Financial Performance - GAAP EPS was $0.94 and adjusted non-GAAP EPS was $1.06 for Q1 2021[7] - The company's semi-annual dividend increased 10 percent to 57 cents per share[7, 20] - Operating cash generation was $22.7 million in Q1 2021[7, 9, 19] - The balance sheet shows $116.6 million in net cash[7, 9, 19] Segment Performance - Performance Chemicals operating income increased 17 percent versus Q1 2020[7, 9, 12] - Oilfield Services showed continued sequential quarter revenue growth of 28%[9] - Fuel Specialties sales decreased 5 percent [9, 11] - Oilfield Services sales decreased 34 percent due to reduced customer activity[16] Corporate Items - The effective tax rate was 240 percent [17]

Table of Contents Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-13879 INNOSPEC INC. (Exact name of registrant as specified in its charter) DELAWARE 98-0181725 (State or ...

Financial Data and Key Metrics Changes - Total revenues for Q4 2020 were $310.8 million, a 20% decrease from $390.7 million in Q4 2019, primarily due to reduced customer activity in oilfield services and lower demand from the pandemic [18] - Full year revenues decreased 21% to $1.2 billion from $1.5 billion in 2019 [21] - EBITDA for Q4 was $40.2 million compared to $55.2 million in the previous year, and net income was $22.6 million compared to $31.1 million [19] - GAAP earnings per share for Q4 were $0.91, down from $1.26 a year ago, while adjusted EPS was $1.27 compared to $1.47 [20][22] Business Line Data and Key Metrics Changes - **Fuel Specialties**: Q4 revenues were $138.3 million, down 8% from $150.3 million a year ago, with operating income down 11% to $25.5 million [23][24] - **Performance Chemicals**: Q4 revenues increased 8% to $114.6 million, with operating income slightly down by 2% to $14.6 million [25][26] - **Oilfield Services**: Q4 revenues were $57.9 million, down 52% from Q4 2019, but operating income improved to $0.2 million from a loss of $11.8 million [27][28] Market Data and Key Metrics Changes - Global fuel consumption grew for the second consecutive quarter, leading to a 15% sequential increase in sales and operating income in fuel specialties [11] - Oil prices have stabilized above $50, supporting customer activity levels in oilfield services [15] Company Strategy and Development Direction - The company is investing in R&D capabilities, including a new technology center in North Carolina, to support growth in key markets such as personal care and agriculture [9][10] - The company aims to maintain a focus on cash flow and cost control while exploring acquisition opportunities to enhance shareholder value [36][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in demand across various markets as vaccination efforts progress, although caution remains due to ongoing pandemic uncertainties [34][75] - The company anticipates a gradual recovery in oilfield services and fuel specialties, with expectations for improved profitability as market conditions stabilize [46][66] Other Important Information - The company reported a net cash position of $104.7 million as of December 31, 2020, compared to $15.6 million a year ago [31] - Corporate costs were reduced to $10.7 million, primarily due to lower personnel-related accruals [29] Q&A Session Summary Question: What was the mix headwind in fuels? - Management indicated that the headwind was primarily from commercial aviation, with a gradual recovery in demand expected [43] Question: Outlook for oilfield demand and profitability? - Management is optimistic about oilfield services, expecting a controlled recovery with improved activity levels throughout 2021 [45][66] Question: Seasonal perspective on Q4 performance? - Management expects some improvement in Q1 due to recovering demand and cold weather impacts [48] Question: Update on new products delayed by the pandemic? - Management noted that product activity is still slow but expected to improve by mid-year as lockdowns ease [49] Question: Clarification on acquisition-related costs? - Management clarified that these costs are related to ongoing efforts to identify and diligence acquisition targets [58] Question: Investment or CapEx outlook for 2021? - Expected CapEx for 2021 is between $40 million to $45 million, focusing on growth projects in Performance Chemicals [103][104]

Part I [Business](index=4&type=section&id=Item%201%20Business) Innospec develops and supplies specialty chemicals across three core segments, focusing on organic growth and strategic acquisitions, with its Octane Additives segment ceasing operations in 2020 * Innospec develops, manufactures, and supplies specialty chemicals for **three main business segments**: Fuel Specialties, Performance Chemicals, and Oilfield Services, with the **Octane Additives segment ceasing trading on June 30, 2020**[10](index=10&type=chunk)[11](index=11&type=chunk)[13](index=13&type=chunk) * The company's strategy focuses on developing new products and technologies to grow its **three active segments**, actively pursuing strategic acquisitions and partnerships[23](index=23&type=chunk) * Key raw materials include oleochemicals and ethylene, with ethylene for German operations being a **single-source supply** for products representing approximately **4% of total sales**[27](index=27&type=chunk)[28](index=28&type=chunk) Research & Development Expenditures (2018-2020) | Year | Expenditure (in millions) | | :--- | :--- | | 2020 | $30.9 | | 2019 | $35.4 | | 2018 | $33.4 | * The company is subject to significant environmental regulations, including **REACH in the E.U. and U.K. REACH**, requiring substance registration and increasing expenses[45](index=45&type=chunk)[46](index=46&type=chunk) * As of December 31, 2020, the company had approximately **1,900 employees across 24 countries**[48](index=48&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A%20Risk%20Factors) The company faces significant risks from global conditions, including the COVID-19 pandemic, Brexit, volatile oil prices, and operational challenges, alongside regulatory compliance and financial market fluctuations * The **COVID-19 pandemic** has adversely impacted business, particularly