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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549



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FORM 10-Q



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



For the quarterly period ended June 30, 2005



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 1-32190



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NEWMARKET CORPORATION

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|VIRGINIA                                                       |  | 20-0812170                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                           |  |           
|------------------------------------------ |  | ----------
|330 SOUTH FOURTH STREET RICHMOND, VIRGINIA |  | 23218-2189
|(Address of principal executive offices)   |  | (Zip Code)



Registrants
telephone number, including area code - (804) 788-5000



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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  x    No ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act).    Yes  x    No ̈



Number of shares of common stock, without par value, outstanding as of July
31, 2005: 17,039,059.



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##### Table of Contents

NEWMARKET CORPORATION



INDEX



|                                                                                                |  |           
|----------------------------------------------------------------------------------------------- |  | ----------
|                                                                                                |  | PageNumber
|PART I.
FINANCIAL INFORMATION                                                                   |  |           
|                                                                                                | 
|ITEM 1.
Financial Statements                                                                    |  |           
|                                                                                                | 
|Condensed Consolidated Statements of Income  Three and Six Months Ended June 30, 2005 and 2004 |  | 3         
|                                                                                                | 
|Condensed Consolidated Balance Sheets  June 30, 2005 and December 31, 2004                     |  | 4         
|                                                                                                | 
|Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2005 and 2004       |  | 5         
|                                                                                                | 
|Notes to Condensed Consolidated Financial Statements                                            |  | 6 - 25    
|                                                                                                | 
|ITEM 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations   |  | 26 -  36  
|                                                                                                | 
|ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk                              |  | 36        
|                                                                                                | 
|ITEM 4.
Controls and Procedures                                                                 |  | 37        
|                                                                                                | 
|PART II.
OTHER INFORMATION                                                                      |  |           
|                                                                                                | 
|ITEM 1.
Legal Proceedings                                                                       |  | 38        
|                                                                                                | 
|ITEM 4.
Submission of Matters to a Vote of Security Holders                                     |  | 38        
|                                                                                                | 
|ITEM 5.
Other Information                                                                       |  | 39        
|                                                                                                | 
|ITEM 6.
Exhibits                                                                                |  | 39        
|                                                                                                | 
|SIGNATURES                                                                                      |  | 40        



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements



NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)



|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|------------------------------------------------------- |  | ------------------------- | ------- | ------------------------ | - | ------- |  | ---- | ------- |  | - | -------
|                                                        |  | Three Months EndedJune 30 |         | Six Months Ended June 30
|                                                        |  | 2005                      |         | 2004                     |   | 2005    |  | 2004
|Net sales                                               |  | $                         | 271,842 |                          | $ | 221,510 |  | $    | 510,956 |  | $ | 438,280
|Cost of goods sold                                      |  |                           | 219,681 |                          |   | 170,978 |  |      | 415,682 |  |   | 341,887
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Gross profit                                            |  |                           | 52,161  |                          |   | 50,532  |  |      | 95,274  |  |   | 96,393 
|                                                        |  |                           |         |                         
|Operating profit from TEL marketing agreements services |  |                           | 6,826   |                          |   | 10,763  |  |      | 13,277  |  |   | 18,075 
|                                                        |  |                           |         |                         
|Selling, general, and administrative expenses           |  |                           | 23,969  |                          |   | 24,910  |  |      | 46,262  |  |   | 48,428 
|Research, development, and testing expenses             |  |                           | 15,797  |                          |   | 15,098  |  |      | 32,077  |  |   | 30,847 
|Special item income                                     |  |                           | 3,868   |                          |   |        |  |      | 3,868   |  |   |       
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Operating profit                                        |  |                           | 23,089  |                          |   | 21,287  |  |      | 34,080  |  |   | 35,193 
|                                                        |  |                           |         |                         
|Interest and financing expenses                         |  |                           | 4,455   |                          |   | 4,527   |  |      | 8,782   |  |   | 9,683  
|Other income, net                                       |  |                           | 131     |                          |   | 283     |  |      | 371     |  |   | 449    
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Income before income taxes                              |  |                           | 18,765  |                          |   | 17,043  |  |      | 25,669  |  |   | 25,959 
|Income tax expense                                      |  |                           | 5,698   |                          |   | 5,689   |  |      | 7,840   |  |   | 8,787  
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Net income                                              |  | $                         | 13,067  |                          | $ | 11,354  |  | $    | 17,829  |  | $ | 17,172 
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Basic earnings per share                                |  | $                         | 0.77    |                          | $ | 0.67    |  | $    | 1.05    |  | $ | 1.02   
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Diluted earnings per share                              |  | $                         | 0.76    |                          | $ | 0.66    |  | $    | 1.03    |  | $ | 1.00   
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Shares used to compute basic earnings per share         |  |                           | 17,016  |                          |   | 16,904  |  |      | 16,999  |  |   | 16,859 
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        
|Shares used to compute diluted earnings per share       |  |                           | 17,305  |                          |   | 17,168  |  |      | 17,310  |  |   | 17,144 
|                                                        |  |                           |         |                          |   |         |  |      |         |  |   |        



See accompanying notes to the
condensed consolidated financial statements.



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NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)



|                                                                                                         |  |              |         |   |                 |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | --------------- | - | ------- | -
|                                                                                                         |  | June 30 2005 |         |   | December 312004 |  
|                                                                                                         |  | (unaudited)  |         |   |                 |  
|ASSETS                                                                                                   |  |              |         |   |                 |   |         |  
|Current assets:                                                                                          |  |              |         |   |                 |   |         |  
|Cash and cash equivalents                                                                                |  | $            | 31,453  |   |                 | $ | 28,778  |  
|Restricted cash                                                                                          |  |              | 1,409   |   |                 |   | 1,706   |  
|Trade and other accounts receivable, less allowance for doubtful accounts ($1,051 - 2005; $1,067 - 2004) |  |              | 177,377 |   |                 |   | 158,423 |  
|Receivable - TEL marketing agreements services                                                           |  |              | 3,913   |   |                 |   | 3,298   |  
|Inventories:                                                                                             |  |              |         |   |                 |   |         |  
|Finished goods                                                                                           |  |              | 131,207 |   |                 |   | 131,627 |  
|Raw materials                                                                                            |  |              | 17,561  |   |                 |   | 17,471  |  
|Stores, supplies and other                                                                               |  |              | 8,315   |   |                 |   | 8,691   |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|                                                                                                         |  |              | 157,083 |   |                 |   | 157,789 |  
|                                                                                                         |  |             
|Deferred income taxes                                                                                    |  |              | 7,482   |   |                 |   | 7,874   |  
|Prepaid expenses                                                                                         |  |              | 5,639   |   |                 |   | 2,387   |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Total current assets                                                                                     |  |              | 384,356 |   |                 |   | 360,255 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Property, plant and equipment, at cost                                                                   |  |              | 774,454 |   |                 |   | 777,105 |  
|Less accumulated depreciation and amortization                                                           |  |              | 614,517 |   |                 |   | 610,876 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Net property, plant and equipment                                                                        |  |              | 159,937 |   |                 |   | 166,229 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Prepaid pension cost                                                                                     |  |              | 17,830  |   |                 |   | 20,101  |  
|Deferred income taxes                                                                                    |  |              | 7,044   |   |                 |   | 4,367   |  
|Other assets and deferred charges                                                                        |  |              | 60,324  |   |                 |   | 68,961  |  
|Intangibles, net of amortization                                                                         |  |              | 53,054  |   |                 |   | 56,282  |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Total assets                                                                                             |  | $            | 682,545 |   |                 | $ | 676,195 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                     |  |              |         |   |                 |   |         |  
|Current liabilities:                                                                                     |  |              |         |   |                 |   |         |  
|Accounts payable                                                                                         |  | $            | 70,898  |   |                 | $ | 75,719  |  
|Accrued expenses                                                                                         |  |              | 44,997  |   |                 |   | 52,710  |  
|Book overdraft                                                                                           |  |              | 6,171   |   |                 |   | 5,015   |  
|Long-term debt, current portion                                                                          |  |              | 620     |   |                 |   | 601     |  
|Income taxes payable                                                                                     |  |              | 8,434   |   |                 |   | 6,138   |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Total current liabilities                                                                                |  |              | 131,120 |   |                 |   | 140,183 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Long-term debt                                                                                           |  |              | 187,518 |   |                 |   | 183,837 |  
|Other noncurrent liabilities                                                                             |  |              | 117,591 |   |                 |   | 120,293 |  
|                                                                                                         |  |             
|Commitments and contingencies (Note 10)                                                                  |  |              |         |   |                 |   |         |  
|                                                                                                         |  |             
|Shareholders equity:                                                                                    |  |              |         |   |                 |   |         |  
|Common stock and paid-in capital (without par value) Issued - 17,033,059 in 2005 and 16,980,759 in 2004  |  |              | 84,951  |   |                 |   | 84,724  |  
|Accumulated other comprehensive loss                                                                     |  |              | (25,492 | ) |                 |   | (21,870 | )
|Retained earnings                                                                                        |  |              | 186,857 |   |                 |   | 169,028 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|                                                                                                         |  |              | 246,316 |   |                 |   | 231,882 |  
|                                                                                                         |  |              |         |   |                 |   |         |  
|Total liabilities and shareholders equity                                                               |  | $            | 682,545 |   |                 | $ | 676,195 |  
|                                                                                                         |  |              |         |   |                 |   |         |  



See accompanying notes to the
condensed consolidated financial statements.



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NEWMARKET CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



|                                                                             |  |                          |         |   |      |   |         |  
|---------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                                             |  | Six Months Ended June 30 |        
|                                                                             |  | 2005                     |         |   | 2004 |  
|Cash and cash equivalents at beginning of year                               |  | $                        | 28,778  |   |      | $ | 33,367  |  
|                                                                             |  |                          |         |   |      |   |         |  
|Cash flows from operating activities:                                        |  |                          |         |   |      |   |         |  
|Net income                                                                   |  |                          | 17,829  |   |      |   | 17,172  |  
|Adjustments to reconcile net income to cash flows from operating activities: |  |                          |         |   |      |   |         |  
|Depreciation and other amortization                                          |  |                          | 17,565  |   |      |   | 21,682  |  
|Amortization of deferred financing costs                                     |  |                          | 945     |   |      |   | 1,636   |  
|Noncash pension expense                                                      |  |                          | 6,506   |   |      |   | 5,158   |  
|Deferred income tax benefit                                                  |  |                          | (458    | ) |      |   | (2,169  | )
|Gain on insurance settlement                                                 |  |                          | (3,868  | ) |      |   |        |  
|Working capital changes                                                      |  |                          | (36,573 | ) |      |   | (31,858 | )
|Cash pension contributions                                                   |  |                          | (5,061  | ) |      |   | (7,022  | )
|Proceeds from insurance settlement                                           |  |                          | 6,000   |   |      |   |        |  
|Long-term receivable - TEL marketing agreements                              |  |                          | 618     |   |      |   | 114     |  
|Other, net                                                                   |  |                          | 4,449   |   |      |   | 614     |  
|                                                                             |  |                          |         |   |      |   |         |  
|Cash provided from operating activities                                      |  |                          | 7,952   |   |      |   | 5,327   |  
|                                                                             |  |                          |         |   |      |   |         |  
|Cash flows from investing activities:                                        |  |                          |         |   |      |   |         |  
|Capital expenditures                                                         |  |                          | (7,074  | ) |      |   | (6,047  | )
|Other, net                                                                   |  |                          | 121     |   |      |   | 11      |  
|                                                                             |  |                          |         |   |      |   |         |  
|Cash used in investing activities                                            |  |                          | (6,953  | ) |      |   | (6,036  | )
|                                                                             |  |                          |         |   |      |   |         |  
|Cash flows from financing activities:                                        |  |                          |         |   |      |   |         |  
|Borrowing under revolving credit agreement                                   |  |                          | 4,000   |   |      |   |        |  
|Repayment of debt - previous agreements                                      |  |                          |        |   |      |   | (3,807  | )
|Change in book overdraft                                                     |  |                          | 1,156   |   |      |   | 3,467   |  
|Financing costs                                                              |  |                          |        |   |      |   | (1,089  | )
|Proceeds from exercise of stock options                                      |  |                          | 227     |   |      |   | 773     |  
|Decrease in capital lease                                                    |  |                          | (300    | ) |      |   | (281    | )
|                                                                             |  |                          |         |   |      |   |         |  
|Cash provided from (used in) financing activities                            |  |                          | 5,083   |   |      |   | (937    | )
|                                                                             |  |                          |         |   |      |   |         |  
|Effect of foreign exchange on cash and cash equivalents                      |  |                          | (3,407  | ) |      |   | (2,382  | )
|                                                                             |  |                          |         |   |      |   |         |  
|Increase (decrease) in cash and cash equivalents                             |  |                          | 2,675   |   |      |   | (4,028  | )
|                                                                             |  |                          |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                   |  | $                        | 31,453  |   |      | $ | 29,339  |  
|                                                                             |  |                          |         |   |      |   |         |  



See accompanying notes to the
condensed consolidated financial statements.



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NEWMARKET CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|1. | Financial Statement Presentation
|-- | --------------------------------



In the opinion of management, the accompanying condensed consolidated financial statements of NewMarket Corporation and Subsidiaries contain all necessary
adjustments for the fair presentation of, in all material respects, our consolidated financial position as of June 30, 2005, as well as our consolidated results of operations for the three-months and six-months ended June 30, 2005 and 2004 and our
consolidated cash flows for the six-months ended June 30, 2005 and 2004. The financial statements are subject to normal year-end adjustments and do not include comprehensive footnotes. All adjustments are of a normal, recurring nature, unless
otherwise disclosed. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the NewMarket Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2004
(2004 Annual Report), as filed with the Securities and Exchange Commission (SEC). The results of operations for the three-month and six-month periods ended June 30, 2005 are not necessarily indicative of the results to be expected for the full year.



Unless the context otherwise requires, all references to
we, us, our, the Company and NewMarket are to NewMarket Corporation and its subsidiaries.



