##### Table of Contents

false 2022 Q3--12-31 0001054905 DE 0001054905 2022-01-01 2022-09-30 0001054905 2021-01-01 2021-09-30 0001054905 2022-07-01 2022-09-30 0001054905 2021-07-01 2021-09-30 0001054905 2022-09-30 0001054905 2021-12-31 0001054905 2022-11-02 0001054905 2020-12-31 0001054905 2022-06-30 0001054905 2021-06-30 0001054905 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:PersonalCareMember 2021-07-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:HomeCareMember 2021-07-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:FuelSpecialtiesMember iosp:OtherFuelSpecialtiesMember 2021-07-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember 2021-07-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:FuelSpecialtiesMember iosp:RefineryAndPerformanceMember 2021-07-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:OtherPerformanceChemicalsMember 2021-07-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:FuelSpecialtiesMember 2021-07-01 2021-09-30 0001054905 iosp:OilfieldServicesMember us-gaap:OperatingSegmentsMember 2021-07-01 2021-09-30 0001054905 country:DE 2021-07-01 2021-09-30 0001054905 us-gaap:CorporateNonSegmentMember 2021-07-01 2021-09-30 0001054905 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-01 2021-09-30 0001054905 us-gaap:EmployeeStockOptionMember 2021-07-01 2021-09-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001054905 us-gaap:TreasuryStockMember 2021-07-01 2021-09-30 0001054905 iosp:StockEquivalentUnitsMember 2021-07-01 2021-09-30 0001054905 iosp:RemediationMember 2021-01-01 2021-09-30 0001054905 us-gaap:NondesignatedMember us-gaap:ForeignExchangeContractMember iosp:OtherNetIncomeExpenseMember 2021-01-01 2021-09-30 0001054905 iosp:PersonalCareMember iosp:PerformanceChemicalsMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:HomeCareMember 2021-01-01 2021-09-30 0001054905 iosp:OtherFuelSpecialtiesMember iosp:FuelSpecialtiesMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0001054905 iosp:PerformanceChemicalsMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0001054905 iosp:RefineryAndPerformanceMember iosp:FuelSpecialtiesMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0001054905 iosp:OtherPerformanceChemicalsMember iosp:PerformanceChemicalsMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0001054905 iosp:FuelSpecialtiesMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:OilfieldServicesMember 2021-01-01 2021-09-30 0001054905 country:DE 2021-01-01 2021-09-30 0001054905 us-gaap:CorporateNonSegmentMember 2021-01-01 2021-09-30 0001054905 us-gaap:RetainedEarningsMember 2021-01-01 2021-09-30 0001054905 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-01-01 2021-09-30 0001054905 us-gaap:AccumulatedTranslationAdjustmentMember 2021-01-01 2021-09-30 0001054905 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-01-01 2021-09-30 0001054905 iosp:AdvanSixMember 2021-01-01 2021-09-30 0001054905 iosp:EuropeanMetalRecyclingLimitedMember 2021-01-01 2021-09-30 0001054905 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-09-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-09-30 0001054905 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0001054905 us-gaap:NoncontrollingInterestMember 2021-01-01 2021-09-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-09-30 0001054905 us-gaap:TreasuryStockMember 2021-01-01 2021-09-30 0001054905 iosp:StockEquivalentUnitsMember 2021-01-01 2021-09-30 0001054905 iosp:PerformanceChemicalsMember 2022-01-01 2022-09-30 0001054905 iosp:FuelSpecialtiesMember 2022-01-01 2022-09-30 0001054905 iosp:RemediationMember 2022-01-01 2022-09-30 0001054905 us-gaap:NondesignatedMember us-gaap:ForeignExchangeContractMember iosp:OtherNetIncomeExpenseMember 2022-01-01 2022-09-30 0001054905 iosp:PersonalCareMember iosp:PerformanceChemicalsMember us-gaap:OperatingSegmentsMember 2022-01-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:HomeCareMember 2022-01-01 2022-09-30 0001054905 iosp:OtherFuelSpecialtiesMember iosp:FuelSpecialtiesMember us-gaap:OperatingSegmentsMember 2022-01-01 2022-09-30 0001054905 iosp:PerformanceChemicalsMember us-gaap:OperatingSegmentsMember 2022-01-01 2022-09-30 0001054905 iosp:RefineryAndPerformanceMember iosp:FuelSpecialtiesMember us-gaap:OperatingSegmentsMember 2022-01-01 2022-09-30 0001054905 iosp:OtherPerformanceChemicalsMember iosp:PerformanceChemicalsMember us-gaap:OperatingSegmentsMember 2022-01-01 2022-09-30 0001054905 iosp:FuelSpecialtiesMember us-gaap:OperatingSegmentsMember 2022-01-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:OilfieldServicesMember 2022-01-01 2022-09-30 0001054905 country:DE 2022-01-01 2022-09-30 0001054905 us-gaap:CorporateNonSegmentMember 2022-01-01 2022-09-30 0001054905 us-gaap:RetainedEarningsMember 2022-01-01 2022-09-30 0001054905 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2022-01-01 2022-09-30 0001054905 us-gaap:AccumulatedTranslationAdjustmentMember 2022-01-01 2022-09-30 0001054905 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2022-01-01 2022-09-30 0001054905 us-gaap:EarliestTaxYearMember us-gaap:NonUsMember 2022-01-01 2022-09-30 0001054905 us-gaap:LatestTaxYearMember us-gaap:NonUsMember 2022-01-01 2022-09-30 0001054905 iosp:AdvanSixMember 2022-01-01 2022-09-30 0001054905 iosp:EuropeanMetalRecyclingLimitedMember 2022-01-01 2022-09-30 0001054905 iosp:UnrecognizedTaxBenefitsMember 2022-01-01 2022-09-30 0001054905 iosp:InterestAndPenaltiesMember 2022-01-01 2022-09-30 0001054905 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-09-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-09-30 0001054905 us-gaap:NoncontrollingInterestMember 2022-01-01 2022-09-30 0001054905 us-gaap:EmployeeStockOptionMember 2022-01-01 2022-09-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-09-30 0001054905 us-gaap:TreasuryStockMember 2022-01-01 2022-09-30 0001054905 iosp:StockEquivalentUnitsMember 2022-01-01 2022-09-30 0001054905 srt:MaximumMember 2022-01-01 2022-09-30 0001054905 us-gaap:RevolvingCreditFacilityMember 2022-01-01 2022-09-30 0001054905 country:GB us-gaap:ForeignCountryMember iosp:ProfitDiversionComplianceFacilityMember 2022-01-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:PersonalCareMember 2022-07-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:HomeCareMember 2022-07-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:FuelSpecialtiesMember iosp:OtherFuelSpecialtiesMember 2022-07-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember 2022-07-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:FuelSpecialtiesMember iosp:RefineryAndPerformanceMember 2022-07-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:PerformanceChemicalsMember iosp:OtherPerformanceChemicalsMember 2022-07-01 2022-09-30 0001054905 us-gaap:OperatingSegmentsMember iosp:FuelSpecialtiesMember 2022-07-01 2022-09-30 0001054905 iosp:OilfieldServicesMember us-gaap:OperatingSegmentsMember 2022-07-01 2022-09-30 0001054905 country:DE 2022-07-01 2022-09-30 0001054905 us-gaap:CorporateNonSegmentMember 2022-07-01 2022-09-30 0001054905 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0001054905 us-gaap:NoncontrollingInterestMember 2022-07-01 2022-09-30 0001054905 us-gaap:EmployeeStockOptionMember 2022-07-01 2022-09-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0001054905 us-gaap:TreasuryStockMember 2022-07-01 2022-09-30 0001054905 iosp:StockEquivalentUnitsMember 2022-07-01 2022-09-30 0001054905 iosp:SmithGambrellAndRussellLimitedLiabilityPartnershipMember 2022-09-30 0001054905 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member iosp:EmissionTradingSchemeCreditsMember 2022-09-30 0001054905 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member iosp:EmissionTradingSchemeCreditsMember 2022-09-30 0001054905 iosp:AdvanSixMember 2022-09-30 0001054905 iosp:EuropeanMetalRecyclingLimitedMember 2022-09-30 0001054905 iosp:ItalianTaxAuthoritiesMember 2022-09-30 0001054905 country:US 2022-09-30 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2022-09-30 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-09-30 0001054905 srt:EuropeMember 2022-09-30 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueInputsLevel1Member us-gaap:ForeignExchangeContractMember 2022-09-30 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel1Member us-gaap:ForeignExchangeContractMember 2022-09-30 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member 2022-09-30 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member 2022-09-30 0001054905 iosp:UnrecognizedTaxBenefitsMember 2022-09-30 0001054905 iosp:InterestAndPenaltiesMember 2022-09-30 0001054905 us-gaap:RevolvingCreditFacilityMember 2022-09-30 0001054905 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member iosp:EmissionTradingSchemeCreditsMember 2021-12-31 0001054905 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member iosp:EmissionTradingSchemeCreditsMember 2021-12-31 0001054905 iosp:AdvanSixMember 2021-12-31 0001054905 iosp:SmithGambrellAndRussellLimitedLiabilityPartnershipMember 2021-12-31 0001054905 iosp:EuropeanMetalRecyclingLimitedMember 2021-12-31 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2021-12-31 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2021-12-31 0001054905 srt:EuropeMember 2021-12-31 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueInputsLevel1Member us-gaap:ForeignExchangeContractMember 2021-12-31 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel1Member us-gaap:ForeignExchangeContractMember 2021-12-31 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member 2021-12-31 0001054905 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member 2021-12-31 0001054905 us-gaap:RevolvingCreditFacilityMember 2021-12-31 0001054905 us-gaap:RevolvingCreditFacilityMember 2019-09-26 0001054905 us-gaap:RevolvingCreditFacilityMember iosp:AccordionFeatureMember 2019-09-26 0001054905 iosp:SmithGambrellAndRussellLimitedLiabilityPartnershipMember 2021-09-30 0001054905 us-gaap:CommonStockMember 2021-06-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001054905 us-gaap:TreasuryStockMember 2021-06-30 0001054905 us-gaap:RetainedEarningsMember 2021-06-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0001054905 us-gaap:NoncontrollingInterestMember 2021-06-30 0001054905 us-gaap:CommonStockMember 2021-09-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001054905 us-gaap:TreasuryStockMember 2021-09-30 0001054905 us-gaap:RetainedEarningsMember 2021-09-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30 0001054905 us-gaap:NoncontrollingInterestMember 2021-09-30 0001054905 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-12-31 0001054905 us-gaap:AccumulatedTranslationAdjustmentMember 2020-12-31 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0001054905 us-gaap:CommonStockMember 2020-12-31 0001054905 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001054905 us-gaap:TreasuryStockMember 2020-12-31 0001054905 us-gaap:RetainedEarningsMember 2020-12-31 0001054905 us-gaap:NoncontrollingInterestMember 2020-12-31 0001054905 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-09-30 0001054905 us-gaap:AccumulatedTranslationAdjustmentMember 2021-09-30 0001054905 iosp:UnrecognizedTaxBenefitsMember 2021-12-31 0001054905 iosp:InterestAndPenaltiesMember 2021-12-31 0001054905 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-12-31 0001054905 us-gaap:AccumulatedTranslationAdjustmentMember 2021-12-31 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001054905 us-gaap:CommonStockMember 2021-12-31 0001054905 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001054905 us-gaap:TreasuryStockMember 2021-12-31 0001054905 us-gaap:RetainedEarningsMember 2021-12-31 0001054905 us-gaap:NoncontrollingInterestMember 2021-12-31 0001054905 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2022-09-30 0001054905 us-gaap:AccumulatedTranslationAdjustmentMember 2022-09-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0001054905 us-gaap:CommonStockMember 2022-09-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001054905 us-gaap:TreasuryStockMember 2022-09-30 0001054905 us-gaap:RetainedEarningsMember 2022-09-30 0001054905 us-gaap:NoncontrollingInterestMember 2022-09-30 0001054905 us-gaap:CommonStockMember 2022-06-30 0001054905 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001054905 us-gaap:TreasuryStockMember 2022-06-30 0001054905 us-gaap:RetainedEarningsMember 2022-06-30 0001054905 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001054905 us-gaap:NoncontrollingInterestMember 2022-06-30 iso4217:USD xbrli:shares utr:Year iso4217:USD xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022
or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number
1-13879
INNOSPEC INC.
(Exact name of registrant as specified in its charter)

