NEU 10-K & 10-Q changes, risk factors and insider trading

•A significant portion of our specialty materials business is under contracts with contractors or subcontractors of the U.S. government or directly with the U.S. government. These contracts are impacted by governmental prioritiespriorities, as well as shutdowns, and are subject to potential fluctuations in funding or early termination, including for convenience, any of which could have a material adverse effect on our results of operations, financial condition, or cash flows.

Furthermore, we cannot assure that any pending patent application filed by us will result in an issued patent, or if patents are issued to us, that those patents will provide meaningful protection against competitors or against competitive technologies. We could face patent infringement claims from our competitors or others alleging that our processes or products infringe on their proprietary technologies. If we were found to be infringing on the proprietary technology of others, we may be liable for damages, and we may be required to change our processes, redesign our products partially or completely, pay to use the technology of others, or stop using certain technologies or producing the infringing product entirely. Even if we ultimately prevail in an infringement suit, the existence of the suit could prompt customers to switch to products that are not the subject of infringement suits. We may not prevail in any intellectual property litigationlitigation, and such litigation may result in significant legal costs or otherwise impede our ability to produce and distribute key products.

The occurrence of extraordinary events, including future terrorist attacks, the outbreak or escalation of war, armed hostilities, or a health-related epidemic cannot be predicted, but their occurrence can be expected to negatively affect the economy in general, as well as the markets for our products, and could result in production downtime. In addition, the damage from a direct attack on our facilities or other assets or on facilities or other assets used by us could include loss of life or property damage, and our insurance coverage may not be sufficient to cover all of the damage incurred or securing coverage for these types of events may be prohibitively expensive.

We have incurred, and may in the future incur, substantial amounts of indebtedness to support our operations.operations, including financing acquisitions or other investment opportunities. To the degree that our indebtedness is at variable interest rates, increasing interest rates in the market will result in higher interest expense in our results of operations. Substantial amounts of indebtedness could, among other things, require us to dedicate a substantial portion of our cash flow to repaying and servicing our indebtedness, thus reducing the amount of funds available for other general corporate purposes; limit our ability to borrow additional funds necessary for working capital, capital expenditures or other general corporate purposes; and limit our flexibility in planning for, or reacting to, changes in our business.

In addition, our ability to realize the expected benefits from our acquisitionrecent of AMPACacquisitions is subject to several factors. These include our ability to retain key AMPAC personnel, our ability to maintain relationships with suppliers and customers of AMPAC,customers, and our ability to integrate AMPACthem into certain information technology systems, operational systems, procedures, or controls without disrupting itstheir operations.

The following discussion, as well as other discussions in this Annual Report on Form 10-K, contains forward-looking statements about future events and expectations within the meaning of the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future results. When we use words in this document such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “projects,” “expects,” “should,” “could,” “may,” “will,” and similar expressions, we do so to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding future prospects of growth in the petroleum additives market,or specialty materials markets, other trends in thethese petroleum additives market,markets, our ability to maintain or increase our market share, and our future capital expenditure levels,levels and our future financial results.

Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at production facilities, including single-sourced facilities; hazards common to chemical businesses; the ability to respond effectively to technological changes in our industries; failure to protect our intellectual property rights; sudden, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the loss of significant customers; termination or changes to contracts with contractors and subcontractors of the U.S. government or directly with the U.S. government; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, wars, and health-related epidemics; risks related to operating outside of the United StatesStates, including tariffs and trade policy; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from acquisitions, or our inability to successfully integrate acquisitions into our business; and the underperformance of our pension assets resulting in additional cash contributions to our pension plans. Risk factors are discussed in Item 1A. “Risk Factors.”

You should keep in mind that any forward-looking statement made by us in this discussion or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, any forward-looking statement made in this discussion or elsewhere,elsewhere might not occur.

When comparing the results of the petroleum additives segment for 20242025 with 2023,2024, net sales declined 2.0%,3.9%, resulting primarily from alower decreaseproduct in selling prices and a small unfavorable foreign currency impact. Product shipments were flat.shipments. Petroleum additives operating profit wasdecreased 15.1% higher12.1% when comparing the 2025 and 2024 with 2023,periods, primarily reflecting the favorable impact of lower rawproduct materialshipments and selling prices, as well as higher operating costs, which were partially offset by thelower raw material costs. In addition to lower sellingproduction prices.at Theour lowermanufacturing plants, the higher operating costs reflectincluded ourhigher continuedtechnology focusinvestments onfor operationalresearch, efficiency.development and testing during the 2025 period as compared to the 2024 period, as well as one-time charges related to network optimization efforts.