At both June 30, 2005 and December 31, 2004, we had a book overdraft for some of our disbursement cash accounts. A book overdraft represents transactions
that have not cleared the bank accounts at the end of the reporting period. We transfer cash on an as-needed basis to fund these items as they clear the bank in subsequent periods.



|2. | Reclassifications
|-- | -----------------



Both second quarter and six months 2004 segment operating profit were adjusted from previously reported information to reflect the current allocation of
certain costs in alignment with the 2004 transition to a holding company structure, which was effective as of June 18, 2004. The reclassification had no effect on net income.



|3. | Asset Retirement Obligations
|-- | ----------------------------



Our asset retirement obligations are related primarily to tetraethyl lead (TEL) operations. These obligations had been previously fully accrued. Upon the
January 1, 2003 adoption of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (SFAS No. 143), these accruals were discounted to their net present value, which resulted in the recognition of
a gain. Current accretion of the asset retirement obligations is expensed in operations. The following table illustrates the activity associated with SFAS No. 143 for the six months ended June 30, 2005 and the year ended December 31, 2004.



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|                                                 |  |                |        |   |                 |   |        |  
|------------------------------------------------ |  | -------------- | ------ | - | --------------- | - | ------ | -
|                                                 |  | June 302005    |        |   | December 312004 |  
|                                                 |  | (in thousands) |       
|Asset retirement obligation, beginning of period |  | $              | 10,268 |   |                 | $ | 13,238 |  
|Accretion expense                                |  |                | 410    |   |                 |   | 702    |  
|Liabilities settled                              |  |                | (1,019 | ) |                 |   | (2,998 | )
|Changes in expected cash flows and timing        |  |                | 1,679  |   |                 |   | (1,147 | )
|Foreign currency impact                          |  |                | (88    | ) |                 |   | 473    |  
|                                                 |  |                |        |   |                 |   |        |  
|Asset retirement obligation, end of period       |  | $              | 11,250 |   |                 | $ | 10,268 |  
|                                                 |  |                |        |   |                 |   |        |  



|4. | Stock-Based Compensation
|-- | ------------------------



We account for the stock-based compensation plan using the intrinsic-value method. Under this method, we do not record compensation cost for stock options
unless the quoted market price of the stock at grant date or other measurement date exceeds the amount the employee must pay to exercise the stock option. Compensation cost for restricted stock grants, if issued, is recognized over the vesting
period. See Note 12 of the Notes to Condensed Consolidated Financial Statements for information on an accounting standard which we will adopt in 2006 related to the accounting for stock-based compensation. See Note 16 of the Notes to Consolidated
Financial Statements in our 2004 Annual Report for further information on our stock-based compensation plan.



The following table illustrates the effect on net income and earnings per share as if we had applied the fair-value method of accounting for the
stock-based compensation plan.



|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | ------ | ---- | ----------------------- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                              |  | Three Months EndedJune 30                |        |      | Six Months EndedJune 30 |       
|                                                                                                                              |  | 2005                                     |        | 2004 |                         |        | 2005 |  |   | 2004   |  
|                                                                                                                              |  | (in thousands, except per share amounts) |       
|Net income, as reported                                                                                                       |  | $                                        | 13,067 |      | $                       | 11,354 |      |  | $ | 17,829 |   |  | $ | 17,172 |  
|Less: Total stock-based employee compensation expense determined under the fair-value based method, net of related tax effect |  |                                          |       |      |                         | (31    | )    |  |   | (23    | ) |  |   | (61    | )
|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|Net income, pro forma                                                                                                         |  | $                                        | 13,067 |      | $                       | 11,323 |      |  | $ | 17,806 |   |  | $ | 17,111 |  
|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|Earnings per share:                                                                                                           |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|Basic, as reported                                                                                                            |  | $                                        | 0.77   |      | $                       | 0.67   |      |  | $ | 1.05   |   |  | $ | 1.02   |  
|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|Basic, pro forma                                                                                                              |  | $                                        | 0.77   |      | $                       | 0.67   |      |  | $ | 1.05   |   |  | $ | 1.02   |  
|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|Diluted, as reported                                                                                                          |  | $                                        | 0.76   |      | $                       | 0.66   |      |  | $ | 1.03   |   |  | $ | 1.00   |  
|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  
|Diluted, pro forma                                                                                                            |  | $                                        | 0.76   |      | $                       | 0.66   |      |  | $ | 1.03   |   |  | $ | 1.00   |  
|                                                                                                                              |  |                                          |        |      |                         |        |      |  |   |        |   |  |   |        |  



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|5. | Segment Information
|-- | -------------------



The tables below show our consolidated net sales by segment, operating profit by segment including a reconciliation to income before income taxes, and
depreciation and amortization by segment.



Net Sales by
Segment

(in millions)



|                       |  |                           |       |                         |   |       |  |      |       |  |   |      
|---------------------- |  | ------------------------- | ----- | ----------------------- | - | ----- |  | ---- | ----- |  | - | -----
|                       |  | Three Months EndedJune 30 |       | Six Months EndedJune 30
|                       |  | 2005                      |       | 2004                    |   | 2005  |  | 2004
|Petroleum additives    |  | $                         | 269.0 |                         | $ | 218.1 |  | $    | 506.2 |  | $ | 432.8
|Tetraethyl lead        |  |                           | 2.8   |                         |   | 3.4   |  |      | 4.8   |  |   | 5.5  
|                       |  |                           |       |                         |   |       |  |      |       |  |   |      
|Consolidated net sales |  | $                         | 271.8 |                         | $ | 221.5 |  | $    | 511.0 |  | $ | 438.3
|                       |  |                           |       |                         |   |       |  |      |       |  |   |      



Segment Operating
Profit

(in millions)



|                                              |  |                           |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|--------------------------------------------- |  | ------------------------- | ---- | - | ------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                              |  | Three Months EndedJune 30 |      |   | Six Months Ended June 30 |  
|                                              |  | 2005                      |      |   | 2004                     |   |      | 2005 |  |   | 2004 |  
|Petroleum additives                           |  | $                         | 17.0 |   |                          | $ | 17.3 |      |  | $ | 26.8 |   |  | $ | 30.2 |  
|Tetraethyl lead (a)                           |  |                           | 9.5  |   |                          |   | 9.1  |      |  |   | 13.8 |   |  |   | 15.5 |  
|Contract manufacturing and other              |  |                           | 1.0  |   |                          |   |     |      |  |   | 1.7  |   |  |   |     |  
|                                              |  |                           |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|Segment operating profit                      |  |                           | 27.5 |   |                          |   | 26.4 |      |  |   | 42.3 |   |  |   | 45.7 |  
|Corporate, general and administrative expense |  |                           | (3.3 | ) |                          |   | (3.7 | )    |  |   | (6.0 | ) |  |   | (7.2 | )
|Interest expense                              |  |                           | (4.5 | ) |                          |   | (4.5 | )    |  |   | (8.8 | ) |  |   | (9.7 | )
|Other expense, net                            |  |                           | (0.9 | ) |                          |   | (1.2 | )    |  |   | (1.8 | ) |  |   | (2.8 | )
|                                              |  |                           |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|Income before income taxes                    |  | $                         | 18.8 |   |                          | $ | 17.0 |      |  | $ | 25.7 |   |  | $ | 26.0 |  
|                                              |  |                           |      |   |                          |   |      |      |  |   |      |   |  |   |      |  

---

The prior period has been reclassified to conform
to the current presentation. The reclassifications consist of anallocation of certain costs in alignment with the 2004 transition to a holding company structure. There was no impact on net income in any period.



|(a) | The tetraethyl lead segment operating profit includes an insurance settlement related to asbestos liabilities. This item is discussed in Note 10.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------



8



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##### Table of Contents

Depreciation and Amortization

(in millions)



|                                    |  |                           |     |                         |   |      |  |      |      |  |   |     
|----------------------------------- |  | ------------------------- | --- | ----------------------- | - | ---- |  | ---- | ---- |  | - | ----
|                                    |  | Three Months EndedJune 30 |     | Six Months EndedJune 30
|                                    |  | 2005                      |     | 2004                    |   | 2005 |  | 2004
|Petroleum additives                 |  | $                         | 6.4 |                         | $ | 8.2  |  | $    | 13.5 |  | $ | 16.6
|Tetraethyl lead                     |  |                           | 1.7 |                         |   | 2.2  |  |      | 3.4  |  |   | 4.3 
|Other long-lived assets             |  |                           | 0.3 |                         |   | 0.4  |  |      | 0.7  |  |   | 0.8 
|                                    |  |                           |     |                         |   |      |  |      |      |  |   |     
|Total depreciation and amortization |  | $                         | 8.4 |                         | $ | 10.8 |  | $    | 17.6 |  | $ | 21.7
|                                    |  |                           |     |                         |   |      |  |      |      |  |   |     



During the second
quarter 2005, Octel advised us that one of the major TEL customers under our marketing agreements has indicated that it was discontinuing the use of TEL earlier than we had previously expected. Because of this development, we evaluated the
prepayment for TEL marketing agreement services for impairment and concluded the unamortized value of $17.5 million reflected in our financial statements at June 30, 2005 is not impaired. We adjusted the rate of amortization for these prepayments
from a 20% declining balance method to a 30% declining balance method. In addition, based on revised projections of product shipments and product life expectancy, we adjusted the amortization period to run through 2012. This change will have an
insignificant impact on 2005 earnings. Total amortization related to the TEL marketing agreements is currently projected to be:



|  |  |            |  |              |  |                                   
|- |  | ---------- |  | ------------ |  | ----------------------------------
|· |  | 2005       |  | $6.7 million |  |                                   
|· |  | 2006       |  | $4.6 million |  |                                   
|· |  | 2007       |  | $3.3 million |  |                                   
|· |  | 2008       |  | $2.3 million |  |                                   
|· |  | 2009       |  | $1.6 million |  |                                   
|· |  | Thereafter |  | $2.4 million |  | in total for the final three years



This amortization for
each year is included in tetraethyl lead in the table above.



|6. | Pension and Postretirement Plans
|-- | --------------------------------



During the first six months of 2005, we made contributions of approximately $2.1 million for domestic pension plans and approximately $900 thousand for
domestic postretirement plans. We expect to make total contributions in 2005 of approximately $4 million to $6 million for our domestic pension plans and approximately $2 million to $3 million for our domestic postretirement plans.



We made contributions of approximately $3.0 million for our foreign pension
plans during the first six months of 2005 and expect to make total contributions to our foreign pension plans of approximately $6 million to $7 million during 2005.



9



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##### Table of Contents

The tables below present information on periodic benefit cost for our domestic pension and postretirement
plans. The third table presents the same information for the foreign pension plans.



|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------- |  | -------------------------- | ------ | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                   |  | Domestic                   |       
|                                   |  | Pension Benefits           |       
|                                   |  | Three Months Ended June 30 |        |   | Six Months Ended June 30 |  
|                                   |  | 2005                       |        |   | 2004                     |   |        | 2005 |  |   | 2004   |  
|                                   |  | (in thousands)             |       
|Service cost                       |  | $                          | 1,368  |   |                          | $ | 1,147  |      |  | $ | 2,736  |   |  | $ | 2,294  |  
|Interest cost                      |  |                            | 1,479  |   |                          |   | 1,354  |      |  |   | 2,955  |   |  |   | 2,707  |  
|Expected return on plan assets     |  |                            | (1,497 | ) |                          |   | (1,364 | )    |  |   | (2,993 | ) |  |   | (2,727 | )
|Amortization of prior service cost |  |                            | 200    |   |                          |   | 180    |      |  |   | 400    |   |  |   | 359    |  
|Amortization of net loss           |  |                            | 506    |   |                          |   | 356    |      |  |   | 1,012  |   |  |   | 712    |  
|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                   |  | $                          | 2,056  |   |                          | $ | 1,673  |      |  | $ | 4,110  |   |  | $ | 3,345  |  
|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                   | 
|                                   |  | Domestic                   |       
|                                   |  | Postretirement Benefits    |       
|                                   |  | Three Months Ended June 30 |        |   | Six Months Ended June 30 |  
|                                   |  | 2005                       |        |   | 2004                     |   |        | 2005 |  |   | 2004   |  
|                                   |  | (in thousands)             |       
|Service cost                       |  | $                          | 341    |   |                          | $ | 267    |      |  | $ | 681    |   |  | $ | 534    |  
|Interest cost                      |  |                            | 918    |   |                          |   | 1,015  |      |  |   | 1,854  |   |  |   | 2,036  |  
|Expected return on plan assets     |  |                            | (486   | ) |                          |   | (476   | )    |  |   | (971   | ) |  |   | (951   | )
|Amortization of prior service cost |  |                            | (7     | ) |                          |   | (8     | )    |  |   | (14    | ) |  |   | (15    | )
|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                   |  | $                          | 766    |   |                          | $ | 798    |      |  | $ | 1,550  |   |  | $ | 1,604  |  
|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                   | 
|                                   |  | Foreign                    |       
|                                   |  | Pension Benefits           |       
|                                   |  | Three Months Ended June 30 |        |   | Six Months Ended June 30 |  
|                                   |  | 2005                       |        |   | 2004                     |   |        | 2005 |  |   | 2004   |  
|                                   |  | (in thousands)             |       
|Service cost                       |  | $                          | 529    |   |                          | $ | 395    |      |  | $ | 1,070  |   |  | $ | 793    |  
|Interest cost                      |  |                            | 1,058  |   |                          |   | 925    |      |  |   | 2,171  |   |  |   | 1,857  |  
|Expected return on plan assets     |  |                            | (873   | ) |                          |   | (745   | )    |  |   | (1,762 | ) |  |   | (1,494 | )
|Amortization of prior service cost |  |                            | 80     |   |                          |   | 77     |      |  |   | 162    |   |  |   | 155    |  
|Amortization of transition asset   |  |                            | (11    | ) |                          |   | (11    | )    |  |   | (23    | ) |  |   | (21    | )
|Amortization of net loss           |  |                            | 385    |   |                          |   | 261    |      |  |   | 778    |   |  |   | 523    |  
|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                   |  | $                          | 1,168  |   |                          | $ | 902    |      |  | $ | 2,396  |   |  | $ | 1,813  |  
|                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  



10



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##### Table of Contents

|7. | Earnings Per Share
|-- | ------------------



Basic and diluted earnings per share are calculated as shown in the table below. Options are not included in the computation of diluted earnings per share
when the option exercise price exceeds the average market price of the common stock. At both June 30, 2005 and June 30, 2004, we had outstanding options to purchase 50,000 shares of NewMarket common stock at $44.375 per share. These options were not
included in the computation of diluted earnings per share for any period due to their anti-dilutive impact.



