false2022Q2000091591312/3100009159132022-01-012022-06-3000009159132022-07-31xbrli:shares00009159132022-04-012022-06-30iso4217:USD00009159132021-04-012021-06-3000009159132021-01-012021-06-30iso4217:USDxbrli:shares00009159132022-06-3000009159132021-12-310000915913us-gaap:CommonStockMember2022-03-310000915913us-gaap:AdditionalPaidInCapitalMember2022-03-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000915913us-gaap:RetainedEarningsMember2022-03-310000915913us-gaap:ParentMember2022-03-310000915913us-gaap:NoncontrollingInterestMember2022-03-3100009159132022-03-310000915913us-gaap:RetainedEarningsMember2022-04-012022-06-300000915913us-gaap:ParentMember2022-04-012022-06-300000915913us-gaap:NoncontrollingInterestMember2022-04-012022-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300000915913us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300000915913us-gaap:CommonStockMember2022-04-012022-06-300000915913us-gaap:CommonStockMember2022-06-300000915913us-gaap:AdditionalPaidInCapitalMember2022-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000915913us-gaap:RetainedEarningsMember2022-06-300000915913us-gaap:ParentMember2022-06-300000915913us-gaap:NoncontrollingInterestMember2022-06-300000915913us-gaap:CommonStockMember2021-03-310000915913us-gaap:AdditionalPaidInCapitalMember2021-03-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310000915913us-gaap:RetainedEarningsMember2021-03-310000915913us-gaap:ParentMember2021-03-310000915913us-gaap:NoncontrollingInterestMember2021-03-3100009159132021-03-310000915913us-gaap:RetainedEarningsMember2021-04-012021-06-300000915913us-gaap:ParentMember2021-04-012021-06-300000915913us-gaap:NoncontrollingInterestMember2021-04-012021-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300000915913us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300000915913us-gaap:CommonStockMember2021-04-012021-06-300000915913us-gaap:CommonStockMember2021-06-300000915913us-gaap:AdditionalPaidInCapitalMember2021-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300000915913us-gaap:RetainedEarningsMember2021-06-300000915913us-gaap:ParentMember2021-06-300000915913us-gaap:NoncontrollingInterestMember2021-06-3000009159132021-06-300000915913us-gaap:CommonStockMember2021-12-310000915913us-gaap:AdditionalPaidInCapitalMember2021-12-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000915913us-gaap:RetainedEarningsMember2021-12-310000915913us-gaap:ParentMember2021-12-310000915913us-gaap:NoncontrollingInterestMember2021-12-310000915913us-gaap:RetainedEarningsMember2022-01-012022-06-300000915913us-gaap:ParentMember2022-01-012022-06-300000915913us-gaap:NoncontrollingInterestMember2022-01-012022-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300000915913us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300000915913us-gaap:CommonStockMember2022-01-012022-06-300000915913us-gaap:CommonStockMember2020-12-310000915913us-gaap:AdditionalPaidInCapitalMember2020-12-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000915913us-gaap:RetainedEarningsMember2020-12-310000915913us-gaap:ParentMember2020-12-310000915913us-gaap:NoncontrollingInterestMember2020-12-3100009159132020-12-310000915913us-gaap:RetainedEarningsMember2021-01-012021-06-300000915913us-gaap:ParentMember2021-01-012021-06-300000915913us-gaap:NoncontrollingInterestMember2021-01-012021-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300000915913us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300000915913us-gaap:CommonStockMember2021-01-012021-06-300000915913srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2022-01-012022-06-300000915913us-gaap:ErrorCorrectionOtherMember2021-01-012021-12-310000915913us-gaap:ErrorCorrectionOtherMember2020-01-012020-12-310000915913us-gaap:ErrorCorrectionOtherMember2019-01-012019-12-310000915913alb:GuangxiTianyuanNewEnergyMaterialsCoLtdMember2022-01-012022-06-300000915913alb:GuangxiTianyuanNewEnergyMaterialsCoLtdMember2022-06-30alb:metricTon0000915913alb:FineChemistryServicesMember2021-02-252021-02-250000915913alb:FineChemistryServicesMember2021-02-25xbrli:pure0000915913alb:FineChemistryServicesMember2021-04-012021-06-300000915913alb:FineChemistryServicesMember2021-01-012021-06-300000915913us-gaap:OperatingSegmentsMemberalb:LithiumMember2021-12-310000915913alb:BromineSpecialtiesMemberus-gaap:OperatingSegmentsMember2021-12-310000915913alb:CatalystsMemberus-gaap:OperatingSegmentsMember2021-12-310000915913us-gaap:OperatingSegmentsMemberalb:LithiumMember2022-01-012022-06-300000915913alb:BromineSpecialtiesMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300000915913alb:CatalystsMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300000915913us-gaap:OperatingSegmentsMemberalb:LithiumMember2022-06-300000915913alb:BromineSpecialtiesMemberus-gaap:OperatingSegmentsMember2022-06-300000915913alb:CatalystsMemberus-gaap:OperatingSegmentsMember2022-06-300000915913alb:CustomerListsAndRelationshipsMember2021-12-310000915913us-gaap:TrademarksAndTradeNamesMember2021-12-310000915913alb:PatentsAndTechnologyMember2021-12-310000915913us-gaap:OtherIntangibleAssetsMember2021-12-310000915913alb:CustomerListsAndRelationshipsMember2022-01-012022-06-300000915913us-gaap:TrademarksAndTradeNamesMember2022-01-012022-06-300000915913alb:PatentsAndTechnologyMember2022-01-012022-06-300000915913us-gaap:OtherIntangibleAssetsMember2022-01-012022-06-300000915913alb:CustomerListsAndRelationshipsMember2022-06-300000915913us-gaap:TrademarksAndTradeNamesMember2022-06-300000915913alb:PatentsAndTechnologyMember2022-06-300000915913us-gaap:OtherIntangibleAssetsMember2022-06-3000009159132021-02-082021-02-0800009159132021-02-0800009159132022-05-030000915913us-gaap:SubsequentEventMember2022-07-180000915913alb:LithiumMember2022-06-300000915913alb:LithiumMember2021-12-310000915913alb:JointVentureWindfieldHoldingsMember2022-06-300000915913alb:JointVentureWindfieldHoldingsMember2021-12-310000915913alb:OtherVariableInterestEntitiesExcludingWindfieldHoldingsMember2022-06-300000915913alb:OtherVariableInterestEntitiesExcludingWindfieldHoldingsMember2021-12-310000915913alb:FineChemistryServicesMember2022-06-300000915913alb:FineChemistryServicesMember2021-12-310000915913alb:OnePointOneTwoFivePercentNoteMemberus-gaap:UnsecuredDebtMember2022-06-300000915913alb:OnePointOneTwoFivePercentNoteMemberus-gaap:UnsecuredDebtMember2021-12-310000915913us-gaap:UnsecuredDebtMemberalb:OnePointSixTwoFivePercentNotesMember2022-06-300000915913us-gaap:UnsecuredDebtMemberalb:OnePointSixTwoFivePercentNotesMember2021-12-310000915913us-gaap:SeniorNotesMemberalb:ThreePointFourFivePercentSeniorNotesMember2022-06-300000915913us-gaap:SeniorNotesMemberalb:ThreePointFourFivePercentSeniorNotesMember2021-12-310000915913us-gaap:SeniorNotesMemberalb:FourPointOneFivePercentSeniorNotesMember2022-06-300000915913us-gaap:SeniorNotesMemberalb:FourPointOneFivePercentSeniorNotesMember2021-12-310000915913alb:FourPointSixFivePercentSeniorNotesMemberus-gaap:SeniorNotesMember2021-12-310000915913alb:FourPointSixFivePercentSeniorNotesMemberus-gaap:SeniorNotesMember2022-06-300000915913us-gaap:SeniorNotesMemberalb:FivePointZeroFivePercentSeniorNotesMember2022-06-300000915913us-gaap:SeniorNotesMemberalb:FivePointZeroFivePercentSeniorNotesMember2021-12-310000915913alb:FivePointFourFivePercentSeniorNotesMemberus-gaap:SeniorNotesMember2021-12-310000915913alb:FivePointFourFivePercentSeniorNotesMemberus-gaap:SeniorNotesMember2022-06-300000915913us-gaap:SeniorNotesMemberalb:FivePointSixFivePercentSeniorNotesMember2022-06-300000915913us-gaap:SeniorNotesMemberalb:FivePointSixFivePercentSeniorNotesMember2021-12-310000915913alb:CreditFacilitiesMember2022-06-300000915913alb:CreditFacilitiesMember2021-12-310000915913us-gaap:CommercialPaperMember2022-06-300000915913us-gaap:CommercialPaperMember2021-12-310000915913alb:VariablerateforeignbankloansMember2022-06-300000915913alb:VariablerateforeignbankloansMember2021-12-310000915913us-gaap:CapitalLeaseObligationsMember2022-06-300000915913us-gaap:CapitalLeaseObligationsMember2021-12-310000915913us-gaap:OtherDebtSecuritiesMember2022-06-300000915913us-gaap:OtherDebtSecuritiesMember2021-12-310000915913alb:FourPointSixFivePercentSeniorNotesMember2022-05-132022-05-130000915913alb:FourPointSixFivePercentSeniorNotesMemberus-gaap:SeniorNotesMember2022-05-130000915913alb:FivePointZeroFivePercentSeniorNotesMember2022-05-132022-05-130000915913us-gaap:SeniorNotesMemberalb:FivePointZeroFivePercentSeniorNotesMember2022-05-130000915913alb:FivePointSixFivePercentSeniorNotesMember2022-05-132022-05-130000915913us-gaap:SeniorNotesMemberalb:FivePointSixFivePercentSeniorNotesMember2022-05-130000915913us-gaap:SeniorNotesMemberalb:FourPointOneFivePercentSeniorNotesMember2022-01-012022-06-300000915913us-gaap:InterestExpenseMember2022-04-012022-06-300000915