursuant to the provisions of the DGCL stating that such increase or reduction has been so authorized; provided, however, that no decrease shall reduce the number of shares of Series B Preferred Stock to a number less than the number of shares of Series B Preferred Stock issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation.
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series B Preferred Stock with respect to dividends, the holders of shares of Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash to holders of record on the last business day of March, June, September and December in each year (each such date being referred to herein as a Quarterly Dividend Payment Date), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an amount per share (rounded to the nearest cent) equal to 1,000 times the aggregate per share amount of all cash dividends (subject to the provision for adjustment hereinafter set forth), and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock (hereinafter defined) or a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the common stock, par value $0.01 per share, of the Corporation (the Common Stock) since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Preferred Stock. In the event the Corporation shall at any time (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying each such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series B Preferred Stock as provided in paragraph (A) above at the time it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock).
(C) No dividend or distribution (other than a dividend payable in shares of Common Stock) shall be paid or payable to the holders of shares of Common Stock unless, prior thereto, all accrued but unpaid dividends to the date of such dividend or distribution shall have been paid to the holders of shares of Series B Preferred Stock.
(D) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each one one- thousandth of a share of Series B Preferred Stock shall entitle the holder thereof to one vote on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series B Preferred Stock were entitled immediately prior to
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such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of Series B Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation.
(C) (i) Whenever, at any time or times, dividends payable on any share or shares of Series B Preferred Stock shall be in arrears in an amount equal to at least six full quarterly dividends (whether or not declared and whether or not consecutive), the holders of record of the outstanding Preferred Stock shall have the exclusive right, voting separately as a single class, to elect two directors of the Corporation at a special meeting of shareholders of the Corporation or at the Corporations next annual meeting of shareholders, and at each subsequent annual meeting of shareholders, as provided below. At elections for such directors, the holders of shares of Series B Preferred Stock shall be entitled to cast one vote for each one one-thousandth of a share of Series B Preferred Stock held.
(ii) Upon the vesting of such right of the holders of the Preferred Stock, the maximum authorized number of members of the Board of Directors shall automatically be increased by two and the two vacancies so created shall be filled by vote of the holders of the outstanding Preferred Stock as hereinafter set forth. A special meeting of the shareholders of the Corporation then entitled to vote shall be called by the Chairman or the President or the Secretary of the Corporation, if requested in writing by the holders of record of not less than 10% of the Preferred Stock then outstanding. At such special meeting, or, if no such special meeting shall have been called, then at the next annual meeting of shareholders of the Corporation, the holders of the shares of the Preferred Stock shall elect, voting as above provided, two directors of the Corporation to fill the aforesaid vacancies created by the automatic increase in the number of members of the Board of Directors. At any and all such meetings for such election, the holders of a majority of the outstanding shares of the Preferred Stock shall be necessary to constitute a quorum for such election, whether present in person or by proxy, and such two directors shall be elected by the vote of at least a plurality of shares held by such shareholders present or represented at the meeting. Any director elected by holders of shares of the Preferred Stock pursuant to this Section may be removed at any annual or special meeting, by vote of a majority of the shareholders voting as a class who elected such director, with or without cause. In case any vacancy shall occur among the directors elected by the holders of the Preferred Stock pursuant to this Section, such vacancy may be filled by the remaining director so elected, or his successor then in office, and the director so elected to fill such vacancy shall serve until the next meeting of shareholders for the election of directors. After the holders of the Preferred Stock shall have exercised their right to elect directors in any default period and during the continuance of such period, the number of directors shall not be further increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series B Preferred Stock.