We completed the acquisition of Calca on October 1, 2025 and the acquisition of AMPAC for approximately $697 million on January 16, 2024.2024, both of which are part of the specialty materials segment. See Note 2 for further information on the acquisition.acquisitions. The operations2025 and 2024 periods only include the results of AMPAC sinceand Calca for the dateperiods ofwe acquisitionowned areeach reflectedcompany. in theThe specialty materials segment inreported theboth Resultshigher ofnet Operationssales sectionand below.higher operating profit for 2025 as compared to 2024.

Our consolidated net sales for 20242025 amounted to $2.8$2.7 billion, ana increasedecrease of $88$61 million, or 3.3%,2.2%, from 2023.2024.

The following table shows net sales by segment and product line for each of the last three years. The net sales in the table below for the specialty materials segment include sales since the acquisitionacquisitions of Calca on October 1, 2025 and AMPAC on January 16, 2024.

Petroleum Additives - The regions in which we operate include North America (the United States and Canada), Latin America (Mexico, Central America, and South America), Asia Pacific, and the Europe/Middle East/Africa/India (EMEAI) region. The percentage of net sales being generated in the regions has remained fairly consistent over the past three years, with some limited fluctuation due to various factors, including the impact of regional economic trends. In 2024,2025, North America represented approximately 40% of our petroleum additives net sales, while EMEAI contributed approximately 30%, Asia Pacific approximately 20%, and Latin America the remaining amount. As shown in the table above, the percentage of lubricant additives net sales and fuel additives net sales compared to total petroleum additives net sales have remained substantially consistent over the past three years.

Petroleum additives net sales for 20242025 of $2.6$2.5 billion were approximately 2.0%3.9% lower than 2023.2024. TheDecreases decreasein wasAsia acrossPacific allof regions.10.3% Theand North America regionof represented6.2% approximatelywere 35%partially offset by increases of the decrease2.4% in petroleum additives net sales, EMEAI and 0.8% in Latin America represented approximately 22% each, and the Asia Pacific region represented approximately 21%.America.

When comparing petroleum additives net sales for 20242025 with 2023,2024, the primary driver was lower sellingproduct pricesshipments in both lubricant additives and fuel additives, along with a smallsmaller unfavorable foreignimpact currency impact. Lubricant additives shipments were up slightly while fuel additives shipments werefrom lower byselling the same amount.prices.

On a worldwide basis, when comparing 2025 with 2024, the volume of product shipments for petroleum additives was flat4.9% when comparing 2024lower with 2023, with a small increasedecreases in both lubricant additives offsetand fuel additives but primarily driven by alower decrease in fuellubricant additives shipments. Both the North America and Asia Pacific regions reported increasesdecreases in lubricant additives shipments, which were mostlypartially offset by decreasesincreases in the EMEAI and Latin America regions. The EMEAIAsia Pacific and Latin America regions reported increases in fuel additives shipments, which were more than offset by decreases in the North America and Asia PacificEMEAI regions. Overall, the decrease in product shipments reflects some softness in the market, as well as our strategic decision to examine and reduce low-margin business.

Specialty Materials - The specialty materials segment comprises the operations of AMPAC,AMPAC and Calca, both of which operatesoperate predominantly in the North America region. Total net sales for the specialty materials segment were $182 million for 2025 and $141 million for 2024. In addition to the periodinclusion thatof weCalca ownedin AMPAC2025 duringnet 2024.sales, the increase between 2025 and 2024 resulted primarily from increased shipment volumes.

The following table reports segment operating profit for the last three years. The amount reportedamounts for the specialty materials issegment forinclude operating profit since the periodacquisitions fromof Calca on October 1, 2025 and AMPAC on January 16, 2024 to December 31, 2024. A reconciliation of segment operating profit to income before income tax expense is in Note 5.

Petroleum Additives - Petroleum additives segment gross profit increaseddecreased $69$60 million, and segment operating profit increaseddecreased $78$72 million when comparing 20242025 to 2023.2024. The following table presents the petroleum additives segment's cost of goods sold as a percentage of net sales and theits operating profit margin.

PetroleumThe petroleum additives segment's selling, general, and administrative expenses (SG&A) increased by $5 million, or 4.2%,3.8%, in 20242025 compared to 2023.2024. SG&A as a percentage of net sales was 5.2% in 2025 and 4.8% in 2024 and 4.6% in 2023.2024. Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce, including travel-related expenses. While personnel-related costs fluctuate from year to year, there were no significant changes in the drivers of these costs when comparing 20242025 and 2023.2024.