DELAWARE |  | 98-0181725
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
8310 South Valley Highway |  |
Suite 350 |  |
Englewood |  |
Colorado |  | 80112
(Address of principal executive offices) |  | (Zip Code)

Registrant’s telephone number, including area code: (303) 792 5554
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common stock, par value $0.01 per share |  | IOSP |  | NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such file. Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.

Large accelerated filer |  | ☒ |  | Accelerated filer |  | ☐
Non-accelerated filer |  | ☐ |  | Smaller reporting company |  | ☐
Emerging growth company |  | ☐ |  |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class |  | Outstanding as of November 2, 2022
Common Stock, par value $0.01 |  | 24,764,872

##### Table of Contents

PART I |  | FINANCIAL INFORMATION |  |  | 2 |
Item 1 |  | Condensed Consolidated Financial Statements |  |  | 2 |
|  | Condensed Consolidated Statements of Income |  |  | 2 |
|  | Condensed Consolidated Statements of Comprehensive Income |  |  | 3 |
|  | Condensed Consolidated Balance Sheets |  |  | 4 |
|  | Condensed Consolidated Balance Sheets (continued) |  |  | 5 |
|  | Condensed Consolidated Statements of Cash Flows |  |  | 6 |
|  | Condensed Consolidated Statements of Equity |  |  | 7 |
|  | Notes To The Unaudited Interim Condensed Consolidated Financial Statements |  |  | 9 |
Item 2 |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2022 |  |  | 21 |
|  | Critical Accounting Estimates |  |  | 21 |
|  | Results of Operations |  |  | 21 |
|  | Liquidity and Financial Condition |  |  | 30 |
Item 3 |  | Quantitative and Qualitative Disclosures about Market Risk |  |  | 32 |
Item 4 |  | Controls and Procedures |  |  | 33 |
PART II |  | OTHER INFORMATION |  |  | 34 |
Item 1 |  | Legal Proceedings |  |  | 34 |
Item 1A |  | Risk Factors |  |  | 34 |
Item 2 |  | Unregistered Sales of Equity Securities and Use of Proceeds |  |  | 34 |
Item 3 |  | Defaults Upon Senior Securities |  |  | 35 |
Item 4 |  | Mine Safety Disclosures |  |  | 35 |
Item 5 |  | Other Information |  |  | 35 |
Item 6 |  | Exhibits |  |  | 35 |
SIGNATURES |  |  | 36 |

##### Table of Contents

CAUTIONARY STATEMENT RELATIVE TO FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Such forward-looking statements include statements (covered by words like “expects,” “estimates,” “anticipates,” “may,” “could,” “believes,” “feels,” “plans,” “intends” or similar words or expressions, for example) which relate to earnings, growth potential, operating performance, events or developments that we expect or anticipate will or may occur in the future. Although forward-looking statements are believed by management to be reasonable when made, they are subject to certain risks, uncertainties and assumptions, including, the effects of the COVID-19 pandemic, such as its duration, its unknown long-term economic impact, measures taken by governmental authorities to address it, the rise of variants, the effectiveness, acceptance and distributions of COVID-19 vaccines and the effects of any sanctions, export restrictions, inflation, supply chain disruptions or increased economic uncertainty related to the ongoing conflict between Russia and Ukraine and the manner in which the pandemic and/or such conflict may precipitate or exacerbate other risks and/or uncertainties, and our actual performance or results may differ materially from these forward-looking statements. Additional information regarding risks, uncertainties and assumptions relating to Innospec and affecting our business operations and prospects are described in Innospec’s Annual Report on Form 10-K for the year ended December 31, 2021, Innospec’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and other reports filed with the U.S. Securities and Exchange Commission. You are urged to review our discussion of risks and uncertainties that could cause actual results to differ from forward-looking statements under the heading “Risk Factors” in such reports. Innospec undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

1

##### Table of Contents

PART I FINANCIAL INFORMATION
Item 1 Condensed Consolidate
d
Financial Statements
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|  | Three months ended September 30 |  |  | Nine months ended September 30 |
(in millions, except share and per share data) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Net sales |  | $ | 513.0 |  |  | $ | 376.1 |  |  | $ | 1,453.0 |  |  | $ | 1,070.2 |
Cost of goods sold |  |  | (357.0 | ) |  |  | (263.2 | ) |  |  | (1,017.9 | ) |  |  | (748.2 | )
Gross profit |  |  | 156.0 |  |  |  | 112.9 |  |  |  | 435.1 |  |  |  | 322.0 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative |  |  | (95.8 | ) |  |  | (71.2 | ) |  |  | (264.1 | ) |  |  | (197.5 | )
Research and development |  |  | (10.1 | ) |  |  | (10.3 | ) |  |  | (30.3 | ) |  |  | (27.9 | )
Total operating expenses |  |  | (105.9 | ) |  |  | (81.5 | ) |  |  | (294.4 | ) |  |  | (225.4 | )
Operating income |  |  | 50.1 |  |  |  | 31.4 |  |  |  | 140.7 |  |  |  | 96.6 |
Other (expense)/income, net |  |  | (0.9 | ) |  |  | (0.2 | ) |  |  | (0.2 | ) |  |  | 6.2 |
Interest expense, net |  |  | (0.3 | ) |  |  | (0.4 | ) |  |  | (1.1 | ) |  |  | (1.1 | )
Income before income tax expense |  |  | 48.9 |  |  |  | 30.8 |  |  |  | 139.4 |  |  |  | 101.7 |
Income tax expense |  |  | (10.2 | ) |  |  | (7.4 | ) |  |  | (31.9 | ) |  |  | (32.5 | )
Net income |  | $ | 38.7 |  |  | $ | 23.4 |  |  | $ | 107.5 |  |  | $ | 69.2 |
Earnings per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.56 |  |  | $ | 0.95 |  |  | $ | 4.34 |  |  | $ | 2.81 |
Diluted |  | $ | 1.55 |  |  | $ | 0.94 |  |  | $ | 4.30 |  |  | $ | 2.78 |
Weighted average shares outstanding (in thousands): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 24,786 |  |  |  | 24,643 |  |  |  | 24,794 |  |  |  | 24,624 |
Diluted |  |  | 24,965 |  |  |  | 24,864 |  |  |  | 24,976 |  |  |  | 24,872 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
2

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

|  | Three months ended September 30 |  |  | Nine months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Net income |  | $ | 38.7 |  |  | $ | 23.4 |  |  |  | 107.5 |  |  |  | 69.2 |
Other comprehensive income/(loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Changes in cumulative translation adjustment, net of tax of $1.0 million, $(0.5) million, $2.2 million and $0.5 million, respectively |  |  | (16.4 | ) |  |  | (7.0 | ) |  |  | (37.1 | ) |  |  | (14.5 | )
Amortization of prior service cost, net of tax of $0.0 million, $0.0 million, $(0.1) million and $0.0 million, respectively |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.3 |  |  |  | 0.2 |
Amortization of actuarial net losses, net of tax of $0.0 million, $0.0 million, $0.0 million and $(0.1) million, respectively |  |  | 0.1 |  |  |  | 0.5 |  |  |  | 0.4 |  |  |  | 1.7 |
Total other comprehensive loss |  |  | (16.2 | ) |  |  | (6.4 | ) |  |  | (36.4 | ) |  |  | (12.6 | )
Total comprehensive income |  | $ | 22.5 |  |  | $ | 17.0 |  |  |  | 71.1 |  |  |  | 56.6 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
3

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(in millions, except share and per share data) |  | September 30, 2022 |  |  | December 31, 2021 |
Assets |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 100.5 |  |  | $ | 141.8 |
Trade and other accounts receivable (less allowances of $8.9 million and $5.1 million respectively) |  |  | 342.5 |  |  |  | 284.5 |
Inventories (less allowances of $26.3 million and $25.4 million respectively): |  |  |  |  |  |  |  |
Finished goods |  |  | 266.9 |  |  |  | 188.3 |
Raw materials |  |  | 114.9 |  |  |  | 89.3 |
Total inventories |  |  | 381.8 |  |  |  | 277.6 |
Prepaid expenses |  |  | 7.4 |  |  |  | 18.0 |
Prepaid income taxes |  |  | 13.8 |  |  |  | 5.8 |
Other current assets |  |  | 0.4 |  |  |  | 0.4 |
Total current assets |  |  | 846.4 |  |  |  | 728.1 |
Net property, plant and equipment |  |  | 206.6 |  |  |  | 214.4 |
Operating lease right-of-use assets |  |  | 45.9 |  |  |  | 35.4 |
Goodwill |  |  | 351.7 |  |  |  | 364.3 |
Other intangible assets |  |  | 43.6 |  |  |  | 57.5 |
Deferred tax assets |  |  | 5.7 |  |  |  | 6.4 |
Pension asset |  |  | 162.7 |  |  |  | 159.8 |
Other non-current assets |  |  | 6.6 |  |  |  | 5.0 |
Total assets |  | $ | 1,669.2 |  |  | $ | 1,570.9 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - (Continued)
(Unaudited)