reducing demand in the **Fuel Specialties and Oilfield Services segments**[55](index=55&type=chunk) * **Brexit** has created trade barriers and uncertainties, potentially disrupting supply chains and adversely affecting economic conditions[58](index=58&type=chunk)[59](index=59&type=chunk) * The **Octane Additives business for motor gasoline has ceased**, and the development of a lead-free replacement fuel for AvTel poses a significant future risk[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) * Demand for **Oilfield Services products** is highly sensitive to **volatile oil and gas prices** affecting customer exploration and production activities[78](index=78&type=chunk) * The company's revolving credit facility contains **restrictive covenants**, including financial ratios, which if breached, could lead to default and debt acceleration[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) * **Environmental liabilities**, particularly for the Ellesmere Port site, and compliance with complex regulations like **U.K. REACH**, could impose substantial costs[91](index=91&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=Item%201B%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments * None[113](index=113&type=chunk) [Properties](index=24&type=section&id=Item%202%20Properties) The company's principal properties, including headquarters and manufacturing facilities in the U.S., U.K., Germany, and France, are believed to have sufficient capacity to meet current sales levels * The company's principal properties include corporate headquarters in **Englewood, Colorado**, and major facilities in the **U.S., U.K., Germany, and France**[114](index=114&type=chunk) * Management believes current plant capacity and supply agreements are **sufficient to meet sales levels**[116](index=116&type=chunk) [Legal Proceedings](index=25&type=section&id=Item%203%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings, though incidental claims could collectively have a material adverse effect * There are **no material pending legal proceedings** to which the Company or its subsidiaries are a party[117](index=117&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company * Not applicable[118](index=118&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Innospec's common stock trades on NASDAQ under 'IOSP', with no repurchases in 2020, and its five-year cumulative return underperformed major indices except the Russell 2000 * The Company's common stock is listed on **NASDAQ** under the symbol '**IOSP**'[119](index=119&type=chunk) * **No open market repurchases** of common stock were made during **2020** under the **$100 million share repurchase program**[121](index=121&type=chunk) Stock Performance Comparison (Value of $100 Investment) | Index | 2015 | 2020 | | :--- | :--- | :--- | | Innospec Inc. | $100.00 | $176.70 | | S&P 500 Index | $100.00 | $203.04 | | NASDAQ Composite Index | $100.00 | $269.70 | | Russell 2000 Index | $100.00 | $186.36 | [Selected Financial Data](index=28&type=section&id=Item%206%20Selected%20Financial%20Data) This section summarizes key financial data from 2016 to 2020, highlighting a significant decrease in 2020 net sales to **$1,193.1 million** and net income to **$28.7 million** from 2019 Financial Highlights (2019 vs 2020) | Metric (in millions, except per share data) | 2020 | 2019 | | :--- | :--- | :--- | | Net sales | $1,193.1 | $1,513.3 | | Operating income | $33.7 | $149.9 | | Net income | $28.7 | $112.2 | | Diluted EPS | $1.16 | $4.54 | | Net cash provided by operating activities | $145.9 | $161.6 | | Total assets at year end | $1,397.4 | $1,468.8 | | Long-term debt at year end | $0.6 | $60.1 | Quarterly Net Sales 2020 (in millions) | Quarter | Net Sales | | :--- | :--- | | Q1 | $372.3 | | Q2 | $244.9 | | Q3 | $265.1 | | Q4 | $310.8 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **adverse impact of COVID-19 and crude oil demand collapse** on 2020 performance, leading to a **21% revenue decline**, but notes a recovery trend, strong cash flow, and a net cash position after debt repayment [Critical Accounting Estimates](index=30&type=section&id=7.1%20Critical%20Accounting%20Estimates) Management identifies critical accounting estimates including **environmental liabilities of $58.5 million**, income taxes, pension obligations, and a **$19.8 million impairment** of Oilfield Services intangible assets in 2020 * **Environmental remediation provisions** amounted to **$58.5 million** as of December 31, 2020, principally for the **Ellesmere Port site**[136](index=136&type=chunk) * A **0.25% change in the discount rate** for the U.K. pension plan would change the Projected Benefit Obligation (PBO) by approximately **$26 million**[142](index=142&type=chunk)[144](index=144&type=chunk) * A **$19.8 million impairment** of intangible assets was recorded in the **Oilfield Services segment** at June 30, 2020, due to COVID-19 and reduced oil prices[148](index=148&type=chunk) [Results of Operations](index=34&type=section&id=7.2%20Results%20of%20Operations) In 2020, total net sales decreased **21% to $1.2 billion** and operating income fell to **$33.7 million**, driven by declines in Oilfield Services and Fuel Specialties, alongside **$21.3 million restructuring** and **$19.8 million impairment charges** Segment Performance: 2020 vs. 2019 (in millions) | Segment | Net Sales 2020 | Net Sales 2019 | Change | Operating Income 2020 | Operating Income 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Fuel Specialties | $512.7 | $583.7 | -12% | $84.5 | $116.6 | | Performance Chemicals | $425.4 | $428.7 | -1% | $54.8 | $48.7 | | Oilfield Services | $255.0 | $479.9 | -47% | $(9.5) | $39.7 | | Octane Additives | $0.0 | $21.0 | -100% | $(2.8) | $(0.7) | * A **$21.3 million restructuring charge** was recorded in **2020** related to the cessation of the **Octane Additives business**[178](index=178&type=chunk) * An **impairment charge of $19.8 million** was recorded in **2020** related to acquired intangible assets in the **Oilfield Services segment**[178](index=178&type=chunk) * The effective tax rate was **27.7% in 2020**, up from **25.4% in 2019**, with the adjusted rate at **23.5% in 2020**[180](index=180&type=chunk)[182](index=182&type=chunk) [Liquidity and Financial Condition](index=44&type=section&id=7.3%20Liquidity%20and%20Financial%20Condition) The company maintained strong liquidity in 2020, generating **$145.9 million in operating cash flow**, increasing cash to **$105.3 million**, and fully repaying its **$250 million revolving credit facility**, with total contractual commitments at **$137.1 million** * **Net cash provided by operating activities** was **$145.9 million in 2020**, compared to **$161.6 million in 2019**[208](index=208&type=chunk) * **Cash and cash equivalents increased by $29.6 million** during 2020, ending the year at **$105.3 million**[209](index=209&type=chunk)[210](index=210&type=chunk) * The company **repaid all borrowings** under its **$250 million revolving credit facility** during 2020, extending the facility until **September 2024**[211](index=211&type=chunk)[212](index=212&type=chunk) Contractual Commitments at Dec 31, 2020 (in millions) | Commitment Type | Total | 2021 | 2022-23 | 2024-25 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | Remediation payments | $58.5 | $6.6 | $9.4 | $7.1 | $35.4 | | Operating lease commitments | $40.2 | $11.3 | $17.3 | $8.9 | $2.7 | | Raw material purchase obligations | $19.7 | $3.8 | $7.8 | $8.1 | $0.0 | | Capital commitments | $14.7 | $14.7 | $0.0 | $0.0 | $0.0 | | **Total** | **$137.1** | **$37.8** | **$36.4** | **$24.8** | **$38.1** | [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from **interest rates, foreign currency exchange rates (Euro, GBP, BRL)**, and **volatile raw material costs**, managed through debt structure, forward contracts, and long-term purchase agreements * The company had **no outstanding borrowings** under its **$250.0 million revolving credit facility** as of December 31, 2020[237](index=237&type=chunk)[238](index=238&type=chunk) * Primary foreign currency exposures are to the **Euro, British pound sterling, and Brazilian Real**, mitigated with **foreign currency forward contracts**[245](index=245&type=chunk)[246](index=246&type=chunk) * A hypothetical **5% strengthening of the U.S. dollar** against the British pound sterling would increase operating income by approximately **$1.4 million** annually, excluding hedging[248](index=248&type=chunk) * The company manages **volatile raw material costs** through **long-term contracts and advance bulk purchases**, rather than extensive hedging[249](index=249&type=chunk) [Financial Statements and Supplementary Data](index=53&type=section&id=Item%208%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's **audited consolidated financial statements** for 2018-2020, including auditor reports, with a critical audit matter identified as the **valuation of the Plant Closure Provision** requiring significant estimates * **PricewaterhouseCoopers LLP** issued an **unqualified opinion** on the consolidated financial statements and internal control over financial reporting as of December 31, 2020[254](index=254&type=chunk) * A critical audit matter was the **Plant Closure Provision of $58.5 million**, due to significant estimates for future remediation work, particularly at the **Ellesmere Port site**[264](index=264&type=chunk)[265](index=265&type=chunk) Consolidated Income Statement Summary (in millions) | Line Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net sales | $1,193.1 | $1,513.3 | $1,476.9 | | Gross profit | $342.7 | $466.2 | $435.0 | | Operating income | $33.7 | $149.9 | $133.5 | | Net income | $28.7 | $112.2 | $85.0 | | Diluted EPS | $1.16 | $4.54 | $3.45 | * Note 5 details a **$21.3 million restructuring charge in 2020** for the cessation of the **Octane Additives segment's motor gasoline TEL production**[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk) * Note 9 discloses a **$19.8 million impairment charge in 2020** on intangible assets within the **Oilfield Services segment**[360](index=360&type=chunk)[362](index=362&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=104&type=section&id=Item%209%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure * None[457](index=457&type=chunk) [Controls and Procedures](index=104&type=section&id=Item%209A%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's **disclosure controls and internal control over financial reporting were effective** as of December 31, 2020, with no material changes identified * Management, including the **CEO and CFO**, concluded that the Company's **disclosure controls and procedures were effective** as of December 31, 2020[458](index=458&type=chunk) * Management concluded the Company maintained **effective internal control over financial reporting** as of December 31, 2020, based on the **COSO framework (2013)**[462](index=462&type=chunk) [Other Information](index=105&type=section&id=Item%209B%20Other%20Information) The company reports no other information for this item * None[466](index=466&type=chunk) Part III Part III incorporates information by reference from the company's **2021 Proxy Statement**, covering directors, executive officers, compensation, security ownership, related party transactions, and principal accountant fees [Directors, Executive Officers and Corporate Governance](index=105&type=section&id=Item%2010%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, corporate governance, the code of conduct, and the audit committee is incorporated by reference from the company's 2021 Proxy Statement * Information for this item is **incorporated by reference** from the **2021 Proxy Statement**[466](index=466&type=chunk) [Executive Compensation](index=106&type=section&id=Item%2011%20Executive%20Compensation) Information regarding executive compensation, compensation committee interlocks, and the compensation committee report is incorporated by reference from the company's 2021 Proxy Statement * Information for this item is **incorporated by reference** from the **2021 Proxy Statement**[471](index=471&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, as well as matters related to equity compensation plans, is incorporated by reference from the company's 2021 Proxy Statement * Information for this item