Our investment in petroleum additives research, development, and testing (R&D) decreasedincreased approximately $13$7 million when comparing 20242025 with 2023.2024. As a percentage of net sales, R&D was 5.2% in 2025 and 4.7% in 2024 and 5.1% in 2023.2024. Our R&D investments reflect our efforts to support the development of solutions that meet our customers' needs, meet new and evolving standards, and support our expansion into new product areas. Our approach to R&D investments, as it is with SG&A costs, is one of purposeful spending on programs to support our current product base and to ensure that we develop products to support our customers' programs in the future. R&D investments include personnel-related costs, as well as costs for internal and external testing of our products. Substantially all investments in new product development are incurred in the United States and the United Kingdom (U.K.), with approximately 70% of total R&D attributable to the North America and EMEAI regions. The remaining R&D is attributable to the Asia Pacific and Latin America regions and represents customer technology support services in those regions. OurAll of our consolidated R&D investment is related to the petroleum additives segment.

Specialty Materials - The specialty materials segment reported operating profit of $17 million for the period from the AMPAC acquisition date of January 16, 2024 to December 31, 2024. The specialty materials results for the 2024 period include the sale of AMPAC finished goods inventory that we acquired at closing. The acquired inventory, whichinventory was recorded at fair value on the acquisition date and was sold during 2024, generatedgenerating no margin. The remaining increase in specialty materials operating profit for the year comparison resulted from the same factors as those outlined in the net sales discussion.

Interest and financing expenses were $40 million in 2025 and $57 million in 2024 and $37 million in 2023.2024. The increasedecrease in interest and financing expense between 20242025 and 20232024 resulted primarily from both higherlower average debt outstandingoutstanding, andalong with a higherlower average interest rate.

Other income (expense), net wasreflected income of $57 million in 2025 and $51 million in 2024 and $43 million in 2023.2024. The amounts for both periods included the components of net periodic benefit cost (income), except for service costs, from defined benefit pension and postretirement plans.plans, which also represent most of the difference between the two years. See Note 18 for further information on total periodic benefit cost (income).

Income tax expense was $142 million in 2025 and $122 million in 2024 and $100 million in 2023.2024. The effective tax rate was 25.3% in 2025 and 20.8% in 2024 and 20.5% in 2023.2024. When comparing 20242025 and 2023,2024, income tax expense increased $20$25 million due to the higher effective tax rate and decreased $5 million due to lower income before income taxes and $2 million from the slightly higher effective tax rate.taxes.

During 2024,2025, we used the $520$569 million of cash generated from operating activities, along with proceeds from the term loan and net borrowings of $77 million on the revolving credit facilityactivities to acquire AMPACCalca for $681$213 million (net of $16$6 million cash acquired), pay dividends of $96$106 million, fund capital expenditures of $57$78 million, and repurchase shares of our common stock for $32$77 million. We also paid off the $250 million term loan and made a principal payment of $50 million on the 3.78% senior notes. These payments were partially offset by additional net borrowings of $211 million on the revolving credit facility. Cash flows from operating activities included aan decreaseincrease of $23$22 million from higherlower working capital requirements, which is further discussed in the Working Capital section below, and a decrease of $12$10 million for cash contributions to our pension and postretirement plans.

During 2023,2024, we used the $577$520 million of cash generated from operating activitiesactivities, toalong makewith proceeds from the term loan and net paymentsborrowings of $361$77 million on ourthe revolving credit facility,facility to acquire AMPAC for $681 million (net of $16 million cash acquired), pay dividends of $85$96 million, fund capital expenditures of $48$57 million, and repurchase shares of our common stock for $43$32 million. Cash flows from operating activities included ana increasedecrease of $134$23 million from lowerhigher working capital requirements and a decrease of $10$12 million for cash contributions to our pension and postretirement plans.

3.78% Senior Notes - On January 4, 2017, we issued $250 million in senior unsecured notes in a private placement with The Prudential Insurance Company of America and certain other purchasers. These notes bear interest at 3.78% with interest payable semiannually. We have made the firsttwo principal paymentpayments of $50 million each on January 4, 2025 and January 5, 2026. We have fourthree remaining principal payments of $50 million due January 4 of each year through 2029. We have the right to make optional prepayments on the notes at any time, subject to certain limitations. We were in compliance with all covenants under the 3.78% senior notes as of December 31, 20242025 and December 31, 2023.2024.

