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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_________________________________________________ 
FORM 10-Q
_________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 2021
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 1-12658
_________________________________________________ 

ALBEMARLE CORPORATION
(Exact name of registrant as specified in its charter)
_________________________________________________ 
Virginia   54-1692118
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
4250 Congress Street, Suite 900
Charlotte, North Carolina 28209
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code - (980) 299-5700
_________________________________________________ 
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      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
COMMON STOCK, $.01 Par Value ALB New York Stock Exchange
Number of shares of common stock, $.01 par value, outstanding as of April 30, 2021: 116,721,826


ALBEMARLE CORPORATION
INDEX – FORM 10-Q
 
    Page
Number(s)
3
4
5
6
7
8
EXHIBITS
2

PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements (Unaudited).
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
  Three Months Ended
March 31,
  2021 2020
Net sales $ 829,291  $ 738,845 
Cost of goods sold 565,604  496,827 
Gross profit 263,687  242,018 
Selling, general and administrative expenses 93,187  101,877 
Research and development expenses 14,636  16,097 
Operating profit 155,864  124,044 
Interest and financing expenses (43,882) (16,885)
Other income, net 11,312  8,314 
Income before income taxes and equity in net income of unconsolidated investments 123,294  115,473 
Income tax expense 22,107  18,442 
Income before equity in net income of unconsolidated investments 101,187  97,031 
Equity in net income of unconsolidated investments (net of tax) 16,511  26,604 
Net income 117,698  123,635 
Net income attributable to noncontrolling interests (22,021) (16,431)
Net income attributable to Albemarle Corporation $ 95,677  $ 107,204 
Basic earnings per share $ 0.85  $ 1.01 
Diluted earnings per share $ 0.84  $ 1.01 
Weighted-average common shares outstanding – basic 112,592  106,227 
Weighted-average common shares outstanding – diluted 113,330  106,512 
See accompanying Notes to the Condensed Consolidated Financial Statements.
3

ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
  Three Months Ended
March 31,
  2021 2020
Net income $ 117,698  $ 123,635 
Other comprehensive income (loss), net of tax:
Foreign currency translation and other (28,142) (81,977)
Net investment hedge 5,110  2,081 
Cash flow hedge (1,600) (51,460)
Interest rate swap 650  648 
Total other comprehensive loss, net of tax (23,982) (130,708)
Comprehensive income (loss) 93,716  (7,073)
Comprehensive income attributable to noncontrolling interests (22,021) (16,477)
Comprehensive income (loss) attributable to Albemarle Corporation $ 71,695  $ (23,550)
See accompanying Notes to the Condensed Consolidated Financial Statements.
4

ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
March 31, December 31,
2021 2020
Assets
Current assets:
Cash and cash equivalents
$ 569,859  $ 746,724 
Trade accounts receivable, less allowance for doubtful accounts (2021 – $2,084; 2020 – $2,083)
532,964  530,838 
Other accounts receivable 60,558  61,958 
Inventories 685,779  750,237 
Other current assets 93,844  116,427 
Assets held for sale 66,390  — 
Total current assets 2,009,394  2,206,184 
Property, plant and equipment, at cost 7,433,593  7,427,641 
Less accumulated depreciation and amortization 2,043,264  2,073,016 
Net property, plant and equipment 5,390,329  5,354,625 
Investments 663,448  656,244 
Noncurrent assets held for sale 50,683  — 
Other assets 212,258  219,268 
Goodwill 1,629,169  1,665,520 
Other intangibles, net of amortization 335,021  349,105 
Total assets $ 10,290,302  $ 10,450,946 
Liabilities And Equity
Current liabilities:
Accounts payable $ 492,532  $ 483,221 
Accrued expenses 378,973  440,763 
Current portion of long-term debt 616  804,677 
Dividends payable 45,327  40,937 
Liabilities held for sale 4,068  — 
Income taxes payable 31,740  32,251 
Total current liabilities 953,256  1,801,849 
Long-term debt 2,030,032  2,767,381 
Postretirement benefits 47,817  48,075 
Pension benefits 316,652  340,818 
Other noncurrent liabilities 619,309  629,377 
Deferred income taxes 380,683  394,852 
Commitments and contingencies (Note 9)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 116,718 in 2021 and 106,842 in 2020
1,167  1,069 
Additional paid-in capital 2,889,923  1,438,038 
Accumulated other comprehensive loss (350,114) (326,132)
Retained earnings 3,205,408  3,155,252 
Total Albemarle Corporation shareholders’ equity 5,746,384  4,268,227 
Noncontrolling interests 196,169  200,367 
Total equity 5,942,553  4,468,594 
Total liabilities and equity $ 10,290,302  $ 10,450,946 
See accompanying Notes to the Condensed Consolidated Financial Statements.
5

ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(In Thousands, Except Share Data) Additional
Paid-in Capital
Accumulated Other
Comprehensive Loss
Retained Earnings Total Albemarle
Shareholders’ Equity
Noncontrolling
Interests
Total Equity
Common Stock
Shares Amounts
Balance at January 1, 2021 106,842,369  $ 1,069  $ 1,438,038  $ (326,132) $ 3,155,252  $ 4,268,227  $ 200,367  $ 4,468,594 
Net income 95,677  95,677  22,021  117,698 
Other comprehensive (loss) income (23,982) (23,982) —  (23,982)
Cash dividends declared, $0.39 per common share
(45,521) (45,521) (26,219) (71,740)
Stock-based compensation 4,674  4,674  4,674 
Fees related to public issuance of common stock (902) (902) (902)
Exercise of stock options 17,964  —  1,183  1,183  1,183 
Issuance of common stock, net 9,902,307  99  1,453,789  1,453,888  1,453,888 
Shares withheld for withholding taxes associated with common stock issuances (44,465) (1) (6,859) (6,860) (6,860)
Balance at March 31, 2021 116,718,175  $ 1,167  $ 2,889,923  $ (350,114) $ 3,205,408  $ 5,746,384  $ 196,169  $ 5,942,553 
Balance at January 1, 2020 106,040,215  $ 1,061  $ 1,383,446  $ (395,735) $ 2,943,478  $ 3,932,250  $ 161,330  $ 4,093,580 
Net income 107,204  107,204  16,431  123,635 
Other comprehensive loss (130,754) (130,754) 46  (130,708)
Cash dividends declared, $0.385 per common share
(40,933) (40,933) (14,286) (55,219)
Stock-based compensation 3,867  3,867  3,867 
Exercise of stock options 193,537  10,193  10,195  10,195 
Issuance of common stock, net 132,320  (1) —  — 
Shares withheld for withholding taxes associated with common stock issuances (47,458) (1) (3,824) (3,825) (3,825)
Balance at March 31, 2020 106,318,614  $ 1,063  $ 1,393,681  $ (526,489) $ 3,009,749  $ 3,878,004  $ 163,521  $ 4,041,525 
See accompanying Notes to the Condensed Consolidated Financial Statements.
6

ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
2021 2020
Cash and cash equivalents at beginning of year $ 746,724  $ 613,110 
Cash flows from operating activities:
Net income 117,698  123,635 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization 62,260  53,694 
Stock-based compensation and other 2,560  2,501 
Equity in net income of unconsolidated investments (net of tax) (16,511) (26,604)
Dividends received from unconsolidated investments and nonmarketable securities 4,950  — 
Pension and postretirement benefit (4,226) (1,719)
Pension and postretirement contributions (15,329) (6,113)
Unrealized gain on investments in marketable securities (1,762) (627)
Loss on early extinguishment of debt 27,798  — 
Deferred income taxes (19,384) 4,790 
Working capital changes (49,185) 17,730 
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL 43,223  36,723 
Other, net 5,857  (48,956)
Net cash provided by operating activities 157,949  155,054 
Cash flows from investing activities:
Acquisitions, net of cash acquired —  (22,572)
Capital expenditures (179,683) (214,529)
Sales of marketable securities, net 5,245  2,589 
Investments in equity and other corporate investments (286) (356)
Net cash used in investing activities (174,724) (234,868)
Cash flows from financing activities:
Proceeds from issuance of common stock 1,453,888  — 
Repayments of long-term debt and credit agreements (1,174,980) — 
Proceeds from borrowings of credit agreements —  250,000 
Other debt repayments, net (325,159) (151,872)
Fees related to early extinguishment of debt (23,719) — 
Dividends paid to shareholders (41,130) (38,982)
Dividends paid to noncontrolling interests (26,219) (14,286)
Proceeds from exercise of stock options 1,183  10,195 
Withholding taxes paid on stock-based compensation award distributions (6,860) (3,825)
Other (253) (214)
Net cash (used in) provided by financing activities (143,249) 51,016 
Net effect of foreign exchange on cash and cash equivalents (16,841) (31,084)
Decrease in cash and cash equivalents (176,865) (59,882)
Cash and cash equivalents at end of period $ 569,859  $ 553,228 
See accompanying Notes to the Condensed Consolidated Financial Statements.
7

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

NOTE 1—Basis of Presentation
In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Albemarle Corporation and our wholly-owned, majority-owned and controlled subsidiaries (collectively, “Albemarle,” “we,” “us,” “our” or “the Company”) contain all adjustments necessary for a fair statement, in all material respects, of our condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three-month periods ended March 31, 2021 and 2020 and our condensed consolidated statements of cash flows for the three-month periods ended March 31, 2021 and 2020. Income tax expense for the three-month period ended March 31, 2021 includes expense of $7.9 million due to the correction of an out-of-period error regarding an overstated deferred tax liability for the three-month period ended December 31, 2017. The Company does not believe this adjustment is material to the consolidated financial statements for the three-month period ended March 31, 2021, or the three-month period or year ended December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on February 19, 2021. The December 31, 2020 condensed consolidated balance sheet data herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). The results of operations for the three-month period ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made to the accompanying condensed consolidated financial statements and the notes thereto to conform to the current presentation.
The current novel coronavirus (“COVID-19”) pandemic is having an impact on overall global economic conditions. While we have not seen a material impact to our operations to date, the ultimate impact on our business will depend on the length and severity of the outbreak throughout the world. The Company has taken, and plans to continue to take, certain measures to maintain financial flexibility while still protecting our employees and customers.

NOTE 2—Divestitures:
On February 25, 2021, the Company signed a definitive agreement to sell its fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue payment-in-kind (“PIK”) dividends at an annual rate of 12% beginning two years after issuance.
As part of the transaction, Grace will acquire our manufacturing facilities located in South Haven, Michigan and Tyrone, Pennsylvania. The sale of the FCS business reflects the Company’s commitment to investing in its core, growth-oriented business segments. The sale is expected to close in the second quarter of 2021, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities. We currently expect to record a gain in the second quarter of 2021 related to the sale of this business.
We determined that this business met the assets held for sale criteria in accordance with ASC 360, Property,Plant and Equipment during the first quarter of 2021. As such, the assets and liabilities of this business were included in Assets held for sale and Liabilities held for sale, respectively, in the consolidated balance sheet at March 31, 2021.

8

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The carrying amounts of the major classes of assets and liabilities that were classified as held for sale at March 31, 2021 are as follows (in thousands):
March 31, 2021
Assets
Inventories $ 45,225 
Other current assets 21,165 
Net property, plant and equipment 44,080 
Goodwill and other noncurrent assets 6,603 
Assets held for sale $ 117,073 
Liabilities
Current liabilities $ 4,068 
Liabilities held for sale $ 4,068 
The results of operations of the business classified as held for sale is included in the consolidated statements of income. This business did not qualify for discontinued operations treatment because the Company’s management does not consider the sale as representing a strategic shift that had or will have a major effect on the Company’s operations and financial results.

NOTE 3—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the three months ended March 31, 2021 (in thousands):
Lithium Bromine Specialties Catalysts All Other Total
Balance at December 31, 2020
$ 1,441,781  $ 20,319  $ 196,834  $ 6,586  $ 1,665,520 
   Reclass to assets held for sale(a)
—  —  —  (6,586) (6,586)
   Foreign currency translation adjustments and other (23,110) —  (6,655) —  (29,765)
Balance at March 31, 2021 $ 1,418,671  $ 20,319  $ 190,179  $ —  $ 1,629,169 
(a)    Represents goodwill of the FCS business. See Note 2, “Divestitures,” for additional information.


9

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the changes in other intangibles and related accumulated amortization for the three months ended March 31, 2021 (in thousands):
Customer Lists and Relationships
Trade Names and Trademarks(a)
Patents and Technology Other Total
Gross Asset Value
  Balance at December 31, 2020
$ 448,748  $ 18,710  $ 58,096  $ 39,864  $ 565,418 
    Reclass to assets held for sale(b)
—  —  —  (1,473) (1,473)
Foreign currency translation adjustments and other (10,530) (321) (633) (452) (11,936)
  Balance at March 31, 2021
$ 438,218  $ 18,389  $ 57,463  $ 37,939  $ 552,009 
Accumulated Amortization
  Balance at December 31, 2020
$ (147,286) $ (8,176) $ (39,500) $ (21,351) $ (216,313)
    Amortization (5,837) —  (365) (227) (6,429)
Reclass to assets held for sale(b)
—  —  —  1,456  1,456 
Foreign currency translation adjustments and other 3,390  90  604  214  4,298 
  Balance at March 31, 2021
$ (149,733) $ (8,086) $ (39,261) $ (19,908) $ (216,988)
Net Book Value at December 31, 2020
$ 301,462  $ 10,534  $ 18,596  $ 18,513  $ 349,105 
Net Book Value at March 31, 2021
$ 288,485  $ 10,303  $ 18,202  $ 18,031  $ 335,021 
(a)    Net Book Value includes only indefinite-lived intangible assets.
(b)    Represents other intangibles of the FCS business. See Note 2, “Divestitures,” for additional information.

NOTE 4—Income Taxes:
The effective income tax rate for the three-month period ended March 31, 2021 was 17.9% compared to 16.0% for the three-month period ended March 31, 2020. The three-month period ended March 31, 2021 included discrete tax expense recorded for an out-of-period adjustment for an overstated deferred tax liability for the three-month period ended December 31, 2017, offset by a benefit due to the release of a foreign valuation allowance. The Company’s effective income tax rate fluctuates based on, among other factors, its level and location of income. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-month periods ended March 31, 2021 and March 31, 2020 was impacted by a variety of factors, primarily stemming from the location in which income was earned. This was mainly attributable to our share of the income of our Jordan Bromine Company Limited (“JBC”) joint venture, a Free Zones company under the laws of the Hashemite Kingdom of Jordan for both periods.


