CHARLOTTE, N.C., Nov. 7,
2018 /PRNewswire/ --
Third quarter 2018 highlights:
- Third quarter net sales were $777.7
million, an increase of 3% over the prior year; earnings
were $129.7 million, or $1.20 per diluted share, an increase of 13% over
the prior year
- Third quarter adjusted EBITDA was $235.1
million, an increase of 12% over the prior year; adjusted
diluted earnings per share was $1.31,
an increase of 21% over the prior year
- Completed our May 2018
accelerated share repurchase ("ASR") program and initiated an
additional $250 million ASR program,
retiring approximately 4.7 million shares during the first nine
months of 2018
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
In thousands,
except per share amounts
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net sales
|
$
|
777,748
|
|
|
$
|
754,866
|
|
|
$
|
2,453,251
|
|
|
$
|
2,214,187
|
|
Net income
attributable to Albemarle Corporation
|
$
|
129,745
|
|
|
$
|
118,670
|
|
|
$
|
563,966
|
|
|
$
|
273,216
|
|
Adjusted
EBITDA
|
$
|
235,082
|
|
|
$
|
209,383
|
|
|
$
|
742,362
|
|
|
$
|
639,700
|
|
Diluted earnings per
share
|
$
|
1.20
|
|
|
$
|
1.06
|
|
|
$
|
5.11
|
|
|
$
|
2.43
|
|
Non-operating pension and OPEB items(a)
|
(0.02)
|
|
|
(0.01)
|
|
|
(0.05)
|
|
|
(0.02)
|
|
Non-recurring and other unusual item(a)
|
0.13
|
|
|
0.02
|
|
|
(1.10)
|
|
|
0.84
|
|
Adjusted diluted
earnings per share(b)
|
$
|
1.31
|
|
|
$
|
1.08
|
|
|
$
|
3.96
|
|
|
$
|
3.26
|
|
|
(a)
See Non-GAAP Reconciliations for a description of the Non-operating
pension and OPEB items and Non-recurring and other unusual
items.
|
(b)
Totals may not add due to rounding.
|
Albemarle Corporation (NYSE: ALB) reported third quarter 2018
net sales of $777.7 million, earnings
of $129.7 million and adjusted EBITDA
of $235.1 million.
"Albemarle's third quarter
adjusted EBITDA was up 18% over the same period in 2017, excluding
divested businesses, our eighth consecutive quarter of double-digit
year over year growth," said Luke
Kissam, Albemarle's CEO.
"Pricing in lithium continued as expected with prices up versus
prior year. We also continue to make meaningful progress on
extending our long-term lithium supply agreements. While unexpected
shut downs at three of our lithium manufacturing sites resulted in
volume shortfalls during the quarter, all facilities are now back
on line and operating at forecasted rates."
Outlook
Based on our strong performance throughout the year, we are
confirming our previous guidance, as follows:
|
2018
Outlook
|
|
vs Full Year
2017
|
Net sales
|
$3.3 - $3.5
billion
|
|
7% - 14%
|
Adjusted
EBITDA
|
$990 - $1,020
million
|
|
12% - 15%
|
Adjusted EPS (per
diluted share)
|
$5.30 -
$5.50
|
|
15% - 20%
|
Results
Third quarter 2018 earnings were $129.7
million, or $1.20 per diluted
share, compared to $118.7 million, or
$1.06 per diluted share in the third
quarter 2017. The increase in 2018 was primarily driven by earnings
growth in our Bromine Specialties and Catalysts reportable
segments and lower costs in Corporate, in addition to strong
performance in our fine chemistry solutions business. Third quarter
2018 adjusted EBITDA increased by $25.7
million, or 12.3%, compared to the prior year. Third quarter
2018 adjusted net income was $141.5
million, or $1.31 per diluted
share, compared to $120.6 million, or
$1.08 per diluted share, for third
quarter 2017, an increase of 21.3%. See Non-GAAP Reconciliations
for further details. The Company reported net sales of $777.7 million in third quarter 2018, up 3.0%
from net sales of $754.9 million in
the third quarter of 2017, driven by the impact of sales pricing in
each of our reportable segments and increased sales volumes in our
Bromine Specialties and Catalysts segments, partially offset by
lower lithium volumes due to unexpected shut downs at three of
our manufacturing sites and the impact of the divestiture of
the polyolefin catalysts and components portion of the Performance
Catalyst Solutions ("PCS") business ("Polyolefin Catalysts
Divestiture").
For the nine months ended September 30, 2018, earnings were
$564.0 million, or $5.11 per diluted share, compared to $273.2 million, or $2.43 per diluted share for the nine months ended
September 30, 2017. The increase in 2018 was primarily driven
by the $1.60 per diluted share gain
on sale of the Polyolefin Catalysts Divestiture, earnings growth in
each of our reportable segments, and a loss on early extinguishment
of debt of $0.34 per diluted share
recorded in 2017. For the nine months ended September 30,
2018, adjusted EBITDA increased by $102.7
million, or 16.0%, compared to the same period in 2017. For
the nine months ended September 30, 2018, adjusted net income
was $436.6 million, or $3.96 per diluted share, compared to $366.0 million, or $3.26 per diluted share, for the same period
2017, an increase of 21.5%. See Non-GAAP Reconciliations for
further details. The Company reported net sales for the nine months
ended September 30, 2018 of $2.45
billion, up from net sales of $2.21
billion for the nine months ended September 30, 2017,
driven by the favorable impact of higher sales volumes, favorable
pricing and currency exchange impacts in each of our reportable
segments, partially offset by the impact of the Polyolefin
Catalysts Divestiture.
On April 3, 2018, we closed the
Polyolefin Catalysts Divestiture to W.R. Grace & Co. for net
cash proceeds of approximately $413.5
million and recorded an after-tax gain of $176.7 million related to the sale of this
business. The transaction includes Albemarle's Product Development Center located
in Baton Rouge, Louisiana, and
operations at the Yeosu, South
Korea site. The transaction does not include the
organometallics or curatives portion of the PCS business. The
assets and liabilities of this business are included in Assets held
for sale and Liabilities held for sale in the consolidated balance
sheets as of December 31, 2017.
Quarterly Segment Results
During 2018, the PCS product category merged with the Refining
Solutions reportable segment to form a global business focused on
catalysts. As a result, our three reportable segments include: (1)
Lithium; (2) Bromine Specialties; and (3) Catalysts. For comparison
purposes, prior year periods have been reclassified to conform to
the current presentation.