Term Loan - On January 22, 2024, we entered into a credit agreement for an unsecured $250 million term loan (the Term Loan Credit Agreement), which matureshad ona maturity date of January 22, 2026. We borrowed the entire $250 million available under the Term Loan Credit Agreement and paid financing costs of $0.4 million, which are beingwere amortized over the term ofthat principal was outstanding under the agreement. WeUnder arethe agreement, we were required to repay the principal amount borrowed under the term loan in full at maturity. We may, in our sole discretion and subjectSubject to the conditions set forth in the Term Loan Credit Agreement, we had the option to prepay, without penalty, amounts borrowed under the term loan, together with any accrued and unpaid interest, prior to maturity. Any amounts prepaid prior to maturity arewere not available for additional borrowings by us. We repaid the Term Loan Credit Agreement in full during 2025.

The Term Loan Credit Agreement containscontained certain customary covenants, including financial covenants, which requirerequired NewMarket to maintain a consolidated Leverage Ratio (as defined in the Term Loan Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Term Loan Credit Agreement). At December 31, 2024, the Leverage Ratio was 1.33. We were in compliance with all covenants under the term loan at the time we repaid it in 2025 and as of December 31, 2024.

Outstanding borrowings under the revolving credit facility amounted to $288 million at December 31, 2025 and $77 million at December 31, 2024. There were no outstanding borrowings under the former revolving credit facility at December 31, 2023. Outstanding letters of credit under the applicable revolving credit facility amounted to approximately $4 million at December 31, 2024 and $2 million atboth December 31, 2023.2025 and December 31, 2024. The unused portion of the applicable revolving credit facility amounted to $608 million at December 31, 2025 and $819 million at December 31, 2024 and $898 million at December 31, 2023.2024.

The average interest rate for borrowings under the applicablerevolving credit facility was 5.3% during 2025 and 6.5% during 2024 and 6.2% during 2023.2024.

The Revolving Credit Agreement contains certain customary covenants, including financial covenants, which require us to maintain a consolidated Leverage Ratio (as defined in the Revolving Credit Agreement) of no more than 3.75 to 1.00 except during an Increased Leverage Period (as defined in the Revolving Credit Agreement). At December 31, 2024, theThe Leverage Ratio was 1.33.1.27 at December 31, 2025 and 1.33 at December 31, 2024. We were in compliance with all covenants under the applicable revolving credit facility as of December 31, 20242025 and December 31, 2023.2024.

We had long-term debt of $883 million at December 31, 2025 and $971 million at December 31, 2024 and $644 million at December 31, 2023.2024. As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage increaseddecreased from 37.4% at the end of 2023 to 39.9% at the end of 2024.2024 to 33.2% at the end of 2025. The change resulted primarily from the increase in outstandingshareholders' termequity loanalong andwith revolvinga creditnet facility borrowings, partially offset by an increasedecrease in shareholders’outstanding equity.long-term debt. The increase in shareholders'shareholders’ equity primarily reflects our earningsearnings, favorable impact from foreign currency translation adjustments, and an increase in the funded position of our retirement plans,plans partially offset by dividend payments, repurchases of shares of our common stock,stock and andividend unfavorable change in the impact from foreign currency translation adjustments.payments. Generally, we repay any outstanding long-term debt with cash from operations or refinancing activities.

The working capital of AMPACCalca is included in our consolidated balance sheet at December 31, 2024.2025. Other thanExcluding the impact of AMPACCalca working capital, the most significant change in working capital since December 31, 20232024 included a decreaseincreases in both trade and other accounts receivable offset by an increase in inventories. In addition to these items, cash and cashaccrued equivalents decreased as outlined in the cash flows discussion above.expenses.

Capital expenditures were $78 million for 2025 and $57 million for 2024 and $48 million for 2023.2024. We estimate capital expenditures in 20252026 will be in the range of $60$100 million to $70$150 million as we anticipate spending on several improvements to our manufacturing and R&D infrastructure around the world. We expect to continue to finance capital spending through cash provided from operations, as well as with borrowing available under our revolving credit facility.

We spent approximately $44 million in 2025 and $37 million in 2024 and $41 million in 2023 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures. These environmental operating and clean-up expenses are primarily included in cost of goods sold. We expect to continue to fund these costs through cash provided by operations.