10

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 5—Earnings Per Share:
Basic and diluted earnings per share for the three-month periods ended March 31, 2021 and 2020 are calculated as follows (in thousands, except per share amounts):
Three Months Ended
March 31,
2021 2020
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation $ 95,677  $ 107,204 
Denominator:
Weighted-average common shares for basic earnings per share 112,592  106,227 
Basic earnings per share $ 0.85  $ 1.01 
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation $ 95,677  $ 107,204 
Denominator:
Weighted-average common shares for basic earnings per share 112,592  106,227 
Incremental shares under stock compensation plans 738  285 
Weighted-average common shares for diluted earnings per share 113,330  106,512 
Diluted earnings per share $ 0.84  $ 1.01 

At March 31, 2021, there were 62,479 common stock equivalents not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. The Company also granted to the underwriters an option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before deducting expenses, underwriting discounts and commissions. The net proceeds were used for debt repayments and general corporate purposes. See Note 8, “Long-Term Debt,” for further details.
On February 25, 2021, the Company declared a cash dividend of $0.39, an increase from the prior year regular quarterly dividend. This dividend was paid on April 1, 2021 to shareholders of record at the close of business as of March 12, 2021. On May 4, 2021, the Company declared a cash dividend of $0.39 per share, which is payable on July 1, 2021 to shareholders of record at the close of business as of June 11, 2021.
NOTE 6—Inventories:
The following table provides a breakdown of inventories at March 31, 2021 and December 31, 2020 (in thousands):
March 31, December 31,
2021 2020
Finished goods $ 394,401  $ 454,162 
Raw materials and work in process(a)
216,150  219,896 
Stores, supplies and other 75,228  76,179 
Total $ 685,779  $ 750,237 

(a)Included $136.4 million and $129.6 million at March 31, 2021 and December 31, 2020, respectively, of work in process in our Lithium segment.

NOTE 7—Investments:
The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), where the ownership parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”), however this investment is not consolidated as the Company is not the primary beneficiary. The
11

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $496.2 million and $479.6 million at March 31, 2021 and December 31, 2020, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs for which the Company is not the primary beneficiary was $8.3 million and $8.0 million at March 31, 2021 and December 31, 2020, respectively. Our unconsolidated VIEs are reported in Investments on the condensed consolidated balance sheets. The Company does not guarantee debt for, or have other financial support obligations to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.

NOTE 8—Long-Term Debt:
Long-term debt at March 31, 2021 and December 31, 2020 consisted of the following (in thousands):
March 31, December 31,
2021 2020
1.125% notes
$ 443,657  $ 610,800 
1.625% notes
589,700  610,800 
1.875% Senior notes
—  480,007 
3.45% Senior notes
171,612  300,000 
4.15% Senior notes
425,000  425,000 
5.45% Senior notes
350,000  350,000 
Floating rate notes —  200,000 
Credit facilities —  223,900 
Commercial paper notes —  325,000 
Variable-rate foreign bank loans 7,296  7,702 
Finance lease obligations 58,910  59,181 
Unamortized discount and debt issuance costs (15,527) (20,332)
Total long-term debt 2,030,648  3,572,058 
Less amounts due within one year 616  804,677 
Long-term debt, less current portion $ 2,030,032  $ 2,767,381 
In the first quarter of 2021, the Company made the following debt principal payments using proceeds from the February 2021 underwritten public offering of common stock:
€123.8 million of the 1.125% notes due in November 2025
€393.0 million, the remaining balance, of the 1.875% Senior notes originally due in December 2021
$128.4 million of the 3.45% Senior notes due in November 2029
$200.0 million, the remaining balance, of the floating rate notes originally due in November 2022
€183.3 million, the outstanding balance, of the unsecured credit facility originally entered into on August 14, 2019, as amended and restated on December 15, 2020
$325.0 million, the outstanding balance, of the commercial paper notes
As a result, included in Interest and financing expenses for the three-month period ended March 31, 2021 is a loss on early extinguishment of debt of $27.8 million, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of this debt.
Prior to repayment in the first quarter of 2021, the carrying value of our 1.875% Euro-denominated senior notes was designated as an effective hedge of our net investment in certain foreign subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency were recorded in accumulated other comprehensive loss. Upon repayment of these notes, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated. Prior to the net investment hedge being
12

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
discontinued, during the three-month period ended March 31, 2021 and 2020, gains of $5.1 million and $2.1 million (net of income taxes), respectively, were recorded in accumulated other comprehensive loss in connection with the revaluation of these senior notes to our reporting currency.

NOTE 9—Commitments and Contingencies:
Environmental
We had the following activity in our recorded environmental liabilities for the three months ended March 31, 2021 (in thousands):
Beginning balance at December 31, 2020
$ 45,771 
Expenditures (394)
Accretion of discount 242 
Foreign currency translation adjustments and other (605)
Ending balance at March 31, 2021
45,014 
Less amounts reported in Accrued expenses 9,209 
Amounts reported in Other noncurrent liabilities $ 35,805 
Environmental remediation liabilities included discounted liabilities of $38.7 million and $39.2 million at March 31, 2021 and December 31, 2020, respectively, discounted at rates with a weighted-average of 3.5%, and with the undiscounted amount totaling $72.3 million and $73.6 million at March 31, 2021 and December 31, 2020, respectively. For certain locations where the Company is operating groundwater monitoring and/or remediation systems, prior owners or insurers have assumed all or most of the responsibility.
The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities typically arise during the normal course of our operational and environmental management activities or at the time of acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at each relevant site, changes in risk assessment practices, remediation techniques and regulatory requirements can occur, therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites will be determined when evaluations are completed. Although it is difficult to quantify the potential financial impact of these remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility that future environmental remediation costs associated with our past operations, could be an additional $10 million to $35 million before income taxes, in excess of amounts already recorded. The variability of this range is primarily driven by possible environmental remediation activity at a formerly owned site where we indemnify the buyer through a set cutoff date in 2024.
We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Litigation
We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed as incurred.
As previously reported in 2018, following receipt of information regarding potential improper payments being made by third party sales representatives of our Refining Solutions business, within our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act and other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third party sales representatives in our Refining Solutions business, within our Catalysts segment, to the U.S. Department of Justice (“DOJ”), SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, SEC, and DPP in their review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures.
13

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ, SEC, or DPP. We are unable to predict what, if any, action may be taken by the DOJ, SEC, or DPP, or what penalties or remedial actions they may seek to impose. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any fines, penalties, disgorgement, equitable relief or other losses would have a material adverse effect on our financial condition or liquidity.
Indemnities
We are indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although we believe that the financial condition of those parties who may have indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party who may have obligations to indemnify us will adhere to their obligations and we may have to resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. The Company had approximately $29.5 million and $30.5 million at March 31, 2021 and December 31, 2020, respectively, recorded in Other noncurrent liabilities, primarily related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold.
Other
We have contracts with certain of our customers, which serve as guarantees on product delivery and performance according to customer specifications that can cover both shipments on an individual basis as well as blanket coverage of multiple shipments under certain customer supply contracts. The financial coverage provided by these guarantees is typically based on a percentage of net sales value.