|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|---------------------------------------------------- |  | ---------------------------------------- | ------ | ----------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                                     |  | Three Months EndedJune 30                |        | Six Months EndedJune 30
|                                                     |  | 2005                                     |        | 2004                    |   | 2005   |  | 2004
|                                                     |  | (in thousands, except per share amounts)
|Basic earnings per share                             |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Numerator:                                           |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Income available to shareholders, as reported        |  | $                                        | 13,067 |                         | $ | 11,354 |  | $    | 17,829 |  | $ | 17,172
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Denominator:                                         |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Average number of shares of common stock outstanding |  |                                          | 17,016 |                         |   | 16,904 |  |      | 16,999 |  |   | 16,859
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Basic earnings per share                             |  | $                                        | .77    |                         | $ | .67    |  | $    | 1.05   |  | $ | 1.02  
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Diluted earnings per share                           |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Numerator:                                           |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Income available to shareholders, as reported        |  | $                                        | 13,067 |                         | $ | 11,354 |  | $    | 17,829 |  | $ | 17,172
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Denominator:                                         |  |                                          |        |                         |   |        |  |      |        |  |   |       
|                                                     |  |                                          |        |                        
|Average number of shares of common stock outstanding |  |                                          | 17,016 |                         |   | 16,904 |  |      | 16,999 |  |   | 16,859
|                                                     |  |                                          |        |                        
|Shares issuable upon exercise of stock options       |  |                                          | 289    |                         |   | 264    |  |      | 311    |  |   | 285   
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Total shares                                         |  |                                          | 17,305 |                         |   | 17,168 |  |      | 17,310 |  |   | 17,144
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       
|Diluted earnings per share                           |  | $                                        | .76    |                         | $ | .66    |  | $    | 1.03   |  | $ | 1.00  
|                                                     |  |                                          |        |                         |   |        |  |      |        |  |   |       



11



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##### Table of Contents

|8. | Intangibles, net of amortization
|-- | --------------------------------



The following table provides certain information related to our intangible assets.



|                                                           |  |                          |         |                         |   |                     |  |                         |         |  |   |       
|---------------------------------------------------------- |  | ------------------------ | ------- | ----------------------- | - | ------------------- |  | ----------------------- | ------- |  | - | ------
|                                                           |  | June 30, 2005            |         | December 31, 2004      
|                                                           |  | Identifiable Intangibles
|                                                           |  | GrossCarryingAmount      |         | AccumulatedAmortization |   | GrossCarryingAmount |  | AccumulatedAmortization
|                                                           |  | (in thousands)          
|Amortizing intangible assets                               |  |                          |         |                         |   |                     |  |                         |         |  |   |       
|Formulas                                                   |  | $                        | 85,910  |                         | $ | 37,643              |  | $                       | 85,910  |  | $ | 35,384
|Contracts                                                  |  |                          | 40,873  |                         |   | 40,873              |  |                         | 40,873  |  |   | 40,030
|                                                           |  |                          |         |                         |   |                     |  |                         |         |  |   |       
|                                                           |  | $                        | 126,783 |                         | $ | 78,516              |  | $                       | 126,783 |  | $ | 75,414
|                                                           |  |                          |         |                         |   |                     |  |                         |         |  |   |       
|Nonamortizing intangible assetsMinimum pension liabilities |  | $                        | 4,787   |                         |   |                     |  | $                       | 4,913   |  |   |       
|                                                           |  |                          |         |                         |   |                     |  |                         |         |  |   |       
|Aggregate amortization expense                             |  |                          |         |                         | $ | 3,102               |  |                         |         |  | $ | 6,540 
|                                                           |  |                          |         |                         |   |                     |  |                         |         |  |   |       



Estimated
amortization expense in thousands for the next five years is expected to be:

|
|

|  |  |      |  |       
|- |  | ---- |  | ------
|· |  | 2005 |  | $5,367
|· |  | 2006 |  | $4,524
|· |  | 2007 |  | $4,524
|· |  | 2008 |  | $4,524
|· |  | 2009 |  | $4,524



We amortize the cost
of intangible assets by the straight-line method, over their economic lives. Contracts are generally amortized over 5 to 10 years. Formulas are generally amortized over 20 years.



|9. | Long-term Debt
|-- | --------------



Long-term debt consisted of the following:



|                                     |  |                |         |   |                  |   |         |  
|------------------------------------ |  | -------------- | ------- | - | ---------------- | - | ------- | -
|                                     |  | June 30 2005   |         |   | December 31 2004 |  
|                                     |  | (in thousands) |        
|Senior notes                         |  | $              | 150,000 |   |                  | $ | 150,000 |  
|Revolving loan agreement             |  |                | 34,000  |   |                  |   | 30,000  |  
|Capital lease obligations            |  |                | 4,138   |   |                  |   | 4,438   |  
|                                     |  |                |         |   |                  |   |         |  
|                                     |  |                | 188,138 |   |                  |   | 184,438 |  
|Current maturities of long-term debt |  |                | (620    | ) |                  |   | (601    | )
|                                     |  |                |         |   |                  |   |         |  
|                                     |  | $              | 187,518 |   |                  | $ | 183,837 |  
|                                     |  |                |         |   |                  |   |         |  



12



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##### Table of Contents

Senior Notes - On April 30, 2003, Ethyl Corporation (Ethyl) sold senior notes in the
aggregate principal amount of $150 million that bear interest at a fixed rate of 8.875% and are due in 2010.



The senior notes are our senior unsecured obligations and are jointly and severally guaranteed on an unsecured basis by all of our existing and future
wholly-owned domestic restricted subsidiaries and certain of our existing wholly-owned foreign subsidiaries. We incurred financing costs of approximately $5 million related to the senior notes, which are being amortized over seven years.



In connection with the holding company formation, NewMarket assumed all
of Ethyls rights, liabilities and obligations under the senior notes, effective June 18, 2004.



The senior notes and the subsidiary guarantees rank:



| |  |  | effectively junior to all of our and the guarantors existing and future secured indebtedness, including any borrowings under the senior credit facility described below;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | equal in right of payment with any of our and the guarantors existing and future unsecured senior indebtedness; and
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | senior in right of payment to any of our and the guarantors existing and future subordinated indebtedness.
| | - |  | -----------------------------------------------------------------------------------------------------------



The indenture governing the senior notes contains covenants that, among
other things, limit our ability and the ability of our restricted subsidiaries to:



| |  |  | incur additional indebtedness;
| | - |  | ------------------------------



| |  |  | create liens;
| | - |  | -------------



| |  |  | pay dividends or repurchase capital stock;
| | - |  | ------------------------------------------



| |  |  | make certain investments;
| | - |  | -------------------------



| |  |  | sell assets or consolidate or merge with or into other companies; and
| | - |  | ---------------------------------------------------------------------



| |  |  | engage in transactions with affiliates.
| | - |  | ---------------------------------------



We were in compliance with these covenants as of both June 30, 2005 and December 31, 2004.



Senior Credit Facility - On April 30, 2003, we entered into a long-term debt structure for Ethyl. The debt
structure included the senior notes discussed above and a senior credit facility with a bank term loan and a revolving credit facility.



On June 18, 2004, prior to the completion of the holding company formation, Ethyl entered into an Amended and Restated Credit Agreement, which consists of
a $100 million revolving credit facility. This agreement amended and restated the credit agreement that Ethyl had entered into on April 30, 2003. Effective with the completion of the holding company formation, NewMarket assumed all of Ethyls
rights and obligations under the Amended and Restated Credit Agreement pursuant to the First Amendment thereto. We incurred additional financing costs of approximately $1 million, which resulted in total deferred financing costs of approximately $6
million related to the amended and restated credit facility. These costs are being amortized over five years.



13



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##### Table of Contents

Borrowings under the $100 million revolving credit facility are used for working capital and other
general corporate purposes for NewMarket and our subsidiaries. The revolving credit facility includes a sub-facility for letters of credit. Borrowings bear interest, at our election, at either a base rate plus a margin (75 basis points as of June
30, 2005) or LIBOR plus a margin (225 basis points as of June 30, 2005). The revolving credit facility matures on June 18, 2009. Borrowings outstanding at June 30, 2005 under the revolving credit facility were $34 million and bore interest at rates
of 5.4% to 6.75%, depending upon the type of borrowing. At June 30, 2005, we had outstanding letters of credit of $23.7 million, resulting in the unused portion of the revolver amounting to $42.3 million.



The revolving credit facility is secured by liens on substantially all of
our U.S. assets. In addition, the credit facility is guaranteed by our U.S. subsidiaries and certain foreign subsidiaries to the extent that such guarantees would not result in adverse tax consequences.



The credit agreement contains covenants, representations, and events of
default that management considers typical of a credit agreement of this nature. The financial covenants include:



| |  |  | minimum consolidated net worth;
| | - |  | -------------------------------



| |  |  | a minimum fixed charge coverage ratio;
| | - |  | --------------------------------------



| |  |  | a maximum leverage ratio;
| | - |  | -------------------------



| |  |  | a maximum senior secured leverage ratio; and
| | - |  | --------------------------------------------



| |  |  | restrictions on the payment of dividends or repurchases of capital stock.
| | - |  | -------------------------------------------------------------------------



We were in compliance with these covenants as of both June 30, 2005 and December 31, 2004.



|10. | Contractual Commitments and Contingencies
|--- | -----------------------------------------



There have been no significant changes in our contractual commitments and contingencies from those reported in our 2004 Annual Report, except for changes
related to the legal proceedings concerning the TEL case in Maryland. In that case, Ethyl was served as a defendant in the case filed in the Circuit Court for Baltimore City, Maryland, in September 1999. Smith, et al. v. Lead Industries
Association, Inc., et al., alleged personal injuries for seven children from lead exposure arising from lead paint and dust from tailpipe emissions due to leaded gasoline. The court dismissed Ethyl and some other defendants from the case in
February 2002 and granted summary judgment to other defendants in November 2002. The plaintiffs have appealed both decisions, but did not appeal the dismissal of Ethyl as a defendant. On April 4, 2005, the Court of Appeals of Maryland dismissed the
appeal on the basis that the trial courts decision was not a final decision that could be appealed, and the case is once again pending in the trial court. If such claims are further pursued against Ethyl, we believe Ethyl has strong defenses
and will vigorously defend any such claims.



Our accruals for
environmental remediation were approximately $23 million at June 30, 2005 and $22 million at December 31, 2004. In addition to the accruals for environmental remediation, we also have accruals for dismantling and decommissioning costs of
approximately $8 million at June 30, 2005 and $7 million at December 31, 2004.



14



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##### Table of Contents

During the second quarter 2005 we entered into an agreement with Travelers Indemnity Company (Travelers)
resolving certain long standing issues regarding our coverage for certain premises asbestos claims. In addition, our agreement with Travelers provides a procedure for allocating defense and indemnity costs with respect to future premises asbestos
claims. The lawsuit against Travelers in the Southern District of Texas was dismissed.



We also settled our outstanding receivable from Albemarle Corporation (Albemarle) for premises asbestos liability obligations. As a result of the insurance settlement described above, the outstanding amount owed to us
by Albemarle is now $1.4 million, compared to $4 million at year end. The $1.4 million is scheduled to be paid to us by Albemarle in the third quarter of this year.



These settlements resulted in a gain of $3.9 million ($2.5 million after income taxes), which is included as a special item
this quarter. The gain represents monies paid to us to settle historical claims in excess of the receivables we carried on our books from both Travelers and Albemarle.



|11. | Comprehensive Income and Accumulated Other Comprehensive Loss
|--- | -------------------------------------------------------------



The components of comprehensive income consist of the following:



|                                                       |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------ |  | -------------------------- | ------ | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                       |  | Three Months Ended June 30 |        |   | Six Months Ended June 30 |  
|                                                       |  | 2005                       |        |   | 2004                     |   |        | 2005 |  |   | 2004   |  
|                                                       |  | (in thousands)             |        |   | (in thousands)           |  
|Net income                                             |  | $                          | 13,067 |   |                          | $ | 11,354 |      |  | $ | 17,829 |   |  | $ | 17,172 |  
|Other comprehensive (loss) income, net of tax          |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Unrealized (loss) gain on marketable equity securities |  |                            | (4     | ) |                          |   | (7     | )    |  |   | (103   | ) |  |   | 60     |  
|Unrealized gain on derivative instruments              |  |                            | 583    |   |                          |   |       |      |  |   | 1,454  |   |  |   |       |  
|Foreign currency translation adjustments               |  |                            | (3,076 | ) |                          |   | (1,625 | )    |  |   | (4,973 | ) |  |   | (2,177 | )
|                                                       |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Other comprehensive loss                               |  |                            | (2,497 | ) |                          |   | (1,632 | )    |  |   | (3,622 | ) |  |   | (2,117 | )
|                                                       |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Comprehensive income                                   |  | $                          | 10,570 |   |                          | $ | 9,722  |      |  | $ | 14,207 |   |  | $ | 15,055 |  
|                                                       |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  



The components of
accumulated other comprehensive loss consist of the following:



|                                                 |  |                |         |   |                  |   |         |  
|------------------------------------------------ |  | -------------- | ------- | - | ---------------- | - | ------- | -
|                                                 |  | June 302005    |         |   | December 31 2004 |  
|                                                 |  | (in thousands) |        
|Unrealized gain on marketable equity securities  |  | $              | 43      |   |                  | $ | 146     |  
|Minimum pension liability adjustment             |  |                | (16,091 | ) |                  |   | (16,091 | )
|Unrealized gain (loss) on derivative instruments |  |                | 509     |   |                  |   | (945    | )
|Foreign currency translation adjustments         |  |                | (9,953  | ) |                  |   | (4,980  | )
|                                                 |  |                |         |   |                  |   |         |  
|Accumulated other comprehensive loss             |  | $              | (25,492 | ) |                  | $ | (21,870 | )
|                                                 |  |                |         |   |                  |   |         |  



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##### Table of Contents

|12. | Recently Issued Accounting Pronouncements
|--- | -----------------------------------------



In May 2005, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 154, Accounting Changes
and Error Corrections, (SFAS 154). SFAS 154 replaces Accounting Principles Board Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements and is effective for
fiscal years beginning after December 15, 2005. SFAS 154 addresses the accounting and reporting of a change in accounting principle. We do not expect SFAS 154 to have an impact on our financial statements, unless we adopt a change in accounting
principle.