is **incorporated by reference** from the **2021 Proxy Statement**[472](index=472&type=chunk)[473](index=473&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=Item%2013%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related person transactions and director independence is incorporated by reference from the company's 2021 Proxy Statement * Information for this item is **incorporated by reference** from the **2021 Proxy Statement**[474](index=474&type=chunk) [Principal Accountant Fees and Services](index=106&type=section&id=Item%2014%20Principal%20Accountant%20Fees%20and%20Services) Information regarding fees paid to the company's independent registered public accounting firms and the Audit Committee's pre-approval policies is incorporated by reference from the company's 2021 Proxy Statement * Information for this item is **incorporated by reference** from the **2021 Proxy Statement**[475](index=475&type=chunk) Part IV Part IV lists **exhibits filed with the Form 10-K**, including financial statements, accountant consents, and **CEO/CFO certifications**, along with officer and director signatures [Exhibits and Financial Statement Schedules](index=107&type=section&id=Item%2015%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the annual report * This section lists all **exhibits filed with the Form 10-K**, including governance documents, material agreements, and required certifications[479](index=479&type=chunk) [Form 10-K Summary](index=111&type=section&id=Item%2016%20Form%2010-K%20Summary) This item is not applicable * Not applicable[486](index=486&type=chunk)

Financial Data and Key Metrics Changes - Total revenues for Q3 2020 were $265.1 million, a 29% decrease from $371.9 million in the same period last year [12] - Overall gross margin decreased by 2.3 percentage points to 29.7% compared to the previous year [12] - EBITDA for the quarter was $31.5 million, down from $51.1 million a year ago [12] - GAAP earnings per share were $0.51, including special items that decreased earnings by $0.20, compared to $1.22 a year ago [13] Business Line Data and Key Metrics Changes - **Fuel Specialties**: Revenues were $120 million, down 17% year-over-year, with a 12% reduction in volumes and a 5% adverse price mix [14] - **Performance Chemicals**: Revenues increased by 2% to $102 million, driven by a 5% increase in volumes, despite a 6% adverse price mix [15] - **Oilfield Services**: Revenues were $43.1 million, down 64% year-over-year, reflecting reduced customer activity in the U.S. onshore market [16] Market Data and Key Metrics Changes - Global fuel demand began to recover in Q3, leading to increased sales in fuel specialties, although the recovery was slower than anticipated [9] - U.S. completion activity in oilfield services remained low, but sales of drag reducing agents and production chemicals increased as previously shut-in wells came back online [10] Company Strategy and Development Direction - The company aims to return all businesses to pre-COVID growth and profitability, focusing on organic growth projects and potential strategic acquisitions [20] - There is a positive outlook for performance chemicals driven by consumer preferences for natural and environmentally sustainable products [7] - The strategy includes reducing cyclicality in oilfield services by expanding sales in drag reducing agents and production chemicals, particularly in the Middle East [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand and activity levels improving in fuel specialties and oilfield services through Q4 and into 2021 [20] - The company is mindful of economic uncertainty and the potential impact of a second wave of COVID-19 on global recovery [20] Other Important Information - The company maintained its semiannual dividend at $0.52 per share, totaling $1.04 for the full year [7] - Net cash provided by operating activities was $55.5 million, with a strong cash position of $66 million as of September 30, 2020 [18] Q&A Session Summary Question: Expectations for operating expenses in Q4 - Management expects overhead costs to remain low due to previous cost initiatives, aiming for breakeven EBITDA in oilfield services [25][26] Question: Demand trends in Q3 and into October - Demand in oilfield services has started to improve, while fuel specialties have seen a slower recovery due to pandemic concerns [28][29] Question: Impact of potential M&A opportunities - The company remains conservative in its M&A approach, looking for opportunities that complement its business while maintaining a strong balance sheet [46][48] Question: Performance chemicals revenue trends - The negative price mix in performance chemicals is primarily due to lower raw material prices not being passed through to customers [37][39] Question: Long-term outlook on transportation fuel demand - Management believes that transportation fuel demand will recover post-pandemic and remain above GDP growth in the long term [62][64] Question: Update on fuel additives for IMO 2020 mandates - The company is gaining traction in this area, but significant sales increases are still anticipated to take time [78] Question: ESG considerations and their impact - The transition away from tetraethyl lead has positioned the company favorably in the eyes of socially conscious investors, with a focus on sustainability and environmental responsibility [80][82]

