18.

Commitments and Contingencies

Contractual Commitments—NewMarket has operating lease agreements primarily for office space, transportation equipment, and storage facilities. Rental expense was $24 million in 2011, $22 million in 2010, and $19 million in 2009.

Future lease payments for all noncancelable operating leases as of December 31, 2011 are:


• 2012	$	9 million
• 2013	$	6 million
• 2014	$	5 million
• 2015	$	2 million
• 2016	$	1 million
• After 2016	$	1 million

We have contractual obligations for the construction of assets, as well as purchases of property and equipment of approximately $7 million at December 31, 2011.

Raw Material Purchase Obligations—We have raw material purchase obligations over the next five years amounting to approximately $256 million at December 31, 2011 for agreements to purchase goods or services that are enforceable, and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Raw material purchase obligations exclude agreements that are cancelable without penalty. Purchase orders made in the ordinary course of business are excluded from this amount. Any amounts for which we are liable under purchase orders are reflected in our Consolidated Balance Sheets as accounts payable and accrued expenses.

Litigation—We are involved in legal proceedings that are incidental to our business and include administrative or judicial actions seeking remediation under environmental laws, such as Superfund. Some of these legal proceedings relate to environmental matters and involve governmental authorities. For further information see "Environmental" below and Item 3.

While it is not possible to predict or determine with certainty the outcome of any legal proceeding, we believe the outcome of any of these proceedings, or all of them combined, will not result in a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

As previously disclosed, NewMarket Corporation and Afton Chemical Corporation (collectively, NewMarket) brought two civil actions against Innospec Inc. and its subsidiaries Alcor Chemie Vertriebs GmbH and Innospec Ltd. (collectively, Innospec) in July 2010.

NewMarket and Innospec have agreed to settle these actions pursuant to the terms of a settlement agreement between them signed on September 13, 2011 which provides for mutual releases of the parties and dismissal of the actions with prejudice. Under the settlement agreement, Innospec will pay NewMarket an aggregate amount of approximately $45 million, payable in a combination of cash, a promissory note, and stock, of which $25 million was paid in cash on September 20, 2011 and approximately $5 million was paid in the form of 195,313 shares of unregistered Innospec Inc. common stock. Fifteen million dollars is payable in three equal annual installments of $5 million under the promissory note, which bears interest at 1% per year. The first installment is due on September 10, 2012.

Asbestos

We are a defendant in personal injury lawsuits involving exposure to asbestos. These cases involve exposure to asbestos in premises owned or operated, or formerly owned or operated, by subsidiaries of NewMarket. We have never manufactured, sold, or distributed products that contain asbestos. Nearly all of these cases are pending in Texas, Louisiana, or Illinois and involve multiple defendants. We maintain an accrual for these proceedings, as well as a receivable for expected insurance recoveries.

During 2005, we entered into an agreement with Travelers Indemnity Company resolving certain long-standing issues regarding our coverage for certain premises asbestos claims. In addition, our agreement with Travelers provides a procedure for allocating defense and indemnity costs with respect to certain future premises asbestos claims. The lawsuit we had previously filed against Travelers in the Southern District of Texas was dismissed. We also settled our outstanding receivable from Albemarle Corporation for certain premises asbestos liability obligations.

The accrual for our premises asbestos liability related to currently asserted claims is based on the following assumptions and factors:

•

We are often one of many defendants. This factor influences both the number of claims settled against us and also the indemnity cost associated with such resolutions.

•

The estimated percent of claimants in each case that will actually, after discovery, make a claim against us, out of the total number of claimants in a case, is based on a level consistent with past experience and current trends.

•

We utilize average comparable plaintiff cost history as the basis for estimating pending premises asbestos related claims. These claims are filed by both former contractors' employees and former employees who worked at past and present company locations. We also include an estimated inflation factor in the calculation.

•

No estimate is made for unasserted claims.

•

The estimated recoveries from insurance and Albemarle Corporation for these cases are based on, and are consistent with, the 2005 settlement agreements.

Based on the above assumptions, we have provided an undiscounted liability related to premises asbestos claims of $11 million at year-end 2011 and $14 million at year-end 2010. The liabilities related to asbestos claims are included in accrued expenses (current portion) and other noncurrent liabilities on the Consolidated Balance Sheets. Certain of these costs are recoverable through our insurance coverage and agreement with Albemarle Corporation. The receivable for these recoveries related to premises asbestos liabilities was $7 million at December 31, 2011 and $10 million at December 31, 2010. These receivables are included in trade and other accounts receivable, net on the Consolidated Balance Sheets for the current portion. The noncurrent portion is included in other assets and deferred charges.

