INNOSPEC INC. — Interim / Quarterly Report 2020

Aug 5, 2020

Table of Contents

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 June 30, 2020

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	(I.R.S. Employer
incorporation or organization)	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 o-f common stock, as of the latest practicable date.

Class	Outstanding as of July 31, 2020
Common Stock, par value $0.01	24,567,952

Table of Contents

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 Six Months Ended June 30, 2020	22
	Critical Accounting Estimates	22
	Results of Operations	23
	Liquidity and Financial Condition	32
Item 3	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4	Controls and Procedures	35
PART II	OTHER INFORMATION	36
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3	Defaults Upon Senior Securities	37
Item 4	Mine Safety Disclosures	37
Item 5	Other Information	37
Item 6	Exhibits	37
SIGNATURES		38

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,” “believes,” “feel,” “plan,” “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 and the manner in which the pandemic 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, 2019, Innospec’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, this Form 10-Q 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 Consolidated Financial Statements

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except share and per share data)	Three Months Ended June 30 — 2020		2019	2020			2019
Net sales	$ 244.9		$ 362.4	$	617.2		$ 750.7
Cost of goods sold	( 185.8	)	( 251.3	)	( 444.2	)	( 521.8	)
Gross profit	59.1		111.1		173.0		228.9
Operating expenses:
Selling, general and administrative	( 63.5	)	( 71.2	)	( 127.9	)	( 143.7	)
Research and development	( 8.1	)	( 8.2	)	( 16.7	)	( 17.3	)
Restructuring charge	( 21.1	)	0.0		( 21.1	)	0.0
Impairment of intangible assets	( 19.8	)	0.0		( 19.8	)	0.0
Total operating expenses	( 112.5	)	( 79.4	)	( 185.5	)	( 161.0	)
Operating (loss)/income	( 53.4	)	31.7		( 12.5	)	67.9
Other income, net	0.1		0.0		4.0		4.1
Interest expense, net	( 0.5	)	( 1.2	)	( 1.1	)	( 2.7	)
(Loss)/income before income tax expense	( 53.8	)	30.5		( 9.6	)	69.3
Income tax credit/(expense)	14.1		( 8.2	)	3.0		( 18.3	)
Net (loss)/income	$ ( 39.7	)	$ 22.3	$	( 6.6	)	$ 51.0
Earnings per share:
Basic	$ ( 1.62	)	$ 0.91	$	( 0.27	)	$ 2.08
Diluted	$ ( 1.62	)	$ 0.90	$	( 0.27	)	$ 2.07
Weighted average shares outstanding (in thousands):
Basic	24,564		24,483		24,547		24,468
Diluted	24,564		24,678		24,547		24,671

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)

(in millions)	Three Months Ended June 30 — 2020		2019	2020			2019
Net (loss)/income	$ ( 39.7	)	$ 22.3	$	( 6.6	)	$ 51.0
Other comprehensive income/(loss):
Changes in cumulative translation adjustment, net of tax of $( 0.1 ) million, $ 0.3 million, $ 1.5 million and $ 0.1 million respectively	5.5		3.4		( 2.4	)	( 1.6	)
Changes in unrealized losses on derivative instruments, net of tax of $ 0.0 million, $ 0.1 million, $ 0.0 million and $ 0.2 million respectively	0.0		( 0.7	)	0.0		( 1.2	)
Amortization of prior service credit, net of tax of $ 0.0 million, $ 0.1 million, $ 0.1 million and $ 0.1 million respectively	( 0.2	)	( 0.3	)	( 0.4	)	( 0.5	)
Amortization of actuarial net losses, net of tax of $ 0.0 million, $ 0.0 million, $( 0.1 ) million and $ 0.0 million respectively	0.6		0.0		0.8		0.0
Total other comprehensive income/(loss)	5.9		2.4		( 2.0	)	( 3.3	)
Total comprehensive (loss)/income	$ ( 33.8	)	$ 24.7	$	( 8.6	)	$ 47.7

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

(in millions, except share and per share data)	June 30, 2020	December 31, 2019
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$ 58.2	$ 75.7
Trade and other accounts receivable (less allowances of $ 4.3 million and $ 3.8 million respectively)	213.4	292.0
Inventories (less allowances of $ 18.0 million and $ 14.5 million respectively):
Finished goods	175.4	173.9
Raw materials	68.2	70.7
Total inventories	243.6	244.6
Prepaid expenses	9.7	14.7
Prepaid income taxes	8.0	2.5
Other current assets	0.0	0.8
Total current assets	532.9	630.3
Net property, plant and equipment	198.9	198.7
Operating lease right-of-use assets	29.5	32.4
Goodwill	363.3	363.0
Other intangible assets	82.3	113.5
Deferred tax assets	8.9	9.1
Pension asset	118.6	115.9
Other non-current assets	4.6	5.9
Total assets	$ 1,339.0	$ 1,468.8

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)

(in millions, except share and per share data)	June 30, 2020
	(Unaudited)
Liabilities and Equity
Current liabilities:
Accounts payable	$ 74.1	$	122.0
Accrued liabilities	118.8		154.0
Current portion of finance leases	0.6		1.0
Current portion of plant closure provisions	6.3		5.6
Current portion of accrued income taxes	8.4		10.3
Current portion of operating lease liabilities	11.0		10.6
Total current liabilities	219.2		303.5
Long-term debt	38.8		58.6
Finance leases, net of current portion	0.2		0.5
Plant closure provisions, net of current portion	51.6		43.7
Accrued income taxes, net of current portion	32.4		36.2
Unrecognized tax benefits	15.2		16.4
Operating lease liabilities, net of current portion	18.6		21.9
Deferred tax liabilities	44.0		49.6
Pension liabilities and post-employment benefits	17.9		17.8
Other non-current liabilities	1.4		1.7
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	333.0		330.4
Treasury stock ( 4,985,884 and 5,047,278 shares at cost, respectively)	( 93.8	)	( 93.3	)
Retained earnings	736.1		755.5
Accumulated other comprehensive loss	( 76.4	)	( 74.4	)
Total Innospec stockholders’ equity	899.2		918.5
Non-controlling interest	0.5		0.4
Total equity	899.7		918.9
Total liabilities and equity	$ 1,339.0	$	1,468.8

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)