PART I FINANCIAL INFORMATION [Item 1 Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201%20Condensed%20Consolidated%20Financial%20Statements) The company presents its unaudited interim condensed consolidated financial statements for the nine months ended September 30, 2020 [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income and diluted EPS significantly decreased for the three and nine months ended September 30, 2020, due to lower sales Key Income Metrics | Metric (in millions, except per share) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | Change (YoY) | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $265.1 | $371.9 | -28.7% | $882.3 | $1,122.6 | -21.4% | | Gross profit | $78.7 | $119.1 | -33.9% | $251.7 | $348.0 | -27.7% | | Operating income | $16.8 | $38.2 | -56.0% | $4.3 | $106.1 | -95.9% | | Net income | $12.7 | $30.1 | -57.8% | $6.1 | $81.1 | -92.5% | | Diluted EPS | $0.51 | $1.22 | -58.1% | $0.25 | $3.28 | -92.4% | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income increased for the third quarter but significantly decreased for the nine-month period Key Comprehensive Income Metrics | Metric (in millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | Change (YoY) | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net income | $12.7 | $30.1 | -57.8% | $6.1 | $81.1 | -92.5% | | Total other comprehensive income/(loss) | $12.1 | $(12.8) | +194.5% | $10.1 | $(16.1) | +162.7% | | Total comprehensive income | $24.8 | $17.3 | +43.4% | $16.2 | $65.0 | -75.1% | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities decreased as of September 30, 2020, primarily due to lower current assets and debt reduction Key Balance Sheet Metrics | Metric (in millions) | Sep 30, 2020 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Total current assets | $528.8 | $630.3 | -16.1% | | Total assets | $1,343.7 | $1,468.8 | -8.6% | | Total current liabilities | $229.8 | $303.5 | -24.3% | | Long-term debt | $0.0 | $58.6 | -100% | | Total liabilities and equity | $1,343.7 | $1,468.8 | -8.6% | | Total equity | $926.0 | $918.9 | +0.8% | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased for the nine months ended September 30, 2020, alongside reduced financing activities Key Cash Flow Metrics | Metric (in millions) | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $87.7 | $103.2 | -15.0% | | Net cash used in investing activities | $(21.7) | $(23.7) | -8.4% | | Net cash used in financing activities | $(74.8) | $(91.8) | -18.5% | | Net change in cash and cash equivalents | $(9.1) | $(12.8) | -28.9% | | Cash and cash equivalents at end of period | $66.6 | $110.3 | -39.6% | [Condensed Consolidated Statements of Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity slightly increased as of September 30, 2020, driven by translation adjustments and stock compensation Key Equity Metrics | Metric (in millions) | Sep 30, 2020 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Total Innospec stockholders' equity | $925.5 | $918.5 | +0.8% | | Total equity | $926.0 | $918.9 | +0.8% | [Notes To The Unaudited Interim Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20To%20The%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, restructuring, impairments, and the impact of the COVID-19 pandemic [NOTE 1 – BASIS OF PRESENTATION](index=12&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION) The interim statements follow GAAP and reflect the adoption of ASU No 2016-13 for credit losses without material impact - The company adopted ASU No 2016-13 (ASC Topic 326) for credit losses, effective January 1, 2020, with **no material adjustment** to opening retained earnings or the allowance for trade and other accounts receivable upon adoption[38](index=38&type=chunk)[39](index=39&type=chunk) - Trade and other accounts receivable are shown net of a **$4.7 million allowance** at September 30, 2020, which remains immaterial to the financial statements[39](index=39&type=chunk) [NOTE 2 – SEGMENT REPORTING](index=13&type=section&id=NOTE%202%20%E2%80%93%20SEGMENT%20REPORTING) The company reports on four segments, with the Octane Additives segment ceasing trading from July 1, 2020 - The **Octane Additives segment ceased trading** and is no longer a reporting segment from July 1, 2020, due to the end of manufacturing and sale of tetra ethyl lead (TEL) for motor gasoline[44](index=44&type=chunk) Three-Month Segment Performance | Segment (in millions) | Net Sales (3M Sep 2020) | Net Sales (3M Sep 2019) | Gross Profit (3M Sep 2020) | Gross Profit (3M Sep 2019) | Operating Income (3M Sep 2020) | Operating Income (3M Sep 2019) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fuel Specialties | $120.0 | $144.1 | $40.3 | $54.1 | $22.2 | $31.1 | | Performance Chemicals | $102.0 | $99.9 | $24.0 | $22.6 | $12.4 | $9.3 | | Oilfield Services | $43.1 | $121.4 | $14.4 | $41.2 | $(4.5) | $10.0 | | Octane Additives | $0.0 | $6.5 | $0.0 | $1.2 | $0.0 | $0.8 | | Total | $265.1 | $371.9 | $78.7 | $119.1 | $16.8 | $38.2 | Nine-Month Segment Performance | Segment (in millions) | Net Sales (9M Sep 2020) | Net Sales (9M Sep 2019) | Gross Profit (9M Sep 2020) | Gross Profit (9M Sep 2019) | Operating Income (9M Sep 2020) | Operating Income (9M Sep 2019) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fuel Specialties | $374.4 | $433.4 | $116.9 | $154.5 | $59.0 | $88.1 | | Performance Chemicals | $310.8 | $322.7 | $76.5 | $73.2 | $40.2 | $33.8 | | Oilfield Services | $197.1 | $358.1 | $60.5 | $120.4 | $(9.7) | $27.9 | | Octane Additives | $0.0 | $8.4 | $(2.2) | $(0.1) | $(2.8) | $(1.9) | | Total | $882.3 | $1,122.6 | $251.7 | $348.0 | $4.3 | $106.1 | [NOTE 3 – EARNINGS PER SHARE](index=14&type=section&id=NOTE%203%20%E2%80%93%20EARNINGS%20PER%20SHARE) Basic and diluted earnings per share significantly decreased for both reporting periods, reflecting lower net income - Anti-dilutive options excluded from diluted EPS calculation were **17,980** for the three months and **23,420** for the nine months ended Sep 30, 2020[46](index=46&type=chunk) EPS Calculation | Metric (in millions, except per share) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net income available to common stockholders | $12.7 | $30.1 | $6.1 | $81.1 | | Weighted average common shares outstanding (in thousands) | 24,570 | 24,491 | 24,555 | 24,476 | | Diluted EPS | $0.51 | $1.22 | $0.25 | $3.28 | [NOTE 4 – RESTRUCTURING](index=14&type=section&id=NOTE%204%20%E2%80%93%20RESTRUCTURING) A $21.1 million restructuring provision was recorded in Q2 2020 for the Octane Additives segment following the cessation of TEL manufacturing - A **restructuring charge of $21.1 million** was recorded in Q2 2020 for the Octane Additives segment due to the end of TEL production for motor gasoline[47](index=47&type=chunk) - Provisions include environmental monitoring ($2.0 million), facility remediation ($7.5 million), a loss-making contract ($7.2 million), tangible asset impairment ($2.0 million), and redundancy costs ($2.4 million)[48](index=48&type=chunk) [NOTE 5 – GOODWILL](index=15&type=section&id=NOTE%205%20%E2%80%93%20GOODWILL) Goodwill increased slightly to $367.2 million as of September 30, 2020, primarily due to exchange rate effects - The increase in goodwill was primarily due to a **$4.2 million exchange effect**[50](index=50&type=chunk) Goodwill Balance | Metric (in millions) | Jan 1, 2020 | Sep 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Net Book Amount | $363.0 | $367.2 | +1.2% | [NOTE 6 – OTHER INTANGIBLE ASSETS](index=15&type=section&id=NOTE%206%20%E2%80%93%20OTHER%20INTANGIBLE%20ASSETS) Other intangible assets decreased significantly due to impairment charges in the Oilfield Services segment and amortization expense - **Impairment of intangible assets totaling $19.8 million** occurred in Q2 2020, specifically for technology ($10.0 million) and customer relationships ($9.8 million) within the Oilfield Services segment[51](index=51&type=chunk) - Amortization expense for the nine months ended September 30, 2020, was **$16.3 million**, a decrease from $17.2 million in the prior year[52](index=52&type=chunk) Other Intangible Assets Balance | Metric (in millions) | Sep 30, 2020 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Net Book Amount | $78.6 | $113.5 | -30.7% | [NOTE 7 – PENSION AND POST EMPLOYMENT BENEFITS](index=16&type=section&id=NOTE%207%20%E2%80%93%20PENSION%20AND%20POST%20EMPLOYMENT%20BENEFITS) The company's UK defined benefit pension plan generated a net credit, while the German plan incurred a net charge - Net service cost for the UK plan was **$0.9 million** for the nine months ended September 30, 2020, recognized in SG&A expenses[55](index=55&type=chunk) - Post-employment benefit obligations in the Performance Chemicals segment's European businesses increased to **$4.8 million** at September 30, 2020[56](index=56&type=chunk) Net Pension Credit/(Charge) | Metric (in millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | UK Plan net pension credit/(charge) | $1.6 | $2.0 | $4.9 | $5.8 | | German Plan net pension charge | $(0.2) | $(0.2) | $(0.7) | $(0.4) | [NOTE 8 – INCOME TAXES](index=17&type=section&id=NOTE%208%20%E2%80%93%20INCOME%20TAXES) Unrecognized tax benefits totaled $15.5 million at September 30, 2020, including potential liabilities from audits and tax law changes - All **$15.5 million** of unrecognized tax benefits, interest, and penalties would impact the effective tax rate if recognized[58](index=58&type=chunk) - A **$1.2 million unrecognized tax benefit** (plus $0.2 million accrued interest) related to a historical impairment was released in Q2 2020[61](index=61&type=chunk) Unrecognized Tax Benefits | Metric (in millions) | Jan 1, 2020 | Sep 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Unrecognized Tax Benefits | $14.4 | $13.3 | -7.6% | | Interest and Penalties | $2.0 | $2.2 | +10.0% | | Total | $16.4 | $15.5 | -5.5% | [NOTE 9 – LONG-TERM DEBT](index=18&type=section&id=NOTE%209%20%E2%80%93%20LONG-TERM%20DEBT) The company had no outstanding debt under its revolving credit facility as of September 30, 2020, after extending the facility to 2024 - The revolving credit facility was **extended until September 25, 2024**, with $0.3 million in capitalization costs[63](index=63&type=chunk) Long-Term Debt Balance | Metric (in millions) | Sep 30, 2020 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Revolving credit facility | $0.0 | $60.0 | -100% | | Total Long-term debt | $0.0 | $58.6 | -100% | [NOTE 10 – PLANT CLOSURE PROVISIONS](index=18&type=section&id=NOTE%2010%20%E2%80%93%20PLANT%20CLOSURE%20PROVISIONS) Plant closure provisions increased to $57.9 million, including an additional $7.5 million for the Octane Additives segment restructuring - The charge for the nine months ended September 30, 2020, was **$11.0 million**, including $7.5 million for Octane Additives restructuring[67](index=67&type=chunk) Plant Closure Provisions | Metric (in millions) | Jan 1, 2020 | Sep 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Total Provisions | $49.3 | $57.9 | +17.4% | | Due within one year | | $(5.2) | | | Due after one year | | $52.7 | | [NOTE 11 – FAIR VALUE MEASUREMENTS](index=19&type=section&id=NOTE%2011%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) The company's financial assets and liabilities are measured at fair value, with most carrying amounts approximating fair value Fair Value of Financial Instruments | Asset/Liability (in millions) | Sep 30, 2020 Carrying Amount | Sep 30, 2020 Fair Value | Dec 31, 2019 Carrying Amount | Dec 31, 2019 Fair Value | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $66.6 | $66.6 | $75.7 | $75.7 | | Foreign currency forward exchange contracts | $0.2 | $0.2 | $0.8 | $0.8 | | Long-term debt | $0.0 | $0.0 | $58.6 | $58.6 | | Finance leases | $0.6 | $0.6 | $1.5 | $1.5 | | Stock equivalent units | $12.3 | $12.3 | $24.6 | $24.6 | [NOTE 12 – DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT](index=20&type=section&id=NOTE%2012%20%E2%80%93%20DERIVATIVE%20INSTRUMENTS%20AND%20RISK%20MANAGEMENT) The company uses foreign currency forward exchange contracts to manage currency exposure, resulting in a gain in the first nine months of 2020 - Foreign currency forward exchange contracts, not designated as hedging instruments, resulted in a **gain of $0.7 million** for the first nine months of 2020[73](index=73&type=chunk) - The Company **did not hold any interest rate swaps** as of September 30, 2020[74](index=74&type=chunk) [NOTE 13 – COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%2013%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company reports no material pending legal proceedings, while contingent liabilities for guarantees increased - There are **no material pending legal proceedings** to which the Company or its subsidiaries are a party[75](index=75&type=chunk) - Contingent liabilities for guarantees of affiliated companies' obligations totaled **$9.6 million** at September 30, 2020, up from $4.7 million at December 31, 2019[76](index=76&type=chunk) [NOTE 14 – STOCK-BASED COMPENSATION PLANS](index=21&type=section&id=NOTE%2014%20%E2%80%93%20STOCK-BASED%20COMPENSATION%20PLANS) Stock