NOTE 10—Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.


14

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following table provides details of our lease contracts for the three-month periods ended March 31, 2021 and 2020 (in thousands):
Three Months Ended
March 31,
2021 2020
Operating lease cost $ 9,412  $ 8,740 
Finance lease cost:
Amortization of right of use assets 157  154 
Interest on lease liabilities 755  650 
Total finance lease cost 912  804 
Short-term lease cost 2,604  2,883 
Variable lease cost 2,365  1,948 
Total lease cost $ 15,293  $ 14,375 
Supplemental cash flow information related to our lease contracts for the three-month periods ended March 31, 2021 and 2020 is as follows (in thousands):
Three Months Ended March 31,
2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 8,381  $ 11,177 
Operating cash flows from finance leases 439  380 
Financing cash flows from finance leases 159  172 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases 707  16,021 

15

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at March 31, 2021 and December 31, 2020 is as follows (in thousands, except as noted):
March 31, 2021 December 31, 2020
Operating leases:
Other assets $ 128,211  $ 136,292 
Accrued expenses 19,784  22,297 
Other noncurrent liabilities 111,719  116,765 
Total operating lease liabilities 131,503  139,062 
Finance leases:
Net property, plant and equipment 58,701  58,963 
Current portion of long-term debt(a)
2,046  1,752 
Long-term debt 58,294  58,543 
Total finance lease liabilities 60,340  60,295 
Weighted average remaining lease term (in years):
Operating leases 15.7 15.3
Finance leases 27.4 27.5
Weighted average discount rate (%):
Operating leases 3.96  % 3.94  %
Finance leases 4.56  % 4.56  %
(a)    Balance includes accrued interest of finance lease recorded in Accrued liabilities.
Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands):
Operating Leases Finance Leases
Remainder of 2021 $ 17,556  $ 1,631 
2022 20,458  4,454 
2023 21,684  4,454 
2024 10,680  4,454 
2025 9,563  4,454 
Thereafter 131,824  89,916 
Total lease payments 211,765  109,363 
Less imputed interest 80,262  49,023 
Total $ 131,503  $ 60,340 

NOTE 11—Segment Information:
Our three reportable segments include: (1) Lithium; (2) Bromine Specialties; and (3) Catalysts. Each segment has a dedicated team of sales, research and development, process engineering, manufacturing and sourcing, and business strategy personnel and has full accountability for improving execution through greater asset and market focus, agility and responsiveness. This business structure aligns with the markets and customers we serve through each of the segments. This structure also facilitates the continued standardization of business processes across the organization, and is consistent with the manner in which information is presently used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions.
16

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the FCS business that does not fit into any of our core businesses. In February 2021, we announced that we signed a definitive agreement to sell the FCS business. See Note 2, “Divestitures,” for additional information.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and other post-employment benefit (“OPEB”) service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes inter-segment transfers of raw materials at cost and allocations for certain corporate costs.
The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company has reported adjusted EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance with U.S. GAAP.
Three Months Ended
March 31,
2021 2020
(In thousands)
Net sales:
Lithium $ 278,976  $ 236,818 
Bromine Specialties 280,447  231,592 
Catalysts 220,243  207,207 
All Other 49,625  63,228 
Total net sales $ 829,291  $ 738,845 
Adjusted EBITDA:
Lithium $ 106,436  $ 78,637 
Bromine Specialties 94,640  83,262 
Catalysts 25,427  47,470 
All Other 21,479  22,824 
Corporate (17,928) (35,828)
Total adjusted EBITDA $ 230,054  $ 196,365 
17

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
Lithium Bromine Specialties Catalysts Reportable Segments Total All Other Corporate Consolidated Total
Three months ended March 31, 2021
Net income (loss) attributable to Albemarle Corporation $ 74,630  $ 82,113  $ 12,916  $ 169,659  $ 20,016  $ (93,998) $ 95,677 
Depreciation and amortization 31,806  12,527  12,511  56,844  1,463  3,953  62,260 
Acquisition and integration related costs(a)
—  —  —  —  —  2,162  2,162 
Interest and financing expenses(b)
—  —  —  —  —  43,882  43,882 
Income tax expense —  —  —  —  —  22,107  22,107 
Non-operating pension and OPEB items —  —  —  —  —  (5,465) (5,465)
Other(c)
—  —  —  —  —  9,431  9,431 
Adjusted EBITDA $ 106,436  $ 94,640  $ 25,427  $ 226,503  $ 21,479  $ (17,928) $ 230,054 
Three months ended March 31, 2020
Net income (loss) attributable to Albemarle Corporation $ 53,240  $ 71,665  $ 34,892  $ 159,797  $ 20,846  $ (73,439) $ 107,204 
Depreciation and amortization 25,397  11,597  12,578  49,572  1,978  2,144  53,694 
Restructuring and other(d)
—  —  —  —  —  1,847  1,847 
Acquisition and integration related costs(b)
—  —  —  —  —  2,951  2,951 
Interest and financing expenses —  —  —  —  —  16,885  16,885 
Income tax expense —  —  —  —  —  18,442  18,442 
Non-operating pension and OPEB items —  —  —  —  —  (2,908) (2,908)
Other(e)
—  —  —  —  —  (1,750) (1,750)
Adjusted EBITDA $ 78,637  $ 83,262  $ 47,470  $ 209,369  $ 22,824  $ (35,828) $ 196,365 
(a)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).
(b)Included in Interest and financing expenses is a loss on early extinguishment of debt of $27.8 million. See Note 8, “Long-Term Debt,” for additional information.
(c)Included amounts for the three months ended March 31, 2021 recorded in:
SG&A - $5.5 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
Other income, net - $3.9 million of expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
(d)In 2020, we recorded severance expenses as part of business reorganization plans, impacting each of our businesses and Corporate, primarily in the U.S., Germany and with our Jordanian joint venture partner. During the three months ended March 31, 2020, we recorded expenses of $0.7 million in Cost of goods sold, $1.5 million in SG&A and a $0.3 million gain in Net income attributable to noncontrolling interests for the portion of severance expense allocated to our Jordanian joint venture partner. The balance of unpaid severance is recorded in Accrued expenses and is expected to primarily be paid through 2021.
(e)Included amounts for the three months ended March 31, 2020 recorded in:
Other income, net - $2.6 million net gain resulting from the settlement of legal matters related to a business sold, partially offset by a $0.8 million loss resulting from the adjustment of indemnifications related to previously disposed businesses.


18

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 12—Pension Plans and Other Postretirement Benefits:
The components of pension and postretirement benefits cost (credit) for the three-month periods ended March 31, 2021 and 2020 were as follows (in thousands):
Three Months Ended
March 31,
2021 2020
Pension Benefits Cost (Credit):
Service cost $ 1,179  $ 1,214 
Interest cost 5,119  6,687 
Expected return on assets (10,893) (10,063)
Amortization of prior service benefit 29  (51)
Total net pension benefits credit $ (4,566) $ (2,213)
Postretirement Benefits Cost:
Service cost $ 31  $ 26 
Interest cost 309  468 
Total net postretirement benefits cost $ 340  $ 494 
Total net pension and postretirement benefits credit $ (4,226) $ (1,719)
All components of net benefit cost (credit), other than service cost, are included in Other income, net on the consolidated statements of income.
During the three-month periods ended March 31, 2021 and 2020, we made contributions of $14.7 million and $5.4 million, respectively, to our qualified and nonqualified pension plans.
We paid $0.6 million and $0.7 million, respectively, in premiums to the U.S. postretirement benefit plan during the three-month periods ended March 31, 2021 and 2020, respectively.