(in millions)	Six Months Ended June 30 — 2020		2019
Cash Flows from Operating Activities
Net (loss)/income	$ ( 6.6	)	$ 51.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	24.2		23.8
Impairment of intangible assets	19.8		0.0
Impairment of tangible assets	2.0		0.0
Deferred tax expense	( 5.6	)	0.1
Cash contributions to defined benefit pension plans	0.0		( 0.5	)
Non-cash movements on defined benefit pension plans	( 2.2	)	( 3.1	)
Stock option compensation	2.8		3.2
Changes in assets and liabilities, net of effects of acquired and divested companies:
Trade and other accounts receivable	76.2		( 0.7	)
Inventories	( 2.1	)	( 0.1	)
Prepaid expenses	3.9		( 0.2	)
Accounts payable and accrued liabilities	( 79.6	)	( 10.4	)
Accrued income taxes	( 9.5	)	( 0.6	)
Plant closure provisions	8.5		0.0
Unrecognized tax benefits	( 1.3	)	0.7
Other assets and liabilities	1.7		0.0
Net cash provided by operating activities	32.2		63.2
Cash Flows from Investing Activities
Capital expenditures	( 14.6	)	( 16.2	)
Internally developed software	0.0		( 0.7	)
Net cash used in investing activities	( 14.6	)	( 16.9	)
Cash Flows from Financing Activities
Non-controlling interest	0.1		0.0
Proceeds from revolving credit facility	15.0		23.0
Repayments of revolving credit facility	( 35.0	)	( 73.0	)
Receipt of short-term borrowing	0.0		0.7
Repayments of finance leases	( 0.6	)	( 0.9	)
Dividend paid	( 12.8	)	( 12.2	)
Issue of treasury stock	0.8		1.3
Repurchase of common stock	( 2.1	)	( 2.1	)
Net cash used in financing activities	( 34.6	)	( 63.2	)
Effect of foreign currency exchange rate changes on cash	( 0.5	)	( 0.1	)
Net change in cash and cash equivalents	( 17.5	)	( 17.0	)
Cash and cash equivalents at beginning of period	75.7		123.1
Cash and cash equivalents at end of period	$ 58.2		$ 106.1

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) — Balance at December 31, 2019	Common Stock — $ 0.3	Additional Paid-In Capital — $ 330.4	$	( 93.3	)	Retained Earnings — $ 755.5	$ ( 74.4	)	Non- Controlling Interest — $ 0.4	Total Equity — $ 918.9
Net income						( 6.6	)			( 6.6	)
Dividend paid ($ 0.52 per share)						( 12.8	)			( 12.8	)
Changes in cumulative translation adjustment, net of tax							( 2.4	)		( 2.4	)
Share of net income									0.1	0.1
Treasury stock reissued		( 0.2	)	1.6						1.4
Treasury stock repurchased				( 2.1	)					( 2.1	)
Stock option compensation		2.8								2.8
Amortization of prior service credit, net of tax							( 0.4	)		( 0.4	)
Amortization of actuarial net losses, net of tax							0.8			0.8
Balance at June 30, 2020	$ 0.3	$ 333.0	$	( 93.8	)	$ 736.1	$ ( 76.4	)	$ 0.5	$ 899.7

(in millions) — Balance at December 31, 2018	Common Stock — $ 0.3	Additional Paid-In Capital — $ 324.9	$	( 92.8	)	Retained Earnings — $ 668.3	$ ( 75.7	)	Non- Controlling Interest — $ 0.5	$	825.5
Net income						51.0					51.0
Dividend paid ($ 0.52 per share)						( 12.2	)				( 12.2	)
Changes in cumulative translation adjustment, net of tax							( 1.6	)			( 1.6	)
Changes in unrealized gains on derivative instruments, net of tax							( 1.2	)			( 1.2	)
Share of net income									( 0.1	)	( 0.1	)
Treasury stock reissued		( 0.4	)	1.5							1.1
Treasury stock repurchased				( 2.1	)						( 2.1	)
Stock option compensation		3.2									3.2
Amortization of prior service credit, net of tax							( 0.5	)			( 0.5	)
Balance at June 30, 2019	$ 0.3	$ 327.7	$	( 93.4	)	$ 707.1	$ ( 79.0	)	$ 0.4	$	863.1

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			Non- Controlling Interest	Total Equity
Balance at March 31, 2020	$ 0.3	$ 331.2	$ ( 94.0	)	$ 788.6	$ ( 82.3	)	$ 0.5	$ 944.3
Net income					( 39.7	)			( 39.7	)
Dividend paid ($ 0.52 per share)					( 12.8	)			( 12.8	)
Changes in cumulative translation adjustment, net of tax						5.5			5.5
Treasury stock reissued		0.2	0.2						0.4
Stock option compensation		1.6							1.6
Amortization of prior service credit, net of tax						( 0.2	)		( 0.2	)
Amortization of actuarial net losses, net of tax						0.6			0.6
Balance at June 30, 2020	$ 0.3	$ 333.0	$ ( 93.8	)	$ 736.1	$ ( 76.4	)	$ 0.5	$ 899.7

(in millions) — Balance at March 31, 2019	Common Stock — $ 0.3	Additional Paid-In Capital — $ 326.0	Treasury Stock — $ ( 93.5	)	Retained Earnings — $ 697.0	$ ( 81.4	)	Non- Controlling Interest — $ 0.5	$	848.9
Net income					22.3					22.3
Dividend paid ($ 0.52 per share)					( 12.2	)				( 12.2	)
Changes in cumulative translation adjustment, net of tax						3.4				3.4
Changes in unrealized gains on derivative instruments, net of tax						( 0.7	)			( 0.7	)
Share of net income								( 0.1	)	( 0.1	)
Treasury stock reissued		0.1	0.3							0.4
Treasury stock repurchased			( 0.2	)						( 0.2	)
Stock option compensation		1.6								1.6
Amortization of prior service credit, net of tax						( 0.3	)			( 0.3	)
Balance at June 30, 2019	$ 0.3	$ 327.7	$ ( 93.4	)	$ 707.1	$ ( 79.0	)	$ 0.4	$	863.1

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, 2019 filed on February 19, 2020 (the “2019 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.

Credit losses

With an effective date of January 1, 2020, we have applied Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (ASC Topic 326). This replaces the incurred loss impairment methodology under previous GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The standard was adopted using prospective application and principally impacts the allowance for trade and other accounts receivables. Upon adoption, there was no adjustment made to opening retained earnings as at January 1, 2020. As a result of implementing the standard, the Company did not recognize any material change to the allowance within trade and other accounts receivable as at January 1, 2020. Trade and other accounts receivable are shown net of a $ 4.3 million allowance at June 30, 2020. The allowance remains immaterial to the financial statements.

The Company is exposed to credit losses primarily through sales of products. The Company’s expected loss allowance methodology for trade and other accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers’ receivables. Due to the short-term nature of such receivables, the estimate of accounts receivable amounts that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, a further allowance is included to account for the Company’s historic track record of credit losses, for balances which are not aged sufficiently to be considered under the aging based approach.

9

Table of Contents

The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted.

NOTE 2 – SEGMENT REPORTING

The Company reports its financial performance based on the following four reportable segments: Fuel Specialties, Performance Chemicals, Oilfield Services and Octane Additives.

The Fuel Specialties, Performance Chemicals and Oilfield Services segments operate in markets where we actively seek growth opportunities although their ultimate customers are different. The Company expects that the Octane Additives segment will not make any further sales and will cease to be a reporting segment from January 1, 2021, see Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information.