In December 2004, the FASB issued SFAS No. 123
(Revised 2004), Share-Based Payment (SFAS 123R). SFAS 123R is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued
to Employees. In general, SFAS 123 provides guidance in accounting for transactions in which a company obtains employee services in exchange for share-based payments. SFAS 123R requires that the cost from share-based payment transactions be
recognized in the financial statements and be determined using a fair-value-based measurement method. SFAS 123R was to be effective for interim periods beginning after June 15, 2005. In April 2005, the SEC delayed the effective date to the first
fiscal year beginning after June 15, 2005. SFAS 123R applies to all share-based payment transactions initiated or modified after the effective date. We are evaluating SFAS 123R, but do not expect it to have a significant impact on our financial
results.



In March 2005, the FASB issued FASB Interpretation
No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47). FIN 47 clarifies certain aspects of FASB No. 143, Accounting for Asset Retirement Obligations and is effective no later than December 31, 2005. We are
currently evaluating the impact of FIN 47.



|13. | Consolidating Financial Information
|--- | -----------------------------------



The senior notes are fully and unconditionally guaranteed by certain of our subsidiaries (Guarantor Subsidiaries) on a joint and several unsecured senior
basis. The Guarantor Subsidiaries include all of our existing and future wholly-owned domestic restricted subsidiaries and certain of our existing wholly-owned foreign subsidiaries. The Guarantor Subsidiaries and the subsidiaries that do not
guarantee the senior notes (the Non-Guarantor Subsidiaries) are wholly owned by NewMarket Corporation (the Parent). The Guarantor Subsidiaries consist of the following:



|                                   |  |                                          
|---------------------------------- |  | -----------------------------------------
|Domestic Subsidiaries              |  |                                          
|Ethyl Corporation                  |  | Afton Chemical Corporation               
|Ethyl Asia Pacific LLC             |  | Afton Chemical Asia Pacific LLC          
|Ethyl Canada Holdings, Inc.        |  | Afton Chemical Canada Holdings, Inc.     
|Ethyl Export Corporation           |  | Afton Chemical Japan Holdings, Inc.      
|Ethyl Interamerica Corporation     |  | Afton Chemical Additives Corporation     
|Ethyl Ventures, Inc.               |  | NewMarket Services Corporation           
|Interamerica Terminals Corporation |  | The Edwin Cooper Corporation             
|Afton Chemical Intangibles LLC     |  | Old Town LLC                             
|                                   | 
|Foreign Subsidiaries               |  |                                          
|Ethyl Europe S.P.R.L.              |  | Afton Chemical S.P.R.L.                  
|Ethyl Administration GmbH          |  | Afton Chemical Industria de Aditivos Ltda
|Ethyl Services GmbH                |  |                                          



16



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We conduct all of our business and derive all of our income from our subsidiaries. Therefore, our ability
to make payments on the senior notes or other obligations is dependent on the earnings and the distribution of funds from our subsidiaries. There are no restrictions on the ability of any of our domestic subsidiaries to transfer funds to the Parent.
We are currently able to transfer funds from our foreign subsidiaries, although certain conditions may arise occasionally that may restrict these transfers.



The following sets forth the consolidating statements of income for the three months and six months ended June 30, 2005 and 2004, consolidating balance
sheets as of June 30, 2005 and December 31, 2004, and condensed consolidating statements of cash flows for the six months ended June 30, 2005 and 2004 for the Parent, the Guarantor Subsidiaries and Non-Guarantor Subsidiaries. Certain amounts in
these financial statements have been reclassified for the transition to a holding company structure effective as of June 18, 2004. The financial information is based on our understanding of the SECs interpretation and application of Rule 3-10
of the Regulation S-X promulgated by the SEC.



The financial
information may not necessarily be indicative of the results of operations or financial position had the Guarantor Subsidiaries or Non-Guarantor Subsidiaries operated as independent entities.



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NewMarket Corporation and Subsidiaries

Consolidating Statements of Income

Three Months Ended June 30, 2005

(in thousands)



|                                                                        |  |        |        |   |                       |   |                           |  |   |                               |   |  |              |         |   |  |   |        
|----------------------------------------------------------------------- |  | ------ | ------ | - | --------------------- | - | ------------------------- |  | - | ----------------------------- | - |  | ------------ | ------- | - |  | - | -------
|                                                                        |  | Parent |        |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | TotalConsolidatingAdjustments |   |  | Consolidated
|Net sales                                                               |  | $      |       |   |                       | $ | 195,949                   |  | $ | 134,772                       |   |  | $            | (58,879 | ) |  | $ | 271,842
|Cost of goods sold                                                      |  |        | 333    |   |                       |   | 167,522                   |  |   | 111,998                       |   |  |              | (60,172 | ) |  |   | 219,681
|                                                                        |  |        |        |   |                       |   |                           |  |   |                               |   |  |              |         |   |  |   |        
|Gross (loss) profit                                                     |  |        | (333   | ) |                       |   | 28,427                    |  |   | 22,774                        |   |  |              | 1,293   |   |  |   | 52,161 
|                                                                        |  |        |        |   |                      
|Operating profit from TEL marketing agreements services                 |  |        |       |   |                       |   | 2,506                     |  |   | 4,320                         |   |  |              |        |   |  |   | 6,826  
|Intercompany service fee income (expense) from TEL marketing agreements |  |        |       |   |                       |   | 4,120                     |  |   | (4,120                        | ) |  |              |        |   |  |   |       
|                                                                        |  |        |        |   |                      
|Selling, general, and administrative expenses                           |  |        | 1,472  |   |                       |   | 10,666                    |  |   | 11,831                        |   |  |              |        |   |  |   | 23,969 
|Research, development, and testing expenses                             |  |        |       |   |                       |   | 12,083                    |  |   | 3,714                         |   |  |              |        |   |  |   | 15,797 
|Special item income                                                     |  |        |       |   |                       |   | 3,868                     |  |   |                              |   |  |              |        |   |  |   | 3,868  
|                                                                        |  |        |        |   |                       |   |                           |  |   |                               |   |  |              |         |   |  |   |        
|Operating (loss) profit                                                 |  |        | (1,805 | ) |                       |   | 16,172                    |  |   | 7,429                         |   |  |              | 1,293   |   |  |   | 23,089 
|                                                                        |  |        |        |   |                      
|Interest and financing expenses                                         |  |        | 4,411  |   |                       |   | 44                        |  |   |                              |   |  |              |        |   |  |   | 4,455  
|Other (expense) income, net                                             |  |        | (14    | ) |                       |   | 89                        |  |   | 56                            |   |  |              |        |   |  |   | 131    
|                                                                        |  |        |        |   |                       |   |                           |  |   |                               |   |  |              |         |   |  |   |        
|(Loss) income before income taxes and equity income of subsidiaries     |  |        | (6,230 | ) |                       |   | 16,217                    |  |   | 7,485                         |   |  |              | 1,293   |   |  |   | 18,765 
|Income tax (benefit) expense                                            |  |        | (2,608 | ) |                       |   | 5,460                     |  |   | 2,362                         |   |  |              | 484     |   |  |   | 5,698  
|Equity income of subsidiaries                                           |  |        | 16,689 |   |                       |   |                          |  |   |                              |   |  |              | (16,689 | ) |  |   |       
|                                                                        |  |        |        |   |                       |   |                           |  |   |                               |   |  |              |         |   |  |   |        
|Net income                                                              |  | $      | 13,067 |   |                       | $ | 10,757                    |  | $ | 5,123                         |   |  | $            | (15,880 | ) |  | $ | 13,067 
|                                                                        |  |        |        |   |                       |   |                           |  |   |                               |   |  |              |         |   |  |   |        



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NewMarket Corporation and Subsidiaries

Consolidating Statements of Income

Three Months Ended June 30, 2004

(in thousands)



|                                                                        |  |        |        |   |                       |   |         |                           |  |   |                               |   |  |              |         |   |  |   |        
|----------------------------------------------------------------------- |  | ------ | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ----------------------------- | - |  | ------------ | ------- | - |  | - | -------
|                                                                        |  | Parent |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | TotalConsolidatingAdjustments |   |  | Consolidated
|Net sales                                                               |  | $      |       |   |                       | $ | 164,832 |                           |  | $ | 120,356                       |   |  | $            | (63,678 | ) |  | $ | 221,510
|Cost of goods sold                                                      |  |        | 280    |   |                       |   | 131,944 |                           |  |   | 103,653                       |   |  |              | (64,899 | ) |  |   | 170,978
|                                                                        |  |        |        |   |                       |   |         |                           |  |   |                               |   |  |              |         |   |  |   |        
|Gross (loss) profit                                                     |  |        | (280   | ) |                       |   | 32,888  |                           |  |   | 16,703                        |   |  |              | 1,221   |   |  |   | 50,532 
|                                                                        |  |        |        |   |                      
|Operating profit from TEL marketing agreements services                 |  |        |       |   |                       |   | 1,623   |                           |  |   | 9,140                         |   |  |              |        |   |  |   | 10,763 
|Intercompany service fee income (expense) from TEL marketing agreements |  |        |       |   |                       |   | 8,930   |                           |  |   | (8,930                        | ) |  |              |        |   |  |   |       
|                                                                        |  |        |        |   |                      
|Selling, general, and administrative expenses                           |  |        | 1,270  |   |                       |   | 12,746  |                           |  |   | 10,894                        |   |  |              |        |   |  |   | 24,910 
|Research, development, and testing expenses                             |  |        |       |   |                       |   | 12,080  |                           |  |   | 3,018                         |   |  |              |        |   |  |   | 15,098 
|                                                                        |  |        |        |   |                       |   |         |                           |  |   |                               |   |  |              |         |   |  |   |        
|Operating (loss) profit                                                 |  |        | (1,550 | ) |                       |   | 18,615  |                           |  |   | 3,001                         |   |  |              | 1,221   |   |  |   | 21,287 
|                                                                        |  |        |        |   |                      
|Interest and financing expenses                                         |  |        | 4,332  |   |                       |   | 195     |                           |  |   |                              |   |  |              |        |   |  |   | 4,527  
|Other (expense) income, net                                             |  |        | (95    | ) |                       |   | (692    | )                         |  |   | 1,070                         |   |  |              |        |   |  |   | 283    
|                                                                        |  |        |        |   |                       |   |         |                           |  |   |                               |   |  |              |         |   |  |   |        
|(Loss) income before income taxes and equity income of subsidiaries     |  |        | (5,977 | ) |                       |   | 17,728  |                           |  |   | 4,071                         |   |  |              | 1,221   |   |  |   | 17,043 
|Income tax expense                                                      |  |        | 686    |   |                       |   | 4,097   |                           |  |   | 441                           |   |  |              | 465     |   |  |   | 5,689  
|Equity income of subsidiaries                                           |  |        | 18,017 |   |                       |   |        |                           |  |   |                              |   |  |              | (18,017 | ) |  |   |       
|                                                                        |  |        |        |   |                       |   |         |                           |  |   |                               |   |  |              |         |   |  |   |        
|Net income                                                              |  | $      | 11,354 |   |                       | $ | 13,631  |                           |  | $ | 3,630                         |   |  | $            | (17,261 | ) |  | $ | 11,354 
|                                                                        |  |        |        |   |                       |   |         |                           |  |   |                               |   |  |              |         |   |  |   |        



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NewMarket Corporation and Subsidiaries

Consolidating Statements of Income

Six Months Ended June 30, 2005

(in thousands)



|                                                                        |  |        |         |   |                       |   |                           |  |   |                               |   |  |              |          |   |  |   |        
|----------------------------------------------------------------------- |  | ------ | ------- | - | --------------------- | - | ------------------------- |  | - | ----------------------------- | - |  | ------------ | -------- | - |  | - | -------
|                                                                        |  | Parent |         |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | TotalConsolidatingAdjustments |   |  | Consolidated
|Net sales                                                               |  | $      |        |   |                       | $ | 369,839                   |  | $ | 256,893                       |   |  | $            | (115,776 | ) |  | $ | 510,956
|Cost of goods sold                                                      |  |        | 680     |   |                       |   | 319,585                   |  |   | 212,068                       |   |  |              | (116,651 | ) |  |   | 415,682
|                                                                        |  |        |         |   |                       |   |                           |  |   |                               |   |  |              |          |   |  |   |        
|Gross (loss) profit                                                     |  |        | (680    | ) |                       |   | 50,254                    |  |   | 44,825                        |   |  |              | 875      |   |  |   | 95,274 
|                                                                        |  |        |         |   |                      
|Operating profit from TEL marketing agreements services                 |  |        |        |   |                       |   | 4,751                     |  |   | 8,526                         |   |  |              |         |   |  |   | 13,277 
|Intercompany service fee income (expense) from TEL marketing agreements |  |        |        |   |                       |   | 8,127                     |  |   | (8,127                        | ) |  |              |         |   |  |   |       
|                                                                        |  |        |         |   |                      
|Selling, general, and administrative expenses                           |  |        | 3,241   |   |                       |   | 20,568                    |  |   | 22,453                        |   |  |              |         |   |  |   | 46,262 
|Research, development, and testing expenses                             |  |        |        |   |                       |   | 24,590                    |  |   | 7,487                         |   |  |              |         |   |  |   | 32,077 
|Special item income                                                     |  |        |        |   |                       |   | 3,868                     |  |   |                              |   |  |              |         |   |  |   | 3,868  
|                                                                        |  |        |         |   |                       |   |                           |  |   |                               |   |  |              |          |   |  |   |        
|Operating (loss) profit                                                 |  |        | (3,921  | ) |                       |   | 21,842                    |  |   | 15,284                        |   |  |              | 875      |   |  |   | 34,080 
|                                                                        |  |        |         |   |                      
|Interest and financing expenses                                         |  |        | 8,690   |   |                       |   | 92                        |  |   |                              |   |  |              |         |   |  |   | 8,782  
|Other income, net                                                       |  |        | 138     |   |                       |   | 145                       |  |   | 88                            |   |  |              |         |   |  |   | 371    
|                                                                        |  |        |         |   |                       |   |                           |  |   |                               |   |  |              |          |   |  |   |        
|(Loss) income before income taxes and equity income of subsidiaries     |  |        | (12,473 | ) |                       |   | 21,895                    |  |   | 15,372                        |   |  |              | 875      |   |  |   | 25,669 
|Income tax (benefit) expense                                            |  |        | (5,312  | ) |                       |   | 7,216                     |  |   | 5,610                         |   |  |              | 326      |   |  |   | 7,840  
|Equity income of subsidiaries                                           |  |        | 24,990  |   |                       |   |                          |  |   |                              |   |  |              | (24,990  | ) |  |   |       
|                                                                        |  |        |         |   |                       |   |                           |  |   |                               |   |  |              |          |   |  |   |        
|Net income                                                              |  | $      | 17,829  |   |                       | $ | 14,679                    |  | $ | 9,762                         |   |  | $            | (24,441  | ) |  | $ | 17,829 
|                                                                        |  |        |         |   |                       |   |                           |  |   |                               |   |  |              |          |   |  |   |        