(in millions, except share and per share data) |  | September 30, 2022 |  |  | December 31, 2021 |
Liabilities and Equity |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 173.6 |  |  | $ | 148.7 |
Accrued liabilities |  |  | 173.9 |  |  |  | 166.5 |
Finance leases |  |  | — |  |  |  | 0.1 |
Current portion of operating lease liabilities |  |  | 13.6 |  |  |  | 12.4 |
Current portion of plant closure provisions |  |  | 5.6 |  |  |  | 5.2 |
Current portion of accrued income taxes |  |  | 14.7 |  |  |  | 3.7 |
Total current liabilities |  |  | 381.4 |  |  |  | 336.6 |
Operating lease liabilities, net of current portion |  |  | 32.1 |  |  |  | 23.1 |
Plant closure provisions, net of current portion |  |  | 50.0 |  |  |  | 51.3 |
Accrued income taxes, net of current portion |  |  | 20.8 |  |  |  | 30.6 |
Unrecognized tax benefits |  |  | 16.3 |  |  |  | 16.3 |
Deferred tax liabilities |  |  | 59.7 |  |  |  | 60.8 |
Pension liabilities and post-employment benefits |  |  | 15.6 |  |  |  | 17.8 |
Other non-current liabilities |  |  | 1.4 |  |  |  | 1.4 |
Total liabilities |  |  | 577.3 |  |  |  | 537.9 |
Equity: |  |  |  |  |  |  |  |
Common stock, $0.01 par value, authorized 40,000,000 shares, issued 29,554,500 shares |  |  | 0.3 |  |  |  | 0.3 |
Additional paid-in capital |  |  | 352.2 |  |  |  | 346.7 |
Treasury stock (4,781,326 and 4,780,806 shares at cost, respectively) |  |  | (94.6 | ) |  |  | (90.6 | )
Retained earnings |  |  | 914.8 |  |  |  | 822.9 |
Accumulated other comprehensive loss |  |  | (83.3 | ) |  |  | (46.9 | )
Total Innospec stockholders’ equity |  |  | 1,089.4 |  |  |  | 1,032.4 |
Non-controlling interest |  |  | 2.5 |  |  |  | 0.6 |
Total equity |  |  | 1,091.9 |  |  |  | 1,033.0 |
Total liabilities and equity |  | $ | 1,669.2 |  |  | $ | 1,570.9 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
5

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|  | Nine months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |
Cash Flows from Operating Activities |  |  |  |  |  |  |  |
Net income |  | $ | 107.5 |  |  | $ | 69.2 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 30.9 |  |  |  | 30.9 |
Deferred taxes |  |  | 0.6 |  |  |  | 8.0 |
Non-cash movements on defined benefit pension plans |  |  | (1.9 | ) |  |  | (2.4 | )
Stock option compensation |  |  | 4.7 |  |  |  | 4.6 |
Changes in assets and liabilities, net of effects of acquired and divested companies: |  |  |  |  |  |  |  |
Trade and other accounts receivable |  |  | (70.1 | ) |  |  | (86.5 | )
Inventories |  |  | (112.6 | ) |  |  | (57.1 | )
Prepaid expenses |  |  | 11.2 |  |  |  | 2.4 |
Accounts payable and accrued liabilities |  |  | 38.9 |  |  |  | 58.6 |
Plant closure provisions |  |  | 0.3 |  |  |  | (1.5 | )
Accrued income taxes |  |  | (4.0 | ) |  |  | (3.8 | )
Unrecognized tax benefits |  |  | — |  |  |  | 0.4 |
Other assets and liabilities |  |  | (2.2 | ) |  |  | 1.6 |
Net cash provided by operating activities |  |  | 3.3 |  |  |  | 24.4 |
Cash Flows from Investing Activities |  |  |  |  |  |  |  |
Capital expenditures |  |  | (27.1 | ) |  |  | (27.4 | )
Proceeds on disposal of property, plant and equipment |  |  | 0.1 |  |  |  | 0.4 |
Net cash used in investing activities |  |  | (27.0 | ) |  |  | (27.0 | )
Cash Flows from Financing Activities |  |  |  |  |  |  |  |
Non-controlling interest |  |  | 1.9 |  |  |  | 0.1 |
Proceeds from revolving credit facility |  |  | — |  |  |  | — |
Repayments of revolving credit facility |  |  | — |  |  |  | — |
Repayments of finance leases |  |  | (0.1 | ) |  |  | (0.5 | )
Dividend paid |  |  | (15.6 | ) |  |  | (14.0 | )
Issue of treasury stock |  |  | 2.1 |  |  |  | 2.0 |
Repurchase of common stock |  |  | (5.0 | ) |  |  | (0.8 | )
Net cash used in financing activities |  |  | (16.7 | ) |  |  | (13.2 | )
Effect of foreign currency exchange rate changes on cash |  |  | (0.9 | ) |  |  | (0.3 | )
Net change in cash and cash equivalents |  |  | (41.3 | ) |  |  | (16.1 | )
Cash and cash equivalents at beginning of period |  |  | 141.8 |  |  |  | 105.3 |
Cash and cash equivalents at end of period |  | $ | 100.5 |  |  | $ | 89.2 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
6

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)

(in millions) |  | Common Stock |  |  | Additional Paid-In Capital |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Loss |  |  | Non- Controlling Interest |  |  | Total Equity |
Balance at December 31, 2021 |  | $ | 0.3 |  |  | $ | 346.7 |  |  | $ | (90.6 | ) |  | $ | 822.9 |  |  | $ | (46.9 | ) |  | $ | 0.6 |  |  | $ | 1,033.0 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 107.5 |  |  |  |  |  |  |  |  |  |  |  | 107.5 |
Dividend paid ($0.63 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (15.6 | ) |  |  |  |  |  |  |  |  |  |  | (15.6 | )
Changes in cumulative translation adjustment, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (37.1 | ) |  |  |  |  |  |  | (37.1 | )
Non-controlling interest investment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.8 |  |  |  | 1.8 |
Share of net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.1 |  |  |  | 0.1 |
Treasury stock reissued |  |  |  |  |  |  | 0.8 |  |  |  | 1.0 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.8 |
Treasury stock repurchased |  |  |  |  |  |  |  |  |  |  | (5.0 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5.0 | )
Stock option compensation |  |  |  |  |  |  | 4.7 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4.7 |
Amortization of prior service cost, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.3 |  |  |  |  |  |  |  | 0.3 |
Amortization of actuarial net losses, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.4 |  |  |  |  |  |  |  | 0.4 |
Balance at September 30, 2022 |  | $ | 0.3 |  |  | $ | 352.2 |  |  | $ | (94.6 | ) |  | $ | 914.8 |  |  | $ | (83.3 | ) |  | $ | 2.5 |  |  | $ | 1,091.9 |

(in millions) |  | Common Stock |  |  | Additional Paid-In Capital |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Loss |  |  | Non- Controlling Interest |  |  | Total Equity |
Balance at December 31, 2020 |  | $ | 0.3 |  |  | $ | 336.1 |  |  | $ | (93.3 | ) |  | $ | 758.6 |  |  | $ | (57.3 | ) |  | $ | 0.5 |  |  | $ | 944.9 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 69.2 |  |  |  |  |  |  |  |  |  |  |  | 69.2 |
Dividend paid ($0.57 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (14.0 | ) |  |  |  |  |  |  |  |  |  |  | (14.0 | )
Changes in cumulative translation adjustment, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (14.5 | ) |  |  |  |  |  |  | (14.5 | )
Share of net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.1 |  |  |  | 0.1 |
Treasury stock reissued |  |  |  |  |  |  | 0.6 |  |  |  | 1.1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.7 |
Treasury stock repurchased |  |  |  |  |  |  |  |  |  |  | (0.8 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.8 | )
Stock option compensation |  |  |  |  |  |  | 4.6 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4.6 |
Amortization of prior service cost, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.2 |  |  |  |  |  |  |  | 0.2 |
Amortization of actuarial net losses, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.7 |  |  |  |  |  |  |  | 1.7 |
Balance at September 30, 2021 |  | $ | 0.3 |  |  | $ | 341.3 |  |  | $ | (93.0 | ) |  | $ | 813.8 |  |  | $ | (69.9 | ) |  | $ | 0.6 |  |  | $ | 993.1 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
7

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)

(in millions) |  | Common Stock |  |  | Additional Paid-In Capital |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Loss |  |  | Non- Controlling Interest |  |  | Total Equity |
Balance at June 30, 2022 |  | $ | 0.3 |  |  | $ | 350.9 |  |  | $ | (92.3 | ) |  | $ | 876.1 |  |  | $ | (67.1 | ) |  | $ | 0.7 |  |  | $ | 1,068.6 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 38.7 |  |  |  |  |  |  |  |  |  |  |  | 38.7 |
Changes in cumulative translation adjustment, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (16.4 | ) |  |  |  |  |  |  | (16.4 | )
Non-controlling interest investment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.8 |  |  |  | 1.8 |
Treasury stock reissued |  |  |  |  |  |  | (0.2 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.2 | )
Treasury stock repurchased |  |  |  |  |  |  |  |  |  |  | (2.3 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2.3 | )
Stock option compensation |  |  |  |  |  |  | 1.5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.5 |
Amortization of prior service cost, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.1 |  |  |  |  |  |  |  | 0.1 |
Amortization of actuarial net losses, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.1 |  |  |  |  |  |  |  | 0.1 |
Balance at September 30, 2022 |  | $ | 0.3 |  |  | $ | 352.2 |  |  | $ | (94.6 | ) |  | $ | 914.8 |  |  | $ | (83.3 | ) |  | $ | 2.5 |  |  | $ | 1,091.9 |