The debt-related contractual obligations include both principal payments on outstanding long-term debt and the related interest payments. The maturity dates and interest rates, as well as information on the repayment of the principal on our long-term debt is detailed above in the Debt section, as well as in Note 14. At December 31, 2024,2025, all of our long-term debt was at fixed rates, except for the revolving credit facility and the term loan agreement.facility. A discussion of interest rate sensitivity is in Item 7A. Interest is paid semi-annually on our fixed rate long-term debt agreements.

The annual operating expenses and capital expenditures associated with compliance with environmental, health, and safety regulations are included in Item 1, Governmental and Environmental Regulations. In addition to these costs, there are expected cash flows for dismantling and decontamination of environmental sites. At December 31, 2024,2025, these costs were estimated at approximately $1$1.0 million to $1.5 million in each of 20252026 through 2029 and $9 million thereafter.

U.S. Pension and Postretirement Benefit Plans—The average remaining service period of active participants for our U.S. plans is 13.1approximately 13 years, while the average remaining life expectancy of inactive participants is 22.3approximately 22 years. We utilize the sex distinct Pri-2012 table with separate rates for annuitants, non-annuitants, and contingent annuitants, projected generationally using Scale MP-2021 in determining the impact of mortality on the U.S. benefit plans in our financial statements.

An actuarial gain on the assets occurred during 20242025 and 20232024 as the actual investment return for all of our U.S. qualified pension plans exceeded the expected return by approximately $37 million in 2025 and $54 million in 2024 and $47 million in 2023.2024. Investment gains and losses are recognized in earnings on an amortized basis over a period of 5 years. The amortization of the actuarial net gain is expected to be approximately $4$5 million in 20252026 resulting primarily from the actuarial gain related to the investment gains on plan assets and the actuarial gains associated with the increase in the discount rate.assets. We expect that there will be continued volatility in net periodic benefit cost (income) for our pension plans as actual investment returns vary from the expected return, but we continue to believe the potential long-term benefits justify the risk premium for equity investments.

We expect to have net periodic benefit income for our pension and postretirement plans during 2025,2026, as the expected return on assets and amortization is higher than the offsetting benefit costs. Net periodic benefit cost (income) for the pension and the life insurance portion of postretirement plans areis sensitive to changes in the expected return on assets. For example, decreasing the expected rate of return by 100 basis points to 7.0% for pension assets and 3.0% for postretirement benefit assets (while holding other assumptions constant) would reduce the forecasted 20252026 income for our U.S. pension and postretirement plans by approximately $8 million. Similarly, a 100 basis point increase in the expected rate of return to 9.0% for pension assets and 5.0% for postretirement benefit assets (while holding other assumptions constant) would increase forecasted 20252026 pension and postretirement income by $8 million.

Discount Rate Assumption - We develop the discount rate assumption by determining the single effective discount rate for a unique hypothetical bond portfolio constructed from investment-grade bonds that, in the aggregate, match the projected cash flows of each of our retirement plans. The discount rate is developed based on the hypothetical bond portfolio on the last day of December. The discount rate at December 31, 20242025 was 5.875% for all plans.

Liquidity - Cash contribution requirements to the pension plan are sensitive to changes in assumed interest rates and investment gains or losses in the same manner as pension expense. While we do not expect to make a cash contribution to our U.S. qualified pension plans, we expect our aggregate cash contributions to theall U.S. pension plans will be approximately $4 million in 2025.2026. We expect our contributions to the postretirement benefit plans will be approximately $1 million in 2025.2026.

Foreign Pension Benefit Plans - Our foreign pension plans are quite diverse. The following information applies only to our U.K. pension plan, which represents the majority of the amounts recorded in our financial statements for our foreign pension plans. The average remaining service period of active participants for our U.K. plan is approximately 15 years, while the average remaining life expectancy of inactive participants is 2120 years. In determining the impact of mortality on the U.K. pension plan in our financial statements, we utilize the S3PxAS4PxA mortality tables weighted by 92%99% for malesmale members and 100%88% for femalesfemale members and allowS4DxA mortality tables weighted by 106% for futuremale dependents and 107% for female dependents. Future projected improvements in life expectancy are allowed for in line with the CMI 20232024 model with the core smoothing parameter, an initial addition to mortality improvements of 0.3% per year,0.2% and ana experiencehalf-life weightingparameter of 0%1 on both 2020 and 2021 data and 20% on both 2022 and 2023 data,year with a long-term rate of improvement of 1.65% per year for males and 1.15%1.25% per year for females based on the membership of the plan.

