<SEC-DOCUMENT>0001193125-18-318121.txt : 20181210
<SEC-HEADER>0001193125-18-318121.hdr.sgml : 20181210
<ACCEPTANCE-DATETIME>20181105125734
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ACCESSION NUMBER:		0001193125-18-318121
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20181105

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INNOSPEC INC.
		CENTRAL INDEX KEY:			0001054905
		STANDARD INDUSTRIAL CLASSIFICATION:	CHEMICALS & ALLIED PRODUCTS [2800]
		IRS NUMBER:				981081725
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		8310 SOUTH VALLEY HIGHWAY
		STREET 2:		SUITE 350
		CITY:			ENGLEWOOD
		STATE:			CO
		ZIP:			80112
		BUSINESS PHONE:		303-566-0528

	MAIL ADDRESS:	
		STREET 1:		8310 SOUTH VALLEY HIGHWAY
		STREET 2:		SUITE 350
		CITY:			ENGLEWOOD
		STATE:			CO
		ZIP:			80112

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OCTEL CORP
		DATE OF NAME CHANGE:	19980209
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">November&nbsp;5, 2018 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>VIA EMAIL AND EDGAR </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Tracey Houser </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Staff Accountant </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Innospec, Inc. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2017 filed February&nbsp;15, 2018 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the Fiscal Quarter Ended June&nbsp;30, 2018 filed August&nbsp;8, 2018 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;001-13879</FONT> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms Houser: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are submitting this response to your letter
dated October&nbsp;30, 2018 (the &#147;Comment Letter&#148;) in respect of the above-referenced filings addressed to Ian Cleminson Chief Financial Officer, of Innospec Inc. (the &#147;Corporation,&#148; &#147;Company,&#148; &#147;we,&#148;
&#147;us&#148; or &#147;our&#148;). We understand that you will be reviewing our response and may have additional comments. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The responses set forth below
correspond to the numbering in the Comment Letter. In addition, for ease of reference, we have reproduced your comments in the Comment Letter in bold text before each response. Where relevant, our responses below include the proposed form of new or
modified disclosures to be made in our applicable future filings. Italicized text in our responses below represents proposed additional disclosure. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2017 </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Note 10. Income Taxes, page 79. </B></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Please tell us your consideration for disclosing the cumulative amount of undistributed foreign earnings
that are considered indefinitely reinvested in accordance with ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">740-30-50-2</FONT></FONT></FONT> in light of your disclosure that you intend to
indefinitely reinvest your undistributed foreign earnings. </B></P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Company Response: Beginning with our Form 10-K for the year ended
December 31, 2018, we propose to expand such disclosure to include the amount of unremitted earnings as set forth in the sample disclosure below based on our Form 10-K for the year ended December 31, 2017: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>The Company is in a position to control whether or not to repatriate foreign earnings and we currently do not expect to make a repatriation in the
foreseeable future. No additional income taxes have been provided for on any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as the earnings continue
to be indefinitely reinvested in foreign operations. The amount of unremitted earnings at December 31, 2017 was approximately $864&nbsp;million. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed
foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e. basis difference in excess of that subject to the one-time transition tax) is not practicable at this time. </I></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the Fiscal Quarter Ended June&nbsp;30, 2018 </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Notes to the Unaudited Interim Condensed Consolidated Financial Statements, page 8 </B></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Please provide the disclosures required by ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">606-10-50</FONT></FONT> (e.g., explanations of your performance obligations, transaction price allocated to remaining performance obligations, significant judgements applied, determining the timing of satisfaction of each
performance obligation, election of practical expedients, etc.). We remind you of the guidance in Rule <FONT STYLE="white-space:nowrap">10-01(a)(5)</FONT> of Regulation <FONT STYLE="white-space:nowrap">S-X,</FONT> which would elicit both annual and
interim period financial statements prescribed by new accounting principles and practice in each quarterly report in the year of adoption. </B></P></TD></TR></TABLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Company Response: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Beginning with our Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the period ended September&nbsp;30, 2018, we propose to expand such disclosure as set
forth in the sample disclosure below: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>On January&nbsp;1, 2018 we adopted Accounting Standard Update (ASU)
<FONT STYLE="white-space:nowrap">2014-09,</FONT> Revenue from Contracts with Customers (Topic 606) using the modified retrospective method. The impact of adopting ASC 606 did not result in a change to income, and therefore we are not reflecting a
cumulative effect to the opening balance of retained earnings due to the adoption of ASC 606. The comparative period has not been adjusted and continues to be reported under the accounting standards in effect for this period. </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>Our revenues are primarily derived from the manufacture and sale of specialty chemicals. We recognize revenue when control of the product is transferred to
our customer and for an amount that reflects the consideration we expect to collect from the customer. Control is generally transferred to the customer when title transfers (which may include physical possession by the customer), we have a right to
payment from the customer, the customer has accepted the product, and the customer has assumed the risks and rewards of ownership. We have supplier managed inventory arrangements with some of our customers to facilitate <FONT
STYLE="white-space:nowrap">on-demand</FONT> product availability. In some cases, the inventory resides at a customer site, although title has not transferred, we are not entitled to payment, and we have not invoiced for the product. We have
evaluated the contract terms under these arrangements and have determined that control transfers when the customer uses the product, at which time revenue is recognized. Our contracts generally include one performance obligation, which is providing
speciality chemicals. The performance obligation is satisfied at a point in time when products are shipped, delivered, or consumed by the customer, depending on the underlying contracts. </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>While some of our customers have payment terms beyond 30 days, we do not provide extended payment terms of a year or more, nor do our contracts include a
financing component. Some of our contracts include variable consideration in the form of rebates. We record rebates at the point of sale as a reduction in sales when we can reasonably estimate the amount of the rebate. The estimates are based on our
best judgment at the time of sale, which includes anticipated as well as historical performance. </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>Taxes assessed by a governmental authority which
are concurrent with sales to our customers, including sales, use, value-added, and revenue-related excise taxes, are collected by us from the customer and are not included in net sales, but are reflected in accrued expenses until remitted to the
appropriate governmental authority. When we are responsible for shipping and handling costs after title has transferred, we account for those as fulfilment costs and include them in cost of goods sold. </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">***** </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If you have any additional questions or
comments, please feel free to contact me directly at 00 44 151 355 3611. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Ian P. Cleminson</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Ian P. Cleminson</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom">Executive Vice-President and Chief Financial Officer</TD></TR>
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