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:

(in millions)	Three Months Ended June 30 — 2020		2019	2020			2019
Net Sales:
Refinery and Performance	$ 74.9		$ 95.2	$	183.5		$ 212.5
Other	32.5		38.1		70.9		76.8
Fuel Specialties	107.4		133.3		254.4		289.3
Personal Care	49.8		54.9		112.8		115.9
Home Care	21.3		23.1		42.9		50.1
Other	24.6		26.7		53.1		56.8
Performance Chemicals	95.7		104.7		208.8		222.8
Oilfield Services	41.8		122.5		154.0		236.7
Octane Additives	0.0		1.9		0.0		1.9
	$ 244.9		$ 362.4	$ 617.2			$ 750.7
Gross profit/(loss):
Fuel Specialties	$ 25.4		$ 44.7	$	76.6		$ 100.4
Performance Chemicals	24.9		24.0		52.5		50.6
Oilfield Services	9.9		41.5		46.1		79.2
Octane Additives	( 1.1	)	0.9		( 2.2	)	( 1.3	)
	$ 59.1		$ 111.1	$ 173.0			$ 228.9
Operating income/(loss):
Fuel Specialties	$ 4.7		$ 24.1	$	36.8		$ 57.0
Performance Chemicals	12.2		11.0		27.8		24.5
Oilfield Services	( 12.4	)	10.1		( 5.2	)	17.9
Octane Additives	( 1.6	)	0.1		( 2.8	)	( 2.7	)
Corporate costs	( 15.4	)	( 13.6	)	( 28.2	)	( 28.8	)
Restructuring charge	( 21.1	)	0.0		( 21.1	)	0.0
Impairment of intangible assets	( 19.8	)	0.0		( 19.8	)	0.0
Total operating (loss)/ income	$ ( 53.4	)	$ 31.7	$	( 12.5	)	$ 67.9

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 June 30 — 2020		2019	Six Months Ended June 30 — 2020		2019
Numerator (in millions):
Net (loss)/ income available to common stockholders	$ ( 39.7	)	$ 22.3	$ ( 6.6	)	$ 51.0
Denominator (in thousands):
Weighted average common shares outstanding	24,564		24,483	24,547		24,468
Dilutive effect of stock options and awards	0		195	0		203
Denominator for diluted earnings per share	24,564		24,678	24,547		24,671
Net (loss)/ income per share, basic:	$ ( 1.62	)	$ 0.91	$ ( 0.27	)	$ 2.08
Net (loss)/ income per share, diluted:	$ ( 1.62	)	$ 0.90	$ ( 0.27	)	$ 2.07

In the three and six months ended June 30, 2020, the average number of anti-dilutive options excluded from the calculation of diluted earnings per share were 0 and 0 , respectively (three and six months ended June 30, 2019 – 12,539 and 212,095 , respectively).

NOTE 4 – RESTRUCTURING

During the quarter ended June 30, 2020, the Company has recorded provisions of $ 21.1 million for the restructuring of its Octane Additives segment in line with the end of the manufacturing and sale of tetra ethyl lead (“TEL”) for use in motor gasoline. The Company expects that the Octane Additives segment will not make any further sales and will cease to be a reporting segment from January 1, 2021 . Production of TEL will continue for sales to the aviation market, as reported within our Fuel Specialties segment.

The provisions comprise the future committed costs of environmental monitoring of $ 2.0 million, remediation of facilities of $ 7.5 million, provision for a loss making contract of $ 7.2 million, impairment of tangible assets of $ 2.0 million and costs of redundancy due to the down-sizing of the TEL operations of $ 2.4 million.

11

Table of Contents

NOTE 5 – GOODWILL

The following table summarizes the goodwill movements:

(in millions)	Gross Cost	Accumulated Impairment Losses		Net Book Amount
Opening balance at January 1	$ 599.5	$ ( 236.5	)	$ 363.0
Exchange effect	0.3	0.0		0.3
Closing balance at June 30	$ 599.8	$ ( 236.5	)	$ 363.3

NOTE 6 – OTHER INTANGIBLE ASSETS

The following table summarizes the other intangible assets movements:

(in millions)	2020
Gross cost at January 1	$ 294.8
Exchange effect	0.1
Gross cost at June 30	294.9
Accumulated amortization at January 1	( 181.3	)
Amortization expense	( 11.5	)
Impairment	( 19.8	)
Exchange effect	0.0
Accumulated amortization at June 30	( 212.6	)
Net book amount at June 30	$ 82.3

During the quarter ended June 30, 2020, the Company impaired the intangible assets arising from the acquisition of Strata Control Services Inc., which forms part of our Oilfield Services segment. The impairment review was triggered by the reduction in demand for drilling related products. A discounted cash flow analysis was performed to determine the fair value of the assets, linked to the down turn in the results of that segment. The impaired assets relate to technology ($ 10.0 million) and customer relationships ($ 9.8 million).

The amortization expense for the six months ended June 30, 2020 was $ 11.5 million (six months ended June 30, 2019 – $ 11.5 million).

The net book amount by category of other intangible assets is shown in the following table:

(in millions)	June 30 2020	December 31 2019
Product rights	$ 8.2	$ 10.1
Brand names	2.6	2.9
Technology	20.9	32.6
Customer relationships	45.8	60.8
Internally developed software	4.8	7.1
	$ 82.3	$ 113.5

12

Table of Contents

NOTE 7 – PENSION AND POST EMPLOYMENT BENEFITS

The Company maintains a defined benefit pension plan (the “Plan”) covering a number of its current and former employees in the United Kingdom, although it does also have other much smaller pension arrangements in the U.S. and overseas. The Plan is closed to future service accrual but has a large number of deferred and current pensioners.

The net service cost for the three and six months ended June 30, 2020 was $ 0.3 million and $ 0.6 million respectively (three and six months ended June 30, 2019 – $ 0.3 million and $ 0.5 million respectively) and has been recognized in selling, general and administrative expenses within corporate costs. The following table shows the income statement effect recognized within other income, net:

(in millions)	Three Months Ended June 30 — 2020		2019		Six Months Ended June 30 — 2020		2019
Plan net pension credit/(charge):
Interest cost on projected benefit obligation	$ ( 2.7	)	$ ( 3.9	)	$ ( 5.5	)	$ ( 7.8	)
Expected return on plan assets	4.3		5.5		8.8		11.1
Amortization of prior service credit	0.2		0.3		0.4		0.5
Amortization of actuarial net losses	( 0.2	)	0.0		( 0.4	)	0.0
	$ 1.6		$ 1.9		$ 3.3		$ 3.8

The amortization of prior service credit and actuarial net losses is a reclassification out of accumulated other comprehensive loss into other income and expense.

The Company also maintains an unfunded defined benefit pension plan covering a number of its current and former employees in Germany (the “German plan”) within our Fuel Specialties segment. The German plan is closed to new entrants and has no assets. The net service cost for the German plan for the three and six months ended June 30, 2020 was $ 0.1 million and $ 0.1 million respectively (three and six months ended June 30, 2019 – $ 0.1 million and $ 0.1 million respectively) and has been recognized in selling, general and administrative expenses. The following table shows the income statement effect recognized within other income and expense:

(in millions)	Three Months Ended June 30 — 2020		2019	Six Months Ended June 30 — 2020		2019
Plan net pension charge:
Interest cost on projected benefit obligation	$ 0.0		$ 0.0	$ ( 0.1	)	$ ( 0.1	)
Amortization of actuarial net losses	( 0.3	)	0.0	( 0.4	)	( 0.1	)
	$ ( 0.3	)	$ 0.0	$ ( 0.5	)	$ ( 0.2	)

As at June 30, 2020, our Performance Chemicals segment has obligations for post-employment benefits in its European businesses with a liability of $ 4.6 million (December 31, 2019 – $ 4.5 million).