NOTE 13—Fair Value of Financial Instruments:
In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions and other risk factors existing at the time of assessment. Fair value information for our financial instruments is as follows:
Long-Term Debt—the fair values of our notes are estimated using Level 1 inputs and account for the difference between the recorded amount and fair value of our long-term debt. The carrying value of our remaining long-term debt reported in the accompanying condensed consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on prevailing variable market rates currently available in the countries in which we have borrowings.
March 31, 2021 December 31, 2020
Recorded
Amount
Fair Value Recorded
Amount
Fair Value
(In thousands)
Long-term debt $ 2,042,936  $ 2,203,416  $ 3,588,157  $ 3,783,225 
Foreign Currency Forward Contracts—During the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia. This derivative financial instrument is used to manage risk and is not used for trading or other speculative purposes. This foreign currency forward contract has been designated as a hedging instrument under ASC 815, Derivatives and Hedging. At March 31, 2021 and December 31, 2020, we had outstanding designated foreign currency forward contracts with notional values totaling the equivalent of $294.2 million and $75.4 million, respectively.
We also enter into foreign currency forward contracts in connection with our risk management strategies that have not been designated as hedging instruments under ASC 815, Derivatives and Hedging, in an attempt to minimize the financial impact of changes in foreign currency exchange rates. These derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The fair values of our non-designated foreign currency forward contracts are estimated based on current settlement values. At March 31, 2021 and December 31, 2020, we had outstanding non-designated
19

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
foreign currency forward contracts with notional values totaling $559.8 million and $611.1 million, respectively, hedging our exposure to various currencies including the Euro, Australian dollar, Taiwanese dollar, Chinese renminbi and Chilean peso.
The following table summarizes the fair value of our foreign currency forward contracts included in the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 (in thousands):
March 31, 2021 December 31, 2020
Assets Liabilities Assets Liabilities
Designated as hedging instruments(a)
$ —  $ 3,735  $ 7,043  $ — 
Not Designated as hedging instruments(b)
16,123  182  6,563  4,803 
Total $ 16,123  $ 3,917  $ 13,606  $ 4,803 
(a)    Included $3.7 million in Accrued expenses at March 31, 2021 and $6.2 million in Other current assets and $0.9 million in Other assets at December 31, 2020.
(b)    Included $15.8 million in Other current assets, $0.3 million in Other assets and $0.2 million in Accrued expenses at March 31, 2021 and $6.6 million in Other current assets and $4.8 million in Accrued expenses at December 31, 2020.

The following table summarizes the net gains (losses) recognized for our foreign currency forward contracts during the three-month periods ended March 31, 2021 and 2020 (in thousands):
Three Months Ended
March 31,
2021 2020
Designated as hedging instruments
Losses recognized in Other comprehensive income $ (1,600) $ (51,460)
Not designated as hedging instruments
Losses recognized in Other income, net(a)
$ (191) $ (5,454)
(a)    Fluctuations in the value of our foreign currency forward contracts not designated as hedging instruments are generally expected to be offset by changes in the value of the underlying exposures being hedged, which are also reported in Other income, net.
In addition, for the three-month periods ended March 31, 2021 and 2020, we recorded net cash settlements of $7.9 million and $6.8 million, respectively, in Other, net, in our condensed consolidated statements of cash flows.
As of March 31, 2021, there are no unrealized gains or losses related to the cash flow hedges expected to be reclassified to earnings in the next twelve months.
The counterparties to our foreign currency forward contracts are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties.

NOTE 14—Fair Value Measurement:
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:
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
Level 3 Unobservable inputs for the asset or liability
20

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (in thousands):
March 31, 2021 Quoted Prices in Active Markets for Identical Items (Level 1) Quoted Prices in Active Markets for Similar Items (Level 2) Unobservable Inputs (Level 3)
Assets:
Investments under executive deferred compensation plan(a)
$ 28,963  $ 28,963  $ —  $ — 
Private equity securities measured at net asset value(b)(c)
$ 4,667  $ —  $ —  $ — 
Foreign currency forward contracts(d)
$ 16,123  $ —  $ 16,123  $ — 
Liabilities:
Obligations under executive deferred compensation plan(a)
$ 28,963  $ 28,963  $ —  $ — 
Foreign currency forward contracts(d)
$ 3,917  $ —  $ 3,917  $ — 
December 31, 2020 Quoted Prices in Active Markets for Identical Items (Level 1) Quoted Prices in Active Markets for Similar Items (Level 2) Unobservable Inputs (Level 3)
Assets:
Investments under executive deferred compensation plan(a)
$ 32,447  $ 32,447  $ —  $ — 
Private equity securities measured at net asset value(b)(c)
$ 4,661  $ —  $ —  $ — 
Foreign currency forward contracts(d)
$ 13,606  $ —  $ 13,606  $ — 
Liabilities:
Obligations under executive deferred compensation plan(a)
$ 32,447  $ 32,447  $ —  $ — 
Foreign currency forward contracts(d)
$ 4,803  $ —  $ 4,803  $ — 
(a)We maintain an Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.
(b)Primarily consists of private equity securities reported in Investments in the condensed consolidated balance sheets. The changes in fair value are reported in Other income, net, in our consolidated statements of income.
(c)Holdings in certain private equity securities 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.
(d)As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2. See Note 13, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.

21

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 15—Accumulated Other Comprehensive (Loss) Income:
The components and activity in Accumulated other comprehensive (loss) income (net of deferred income taxes) consisted of the following during the periods indicated below (in thousands):
Foreign Currency Translation and Other
Net Investment Hedge(a)
Cash Flow Hedge(b)
Interest Rate Swap(c)
Total
Three months ended March 31, 2021
Balance at December 31, 2020 $ (369,152) $ 46,593  $ 6,449  $ (10,022) $ (326,132)
Other comprehensive (loss) income before reclassifications (28,167) 5,110  (1,600) —  (24,657)
Amounts reclassified from accumulated other comprehensive loss 25  —  —  650  675 
Other comprehensive income (loss), net of tax (28,142) 5,110  (1,600) 650  (23,982)
Amounts reclassified within accumulated other comprehensive loss 51,703  (51,703) —  —  — 
Other comprehensive income attributable to noncontrolling interests —  —  —  —  — 
Balance at March 31, 2021 $ (345,591) $ —  $ 4,849  $ (9,372) $ (350,114)
Three months ended March 31, 2020
Balance at December 31, 2019 $ (468,737) $ 80,778  $ 4,847  $ (12,623) $ (395,735)
Other comprehensive (loss) income before reclassifications (81,986) 2,081  (51,460) —  (131,365)
Amounts reclassified from accumulated other comprehensive loss —  —  648  657 
Other comprehensive (loss) income, net of tax (81,977) 2,081  (51,460) 648  (130,708)
Other comprehensive loss attributable to noncontrolling interests (46) —  —  —  (46)
Balance at March 31, 2020 $ (550,760) $ 82,859  $ (46,613) $ (11,975) $ (526,489)
(a)During the first quarter of 2021 the net investment hedge was discontinued following the repayment of the 1.875% Euro-denominated senior notes. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge have been reclassified to Foreign currency translation and other, and will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated.
(b)We entered into a foreign currency forward contract, which was designated and accounted for as a cash flow hedge under ASC 815, Derivatives and Hedging. See Note 13, “Fair Value of Financial Instruments,” for additional information.
(c)The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in interest expense.
The amount of income tax (expense) benefit allocated to each component of Other comprehensive (loss) income for the three-month periods ended March 31, 2021 and 2020 is provided in the following tables (in thousands):
Foreign Currency Translation and Other Net Investment Hedge Cash Flow Hedge Interest Rate Swap
Three months ended March 31, 2021
Other comprehensive (loss) income, before tax $ (28,138) $ 6,552  $ (1,600) $ 834 
Income tax (expense) benefit (4) (1,442) —  (184)
Other comprehensive (loss) income, net of tax $ (28,142) $ 5,110  $ (1,600) $ 650 
Three months ended March 31, 2020
Other comprehensive (loss) income, before tax $ (81,980) $ 2,675  $ (51,460) $ 834 
Income tax benefit (expense) (594) —  (186)
Other comprehensive (loss) income, net of tax $ (81,977) $ 2,081  $ (51,460) $ 648 


