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Plant Closure Provisions

6 Months Ended

Jun. 30, 2011

NOTE 10—PLANT CLOSURE PROVISIONS

The liability for estimated closure costs of Innospec's Octane Additives manufacturing facilities includes costs for personnel reductions (severance), decontamination and environmental remediation activities (remediation) when demand for TEL diminishes. Severance provisions have also been made in relation to Corporate personnel and personnel in the three reporting segments.

Movements in the provisions are summarized as follows:


	2011												2010
(in millions)	Severance			Other Restructuring			Remediation			Total			Total
Total at January 1	$	1.5		$	0.1		$	25.9		$	27.5		$	28.4
Charge		0.0			0.0			1.2			1.2			1.4
Expenditure		(0.3	)		0.0			(1.3	)		(1.6	)		(1.5	)
Exchange effect		0.0			0.0			0.3			0.3			(0.4	)

Total at June 30		1.2			0.1			26.1			27.4			27.9
Due within one year		(0.2	)		(0.1	)		(3.7	)		(4.0	)		(4.4	)

Balance at June 30	$	1.0		$	0.0		$	22.4		$	23.4		$	23.5

Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date. Severance charges are recognized in the income statement as restructuring costs along with other restructuring costs. Remediation costs are recognized in cost of goods sold.

Remediation

The remediation provision represents the fair value of the Company's liability for asset retirement obligations. The accretion expense recognized in the first half year of 2011 was $1.2 million.

The Company records environmental liabilities when they are probable and costs can be estimated reasonably. The Company has to anticipate the program of work required and the associated future costs, and has to comply with environmental legislation in the relevant countries. The Company views the costs of vacating our Ellesmere Port site in the United Kingdom as a contingent liability because there is no present intention to exit the site. The Company has further determined that, due to the uncertain product life of TEL, particularly in the market for aviation gasoline, there exists such uncertainty as to the timing of such cash flows that it is not possible to estimate them sufficiently reliably to recognize a provision.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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