13

Table of Contents

NOTE 8 – INCOME TAXES

A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows:

(in millions) — Opening balance at January 1	Unrecognized Tax Benefits — $ 14.4	$	2.0	Total — $ 16.4
Net change for tax positions of prior periods	( 1.2	)	0.0	( 1.2	)
Closing balance at June 30	13.2		2.0	15.2
Current	0.0		0.0	0.0
Non-current	$ 13.2	$	2.0	$ 15.2

All of the $ 15.2 million of unrecognized tax benefits, interest and penalties would impact our effective tax rate if recognized.

As previously disclosed, 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 $ 3.1 million may arise as a consequence of the tax audit. This includes a reduction in interest accrued of $ 0.2 million recorded in the six months to June 30, 2020. 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.

As previously disclosed, 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, 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 $ 12.1 million may arise in relation to this item. This includes an increase in interest accr u ed of $ 0.4 million in the six months to June 30, 2020 .

In 2015, the Company recorded an unrecognized tax benefit of $ 1.2 million in relation to additional tax that could have arisen if a historical impairment in value of certain of the Company’s non-U.S. subsidiaries was reversed upon challenge by the tax authorities. The Company has released the provision of $ 1.2 million in full, together with accrued interest of $ 0.2 million thereon, in the three months ended June 30, 2020, following a review of the value of the Company’s investments that confirmed the historical impairment in value undertaken in 2005 was appropriate.

The Company and its U.S. subsidiaries remain open to examination by the IRS for years 2016 onwards under the statute of limitations. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including Germany (2015 onwards), Switzerland (2015 onwards), Spain (2016 onwards), France (2017 onwards) and the United Kingdom (2018 onwards).

14

Table of Contents

NOTE 9 – LONG-TERM DEBT

Long-term debt consists of the following:

(in millions) — Revolving credit facility	June 30, 2020 — $ 40.0	$	60.0
Deferred finance costs	( 1.2	)	( 1.4	)
	38.8		58.6
Less current portion	0.0		0.0
	$ 38.8	$	58.6

NOTE 10 – PLANT CLOSURE PROVISIONS

The Company has continuing plans to close some of its manufacturing facilities at sites around the world as and when those operations are expected to be decommissioned. The liability for estimated closure costs of Innospec’s manufacturing facilities includes costs for decontamination and environmental remediation activities (“remediation”).

As a result, the principal site giving rise to remediation liabilities is the manufacturing site at Ellesmere Port in the United Kingdom. There are also remediation liabilities on a much smaller scale in respect of our other manufacturing sites in the U.S. and Europe.

Movements in the provisions are summarized as follows:

(in millions)	2020
Total at January 1	$ 49.3
Charge for the period	9.8
Utilized in the period	( 1.3	)
Exchange effect	0.1
Total at June 30	57.9
Due within one year	( 6.3	)
Due after one year	$ 51.6

The charge for the six months ended June 30, 2020 was $ 9.8 million (six months ended June 30, 2019 – $ 2.1 million). This includes $ 7.5 million of additional provisions as a result of the restructuring activities following the cessation of sales of TEL for use in motor gasoline (see Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information).

Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date.

15

Table of Contents

NOTE 11 – 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:

(in millions)	June 30, 2020 — Carrying Amount	Fair Value	December 31, 2019 — Carrying Amount	Fair Value
Assets
Non-derivatives:
Cash and cash equivalents	$ 58.2	$ 58.2	$ 75.7	$ 75.7
Derivatives (Level 1 measurement):
Other current and non-current assets:
Foreign currency forward exchange contracts	0.0	0.0	0.8	0.8
Liabilities
Non-derivatives:
Long-term debt (including current portion)	$ 38.8	$ 38.8	$ 58.6	$ 58.6
Finance leases (including current portion)	0.8	0.8	1.5	1.5
Derivatives (Level 1 measurement):
Other current and non-current liabilities:
Foreign currency forward exchange contracts	0.6	0.6	0.0	0.0
Non-financial liabilities (Level 3 measurement):
Other current and non-current liabilities:
Stock equivalent units	14.5	14.5	24.6	24.6

The following methods and assumptions were used to estimate the fair values of financial instruments:

Cash and cash equivalents: The carrying amount approximates fair value because of the short-term maturities of such instruments.

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.

Long-term debt and finance leases: Long-term debt comprises the revolving credit facility, which is shown net of deferred finance costs that have been capitalized. Finance leases relate to certain fixed assets in our Fuel Specialties and Oilfield Services segments. The carrying amount of long-term debt and 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.

16

Table of Contents

NOTE 12 – 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 June 30, 2020 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 six months of 2020 was a gain of $ 1.8 million (first six months of 2019: gain of $ 1.0 million).

As at June 30, 2020 and December 31, 2019 the Company did not hold any interest rate swaps. In prior years, the Company entered into interest rate swaps to minimize interest rate exposure related to a portion of its borrowing requirements. These interest rate swaps were designated as hedging instruments, and their impact on accumulated other comprehensive loss for the first six months of 2019 was a loss of $ 1.5 million.

NOTE 13 – COMMITMENTS AND 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 June 30, 2020, such guarantees which are not recognized as liabilities in the condensed consolidated financial statements amounted to $ 4.9 million (December 31, 2019 - $ 4.7 million). The remaining terms of the fixed maturity guarantees vary from 1 month 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 fulfill 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.

17

Table of Contents

NOTE 14 – STOCK-BASED COMPENSATION PLANS

The Company grants stock options and stock equivalent units (“SEUs”) from time to time as a long-term performance incentive. In certain cases the grants are subject to performance conditions such as the Company’s stock price. Where performance conditions apply the Monte Carlo simulation model is used to determine the fair values. Otherwise the Black-Scholes model is used to determine the fair values.

Stock option plans

The following table summarizes the transactions of the Company’s stock option plans for the six months ended June 30, 2020:

Outstanding at December 31, 2019	504,459		Weighted Average Exercise Price — $ 33.05	Weighted Average Grant-Date Fair Value — $ 41.35
Granted - at discount	63,950		$ 1.11	$ 76.80
- at market value	10,419		$ 95.70	$ 18.69
Exercised	( 81,860	)	$ 9.73	$ 52.31
Forfeited	( 13,161	)	$ 22.43	$ 45.20
Outstanding at June 30, 2020	483,807		$ 34.41	$ 43.59

At June 30, 2020, there were 43,638 stock options that were exercisable, of which 8,779 had performance conditions attached.

The stock option compensation cost for the first six months of 2020 was $ 2.8 million (first six months of 2019 – $ 3.2 million). The total intrinsic value of options exercised in the first six months of 2020 was $ 4.6 million (first six months of 2019 – $ 2.7 million).