22

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 16—Related Party Transactions:
Our consolidated statements of income include sales to and purchases from unconsolidated affiliates in the ordinary course of business as follows (in thousands):
Three Months Ended
March 31,
2021 2020
Sales to unconsolidated affiliates $ 5,730  $ 7,217 
Purchases from unconsolidated affiliates(a)
$ 33,150  $ 76,475 
(a)Purchases from unconsolidated affiliates primarily relate to purchases from our Windfield joint venture.

Our condensed consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the ordinary course of business as follows (in thousands):
March 31, 2021 December 31, 2019
Receivables from unconsolidated affiliates $ 5,862  $ 4,098 
Payables to unconsolidated affiliates $ 33,988  $ 30,123 

NOTE 17—Supplemental Cash Flow Information:
Supplemental information related to the condensed consolidated statements of cash flows is as follows (in thousands):
Three Months Ended
March 31,
2021 2020
Supplemental non-cash disclosure related to investing activities:
Capital expenditures included in Accounts payable $ 151,604  $ 176,464 
As part of the purchase price paid for the acquisition of a 60% interest in MRL’s Wodgina Project, the Company transferred $43.2 million and $36.7 million of its construction in progress of the designated Kemerton assets during the three months ended March 31, 2021 and 2020, respectively, representing MRL’s 40% interest in the assets. Since the acquisition, we have transferred $387.3 million of construction in progress to MRL through March 31, 2021. The cash outflow for these assets is recorded in Capital expenditures within Cash flows from investing activities on the condensed consolidated statements of cash flows. The non-cash transfer of these assets is recorded in Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL within Cash flows from operating activities on the consolidated statements of cash flows. The Company expects to transfer a total of approximately $480 million over the construction of these assets, as defined in the purchase agreement.

NOTE 18—Recently Issued Accounting Pronouncements:
In December 2019, the Financial Accounting Standards Board (“FASB”) issued accounting guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. This guidance became effective on January 1, 2020 and did not have a significant impact on our financial statements.
In March 2020, the FASB issued accounting guidance that provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The guidance applies only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued additional accounting guidance which clarifies that certain optional expedients and exceptions apply to derivatives that are affected by the discounting transition. The guidance under both FASB issuances is effective March 12, 2020 through December 31, 2022. We currently do not expect this guidance to have a significant impact on our consolidated financial statements.
23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Some of the information presented in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on our current expectations, which are in turn based on assumptions that we believe are reasonable based on our current knowledge of our business and operations. We have used words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “would,” “will” and variations of such words and similar expressions to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. There can be no assurance that our actual results will not differ materially from the results and expectations expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation, information related to:
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;
hazards associated with chemicals manufacturing;
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 from 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 through 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;
uncertainties as to the duration and impact of the novel coronavirus (“COVID-19”) pandemic; and
the other factors detailed from time to time in the reports we file with the U.S. Securities and Exchange Commission (“SEC”).
We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws. The following discussion should be read together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.
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The following is a discussion and analysis of our results of operations for the three-month periods ended March 31, 2021 and 2020. A discussion of our consolidated financial condition and sources of additional capital is included under a separate heading “Financial Condition and Liquidity.”
Overview
We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that are designed to meet our customers’ needs across a diverse range of end markets. We believe our purpose is making the world safe and sustainable by powering the potential of people. The end markets we serve include energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, crop protection and custom chemistry services. We believe that our commercial and geographic diversity, technical expertise, innovative capability, flexible, low-cost global manufacturing base, experienced management team and strategic focus on our core base technologies will enable us to maintain leading market positions in those areas of the specialty chemicals industry in which we operate.
Secular trends favorably impacting demand within the end markets that we serve combined with our diverse product portfolio, broad geographic presence and customer-focused solutions will continue to be key drivers of our future earnings growth. We continue to build upon our existing green solutions portfolio and our ongoing mission to provide innovative, yet commercially viable, clean energy products and services to the marketplace to contribute to our sustainable revenue. For example, our Lithium business contributes to the growth of clean miles driven with electric miles and more efficient use of renewable energy through grid storage; Bromine Specialties enables the prevention of fires starting in electronic equipment, greater fuel efficiency from rubber tires and the reduction of emissions from coal fired power plants; and the Catalysts business creates efficiency of natural resources through more usable products from a single barrel of oil, enables safer, greener production of alkylates used to produce more environmentally-friendly fuels, and reduced emissions through cleaner transportation fuels. We believe our disciplined cost reduction efforts and ongoing productivity improvements, among other factors, position us well to take advantage of strengthening economic conditions as they occur, while softening the negative impact of the current challenging global economic environment.
First Quarter 2021
During the first quarter of 2021:
Our board of directors declared a quarterly dividend of $0.39 per share on February 25, 2021, which was paid on April 1, 2021 to shareholders of record at the close of business as of March 12, 2021.
We announced the planned capacity expansion at our lithium production facility in Silver Peak, Nevada beginning in 2021. We plan to invest $30 million to $50 million to double the current production at the Silver Peak site by 2025, making full use of the brine water rights.
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. The Company also granted to the underwriters an option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before deducting expenses, underwriting discounts and commissions.
On February 25, 2021, we signed a definitive agreement to sell our fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The sale is expected to close in the second quarter of 2021, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities.
Using the proceeds of the underwritten public offering of shares of our common stock, we repaid the outstanding principal balances of the 1.875% senior notes due in 2021, the floating rate notes due in 2022, the unsecured credit facility originally entered into on August 14, 2019, as amended and restated on December 15, 2020 (the “2019 Credit Facility”) and the commercial paper notes. In addition, we repaid €123.8 million of the 1.125% notes due in 2025 and $128.4 million of the 4.15% senior notes due in 2029. As a result, we recorded a loss on early extinguishment of debt of $27.8 million, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of this debt during the first quarter of 2021.
Our net sales for the quarter were $829.3 million, up 12% from net sales of $738.8 million in the first quarter of 2020.
Diluted earnings per share were $0.84, a 17% decrease from first quarter of 2020 results.
Net cash provided by operations was $157.9 million in the first quarter of 2021, an increase of 2% from the first quarter of 2020.