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(iii) The right of the holders of the Preferred Stock, voting separately as a class, to elect two members of the Board of Directors of the Corporation as aforesaid shall continue until, and only until, such time as all arrears in dividends (whether or not declared) on the Preferred Stock shall have been paid or declared and set apart for payment, at which time such right shall terminate, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above-mentioned. Upon any termination of the right of the holders of the shares of the Preferred Stock as a class to vote for directors as herein provided, the term of office of all directors then in office elected by the holders of Preferred Stock pursuant to this Section shall terminate immediately. Whenever the term of office of the directors elected by the holders of the Preferred Stock pursuant to this Section shall terminate and the special voting powers vested in the holders of the Preferred Stock pursuant to this Section shall have expired, the maximum number of members of the Board of Directors of the Corporation shall be such number as may be provided for in the By-laws of the Corporation or in a resolution of the Board of Directors adopted pursuant thereto, irrespective of any increase made pursuant to the provisions of this Section.
(D) Except as set forth herein, holders of Series B Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series B Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, except dividends paid ratably on the Series B Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series B Preferred Stock, except in accordance with a purchase offer made in writing or by
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publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section, purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series B Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall have received $1.00 per share, plus an amount per share equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (collectively, the Series B Liquidation Preference). Following the payment of the full amount of the Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the Common Adjustment) equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the Adjustment Number). Following the payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series B Preferred Stock and Common Stock, respectively, holders of Series B Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio, on a per share basis, of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series B Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in
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each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series B Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
8. Redemption. The shares of a Series B Preferred Stock shall not be redeemable by the Corporation. The preceding sentence shall not limit the ability of the Corporation to purchase or otherwise deal in such shares of stock to the extent permitted by law.
9. Ranking. The Series B Preferred Stock shall rank junior to all other series of the Corporations preferred stock (whether with or without par value) as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.
10. Amendment. The Certificate of Incorporation of the Corporation, as amended as of this date, shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series B Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series B Preferred Stock, voting separately as a class.
11. Fractional Shares. Series B Preferred Stock may be issued in fractional shares which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Preferred Stock.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Andrew Hartley its Vice President and General Counsel and the same to be attested by KATE DAVISON its GROUP LEGAL ADVISOR on this 12th day of June, 2009.
INNOSPEC INC. | ||
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Name: | Andrew Hartley | |
Title: | Vice President and General Counsel |
Attest: | ||
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Name: | KATE DAVISON | |
Title: | GROUP LEGAL ADVISOR |
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Exhibit 4.1
DESCRIPTION OF COMMON STOCK
The following is a summary of the material terms of the common stock of Innospec Inc., a Delaware corporation (the Company, Innospec, we, our or us). Because it is only a summary, it may not contain all of the information that may be important to you, and should be read in conjunction with the restated certificate of incorporation of the Company (the Certificate of Incorporation), the amended and restated bylaws of the Company (the Bylaws), the Companys Corporate Governance Guidelines and applicable Delaware law.
General
The Company is authorized by its Certificate of Incorporation to issue 50 million total of shares of all classes of stock, consisting 40 million shares of Common Stock, par value $.01 per share (Common Stock) and of 10 million shares preferred stock, par value $.01 per share (Preferred Stock). The Board is authorized to provide for the issuance of shares of Preferred Stock in one or more series and to determine, with respect to any series, the terms and rights of such series.
Dividend and Liquidation Rights
Subject to any preferential or other rights of any outstanding series of Preferred Stock that may be designated by the Board of Directors of the Company (the Board), the holders of Common Stock will be entitled to such dividends as may be declared from time to time by the Board from available funds, and upon liquidation will be entitled to receive pro rata all assets of the Company available for distribution to holders of Common Stock.
Voting Rights
Each share of Common Stock has one vote per share. Holders of Common Stock are entitled to vote on all matters to be voted on by stockholders. The holders of our Common Stock do not have cumulative voting rights.
Company Bylaws provide for a plurality of shares present in person or represented by proxy voting standard for the election of directors. While directors are elected by a plurality vote, the Companys Corporate Governance Guidelines requires that any nominee who receives more withheld votes than for votes, must submit a resignation which is subject to acceptance or rejection by the Board.
Other Rights
The Companys Common Stock is not liable to further calls or assessment. Holders of the Companys Common Stock have no preemptive rights. The Common Stock cannot be redeemed and does not have any conversion rights or sinking fund provisions.