The total compensation cost related to non-vested stock options not yet recognized at June 30, 2020 was $ 10.2 million and this cost is expected to be recognized over the weighted-average period of 1.93 years.

Stock equivalent units

The following table summarizes the transactions of the Company’s SEUs for the six months ended June 30, 2020:

Outstanding at December 31, 2019	390,816		Weighted Average Exercise Price — $ 3.69	Weighted Average Grant-Date Fair Value — $ 59.91
Granted - at discount	108,607		$ 0.00	$ 76.86
- at market value	3,634		$ 95.70	$ 18.69
Exercised	( 88,557	)	$ 0.86	$ 60.55
Forfeited	( 17,036	)	$ 0.86	$ 65.38
Outstanding at June 30, 2020	397,464		$ 4.27	$ 63.79

18

Table of Contents

At June 30, 2020 there were 57,696 SEUs that are exercisable, of which 51,164 had performance conditions attached.

The charges for SEUs are spread over the life of the award subject to a revaluation to fair value each quarter. The revaluation may result in a charge or a credit to the income statement in the quarter dependent upon our share price and other performance criteria.

The SEU compensation for the first six months of 2020 was a $ 3.0 million credit (first six months of 2019 – $ 11.8 million charge). The total intrinsic value of SEUs exercised in the first six months of 2020 was $ 6.1 million (first six months of 2019 – $ 7.1 million).

The weighted-average remaining vesting period of non-vested SEUs is 2.20 years.

19

Table of Contents

NOTE 15 – RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Reclassifications out of accumulated other comprehensive loss for the first six months of 2020 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 credit	$ ( 0.4	)	See (1) below
Amortization of actuarial net losses	0.8		See (1) below
	0.4		Total before tax
	0.0		Income tax expense
Total reclassifications	$ 0.4		Net of tax

(1) These items are included in other income and expense. See Note 7 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Changes in accumulated other comprehensive loss for the first six months of 2020, net of tax, were:

(in millions) — Balance at December 31, 2019	Defined Benefit Pension Plan Items — $ ( 9.3	)	Cumulative Translation Adjustments — $ ( 65.1	)	Total — $ ( 74.4	)
Other comprehensive income before reclassifications	0.0		( 2.4	)	( 2.4	)
Amounts reclassified from AOCL	0.4		0.0		0.4
Total other comprehensive income	0.4		( 2.4	)	( 2.0	)
Balance at June 30, 2020	$ ( 8.9	)	$ ( 67.5	)	$ ( 76.4	)

20

Table of Contents

NOTE 16 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s disclosures.

NOTE 17 – 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 six months of 2020 the Company purchased product from AdvanSix for $ 0.2 million. As at June 30, 2020, the Company owed $ 0.0 million to AdvanSix.

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 six months of 2020 the Company incurred fees from SGR of $ 0.2 million (first six months of 2019 – $ 0.4 million). As at June 30, 2020, the Company owed $ 0.0 million to SGR (December 31, 2019 – $ 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 six months of 2020 for a value of $ 0.0 million (first six months of 2019 – $ 0.0 million). A tendering process is operated periodically to select the best buyer for the sale of scrap metal by the Company. As at June 30, 2020 EMR owed $ 0.0 million for scrap metal purchased from the Company (December 31, 2019 – $ 0.0 million).

21

Table of Contents

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Six Months Ended June 30, 2020

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 and property, plant and equipment and other intangible assets (net of depreciation and amortization). These policies have been discussed in the Company’s 2019 Form 10-K.

Impact of COVID-19 Pandemic and Current Economic Environment

As anticipated in our Form 10-Q for the quarter ending March 31, 2020, there has been a significant impact in the Company’s results during the second quarter of 2020, due to the COVID-19 pandemic and global economic environment. Fuel Specialties have been impacted by reduced demand stemming from the reduction in freight transport and passenger miles and the widespread grounding of aircraft for the majority of the quarter. We expect demand will start to improve, to the extent global lockdowns are eased and economic activity recovers. Performance Chemicals have experienced little overall impact from the pandemic as increased demand for certain products linked to health, hygiene and cleaning outweighed some lost revenues linked to the short-term shutdown of some of our customers manufacturing facilities. Oilfield Services have been heavily impacted by the reduction in oil exploration and production as the wider industry reacts to the reduction in demand and low oil price. We have taken the measure of reducing headcount within this business and we have also impaired some intangible assets (see Note 6 of the Notes to the Condensed Consolidated Financial Statements for further information). We do not know how long this downturn will last and the rate of recovery will depend heavily on the rate and extent to which the government restrictions on movement continue to be lifted.

Our manufacturing facilities have continued to operate with only some minor interruption, and we expect them to continue to do so. We have implemented flexible working, including working from home for our employees where possible, in line with advice and rules in each of the jurisdictions in which we operate. Raw material sourcing has not been significantly impacted and we do not expect that to change over the remainder of the year. Logistics are operating with some delays but our products are currently being delivered to our customers.

Our financial position remains strong. We have sufficient access to capital if needed, including our $250 million revolving credit facility we entered into in September 2019, and we do not anticipate any issues with meeting the covenants for our debt agreements. Our major capital projects are continuing to progress as planned.

As we operate in the chemical industry, we continue to be focused on protecting the health and safety of our employees and have procedures in place at each of our operating facilities to help ensure their well-being.

We do not know how long the current economic environment will continue and while we have made estimates as to potential impacts on our financial position and operations, the ultimate impact on our business will depend on many factors which are very difficult to predict with certainty and substantially beyond our control.

22

Table of Contents

RESULTS OF OPERATIONS

The Company currently reports its financial performance based on the following four reportable segments: Fuel Specialties, Performance Chemicals, Oilfield Services and Octane Additives. The Company expects that the Octane Additives segment will not make any further sales and will cease to be a reporting segment from January 1, 2021.

The following table provides operating income by reporting segment:

(in millions)	Three Months Ended June 30 — 2020		2019	2020			2019
Net sales:
Fuel Specialties	$ 107.4		$ 133.3	$	254.4		$ 289.3
Performance Chemicals	95.7		104.7		208.8		222.8
Oilfield Services	41.8		122.5		154.0		236.7
Octane Additives	0.0		1.9		0.0		1.9
	$ 244.9		$ 362.4	$	617.2		$ 750.7
Gross profit/(loss):
Fuel Specialties	$ 25.4		$ 44.7	$	76.6		$ 100.4
Performance Chemicals	24.9		24.0		52.5		50.6
Oilfield Services	9.9		41.5		46.1		79.2
Octane Additives	(1.1	)	0.9		(2.2	)	(1.3	)
	$ 59.1		$ 111.1	$	173.0		$ 228.9
Operating income/(loss):
Fuel Specialties	$ 4.7		$ 24.1		36.8		57.0
Performance Chemicals	12.2		11.0		27.8		24.5
Oilfield Services	(12.4	)	10.1		(5.2	)	17.9
Octane Additives	(1.6	)	0.1		(2.8	)	(2.7	)
Corporate costs	(15.4	)	(13.6	)	(28.2	)	(28.8	)
Restructuring charge	(21.1	)	0.0		(21.1	)	0.0
Impairment of intangible assets	(19.8	)	0.0		(19.8	)	0.0
Total operating (loss)/income	$ (53.4	)	$ 31.7	$	(12.5	)	$ 67.9