Lithium reported net sales of $270.9
million in the third quarter of 2018, an increase of 0.6%
from third quarter 2017 net sales of $269.2
million. The $1.7 million
increase in net sales as compared to prior year was primarily due
to approximately $16.2 million in
pricing increases, partially offset by lower sales volumes due to
temporary operational issues. Adjusted EBITDA for Lithium was
$113.6 million, an increase of 0.6%
from third quarter 2017 results of $112.9
million. The $0.7 million
increase in adjusted EBITDA as compared to the prior year was
primarily due to favorable pricing impacts, partially offset by
higher royalty payments and decreased sales volumes.
Bromine Specialties reported net sales of $232.6 million in the third quarter of 2018, an
increase of 9.2% from third quarter 2017 net sales of $212.9 million. The $19.7
million increase in net sales as compared to the prior year
was primarily due to favorable pricing impacts and increased sales
volumes. Adjusted EBITDA for Bromine Specialties was $78.6 million, an increase of 22.9% from third
quarter 2017 results of $63.9
million. The $14.6 million
increase in adjusted EBITDA as compared to the prior year was
primarily due to favorable pricing impacts and increased sales
volumes, partially offset by higher raw material pricing.
Catalysts reported net sales of $251.1
million in the third quarter of 2018, an increase of 2.7%
from net sales of $244.6 million in
the third quarter of 2017. The $6.5
million increase in net sales as compared to the prior year
was primarily due to increased sales volume and favorable pricing
impacts, which more than offset the $27.0
million impact of the Polyolefin Catalysts Divestiture.
Adjusted EBITDA for Catalysts was $62.6
million in the third quarter of 2018, an increase of 3.7%
from third quarter 2017 results of $60.4
million. The $2.2 million
increase in adjusted EBITDA as compared to the prior year was
primarily due to increased sales volumes and favorable pricing,
partially offset by higher material costs and $1.9 million of unfavorable currency exchange
impacts. Additionally, the impact of the Polyolefin Catalysts
Divestiture of $10.5 million was more
than offset by the $10.9 million year
over year impact of Hurricane Harvey, which affected the Company in
the third quarter of 2017. This includes a partial insurance claim
reimbursement of $2.2 million
received in the third quarter of 2018.
All Other net sales were $23.1
million in the third quarter of 2018, a decrease of 17.7%
from net sales of $28.0 million in
the third quarter of 2017. The $5.0
million decrease in net sales as compared to the prior year
was primarily due to decreased sales volumes and unfavorable
pricing impacts in our fine chemistry services business. All Other
adjusted EBITDA was $4.0 million in
the third quarter of 2018, an increase from third quarter 2017
results of $0.3 million. The
$3.7 million increase in adjusted
EBITDA as compared to the prior year was primarily due to a
$2.1 million gain in the fair value
of our investment in private equity securities and favorable impact
of product mix, partially offset by unfavorable pricing impacts in
our fine chemistry services business.
Corporate Results
Corporate adjusted EBITDA was a charge of $23.7 million in the third quarter of 2018
compared to a charge of $28.2 million
in the third quarter of 2017. The improvement in Corporate adjusted
EBITDA was primarily due to lower selling, general and
administrative spend, partially offset by $3.5 million of unfavorable currency exchange
impacts.
Income Taxes
In December 2017, the Tax Cuts and
Jobs Act ("TCJA") was enacted, requiring companies, among other
things, to pay a one-time transition tax on earnings of certain
foreign subsidiaries that were previously tax deferred and reducing
the U.S. federal corporate income tax rate from 35% to
21%. The SEC staff issued SAB 118, which will allow us to
record provisional amounts during a measurement period, which
should not extend beyond one year from the enactment date. In the
nine months ended September 30, 2018, we recorded a discrete
tax benefit of $2.8 million to adjust
amounts previously recorded for the one-time transition tax and a
discrete tax benefit of $2.0 million
for other adjustments.
Our effective income tax rates for the third quarter of 2018 and
2017 of 21.5% and 14.3%, respectively, are influenced by
non-recurring, other unusual and non-operating pension and OPEB
items (see notes to the condensed consolidated financial
information). The increase in the effective tax rate in the third
quarter of 2018 compared to 2017 was impacted by a variety of
factors, primarily stemming from a change in the geographic mix of
earnings. Our adjusted effective income tax rates, which exclude
non-recurring, other unusual and non-operating pension and OPEB
items, were 18.9% and 17.0% for the third quarter of 2018 and 2017,
respectively, and continue to be influenced by the level and
geographic mix of income. Our effective income tax rates for the
nine months ended September 30, 2018 and 2017 were 20.1% and
17.6%, respectively, and our adjusted effective income tax rates
for the nine months ended September 30, 2018 and 2017 were
22.2% and 19.5%, respectively.
Cash Flow
Our cash from operations was approximately $376.9 million for the nine months ended
September 30, 2018, an increase of $302.1 million versus the same period in 2017,
primarily due to changes in working capital, including the payment
of approximately $255 million in
taxes related to the sale of the Chemetall Surface Treatment
business in 2017, as well as increased earnings in each of our
reportable segments and increased dividends received from
unconsolidated investments in 2018. Capital expenditures were
$471.7 million as compared to
$187.5 million in the first nine
months of 2017, with the increase driven largely by expansion
investment in our Lithium business.
We had $641.2 million in cash and
cash equivalents at September 30, 2018, as compared to
$1.14 billion at December 31, 2017. During the first nine months
of 2018, cash on hand, cash provided by operations and net proceeds
from divestitures funded $135.8
million of commercial paper note repayments, net of
borrowings, $471.7 million of capital
expenditures for plant, machinery and equipment, and mining
resource development, dividends to shareholders of $108.9 million and $500.0
million of accelerated share repurchase programs. Under our
accelerated share repurchase programs we received and retired
approximately 4.7 million shares of our common stock during the
first nine months of 2018, approximately 2.3 million shares of
which were received and retired during the third quarter of 2018.
Any remaining shares to be delivered under the August 2018 accelerated share repurchase program
is expected to be received and retired by the end of 2018.