The target asset allocation in the U.K. is 40% in pooled equities funds, 40% in pooled government bonds, and 20% in pooled diversified growth funds. The actual allocation at the end of 20242025 was 51%53% in pooled equities funds, 27%25% in pooled government bonds, 21%and 22% in pooled diversified growth funds, and 1% in cash.funds. Based on the actual asset allocation and the expected yields available in the U.K. markets, the expected long-term rate of return for the U.K. pension plan was 7.7%7.8% at December 31, 2024.2025.

An actuarial gain on the assets occurred during both 20242025 and 20232024 as the actual investment return exceeded the expected investment return by approximately $6 million in 2025 and $1 million in 20242024. andActuarial $4 million in 2023. An actuarial gaingains of $16$6 million occurred during 20242025 and an actuarial loss of $3$16 million occurred during 20232024 on plan liabilities primarily due to changes in the assumptions. Investment and liability gains and losses are recognized in earnings on an amortized basis over a period of years. The combined net gains result in an expected amortization of net gain of $0.8$1 million in 2025.2026. We expect that there will be continued volatility in the net periodic benefit cost (income) for our U.K. pension plan as actual investment returns vary from the expected return, but we continue to believe the potential benefits justify the risk premium for the target asset allocation.

Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at production facilities, including single-sourced facilities; hazards common to chemical businesses; the ability to respond effectively to technological changes in our industries; failure to protect our intellectual property rights; sudden, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the loss of significant customers; termination or changes to contracts with contractors and subcontractors of the U.S. government or directly with the U.S. government; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, wars,wars or other conflicts, and health-related epidemics; risks related to operating outside of the United States, including tariffs and trade policy; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from acquisitions, or our inability to successfully integrate acquisitions into our business; the underperformance of our pension assets resulting in additional cash contributions to our pension plans; and other factors detailed from time to time in the reports that NewMarket files with the SEC, including the risk factors in Part I, Item 1A. “Risk Factors” of our 2025 Annual Report, which is available to shareholders at www.newmarket.com.

You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, any forward-looking statement made in this report or elsewhere,elsewhere might not occur.

When comparing the results of the petroleum additives segment for the first threesix months of 2026 with the first threesix months of 2025, net sales declineddecreased 5.5%,1.1%, resulting primarily from lower lubricant additives product shipments. Operating profit declined 5.0% and was also unfavorably impacted for the three months comparison by lower product shipments. In addition, favorable raw material costs wereshipments partially offset by higher operatingselling costs.prices. Operating profit increased 0.9% over the same comparative periods.

For the threesix months comparison periods of 2026 and 2025, the specialty materials segment reported higher net salessales, dueas towell theas acquisitionslightly of Calca in the fourth quarter of 2025, but lowerhigher operating profit primarily due to the impact of product shipment mix at AMPAC.profit. Specialty materials net sales and operating profit for the first threesix months of 2025 do not reflect financial results of Calca since the acquisition of Calca occurred on October 1, 2025. We continue to expect to experience substantial variation in quarterly results for the specialty materials segment due to the nature of its business.

Consolidated net sales for the second quarter of 2026 totaled $747.1 million, representing an increase of $48.6 million, or 7.0%, from the second quarter of 2025. Consolidated net sales for the first threesix months of 2026 totaled $669.7$1.4 million,billion, representing aan decreaseincrease of $31.2$17.4 million, or 4.5%,1.2%, from the first threesix months of 2025. The following table shows net sales by segment and product line. The net sales in the table below for the specialty materials segment do not include sales from Calca for the 2025 periodperiods as the acquisition occurred on October 1, 2025.

Petroleum additives net sales for the firstsecond three monthsquarter of 2026 were $609.8$675.6 million, a decrease of $35.7 million, or 5.5%,million compared to $653.9 million for the firstsecond three monthsquarter of 2025.2025, Decreasesan increase of 3.3%. Net sales increased across all regions with growth of 2.8% in North AmericaAmerica, of3.2% 10.7%in Asia Pacific, 2.6% in EMEAI, and Asia Pacific of 9.4% were partially offset by increases7.7% in EMEAI of 1.7% and Latin America of 0.7%.America.

The following table details the approximate components of the changes in petroleum additives net sales between the second quarter and first threesix months of 2026 and 2025.

The primary foreign currencies in which we transact include the Euro, Pound Sterling, Japanese Yen, Chinese Renminbi, and Indian Rupee. Comparing both the second quarters and first threesix months periods of 2026 and 2025, the United States Dollar strengthened against the Rupee and Yen and weakened against the Euro, Renminbi, and Pound Sterling, resulting in the favorable impacts to net sales shown in the table above.