23

Table of Contents

Three Months Ended June 30, 2020

The following table shows the change in components of operating income by reporting segment for the three months ended June 30, 2020 and the three months ended June 30, 2019:

(in millions, except ratios)	Three Months Ended June 30 — 2020		2019		Change
Net sales:
Fuel Specialties	$ 107.4		$ 133.3		$ (25.9	)	-19 %
Performance Chemicals	95.7		104.7		(9.0	)	-9 %
Oilfield Services	41.8		122.5		(80.7	)	-66 %
Octane Additives	0.0		1.9		(1.9	)	-100 %
	$ 244.9		$ 362.4		$ (117.5	)	-32 %
Gross profit/(loss):
Fuel Specialties	$ 25.4		$ 44.7		$ (19.3	)	-43 %
Performance Chemicals	24.9		24.0		0.9		+4 %
Oilfield Services	9.9		41.5		(31.6	)	-76 %
Octane Additives	(1.1	)	0.9		(2.0	)	-222 %
	$ 59.1		$ 111.1		$ (52.0	)	-47 %
Gross margin (%):
Fuel Specialties	23.6		33.5		-9.9
Performance Chemicals	26.0		22.9		+3.1
Oilfield Services	23.7		33.9		-10.2
Octane Additives	n/a		47.4		n/a
Aggregate	24.1		30.7		-6.6
Operating expenses:
Fuel Specialties	$ (20.7	)	$ (20.6	)	$ (0.1	)	0 %
Performance Chemicals	(12.7	)	(13.0	)	0.3		-2 %
Oilfield Services	(22.3	)	(31.4	)	9.1		-29 %
Octane Additives	(0.5	)	(0.8	)	0.3		-38 %
Corporate costs	(15.4	)	(13.6	)	(1.8	)	+13 %
Restructuring charge	(21.1	)	0.0		(21.1	)	n/a
Impairment of intangible assets	(19.8	)	0.0		(19.8	)	n/a
	$ (112.5	)	$ (79.4	)	$ 33.1		+42 %

24

Table of Contents

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:

Change (%)	Three Months Ended June 30, 2020 — Americas	EMEA	ASPAC	AvTel	Total
Volume	-21	-9	-23	-16	-15
Price and product mix	+3	-4	-10	-4	-3
Exchange rates	0	-3	0	0	-1
	-18	-16	-33	-20	-19

Volumes in all our regions suffered from the adverse impact of the global COVID-19 pandemic, which reduced demand for fuel additive products. We believe that customer demand will start to recover in the third quarter to the extent that lockdowns in countries around the world are eased. Price and product mix in the Americas was favorable due to a richer sales mix, while price and product mix in the other regions was adverse due to lower sales of higher margin products. AvTel volumes were lower than the prior year due to variations in the demand from customers, together with an adverse price and product mix. EMEA was negatively impacted by exchange rate movements year over year, driven by a weakening of the British pound sterling and the European Union euro against the U.S. dollar.

Gross margin : the year over year decrease of 9.9 percentage points was due to the impact of the COVID-19 pandemic reducing the demand for our higher margin products, together with adverse raw material costs and higher provisions for slow moving inventory.

Operating expenses: the year over year increase of $0.1 million was driven by a higher provision for doubtful debts, being partly offset by a reduction in travel and entertainment expenses as a result of the COVID-19 pandemic.

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:

Change (%)	Three Months Ended June 30, 2020 — Americas	EMEA	ASPAC	Total
Volume	+3	-9	+13	-4
Price and product mix	-13	0	+3	-4
Exchange rates	0	-1	-1	-1
	-10	-10	+15	-9

Higher volumes in the Americas and ASPAC were driven by increased demand for our Personal Care and Home Care products. Volumes were lower in EMEA due to lower demand in Personal Care and Home Care products. The Americas suffered an adverse price and product mix due to increased sales of lower margin products, while ASPAC benefitted from a favorable price and product mix due to increased sales of higher margin products. EMEA and ASPAC were negatively 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 during the quarter.

25

Table of Contents

Gross margin: the year over year increase of 3.1 percentage points was due to a richer sales mix, the continued benefit of margin improvement projects and the timing of pricing movements for certain raw materials.

Operating expenses: the year over year decrease of $0.3 million was primarily due to a reduction in travel and entertainment expenses as a result of the COVID-19 pandemic.

Oilfield Services

Net sales: the year over year decrease of $80.7 million, or 66 percent, was primarily due to a collapse of customer activity in exploration and production for the US onshore market, as a result of the COVID-19 pandemic reducing world-wide demand, together with the depressed price of crude oil. The Company hopes the demand for crude oil will begin to recover in the third quarter.

Gross margin: the year over year decrease of 10.2 percentage points was due to increased inventory provisions as a result of the collapse in demand.

Operating expenses: the year over year decrease of $9.1 million was driven by the right-sizing of the operations to adjust for the reduction in demand caused by the global COVID-19 pandemic.

Octane Additives

Net sales: were nil in the second quarter compared to $1.9 million in the second quarter of the prior year. As expected for some time, the production of TEL for use in motor gasoline has now come to an end. The Company expects that the Octane Additives segment will not make any further sales and will cease to be a reporting segment from January 1, 2021.

Gross loss/profit: was a $1.1 million loss in the second quarter compared to a $0.9 million profit in the second quarter of the prior year. The loss in the current quarter primarily related to the accretion charge on the plant closure provision, being consistent with the first quarter of 2020.

Operating expenses: the year over year decrease of $0.3 million was a result of management plans to maintain efficient operational activity in line with the cessation of sales and production.

Other Income Statement Captions

Corporate costs: the year over year increase of $1.8 million was due to higher accruals for long-term performance-based incentive plans and higher spending on information technology following the network security incident in the second quarter of 2019, being partly offset by a reduction in travel and entertainment expenses as a result of the COVID-19 pandemic.

Restructuring charge: was $21.1 million in the second quarter of 2020 related to the cessation of production and sales of TEL for use in motor gasoline. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information.

26

Table of Contents

Impairment of intangible assets : was $19.8 million in the second quarter of 2020 related to acquired intangible assets in our Oilfield Services segment. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for further information.

Other net income: for the second quarter of 2020 and 2019, included the following:

(in millions)	2020
.
United Kingdom pension credit	$ 1.6	$	1.9	$	(0.3	)
German pension charge	(0.3	)	0.0		(0.3	)
Foreign exchange loss on translation	(1.1	)	(2.7	)	1.6
Foreign currency forward contracts (loss)/gain	(0.1	)	0.8		(0.9	)
	$ 0.1	$	0.0	$	0.1

Interest expense, net: was $0.5 million for 2020 compared to $1.2 million in the prior year, driven by lower average net debt as the business generated cash inflows.