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NewMarket Corporation and Subsidiaries

Consolidating Statements of Income

Six Months Ended June 30, 2004

(in thousands)



|                                                                        |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |        
|----------------------------------------------------------------------- |  | ------ | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------------------------- | - |  | ------------ | -------- | - |  | - | -------
|                                                                        |  | Parent |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Total Consolidating Adjustments |   |  | Consolidated
|Net sales                                                               |  | $      |        |   |                        | $ | 324,490 |                            |  | $ | 232,753                         |   |  | $            | (118,963 | ) |  | $ | 438,280
|Cost of goods sold                                                      |  |        | 496     |   |                        |   | 257,771 |                            |  |   | 204,405                         |   |  |              | (120,785 | ) |  |   | 341,887
|                                                                        |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |        
|Gross (loss) profit                                                     |  |        | (496    | ) |                        |   | 66,719  |                            |  |   | 28,348                          |   |  |              | 1,822    |   |  |   | 96,393 
|                                                                        |  |        |         |   |                       
|Operating profit from TEL marketing agreements services                 |  |        |        |   |                        |   | 4,338   |                            |  |   | 13,737                          |   |  |              |         |   |  |   | 18,075 
|Intercompany service fee income (expense) from TEL marketing agreements |  |        |        |   |                        |   | 13,476  |                            |  |   | (13,476                         | ) |  |              |         |   |  |   |       
|                                                                        |  |        |         |   |                       
|Selling, general, and administrative expenses                           |  |        | 2,373   |   |                        |   | 24,109  |                            |  |   | 21,946                          |   |  |              |         |   |  |   | 48,428 
|Research, development, and testing expenses                             |  |        |        |   |                        |   | 24,621  |                            |  |   | 6,226                           |   |  |              |         |   |  |   | 30,847 
|                                                                        |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |        
|Operating (loss) profit                                                 |  |        | (2,869  | ) |                        |   | 35,803  |                            |  |   | 437                             |   |  |              | 1,822    |   |  |   | 35,193 
|                                                                        |  |        |         |   |                       
|Interest and financing expenses                                         |  |        | 9,257   |   |                        |   | 426     |                            |  |   |                                |   |  |              |         |   |  |   | 9,683  
|Other income (expense), net                                             |  |        | 4       |   |                        |   | (658    | )                          |  |   | 1,103                           |   |  |              |         |   |  |   | 449    
|                                                                        |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |        
|(Loss) income before income taxes and equity income of subsidiaries     |  |        | (12,122 | ) |                        |   | 34,719  |                            |  |   | 1,540                           |   |  |              | 1,822    |   |  |   | 25,959 
|Income tax (benefit) expense                                            |  |        | (2,320  | ) |                        |   | 10,761  |                            |  |   | (338                            | ) |  |              | 684      |   |  |   | 8,787  
|Equity income of subsidiaries                                           |  |        | 26,974  |   |                        |   |        |                            |  |   |                                |   |  |              | (26,974  | ) |  |   |       
|                                                                        |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |        
|Net income                                                              |  | $      | 17,172  |   |                        | $ | 23,958  |                            |  | $ | 1,878                           |   |  | $            | (25,836  | ) |  | $ | 17,172 
|                                                                        |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |        



21



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NewMarket Corporation and Subsidiaries

Consolidating Balance Sheets

June 30, 2005

(in thousands)



|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|---------------------------------------------- |  | ------ | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------------------------- | - |  | ------------ | -------- | - |  | - | ------- | -
|                                               |  | Parent |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Total Consolidating Adjustments |   |  | Consolidated |         
|ASSETS                                         |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|                                               |  |        |         |   |                       
|Cash and cash equivalents                      |  | $      | 269     |   |                        | $ | 13,390  |                            |  | $ | 17,794                          |   |  | $            |         |   |  | $ | 31,453  |  
|Restricted cash                                |  |        | 898     |   |                        |   | 511     |                            |  |   |                                |   |  |              |         |   |  |   | 1,409   |  
|Trade and other accounts receivable, net       |  |        | 2,287   |   |                        |   | 96,062  |                            |  |   | 79,028                          |   |  |              |         |   |  |   | 177,377 |  
|Receivable - TEL marketing agreements services |  |        |        |   |                        |   | (5,169  | )                          |  |   | 9,082                           |   |  |              |         |   |  |   | 3,913   |  
|Amounts due from affiliated companies          |  |        |        |   |                        |   | 117,985 |                            |  |   | 33,134                          |   |  |              | (151,119 | ) |  |   |        |  
|Inventories                                    |  |        |        |   |                        |   | 91,406  |                            |  |   | 67,141                          |   |  |              | (1,464   | ) |  |   | 157,083 |  
|Deferred income taxes                          |  |        | 1,127   |   |                        |   | 5,159   |                            |  |   | 599                             |   |  |              | 597      |   |  |   | 7,482   |  
|Prepaid expenses                               |  |        | 516     |   |                        |   | 3,885   |                            |  |   | 1,238                           |   |  |              |         |   |  |   | 5,639   |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total current assets                           |  |        | 5,097   |   |                        |   | 323,229 |                            |  |   | 208,016                         |   |  |              | (151,986 | ) |  |   | 384,356 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Property, plant and equipment, at cost         |  |        |        |   |                        |   | 710,050 |                            |  |   | 64,404                          |   |  |              |         |   |  |   | 774,454 |  
|Less accumulated depreciation & amortization   |  |        |        |   |                        |   | 553,910 |                            |  |   | 60,607                          |   |  |              |         |   |  |   | 614,517 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Net property, plant and equipment              |  |        |        |   |                        |   | 156,140 |                            |  |   | 3,797                           |   |  |              |         |   |  |   | 159,937 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Investment in consolidated subsidiaries        |  |        | 471,621 |   |                        |   |        |                            |  |   |                                |   |  |              | (471,621 | ) |  |   |        |  
|Prepaid pension cost                           |  |        | 15,800  |   |                        |   |        |                            |  |   | 2,030                           |   |  |              |         |   |  |   | 17,830  |  
|Deferred income taxes                          |  |        | 14,603  |   |                        |   | (3,493  | )                          |  |   | (4,066                          | ) |  |              |         |   |  |   | 7,044   |  
|Other assets and deferred charges              |  |        | 17,816  |   |                        |   | 35,015  |                            |  |   | 7,493                           |   |  |              |         |   |  |   | 60,324  |  
|Intangibles, net of amortization               |  |        | 970     |   |                        |   | 50,133  |                            |  |   | 1,951                           |   |  |              |         |   |  |   | 53,054  |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total assets                                   |  | $      | 525,907 |   |                        | $ | 561,024 |                            |  | $ | 219,221                         |   |  | $            | (623,607 | ) |  | $ | 682,545 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY           |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|                                               |  |        |         |   |                       
|Accounts payable                               |  | $      | 33      |   |                        | $ | 49,365  |                            |  | $ | 21,500                          |   |  | $            |         |   |  | $ | 70,898  |  
|Accrued expenses                               |  |        | 5,613   |   |                        |   | 33,789  |                            |  |   | 5,595                           |   |  |              |         |   |  |   | 44,997  |  
|Book overdraft                                 |  |        | 22      |   |                        |   | 6,149   |                            |  |   |                                |   |  |              |         |   |  |   | 6,171   |  
|Amounts due to affiliated companies            |  |        | 27,928  |   |                        |   | 33,543  |                            |  |   | 89,648                          |   |  |              | (151,119 | ) |  |   |        |  
|Long-term debt, current portion                |  |        |        |   |                        |   | 620     |                            |  |   |                                |   |  |              |         |   |  |   | 620     |  
|Income taxes payable                           |  |        | 2,094   |   |                        |   | 4,469   |                            |  |   | 1,871                           |   |  |              |         |   |  |   | 8,434   |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total current liabilities                      |  |        | 35,690  |   |                        |   | 127,935 |                            |  |   | 118,614                         |   |  |              | (151,119 | ) |  |   | 131,120 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Long-term debt                                 |  |        | 184,000 |   |                        |   | 3,518   |                            |  |   |                                |   |  |              |         |   |  |   | 187,518 |  
|Other noncurrent liabilities                   |  |        | 59,901  |   |                        |   | 38,133  |                            |  |   | 19,557                          |   |  |              |         |   |  |   | 117,591 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total liabilities                              |  |        | 279,591 |   |                        |   | 169,586 |                            |  |   | 138,171                         |   |  |              | (151,119 | ) |  |   | 436,229 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Shareholders equity:                          |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Common stock and paid-in capital               |  |        | 84,951  |   |                        |   | 272,588 |                            |  |   | 40,347                          |   |  |              | (312,935 | ) |  |   | 84,951  |  
|Accumulated other comprehensive loss           |  |        | (25,492 | ) |                        |   | (12,603 | )                          |  |   | (9,726                          | ) |  |              | 22,329   |   |  |   | (25,492 | )
|Retained earnings                              |  |        | 186,857 |   |                        |   | 131,453 |                            |  |   | 50,429                          |   |  |              | (181,882 | ) |  |   | 186,857 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total shareholders equity                     |  |        | 246,316 |   |                        |   | 391,438 |                            |  |   | 81,050                          |   |  |              | (472,488 | ) |  |   | 246,316 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total liabilities and shareholders equity     |  | $      | 525,907 |   |                        | $ | 561,024 |                            |  | $ | 219,221                         |   |  | $            | (623,607 | ) |  | $ | 682,545 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  



22



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##### Table of Contents

NewMarket Corporation and Subsidiaries

Consolidating Balance Sheets

December 31, 2004

(in thousands)



|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|---------------------------------------------- |  | ------ | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------------------------- | - |  | ------------ | -------- | - |  | - | ------- | -
|                                               |  | Parent |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Total Consolidating Adjustments |   |  | Consolidated |         
|ASSETS                                         |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|                                               |  |        |         |   |                       
|Cash and cash equivalents                      |  | $      | 51      |   |                        | $ | 8,587   |                            |  | $ | 20,140                          |   |  | $            |         |   |  | $ | 28,778  |  
|Restricted cash                                |  |        | 1,132   |   |                        |   | 574     |                            |  |   |                                |   |  |              |         |   |  |   | 1,706   |  
|Trade and other accounts receivable, net       |  |        | 5,402   |   |                        |   | 82,507  |                            |  |   | 70,514                          |   |  |              |         |   |  |   | 158,423 |  
|Receivable - TEL marketing agreements services |  |        |        |   |                        |   | (3,869  | )                          |  |   | 7,167                           |   |  |              |         |   |  |   | 3,298   |  
|Amounts due from affiliated companies          |  |        |        |   |                        |   | 82,228  |                            |  |   | 33,819                          |   |  |              | (116,047 | ) |  |   |        |  
|Inventories                                    |  |        |        |   |                        |   | 97,823  |                            |  |   | 62,305                          |   |  |              | (2,339   | ) |  |   | 157,789 |  
|Deferred income taxes                          |  |        | 1,129   |   |                        |   | 5,117   |                            |  |   | 704                             |   |  |              | 924      |   |  |   | 7,874   |  
|Prepaid expenses                               |  |        | 252     |   |                        |   | 1,263   |                            |  |   | 872                             |   |  |              |         |   |  |   | 2,387   |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total current assets                           |  |        | 7,966   |   |                        |   | 274,230 |                            |  |   | 195,521                         |   |  |              | (117,462 | ) |  |   | 360,255 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Property, plant and equipment, at cost         |  |        |        |   |                        |   | 712,074 |                            |  |   | 65,031                          |   |  |              |         |   |  |   | 777,105 |  
|Less accumulated depreciation & amortization   |  |        |        |   |                        |   | 549,562 |                            |  |   | 61,314                          |   |  |              |         |   |  |   | 610,876 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Net property, plant and equipment              |  |        |        |   |                        |   | 162,512 |                            |  |   | 3,717                           |   |  |              |         |   |  |   | 166,229 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Investment in consolidated subsidiaries        |  |        | 458,555 |   |                        |   |        |                            |  |   |                                |   |  |              | (458,555 | ) |  |   |        |  
|Prepaid pension cost                           |  |        | 18,113  |   |                        |   |        |                            |  |   | 1,988                           |   |  |              |         |   |  |   | 20,101  |  
|Deferred income taxes                          |  |        | 13,468  |   |                        |   | (4,079  | )                          |  |   | (5,022                          | ) |  |              |         |   |  |   | 4,367   |  
|Other assets and deferred charges              |  |        | 20,587  |   |                        |   | 40,456  |                            |  |   | 7,918                           |   |  |              |         |   |  |   | 68,961  |  
|Intangibles, net of amortization               |  |        | 970     |   |                        |   | 53,235  |                            |  |   | 2,077                           |   |  |              |         |   |  |   | 56,282  |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total assets                                   |  | $      | 519,659 |   |                        | $ | 526,354 |                            |  | $ | 206,199                         |   |  | $            | (576,017 | ) |  | $ | 676,195 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY           |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|                                               |  |        |         |   |                       
|Accounts payable                               |  | $      | 30      |   |                        | $ | 44,944  |                            |  | $ | 30,745                          |   |  | $            |         |   |  | $ | 75,719  |  
|Accrued expenses                               |  |        | 5,648   |   |                        |   | 41,069  |                            |  |   | 5,993                           |   |  |              |         |   |  |   | 52,710  |  
|Book overdraft                                 |  |        | 17      |   |                        |   | 4,998   |                            |  |   |                                |   |  |              |         |   |  |   | 5,015   |  
|Amounts due to affiliated companies            |  |        | 40,831  |   |                        |   |        |                            |  |   | 75,216                          |   |  |              | (116,047 | ) |  |   |        |  
|Long-term debt, current portion                |  |        |        |   |                        |   | 601     |                            |  |   |                                |   |  |              |         |   |  |   | 601     |  
|Income taxes payable                           |  |        | 1,708   |   |                        |   | 4,750   |                            |  |   | (320                            | ) |  |              |         |   |  |   | 6,138   |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total current liabilities                      |  |        | 48,234  |   |                        |   | 96,362  |                            |  |   | 111,634                         |   |  |              | (116,047 | ) |  |   | 140,183 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Long-term debt                                 |  |        | 180,000 |   |                        |   | 3,837   |                            |  |   |                                |   |  |              |         |   |  |   | 183,837 |  
|Other noncurrent liabilities                   |  |        | 59,543  |   |                        |   | 40,074  |                            |  |   | 20,676                          |   |  |              |         |   |  |   | 120,293 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total liabilities                              |  |        | 287,777 |   |                        |   | 140,273 |                            |  |   | 132,310                         |   |  |              | (116,047 | ) |  |   | 444,313 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Shareholders equity:                          |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Common stock and paid-in capital               |  |        | 84,724  |   |                        |   | 271,483 |                            |  |   | 40,347                          |   |  |              | (311,830 | ) |  |   | 84,724  |  
|Accumulated other comprehensive loss           |  |        | (21,870 | ) |                        |   | (11,686 | )                          |  |   | (7,125                          | ) |  |              | 18,811   |   |  |   | (21,870 | )
|Retained earnings                              |  |        | 169,028 |   |                        |   | 126,284 |                            |  |   | 40,667                          |   |  |              | (166,951 | ) |  |   | 169,028 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total shareholders equity                     |  |        | 231,882 |   |                        |   | 386,081 |                            |  |   | 73,889                          |   |  |              | (459,970 | ) |  |   | 231,882 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  
|Total liabilities and shareholders equity     |  | $      | 519,659 |   |                        | $ | 526,354 |                            |  | $ | 206,199                         |   |  | $            | (576,017 | ) |  | $ | 676,195 |  
|                                               |  |        |         |   |                        |   |         |                            |  |   |                                 |   |  |              |          |   |  |   |         |  