Total net sales for the specialty materials segment were $58.1$67.2 million for the firstsecond three monthsquarter of 2026, compared to $53.7$42.0 million for the firstsecond threequarter of 2025. For the six months ofcomparison, net sales were $125.3 million for 2026 and $95.8 million for 2025. The increase in net sales primarilyfor reflectsboth comparison periods was the result of higher selling prices from favorable product mix, as well as the inclusion of Calca's net sales following its acquisition on October 1, 2025, as there were no Calca net sales in the prior year period. This increase was partially offset by the impact of product shipment mix at AMPAC.2025.

The following table presents reporting segment operating profit for the threesecond quarter and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 for the petroleum additives and specialty materials segments, as well as the operating loss for the "All other" businesses. A reconciliation of segment operating profit to income before income tax expense is included in Note 4.

Petroleum additives segment gross profit decreasedincreased $7.4$7.0 million and operating profit increased $9.5 million when comparing the second quarter of 2026 to the second quarter of 2025. Gross profit decreased $7.1$0.4 million and operating profit increased $2.4 million when comparing the first threesix months of 2026 to the first threesix months of 2025.

For the rolling four quarters ended MarchJune 31,30, 2026, the operating profit margin for petroleum additives was 20.5%,20.7%, which is within our historical range of operating profit margin. While operating margins will fluctuate from quarter to quarter due to multiple factors, we believe the fundamentals of our business and industry as a whole are unchanged.

Petroleum additives selling, general, and administrative (SG&A) expenses fordecreased $0.5 million in the second quarter of 2026 compared with the second quarter of 2025 and increased $0.6 million in the first threesix months of 2026 werecompared $1.2 million higher thanwith the first threesix months of 2025. SG&A expenses as a percentage of net sales were 5.5%4.8% for the second quarter of 2026, 5.1% for the second quarter of 2025, 5.2% for the first threesix months of 20262026, and 5.0%5.1% for the first threesix months of 2025. Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce, including travel-related expenses. While personnel-related costs fluctuate from period to period, there were no significant changes in the drivers of these costs when comparing the periods.

Our investmentsInvestments in petroleum additives research, development, and testing (R&D) decreased $1.5$2.0 million when comparing the second quarters of 2026 and 2025 and decreased $3.5 million when comparing the first threesix months of 2026 and 2025. As a percentage of net sales, our R&D investment was 5.2%4.5% for the second quarter of 2026, 5.0% for the second quarter of 2025, 4.8% for the first threesix months of 2026, and 5.1%5.0% for the first threesix months of 2025. Our R&D investments reflect our efforts to support the development of solutions that meet our customers' needs, meet new and evolving standards, and support our expansion into new product areas. Our approach to R&D investments, as it is with SG&A costs, is one of purposeful spending on programs to support our current product base and to ensure that we develop products to support our customers' programs in the future. R&D investments include personnel-related costs, as well as costs for internal and external testing of our products.

Interest and financing expenses were $8.8 million for the firstsecond three monthsquarter of 2026 and2026, $10.7 million for the second quarter of 2025, $17.6 million for the first threesix months of 2026, and $21.4 million for the first six months of 2025.

The decrease for both the threesecond quarter and six months comparisons resulted primarily from both lower average debt outstanding and a lower average interest rate.

Other income (expense), net was income of $17.2$15.5 million for the second quarter of 2026, $15.3 million for the second quarter of 2025, $32.7 million for the first threesix months of 20262026, and $14.9$30.2 million for the first threesix months of 2025. The amounts for both the 2026 and 2025 three-monthsecond quarter and six months periods primarily reflect the non-service cost components of net periodic benefit cost (income) from defined benefit pension and postretirement plans. See Note 5 for further information on total periodic benefit cost (income).

Income tax expense was $33.6$36.6 million for the firstsecond three monthsquarter of 2026 and $38.2$36.4 million for the firstsecond three monthsquarter of 2025. The effective tax rate was 22.2%21.5% for the firstsecond three monthsquarter of 2026 and 23.3%24.7% for the firstsecond three monthsquarter of 2025. Income tax expense decreasedincreased $2.9$5.6 million due to lowerhigher income andbut $1.7was mostly offset by a $5.5 million decrease resulting from the lower effective tax rate.