(in millions) |  | Common Stock |  |  | Additional Paid-In Capital |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Loss |  |  | Non- Controlling Interest |  |  | Total Equity |
Balance at June 30, 2021 |  | $ | 0.3 |  |  | $ | 339.5 |  |  | $ | (93.1 | ) |  | $ | 790.4 |  |  | $ | (63.5 | ) |  | $ | 0.6 |  |  | $ | 974.2 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 23.4 |  |  |  |  |  |  |  |  |  |  |  | 23.4 |
Changes in cumulative translation adjustment, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7.0 | ) |  |  |  |  |  |  | (7.0 | )
Treasury stock reissued |  |  |  |  |  |  | 0.1 |  |  |  | 0.1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.2 |
Stock option compensation |  |  |  |  |  |  | 1.7 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.7 |
Amortization of prior service cost, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.1 |  |  |  |  |  |  |  | 0.1 |
Amortization of actuarial net losses, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.5 |  |  |  |  |  |  |  | 0.5 |
Balance at September 30, 2021 |  | $ | 0.3 |  |  | $ | 341.3 |  |  | $ | (93.0 | ) |  | $ | 813.8 |  |  | $ | (69.9 | ) |  | $ | 0.6 |  |  | $ | 993.1 |

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
8

Table of Contents
INNOSPEC INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form
10-Q
and Article 10 of Regulation
S-X
under the Securities Exchange Act of 1934. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position, results of operations and cash flows.
It is our opinion, however, that all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) have been made which are necessary for the condensed consolidated financial statements to be fairly stated. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form
10-K
for the year ended December 31, 2021 filed on February 16, 2022 (the “2021 Form
10-K”).
The results for the interim period covered by this report are not necessarily indicative of the results to be expected for the full year.
When we use the terms “Innospec,” “the Corporation,” “the Company,” “Registrant,” “we,” “us” and “our,” we are referring to Innospec Inc. and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.
9

Table of Contents
NOTE 2 – SEGMENT REPORTING
The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.
The Company evaluates the performance of its segments based on operating income. The following tables analyze sales and other financial information by the Company’s reportable segments:

|  | Three months ended September 30 |  |  | Nine months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Net sales : |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personal Care |  | $ | 102.4 |  |  | $ | 75.8 |  |  | $ | 311.1 |  |  | $ | 217.8 |
Home Care |  |  | 22.6 |  |  |  | 24.4 |  |  |  | 72.3 |  |  |  | 68.7 |
Other |  |  | 34.7 |  |  |  | 32.6 |  |  |  | 112.4 |  |  |  | 100.4 |
Performance Chemicals |  |  | 159.7 |  |  |  | 132.8 |  |  |  | 495.8 |  |  |  | 386.9 |
Refinery and Performance |  |  | 133.2 |  |  |  | 113.8 |  |  |  | 405.5 |  |  |  | 307.9 |
Other |  |  | 45.5 |  |  |  | 42.6 |  |  |  | 141.4 |  |  |  | 130.9 |
Fuel Specialties |  |  | 178.7 |  |  |  | 156.4 |  |  |  | 546.9 |  |  |  | 438.8 |
Oilfield Services |  |  | 174.6 |  |  |  | 86.9 |  |  |  | 410.3 |  |  |  | 244.5 |
|  | $ | 513.0 |  |  | $ | 376.1 |  |  | $ | 1,453.0 |  |  | $ | 1,070.2 |
Gross profit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 39.1 |  |  | $ | 32.6 |  |  | $ | 123.5 |  |  | $ | 95.6 |
Fuel Specialties |  |  | 53.4 |  |  |  | 49.1 |  |  |  | 171.0 |  |  |  | 144.1 |
Oilfield Services |  |  | 63.5 |  |  |  | 31.2 |  |  |  | 140.6 |  |  |  | 82.3 |
|  | $ | 156.0 |  |  | $ | 112.9 |  |  | $ | 435.1 |  |  | $ | 322.0 |
Operating income/(loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 25.4 |  |  | $ | 17.8 |  |  | $ | 79.5 |  |  | $ | 54.0 |
Fuel Specialties |  |  | 27.9 |  |  |  | 26.6 |  |  |  | 94.9 |  |  |  | 78.9 |
Oilfield Services |  |  | 14.2 |  |  |  | 2.7 |  |  |  | 21.2 |  |  |  | 6.1 |
Corporate costs |  |  | (17.4 | ) |  |  | (15.7 | ) |  |  | (54.9 | ) |  |  | (42.4 | )
Total operating income |  | $ | 50.1 |  |  | $ | 31.4 |  |  | $ | 140.7 |  |  | $ | 96.6 |

10

Table of Contents
NOTE 3 – EARNINGS PER SHARE
Basic earnings per share is based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the effect of options that are dilutive and outstanding during the period under the treasury stock method. Per share amounts are computed as follows:

|  | Three months ended September 30 |  |  | Nine months ended September 30 |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Numerator (in millions): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 38.7 |  |  | $ | 23.4 |  |  | $ | 107.5 |  |  | $ | 69.2 |
Denominator (in thousands): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 24,786 |  |  |  | 24,643 |  |  |  | 24,794 |  |  |  | 24,624 |
Dilutive effect of stock options and awards |  |  | 179 |  |  |  | 221 |  |  |  | 182 |  |  |  | 248 |
Denominator for diluted earnings per share |  |  | 24,965 |  |  |  | 24,864 |  |  |  | 24,976 |  |  |  | 24,872 |
Net income per share, basic: |  | $ | 1.56 |  |  | $ | 0.95 |  |  | $ | 4.34 |  |  | $ | 2.81 |
Net income per share, diluted: |  | $ | 1.55 |  |  | $ | 0.94 |  |  | $ | 4.30 |  |  | $ | 2.78 |

In the three and nine months ended September 30, 2022, the average number of anti-dilutive options excluded from the calculation of diluted earnings per share were 109,377 and 54,522, respectively (three and nine months ended September 30, 2021 – 19,191 and 14,649, respectively).
NOTE 4 – GOODWILL
The following table summarizes the goodwill movements in the year:

(in millions) |  | Gross Cost |
Opening balance at January 1, 2022 |  | $ | 364.3 |
Exchange effect |  |  | (12.6 | )
Closing balance at September 30, 2022 |  | $ | 351.7 |

The exchange effect for the nine months ended September 30, 2022 was $12.4 million relating to our Performance Chemicals segment and $0.2 million relating to our Fuel Specialties segment.
11

Table of Contents
NOTE 5 – OTHER INTANGIBLE ASSETS
The following table analyzes other intangible assets movements in the year:

(in millions) |  | 2022 |
Gross cost at January 1 |  | $ | 295.2 |
Exchange effect |  |  | (6.3 | )
Gross cost at September 30 |  |  | 288.9 |
Accumulated amortization at January 1 |  |  | (237.7 | )
Amortization expense |  |  | (11.4 | )
Exchange effect |  |  | 3.8 |
Accumulated am o rtization at September 30 |  |  | (245.3 | )
Net book amount at September 30 |  | $ | 43.6 |

The amortization expense for the nine months ended September 30, 2022 was $11.4 million (nine months ended September 30, 2021 – $12.0 million).
NOTE 6 – PENSION AND POST EMPLOYMENT BENEFITS
The Company maintains a defined benefit pension plan covering certain current and former employees in the United Kingdom (the “UK Plan”). The UK Plan is closed to future service accrual and has a large number of deferred and current pensioners.
The Company also maintains an unfunded defined benefit pension plan covering certain current and former employees in Germany (the “German plan”). The German plan is closed to new entrants and has no assets.
The net periodic benefit of these plans is shown in the following table:

|  | Three months ended September 30 |  |  | Nine months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Service cost |  | $ | (0.6 | ) |  | $ | (0.5 | ) |  | $ | (1.8 | ) |  | $ | (1.4 | )
Interest cost on projected benefit obligation |  |  | (2.4 | ) |  |  | (1.9 | ) |  |  | (7.8 | ) |  |  | (5.7 | )
Expected return on plan assets |  |  | 3.8 |  |  |  | 3.9 |  |  |  | 12.3 |  |  |  | 11.7 |
Amortization of prior service cost |  |  | (0.1 | ) |  |  | (0.1 | ) |  |  | (0.4 | ) |  |  | (0.2 | )
Amortization of actuarial net losses |  |  | (0.1 | ) |  |  | (0.6 | ) |  |  | (0.4 | ) |  |  | (1.9 | )
Net periodic benefit |  | $ | 0.6 |  |  | $ | 0.8 |  |  | $ | 1.9 |  |  | $ | 2.5 |

The service cost has been recognized in selling, general and administrative expenses. All other items have been recognized within other income and expense. The amortization of prior service cost and actuarial net losses are a reclassification out of accumulated other comprehensive loss into other income and expense.
In addition, we have obligations for post-employment benefits in some of our other European businesses. As at September 30, 2022, we have recorded a liability of $4.1 million (December 31, 2021 – $4.6 million).
12

Table of Contents
In May 2022, the Trustees of the UK Plan entered into an agreement with Legal and General Assurance Society Limited to acquire an insurance policy that operates as an investment asset, with the intent of matching the remaining uninsured part of the UK Plan’s future cash flow arising from the accrued pension liabilities of members. Such an arrangement is commonly termed as a
“buy-in”.
The
buy-in
reduces the UK Plan’s value at risk in relation to key risks associated with improved longevity, inflation and interest rate movements whilst improving the security to the UK Plan and its members. The Company consequently benefits from the
buy-in
as it reduces the UK Plan’s potential reliance on the Company for future cash funding requirements. In accordance with US GAAP the
buy-in
does not trigger a remeasurement at an interim period, so accounting entries to reflect this will be included in Innospec’s Annual Report on Form
10-K
for the year ended December 31, 2022.​​​​​​​
NOTE 7 – INCOME TAXES
A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows:

(in millions) |  | Unrecognized Tax Benefits |  |  | Interest and Penalties |  |  | Total |
Opening balance at January 1, 2022 |  | $ | 13.2 |  |  | $ | 3.1 |  |  | $ | 16.3 |
Net change for tax positions of prior periods |  |  | (0.5 | ) |  |  | 0.5 |  |  |  | — |
Closing balance at September 30, 2022 |  |  | 12.7 |  |  |  | 3.6 |  |  |  | 16.3 |
Current |  |  | — |  |  |  | — |  |  |  | — |
Non-current |  | $ | 12.7 |  |  | $ | 3.6 |  |  | $ | 16.3 |