23



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##### Table of Contents

NewMarket Corporation and Subsidiaries

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30,
2005

(in thousands)



|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|------------------------------------------------------- |  | ------ | ------ | - | ---------------------- | - | ------ | -------------------------- |  | - | ------------------------------- | - |  | ------------ | ------ | - |  | - | ------ | -
|                                                        |  | Parent |        |   | Guarantor Subsidiaries |   |        | Non-Guarantor Subsidiaries |  |   | Total Consolidating Adjustments |   |  | Consolidated |       
|Cash (used in) provided from operating activities       |  | $      | (3,689 | ) |                        | $ | 9,529  |                            |  | $ | 2,112                           |   |  | $            |       |   |  | $ | 7,952  |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash flows from investing activities                    |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Capital expenditures                                    |  |        |       |   |                        |   | (6,488 | )                          |  |   | (586                            | ) |  |              |       |   |  |   | (7,074 | )
|Increase in intercompany loans                          |  |        | (2,900 | ) |                        |   |       |                            |  |   |                                |   |  |              | 2,900  |   |  |   |       |  
|Cash dividends from subsidiaries                        |  |        | 2,575  |   |                        |   |       |                            |  |   |                                |   |  |              | (2,575 | ) |  |   |       |  
|Other, net                                              |  |        |       |   |                        |   | 121    |                            |  |   |                                |   |  |              |       |   |  |   | 121    |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash used in investing activities                       |  |        | (325   | ) |                        |   | (6,367 | )                          |  |   | (586                            | ) |  |              | 325    |   |  |   | (6,953 | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash flows from financing activities                    |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Borrowings under revolving credit agreement             |  |        | 4,000  |   |                        |   |       |                            |  |   |                                |   |  |              |       |   |  |   | 4,000  |  
|Change in book overdraft                                |  |        | 5      |   |                        |   | 1,151  |                            |  |   |                                |   |  |              |       |   |  |   | 1,156  |  
|Financing from affiliated companies                     |  |        |       |   |                        |   | 2,900  |                            |  |   |                                |   |  |              | (2,900 | ) |  |   |       |  
|Cash dividends paid                                     |  |        |       |   |                        |   | (2,575 | )                          |  |   |                                |   |  |              | 2,575  |   |  |   |       |  
|Proceeds from exercise of stock options                 |  |        | 227    |   |                        |   |       |                            |  |   |                                |   |  |              |       |   |  |   | 227    |  
|Decrease in capital lease                               |  |        |       |   |                        |   | (300   | )                          |  |   |                                |   |  |              |       |   |  |   | (300   | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash provided from financing activities                 |  |        | 4,232  |   |                        |   | 1,176  |                            |  |   |                                |   |  |              | (325   | ) |  |   | 5,083  |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Effect of foreign exchange on cash and cash equivalents |  |        |       |   |                        |   | 465    |                            |  |   | (3,872                          | ) |  |              |       |   |  |   | (3,407 | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Increase (decrease) in cash and cash equivalents        |  |        | 218    |   |                        |   | 4,803  |                            |  |   | (2,346                          | ) |  |              |       |   |  |   | 2,675  |  
|Cash and cash equivalents at beginning of year          |  |        | 51     |   |                        |   | 8,587  |                            |  |   | 20,140                          |   |  |              |       |   |  |   | 28,778 |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash and cash equivalents at end of period              |  | $      | 269    |   |                        | $ | 13,390 |                            |  | $ | 17,794                          |   |  | $            |       |   |  | $ | 31,453 |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  



24



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##### Table of Contents

NewMarket Corporation and Subsidiaries

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30,
2004



|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|------------------------------------------------------- |  | ------ | ------ | - | ---------------------- | - | ------ | -------------------------- |  | - | ------------------------------- | - |  | ------------ | ------ | - |  | - | ------ | -
|                                                        |  | Parent |        |   | Guarantor Subsidiaries |   |        | Non-Guarantor Subsidiaries |  |   | Total Consolidating Adjustments |   |  | Consolidated |       
|Cash (used in) provided from operating activities       |  | $      | (1,926 | ) |                        | $ | 6,248  |                            |  | $ | 1,005                           |   |  | $            |       |   |  | $ | 5,327  |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash flows from investing activities                    |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Capital expenditures                                    |  |        |       |   |                        |   | (5,613 | )                          |  |   | (434                            | ) |  |              |       |   |  |   | (6,047 | )
|Cash dividends from subsidiaries                        |  |        | 2,000  |   |                        |   |       |                            |  |   |                                |   |  |              | (2,000 | ) |  |   |       |  
|Other, net                                              |  |        |       |   |                        |   | 11     |                            |  |   |                                |   |  |              |       |   |  |   | 11     |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash provided from (used in) investing activities       |  |        | 2,000  |   |                        |   | (5,602 | )                          |  |   | (434                            | ) |  |              | (2,000 | ) |  |   | (6,036 | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash flows from financing activities                    |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Repayments of debt - previous agreements                |  |        | (3,807 | ) |                        |   |       |                            |  |   |                                |   |  |              |       |   |  |   | (3,807 | )
|Change in book overdraft                                |  |        |       |   |                        |   | 3,467  |                            |  |   |                                |   |  |              |       |   |  |   | 3,467  |  
|Cash dividends paid                                     |  |        |       |   |                        |   | (2,000 | )                          |  |   |                                |   |  |              | 2,000  |   |  |   |       |  
|Repayment of intercompany note payable                  |  |        |       |   |                        |   | (5,281 | )                          |  |   |                                |   |  |              | 5,281  |   |  |   |       |  
|Financing from affiliated companies                     |  |        |       |   |                        |   | 5,281  |                            |  |   |                                |   |  |              | (5,281 | ) |  |   |       |  
|Debt issuance costs                                     |  |        | (1,089 | ) |                        |   |       |                            |  |   |                                |   |  |              |       |   |  |   | (1,089 | )
|Proceeds from exercise of stock options                 |  |        | 773    |   |                        |   |       |                            |  |   |                                |   |  |              |       |   |  |   | 773    |  
|Decrease in capital lease                               |  |        |       |   |                        |   | (281   | )                          |  |   |                                |   |  |              |       |   |  |   | (281   | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash (used in) provided from financing activities       |  |        | (4,123 | ) |                        |   | 1,186  |                            |  |   |                                |   |  |              | 2,000  |   |  |   | (937   | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Effect of foreign exchange on cash and cash equivalents |  |        | (715   | ) |                        |   | 314    |                            |  |   | (1,981                          | ) |  |              |       |   |  |   | (2,382 | )
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Decrease (increase) in cash and cash equivalents        |  |        | (4,764 | ) |                        |   | 2,146  |                            |  |   | (1,410                          | ) |  |              |       |   |  |   | (4,028 | )
|Cash and cash equivalents at beginning of year          |  |        | 8,500  |   |                        |   | 9,189  |                            |  |   | 15,678                          |   |  |              |       |   |  |   | 33,367 |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  
|Cash and cash equivalents at end of period              |  | $      | 3,736  |   |                        | $ | 11,335 |                            |  | $ | 14,268                          |   |  | $            |       |   |  | $ | 29,339 |  
|                                                        |  |        |        |   |                        |   |        |                            |  |   |                                 |   |  |              |        |   |  |   |        |  



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ITEM 2. Managements Discussion and Analysis ofFinancial Condition and Results of Operations



Forward-Looking Statements



The following discussion contains statements about future events and expectations, or forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future results. When we use words in this document, such as anticipates, intends,
plans, believes, estimates, expects, and similar expressions, we do so to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make
regarding future prospects of growth in the petroleum additives market, the level of future declines in the market for tetraethyl lead (TEL), other trends in the petroleum additives market, our ability to maintain or increase our market share, and
our future capital expenditure levels.



We believe our
forward-looking statements are based on reasonable expectations and assumptions, within the bounds of what we know about our business and operations. However, we offer no assurance that actual results will not differ materially from our expectations
due to uncertainties and factors that are difficult to predict and beyond our control.



These factors include, but are not limited to, timing of sales orders, gain or loss of significant customers, competition from other manufacturers, resolution of environmental liabilities, changes in the demand for
our products, significant changes in new product introduction, increases in product cost, the impact of fluctuations in foreign exchange rates on reported results of operations, changes in various markets, geopolitical risks in certain of the
countries in which we conduct business, and the impact of consolidation of the petroleum additives industry. In addition, we also discuss certain risk factors in Item 7A, Quantitative and Qualitative Disclosures About Market Risk in the
2004 Annual Report and incorporate the same herein by reference.



You should keep in mind that any forward-looking statement made by us in this discussion speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these
events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you
should keep in mind that the events described in any forward-looking statement, made in this discussion or elsewhere, might not occur.



Results of Operations



Net Sales



Our consolidated net sales for the second quarter 2005 amounted to $271.8 million, representing an increase of 23% from the 2004 level of $221.5 million.
The six months 2005 consolidated net sales were $511.0 million as compared to $438.3 million for the same 2004 period, which represents an increase of 17% over six months 2004. The table below shows our consolidated net sales by segment.



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Net Sales by Segment

(in millions)



|                       |  |                            |       |                          |   |       |  |      |       |  |   |      
|---------------------- |  | -------------------------- | ----- | ------------------------ | - | ----- |  | ---- | ----- |  | - | -----
|                       |  | Three Months Ended June 30 |       | Six Months Ended June 30
|                       |  | 2005                       |       | 2004                     |   | 2005  |  | 2004
|Petroleum additives    |  | $                          | 269.0 |                          | $ | 218.1 |  | $    | 506.2 |  | $ | 432.8
|Tetraethyl lead        |  |                            | 2.8   |                          |   | 3.4   |  |      | 4.8   |  |   | 5.5  
|                       |  |                            |       |                          |   |       |  |      |       |  |   |      
|Consolidated net sales |  | $                          | 271.8 |                          | $ | 221.5 |  | $    | 511.0 |  | $ | 438.3
|                       |  |                            |       |                          |   |       |  |      |       |  |   |      



Petroleum
Additives Segment



Petroleum additives net sales in the
second quarter 2005 of $269.0 million were up $50.9 million, or approximately 23%, from $218.1 million in the second quarter 2004. Shipments for the second quarter 2005 increased approximately 13% as compared to second quarter 2004. The increase in
shipments was the result of significantly higher shipments in the engine oil additives product line. Shipments in the other product lines for the second quarter 2005 were generally unchanged compared to the second quarter 2004. Selling prices, which
were higher in second quarter 2005 than the same 2004 period, as well as a favorable foreign currency impact, also resulted in the higher net sales between the two second quarter periods.



The six months 2005 petroleum additives net sales of $506.2 million were
$73.4 million, or 17%, higher than the 2004 six months petroleum additives net sales of $432.8 million. Total petroleum additives shipments increased 6% when comparing six months 2005 to six months 2004. Again, the higher shipments resulted from an
increase in the engine oil additives product line. Shipments in the other product lines were down less than 4%. Similar to the second quarter results, higher selling prices and favorable foreign currency also resulted in higher net sales when
comparing six months 2005 and six months 2004.



The components
of the petroleum additives increase in net sales of $50.9 million between the two second quarter periods and $73.4 million between the two six months periods are shown below (in millions):



|                                                            |  |                |       |            |   |      
|----------------------------------------------------------- |  | -------------- | ----- | ---------- | - | -----
|                                                            |  | Second Quarter |       | Six Months
|Period ended June 30, 2004                                  |  | $              | 218.1 |            | $ | 432.8
|Change in shipments and product mix                         |  |                | 28.8  |            |   | 38.2 
|Changes in selling prices including foreign currency impact |  |                | 22.1  |            |   | 35.2 
|                                                            |  |                |       |            |   |      
|Period ended June 30, 2005                                  |  | $              | 269.0 |            | $ | 506.2
|                                                            |  |                |       |            |   |      



Tetraethyl Lead
Segment



Most of the TEL marketing activity is through
marketing agreements with The Associated Octel Company Limited and its affiliates (Octel), under which we do not record the sales transactions. Therefore, the TEL net sales shown in the table above are those made by Ethyl Corporation (Ethyl) in
areas not covered by the marketing agreements. The sales made in areas not covered by the Octel marketing agreements are very minor compared to the TEL sales made through the marketing agreements.



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Total TEL sales for the second quarter and six months 2005 were lower than the same periods in 2004.
These changes were caused substantially by variation in the quarter-to-quarter timing of sales orders.



Segment Operating Profit



NewMarket evaluates the performance of the petroleum additives business of Afton Chemical Corporation (Afton) and Ethyls TEL business based on
segment operating profit. Corporate departments and other expenses are billed to Afton and Ethyl based on the services provided under the holding company structure. Depreciation on segment property, plant, and equipment and amortization of segment
intangible assets and the prepayment for services are included in the operating profit of each segment.