Earnings Call
The Company's performance for the third quarter ended
September 30, 2018 will be discussed on a conference call at
9:00 AM Eastern time on
November 8, 2018. The call can be accessed by dialing
800-230-3019 (International Dial-In # 617-597-5413), and entering
conference ID 98486204. The Company's earnings presentation and
supporting material can be accessed through Albemarle's website under Investors at
www.albemarle.com.
About Albemarle
Albemarle Corporation (NYSE: ALB), headquartered in Charlotte, NC, is a global specialty chemicals
company with leading positions in lithium, bromine and refining
catalysts. We power the potential of companies in many of the
world's largest and most critical industries, from energy and
communications to transportation and electronics. Working
side-by-side with our customers, we develop value-added, customized
solutions that make them more competitive. Our solutions combine
the finest technology and ingredients with the knowledge and
know-how of our highly experienced and talented team of operators,
scientists and engineers.
Discovering and implementing new and better performance-based
sustainable solutions is what motivates all of us. We think beyond
business-as-usual to drive innovations that create lasting value.
Albemarle employs approximately
5,000 people and serves customers in approximately 100 countries.
We regularly post information to www.albemarle.com, including
notification of events, news, financial performance, investor
presentations and webcasts, non-GAAP reconciliations, SEC filings
and other information regarding our company, its businesses and the
markets it serves.
Forward-Looking Statements
Some of the information presented in this press release, the
conference call and discussions that follow, including, without
limitation, information related to product development, production
capacity, committed volumes, market trends, pricing, expected
growth, earnings and demand for our products, input costs,
surcharges, tax rates, stock repurchases, dividends, cash flow
generation, costs and cost synergies, capital projects, economic
trends, outlook and all other information relating to matters that
are not historical facts may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Actual results could differ materially from the views
expressed. Factors that could cause actual results to differ
materially from the outlook expressed or implied in any
forward-looking statement include, without limitation: changes in
economic and business conditions; changes in financial and
operating performance of our major customers and industries and
markets served by us; the timing of orders received from customers;
the gain or loss of significant customers; competition from other
manufacturers; changes in the demand for our products or the
end-user markets in which our products are sold; limitations or
prohibitions on the manufacture and sale of our products;
availability of raw materials; increases in the cost of raw
materials and energy, and our ability to pass through such
increases to our customers; changes in our markets in general;
fluctuations in foreign currencies; changes in laws and government
regulation impacting our operations or our products; the occurrence
of regulatory actions, proceedings, claims or litigation; the
occurrence of cyber-security breaches, terrorist attacks,
industrial accidents, natural disasters or climate change; the
inability to maintain current levels of product or premises
liability insurance or the denial of such coverage; political
unrest affecting the global economy, including adverse effects form
terrorism or hostilities; political instability affecting our
manufacturing operations or joint ventures; changes in accounting
standards; the inability to achieve results from our global
manufacturing cost reduction initiatives as well as our ongoing
continuous improvement and rationalization programs; changes in the
jurisdictional mix of our earnings and changes in tax laws and
rates; changes in monetary policies, inflation or interest rates
that may impact our ability to raise capital or increase our cost
of funds, impact the performance of our pension fund investments
and increase our pension expense and funding obligations;
volatility and uncertainties in the debt and equity markets;
technology or intellectual property infringement, including
cyber-security breaches, and other innovation risks; decisions we
may make in the future; the ability to successfully execute,
operate and integrate acquisitions and divestitures; and the other
factors detailed from time to time in the reports we file with the
SEC, including those described under "Risk Factors" in our Annual
Report on Form 10-K and our Quarterly Reports on Form 10-Q. These
forward-looking statements speak only as of the date of this press
release. We assume no obligation to provide any revisions to any
forward-looking statements should circumstances change, except as
otherwise required by securities and other applicable laws.
Albemarle Corporation
and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
sales
|
$
|
777,748
|
|
|
$
|
754,866
|
|
|
$
|
2,453,251
|
|
|
$
|
2,214,187
|
|
Cost of goods
sold
|
497,211
|
|
|
479,210
|
|
|
1,556,379
|
|
|
1,411,614
|
|
Gross
profit
|
280,537
|
|
|
275,656
|
|
|
896,872
|
|
|
802,573
|
|
Selling, general and
administrative expenses
|
100,167
|
|
|
106,471
|
|
|
325,174
|
|
|
331,984
|
|
Research and
development expenses
|
16,610
|
|
|
21,763
|
|
|
53,670
|
|
|
63,423
|
|
Gain on sale of
business
|
—
|
|
|
—
|
|
|
(218,705)
|
|
|
—
|
|
Operating
profit
|
163,760
|
|
|
147,422
|
|
|
736,733
|
|
|
407,166
|
|
Interest and
financing expenses
|
(12,988)
|
|
|
(15,792)
|
|
|
(39,834)
|
|
|
(98,895)
|
|
Other income
(expenses), net
|
3,793
|
|
|
(1,986)
|
|
|
(31,906)
|
|
|
(3,399)
|
|
Income before income
taxes and equity in net income of unconsolidated
investments
|
154,565
|
|
|
129,644
|
|
|
664,993
|
|
|
304,872
|
|
Income tax
expense
|
33,167
|
|
|
18,495
|
|
|
133,630
|
|
|
53,596
|
|
Income before equity
in net income of unconsolidated investments
|
121,398
|
|
|
111,149
|
|
|
531,363
|
|
|
251,276
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
22,081
|
|
|
19,044
|
|
|
61,727
|
|
|
55,263
|
|
Net income
|
143,479
|
|
|
130,193
|
|
|
593,090
|
|
|
306,539
|
|
Net income
attributable to noncontrolling interests
|
(13,734)
|
|
|
(11,523)
|
|
|
(29,124)
|
|
|
(33,323)
|
|
Net income
attributable to Albemarle Corporation
|
$
|
129,745
|
|
|
$
|
118,670
|
|
|
$
|
563,966
|
|
|
$
|
273,216
|
|
Basic earnings per
share
|
$
|
1.21
|
|
|
$
|
1.07
|
|
|
$
|
5.16
|
|
|
$
|
2.46
|
|
Diluted earnings per
share
|
$
|
1.20
|
|
|
$
|
1.06
|
|
|
$
|
5.11
|
|
|
$
|
2.43
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding – basic
|
107,315
|
|
|
110,476
|
|
|
109,223
|
|
|
111,049
|
|
Weighted-average
common shares outstanding – diluted
|
108,302
|
|
|
111,975
|
|
|
110,276
|
|
|
112,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to the condensed consolidated financial
information.