All of the $16.3 million of unrecognized tax benefits, interest and penalties would impact our effective tax rate if recognized.
In 2021 a
non-U.S.
subsidiary, Innospec Limited, entered into a review by the U.K. tax authorities under the U.K.’s Profit Diversion Compliance Facility (“PDCF”). The Company determined that additional tax and interest totaling $0.9 million may arise during the course of the PDCF review process which is currently ongoing. This includes a reduction for foreign exchange movements of $0.1 million recorded in the nine months to September 30, 2022.
A
non-U.S.
subsidiary, Innospec Performance Chemicals Italia Srl, is subject to an ongoing tax audit in relation to the period 2011 to 2014 inclusive. The Company has determined that additional tax, interest and penalties totaling $2.9 million may arise as a consequence of the tax audit. This includes an increase in interest accrual of $0.1 million and a reduction for foreign exchange movements of $0.5 million recorded in the nine months to September 30, 2022. As any additional tax arising as a consequence of the tax audit would be reimbursed by the previous owner under the terms of the sale and purchase agreement, an indemnification asset of the same amount is recorded in the financial statements to reflect this arrangement.
In 2018 the Company recorded an unrecognized tax benefit in relation to a potential adjustment that could arise as a consequence of the Tax Cuts and Jobs Act of 2017 (“Tax Act”), but for which retrospective adjustment to the filed 2017 U.S. federal income tax returns was not permissible. The Company has determined that additional tax, interest and penalties totaling $12.5 million may arise in relation to this item. This includes an increase in interest accrued of $0.5 million in the nine months to September 30, 2022.
13

Table of Contents
The Company and its U.S. subsidiaries remain open to examination by the IRS for certain elements of year 2017 and for years 2018 onwards under the statute of limitations. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including the U.K. (2017 onwards), Germany (2018 onwards), Spain (2018 onwards) and France (2019 onwards).
NOTE 8 – LONG-TERM DEBT​​​​​​​
As at September 30, 2022, and December 31, 2021, the Company had not drawn down on its revolving credit facility.
The Company continues to have available a $250.0 million revolving credit facility until September 25, 2024. The facility contains an accordion feature whereby the Company may elect to increase the total available borrowings by an aggregate amount of up to $125.0 million.
As at September 30, 2022, the deferred finance costs of $0.7 million (December 31, 2021 - $1.0 million) related to the arrangement of the credit facility, are included within other current and
non-current
assets at the balance sheet dates.
NOTE 9 – PLANT CLOSURE PROVISIONS
The Company has continuing plans to remediate manufacturing facilities at sites around the world as and when those operations are expected to cease or we are required to decommission the sites according to local laws and regulations. The liability for estimated plant closure costs includes costs for environmental remediation liabilities and asset retirement obligations.
The principal site giving rise to asset retirement obligations is the manufacturing site at Ellesmere Port in the United Kingdom. There are also asset retirement obligations and environmental remediation liabilities on a much smaller scale in respect of other manufacturing sites.
Movements in the provisions are summarized as follows:

(in millions) |  | 2022 |
Total at January 1 |  | $ | 56.5 |
Charge for the period |  |  | 2.7 |
Utilized in the period |  |  | (2.5 | )
Exchange effect |  |  | (1.1 | )
Total at September 30 |  |  | 55.6 |
Due within one year |  |  | (5.6 | )
Due after one year |  | $ | 50.0 |

The charge for the nine months ended September 30, 2022 was $2.7 million (nine months ended September 30, 2021 – $2.8 million). The current year charge represents the accounting accretion only, with no changes for the expected cost and scope of future remediation activities.
Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date.
14

Table of Contents
NOTE 10 – FAIR VALUE MEASUREMENTS
The following table presents the carrying amount and fair values of the Company’s financial assets and liabilities measured on a recurring basis:

|  | September 30, 2022 |  |  | December 31, 2021 |
(in millions) |  | Carrying Amount |  |  | Fair Value |  |  | Carrying Amount |  |  | Fair Value |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 100.5 |  |  | $ | 100.5 |  |  | $ | 141.8 |  |  | $ | 141.8 |
Derivatives (Level 1 measurement): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current and non-current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Emissions Trading Scheme credits |  |  | 2.7 |  |  |  | 2.7 |  |  |  | 3.9 |  |  |  | 3.9 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Finance leases (including current portion) |  | $ | — |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | 0.1 |
Derivatives (Level 1 measurement): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current and non-current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward exchange contracts |  |  | 0.8 |  |  |  | 0.8 |  |  |  | 1.2 |  |  |  | 1.2 |
Non-financial liabilities (Level 3 measurement): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current and non-current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock equivalent units |  |  | 24.1 |  |  |  | 24.1 |  |  |  | 17.3 |  |  |  | 17.3 |

The following methods and assumptions were used to estimate the fair values:
Cash and cash equivalents:
The carrying amount approximates fair value because of the short-term maturities of such instruments.
Emissions Trading Scheme credits:
The fair value is determined by the open market pricing at the end of the reporting period.
Derivatives:
The fair value of derivatives relating to foreign currency forward exchange contracts are derived from current settlement prices and comparable contracts using current assumptions. Foreign currency forward exchange contracts primarily relate to contracts entered into to hedge future known transactions or hedge balance sheet net cash positions. The movements in the carrying amounts and fair values of these contracts are largely due to changes in exchange rates against the U.S. dollar.
Finance leases:
Finance leases relate to certain fixed assets in our Fuel Specialties and Oilfield Services segments. The carrying amount of finance leases approximates to the fair value.
Stock equivalent units:
The fair values of stock equivalent units are calculated at each balance sheet date using either the Black-Scholes or Monte Carlo method depending on the terms of each grant.
15

Table of Contents
NOTE 11 – DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT
The Company enters into various foreign currency forward exchange contracts to minimize currency exchange rate exposure from expected future cash flows. As at September 30, 2022, the contracts have maturity dates of up to twelve months at the date of inception. These foreign currency forward exchange contracts have not been designated as hedging instruments, and their impact on the income statement for the first nine months of 2022 was a gain of $6.5 million (first nine months of 2021 – a gain of $0.9 million).
NOTE 12 – CONTINGENCIES
Legal matters
While we are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, employee and product liability claims, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party, or of which any of their property is subject. It is possible, however, that an adverse resolution of an unexpectedly large number of such individual claims or proceedings could in the aggregate have a material adverse effect on the results of operations for a particular year or quarter.
Guarantees
The Company and certain of the Company’s consolidated subsidiaries are contingently liable for certain obligations of affiliated companies primarily in the form of guarantees of debt and performance under contracts entered into as a normal business practice. This includes guarantees of
non-U.S.
excise taxes and customs duties. As at September 30, 2022, such guarantees which are not recognized as liabilities in the condensed consolidated financial statements amounted to $5.9 million (December 31, 2021 - $4.6 million). The remaining terms of the fixed maturity guarantees are up to 4 years, with some further guarantees having no fixed expiry date.
Under the terms of the guarantee arrangements, generally the Company would be required to perform should the affiliated company fail to fulfil its obligations under the arrangements. In some cases, the guarantee arrangements have recourse provisions that would enable the Company to recover any payments made under the terms of the guarantees from securities held of the guaranteed parties’ assets.
The Company and its affiliates have numerous long-term sales and purchase commitments in their various business activities, which are expected to be fulfilled with no adverse consequences material to the Company.
16

Table of Contents
NOTE 13 – STOCK-BASED COMPENSATION PLANS
The compensation cost recorded for stock options for the three months ended September 30, 2022 and 2021 was $1.5 million and $1.7 million, respectively. The compensation cost recorded for stock equivalent units for the three months ended September 30, 2022 and 2021 was $1.8 million and $0.5 million, respectively.
The compensation cost recorded for stock options for the first nine months of 2022 and 2021 was $4.7 million and $4.6 million, respectively. The compensation cost recorded for stock equivalent units for the first nine months of 2022 and 2021 was $15.9 million and $3.4 million, respectively.
The following table summarizes the transactions of the Company’s share-based compensation plans for the nine months ended September 30, 2022.

|  | Number of shares |  |  | Weighted Average Grant-Date Fair Value |
Nonvested at December 31, 2021 |  |  | 680,711 |  |  | $ | 74.6 |
Granted |  |  | 332,009 |  |  | $ | 60.2 |
Vested |  |  | (126,552 | ) |  | $ | 69.7 |
Forfeited |  |  | (57,746 | ) |  | $ | 69.3 |
Nonvested at September 30, 2022 |  |  | 828,422 |  |  | $ | 69.9 |

New grants in the quarter have similar vesting conditions to those granted in previous periods. The valuation methodologies of the new grants are consistent with previous periods.
As of September 30, 2022, there was $26.2 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 2.01 years.
17

Table of Contents
NOTE 14 – RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS
Reclassifications out of accumulated other comprehensive loss (“AOCL”) for the first nine months of 2022 were:

(in millions) Details about AOCL Components |  | Amount Reclassified from AOCL |  |  | Affected Line Item in the Statement where Net Income is Presented
Defined benefit pension plan items: |  |  |  |  |  |
Amortization of prior service cost |  | $ | 0.4 |  |  | See (1) below
Amortization of actuarial net losses |  |  | 0.4 |  |  | See (1) below
|  |  | 0.8 |  |  | Total before tax
|  |  | (0.1 | ) |  | Income tax expense
Total reclassifications |  | $ | 0.7 |  |  | Net of tax
(1) These items are included in other income and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Changes in
AOCL
for the first nine months of 2022, net of tax, wer
e
:

(in millions) |  | Defined Benefit Pension Plan Items |  |  | Cumulative Translation Adjustments |  |  | Total |
Balance at December 31, 2021 |  | $ | 10.7 |  |  | $ | (57.6 | ) |  | $ | (46.9 | )
Other comprehensive income before reclassifications |  |  | — |  |  |  | (37.1 | ) |  |  | (37.1 | )
Amounts reclassified from AOCL |  |  | 0.7 |  |  |  | — |  |  |  | 0.7 |
Total other comprehensive income/(loss) |  |  | 0.7 |  |  |  | (37.1 | ) |  |  | (36.4 | )
Balance at September 30, 2022 |  | $ | 11.4 |  |  | $ | (94.7 | ) |  | $ | (83.3 | )

18

Table of Contents
Reclassifications out of AOCL for the first nine months of 2021 were:

(in millions) Details about AOCL Components |  | Amount Reclassified from AOCL |  |  | Affected Line Item in the Statement where Net Income is Presented
Defined benefit pension plan items: |  |  |  |  |  |
Amortization of prior service cost |  | $ | 0.2 |  |  | See (1) below
Amortization of actuarial net losses |  |  | 1.9 |  |  | See (1) below
|  |  | 2.1 |  |  | Total before tax
|  |  | (0.2 | ) |  | Income tax expense
Total reclassifications |  | $ | 1.9 |  |  | Net of tax

(1) | These items are included in other inc o me and expense. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Changes in AOCL for the first nine months of 2021, net of tax, were:

(in millions) |  | Defined Benefit Pension Plan Items |  |  | Cumulative Translation Adjustments |  |  | Total |
Balance at December 31, 2020 |  | $ | (19.9 | ) |  | $ | (37.4 | ) |  | $ | (57.3 | )
Other comprehensive income before reclassifications |  |  | — |  |  |  | (14.5 | ) |  |  | (14.5 | )
Amounts reclassified from AOCL |  |  | 1.9 |  |  |  | — |  |  |  | 1.9 |
Total other comprehensive income |  |  | 1.9 |  |  |  | (14.5 | ) |  |  | (12.6 | )
Balance at September 30, 2021 |  | $ | (18.0 | ) |  | $ | (51.9 | ) |  | $ | (69.9 | )

19

Table of Contents
NOTE 15 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Company has reviewed recently issued accounting pronouncements and concluded there were no matters relevant to the Company’s financial statements.
NOTE 16 – RELATED PARTY TRANSACTIONS
Mr. Patrick S. Williams has been an executive director of the Company since April 2009 and has been a
non-executive
director of AdvanSix, a chemicals manufacturer, since February 2020. In the first nine months of 2022 the Company purchased product from AdvanSix for $0.4 million (first nine months of 2021 – $0.3 million). As at September 30, 2022, the Company owed $0.0 million to AdvanSix (December 31, 2021 – $0.1 million).
Mr. Robert I. Paller has been a
non-executive
director of the Company since November 1, 2009. The Company has retained and continues to retain Smith, Gambrell & Russell, LLP (“SGR”), a law firm with which Mr. Paller holds a position. In the first nine months of 2022 the Company incurred fees from SGR of $0.2 million (first nine months of 2021 – $0.1 million). As at September 30, 2022, the Company owed $0.0 million to SGR (December 31, 2021 – $0.0 million).
Mr. David F. Landless has been a
non-executive
director of the Company since January 1, 2016 and is a
non-executive
director of Ausurus Group Limited which owns European Metal Recycling Limited (“EMR”). The Company has sold scrap metal to EMR in the first nine months of 2022 for a value of $0.1 million (first nine months of 2021 – $0.5 million). A tendering process is operated periodically to select the best buyer for the sale of scrap metal by the Company. As at September 30, 2022 EMR owed $0.0 million for scrap metal purchased from the Company (December 31, 2021 – $0.0 million).
20

##### Table of Contents

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2022

This discussion should be read in conjunction with our unaudited interim condensed consolidated financial statements and the notes thereto.

CRITICAL ACCOUNTING ESTIMATES

The policies and estimates that the Company considers the most critical in terms of complexity and subjectivity of assessment are those related to environmental liabilities, pensions, income taxes, goodwill, property, plant and equipment and other intangible assets (net of depreciation and amortization) and the impact of the COVID-19 pandemic (“the pandemic”) and the current economic environment. These policies have been discussed in the Company’s 2021 Form 10-K.

RESULTS OF OPERATIONS

The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.

The following table provides sales, gross profit and operating income by reporting segment:

|  | Three months ended September 30 |  |  | Nine months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 159.7 |  |  | $ | 132.8 |  |  | $ | 495.8 |  |  | $ | 386.9 |
Fuel Specialties |  |  | 178.7 |  |  |  | 156.4 |  |  |  | 546.9 |  |  |  | 438.8 |
Oilfield Services |  |  | 174.6 |  |  |  | 86.9 |  |  |  | 410.3 |  |  |  | 244.5 |
|  | $ | 513.0 |  |  | $ | 376.1 |  |  | $ | 1,453.0 |  |  | $ | 1,070.2 |
Gross profit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 39.1 |  |  | $ | 32.6 |  |  | $ | 123.5 |  |  | $ | 95.6 |
Fuel Specialties |  |  | 53.4 |  |  |  | 49.1 |  |  |  | 171.0 |  |  |  | 144.1 |
Oilfield Services |  |  | 63.5 |  |  |  | 31.2 |  |  |  | 140.6 |  |  |  | 82.3 |
|  | $ | 156.0 |  |  | $ | 112.9 |  |  | $ | 435.1 |  |  | $ | 322.0 |
Operating income/(loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 25.4 |  |  | $ | 17.8 |  |  | $ | 79.5 |  |  | $ | 54.0 |
Fuel Specialties |  |  | 27.9 |  |  |  | 26.6 |  |  |  | 94.9 |  |  |  | 78.9 |
Oilfield Services |  |  | 14.2 |  |  |  | 2.7 |  |  |  | 21.2 |  |  |  | 6.1 |
Corporate costs |  |  | (17.4 | ) |  |  | (15.7 | ) |  |  | (54.9 | ) |  |  | (42.4 | )
Total operating income |  | $ | 50.1 |  |  | $ | 31.4 |  |  | $ | 140.7 |  |  | $ | 96.6 |

21

##### Table of Contents

Three Months Ended September 30, 2022

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the three months ended September 30, 2022 and the three months ended September 30, 2021:

|  | Three months ended September 30 |  |  |  |  |  |  |
(in millions, except ratios) |  | 2022 |  |  | 2021 |  |  | Change |  |  |  |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 159.7 |  |  | $ | 132.8 |  |  | $ | 26.9 |  |  |  | +20 | %
Fuel Specialties |  |  | 178.7 |  |  |  | 156.4 |  |  |  | 22.3 |  |  |  | +14 | %
Oilfield Services |  |  | 174.6 |  |  |  | 86.9 |  |  |  | 87.7 |  |  |  | +101 | %
|  | $ | 513.0 |  |  | $ | 376.1 |  |  | $ | 136.9 |  |  |  | +36 | %
Gross profit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 39.1 |  |  | $ | 32.6 |  |  | $ | 6.5 |  |  |  | +20 | %
Fuel Specialties |  |  | 53.4 |  |  |  | 49.1 |  |  |  | 4.3 |  |  |  | +9 | %
Oilfield Services |  |  | 63.5 |  |  |  | 31.2 |  |  |  | 32.3 |  |  |  | +104 | %
|  | $ | 156.0 |  |  | $ | 112.9 |  |  | $ | 43.1 |  |  |  | +38 | %
Gross margin (%): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  |  | 24.5 |  |  |  | 24.5 |  |  |  | +0.0 | % |  |  |  |
Fuel Specialties |  |  | 29.9 |  |  |  | 31.4 |  |  |  | -1.5 | % |  |  |  |
Oilfield Services |  |  | 36.4 |  |  |  | 35.9 |  |  |  | +0.5 | % |  |  |  |
Aggregate |  |  | 30.4 |  |  |  | 30.0 |  |  |  | +0.4 | % |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | (13.7 | ) |  | $ | (14.8 | ) |  | $ | 1.1 |  |  |  | -7 | %
Fuel Specialties |  |  | (25.5 | ) |  |  | (22.5 | ) |  |  | (3.0 | ) |  |  | +13 | %
Oilfield Services |  |  | (49.3 | ) |  |  | (28.5 | ) |  |  | (20.8 | ) |  |  | +73 | %
Corporate costs |  |  | (17.4 | ) |  |  | (15.7 | ) |  |  | (1.7 | ) |  |  | +11 | %
|  | $ | (105.9 | ) |  | $ | (81.5 | ) |  | $ | (24.4 | ) |  |  | +30 | %

22

##### Table of Contents

Performance Chemicals

Net sales: the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

|  | Three months ended September 30, 2022 |
Change (%) |  | Americas |  |  | EMEA |  |  | ASPAC |  |  | Total |
Volume |  |  | +22 |  |  |  | -13 |  |  |  | +55 |  |  |  | +4 |
Price and product mix |  |  | +23 |  |  |  | +32 |  |  |  | -14 |  |  |  | +26 |
Exchange rates |  |  | — |  |  |  | -16 |  |  |  | -10 |  |  |  | -10 |
|  |  | +45 |  |  |  | +3 |  |  |  | +31 |  |  |  | +20 |

Higher sales volumes for the Americas and ASPAC were primarily driven by increased demand for our personal care products. Lower sales volumes for EMEA were due to reductions in demand for our Home Care products when compared to the strong sales volumes in the prior year. The Americas and EMEA benefitted from a favorable price and product mix due to increased sales of higher priced products together with the impact of increased raw materials pricing being passed on through higher selling prices. ASPAC was impacted by an adverse price and product mix due to increased sales of lower priced products. EMEA and ASPAC were adversely impacted by exchange rate movements year over year, due to a weakening of the British pound sterling and the European Union euro against the U.S. dollar.

Gross margin: was unchanged year over year, primarily due to a favorable sales mix from increased sales of higher margin products being offset by higher raw material costs.

Operating expenses: decreased $1.1 million year over year, primarily due to lower provisions for doubtful debts and lower acquired intangibles amortization, partly offset by higher performance-related remuneration accruals.

Fuel Specialties

Net sales: the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

|  | Three months ended September 30, 2022 |
Change (%) |  | Americas |  |  | EMEA |  |  | ASPAC |  |  | AvGas |  |  | Total |
Volume |  |  | -11 |  |  |  | -13 |  |  |  | +16 |  |  |  | +32 |  |  |  | -6 |
Price and product mix |  |  | +33 |  |  |  | +34 |  |  |  | +32 |  |  |  | -16 |  |  |  | +30 |
Exchange rates |  |  | — |  |  |  | -21 |  |  |  | -6 |  |  |  | — |  |  |  | -10 |
|  |  | +22 |  |  |  | — |  |  |  | +42 |  |  |  | +16 |  |  |  | +14 |

Sales volumes in the Americas and EMEA have decreased year over year as the global demand for refined fuel products has stabilised following the post COVID-19 pandemic increases in the prior year. ASPAC sales volumes were higher year over year, primarily due to variations in the timing of demand. Price and product mix was favorable in all our regions due to increased sales of higher margin products and the impact of increased raw materials pricing being passed on through higher selling prices. AvGas volumes were higher than the prior year due to variations in the demand from customers, being partly offset by an adverse price and product mix with a higher proportion of sales to lower margin customers. EMEA and ASPAC were adversely impacted by exchange rate movements year over year, due to a weakening of the British pound sterling and the European Union euro against the U.S. dollar.

23

##### Table of Contents

Gross margin: the year over year decrease of 1.5 percentage points was due to the impact of the time lag for passing higher raw material costs through to selling prices, together with higher manufacturing costs linked to increased energy prices.

Operating expenses: the year over year increase of $3.0 million was due to higher selling expenses to support the increased sales, including higher provisions for doubtful debts, together with higher performance-related remuneration accruals.

Oilfield Services

Net sales: have increased year over year by $87.7 million, or 101 percent, with the majority of our customer activity concentrated in the Americas region. Customer demand has increased in the third quarter of 2022 which we expect will continue to drive further sales growth into 2023.