The table below reports operating profit by segment for the second quarter and six months of 2005 and 2004. Certain prior periods have been reclassified
to conform to the current presentation. The reclassifications consist of an allocation of certain costs in alignment with the June 18, 2004 transition to a holding company structure.



The Contract manufacturing and other classification in the table below primarily represents certain
manufacturing operations that Ethyl provides to Afton.



Segment Operating Profit

(in millions)



|                                 |  |                            |      |                          |   |      |  |      |      |  |   |     
|-------------------------------- |  | -------------------------- | ---- | ------------------------ | - | ---- |  | ---- | ---- |  | - | ----
|                                 |  | Three Months Ended June 30 |      | Six Months Ended June 30
|                                 |  | 2005                       |      | 2004                     |   | 2005 |  | 2004
|Petroleum additives              |  | $                          | 17.0 |                          | $ | 17.3 |  | $    | 26.8 |  | $ | 30.2
|                                 |  |                            |      |                          |   |      |  |      |      |  |   |     
|Tetraethyl lead                  |  | $                          | 9.5  |                          | $ | 9.1  |  | $    | 13.8 |  | $ | 15.5
|                                 |  |                            |      |                          |   |      |  |      |      |  |   |     
|Contract manufacturing and other |  | $                          | 1.0  |                          | $ |     |  | $    | 1.7  |  | $ |    
|                                 |  |                            |      |                          |   |      |  |      |      |  |   |     



Petroleum
Additives Segment



Second Quarter 2005 vs. Second
Quarter 2004 - Petroleum additives second quarter 2005 operating profit was $17.0 million as compared to $17.3 million for second quarter 2004.



While net sales were approximately 23% higher and shipments were approximately 13% higher, unrecovered rising costs of raw materials, as well as small
increases in selling, general, and administrative (SG&A) expenses and research, development, and testing (R&D) expenses, resulted in operating profit being generally unchanged when comparing second quarter 2005 to second quarter 2004
results. The 2005 results also include a favorable foreign currency impact. Raw material costs have continued to increase since June 30, 2005. We are currently attempting to recover the most recent increases in the marketplace.



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The increase in R&D expenses in the petroleum additives segment between the two first quarter periods
was $500 thousand and included a small unfavorable foreign currency impact.



SG&A expenses for this segment increased about $500 thousand, or approximately 3%, from second quarter 2004 levels and resulted substantially from an unfavorable foreign currency impact. As a percentage of net
sales, SG&A expenses combined with R&D expenses, decreased from 15.4% for the second quarter 2004 to 12.8% for the same period this year. This decrease reflects higher sales, partially offset by the 3% increase in combined SG&A and
R&D expenses.



Six Months 2005 vs. Six Months
2004 - Petroleum additives six months 2005 operating profit was $26.8 million, which was a decrease of 11% from the six months 2004 level of $30.2 million. The six months 2005 decrease was across most major product lines.



Continuing the trend from the first three months 2005, net sales were
approximately 17% higher and shipments were approximately 6% higher. Despite the favorable trend in net sales, operating profit for six months 2005 was lower than six months 2004 due to unrecovered rising costs of raw materials, as well as the small
increases in SG&A expenses and R&D expenses. We have increased selling prices during six months 2005, but the rising costs of raw materials has outpaced the selling price increases during the year. The 2005 results also include a favorable
foreign currency impact.



Petroleum additives segment R&D
expenses increased $900 thousand when comparing six months 2005 to six months 2004. The increase was across most product lines and included a small unfavorable foreign currency impact.



The six months 2005 SG&A expenses for the petroleum additives segment increased about $1 million, or approximately 3%,
when comparing to six months 2004 levels. The increase was across all product lines and included a significant unfavorable foreign currency impact. As a percentage of net sales, SG&A expenses combined with R&D expenses decreased from 15.4%
for six months 2004 to 13.5% for six months 2005. This decrease reflects higher sales, partially offset by the 3% increase in combined SG&A and R&D expenses.



TEL Segment



Results of our TEL segment include the operating profit contribution from our marketing agreements with Octel, as well as certain TEL operations not
included in the marketing agreements.



The operating profit
from our marketing agreements for the second quarter 2005 was $6.8 million, which was $3.9 million lower than the second quarter last year. Similarly, the six months 2005 marketing agreements operating results of $13.3 million were $4.8 million
lower than six months 2004. Both 2005 periods reflect improved pricing over 2004, but volumes were 40% lower for the second quarter 2005 and 31% lower for six months 2005 compared to the same periods in 2004. Amortization of the prepayment for
services was about $400 thousand lower for the second quarter 2005 and $800 thousand lower for six months 2005 than the same periods in 2004, reflecting the declining balance method of amortization.



The decrease in operating profit from the marketing agreements is primarily
due to lower shipments. During the second quarter 2005, Octel advised us that one of the major TEL customers under our marketing agreements has indicated that it was discontinuing the use of TEL earlier than we had previously expected. The TEL
market will continue to decline as other customers discontinue use of the product.



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Other TEL operations not included in the marketing agreements were $4.3 million favorable when comparing
second quarter 2005 to second quarter 2004 and $3.1 million favorable when comparing six months 2005 to the same 2004 period. Both the second quarter and six months 2005 results include a special item of $3.9 million before income taxes for
insurance settlement gains related to our premises asbestos liabilities. The other TEL operations results for both the second quarter and six months 2005 periods also reflect lower expenses for premises asbestos charges reflecting the favorable
impact of a change in expected future insurance reimbursements, which was largely offset by an increase in certain plant clean-up costs.



While the market for this product is declining, this business continues to supply Ethyl with substantial cash flows.



The following discussion references the Condensed Consolidated Financial
Statements beginning on page 3 of this Quarterly Report on Form 10-Q.



Special Item Income



During the second quarter 2005 we entered into an agreement with Travelers Indemnity Company (Travelers) resolving certain long standing issues regarding our coverage for certain premises asbestos claims. In addition, our agreement with
Travelers provides a procedure for allocating defense and indemnity costs with respect to future premises asbestos claims. The lawsuit against Travelers in the Southern District of Texas was dismissed.



We also settled our outstanding receivable from Albemarle Corporation
(Albemarle) for premises asbestos liability obligations. As a result of the insurance settlement described above, the outstanding amount owed to us by Albemarle is now $1.4 million, compared to $4 million at year end. The $1.4 million is scheduled
to be paid to us by Albemarle in the third quarter of this year.



These settlements resulted in a gain of $3.9 million ($2.5 million after income taxes), which is included as a special item this quarter. The gain represents monies paid to us to settle historical claims in excess of the receivables we
carried on our books from both Travelers and Albemarle.



Interest and Financing Expenses



Both
second quarter 2005 and second quarter 2004 interest and financing expenses were $4.5 million. Average debt, as well as average interest rates, was substantially unchanged between the two periods. Fees and amortization of financing costs were $79
thousand lower for the 2005 quarter.



Six months 2005 interest
and financing expenses were $8.8 million as compared to $9.7 million for six months 2004. Lower average debt resulted in a decrease in interest and financing expenses of $300 thousand, while higher average interest rates resulted in an increase of
$39 thousand. Fees and amortization of financing costs were $700 thousand lower for the 2005 period.



Other Income, Net



Other income, net was $100 thousand for the second quarter 2005 compared to $300 thousand for the second quarter 2004. Both the 2005 and 2004 six months
periods were $400 thousand. All periods were comprised of a number of non-material items.



Income Taxes



Income taxes were $5.7 million for both the second quarter 2005 and 2004. The effective tax rate was 30.4% for the second quarter 2005 and 33.4% for the second quarter 2004. The increase in income before income taxes from 2005 to 2004
resulted in an increase of $600 thousand in income taxes in the second quarter 2005, while the decrease in the effective tax rate between 2005 and 2004 resulted in an offsetting decrease in tax expense of $600 thousand.



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Six months 2005 income taxes were $7.8 million with an effective tax rate of 30.5%. The income taxes for
six months 2004 were $8.8 million with an effective tax rate of 33.8%. The decrease in the effective tax rate resulted in a decrease of $900 thousand in income taxes. The remaining $100 thousand decrease was the result of the lower income before
income taxes for six months 2005.



The effective tax rate for
both 2005 periods reflects a larger research and development tax credit in 2005.



Our deferred taxes are in a net asset position. Based on forecast operating plans, we believe that we will recover the full benefit of our deferred tax assets.



Cash Flows, Financial Condition, and Liquidity



Cash and cash equivalents at June 30, 2005 were $31.5 million, which was an
increase of $2.7 million since December 31, 2004 and included a $3.4 million negative impact from foreign currency. Cash flows from operating activities for the six months 2005 were $8.0 million. We used these cash flows and $4.0 million of
additional borrowing to fund capital expenditures of $7.1 million and cover additional book overdrafts of $1.2 million. Included in the 2005 cash flows from operating activities were collections of $3.7 million related to the 2004 environmental
insurance settlement, as well as $6.0 million from a 2005 insurance settlement related to our premises asbestos liabilities. Cash flows from operating activities for the 2005 period also included higher working capital requirements, which are
discussed more fully below under Working Capital. We expect that cash from operations, together with borrowing available under our senior credit facility, will continue to be sufficient to cover our operating expenses and planned capital
expenditures.



The terms of the 2004 environmental insurance
settlement provide for a total payment of $15.6 million. In addition to the $7.7 million received during 2004, we received $3.7 million in the first quarter 2005 and will receive the remaining $4.2 million in the first quarter 2006.



Cash



We had restricted cash of $1.4 million at June 30, 2005 and $1.7 million at December 31, 2004. Of these funds at June 30,
2005, $900 thousand was cash received from Metropolitan Life Insurance Company (Metropolitan) in 2003. These funds amounted to $1.1 million at December 31, 2004.



The funds from Metropolitan are used to reduce the employee portion of retiree health benefits costs. The remaining $500
thousand of restricted cash represents funds related to the issuance of a European bank guarantee.



Debt



Senior Notes - On April 30, 2003, Ethyl sold senior notes in the aggregate principal amount of $150 million that bear interest at a fixed
rate of 8.875% and are due in 2010.



The senior notes are our
senior unsecured obligations and are jointly and severally guaranteed on an unsecured basis by all of our existing and future wholly-owned domestic restricted subsidiaries and certain of our existing wholly-owned foreign subsidiaries. We incurred
financing costs of approximately $5 million related to the senior notes, which are being amortized over seven years.



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In connection with the holding company formation, NewMarket assumed all of Ethyls rights,
liabilities and obligations under the senior notes, effective June 18, 2004.



The senior notes and the subsidiary guarantees rank:



| |  |  | effectively junior to all of our and the guarantors existing and future secured indebtedness, including any borrowings under the senior credit facility described below;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | equal in right of payment with any of our and the guarantors existing and future unsecured senior indebtedness; and
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | senior in right of payment to any of our and the guarantors existing and future subordinated indebtedness.
| | - |  | -----------------------------------------------------------------------------------------------------------



The indenture governing the senior notes contains covenants that, among
other things, limit our ability and the ability of our restricted subsidiaries to:



| |  |  | incur additional indebtedness;
| | - |  | ------------------------------



| |  |  | create liens;
| | - |  | -------------



| |  |  | pay dividends or repurchase capital stock;
| | - |  | ------------------------------------------



| |  |  | make certain investments;
| | - |  | -------------------------



| |  |  | sell assets or consolidate or merge with or into other companies; and
| | - |  | ---------------------------------------------------------------------



| |  |  | engage in transactions with affiliates.
| | - |  | ---------------------------------------



We were in compliance with these covenants as of both June 30, 2005 and December 31, 2004.



Senior Credit Facility - On April 30, 2003, we entered into a long-term debt structure for Ethyl. The debt
structure included the senior notes discussed above and a senior credit facility with a bank term loan and a revolving credit facility.



On June 18, 2004, prior to the completion of the holding company formation, Ethyl entered into an Amended and Restated Credit Agreement, which consists of
a $100 million revolving credit facility. This agreement amended and restated the credit agreement that Ethyl had entered into on April 30, 2003. Effective with the completion of the holding company formation, NewMarket assumed all of Ethyls
rights and obligations under the Amended and Restated Credit Agreement pursuant to the First Amendment thereto. We incurred additional financing costs of approximately $1 million, which resulted in total deferred financing costs of approximately $6
million related to the amended and restated credit facility. These costs are being amortized over five years.



Borrowings under the $100 million revolving credit facility are used for working capital and other general corporate purposes for NewMarket and our
subsidiaries. The revolving credit facility includes a sub-facility for letters of credit. Borrowings bear interest, at our election, at either a base rate plus a margin (75 basis points as of June 30, 2005) or LIBOR plus a margin (225 basis points
as of June 30, 2005). The revolving credit facility matures on June 18, 2009. Borrowings outstanding at June 30, 2005 under the revolving credit facility were $34.0 million and bore interest at rates of 5.40% to 6.75%, depending upon the type of
borrowing. At June 30, 2005, we had outstanding letters of credit of $23.7 million, resulting in the unused portion of the revolver amounting to $42.3 million.



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The revolving credit facility is secured by liens on substantially all of our U.S. assets. In addition,
the credit facility is guaranteed by our U.S. subsidiaries and certain foreign subsidiaries to the extent that such guarantees would not result in adverse tax consequences.



The credit agreement contains covenants, representations, and events of default that management considers typical of a
credit agreement of this nature. The financial covenants include:



| |  |  | minimum consolidated net worth;
| | - |  | -------------------------------



| |  |  | a minimum fixed charge coverage ratio;
| | - |  | --------------------------------------



| |  |  | a maximum leverage ratio;
| | - |  | -------------------------



| |  |  | a maximum senior secured leverage ratio; and
| | - |  | --------------------------------------------



| |  |  | restrictions on the payment of dividends or repurchases of capital stock.
| | - |  | -------------------------------------------------------------------------



We were in compliance with these covenants as of both June 30, 2005 and December 31, 2004.



** *



We had combined current and noncurrent long-term debt of $188.1 million at June 30, 2005, representing an increase of $3.7 million in our total debt since
December 31, 2004. The increase resulted from additional borrowing of $4 million on the revolving credit facility, which was partially offset by a $300 thousand decrease on a capital lease.