25

Outlook
The current global business environment presents a diverse set of opportunities and challenges in the markets we serve. In particular, the market for lithium battery and energy storage, particularly that for electric vehicles (“EVs”), remains strong, providing the opportunity to continue to develop high quality and innovative products while managing the high cost of expanding capacity. The other markets we serve continue to present various opportunities for value and growth as we have positioned ourselves to manage the impact on our business of changing global conditions, such as slow and uneven global growth, currency exchange volatility, crude oil price fluctuation, a dynamic pricing environment, an ever-changing landscape in electronics, the continuous need for cutting edge catalysts and technology by our refinery customers and increasingly stringent environmental standards. Amidst these dynamics, we believe our business fundamentals are sound and that we are strategically well-positioned as we remain focused on increasing sales volumes, optimizing and improving the value of our portfolio primarily through pricing and product development, managing costs and delivering value to our customers and shareholders. We believe that our businesses remain well-positioned to capitalize on new business opportunities and long-term trends driving growth within our end markets and to respond quickly to changes in economic conditions in these markets.
Currently, the COVID-19 pandemic is having an impact on overall global economic conditions. While we have not seen a material impact to our operations to date, the ultimate impact on our business will depend on the length and severity of the outbreak throughout the world. All of our information technology systems are running as designed and all sites are operating at normal capacity while we continue to comply with all government and health agency recommendations and requirements, as well as protecting the safety of our employees and communities. We believe we have sufficient inventory to continue to produce at current levels, however, government mandated shutdowns could impact our ability to acquire additional materials and disrupt our customers’ purchases. At this time we cannot predict the expected overall financial impact of the COVID-19 pandemic on our business, but we are planning for various economic scenarios and continue to make efforts to protect the safety of our employees and the health of our business.
Lithium: We expect results to be higher year-over-year during 2021 in Lithium, due mainly to North American plant restarts, efficiency improvements and tolling, offset by pricing pressure in certain markets and higher unit costs from plant start-ups at La Negra, Chile and Kemerton, Western Australia. There is no new capacity coming online during 2021 to drive significant additional sales volume, although we expect our new plants in La Negra and Kemerton to begin producing sales in 2022. EV sales have started to rebound after a marked slowdown during the second quarter of 2020, with full year 2020 and first quarter 2021 showing a healthy increase in total EV sales over the prior year. We continue to keep the Wodgina spodumene mine idled until demand supports bringing the mine back to production.
On a longer-term basis, we believe that demand for lithium will continue to grow as new lithium applications advance and the use of plug-in hybrid electric vehicles and full battery electric vehicles increases. This demand for lithium is supported by a favorable backdrop of steadily declining lithium ion battery costs, increasing battery performance, continuing significant investments in the battery and EV supply chain by our customers and automotive OEM’s, favorable global public policy toward e-mobility/renewable energy usage, and additional stimulus measures taken in Europe in light of the COVID-19 pandemic that we expect to bolster EV demand. Our outlook is also bolstered by long-term supply agreements with key strategic customers, reflecting our standing as a preferred global lithium partner, highlighted by our scale, access to geographically diverse, low-cost resources and long-term track record of reliability of supply and operating execution.
Bromine Specialties: We expect both net sales and profitability to be modestly higher in 2021, as we recover from the lower demand due to shutdowns related to the COVID-19 pandemic and ongoing cost savings initiatives. While we have not experienced a material impact from the COVID-19 pandemic to date, sales in 2020 were adversely impacted and we are likely to see continued adverse impacts into 2021.
On a longer-term basis, we continue to believe that improving global standards of living, widespread digitization, increasing demand for data management capacity and the potential for increasingly stringent fire safety regulations in developing markets are likely to drive continued demand for fire safety products. Our long-term drilling outlook is uncertain at this time and will follow a long-term trajectory in line with oil prices. We are focused on profitably growing our globally competitive bromine and derivatives production network to serve all major bromine consuming products and markets. The combination of our solid, long-term business fundamentals, strong cost position, product innovations and effective management of raw material costs will enable us to manage our business through end-market challenges and to capitalize on opportunities that are expected with favorable market trends in select end markets.
Catalysts: Total Catalysts results in 2021 are expected to be down year-over-year. In the first quarter of 2021, both the refining catalyst and performance catalyst solutions (“PCS”) businesses were negatively impacted by the U.S. Gulf Coast winter storm. While we expect PCS volumes to improve slightly over lower 2020 levels, we expect 2021 results to be flat to slightly down year-over-year due to the impact of the storms. In addition, we expect 2021 refining catalyst volumes to be lower year-over-year resulting from a recent change in customer order patterns in North America and the impact of the storms. The
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fluidized catalytic cracking (“FCC”) market is expected to gradually recover from the COVID-19 pandemic in line with increased travel and depletion of global gasoline inventories, however, demand may not return to normal levels until late 2022 at the earliest. Hydroprocessing catalysts (“HPC”) demand tends to be lumpier than FCC demand and is also expected to continue to be negatively impacted as refiners defer spending into 2021 and 2022.
On a longer-term basis, we believe increased global demand for transportation fuels, new refinery start-ups and ongoing adoption of cleaner fuels will be the primary drivers of growth in our Catalysts business. We believe delivering superior end-use performance continues to be the most effective way to create sustainable value in the refinery catalysts industry. We also believe our technologies continue to provide significant performance and financial benefits to refiners challenged to meet tighter regulations around the world, including those managing new contaminants present in North America tight oil, and those in the Middle East and Asia seeking to use heavier feedstock while pushing for higher propylene yields. Longer-term, we believe that the global crude supply will get heavier and more sour, a trend that bodes well for our catalysts portfolio. With superior technology and production capacities, and expected growth in end market demand, we believe that Catalysts remains well-positioned for the future. In PCS, we expect growth on a longer-term basis in our organometallic business due to growing global demand for plastics driven by rising standards of living and infrastructure spending. We have discontinued efforts to sell our PCS business.
All Other: The FCS business is reported outside the Company’s reportable segments as it does not fit in the Company’s core businesses. On February 25, 2021, we signed a definitive agreement to sell the FCS business to Grace for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The sale is expected to close in the second quarter of 2021, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities. We expect the near future prospects for the FCS business to continue to be positively impacted by the timing of customer orders in a strong pharmaceutical and agriculture contract manufacturing environment.
Corporate: In the first quarter of 2021, we increased our quarterly dividend rate to $0.39 per share. We continue to focus on cash generation, working capital management and process efficiencies. In addition, we expect our global effective tax rate for 2021 to continue to vary based on the locales in which income is actually earned and remains subject to potential volatility from changing legislation in the U.S. and other tax jurisdictions.
We remain committed to evaluating the merits of any opportunities that may arise for acquisitions or other business development activities that will complement our business footprint. Additional information regarding our products, markets and financial performance is provided at our website, www.albemarle.com. Our website is not a part of this document nor is it incorporated herein by reference.

Results of Operations

The following data and discussion provides an analysis of certain significant factors affecting our results of operations during the periods included in the accompanying consolidated statements of income.