Gross margin: the year over year increase of 0.5 percentage points was due to a favorable sales mix, while management continue to maintain prices in a competitive market.

Operating expenses: the year over year increase of $20.8 million was driven by higher customer service costs which are necessary to support the increase in demand, together with increased provisions for doubtful debts and higher performance-related remuneration accruals.

Other Income Statement Captions

Corporate costs: the year over year increase of $1.7 million was primarily due to higher performance-related remuneration accruals.

Other net income/(expense): for the third quarter of 2022 and 2021, included the following:

(in millions) |  | 2022 |  |  | 2021 |  |  | Change |
Net pension credit |  | $ | 1.2 |  |  | $ | 1.3 |  |  | $ | (0.1 | )
Foreign exchange gains/(losses) on translation |  |  | (6.2 | ) |  |  | (2.2 | ) |  |  | (4.0 | )
Foreign currency forward contracts gains/(losses) |  |  | 4.1 |  |  |  | 0.7 |  |  |  | 3.4 |
|  | $ | (0.9 | ) |  | $ | (0.2 | ) |  | $ | (0.7 | )

Interest expense, net: was $0.3 million in the third quarter of 2022 compared to $0.4 million in the third quarter of 2021. Interest expense includes a commitment fee to retain the Company’s revolving credit facility for the term of the agreement.

24

##### Table of Contents

Income taxes: the effective tax rate was 20.9% and 24.0% in the third quarter of 2022 and 2021, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 20.1% in 2022 compared with 22.3% in 2021. The 2.2% percentage point decrease in the adjusted effective rate was primarily due to the fact that a lower proportion of the Company’s profits are being generated in higher tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company’s operations and for planning and forecasting in subsequent periods.

The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:

|  | Three months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |
Income before income taxes |  | $ | 48.9 |  |  | $ | 30.8 |
Indemnification asset regarding tax audit |  |  | 0.2 |  |  |  | 0.1 |
Adjustment for stock compensation |  |  | 1.5 |  |  |  | 1.6 |
Legacy costs of closed operations |  |  | 0.7 |  |  |  | 1.1 |
|  | $ | 51.3 |  |  | $ | 33.6 |
Income taxes |  | $ | 10.2 |  |  | $ | 7.4 |
Adjustment of income tax provision |  |  | — |  |  |  | (0.1 | )
Tax on legacy cost of closed operations |  |  | 0.1 |  |  |  | 0.2 |
Adjusted income taxes |  | $ | 10.3 |  |  | $ | 7.5 |
GAAP effective tax rate |  |  | 20.9 | % |  |  | 24.0 | %
Adjusted effective tax rate |  |  | 20.1 | % |  |  | 22.3 | %

25

##### Table of Contents

Nine Months Ended September 30 , 2022

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the nine months ended September 30, 2022 and the nine months ended September 30, 2021:

|  | Nine months ended September 30 |  |  |  |  |  |  |
(in millions, except ratios) |  | 2022 |  |  | 2021 |  |  | Change |  |  |  |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 495.8 |  |  | $ | 386.9 |  |  | $ | 108.9 |  |  |  | +28 | %
Fuel Specialties |  |  | 546.9 |  |  |  | 438.8 |  |  |  | 108.1 |  |  |  | +25 | %
Oilfield Services |  |  | 410.3 |  |  |  | 244.5 |  |  |  | 165.8 |  |  |  | +68 | %
|  | $ | 1,453.0 |  |  | $ | 1,070.2 |  |  | $ | 382.8 |  |  |  | +36 | %
Gross profit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | 123.5 |  |  | $ | 95.6 |  |  | $ | 27.9 |  |  |  | +29 | %
Fuel Specialties |  |  | 171.0 |  |  |  | 144.1 |  |  |  | 26.9 |  |  |  | +19 | %
Oilfield Services |  |  | 140.6 |  |  |  | 82.3 |  |  |  | 58.3 |  |  |  | +71 | %
|  | $ | 435.1 |  |  | $ | 322.0 |  |  | $ | 113.1 |  |  |  | +35 | %
Gross margin (%): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  |  | 24.9 |  |  |  | 24.7 |  |  |  | +0.2 | % |  |  |  |
Fuel Specialties |  |  | 31.3 |  |  |  | 32.8 |  |  |  | -1.5 | % |  |  |  |
Oilfield Services |  |  | 34.3 |  |  |  | 33.7 |  |  |  | +0.6 | % |  |  |  |
Aggregate |  |  | 29.9 |  |  |  | 30.1 |  |  |  | -0.2 | % |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Performance Chemicals |  | $ | (44.0 | ) |  | $ | (41.6 | ) |  | $ | (2.4 | ) |  |  | +6 | %
Fuel Specialties |  |  | (76.1 | ) |  |  | (65.2 | ) |  |  | (10.9 | ) |  |  | +17 | %
Oilfield Services |  |  | (119.4 | ) |  |  | (76.2 | ) |  |  | (43.2 | ) |  |  | +57 | %
Corporate costs |  |  | (54.9 | ) |  |  | (42.4 | ) |  |  | (12.5 | ) |  |  | +29 | %
|  | $ | (294.4 | ) |  | $ | (225.4 | ) |  | $ | (69.0 | ) |  |  | +31 | %

26

##### Table of Contents

Performance Chemicals

Net sales: the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

|  | Nine months ended September 30, 2022 |
Change (%) |  | Americas |  |  | EMEA |  |  | ASPAC |  |  | Total |
Volume |  |  | +29 |  |  |  | -10 |  |  |  | +4 |  |  |  | +5 |
Price and product mix |  |  | +26 |  |  |  | +35 |  |  |  | +20 |  |  |  | +31 |
Exchange rates |  |  | — |  |  |  | -13 |  |  |  | -7 |  |  |  | -8 |
|  |  | +55 |  |  |  | +12 |  |  |  | +17 |  |  |  | +28 |

Higher sales volumes for the Americas and ASPAC were primarily driven by increased demand for our personal care products. Lower sales volumes for EMEA were due to reductions in demand for our Home Care products when compared to the strong sales volumes in the prior year. All our regions benefitted from a favorable price and product mix due to increased sales of higher priced products together with the impact of increased raw materials pricing being passed on through higher selling prices. EMEA and ASPAC were adversely impacted by exchange rate movements year over year, due to a weakening of the British pound sterling and the European Union euro against the U.S. dollar.

Gross margin: the year over year increase of 0.2 percentage points was primarily due to a favorable sales mix from increased sales of higher margin products.

Operating expenses: the year over year increase of $2.4 million was due to higher selling expenses to support our increased sales, higher research and development costs and higher personnel-related expenses, including higher share-based compensation accruals and higher performance-related remuneration accruals; partly offset by lower provisions for doubtful debts.

Fuel Specialties

Net sales: the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

|  | Nine months ended September 30, 2022 |
Change (%) |  | Americas |  |  | EMEA |  |  | ASPAC |  |  | AvGas |  |  | Total |
Volume |  |  | +16 |  |  |  | -5 |  |  |  | +16 |  |  |  | +16 |  |  |  | +7 |
Price and product mix |  |  | +32 |  |  |  | +32 |  |  |  | +16 |  |  |  | -19 |  |  |  | +26 |
Exchange rates |  |  | — |  |  |  | -17 |  |  |  | -4 |  |  |  | — |  |  |  | -8 |
|  |  | +48 |  |  |  | +10 |  |  |  | +28 |  |  |  | -3 |  |  |  | +25 |

The Americas and ASPAC sales volumes have increased year over year as the global demand for refined fuel products has increased. EMEA sales volumes were lower year over year due to the timing of demand from customers. Price and product mix was favorable in all our regions due to increased sales of higher margin products and the impact of increased raw materials pricing being passed on through higher selling prices. AvGas volumes were higher than the prior year due to variations in the demand from customers, being offset by an adverse price and product mix with a higher proportion of sales being made to lower margin customers. EMEA and ASPAC were adversely impacted by exchange rate movements year over year, due to a weakening of the British pound sterling and the European Union euro against the U.S. dollar.

27

##### Table of Contents

Gross margin: the year over year decrease of 1.5 percentage points was due to the impact of the time lag for passing higher raw material costs through to selling prices, together with higher manufacturing costs linked to increased energy prices.

Operating expenses: the year over year increase of $10.9 million was due to higher selling expenses driven by increased sales volumes, including higher provisions for doubtful debts, together with higher research and development costs and higher personnel-related expenses, including higher share-based compensation accruals and higher performance-related remuneration accruals.

Oilfield Services

Net sales: have increased year over year by $165.8 million, or 68 percent, with the majority of our customer activity being concentrated in the Americas region. Customer demand has increased each quarter in 2022, which we believe represents a positive sign for further sales growth for the remainder of 2022 and into 2023.

Gross margin: the year over year increase of 0.6 percentage points was due to a favorable sales mix, while management continue to maintain prices in a competitive market.

Operating expenses: the year over year increase of $43.2 million was driven by higher customer service costs which are necessary to support the increase in demand, together with higher personnel-related expenses, including higher share-based compensation accruals and higher performance-related remuneration accruals, and increased provisions for doubtful debts.

Other Income Statement Captions

Corporate costs: the year over year increase of $12.5 million was driven by higher personnel-related expenses, including higher share-based compensation accruals and higher performance-related remuneration accruals, together with increased maintenance expenditure for our information technology infrastructure.

Other net income/(expense): for the first nine months of 2022 and 2021, included the following:

(in millions) |  | 2022 |  |  | 2021 |  |  | Change |
Net pension credit |  | $ | 3.7 |  |  | $ | 3.9 |  |  | $ | (0.2 | )
Profit on disposal of assets |  |  | — |  |  |  | 0.2 |  |  |  | (0.2 | )
Foreign exchange gains/(losses) on translation |  |  | (10.4 | ) |  |  | 1.2 |  |  |  | (11.6 | )
Foreign currency forward contracts gains/(losses) |  |  | 6.5 |  |  |  | 0.9 |  |  |  | 5.6 |
|  | $ | (0.2 | ) |  | $ | 6.2 |  |  | $ | (6.4 | )

Interest expense, net: was $1.1 million in the first nine months of 2022 compared to $1.1 million in the first nine months of 2021. Interest expense includes a commitment fee to retain the Company’s revolving credit facility for the term of the agreement.

28

##### Table of Contents

Income taxes: the effective tax rate was 22.9% and 32.0% in the first nine months of 2022 and 2021, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 22.4% in the first nine months of 2022 compared with 23.3% in the first nine months of 2021. The 0.9% percentage point decrease in the adjusted effective rate was primarily due to the fact that a lower proportion of the Company’s profits are being generated in higher tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company’s operations and for planning and forecasting in subsequent periods.