As a percentage of total capitalization (total long-term debt and
shareholders equity), our total debt decreased from 44.3% at the end of 2004 to 43.3% at June 30, 2005. The increased debt level partially offset the increases in shareholders equity, which were primarily due to net income. Normally, we
repay long-term debt with cash from operations, as well as with proceeds from occasional sales of business units, plant sites, or other assets.



Capital Expenditures



We funded capital expenditures of $7.1 million through June 30, 2005, and we estimate our total capital spending during 2005 will be approximately $20
million. We expect to continue to finance capital spending through cash provided from operations.



Working Capital



We had working capital at June 30, 2005 of $253.2 million, resulting in a current ratio of 2.93 to 1. At December 31, 2004, the working capital was $220.1
million and the current ratio was 2.57 to 1.



The increase in
working capital and the current ratio primarily reflects increases in accounts receivable and prepaid insurance, as well as decreases in accounts payable and accrued expenses. The accounts receivable increase is due to the higher sales levels,
reflecting both increased volumes shipped and higher prices. The increase in prepaid insurance is the result of the timing of premium payments which are amortized over the year. Accounts payable and accrued expenses are lower due to sales rebate
payments made during the first quarter and normal fluctuations.



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Critical Accounting Policies



It is our goal to clearly present our financial information in a manner that enhances the understanding of our sources of
earnings and our financial condition. We do this by including the information required by the SEC, as well as additional information that gives further insight into our financial operations.



This report, as well as the 2004 Annual Report, includes a discussion of our
accounting principles, as well as methods and estimates used in the preparation of our financial statements. We believe these discussions and statements fairly represent the financial position and operating results of our company. The purpose of
this portion of our discussion is to further emphasize some of the more critical areas where a significant change in facts and circumstances in our operating and financial environment might cause a change in reported financial results.



As discussed in the 2004 Annual Report, we have made certain payments
related to our TEL marketing agreements. The unamortized total at June 30, 2005 for these prepayments is $17.5 million. We are amortizing these costs on an accelerated basis using a declining balance method over the life of the contracts. We believe
this is the appropriate methodology and time period for this amortization based on the facts and circumstances of our TEL operations and the estimated product life of TEL. The customer base of TEL is significantly concentrated in a few countries and
when conditions change that cause a shorter product life or other restrictions outside of our control, the amortization period and/or rate is adjusted accordingly. Any adjustment to the amortization period would impact earnings, but would have no
effect on cash flows. We continue to keep our accounting for this issue current with the business conditions.



During the second quarter 2005, Octel advised us that one of the major TEL customers under our marketing agreements has indicated that it was
discontinuing the use of TEL earlier than we had previously expected. Because of this development, we evaluated the prepayment for maketing agreement services for impairment and concluded the unamortized value at June 30, 2005 is not impaired. We
adjusted the rate of amortization from a 20% declining balance method to a 30% declining balance method. In addition, based on revised projections of product shipments and product life expectancy, we adjusted the amortization period to run through
2012. This change will have an insignificant impact on 2005 earnings. Total amortization related to the TEL marketing agreements is currently projected to be:



| |  |  | $6.7 million in 2005,
| | - |  | ---------------------



| |  |  | $4.6 million in 2006,
| | - |  | ---------------------



| |  |  | $3.3 million in 2007,
| | - |  | ---------------------



| |  |  | $2.3 million in 2008,
| | - |  | ---------------------



| |  |  | $1.6 million in 2009, and
| | - |  | -------------------------



| |  |  | $2.4 million in total for the final three years.
| | - |  | ------------------------------------------------



We also have certain identifiable intangibles amounting to $48.3 million at June 30, 2005. These intangibles relate to our petroleum additives business
and are being amortized over periods with up to eleven years of remaining life. We continue to assess the market related to these intangibles, as well as their specific values, and conclude the amortization periods and values are appropriate. We
also evaluate these intangibles for any potential impairment. These evaluations continue to support the value at which these identifiable intangibles are carried on our financial statements. However, if conditions were to deteriorate substantially
in this market, it could possibly cause a reduction in the periods of this amortization charge or could possibly result in a noncash write-off of a portion of the



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intangibles carrying value. A reduction in the amortization period would have no cash effect. While
we do not anticipate such a change in the market conditions, this disclosure is provided to enhance the understanding of the factors involved.



We have made disclosure of our environmental issues in Part I, Item I of the 2004 Annual Report, as well as in the Notes to Consolidated Financial
Statements of the 2004 Annual Report. We believe our environmental accruals are appropriate for the exposures and regulatory guidelines under which we currently operate. While we currently do not anticipate significant changes to the many factors
that could impact our environmental requirements, we continue to keep our accruals consistent with these requirements as they change.



Also, as noted in the discussion of Legal Proceedings in Item 3 of the 2004 Annual Report, while it is not possible to predict or determine the outcome of
any legal proceeding, it is our opinion that we will not experience materially adverse effects on our results of operations or financial condition as a result of any pending or threatened proceeding.



We use significant assumptions to record the impact of the pension and
postretirement plans in the financial statements. These assumptions include the discount rate, expected long-term rate of return, rate of compensation increase, and health care cost trend rate. A change in any one of these assumptions could result
in significantly different results for the plans. We develop these assumptions after considering advice from a major global actuarial consulting firm. Information is provided on the pension and postretirement plans in Note 19 of the 2004 Annual
Report. In addition, further disclosure on the impact of changes in these assumptions is provided in the Financial Position and Liquidity section of Item 7 of the 2004 Annual Report.



Recently Issued Accounting Pronouncements



In May 2005, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 154, Accounting Changes and Error Corrections, (SFAS 154). SFAS 154 replaces Accounting Principles Board Opinion No. 20, Accounting Changes, and SFAS No. 3,
Reporting Accounting Changes in Interim Financial Statements and is effective for fiscal years beginning after December 15, 2005. SFAS 154 addresses the accounting and reporting of a change in accounting principle. We do not expect SFAS
154 to have an impact on our financial statements, unless we adopt a change in accounting principle.



In December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment (SFAS 123R). SFAS 123R is a revision of SFAS No. 123,
Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. In general, SFAS 123R provides guidance in accounting for transactions in which a
company obtains employee services in exchange for share-based payments. SFAS 123R requires that the cost from share-based payment transactions be recognized in the financial statements and be determined using a fair-value-based measurement method.
SFAS 123R was to be effective for interim periods beginning after June 15, 2005. In April 2005, the SEC delayed the effective date to the first fiscal year beginning after June 15, 2005. SFAS 123R applies to all share-based payment transactions
initiated or modified after the effective date. We are evaluating SFAS 123R, but do not expect it to have a significant impact on our financial results.



In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47). FIN 47 clarifies
certain aspects of FASB No. 143, Accounting for Asset Retirement Obligations and is effective no later than December 31, 2005. We are currently evaluating the impact of FIN 47.



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Outlook



Petroleum Additives



This segment performed well in the marketplace in the first half of this year as evidenced by its significant revenue and volume gains when compared to
the first half of 2004. Unfortunately, when the profits for the two six month periods are compared, the negative impact of rising raw material costs continues to obscure the favorable accomplishments.



Since the end of the second quarter there has been another round of raw
material price increases and, once again, we are in the marketplace attempting to recover those increases through price increases for our products. This business cycle results in higher working capital in receivables and has reduced the amount of
cash we have available for debt reduction.



We continue to
expect that the operating profit for petroleum additives will be higher in 2005 than in 2004. The many business factors detailed in our 2004 Annual Report and the compression of our margins mentioned above will be major factors in the ultimate
profitability of this segment for the year.



TEL



This segment had a relatively good performance in the first
half of 2005. Nonetheless, we believe profits in the second half of the year will be significantly lower than the first six months of 2005. The anticipated decline in profitability is volume driven, and we expect that TEL will earn less in 2005 than
in 2004. As we have continually stated, this segment will continue to decline in profitability as its use is phased-out around the world.



Cash Flow



As discussed above, as our revenue grows from both business gains and price increases, the working capital needs of our business have increased
significantly this year, mainly in the accounts receivable area. While our cash generated from earnings remains strong, the working capital increases have lowered our free cash flow. We now expect that our debt reduction capacity from our cash flow
for 2005 will be in the $25 million to $30 million range.



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk



Except for foreign currency risk discussed below, there have been no significant changes in our market risk from the information provided in the 2004
Annual Report.



During 2004, we entered into $26 million of
Euro-denominated forward contracts to minimize currency exposure from expected cash flows from foreign operations. The contracts all have maturity dates in 2005. At June 30, 2005, there were $13 million remaining of these Euro-denominated contracts.
With other variables held constant, a hypothetical 10% adverse change in the June 30, 2005 forward Euro rates would have resulted in a decrease of about $1 million in the value of the contracts.



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##### Table of Contents

|ITEM | 4. Controls and Procedures
|---- | --------------------------



Evaluation of Disclosure Controls and Procedures



We maintain a system of internal control over financial reporting to provide reasonable, but not absolute, assurance of the reliability of the
financial records and the protection of assets. Our controls and procedures include written policies and procedures, careful selection and training of qualified personnel, and an internal audit program. We use a third-party firm, separate from our
independent registered public accounting firm, to assist with internal audit services.



We work closely with the business groups, operations personnel, and information technology to ensure transactions are recorded properly. Environmental and legal staff are consulted to determine the appropriateness of
our environmental and legal liabilities for each reporting period. We regularly review the regulations and rule changes that affect our financial disclosures.



Our disclosure control procedures include signed representation letters from our regional officers, as well as senior management.



We have formed a Financial Disclosure Committee, which is made up of the
president and senior vice president of Afton, the president of Ethyl, and the general counsel and controller of NewMarket. The committee, as well as regional management, makes representations with regard to the financial statements that, to the best
of their knowledge, the report does not contain any misstatement of a material fact or omit a material fact that is necessary to make the statements not misleading with respect to the periods covered by the report.



The committee and the regional management also represent, to the best of
their knowledge, that the financial statements and other financial information included in the report fairly present, in all material respects, the financial condition, results of operations and cash flows of the company as of and for the periods
presented in the report.



Pursuant to Rule 13a-15(b) under the
Securities Exchange Act of 1934 (the Exchange Act), we carried out an evaluation, with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of our disclosure
controls and procedures (as defined under Rule 13a-15(e)) under the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our
disclosure controls and procedures are effective.



There has
been no change in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, during the quarter ended June 30, 2005, that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.



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##### Table of Contents

PART II  Other Information



|ITEM | 1. Legal Proceedings
|---- | --------------------



We are involved in legal proceedings that are incidental to our business and include administrative or judicial actions seeking remediation under
environmental laws, such as Superfund.



These proceedings
include certain product liability cases. The only product liability cases of potential consequence in which we are involved are TEL-related. In one case, Ethyl was served as a defendant in a case filed in the Circuit Court for Baltimore City,
Maryland, in September 1999. Smith, et al. v. Lead Industries Association, Inc., et al., alleged personal injuries for seven children from lead exposure arising from lead paint and dust from tailpipe emissions due to leaded gasoline. The
court dismissed Ethyl and some other defendants from the case in February 2002 and granted summary judgment to other defendants in November 2002. The plaintiffs have appealed both decisions, but did not appeal the dismissal of Ethyl as a defendant.
On April 4, 2005, the Court of Appeals of Maryland dismissed the appeal on the basis that the trial courts decision was not a final decision that could be appealed, and the case is once again pending in the trial court. If such claims are
further pursued against Ethyl, we believe Ethyl has strong defenses and will vigorously defend any such claims.



|ITEM | 4. Submission of Matters to a Vote of Security Holders
|---- | ------------------------------------------------------



At the annual meeting of NewMarket shareholders held on May 26, 2005, the shareholders elected the directors nominated in the NewMarket Proxy Statement,
dated April 18, 2005, with the following affirmative votes and votes withheld:



|                    |  |                   |  |               
|------------------- |  | ----------------- |  | --------------
|Director            |  | Affirmative Votes |  | Votes Withheld
|Phyllis L. Cothran  |  | 15,058,372        |  | 917,645       
|Bruce C. Gottwald   |  | 15,469,393        |  | 506,624       
|Thomas E. Gottwald  |  | 15,472,742        |  | 503,275       
|Patrick D. Hanley   |  | 15,060,827        |  | 915,190       
|James E. Rogers     |  | 15,009,589        |  | 966,428       
|Sidney Buford Scott |  | 14,717,596        |  | 1,258,421     
|Charles B. Walker   |  | 15,474,144        |  | 501,873       



The shareholders also
approved the following proposal:



|                                                                                                                                                      |  |                   |  |               |  |            
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- |  | ------------- |  | -----------
|Proposal                                                                                                                                              |  | Affirmative Votes |  | Votes Against |  | Abstentions
|To ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm for the fiscal year ending December
31, 2005 |  | 15,850,896        |  | 115,594       |  | 9,527      



There were no broker
non-votes with respect to the election of directors or the ratification of our independent registered public accounting firm.



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##### Table of Contents

|ITEM | 5. Other Information
|---- | --------------------



None



ITEM 6. Exhibits



|              |  |                                                                                                                                                                               
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31(a) |  | Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald
|              | 
|Exhibit 31(b) |  | Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by David A. Fiorenza 
|              | 
|Exhibit 32(a) |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald                                  
|              | 
|Exhibit 32(b) |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by David A. Fiorenza                                   





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##### 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.



|                     |  |                       |  |                               
|-------------------- |  | --------------------- |  | ------------------------------
|                     |  | NEWMARKET CORPORATION
|                     |  | (Registrant)         
|                     |  |                      
|Date: August 1, 2005 |  | By:                   |  | /s/ D. A. Fiorenza            
|                     |  |                       |  | David A. Fiorenza             
|                     |  |                       |  | Vice President and Treasurer  
|                     |  |                       |  | (Principal Financial Officer) 
|                     |  |                      
|Date: August 1, 2005 |  | By:                   |  | /s/ Wayne C. Drinkwater       
|                     |  |                       |  | Wayne C. Drinkwater           
|                     |  |                       |  | Controller                    
|                     |  |                       |  | (Principal Accounting Officer)



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##### Table of Contents

EXHIBIT INDEX



|              |  |                                                                                                                                                                               
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31(a) |  | Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Thomas E. Gottwald
|              | 
|Exhibit 31(b) |  | Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of David A. Fiorenza 
|              | 
|Exhibit 32(a) |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Thomas E. Gottwald                                  
|              | 
|Exhibit 32(b) |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by David A. Fiorenza                                   





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