ALB Albemarle Corporation

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Report of Independent Registered Public Accounting Firm

To the Administrator of the Albemarle Corporation Retirement Savings Plan

In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Albemarle Corporation Retirement Savings Plan (the “Plan”) as of December 31, 2016 and 2015 , and the changes in net assets available for benefits for the year ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The supplemental Schedule of Assets (Held at End of Year) as of December 31, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedules, we evaluated whether the supplemental schedules, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the Schedule of Assets (Held at End of Year) as of December 31, 2016 is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ PricewaterhouseCoopers LLP

Houston, TX

June 21, 2017

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ALBEMARLE CORPORATION RETIREMENT SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2016 and 2015

(in U.S. dollars)

	2016				2015
Assets:
Investments, at fair value	$	766,701,200			$	690,646,530
Receivables:
Employer contributions	195,442				177,931
Employee contributions	191,839				161,597
Dividends and interest	116,536				135,942
Notes receivable from participants	8,750,433				9,585,395
Net assets available for benefits	$	775,955,450			$	700,707,395

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ALBEMARLE CORPORATION RETIREMENT SAVINGS PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

for the Year ended December 31, 2016

(in U.S. dollars)

	2016
Additions:
Employee contributions	$	24,477,962
Employer contributions	27,945,754
Investment income:
Dividends and interest	18,666,992
Net appreciation in fair value of investments	87,355,883
Subtotal of investment income	106,022,875
Interest income on notes receivable from participants	368,352
Total additions	158,814,943
Deductions:
Benefit payments	(83,268,254		)
Administrative expenses	(298,634		)
Total deductions	(83,566,888		)
Net increase in net assets available for benefits	75,248,055
Net assets available for benefits, beginning of year	700,707,395
Net assets available for benefits, end of year	$	775,955,450

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1.	Description of Plan:

a.

General and Eligibility: The Albemarle Corporation Retirement Savings Plan, as amended and restated (the “Plan”), is a defined-contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Bank of America, N.A. (“Bank of America”) serves as the Plan’s trustee and recordkeeper. Employees are eligible to become a member of the Plan on their date of employment as a regular employee of Albemarle Corporation (the “Company” or “Albemarle”). Information regarding Plan benefits, priority of distributions upon termination of the Plan and vesting is provided in the Plan agreement, which is available at the main office of the Company at 4350 Congress Street, Suite 700, Charlotte, North Carolina 28209.

b.	Divestiture: On December 14, 2016, Albemarle closed the sale of the Chemetall Surface Treatment business to BASF SE. At the effective date of the divestiture, affected participants were no longer eligible to contribute to the Plan. Affected participants were given the option to leave their accounts in the Plan or request a distribution from the Plan at their election.

c.

Contributions: Non-highly compensated participants can make pre-tax 401(k) contributions, Roth 401(k) contributions or a combination thereof, ranging from a minimum of 1% to a maximum of 50% of base pay and bonus as defined in the Plan agreement, subject to annual limitations prescribed by the Internal Revenue Service (“IRS”). Albemarle matches 100% of the first 3% of base pay and bonus that eligible participants contribute to the Plan. For contributions exceeding 3% but not greater than 9% of base pay and bonus, Albemarle matches 50% of such contributions. The combined Company match to these participants cannot exceed 6% of base pay and bonus. For employees that are members of certain collective bargaining units or other employee groups as specified in the Plan, Albemarle matches 100% of the participant’s contribution up to a maximum of 5% of base pay.

d.

Participant Accounts: Accounts are periodically adjusted to reflect activity occurring since the previous valuation date including: contributions credited to and any distributions charged against accounts; interest, dividends and realized and unrealized gains or losses to the applicable investment funds; and stock and/or units of participation purchases and/or sales by the Trustee for the Plan. The benefit to which a participant is entitled is the value of the participant’s vested account at the applicable time.

e.	Vesting : All contributions (employer and participant) plus actual earnings thereon are 100% vested at all times.

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f.

Investment options : At December 31, 2016 , the Plan’s investment options consisted of twenty-five active funds and two inactive funds. Inactive funds are the Tredegar Corporation Common Stock Fund, which holds investments in common stock of Tredegar Corporation and the NewMarket (formerly named Ethyl) Common Stock Fund, which holds investments in common stock of NewMarket Corporation. Effective January 1, 2013, a self-directed brokerage account option is also available to allow participants to select investment options not specifically offered by the Plan.

g.