The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:

|  | Nine months ended September 30 |
(in millions) |  | 2022 |  |  | 2021 |
Income before income taxes |  | $ | 139.4 |  |  | $ | 101.7 |
Indemnification asset regarding tax audit |  |  | 0.4 |  |  |  | 0.1 |
Adjustment for stock compensation |  |  | 4.7 |  |  |  | 4.2 |
Acquisition costs |  |  | — |  |  |  | 0.8 |
Legacy cost of closed operations |  |  | 2.6 |  |  |  | 2.9 |
|  | $ | 147.1 |  |  | $ | 109.7 |
Income taxes |  | $ | 31.9 |  |  | $ | 32.5 |
Tax on stock compensation |  |  | 0.5 |  |  |  | 0.3 |
Adjustment of income tax provision |  |  | — |  |  |  | (0.4 | )
Tax on acquisition costs |  |  | — |  |  |  | 0.2 |
Tax on legacy cost of closed operations |  |  | 0.5 |  |  |  | 0.6 |
Tax on foreign exchange on distribution |  |  | — |  |  |  | (0.2 | )
Change in UK statutory tax rate |  |  | — |  |  |  | (7.4 | )
Adjusted income taxes |  | $ | 32.9 |  |  | $ | 25.6 |
GAAP effective tax rate |  |  | 22.9 | % |  |  | 32.0 | %
Adjusted effective tax rate |  |  | 22.4 | % |  |  | 23.3 | %

29

##### Table of Contents

LIQUIDITY AND FINANCIAL CONDITION

Working Capital

In the first nine months of 2022 our working capital increased by $73.5 million, while our adjusted working capital increased by $119.3 million. The difference is primarily due to the exclusion of the decrease in our cash and cash equivalents and the exclusion of movements for income taxes prepaid and due within one year.

The Company believes that adjusted working capital, a non-GAAP financial measure, (defined by the Company as trade and other accounts receivable, inventories, prepaid expenses, accounts payable and accrued liabilities rather than total current assets less total current liabilities) provides useful information to investors in evaluating the Company’s underlying performance and identifying operating trends. Management uses this non-GAAP financial measure internally to allocate resources and evaluate the performance of the Company’s operations. Items excluded from working capital in the adjusted working capital calculation are listed in the table below and represent factors which do not fluctuate in line with the day to day working capital needs of the business.

(in millions) |  | September 30, 2022 |  |  | December 31, 2021 |
Total current assets |  | $ | 846.4 |  |  | $ | 728.1 |
Total current liabilities |  |  | (381.4 | ) |  |  | (336.6 | )
Working capital |  |  | 465.0 |  |  |  | 391.5 |
Less cash and cash equivalents |  |  | (100.5 | ) |  |  | (141.8 | )
Less prepaid income taxes |  |  | (13.8 | ) |  |  | (5.8 | )
Less other current assets |  |  | (0.4 | ) |  |  | (0.4 | )
Add back current portion of accrued income taxes |  |  | 14.7 |  |  |  | 3.7 |
Add back finance leases |  |  | — |  |  |  | 0.1 |
Add back current portion of plant closure provisions |  |  | 5.6 |  |  |  | 5.2 |
Add back current portion of operating lease liabilities |  |  | 13.6 |  |  |  | 12.4 |
Adjusted working capital |  | $ | 384.2 |  |  | $ | 264.9 |

We had a $58.0 million increase in trade and other accounts receivable driven by increased trading activity across all our reporting segments. Days’ sales outstanding decreased in our Performance Chemicals segment from 64 days to 57 days; increased from 53 days to 58 days in our Fuel Specialties segment; and increased from 52 days to 57 days in our Oilfield Services segment.

We had a $104.2 million increase in inventories, net of a $0.1 million increase in allowances, in anticipation of further increases in demand in 2022, while managing the risk of further supply chain disruption for certain key raw materials, especially in our Fuel Specialties segment. Days’ sales in inventory increased in our Performance Chemicals segment from 59 days to 76 days; increased from 108 days to 151 days in our Fuel Specialties segment; and decreased from 76 days to 58 days in our Oilfield Services segment.

Prepaid expenses decreased $10.6 million, from $18.0 million to $7.4 million due to the normal expensing of prepaid invoices.

We had a $32.3 million increase in accounts payable and accrued liabilities, which was dependent on the timing of payments for each of our reporting segments. Creditor days (including goods received not invoiced) decreased in our Performance Chemicals segment from 47 days to 44 days; decreased from 50 days to 46 days in our Fuel Specialties segment; and increased from 48 days to 52 days in our Oilfield Services segment.

30

##### Table of Contents

Operating Cash Flows

We generated cash from operating activities of $3.3 million in the first nine months of 2022 compared to cash generated of $24.4 million in the first nine months of 2021. The reduction in cash generated from operating activities was principally related to the increase in working capital required to support the growth in sales and secure the supply of raw materials.

Cash

At September 30, 2022 and December 31, 2021, we had cash and cash equivalents of $100.5 million and $141.8 million, respectively, of which $42.9 million and $55.1 million, respectively, were held by non-U.S. subsidiaries principally in the United Kingdom.

The decrease in cash and cash equivalents of $41.3 million for the first nine months of 2022 was driven by our increased working capital levels to support sales growth, together with our continued investments in capital projects, share repurchases and the payment of our semi-annual dividend.

Debt

At September 30, 2022, we had no debt outstanding under the revolving credit facility and $0.0 million of obligations under finance leases relating to certain fixed assets within our Oilfield Services segment.

At December 31, 2021, we had no debt outstanding under the revolving credit facility and $0.1 million of obligations under finance leases relating to certain fixed assets within our Fuel Specialties and Oilfield Services segments.

31

##### Table of Contents

Item 3 Quantitative and Qualitative Disclosures about Market Risk

The Company uses floating rate debt to finance its global operations. The Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations, and market risk related to changes in interest rates and foreign currency exchange rates. The political and economic risks are mitigated by the stability of the major countries in which the Company’s largest operations are located. Credit limits, ongoing credit evaluation and account monitoring procedures are used to minimize bad debt risk. Collateral is not generally required.

From time to time, the Company uses derivatives, including interest rate swaps, commodity swaps and foreign currency forward exchange contracts, in the normal course of business to manage market risks. The derivatives used in hedging activities are considered risk management tools and are not used for trading purposes. In addition, the Company enters into derivative instruments with a diversified group of major financial institutions in order to manage the exposure to non-performance of such instruments. The Company’s objective in managing the exposure to changes in interest rates is to limit the impact of such changes on earnings and cash flows and to lower overall borrowing costs. The Company’s objective in managing the exposure to changes in foreign currency exchange rates is to reduce volatility on earnings and cash flows associated with such changes.

The Company offers fixed prices for some long-term sales contracts. As manufacturing and raw material costs are subject to variability the Company, from time to time, uses commodity swaps to hedge the cost of some raw materials thus reducing volatility on earnings and cash flows. The derivatives are considered risk management tools and are not used for trading purposes. The Company’s objective is to manage its exposure to fluctuating costs of raw materials.

The Company’s exposure to market risk has been discussed in the Company’s 2021 Annual Report on Form 10-K and there have been no significant changes since that time.

32

##### Table of Contents

Item 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation carried out as of the end of the period covered by this report, under the supervision and with the participation of our management, our Chief Executive Officer and our Chief Financial Officer concluded that the Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) were effective as of September 30, 2022, to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

The Company is continuously seeking to improve the efficiency and effectiveness of its operations and of its internal control over financial reporting. This is intended to result in refinements to processes throughout the Company.

There were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

33

##### Table of Contents

PART II OTHER INFORMATION

Item 1 Legal Proceedings

Legal matters

While we are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, employee and product liability claims, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party, or of which any of their property is subject. It is possible, however, that an adverse resolution of an unexpectedly large number of such individual claims or proceedings could, in the aggregate, have a material adverse effect on results of operations for a particular year or quarter.

Item 1A Risk Factors

Information regarding risk factors that could have a material impact on our results of operations or financial condition are described under “Risk Factors” in Item 1A of Part I of our 2021 Form 10-K and in Item 1A of Part II of our Form 10-Q for the quarter ended March 31, 2022. In management’s view, there have been no material changes in the risk factors facing the Company as disclosed in those SEC filings.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

There have been no unregistered sales of equity securities.

During the quarter ended September 30, 2022, the Company purchased its common stock as part of a recently announced share repurchase program.

The following table provides information about our repurchases of equity securities in the period.

Issuer Purchases of Equity Securities

Period |  | Total number of shares purchased |  |  | Average price paid per share |  |  | Total number of shares purchased as part of publicly announced plans or programs1 |  |  | Approximate dollar value of shares that may yet be purchased under the plans or programs |
July 1, 2022 through July 31, 2022 |  |  | 7,500 |  |  |  | 91.93 |  |  |  | 7,500 |  |  | $ | 46.6 million |
August 1, 2022 through August 31, 2022 |  |  | 2,500 |  |  |  | 95.91 |  |  |  | 2,500 |  |  | $ | 46.4 million |
September 1, 2022 through September 30, 2022 |  |  | 15,000 |  |  |  | 90.52 |  |  |  | 15,000 |  |  | $ | 45.0 million |
Total |  |  | 25,000 |  |  |  | 91.48 |  |  |  | 25,000 |  |  | $ | 45.0 million |

1 | On February 15, 2022 the Company announced a repurchase plan for up to $50 million of the Company’s common stock over a three-year period commencing on February 16, 2022.

34

##### Table of Contents

Item 3 Defaults Upon Senior Securities

None.

Item 4 Mine Safety Disclosures

Not applicable.

Item 5 Other Information

None.

Item 6 Exhibits

31.1 |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 |  | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 |  | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 |  | XBRL Instance Document and Related Item - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
104 |  | Cover Page Interactive Data File – The cover page XBRL tags are embedded within the inline XBRL document.

35

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  |  |  |  |  | INNOSPEC INC.
|  |  |  |  |  | Registrant
Date: November 9, 2022 |  |  |  | By |  | /s/ PATRICK S. WILLIAMS
|  |  |  |  |  | Patrick S. Williams
|  |  |  |  |  | President and Chief Executive Officer
Date: November 9, 2022 |  |  |  | By |  | /s/ IAN P. CLEMINSON
|  |  |  |  |  | Ian P. Cleminson
|  |  |  |  |  | Executive Vice President and Chief Financial Officer