Income taxes: the effective tax rate was 26.2% and 26.9% in the second quarter of 2020 and 2019, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 23.6% in 2020 compared with 25.6% in 2019. The 2.0% decrease in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company’s profits are being generated in lower 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 rate to the adjusted effective tax rate:

(in millions)	Three Months Ended June 30 — 2020		2019
(Loss)/income before income taxes	$ (53.8	)	$ 30.5
Indemnification asset regarding tax audit	(0.5	)	0.0
Adjustment for stock compensation	(1.4	)	1.1
Restructuring charge	21.1		0.0
Impairment of acquired intangible assets	19.8		0.0
	$ (14.8	)	$ 31.6
Income taxes	$ (14.1	)	$ 8.2
Tax on stock compensation	0.1		0.3
Adjustment of income tax provision	1.2		(0.4	)
Tax on restructuring charge	4.3		0.0
Tax on impairment of acquired intangible assets	4.6		0.0
Tax on foreign exchange on distribution	0.4		0.0
	$ (3.5	)	$ 8.1
GAAP effective tax rate	26.2	%	26.9	%
Adjusted effective tax rate	23.6	%	25.6	%

27

Table of Contents

Six Months Ended June 30, 2020

The following table shows the change in components of operating income by reporting segment for the six months ended June 30, 2020 and the six months ended June 30, 2019:

(in millions, except ratios)	Six Months Ended June 30 — 2020		2019		Change
Net sales:
Fuel Specialties	$ 254.4		$ 289.3		$ (34.9	)	-12 %
Performance Chemicals	208.8		222.8		(14.0	)	-6 %
Oilfield Services	154.0		236.7		(82.7	)	-35 %
Octane Additives	0.0		1.9		(1.9	)	-100 %
	$ 617.2		$ 750.7		$ (133.5	)	-18 %
Gross profit/(loss):
Fuel Specialties	$ 76.6		$ 100.4		$ (23.8	)	-24 %
Performance Chemicals	52.5		50.6		1.9		+4 %
Oilfield Services	46.1		79.2		(33.1	)	-42 %
Octane Additives	(2.2	)	(1.3	)	(0.9	)	+69 %
	$ 173.0		$ 228.9		$ (55.9	)	-24 %
Gross margin (%):
Fuel Specialties	30.1		34.7		-4.6
Performance Chemicals	25.1		22.7		+2.4
Oilfield Services	29.9		33.5		-3.6
Octane Additives	n/a		n/a		n/a
Aggregate	28.0		30.5		-2.5
Operating expenses:
Fuel Specialties	$ (39.8	)	$ (43.4	)	$ 3.6		-8 %
Performance Chemicals	(24.7	)	(26.1	)	1.4		-5 %
Oilfield Services	(51.3	)	(61.3	)	10.0		-16 %
Octane Additives	(0.6	)	(1.4	)	0.8		-57 %
Corporate costs	(28.2	)	(28.8	)	0.6		-2 %
Restructuring charge	(21.1	)	0.0		(21.1	)	n/a
Impairment of intangible assets	(19.8	)	0.0		(19.8	)	n/a
	$ (185.5	)	$ (161.0	)	$ (24.5	)	-15 %

28

Table of Contents

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:

Change (%)	Six Months Ended June 30, 2020 — Americas	EMEA	ASPAC	AvTel	Total
Volume	-10	-9	-19	+16	-9
Price and product mix	+1	-2	-3	-9	-2
Exchange rates	0	-3	0	0	-1
	-9	-14	-22	+7	-12

Volumes in all our regions suffered from the adverse impact of the global COVID-19 pandemic, which reduced demand for fuel additive products. We believe that customer demand will start to recover in the third quarter as lockdowns in countries around the world are eased. Price and product mix in the Americas was favorable due to a richer sales mix, while price and product mix in the other regions was adverse due to lower sales of higher margin products. AvTel volumes were higher than the prior year due to variations in the demand from customers, partly offset by an adverse price and product mix. EMEA was negatively impacted by exchange rate movements year over year, driven by a weakening of the British pound sterling and the European Union euro against the U.S. dollar.

Gross margin : the year over year decrease of 4.6 percentage points was due to the impact of the COVID-19 pandemic in the second quarter reducing the demand for our higher margin products, together with adverse raw material costs and higher provisions for slow moving inventory.

Operating expenses: the year over year decrease of $3.6 million was driven by lower personnel related performance-based remuneration due to a decrease in share-based compensation accruals linked to the Innospec share price, which declined significantly in the first quarter then partly recovered in the second quarter. There was also a reduction in travel and entertainment expenses as a result of the COVID-19 pandemic.

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:

Change (%)	Six Months Ended June 30, 2020 — Americas	EMEA	ASPAC	Total
Volume	+8	-5	+36	+2
Price and product mix	-12	-4	-2	-7
Exchange rates	0	-2	-1	-1
	-4	-11	+33	-6

Higher volumes in the Americas and ASPAC were driven by increased demand for our Personal Care and Home Care products. Volumes were lower in EMEA due to lower demand in Personal Care and Home Care products. All our regions suffered an adverse price and product mix due to increased sales of lower margin products. EMEA and ASPAC were negatively 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 during the quarter.

29

Table of Contents

Gross margin: the year over year increase of 2.4 percentage points was due to a richer sales mix, the continued benefit of margin improvement projects and the timing of pricing movements for certain raw materials.

Operating expenses: the year over year decrease of $1.4 million was primarily driven by lower personnel related performance-based remuneration due to a decrease in the share-based compensation accruals linked to the Innospec share price, which declined significantly in the first quarter then partly recovered in the second quarter.

Oilfield Services

Net sales: the year over year decrease of $82.7 million, or 35 percent, was primarily due to a collapse of customer activity in exploration and production for the US onshore market, as a result of the COVID-19 pandemic reducing world-wide demand together with the depressed price of crude oil. The Company hopes the demand for crude oil will begin to recover in the third quarter.

Gross margin: the year over year decrease of 3.6 percentage points was due to significant inventory adjustments as a result of the collapse in demand.

Operating expenses: the year over year decrease of $10.0 million was driven by the right-sizing of the operations to adjust for the reduction in demand caused by the global COVID-19 pandemic.

Octane Additives

Net sales: were nil in the first six months compared to $1.9 million in the first six months of the prior year. As expected for some time, the production of TEL for use in motor gasoline has now come to an end. The Company expects that the Octane Additives segment will not make any further sales and will cease to be a reporting segment from January 1, 2021.

Gross loss: was a $2.2 million loss in the first six months compared to a $1.3 million loss in the first six months of the prior year. The loss in the current year primarily related to the accretion charge on the plant closure provision.

Operating expenses: the year over year decrease of $0.8 million was a result of management plans to maintain efficient operational activity in line with the cessation of sales and production.

Other Income Statement Captions

Corporate costs: the year over year decrease of $0.6 million was driven by lower personnel related performance-based remuneration, primarily due to a decrease in the share-based compensation accruals linked to the Innospec share price, which declined significantly in the first quarter then partly recovered in the second quarter. The reduction in costs was offset in part by higher spending on information technology following the network security incident in the second quarter of 2019.

Restructuring charge: was $21.1 million related to the cessation of production and sales of TEL for use in motor gasoline. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information.

