Plant Closure Provisions

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

NOTE 9 – PLANT CLOSURE PROVISIONS

The liability for estimated closure costs of Innospec’s manufacturing facilities includes costs for decontamination and environmental remediation activities (“remediation”). The principal site giving rise to remediation liabilities is the manufacturing site at Ellesmere Port in the United Kingdom. There are also remediation liabilities on a much smaller scale in respect of our other manufacturing sites in the U.S. and Europe.

Movements in the provisions are summarized as follows:


	Nine Months Ended September 30
	2014									2013
(in millions)	Severance			Remediation			Total			Total

Total at January 1	$	1.0		$	31.4		$	32.4		$	30.4
Charge for the period		0.0			2.1			2.1			2.0
Utilized in the period		0.0			(1.8	)		(1.8	)		(1.4	)
Released in the period		(1.0	)		0.0			(1.0	)		0.0
Exchange effect		0.0			(0.2	)		(0.2	)		0.1

Total at September 30		0.0			31.5			31.5			31.1
Due within one year		0.0			(4.1	)		(4.1	)		(3.7	)

Due after one year	$	0.0		$	27.4		$	27.4		$	27.4

Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date. A severance provision which is no longer required has been released to the income statement in the second quarter of 2014. Remediation costs are recognized in cost of goods sold.

Remediation

The remediation provision represents the Company’s liability for environmental liabilities and asset retirement obligations. The charge for the period represents the accretion expense recognized in the first nine months of 2014.

We recognize environmental liabilities when they are probable and costs can be reasonably estimated, and asset retirement obligations when there is a legal obligation and costs can be reasonably estimated. The Company has to anticipate the program of work required and the associated future expected costs, and comply with environmental legislation in the countries in which it operates or has operated in. The Company views the costs of vacating our Ellesmere Port site as contingent upon if and when it vacates the site because there is no present intention to do so. The Company has further determined that, due to the uncertain product life of TEL particularly in the market for aviation gasoline and other products being manufactured on the site, there are uncertainties as to the probability and timing of the expected costs. Such uncertainties have been considered in estimating the 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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