Participant loans: Notes receivable from participants are reported on the Statements of Net Assets Available for Benefits at their unpaid principal balance plus accrued but unpaid interest. Participants may borrow a minimum of $1,000 from their fund accounts up to a maximum equal to the lesser of $50,000 or 50 percent of the participant’s non-forfeitable account balance. The loans are collateralized by the balance in the participant’s account and bear interest at a rate of prime plus one percent as determined by the last day of the quarter preceding the loan origination date, for the life of the loan. Loan terms range from 1 to 30 years, with interest rates ranging from 4.50% to 9.50% at December 31, 2016 . Principal and interest is repaid in installments during the term of the loan through payroll deductions. The pension contribution account is not available for loans and is not taken into account in determining the maximum amount of a loan available to a participant.

h.

Payment of Benefits: Employees may decide whether benefits will be received directly in the form of a lump sum or rolled over to an individual IRA account or to another qualified plan. For the portion of the participant account invested in the Albemarle Stock Fund, the NewMarket Common Stock Fund and the Tredegar Corporation Common Stock Fund, the participant can receive the distribution in either cash or whole shares of stock. The Plan requires automatic payment when a participant terminates employment and has benefits in the Plan of $1,000 or less. Those participants who terminate employment with benefit amounts in excess of $1,000 may leave their accounts in the Plan or request a distribution from the Plan at their election. Absent such election, the amounts will remain in the Plan.

i.	Forfeitures: Forfeitures during a plan year serve to reduce required Company contributions. For the year ended December 31, 2016 , $18,399 of forfeitures were used to reduce required Company contributions. As of December 31, 2016 , there was an immaterial amount of forfeitures remaining which may be used as a reduction of required Company contributions for the 2017 plan year.

j.

ESOP: Effective December 14, 2001, investments in the Albemarle Stock Fund, which are allocated to participants’ accounts, constitute an Employee Stock Ownership Plan (the “ESOP”). Participants may elect to have cash dividends paid on stock held by the ESOP and allocated to their accounts, distributed directly to them or reinvested. Distributions of dividends are included in Benefit payments on the Statement of Changes in Net Assets Available for Benefits and totaled approximately $81,000 and $84,000 in 2016 and 2015 , respectively.

2.	Summary of Significant Accounting Policies:

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Securities Valuation:

Investments are stated at values determined as follows:

Common stocks	-	Fair value, based on the last published sale price on the New York Stock Exchange (or other major exchange).
Mutual funds	-	Net asset value of shares or units held by the Plan at year-end, based on the quoted market value of the underlying assets. There are no restrictions on redemptions of these investments.
Money Market Funds	-	Cost, which approximates fair value based on short term maturities and liquidity.

Common/Collective Trusts:
Stable Value Retirement Fund	-	Net asset value of units held by the Plan at year-end, with the underlying assets valued as follows: investments in Guaranteed Insurance Contracts (“GIC’s”) and Bank Investment Contracts (“BIC’s”) with benefit responsive features are carried at cost plus accrued interest. Money market instruments and U.S. Government agency obligations are valued at amortized cost, which approximates fair value.
Equities	-	Net asset value of units held by the Plan at year-end. The net asset value is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less liabilities, divided by the number of outstanding units. Redemption is permitted daily with no significant restrictions or notice periods. These funds had no unfunded commitments at December 31, 2016.
Fixed Income	-	Net asset value of units held by the Plan at year-end. The net asset value is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less liabilities, divided by the number of outstanding units. Redemption is permitted daily with no significant restrictions or notice periods. These funds had no unfunded commitments at December 31, 2016.

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3.	Federal Income Taxes:

4.	Plan Termination:

5.	Fair Value Measurements:

Level 1		Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2		Unadjusted quoted prices in active markets for similar assets or liabilities, or
		Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
		Inputs other than quoted prices that are observable for the asset or liability, or
		Inputs that are derived principally from or corroborated by observable market data by correlation or other means
Level 3		Unobservable inputs for the asset or liability

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ALBEMARLE CORPORATION RETIREMENT SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

The following tables set forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2016 and 2015 :

	Investments at Fair Value as of December 31, 2016
	Level 1				Level 2				Level 3				Total
Albemarle Stock Fund	$	154,484,961			$	—			$	—			$	154,484,961
Mutual funds	307,113,061				—				—				307,113,061
Brokerage securities	15,835,867				—				—				15,835,867
Common stock funds	11,699,889				—				—				11,699,889
Money market funds	24,889,812				—				—				24,889,812
Total assets in the fair value hierarchy	514,023,590				—				—				514,023,590
Investments measured at net asset value (a)	—				—				—				252,677,610
Total Investments at fair value	$	514,023,590			$	—			$	—			$	766,701,200

	Investments at Fair Value as of December 31, 2015
	Level 1				Level 2				Level 3				Total
Albemarle Stock Fund	$	130,953,874			$	—			$	—			$	130,953,874
Mutual funds	312,094,111				—				—				312,094,111
Brokerage securities	13,209,285				—				—				13,209,285
Common stock funds	12,358,753				—				—				12,358,753
Money market funds	11,439,683				—				—				11,439,683
Total assets in the fair value hierarchy	480,055,706				—				—				480,055,706
Investments measured at net asset value (a)	—				—				—				210,590,824
Total Investments at fair value	$	480,055,706			$	—			$	—			$	690,646,530

(a)	The common/collective trusts are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amount presented in this table is intended to permit reconciliation of the fair value hierarchy to the amount presented on the Statements of Net Assets Available for Benefits.