option compensation cost was $4.4 million, while stock equivalent unit compensation resulted in a credit due to revaluation - Stock option compensation cost for the first nine months of 2020 was **$4.4 million**, down from $4.9 million in 2019[82](index=82&type=chunk) - SEU compensation for the first nine months of 2020 was a **$4.9 million credit**, compared to a $14.0 million charge in 2019, influenced by share price and performance criteria revaluation[85](index=85&type=chunk) Stock Option Activity | Stock Option Metric | Dec 31, 2019 | Sep 30, 2020 | | :--- | :--- | :--- | | Options Outstanding | 504,459 | 466,440 | | Weighted Average Exercise Price | $33.05 | $34.04 | | Weighted Average Grant-Date Fair Value | $41.35 | $44.27 | [NOTE 15 – RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS](index=23&type=section&id=NOTE%2015%20%E2%80%93%20RECLASSIFICATIONS%20OUT%20OF%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Reclassifications out of accumulated other comprehensive loss totaled $0.6 million, primarily from defined benefit pension plan items Reclassifications from AOCL | AOCL Component (in millions) | Amount Reclassified from AOCL (9M 2020) | | :--- | :--- | | Amortization of prior service credit | $(0.6) | | Amortization of actuarial net losses | $1.2 | | Total before tax | $0.6 | AOCL Balance | AOCL Balance (in millions) | Dec 31, 2019 | Sep 30, 2020 | | :--- | :--- | :--- | | Total | $(74.4) | $(64.3) | [NOTE 16 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS](index=24&type=section&id=NOTE%2016%20%E2%80%93%20RECENTLY%20ISSUED%20ACCOUNTING%20PRONOUNCEMENTS) The company is evaluating ASU No 2019-12 and does not expect a material impact on its disclosures - The Company is evaluating ASU No 2019-12, 'Simplifying the Accounting for Income Taxes,' effective for fiscal years beginning after December 15, 2020, with **no material impact on disclosures expected**[89](index=89&type=chunk) [NOTE 17 – RELATED PARTY TRANSACTIONS](index=24&type=section&id=NOTE%2017%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions included product purchases, legal fees, and scrap metal sales totaling $1.0 million - Purchased **$0.2 million** of product from AdvanSix in the first nine months of 2020[90](index=90&type=chunk) - Incurred **$0.6 million** in legal fees from Smith, Gambrell & Russell, LLP in the first nine months of 2020[91](index=91&type=chunk) - Sold **$0.2 million** of scrap metal to European Metal Recycling Limited in the first nine months of 2020[92](index=92&type=chunk) [Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2020](index=25&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20for%20the%20Three%20and%20Nine%20Months%20Ended%20September%2030,%202020) The company discusses financial performance, highlighting the adverse impact of COVID-19 on key segments and liquidity changes [Critical Accounting Estimates](index=25&type=section&id=Critical%20Accounting%20Estimates) Key estimates involve environmental liabilities, pensions, income taxes, goodwill, and other intangible assets - Critical accounting estimates include **environmental liabilities, pensions, income taxes, goodwill, and property, plant and equipment and other intangible assets**[95](index=95&type=chunk) [Impact of COVID-19 Pandemic and Current Economic Environment](index=25&type=section&id=Impact%20of%20COVID-19%20Pandemic%20and%20Current%20Economic%20Environment) The pandemic adversely impacted Fuel Specialties and Oilfield Services, while Performance Chemicals showed resilience - **Fuel Specialties** was impacted by reduced demand from lower freight transport and passenger miles, with some recovery in Q3 but not to pre-COVID levels[96](index=96&type=chunk) - **Performance Chemicals** experienced little overall impact, with increased demand for health, hygiene, and cleaning products offsetting some lost revenues[96](index=96&type=chunk) - **Oilfield Services** was heavily impacted by reduced oil exploration and production due to lower demand and low oil prices[96](index=96&type=chunk) - The company's financial position remains strong with sufficient capital access, including a **$250 million revolving credit facility** extended to September 2024[98](index=98&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Operating income significantly decreased for both the three and nine-month periods due to segment declines and one-off charges Overall Performance Summary | Metric (in millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | Change (YoY) | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Net sales | $265.1 | $371.9 | -28.7% | $882.3 | $1,122.6 | -21.4% | | Total Gross profit | $78.7 | $119.1 | -33.9% | $251.7 | $348.0 | -27.7% | | Total Operating income | $16.8 | $38.2 | -56.0% | $4.3 | $106.1 | -95.9% | [Three Months Ended September 30, 2020](index=28&type=section&id=Three%20Months%20Ended%20September%2030,%202020) Third-quarter net sales and gross profit declined by 29% and 34% respectively, driven by Oilfield Services and Fuel Specialties Net Sales by Segment | Segment (in millions) | Net Sales (2020) | Net Sales (2019) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Fuel Specialties | $120.0 | $144.1 | $(24.1) | -17% | | Performance Chemicals | $102.0 | $99.9 | $2.1 | +2% | | Oilfield Services | $43.1 | $121.4 | $(78.3) | -64% | | Octane Additives | $0.0 | $6.5 | $(6.5) | -100% | | Total | $265.1 | $371.9 | $(106.8) | -29% | Gross Margin by Segment | Segment Gross Margin (%) | 2020 | 2019 | Change (pp) | | :--- | :--- | :--- | :--- | | Fuel Specialties | 33.6 | 37.5 | -3.9 | | Performance Chemicals | 23.5 | 22.6 | +0.9 | | Oilfield Services | 33.4 | 33.9 | -0.5 | | Aggregate | 29.7 | 32.0 | -2.3 | [Nine Months Ended September 30, 2020](index=32&type=section&id=Nine%20Months%20Ended%20September%2030,%202020) Nine-month net sales and gross profit fell 21% and 28% respectively, led by declines in Oilfield Services and Fuel Specialties - **Restructuring charge of $21.1 million** and **impairment of intangible assets of $19.8 million** significantly impacted operating expenses for the nine months ended September 30, 2020[136](index=136&type=chunk) Net Sales by