|
|
Albemarle Corporation
and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
641,226
|
|
|
$
|
1,137,303
|
|
Other current
assets
|
1,418,351
|
|
|
1,301,108
|
|
Assets held for
sale
|
—
|
|
|
39,152
|
|
Total current
assets
|
2,059,577
|
|
|
2,477,563
|
|
Property, plant and
equipment
|
4,571,779
|
|
|
4,124,335
|
|
Less accumulated
depreciation and amortization
|
1,746,414
|
|
|
1,631,025
|
|
Net property, plant
and equipment
|
2,825,365
|
|
|
2,493,310
|
|
Noncurrent assets
held for sale
|
—
|
|
|
139,813
|
|
Other assets and
intangibles
|
2,602,253
|
|
|
2,640,086
|
|
Total
assets
|
$
|
7,487,195
|
|
|
$
|
7,750,772
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current portion of
long-term debt
|
$
|
286,188
|
|
|
$
|
422,012
|
|
Other current
liabilities
|
840,821
|
|
|
776,975
|
|
Liabilities held for
sale
|
—
|
|
|
1,938
|
|
Total current
liabilities
|
1,127,009
|
|
|
1,200,925
|
|
Long-term
debt
|
1,411,605
|
|
|
1,415,360
|
|
Noncurrent
liabilities held for sale
|
—
|
|
|
614
|
|
Other noncurrent
liabilities
|
883,820
|
|
|
945,788
|
|
Deferred income
taxes
|
378,484
|
|
|
370,389
|
|
Albemarle Corporation
shareholders' equity
|
3,528,844
|
|
|
3,674,549
|
|
Noncontrolling
interests
|
157,433
|
|
|
143,147
|
|
Total liabilities and
equity
|
$
|
7,487,195
|
|
|
$
|
7,750,772
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to the condensed consolidated financial
information.
|
Albemarle Corporation
and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)
|
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
2018
|
|
2017
|
Cash and cash
equivalents at beginning of year
|
$
|
1,137,303
|
|
|
$
|
2,269,756
|
|
Cash and cash
equivalents at end of period
|
$
|
641,226
|
|
|
$
|
1,045,339
|
|
Sources of cash
and cash equivalents:
|
|
|
|
Net income
|
$
|
593,090
|
|
|
$
|
306,539
|
|
Cash proceeds from
divestitures, net
|
413,479
|
|
|
6,857
|
|
Proceeds from
borrowings of long-term debt
|
—
|
|
|
27,000
|
|
Other borrowings,
net
|
—
|
|
|
79,203
|
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
32,794
|
|
|
11,900
|
|
Proceeds from exercise
of stock options
|
2,302
|
|
|
7,011
|
|
Uses of cash and
cash equivalents:
|
|
|
|
Working capital
changes
|
(131,813)
|
|
|
(398,913)
|
|
Capital
expenditures
|
(471,675)
|
|
|
(187,519)
|
|
Acquisitions, net of
cash acquired
|
(11,403)
|
|
|
(45,406)
|
|
Repayments of
long-term debt
|
—
|
|
|
(753,209)
|
|
Repurchases of common
stock
|
(500,000)
|
|
|
(250,000)
|
|
Repayments of other
borrowings, net
|
(134,505)
|
|
|
—
|
|
Pension and
postretirement contributions
|
(11,068)
|
|
|
(9,607)
|
|
Dividends paid to
shareholders
|
(108,922)
|
|
|
(105,205)
|
|
Fees related to early
extinguishment of debt
|
—
|
|
|
(46,959)
|
|
Dividends paid to
noncontrolling interests
|
(14,756)
|
|
|
(27,791)
|
|
Non-cash and other
items:
|
|
|
|
Depreciation and
amortization
|
150,511
|
|
|
144,087
|
|
Gain on sale of
business
|
(218,705)
|
|
|
—
|
|
Gain on
acquisition
|
—
|
|
|
(6,025)
|
|
Pension and
postretirement (benefit) expense
|
(2,708)
|
|
|
67
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
52,801
|
|
Deferred income
taxes
|
43,400
|
|
|
4,677
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
(61,727)
|
|
|
(55,263)
|
|
|
|
|
|
|
|
See accompanying
notes to the condensed consolidated financial
information.
|
Albemarle Corporation
and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
sales:
|
|
|
|
|
|
|
|
Lithium
|
$
|
270,928
|
|
|
$
|
269,238
|
|
|
$
|
886,523
|
|
|
$
|
729,288
|
|
Bromine
Specialties
|
232,616
|
|
|
212,923
|
|
|
678,769
|
|
|
636,059
|
|
Catalysts
|
251,139
|
|
|
244,594
|
|
|
796,822
|
|
|
756,407
|
|
All Other
|
23,065
|
|
|
28,021
|
|
|
90,978
|
|
|
91,144
|
|
Corporate
|
—
|
|
|
90
|
|
|
159
|
|
|
1,289
|
|
Total net
sales
|
$
|
777,748
|
|
|
$
|
754,866
|
|
|
$
|
2,453,251
|
|
|
$
|
2,214,187
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Lithium
|
$
|
113,629
|
|
|
$
|
112,944
|
|
|
$
|
386,260
|
|
|
$
|
327,996
|
|
Bromine
Specialties
|
78,585
|
|
|
63,936
|
|
|
217,921
|
|
|
194,499
|
|
Catalysts
|
62,602
|
|
|
60,394
|
|
|
205,534
|
|
|
197,570
|
|
All Other
|
3,968
|
|
|
306
|
|
|
7,729
|
|
|
7,906
|
|
Corporate
|
(23,702)
|
|
|
(28,197)
|
|
|
(75,082)
|
|
|
(88,271)
|
|
Total adjusted
EBITDA
|
$
|
235,082
|
|
|
$
|
209,383
|
|
|
$
|
742,362
|
|
|
$
|
639,700
|
|
|
See accompanying
non-GAAP reconciliations below.
|
Additional Information
It should be noted that adjusted net income attributable to
Albemarle Corporation, adjusted diluted earnings per share,
non-operating pension and OPEB items per diluted share,
non-recurring and other unusual items per diluted share, adjusted
effective income tax rates, EBITDA, adjusted EBITDA, EBITDA margin
and adjusted EBITDA margin are financial measures that are not
required by, or presented in accordance with, accounting principles
generally accepted in the United
States, or GAAP. These non-GAAP measures should not be
considered as alternatives to Net income attributable to Albemarle
Corporation ("earnings"). These measures are presented here to
provide additional useful measurements to review our operations,
provide transparency to investors and enable period-to-period
comparability of financial performance. The Company's chief
operating decision maker uses these measures to assess the ongoing
performance of the Company and its segments, as well as for
business and enterprise planning purposes.