Environmental—During 2000, the EPA named us as a PRP for the clean-up of soil and groundwater contamination at the Sauget Area 2 Site in Sauget, Illinois. Without admitting any fact, responsibility, fault, or liability in connection with this site, we are participating with other PRPs in site investigations and feasibility studies. The Sauget Area 2 Site PRPs received notice of approval from the EPA of their October 2009 Human Health Risk Assessment. Additionally, the PRPs have submitted their Feasibility Study (FS) to the EPA Remedy review board. We have accrued our estimated proportional share of the expenses for the FS, as well as our best estimate of our proportional share of the remediation liability proposed in our ongoing discussions and submissions with the agencies involved. We do not believe there is any additional information available as a basis for revision of the liability that we have established. The amount accrued for this site is not material.

At a former TEL plant site located in the state of Louisiana, we have completed significant environmental remediation, although we will be monitoring and treating the site for an extended period. The accrual for this site was $6.1 million at year-end 2011 and $6.8 million at year-end 2010. We based these amounts on the best estimate of future costs discounted at approximately 3% in both 2011 and 2010. An inflation factor is included in the estimate. The undiscounted liability was $7.7 million at year-end 2011 and $8.7 million at year-end 2010. The expected payments for each of the next five years amount to approximately $600 thousand for each of the years 2012 through 2016. Expected payments thereafter amount to approximately $4.7 million.

At a plant site in Houston, Texas, we have an accrual of $7.4 million at December 31, 2011 and $7.6 million at December 31, 2010 for environmental remediation, dismantling, and decontamination. Included in these amounts are $7.0 million at year-end 2011 and $7.3 million at year-end 2010 for remediation. Of the total remediation, $6.5 million at December 31, 2011 and $6.9 million at December 31, 2010 relates to remediation of groundwater and soil. The accruals for this site are discounted at approximately 3% at December 31, 2011 and December 31, 2010. The accruals include an inflation factor. The undiscounted accrual for this site was $10.2 million at year-end 2011 and $10.8 million at year-end 2010. The expected payments for each of the next five years are approximately $1.0 million in 2012, $500 thousand in 2013, $1.6 million in 2014, and $200 thousand for each of the years 2015 and 2016. Expected payments thereafter amount to approximately $6.7 million.

At a superfund site in Louisiana, we have an accrual of $3.1 million at December 31, 2011 and $3.3 million at December 31, 2010 for environmental remediation. The accrual for this site was discounted at approximately 3% at December 31, 2011 and December 31, 2010 and included an inflation factor. The undiscounted accrual for this site was $4.0 million at December 31, 2011 and $4.2 million at December 31, 2010. The expected payments over the next five years amount to approximately $300 thousand in 2012, $200 thousand in each of the years 2013 through 2014 and $300 thousand for each of the years 2015 and 2016. Expected payments thereafter amount to approximately $2.7 million.

The remaining environmental liabilities are not discounted.

We accrue for environmental remediation and monitoring activities for which costs can be reasonably estimated and are probable. These estimates are based on an assessment of the site, available clean-up methods, and prior experience in handling remediation. While we believe we are currently fully accrued for known environmental issues, it is possible that unexpected future costs could have a significant impact on our financial position and results of operations.

At December 31, our total accruals for environmental remediation were $21.7 million for 2011 and $22.5 million for 2010. In addition to the accruals for environmental remediation, we also have accruals for dismantling and decommissioning costs of $600 thousand at December 31, 2011 and $500 thousand at December 31, 2010.

NewMarket spent $19 million in 2011, $18 million in 2010, and $17 million in 2009 for ongoing environmental operating and clean-up costs, excluding depreciation of previously capitalized expenditures. On capital expenditures for pollution prevention and safety projects, we spent $9 million in 2011, $7 million in 2010, and $5 million in 2009.

Letters of Credit and Guarantees—We have outstanding guarantees with several financial institutions in the amount of $63 million at December 31, 2011. The guarantees are secured by letters of credit, as well as cash collateral. A portion of these guarantees is unsecured. The outstanding letters of credit amounted to $6 million at December 31, 2011, all of which were issued under the letter of credit sub-facility of our revolving credit facility. See Note 12. The letters of credit primarily relate to insurance guarantees. We renew letters of credit as necessary. The remaining amounts represent performance, lease, custom, and excise tax guarantees, as well as a cash deposit of $36 million related to the Goldman Sachs interest rate swap. The cash deposit is recorded in "Other assets and deferred charges" on the Consolidated Balance Sheets. See Note 16 for further information. Expiration dates range from 2012 to 2014. Some of the guarantees have no expiration date.

We cannot estimate the maximum amount of potential liability under the guarantees. However, we accrue for potential liabilities when a future payment is probable and the range of loss can be reasonably estimated.