Provisions of our Certificate of Incorporation and our Bylaws that Could Delay or Prevent a Change in Control
The Companys Certificate of Incorporation and Bylaws contain provisions which could make it difficult to obtain control of the Company if the Board does not approve the transaction. The provisions include the following:
Classified Board of Directors
The Board is divided into three classes, as nearly equal in number as is reasonably possible, serving staggered terms such that approximately a third of directors are up for election each year. Therefore, at least two annual meetings of stockholders, instead of one, will generally be required to effect a change in a majority of the Board. As a result, the Companys classified Board may discourage proxy contests for the election of directors or purchases of a substantial block of Common Stock because its provisions could operate to prevent obtaining control
of the Board in a relatively short period of time. The classification provisions could also have the effect of discouraging a third party from making a tender offer or otherwise attempting to obtain control of the Company. In addition, because Section 141(k)(1) of the Delaware General Corporation Law provides that a director serving on a classified board of directors may be removed only for cause, a classified Board could delay stockholders who do not agree with the policies of the Board from replacing a majority of the Board for two years unless they can demonstrate that the directors should be removed for cause and obtain the requisite vote.
Special Meetings of Stockholders and Action by Written Consent
The By-laws provide that special meetings of stockholders of the Company may be called only by the Chairman of the Board, the President or the Board. The Certificate of Incorporation also requires that stockholder action be taken at a meeting of stockholders and prohibits action by written consent.
Advance Notice Provisions
The Companys Bylaws generally require that for a stockholder to nominate a director or bring other business before an annual meeting, the stockholder must deliver written notice to the Secretary of the Company not less than 60 nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders.
Certain Business Combinations
The Certificate of Incorporation generally provides that, whether or not a vote of the stockholders is otherwise required, the affirmative vote of the holders of not less than 80% of the outstanding voting shares of the Company shall be required for the approval or authorization of any Business Combination with an Interested Stockholder or any affiliate or associate of an Interested Stockholder. However, a Business Combination will not be subject to such voting threshold if the Business Combination was approved by two-thirds of the Board or the consideration satisfies pricing levels specified in the Certificate of Incorporation.
The term Business Combination is generally defined to include (a) any merger or consolidation of the Company or any subsidiary; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition or any security arrangement, investment, loan advance, guarantee, agreement to purchase, agreement to pay, extension of credit, joint venture participation or other similar arrangement (in one transaction or a series of related transactions), involving substantial part, as further described in the Certificate of Incorporation, of any assets, securities or commitments of the Company or any subsidiary; (c) the adoption of any plan or proposal for the liquidation or dissolution of the Company or for any amendment to the By-Laws or to the Certificate of Incorporation proposed by or on behalf of any Interested Stockholder or an affiliate or associate of any Interested Stockholder, (d) any reclassification of securities (including any reverse stock split), or recapitalization of the Company or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series of capital stock, or any securities convertible into capital stock or equity securities of any subsidiary, which is beneficially owned by any Interested Stockholder or any affiliate or associate of any Interested Stockholder; or (e) or any agreement, contract or arrangement providing for any one or more of such actions.
The term Interested Stockholder is generally defined as (a) a person having, or having publicly announced an intention to acquire, beneficial ownership of the Companys voting shares; or (b) an affiliate or associate of the Company that within the two prior years was the beneficial owner of 10% or more of the voting shares.
Amendments to the Certificate of Incorporation
Certain articles of the Certificate of Incorporation, including the articles containing the classified board and business combination provisions described above and the article governing amendments to the Certificate of Incorporation, require the affirmative vote of the holders of not less than 80% of the outstanding voting shares of the Company.