A description of other non-GAAP financial measures that we use
to evaluate our operations and financial performance, and
reconciliation of these non-GAAP financial measures to the most
directly comparable financial measures calculated and reported in
accordance with GAAP can be found on the following pages of this
press release, which is also posted in the Investors section of our
website at www.albemarle.com. The Company does not provide a
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable financial measures calculated and
reported in accordance with GAAP, as the Company is unable to
estimate significant non-recurring or unusual items without
unreasonable effort. The amounts and timing of these items are
uncertain and could be material to the Company's results calculated
in accordance with GAAP.
ALBEMARLE
CORPORATION AND SUBSIDIARIES
Non-GAAP
Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net
income attributable to Albemarle Corporation, EBITDA and adjusted
EBITDA, the non-GAAP financial measures, to Net income attributable
to Albemarle Corporation ("earnings"), the most directly comparable
financial measure calculated and reported in accordance with GAAP.
Adjusted earnings is defined as earnings before the non-recurring,
other unusual and non-operating pension and OPEB items as listed
below. EBITDA is defined as earnings before interest and financing
expenses, income taxes, and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA and the non-recurring, other unusual
and non-operating pension and OPEB items as listed below.
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
In thousands, except
percentages and per share amounts
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
attributable to Albemarle Corporation
|
$
|
129,745
|
|
|
$
|
118,670
|
|
|
$
|
563,966
|
|
|
$
|
273,216
|
|
Add back:
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
(1,856)
|
|
|
(694)
|
|
|
(5,595)
|
|
|
(2,093)
|
|
Non-recurring and
other unusual items (net of tax)
|
13,568
|
|
|
2,575
|
|
|
(121,731)
|
|
|
94,918
|
|
Adjusted net income
attributable to Albemarle Corporation
|
$
|
141,457
|
|
|
$
|
120,551
|
|
|
$
|
436,640
|
|
|
$
|
366,041
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$
|
1.31
|
|
|
$
|
1.08
|
|
|
$
|
3.96
|
|
|
$
|
3.26
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding – diluted
|
108,302
|
|
|
111,975
|
|
|
110,276
|
|
|
112,456
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Albemarle Corporation
|
$
|
129,745
|
|
|
$
|
118,670
|
|
|
$
|
563,966
|
|
|
$
|
273,216
|
|
Add back:
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
12,988
|
|
|
15,792
|
|
|
39,834
|
|
|
98,895
|
|
Income tax
expense
|
33,167
|
|
|
18,495
|
|
|
133,630
|
|
|
53,596
|
|
Depreciation and
amortization
|
49,707
|
|
|
49,895
|
|
|
150,511
|
|
|
144,087
|
|
EBITDA
|
225,607
|
|
|
202,852
|
|
|
887,941
|
|
|
569,794
|
|
Non-operating pension
and OPEB items
|
(2,195)
|
|
|
(1,028)
|
|
|
(6,596)
|
|
|
(3,144)
|
|
Non-recurring and
other unusual items (excluding items associated with interest
expense)
|
11,670
|
|
|
7,559
|
|
|
(138,983)
|
|
|
73,050
|
|
Adjusted
EBITDA
|
$
|
235,082
|
|
|
$
|
209,383
|
|
|
$
|
742,362
|
|
|
$
|
639,700
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
777,748
|
|
|
$
|
754,866
|
|
|
$
|
2,453,251
|
|
|
$
|
2,214,187
|
|
EBITDA
margin
|
29.0
|
%
|
|
26.9
|
%
|
|
36.2
|
%
|
|
25.7
|
%
|
Adjusted EBITDA
margin
|
30.2
|
%
|
|
27.7
|
%
|
|
30.3
|
%
|
|
28.9
|
%
|
See below for a reconciliation of adjusted EBITDA on a segment
basis, the non-GAAP financial measure, to Net income attributable
to Albemarle Corporation, the most directly comparable financial
measure calculated and reporting in accordance with GAAP (in
thousands, except percentages).
|
Lithium
|
|
Bromine
Specialties
|
|
Catalysts
|
|
Reportable
Segments Total
|
|
All
Other
|
|
Corporate
|
|
Consolidated
Total
|
|
% of Net
Sales
|
Three months ended
September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
|
90,313
|
|
|
$
|
67,967
|
|
|
$
|
50,491
|
|
|
$
|
208,771
|
|
|
$
|
1,978
|
|
|
$
|
(81,004)
|
|
|
$
|
129,745
|
|
|
16.7
|
%
|
Depreciation and
amortization
|
23,370
|
|
|
10,618
|
|
|
12,111
|
|
|
46,099
|
|
|
1,990
|
|
|
1,618
|
|
|
49,707
|
|
|
6.4
|
%
|
Non-recurring and
other unusual items
|
(54)
|
|
|
—
|
|
|
—
|
|
|
(54)
|
|
|
—
|
|
|
11,724
|
|
|
11,670
|
|
|
1.5
|
%
|
Interest and
financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,988
|
|
|
12,988
|
|
|
1.7
|
%
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,167
|
|
|
33,167
|
|
|
4.2
|
%
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,195)
|
|
|
(2,195)
|
|
|
(0.3)
|
%
|
Adjusted
EBITDA
|
$
|
113,629
|
|
|
$
|
78,585
|
|
|
$
|
62,602
|
|
|
$
|
254,816
|
|
|
$
|
3,968
|
|
|
$
|
(23,702)
|
|
|
$
|
235,082
|
|
|
30.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
|
89,745
|
|
|
$
|
53,760
|
|
|
$
|
47,846
|
|
|
$
|
191,351
|
|
|
$
|
(1,776)
|
|
|
$
|
(70,905)
|
|
|
$
|
118,670
|
|
|
15.7
|
%
|
Depreciation and
amortization
|
22,316
|
|
|
10,176
|
|
|
13,798
|
|
|
46,290
|
|
|
2,082
|
|
