Operator: Greetings and welcome to the NewMarket Corporation First Quarter 2013 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host David Fiorenza, Chief Financial Officer for NewMarket Corporation. Thank you. Mr. Fiorenza, you may begin.
David A. Fiorenza - VP and CFO: Thank you, Doug, and thank you for joining us to discuss our first quarter performance. With me today is our CEO, Teddy Gottwald. We have a few planned comments, after which we'll open the lines for your questions.
As a reminder, some of the comments we will make today are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We believe we base our statements 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. A full discussion of these factors can be found in our 2012 10-K. We plan to file our 10-Q before the end of April. It will contain more details on the operations of our company. Please take the time to review it.
I will be referring to the numbers that were included in last night's release.
Net income for the first quarter was $67.8 million or $5.07 a share compared to income of $66.5 million or $4.96 a share for the first quarter last year.
Earnings for both of the quarters include income from an interest rate swap, while the first quarter of last year also includes a charge for the early extinguishment of debt. The impacts of these are detailed on the first page of the press release.
First quarter of this year also includes the benefit of booking five quarters worth of R&D tax credits. You may recall that Congress did not reinstate the R&D tax credit until January of 2013. The reinstatement was retroactive for all of 2012. But we were not allowed to book it in the 2012 results. The full 2012 credit included in our results was about $2.9 million.
When you look at the overall P&L statement for the two quarters, you will notice that they are virtually identical at the revenue and the gross profit levels.
Petroleum additive sales were $558 million compared to $558 million last year. From a regional perspective both Europe and Asia posted slight increases. While North America and Latin America were slightly lower. The changes within each of these regions are not significant. In general they were all essentially flat.
As we often report, the change in revenue was due to the positive impact of lubricant additive sales, offset by lower revenue due to shipments in fuel additives, lower customer price mix and adverse foreign exchange impact.
Turning to additives operating profit at $102 million, exceeded $100 million, for only the second quarter in our history, excluding the quarter when we booked the legal settlement. The only other quarter over $100 million was the first quarter of last year when PA made $107 million. Our operating margin – profit margin for Petroleum Additives was 18.3% for this quarter and for the rolling four quarters, ending this quarter, the operating profit margin was 16.7%. These are all within the range of our expectations of the segment's performance over time.