The decrease in the effective tax rate for both periods was primarily driven by lower taxes on foreign earnings.

The OBBBA has multiple effective dates, with certain provisions which were effective in 2025 and others implemented through 2027. The 2026 impacts of the OBBBA have been reflected in the income tax provision for the threesecond quarter and six months ended MarchJune 31,30, 2026. These impacts were not material to our consolidated financial statements. We are continuing to assess the impact of the provisions of the OBBBA that are effective in the future.

Cash and cash equivalents at MarchJune 31,30, 2026 were $73.2$93.6 million, aan decreaseincrease of $4.4$16.0 million since December 31, 2025.

Cash and cash equivalents held by our foreign subsidiaries amounted to $54.3$78.2 million at MarchJune 31,30, 2026 and $68.3 million at December 31, 2025. Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends and loans. We do not anticipate significant tax consequences from future distributions of foreign earnings.

Cash provided from operating activities for the first threesix months of 2026 was $124.0$286.2 million, including $19.6$3.6 million of higher working capital requirements. The $19.6$3.6 million excluded a favorable foreign currency impact to the components of working capital on the balance sheet.

When comparing the MarchJune 31,30, 2026 balances with those at December 31, 2025, the most significant changes in working capital included increases in trade and other accounts receivablereceivable, inventories, and accounts payable, along with a decrease in accrued expenses. The increase in trade and other accounts receivable primarily reflects higher sales during the firstsecond quarter of 2026 compared to the fourth quarter of 2025, partially offset by a reduction in a short-term income tax receivable. The increase in inventories is due mainly to increased sales volume and higher raw material prices resulting from the conflict in the Middle East. The increase in accounts payable is primarily the result of increased purchasing along with higher raw material costs during the first threesix months of 2026 and normal invoice payment timing. The decrease in accrued expenses is primarily the result of normal payments related to customer rebates, interest payments on our long-term debt,rebates and personnel-related payments.

Including cash and cash equivalents, as well as the impact of changes in foreign currency exchange rates on the balance sheet, we had total working capital of $647.5$639.6 million at MarchJune 31,30, 2026 and $640.4 million at December 31, 2025. The current ratio was 2.552.25 at MarchJune 31,30, 2026 and 2.53 at December 31, 2025.

Cash used in investing activities totaled $23.2$50.6 million during the first threesix months of 2026, comprised primarily of capital expenditures. We expect that our total capital spending during 2026 will be in the $100 million to $150$130 million range and will include improvements to our manufacturing and R&D infrastructure around the world.

Included in the expected capital expenditures for 2026 is a capital investment to expand AMPAC's ammonium perchlorate production capabilities in support of growing solid rocket motor demand. The project of up to $100 million, which began in 2025 and is currently expected to become completedonline towards the end of 2026, includes the construction of an additional production line, increasing capacity by more than 50%. The increased capacity will allow AMPAC to meet the anticipated future demand of U.S. military and space launch programs, while also addressing the needs of U.S. allies in these critical areas.

Cash used in financing activities during the first threesix months of 2026 amounted to $100.9$215.1 million. These cash flows included repurchases of our common stock of $125.6$126.4 million, cash dividends of $55.6 million, and principal payments of $50.0 million on the 3.78% senior notes, and cash dividends of $28.0 million, which were partially offset by net borrowings of $106.0$21.0 million on the revolving credit facility.

Our long-term debt was $939.6$854.8 million at MarchJune 31,30, 2026 compared to $883.4 million at December 31, 2025.

The revolving credit facility contains financial covenants that require NewMarket to maintain a consolidated Leverage Ratio (as defined in the agreement) of no more than 3.75 to 1.00, except during an Increased Leverage Period (as defined in the agreement) at the end of each quarter. At MarchJune 31,30, 2026, the Leverage Ratio was 1.361.20 under the revolving credit facility.

At MarchJune 31,30, 2026, we were in compliance with all covenants under the 3.78% senior notes, 2.70% senior notes, and revolving credit facility.

As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage increaseddecreased from 33.2% at December 31, 2025 to 35.2%31.7% at MarchJune 31,30, 2026. The change resulted from a net increasedecrease in outstanding long-term debt along with aan decreaseincrease in shareholders' equity. The decreaseincrease in shareholders’ equity primarily reflects our earnings partially offset by repurchases of shares of our common stock, dividend payments, and an unfavorable impact from foreign currency translation adjustments, partially offset by our earnings.adjustments. Generally, we repay any outstanding long-term debt with cash from operations or refinancing activities.