First Quarter 2021 Compared to First Quarter 2020

Selected Financial Data (Unaudited)

Net Sales
In thousands Q1 2021 Q1 2020 $ Change % Change
Net sales $ 829,291  $ 738,845  $ 90,446  12  %
$108.6 million of higher sales volume across all of our reportable segments
$35.0 million of unfavorable pricing, primarily driven by Lithium and partially offset by Bromine Specialties
$17.0 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies

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Gross Profit
In thousands Q1 2021 Q1 2020 $ Change % Change
Gross profit $ 263,687  $ 242,018  $ 21,669  %
Gross profit margin 31.8  % 32.8  %
Higher sales volume in each of our reportable segments, partially offset by unfavorable pricing in Lithium
Lower commission expenses in Chile resulting from the lower pricing in Lithium
Increased production and utility costs of approximately $33 million in Bromine Specialties and Catalysts resulting from the U.S. Gulf Coast winter storm
Increased freight costs in Bromine Specialties and Catalysts
Favorable currency exchange impacts resulting from the weaker U.S. Dollar against various currencies
Selling, General and Administrative Expenses
In thousands Q1 2021 Q1 2020 $ Change % Change
Selling, general and administrative expenses $ 93,187  $ 101,877  $ (8,690) (9) %
Percentage of Net sales 11.2  % 13.8  %
Productivity improvements and a reduction in professional fees and other administrative costs, including those resulting from our previously announced cost savings initiative
$2.3 million decrease in severance expenses and acquisition and integration related costs for various significant projects
Partially offset by $5.5 million of expenses in 2021 primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements

Research and Development Expenses
In thousands Q1 2021 Q1 2020 $ Change % Change
Research and development expenses $ 14,636  $ 16,097  $ (1,461) (9) %
Percentage of Net sales 1.8  % 2.2  %
Decreased research and development spend in each of the reportable segments
Interest and Financing Expenses
In thousands Q1 2021 Q1 2020 $ Change % Change
Interest and financing expenses $ (43,882) $ (16,885) $ (26,997) 160  %
$27.8 million loss on early extinguishment of debt, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of debt during the first quarter of 2021
Decreased debt balance as certain debt instruments were repaid in the first quarter of 2021
Other Income, Net
In thousands Q1 2021 Q1 2020 $ Change % Change
Other income, net $ 11,312  $ 8,314  $ 2,998  36  %
$2.9 million increase in foreign exchange gains
$2.5 million increase in non-operating pension and OPEB benefits
$3.9 million of expenses in 2021 primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
$2.6 million net gain resulting from the settlement of legal matters related to a business sold in 2020
Income Tax Expense
In thousands Q1 2021 Q1 2020 $ Change % Change
Income tax expense $ 22,107  $ 18,442  $ 3,665  20  %
Effective income tax rate
17.9  % 16.0  %
Change in geographic mix of earnings, mainly attributable to our share of the income of our Jordan Bromine Company Limited (“JBC”) joint venture, a Free Zones company under the laws of the Hashemite Kingdom of Jordan
2021 includes discrete tax expense due to an out-of-period adjustment for an overstated deferred tax liability for the three-month period ended December 31, 2017, offset by a benefit due to the release of a foreign valuation allowance

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Equity in Net Income of Unconsolidated Investments
In thousands Q1 2021 Q1 2020 $ Change % Change
Equity in net income of unconsolidated investments $ 16,511  $ 26,604  $ (10,093) (38) %
Lower earnings from our Lithium segment joint venture, Windfield Holdings Pty Ltd (“Talison”), primarily driven by lower pricing, partially offset by higher volumes and favorable currency impacts
Net Income Attributable to Noncontrolling Interests
In thousands Q1 2021 Q1 2020 $ Change % Change
Net income attributable to noncontrolling interests $ (22,021) $ (16,431) $ (5,590) 34  %
Increase in consolidated income related to our JBC joint venture from higher sales volume
Net Income Attributable to Albemarle Corporation
In thousands Q1 2021 Q1 2020 $ Change % Change
Net income attributable to Albemarle Corporation $ 95,677  $ 107,204  $ (11,527) (11) %
Percentage of Net sales 11.5  % 14.5  %
Basic earnings per share $ 0.85  $ 1.01  $ (0.16) (16) %
Diluted earnings per share $ 0.84  $ 1.01  $ (0.17) (17) %
Increased sales volume from each of our reportable segments, partially offset by unfavorable pricing, primarily in Lithium
Increased production and utility costs in Bromine Specialties and Catalysts resulting from the winter storms in the southern U.S.
Increased interest expense primarily due to a loss on early extinguishment of debt of $27.8 million in 2021
Lower equity in net income of unconsolidated investments from the Talison joint venture
Increased effective tax rate
Productivity improvements and a reduction in professional fees and other administrative costs, including those resulting from our previously announced cost savings initiative
Earnings per share also decreased due to underwritten public offering of our common stock in February 2021, increasing share count by 9.8 million shares

Other Comprehensive Income (loss), Net of Tax
In thousands Q1 2021 Q1 2020 $ Change % Change
Other comprehensive income (loss), net of tax $ (23,982) $ (130,708) $ 106,726  (82) %
Foreign currency translation and other
$ (28,142) $ (81,977) $ 53,835  (66) %
2021 included unfavorable movements in the Euro of approximately $13 million, the Brazilian Real of approximately $6 million, the Japanese Yen of approximately $5 million and a net unfavorable variance in various other currencies totaling approximately $4 million
2020 included unfavorable movements in the Euro of approximately $55 million, the Brazilian Real of approximately $16 million, the Chilean Peso of approximately $5 million and a net unfavorable variance in various other currencies totaling approximately $6 million
Cash flow hedge
$ (1,600) $ (51,460) $ 49,860 
Net investment hedge
$ 5,110  $ 2,081  $ 3,029  146  %
Segment Information Overview. We have identified three reportable segments according to the nature and economic characteristics of our products as well as the manner in which the information is used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions. Our reportable business segments consist of: (1) Lithium, (2) Bromine Specialties and (3) Catalysts.

Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business, that does not fit into any of our core businesses.

The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and OPEB service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate,
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whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for certain corporate costs.

The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company has reported adjusted EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, the generally accepted accounting principles in the United States (“U.S. GAAP”). Adjusted EBITDA should not be considered as an alternative to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance with U.S. GAAP.
Three Months Ended March 31, Percentage Change
2021 % 2020 % 2021 vs 2020
(In thousands, except percentages)
Net sales:
   Lithium $ 278,976  33.6  % $ 236,818  32.1  % 18  %
   Bromine Specialties 280,447  33.8  % 231,592  31.3  % 21  %
   Catalysts 220,243  26.6  % 207,207  28.0  % %
   All Other 49,625  6.0  % 63,228  8.6  % (22) %
      Total net sales $ 829,291  100.0  % $ 738,845  100.0  % 12  %
Adjusted EBITDA:
   Lithium $ 106,436  46.3  % $ 78,637  40.0  % 35  %
   Bromine Specialties 94,640  41.1  % 83,262  42.4  % 14  %
   Catalysts 25,427  11.1  % 47,470  24.2  % (46) %
   All Other 21,479  9.3  % 22,824  11.6  % (6) %
   Corporate (17,928) (7.8) % (35,828) (18.2) % 50  %
      Total adjusted EBITDA $