|
1,523
|
|
|
49,895
|
|
|
6.6
|
%
|
Non-recurring and
other unusual items
|
883
|
|
|
—
|
|
|
(1,250)
|
|
|
(367)
|
|
|
—
|
|
|
7,926
|
|
|
7,559
|
|
|
1.0
|
%
|
Interest and
financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,792
|
|
|
15,792
|
|
|
2.1
|
%
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,495
|
|
|
18,495
|
|
|
2.4
|
%
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,028)
|
|
|
(1,028)
|
|
|
(0.1)
|
%
|
Adjusted
EBITDA
|
$
|
112,944
|
|
|
$
|
63,936
|
|
|
$
|
60,394
|
|
|
$
|
237,274
|
|
|
$
|
306
|
|
|
$
|
(28,197)
|
|
|
$
|
209,383
|
|
|
27.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
|
315,939
|
|
|
$
|
187,176
|
|
|
$
|
387,038
|
|
|
$
|
890,153
|
|
|
$
|
1,659
|
|
|
$
|
(327,846)
|
|
|
$
|
563,966
|
|
|
23.0
|
%
|
Depreciation and
amortization
|
71,760
|
|
|
30,745
|
|
|
37,201
|
|
|
139,706
|
|
|
6,070
|
|
|
4,735
|
|
|
150,511
|
|
|
6.2
|
%
|
Non-recurring and
other unusual items
|
(1,439)
|
|
|
—
|
|
|
(218,705)
|
|
|
(220,144)
|
|
|
—
|
|
|
81,161
|
|
|
(138,983)
|
|
|
(5.7)
|
%
|
Interest and
financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,834
|
|
|
39,834
|
|
|
1.6
|
%
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133,630
|
|
|
133,630
|
|
|
5.5
|
%
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,596)
|
|
|
(6,596)
|
|
|
(0.3)
|
%
|
Adjusted
EBITDA
|
$
|
386,260
|
|
|
$
|
217,921
|
|
|
$
|
205,534
|
|
|
$
|
809,715
|
|
|
$
|
7,729
|
|
|
$
|
(75,082)
|
|
|
$
|
742,362
|
|
|
30.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
|
249,178
|
|
|
$
|
164,193
|
|
|
$
|
158,806
|
|
|
$
|
572,177
|
|
|
$
|
1,622
|
|
|
$
|
(300,583)
|
|
|
$
|
273,216
|
|
|
12.3
|
%
|
Depreciation and
amortization
|
62,841
|
|
|
30,306
|
|
|
40,014
|
|
|
133,161
|
|
|
6,284
|
|
|
4,642
|
|
|
144,087
|
|
|
6.5
|
%
|
Non-recurring and
other unusual items (excluding items associated with interest
expense)
|
15,977
|
|
|
—
|
|
|
(1,250)
|
|
|
14,727
|
|
|
—
|
|
|
58,323
|
|
|
73,050
|
|
|
3.3
|
%
|
Interest and
financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,895
|
|
|
98,895
|
|
|
4.5
|
%
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,596
|
|
|
53,596
|
|
|
2.4
|
%
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,144)
|
|
|
(3,144)
|
|
|
(0.1)
|
%
|
Adjusted
EBITDA
|
$
|
327,996
|
|
|
$
|
194,499
|
|
|
$
|
197,570
|
|
|
$
|
720,065
|
|
|
$
|
7,906
|
|
|
$
|
(88,271)
|
|
|
$
|
639,700
|
|
|
28.9
|
%
|
Non-operating pension and OPEB items, consisting of MTM
actuarial gains/losses, settlements/curtailments, interest cost and
expected return on assets, are not allocated to our operating
segments and are included in the Corporate category. In addition,
we believe that these components of pension cost are mainly driven
by market performance, and we manage these separately from the
operational performance of our businesses. In accordance with GAAP,
these non-operating pension and OPEB items are included in Other
income (expenses), net. Non-operating pension and OPEB items were
as follows (in thousands):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Interest
cost
|
$
|
8,509
|
|
|
$
|
8,960
|
|
|
$
|
25,636
|
|
|
$
|
26,738
|
|
Expected return on
assets
|
(10,704)
|
|
|
(9,988)
|
|
|
(32,232)
|
|
|
(29,882)
|
|
Total
|
$
|
(2,195)
|
|
|
$
|
(1,028)
|
|
|
$
|
(6,596)
|
|
|
$
|
(3,144)
|
|
In addition to the non-operating pension and OPEB items
disclosed above, we have identified certain other items and
excluded them from our adjusted net income calculation for the
periods presented. A listing of these items, as well as a detailed
description of each follows below (per diluted share):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Utilization of
inventory markup(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.16
|
|
Restructuring and
other(2)
|
0.04
|
|
|
—
|
|
|
0.04
|
|
|
0.11
|
|
Acquisition and
integration related costs(3)
|
0.03
|
|
|
0.02
|
|
|
0.10
|
|
|
0.18
|
|
Albemarle Foundation
contribution(4)
|
—
|
|
|
—
|
|
|
0.10
|
|
|
—
|
|
Gain on sale of
business(5)
|
—
|
|
|
—
|
|
|
(1.60)
|
|
|
—
|
|
Gain on
acquisition(6)
|
—
|
|
|
0.01
|
|
|
—
|
|
|
(0.05)
|
|
Legal
accrual(7)
|
0.02
|
|
|
—
|
|
|
0.21
|
|
|
—
|
|
Loss on
extinguishment of debt(8)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.34
|
|
Multiemployer plan
shortfall contributions(9)
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.04
|
|
Other(10)
|
0.04
|
|
|
(0.01)
|
|
|
0.16
|
|
|
0.04
|
|
Discrete tax
items(11)
|
—
|
|
|
(0.01)
|
|
|
(0.11)
|
|
|
0.02
|
|
Total non-recurring
and other unusual items
|
$
|
0.13
|
|
|
$
|
0.02
|
|
|
$
|
(1.10)
|
|
|
$
|
0.84
|
|
(1)
|
In connection with
the acquisition of the lithium hydroxide and lithium carbonate
conversion business of Jiangxi Jiangli New Materials Science and
Technology Co. Ltd. ("Jiangli New Materials"), the Company valued
inventory purchased from Jiangli New Materials at fair value, which
resulted in a markup of the underlying net book value of the
inventory totaling approximately $23.1 million. The inventory
markup was expensed over the estimated remaining selling period.