Segment | Segment (in millions) | Net Sales (2020) | Net Sales (2019) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Fuel Specialties | $374.4 | $433.4 | $(59.0) | -14% | | Performance Chemicals | $310.8 | $322.7 | $(11.9) | -4% | | Oilfield Services | $197.1 | $358.1 | $(161.0) | -45% | | Octane Additives | $0.0 | $8.4 | $(8.4) | -100% | | Total | $882.3 | $1,122.6 | $(240.3) | -21% | Gross Margin by Segment | Segment Gross Margin (%) | 2020 | 2019 | Change (pp) | | :--- | :--- | :--- | :--- | | Fuel Specialties | 31.2 | 35.6 | -4.4 | | Performance Chemicals | 24.6 | 22.7 | +1.9 | | Oilfield Services | 30.7 | 33.6 | -2.9 | | Aggregate | 28.5 | 31.0 | -2.5 | [Liquidity and Financial Condition](index=37&type=section&id=Liquidity%20and%20Financial%20Condition) Working capital and operating cash flow decreased, while the company fully repaid its revolving credit facility - Net cash provided by operating activities decreased to **$87.7 million** in the first nine months of 2020 from $103.2 million in 2019[148](index=148&type=chunk) - The Company **repaid all $60.0 million** of its revolving credit facility borrowings, resulting in $0.0 million debt outstanding as of September 30, 2020[149](index=149&type=chunk)[150](index=150&type=chunk) Key Liquidity Metrics | Metric (in millions) | Sep 30, 2020 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Working capital | $299.0 | $326.8 | -8.6% | | Adjusted working capital | $246.4 | $275.3 | -10.6% | | Trade and other accounts receivable | $206.2 | $292.0 | -29.4% | | Accounts payable and accrued liabilities | $207.5 | $276.0 | -24.8% | [Item 3 Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from debt, foreign operations, and currency rates, which it manages with derivatives - The Company uses floating rate debt and is exposed to risks from **non-U.S. activities, interest rates, and foreign currency exchange rates**[153](index=153&type=chunk) - **Derivatives** (foreign currency forward exchange contracts, commodity swaps) are used as risk management tools to manage market risks and reduce volatility, not for trading[154](index=154&type=chunk)[155](index=155&type=chunk) - There were **no significant changes** in market risk exposure since the 2019 Annual Report on Form 10-K[156](index=156&type=chunk) [Item 4 Controls and Procedures](index=40&type=section&id=Item%204%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective as of September 30, 2020, with no material changes to internal controls - Disclosure controls and procedures were **effective** as of September 30, 2020[157](index=157&type=chunk) - **No material changes** to internal control over financial reporting were identified[159](index=159&type=chunk) PART II OTHER INFORMATION [Item 1 Legal Proceedings](index=41&type=section&id=Item%201%20Legal%20Proceedings) The company reports no material pending legal proceedings but acknowledges risks from the aggregation of smaller claims - There are **no material pending legal proceedings** to which the Company or its subsidiaries are a party[160](index=160&type=chunk) [Item 1A Risk Factors](index=41&type=section&id=Item%201A%20Risk%20Factors) Risk factors are materially unchanged, except for an updated emphasis on the adverse and uncertain impact of the COVID-19 pandemic - There are **no material changes** in risk factors since the 2019 Form 10-K, other than an updated risk factor regarding the COVID-19 pandemic[161](index=161&type=chunk) - The **COVID-19 pandemic** has had, and is expected to continue to have, an adverse impact on business, results of operations, financial position, and cash flows[162](index=162&type=chunk) - The extent of the pandemic's impact is **highly uncertain** and depends on factors like duration, government restrictions, and customer demand[162](index=162&type=chunk) [Item 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or stock repurchases occurred during the third quarter of 2020 - **No unregistered sales** of equity securities occurred[164](index=164&type=chunk) - **No open market repurchases** of common stock were made during the quarter ended September 30, 2020[165](index=165&type=chunk) [Item 3 Defaults Upon Senior Securities](index=42&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were **no defaults** upon senior securities[166](index=166&type=chunk) [Item 4 Mine Safety Disclosures](index=42&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[167](index=167&type=chunk) [Item 5 Other Information](index=42&type=section&id=Item%205%20Other%20Information) No other information was reported under this item - **No other information**[168](index=168&type=chunk) [Item 6 Exhibits](index=42&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications, credit agreements, and XBRL data - Exhibits include the Extension Request for Multicurrency Revolving Facility Agreement and Confirmation, CEO and CFO certifications, and XBRL documents[170](index=170&type=chunk)

innospec� chemistry matters Q3 2020 Earnings NOVEMBER 2020 Forward Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Such forward-looking statements include statements (covered by words like "expects," "estimates," "anticipates," "may," "believes," "feels," "plan," "inte ...

Innospec Inc. (NASDAQ:IOSP) Q2 2020 Earnings Conference Call August 5, 2020 10:00 AM ET Company Participants David Jones - VP, General Counsel, Chief Compliance Officer & Corporate Secretary Patrick Williams - President & CEO Ian Cleminson - EVP & CFO Conference Call Participants David Silver - CL King Capital Jon Tanwanteng - CJS Securities Operator Ladies and gentlemen, thank you for standing by. Welcome to today's Innospec's Second Quarter 2020 Earnings Release Conference Call. At this time, all particip ...

innospec� chemistry matters Q2 2020 Earnings AUGUST 2020 Forward Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Such forward-looking statements include statements (covered by words like "expects," "estimates," "anticipates," "may," "believes," "feels," "plan," "intend ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-13879 INNOSPEC INC. (Exact name of registrant as specified in its charter) DELAWARE 98-0181725 (State or other jurisdiction ...