6.	Party-in-Interest Transactions:

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7.	Unallocated Assets:

8.	Reconciliation of Financial Statements to Form 5500:

	2016				2015
Net assets available for benefits per the financial statements	$	775,955,450			$	700,707,395
Fair value reporting difference for fully benefit-responsive investment contracts	316,503				548,971
Amounts allocated to withdrawing participants	(2,434,073		)		(181,096		)
Net assets available for benefits per the Form 5500	$	773,837,880			$	701,075,270

Total income per the financial statements	$	158,814,943
Less: Fair value reporting difference for fully benefit-responsive investment contracts	(232,468		)
Total income per the Form 5500	$	158,582,475

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ALBEMARLE CORPORATION RETIREMENT SAVINGS PLAN

SCHEDULE H, LINE 4i- SCHEDULE OF ASSETS (HELD AT END OF YEAR)

EIN 54-1692118, Plan #002

December 31, 2016

(a)		(b) Identity		(c) Description		(d) Cost*				(e) Current Value
		Invesco Stable Value Retirement Fund		Collective trust		$	—			$	93,089,122
**		Merrill Lynch Retirement Bank Account		Interest-bearing, money market deposit account		—				22,314,252
		PIMCO Total Return Port. Instl. Fund		Mutual fund		—				37,192,927
		Northern Trust Aggregate Bond Index Fund		Collective trust		—				11,073,598
		Northern Trust Collective S&P 500 Index Fund		Collective trust		—				89,928,037
		State Street Russell Small Cap Index Fund		Collective trust		—				25,690,486
		BlackRock MSCI EAFE Equity Index Fund		Collective trust		—				13,774,607
		BlackRock Mid Capitalization Equity Index Fund		Collective trust		—				13,696,128
		JP Morgan Large Cap Growth Fund		Mutual fund		—				35,960,851
		Janus Triton Fund		Mutual fund		—				10,058,707
		Prudential High Yield Fund		Mutual fund		—				8,528,554
		American Beacon Small Cap Value Fund		Mutual fund		—				9,230,440
		John Hancock Disciplined Value Mid Cap Fund		Mutual fund		—				21,324,897
		Voya Real Estate Fund		Mutual fund		—				2,242,208
		Vanguard Emerging Markets Stock Index Fund		Mutual fund		—				8,339,101
		Vanguard REIT Index Fund		Mutual fund		—				11,022,425
		Templeton Global Bond Fund		Mutual fund		—				9,945,582
		Brokerage Account		Brokerage securities		—				15,835,867
		Prudential Jennison Mid-Cap Growth Fund		Mutual fund		—				17,297,117
		American Funds American Balanced Fund		Mutual fund		—				73,832,279
		American Funds Washington Mutual Investors Fund		Mutual fund		—				22,730,951
		Oppenheimer International Growth Fund Class Y		Mutual fund		—				14,380,592
		State Street U.S. Inflation Protected Bond Index Fund		Collective trust		—				5,425,632
		MFS International Value Fund		Mutual fund		—				20,361,492
		Lazard Emerging Markets Fund		Mutual fund		—				4,664,938
**		Albemarle Stock Fund		$.01 par value, 1,794,667 shares		—				154,484,961
		NewMarket Common Stock Fund		$1.00 par value, 26,799 shares		—				11,358,422
		Tredegar Corporation Common Stock Fund		No par value, 14,228 shares		—				341,467
		CMA Money Fund		Cash-interest bearing – short term money market investments		—				2,575,560
		Total plan investments				—				$	766,701,200
**		Notes receivable from participants		Terms from 1- 30 years with interest rates from 4.50% to 9.50%		—				$	8,750,433

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SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ALBEMARLE CORPORATION RETIREMENT SAVINGS PLAN
		BY:		/s/ Scott A. Tozier
				Scott A. Tozier
				Chairman of the Benefit Plans Investment Committee

Dated: June 21, 2017

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EXHIBIT INDEX

Exhibit No.		Description
23.1		Consent of Independent Registered Public Accounting Firm

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