For the three and nine months ended September 30, 2017, $0.6
million and $23.1 million ($0.2 million and $17.8 million after
income taxes, or less than $0.01 and $0.16 per share),
respectively, was included in Cost of goods sold related to the
utilization of the inventory markup.
|
|
|
(2)
|
Included in Selling,
general and administrative expenses for the three and nine months
ended September 30, 2018 is $3.7 million (or $0.04 per share)
related to expected severance payments as part of a business
reorganization plan.
|
|
|
|
The nine months ended
September 30, 2017 included restructuring costs in each of our
reportable segments at several locations, primarily at our Lithium
site in Germany. These restructuring costs are included in the
consolidated statements of income as follows (in millions, except
per share amounts):
|
|
|
|
Nine Months
Ended
|
|
September 30,
2017
|
Restructuring and
other costs:
|
|
Cost of goods
sold
|
$
|
2.9
|
|
Selling, general and
administrative expenses
|
8.4
|
|
Research and
development expenses
|
5.8
|
|
Total
|
$
|
17.1
|
|
Total restructuring
and other costs, after income taxes
|
$
|
13.0
|
|
Total restructuring
and other costs, per diluted share
|
$
|
0.11
|
|
|
|
(3)
|
Acquisition and
integration related costs for the three and nine months ended
September 30, 2018 and 2017 related to various significant
projects. Acquisition and integration related costs are included in
the consolidated statements of income as follows (in millions,
except per share amounts):
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Acquisition and
integration related costs:
|
|
|
|
|
|
|
|
Cost of goods
sold
|
$
|
0.9
|
|
|
$
|
1.8
|
|
|
$
|
2.9
|
|
|
$
|
12.5
|
|
Selling, general and
administrative expenses
|
3.4
|
|
|
3.8
|
|
|
10.2
|
|
|
13.9
|
|
Total
|
$
|
4.3
|
|
|
$
|
5.6
|
|
|
$
|
13.1
|
|
|
$
|
26.4
|
|
Total acquisition and
integration related costs, after income taxes
|
$
|
3.5
|
|
|
$
|
2.6
|
|
|
$
|
10.7
|
|
|
$
|
20.1
|
|
Total acquisition and
integration related costs, per diluted share
|
$
|
0.03
|
|
|
$
|
0.02
|
|
|
$
|
0.10
|
|
|
$
|
0.18
|
|
(4)
|
Included in Selling,
general and administrative expenses for the nine months ended
September 30, 2018 is a $15.0 million ($11.5 million after income
taxes, or $0.10 per share) charitable contribution, using a portion
of the proceeds received from the Polyolefin Catalysts Divestiture,
to the Albemarle Foundation, a non-profit organization that
sponsors grants, health and social projects, educational
initiatives, disaster relief, matching gift programs, scholarships
and other charitable initiatives in locations where our employees
live and operate. This contribution is in addition to the normal
annual contribution made to the Albemarle Foundation by the
Company, and is significant in size and nature in that it is
intended to provide more long-term benefits in the communities
where we live and operate.
|
|
|
(5)
|
Included in Gain on
sale of business, for the nine months ended September 30, 2018 is
$218.7 million ($176.7 million after discrete income taxes, or
$1.60 per share) related to the Polyolefin Catalysts
Divestiture.
|
|
|
(6)
|
Included in Other
income (expenses), net for the nine months ended September 30, 2017
is a gain of $6.0 million ($5.4 million after income taxes, or
$0.05 per share) relating to the acquisition of the remaining 50%
interest in the Sales de Magnesio Ltda. joint venture in Chile.
During the three months ended September 30, 2017 we adjusted this
gain to reduce it by $1.4 million ($0.6 million after income taxes,
or $0.01 per share). The gain was calculated based on the
difference between the purchase price and the book value of the
investment.
|
|
|
(7)
|
Included in Other
income (expenses), net, for the three and nine months ended
September 30, 2018 are charges of $0.4 million ($2.8 million
including the adjustment of previously recorded income taxes, or
$0.03 per share) and $10.8 million (or $0.10 per share),
respectively, related to a legal accrual resulting from a
settlement in a legal matter related to guarantees from a
previously disposed business. In addition, Other income (expenses),
net, for the three and nine months ended September 30, 2018 include
a gain of $1.4 million ($1.1 million after income taxes, or $0.01
per share) and a charge of $16.2 million ($12.5 million after
income taxes, or $0.11 per share), respectively, for a legal
accrual relating to a jury rendered verdict against Albemarle
related to certain business concluded under a 2014 sales agreement
for products that Albemarle no longer manufactures. Both matters
have been resolved and paid during the three months ended September
30, 2018.
|
|
|
(8)
|
Included in Interest
and financing expenses for the nine months ended September 30, 2017
is a loss on early extinguishment of debt of $52.8 million ($38.1
million after income taxes, or $0.34 per share) related to the
tender premiums, fees, unamortized discounts and unamortized
deferred financings costs from the redemption of the 3.00% Senior
notes, €307.0 million of the 1.875% Senior notes and $174.7 million
of the 4.50% Senior notes.
|
|
|
(9)
|
Included in Selling,
general and administrative expenses for the nine months ended
September 30, 2017 is $2.0 million ($1.4 million after income
taxes, or $0.01 per share) for increased capital reserve
contributions to a multiemployer plan, which is subject to a
financial improvement plan. In addition, for the three and nine
months ended September 30, 2017, capital reserve contributions for
this multiemployer plan of $1.6 million and $4.6 million ($0.6
million and $2.8 million after income taxes, or $0.01 and $0.03 per
share), respectively, included in Other income (expenses), net,
have been made to indemnify previously divested
businesses.
|
|
|
(10)
|
Other adjustments for
the three months ended September 30, 2018 included amounts recorded
in:
|
|
•
|
Cost of goods sold -
$3.8 million for the write-off of fixed assets related to a major
capacity expansion in our Jordanian joint venture.
|
|
•
|
Selling, general and
administrative expenses - $0.1 million gain related to a refund
from Chilean authorities due to an overpayment made in a prior
year, partially offset by a $1.2 million contribution, using a
portion of the proceeds received from the Polyolefin Catalysts
Divestiture, to schools in the state of Louisiana for qualified
tuition purposes. This contribution is significant in size and is
intended to provide long-term benefits for families in the
Louisiana community.