30

Table of Contents

Impairment of intangible assets: was $19.8 million related to acquired intangible assets in our Oilfield Services segment. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for further information.

Other net income: for the first six months of 2020 and 2019, included the following:

(in millions) — United Kingdom pension credit	2020 — $ 3.3	$	3.8	$	(0.5	)
German pension charge	(0.5	)	(0.2	)	(0.3	)
Foreign exchange losses on translation	(0.6	)	(0.5	)	(0.1	)
Foreign currency forward contracts gains	1.8		1.0		0.8
	$ 4.0	$	4.1	$	(0.1	)

Interest expense, net: was $1.1 million for 2020 compared to $2.7 million in the prior year, driven by lower average net debt as the business generated cash inflows.

Income taxes: the effective tax rate was 31.3% and 26.4% in the first six months of 2020 and 2019, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 25.8% in the first six months of 2020 compared with 26.4% in the first six months of 2019. The 0.6% reduction in the adjusted effective tax rate reflects the impact of a larger proportion of the Company’s profits being generated in lower 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 rate to the adjusted effective tax rate:

(in millions)	Six Months Ended June 30 — 2020		2019
(Loss)/income before income taxes	$ (9.6	)	$ 69.3
Indemnification asset regarding tax audit	(0.3	)	0.0
Adjustment for stock compensation	0.0		2.6
Restructuring charge	21.1		0.0
Impairment of acquired intangible assets	19.8		0.0
	$ 31.0		$ 71.9
Income taxes	$ (3.0	)	$ 18.3
Tax on stock compensation	0.5		1.3
Adjustment of income tax provision	1.2		(0.6	)
Tax on restructuring charge	4.3		0.0
Tax on impairment of acquired intangible assets	4.6		0.0
Tax on foreign exchange on distribution	0.4		0.0
	$ 8.0		$ 19.0
GAAP effective tax rate	31.3	%	26.4	%
Adjusted effective tax rate	25.8	%	26.4	%

31

Table of Contents

LIQUIDITY AND FINANCIAL CONDITION

Working Capital

In the first six months of 2020 our working capital decreased by $13.1 million, while our adjusted working capital decreased by $1.5 million. The difference is primarily due to a reduction in our cash and cash equivalents, being partly offset by an increase for prepaid taxes.

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) — Total current assets	June 30, 2020 — $ 532.9	$	630.3
Total current liabilities	(219.2	)	(303.5	)
Working capital	313.7		326.8
Less cash and cash equivalents	(58.2	)	(75.7	)
Less prepaid income taxes	(8.0	)	(2.5	)
Less other current assets	0.0		(0.8	)
Add back current portion of accrued income taxes	8.4		10.3
Add back current portion of finance leases	0.6		1.0
Add back current portion of plant closure provisions	6.3		5.6
Add back current portion of operating lease liabilities	11.0		10.6
Adjusted working capital	$ 273.8	$	275.3

We had a $78.6 million decrease in trade and other accounts receivable primarily driven by the decline in sales in our Fuel Specialties and Oilfield Services segments as a result of the COVID-19 pandemic. Days’ sales outstanding in our Fuel Specialties segment increased from 52 days to 59 days; remained unchanged in our Performance Chemicals segment at 64 days; and increased from 66 days to 112 days in our Oilfield Services segment.

We had a $1.0 million decrease in inventories, net of a $2.5 million increase in allowances, as we managed inventory levels to align with the depressed sales in the second quarter resulting from the COVID-19 pandemic. Days’ sales in inventory in our Fuel Specialties segment increased from 97 days to 149 days; increased in our Performance Chemicals segment from 66 days to 81 days; and increased from 71 days to 122 days in our Oilfield Services segment.

Prepaid expenses decreased $5.0 million, from $14.7 million to $9.7 million due to the normal expensing of prepaid invoices.

We had a $83.1 million decrease in accounts payable and accrued liabilities primarily due to lower production activity to align with reduced customer demand, together with lower accruals for share-based payments linked to the decrease in the Innospec share price during the first quarter of the year. Creditor days (including goods received not invoiced) in our Fuel Specialties segment decreased from 52 days to 29 days; decreased in our Performance Chemicals segment from 54 days to 49 days; and decreased in our Oilfield Services segment from 43 days to 33 days.

32

Table of Contents

Operating Cash Flows

We generated cash from operating activities of $32.2 million in the first six months of 2020 compared to cash inflows of $63.2 million in the first six months of 2019. The reduction in cash generated from operating activities was primarily related to the adverse impact of COVID-19 on customer activity and the timing of payments for income taxes.

Cash

At June 30, 2020 and December 31, 2019, we had cash and cash equivalents of $58.2 million and $75.7 million, respectively, of which $27.3 million and $57.9 million, respectively, were held by non-U.S. subsidiaries principally in the United Kingdom.

The decrease in cash and cash equivalents in 2020 of $17.5 million was primarily related to the repayment of $20.0 million of our revolving credit facility.

Debt

At June 30, 2020, we had $40.0 million of debt outstanding under the revolving credit facility and $0.8 million of obligations under finance leases relating to certain fixed assets within our Fuel Specialties and Oilfield Services segments.

At December 31, 2019, we had $60.0 million of debt outstanding under the revolving credit facility and $1.5 million of obligations under finance leases relating to certain fixed assets within our Fuel Specialties and Oilfield Services segments.

33

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 2019 Annual Report on Form 10-K and there have been no significant changes since that time.

34

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 June 30, 2020.

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.

35

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 2019 Form 10-K. In management’s view, there have been no material changes in the risk factors facing the Company since that time other than an update to the risk factor first disclosed under “Risk Factors” in Item 1A of Part II of our Form 10-Q for the quarter ended March 31, 2020, as follows:

The COVID-19 pandemic has had, and is expected to continue to have, an adverse impact on our business, results of operations, financial position and cash flows.

We have been closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our customers, employees, supply chain, and distribution network. The effects of COVID-19 on the global economic environment have impacted the results of the Company significantly, particularly with respect to reduced demand within our Fuel Specialties and Oilfield Services segments, and we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows. The further extent to which our operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted. These include, but are not limited to, the availability and productivity of our employees, the duration and severity of the pandemic; government restrictions on businesses and individuals; the impact of the pandemic on our customers’ businesses and the resulting demand for our products; the impact on our suppliers and supply chain network; the impact on global economies and the timing and rate of economic recovery; and potential adverse effects on the financial markets.

The impact of COVID-19 may also exacerbate other risks discussed in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, any of which could have a material effect on us. This situation is changing rapidly and additional impacts may arise that we are not aware of currently.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

There have been no unregistered sales of equity securities.

During the quarter ended June 30, 2020 the Company made no open market repurchases of its common stock.

36

Table of Contents

During the quarter ended June 30, 2020, the company did not purchase any of its common stock in connection with the exercising of stock options by employees.

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.

37

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: August 5, 2020	By	/s/ PATRICK S. WILLIAMS
		Patrick S. Williams
		President and Chief Executive Officer
Date: August 5, 2020	By	/s/ IAN P. CLEMINSON
		Ian P. Cleminson
		Executive Vice President and Chief Financial Officer