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EXHIBIT 21.1
PRINCIPAL SUBSIDIARIES OF THE REGISTRANT
Alcor Chemie Vertriebs GmbH (Switzerland) |
Innospec Active Chemicals LLC (USA) |
Innospec Deutschland GmbH (Germany) |
Innospec Finance Limited (U.K.) |
Innospec France SA (France) |
Innospec Fuel Specialties LLC (USA) |
Innospec Holdings Limited (U.K.) |
Innospec International Limited (U.K.) |
Innospec Trading Limited (U.K.) |
Innospec Developments Limited (U.K.) |
Innospec Leuna GmbH (Germany) |
Innospec Limited (U.K.) |
Innospec Oil Field Chemicals LLC (USA) |
Innospec International Holdings LLC (USA) |
Independence Oilfield Chemicals LLC (USA) |
Innospec Performance Chemicals Europe Limited (U.K.) |
Innospec Performance Chemicals Spain S.L. (Spain) |
Innospec Performance Chemicals Italia s.r.l (Italy) |
Innospec Saint-Mihiel SAS (France) |
Innospec Canada Limited (Canada) |
Bachman Services, Inc. (USA) |
BioSuite LLC (USA) |
Innospec Strata Holdings, LLC (USA) |
Strata Control Services, Inc. (USA) |
Chemsil Silicones, Inc. (USA) |
Chemtec Chemical Co. (USA) |
Innospec Russ OOO (Russia) |
Innospec Chemicals Beijing Limited (China) |
Innospec Do Brasil Limited (Brazil) |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-225518, 333-131687, 333-124139, 333-174050, 333-174439 and 333-42252) of Innospec Inc. of our report dated February 19, 2020 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Manchester, United Kingdom
February 19, 2020
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Innospec, Inc.:
We consent to the incorporation by reference in the registration statements (No. 333-225518, 333-131687, 333-124139, 333-174050 and 333-174439) on Form S-8 of Innospec Inc. of our report dated February 20, 2019, with respect to the consolidated balance sheet of Innospec, Inc. as of December 31, 2018, the related consolidated statements of income, comprehensive income, accumulated other comprehensive loss, cash flows and equity for the year then ended, and the related notes, which report appears in the December 31, 2019 annual report on Form 10-K of Innospec, Inc.
KPMG LLP
Manchester, United Kingdom
February 19, 2020
Exhibit 23.3
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Innospec, Inc.:
We consent to the incorporation by reference in the registration statements (No. 333-225518, 333-131687, 333-124139, 333-174050 and 333-174439) on Form S-8 of Innospec, Inc. of our report dated February 15, 2018, with respect to the consolidated statements of income, comprehensive income, accumulated other comprehensive loss, cash flows and equity of Innospec, Inc. for the year ended December 31, 2017, and the related notes, which report appears in the December 31, 2019 annual report on Form 10-K of Innospec, Inc.
KPMG Audit Plc
Manchester, United Kingdom
February 19, 2020
Exhibit 31.1
CERTIFICATION OF PATRICK S. WILLIAMS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Patrick S. Williams, certify that:
1. |
I have reviewed this annual report on Form 10-K of Innospec Inc.; |
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ PATRICK S. WILLIAMS |
Patrick S. Williams |
President and Chief Executive Officer |
February 19, 2020 |
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Exhibit 31.2
CERTIFICATION OF IAN P. CLEMINSON PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ian P. Cleminson, certify that:
1. |
I have reviewed this annual report on Form 10-K of Innospec Inc.; |
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ IAN P. CLEMINSON |
Ian P. Cleminson |
Executive Vice President and Chief Financial Officer |
February 19, 2020 |
92
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER 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 Annual Report on Form 10-K of Innospec Inc. (the Company) for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Patrick S. Williams, President and 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; and |
2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ PATRICK S. WILLIAMS |
Patrick S. Williams |
President and Chief Executive Officer |
February 19, 2020 |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of this Report or as a separate disclosure document.
A signed original of this written statement required by 18 U.S.C. §1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request.
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Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER 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 Annual Report on Form 10-K of Innospec Inc. (the Company) for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Ian P. Cleminson, Executive Vice President and 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; and |
2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ IAN P. CLEMINSON |
Ian P. Cleminson |
Executive Vice President and Chief Financial Officer |
February 19, 2020 |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of this Report or as a separate disclosure document.
A signed original of this written statement required by 18 U.S.C. §1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request.
94