|
|
•
|
Other income
(expenses), net - $0.2 million gain related to the revision of
previously recorded expenses of disposed businesses.
|
After
income taxes, these charges totaled $4.4 million, or $0.04 per
share.
|
|
|
|
Other
adjustments for the nine months ended September 30, 2018 included
amounts recorded in:
|
|
•
|
Cost of goods sold -
$4.9 million for the write-off of fixed assets related to a major
capacity expansion in our Jordanian joint venture.
|
|
•
|
Selling, general and
administrative expenses - $1.5 million gain related to a refund
from Chilean authorities due to an overpayment made in a prior
year, partially offset by a $1.2 million contribution, using a
portion of the proceeds received from the Polyolefin Catalysts
Divestiture, to schools in the state of Louisiana for qualified
tuition purposes. This contribution is significant in size and is
intended to provide long-term benefits for families in the
Louisiana community.
|
|
•
|
Other income
(expenses), net - $15.6 million related to environmental charges
related to a site formerly owned by Albemarle and $0.8 million of
charges related to the revision of previously recorded expenses of
disposed businesses.
|
After
income taxes, these charges totaled $17.3 million, or $0.16 per
share.
|
|
|
|
Other
adjustments for the three months ended September 30, 2017 included
amounts recorded in:
|
|
•
|
Cost of goods sold -
$1.3 million reversal of deferred income related to an abandoned
project at an unconsolidated investment.
|
|
•
|
Other income
(expenses), net - $1.1 million related to a reversal of a liability
associated with the previous disposal of a property, partially
offset by the revision of tax indemnification expenses of $0.7
million primarily related to the filing of tax returns for a
previously disposed business.
|
After
income taxes, these net gains totaled $1.1 million, or $0.01 per
share.
|
|
|
|
Other
adjustments for the nine months ended September 30, 2017 included
amounts recorded in:
|
|
•
|
Cost of goods sold -
$1.3 million reversal of deferred income related to an abandoned
project at an unconsolidated investment.
|
|
•
|
Selling, general and
administrative expenses - $1.0 million gain related to a reversal
of an accrual recorded as part of purchase accounting from a
previous acquisition.
|
|
•
|
Other income
(expenses), net - $4.1 million of charges associated with the final
settlements of previously disposed businesses, $3.2 million of
asset retirement obligation charges related to the revision of an
estimate at a site formerly owned by Albemarle and $1.9 million of
tax indemnification expenses primarily related to a competent
authority agreement for a previously disposed business, partially
offset by a reversal of a liability associated with the previous
disposal of a property of $1.1 million.
|
After
income taxes, these charges totaled $4.5 million, or $0.04 per
share.
|
|
|
|
(11)
|
Included in Income
tax expense for the three and nine months ended September 30, 2018
are discrete net tax expenses (benefits), excluding the discrete
tax expense on the gain of sale of business noted above, of $0.2
million, or less than $0.01 per share, and ($11.6) million, or
($0.11) per share, respectively. The net expense for the three
months is primarily related to $1.9 million expense recorded for
stock-based compensation arrangements and $1.7 million expense for
adjustments related to the accounting for the TCJA, partially
offset by a $2.0 million benefit from foreign accrual to return
adjustments and a $1.2 million benefit from the release of foreign
valuation allowances. The net benefit for the nine months is
primarily related to an $8.0 million benefit for tax accounting
method changes, a $4.8 million benefit for adjustments related to
the accounting for the TCJA, $5.4 million excess tax benefits
realized from stock-based compensation arrangements, and a $2.0
million benefit from foreign accrual to return adjustments,
partially offset by $7.3 million expense for adjustments to foreign
valuation allowances.
|
|
|
|
|
Included in Income
tax expense for the three and nine months ended September 30, 2017
are discrete net tax (benefits) expenses of ($0.4) million, or
($0.01) per share, and $2.7 million, or $0.02 per share,
respectively. The net benefit for the three months is primarily
related to a $2.2 million benefit from the excess tax benefits
realized from stock-based compensation arrangements, and $1.0
million from the release of valuation allowances due to a foreign
restructure plan, partially offset by expenses from accrual to
return and rate changes of $2.8 million. The net expense for the
nine months is primarily related to foreign rate changes of $14.8
million and accrual to return adjustments of $7.9 million,
partially offset by a $10.8 million benefit from the release of
valuation allowances due to a foreign restructuring plan, $2.3
million from release of unrecognized tax benefits, and $6.9 million
benefit from excess tax benefits realized from stock-based
compensation arrangements.
|
|
|
|
See below for a reconciliation of the adjusted effective income
tax rate, the non-GAAP financial measure, to the effective income
tax rate, the most directly comparable financial measure calculated
and reporting in accordance with GAAP (in thousands, except
percentages).
|
Income before
income taxes and equity in net income of unconsolidated
investments
|
|
Income tax
expense
|
|
Effective income
tax rate
|
Three months ended
September 30, 2018:
|
|
|
|
|
|
As
reported
|
$
|
154,565
|
|
|
$
|
33,167
|
|
|
21.5
|
%
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
9,475
|
|
|
(2,237)
|
|
|
|
As
adjusted
|
$
|
164,040
|
|
|
$
|
30,930
|
|
|
18.9
|
%
|
|
|
|
|
|
|
Three months ended
September 30, 2017:
|
|
|
|
|
|
As
reported
|
$
|
129,644
|
|
|
$
|
18,495
|
|
|
14.3
|
%
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
6,531
|
|
|
4,650
|
|
|
|
As
adjusted
|
$
|
136,175
|
|
|
$
|
23,145
|
|
|
17.0
|
%
|
|
|
|
|
|
|
Nine months ended
September 30, 2018:
|
|
|
|
|
|
As
reported
|
$
|
664,993
|
|
|
$
|
133,630
|
|
|
20.1
|
%
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
(145,579)
|
|
|
(18,253)
|
|
|
|
As
adjusted
|
$
|
519,414
|
|
|
$
|
115,377
|
|
|
22.2
|
%
|
|
|
|
|
|
|
Nine months ended
September 30, 2017:
|
|
|
|
|
|
As
reported
|
$
|
304,872
|
|
|
$
|
53,596
|
|
|
17.6
|
%
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
122,707
|
|
|
29,882
|
|
|
|
As
adjusted
|
$
|
427,579
|
|
|
$
|
83,478
|
|
|
19.5
|
%
|
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SOURCE Albemarle Corporation