Segmental Reporting

9 Months Ended

Sep. 30, 2012

Segmental Reporting [Abstract]

SEGMENTAL REPORTING

NOTE 2 – SEGMENTAL REPORTING

Innospec divides its business into three segments for management and reporting purposes: Fuel Specialties, Performance Chemicals and Octane Additives. On September 20, 2012, the Company announced its Active Chemicals segment would be renamed Performance Chemicals, effective October 1, 2012, to make the purpose of our products clearer to the customers we serve. The Fuel Specialties and Performance Chemicals segments operate in markets where we actively seek growth opportunities but their end customers are different. The Octane Additives segment is generally characterized by volatile and declining demand.

The Company evaluates the performance of its segments based on operating income. The following table analyzes sales and other financial information by the Company’s reportable segments:

	Three Months Ended September 30						Nine Months Ended September 30
(in millions)	2012			2011			2012			2011
Net sales:
Fuel Specialties	$	127.0		$	136.1		$	372.2		$	376.5
Performance Chemicals		46.8			43.9			138.2			139.1
Octane Additives		9.6			22.1			52.3			58.3
	$	183.4		$	202.1		$	562.7		$	573.9
Gross profit:
Fuel Specialties	$	36.8		$	38.1		$	110.2		$	105.6
Performance Chemicals		10.4			9.6			33.6			35.0
Octane Additives		3.5			10.0			27.6			28.0
	$	50.7		$	57.7		$	171.4		$	168.6
Operating income/(loss):
Fuel Specialties	$	19.6		$	19.9		$	58.2		$	54.5
Performance Chemicals		5.6			5.0			18.8			21.7
Octane Additives		1.5			(38.1	)		21.9			(27.8	)
Pension credit/(charge)		0.0			(0.1	)		0.2			(0.3	)
Corporate costs		(9.1	)		(6.3	)		(25.5	)		(20.3	)
Restructuring charge		(0.1	)		0.0			(0.2	)		0.0
Impairment of Octane Additives segment goodwill		(0.3	)		(0.6	)		(0.9	)		(1.7	)
Profit on disposal		0.1			0.0			0.1			0.0
Total operating income/(loss)	$	17.3		$	(20.2	)	$	72.6		$	26.1

The pension credit/(charge) relates to the United Kingdom defined benefit pension plan which is closed to future service accrual. The charges related to our other much smaller pension arrangements in the U.S. and overseas are included in the segment and income statement captions consistent with the related employees’ costs.

The following table presents a summary of the depreciation and amortization charges incurred by the Company’s reportable segments:

	Three Months Ended September 30				Nine Months Ended September 30
(in millions)	2012		2011		2012		2011
Depreciation:
Fuel Specialties	$	0.4	$	0.6	$	1.4	$	1.8
Performance Chemicals		0.6		1.2		1.8		3.5
Octane Additives		0.2		0.2		0.5		0.6
Corporate		0.4		0.4		1.2		1.3
	$	1.6	$	2.4	$	4.9	$	7.2
Amortization:
Fuel Specialties	$	0.6	$	0.5	$	1.6	$	1.6
Performance Chemicals		0.3		0.3		1.0		1.0
Octane Additives		0.2		0.3		0.5		0.8
	$	1.1	$	1.1	$	3.1	$	3.4