913us-gaap:InterestExpenseMember2022-01-012022-06-300000915913alb:CreditFacilitiesMember2022-01-012022-06-300000915913alb:A2019CreditFacilityMember2022-01-012022-06-30utr:Rate0000915913us-gaap:InterestExpenseMember2021-04-012021-06-300000915913us-gaap:InterestExpenseMember2021-01-012021-06-300000915913alb:OnePointEightSevenFivePercentSeniorNotesMember2022-06-300000915913srt:MinimumMember2022-01-012022-06-300000915913srt:MaximumMember2022-01-012022-06-3000009159132021-10-2800009159132021-10-282021-10-2800009159132022-05-012022-05-310000915913us-gaap:OtherNoncurrentLiabilitiesMember2022-06-300000915913us-gaap:OtherNoncurrentLiabilitiesMember2021-12-310000915913srt:MinimumMemberus-gaap:BuildingMember2022-06-300000915913srt:MaximumMemberus-gaap:BuildingMember2022-06-300000915913alb:NonrealestateMembersrt:MinimumMember2022-06-300000915913alb:NonrealestateMembersrt:MaximumMember2022-06-300000915913srt:MinimumMember2022-06-300000915913srt:MaximumMember2022-06-30alb:segment0000915913us-gaap:OperatingSegmentsMemberalb:LithiumMember2022-04-012022-06-300000915913us-gaap:OperatingSegmentsMemberalb:LithiumMember2021-04-012021-06-300000915913us-gaap:OperatingSegmentsMemberalb:LithiumMember2021-01-012021-06-300000915913alb:BromineSpecialtiesMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300000915913alb:BromineSpecialtiesMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300000915913alb:BromineSpecialtiesMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300000915913alb:CatalystsMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300000915913alb:CatalystsMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300000915913alb:CatalystsMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300000915913us-gaap:AllOtherSegmentsMember2022-04-012022-06-300000915913us-gaap:AllOtherSegmentsMember2021-04-012021-06-300000915913us-gaap:AllOtherSegmentsMember2022-01-012022-06-300000915913us-gaap:AllOtherSegmentsMember2021-01-012021-06-300000915913us-gaap:CorporateNonSegmentMember2022-04-012022-06-300000915913us-gaap:CorporateNonSegmentMember2021-04-012021-06-300000915913us-gaap:CorporateMember2022-01-012022-06-300000915913us-gaap:CorporateMember2021-01-012021-06-300000915913us-gaap:OperatingSegmentsMemberalb:ReportableSegmentsSubtotalMember2022-04-012022-06-300000915913us-gaap:OperatingSegmentsMemberalb:ReportableSegmentsSubtotalMember2021-04-012021-06-300000915913us-gaap:OperatingSegmentsMemberalb:ReportableSegmentsSubtotalMember2022-01-012022-06-300000915913us-gaap:CorporateNonSegmentMember2022-01-012022-06-300000915913us-gaap:OperatingSegmentsMemberalb:ReportableSegmentsSubtotalMember2021-01-012021-06-300000915913us-gaap:CorporateNonSegmentMember2021-01-012021-06-300000915913us-gaap:CostOfSalesMember2022-04-012022-06-300000915913us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-300000915913us-gaap:CostOfSalesMember2022-01-012022-06-300000915913us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-300000915913us-gaap:OtherExpenseMember2022-01-012022-06-300000915913us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-012021-06-300000915913us-gaap:OtherExpenseMember2021-04-012021-06-300000915913us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-06-300000915913us-gaap:OtherExpenseMember2021-01-012021-06-300000915913alb:LithiumHydroxideConversionAssetsMember2022-01-012022-06-300000915913us-gaap:PensionPlansDefinedBenefitMember2022-04-012022-06-300000915913us-gaap:PensionPlansDefinedBenefitMember2021-04-012021-06-300000915913us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-06-300000915913us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-06-300000915913us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-04-012022-06-300000915913us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-04-012021-06-300000915913us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-01-012022-06-300000915913us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-012021-06-300000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000915913us-gaap:ForwardContractsMemberus-gaap:NondesignatedMember2022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:NondesignatedMember2021-12-310000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2021-12-310000915913us-gaap:ForwardContractsMemberus-gaap:AccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:AccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMember2022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMember2021-12-310000915913us-gaap:ForwardContractsMemberus-gaap:AccruedLiabilitiesMemberus-gaap:NondesignatedMember2022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:AccruedLiabilitiesMemberus-gaap:NondesignatedMember2021-12-310000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-04-012022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-04-012021-06-300000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-06-300000915913us-gaap:ForwardContractsMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:NondesignatedMember2022-04-012022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:NondesignatedMember2021-04-012021-06-300000915913us-gaap:ForwardContractsMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:NondesignatedMember2022-01-012022-06-300000915913us-gaap:ForwardContractsMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:NondesignatedMember2021-01-012021-06-300000915913us-gaap:ForwardContractsMemberalb:OtherNetMember2022-01-012022-06-300000915913us-gaap:ForwardContractsMemberalb:OtherNetMember2021-01-012021-06-300000915913us-gaap:FairValueInputsLevel1Member2022-06-300000915913us-gaap:FairValueInputsLevel2Member2022-06-300000915913us-gaap:FairValueInputsLevel3Member2022-06-300000915913us-gaap:FairValueInputsLevel1Member2021-12-310000915913us-gaap:FairValueInputsLevel2Member2021-12-310000915913us-gaap:FairValueInputsLevel3Member2021-12-310000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2022-03-310000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-04-012022-06-300000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-04-012022-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2022-04-012022-06-300000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2022-04-012022-06-300000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-06-300000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2022-06-300000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2022-06-300000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2021-03-310000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-04-012021-06-300000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-04-012021-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2021-04-012021-06-300000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2021-04-012021-06-300000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2021-06-300000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2021-12-310000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-06-300000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-06-300000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2022-01-012022-06-300000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2020-12-310000915913us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-06-300000915913us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-06-300000915913us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-06-300000915913us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2021-01-012021-06-300000915913us-gaap:EquityMethodInvesteeMember2022-04-012022-06-300000915913us-gaap:EquityMethodInvesteeMember2021-04-012021-06-300000915913us-gaap:EquityMethodInvesteeMember2022-01-012022-06-300000915913us-gaap:EquityMethodInvesteeMember2021-01-012021-06-300000915913us-gaap:EquityMethodInvesteeMember2022-06-300000915913us-gaap:EquityMethodInvesteeMember2021-12-310000915913alb:MineralResourcesLimitedWodginaProjectMember2019-10-312019-10-310000915913alb:MineralResourcesLimitedWodginaProjectMemberalb:LithiumHydroxideConversionAssetsMember2022-01-012022-06-300000915913alb:MineralResourcesLimitedWodginaProjectMemberalb:LithiumHydroxideConversionAssetsMember2021-01-012021-06-300000915913alb:LithiumHydroxideConversionAssetsMember2019-10-312019-10-31
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 June 30, 2022
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
July 31, 2022: 117,128,763
ALBEMARLE CORPORATION
INDEX – FORM 10-Q
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
June 30, |
|
Six Months Ended
June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net sales |
$ |
1,479,593 |
|
|
$ |
773,896 |
|
|
$ |
2,607,321 |
|
|
$ |
1,603,187 |
|
|
Cost of goods sold |
899,169 |
|
|
525,479 |
|
|
1,577,867 |
|
|
1,091,083 |
|
|
Gross profit |
580,424 |
|
|
248,417 |
|
|
1,029,454 |
|
|
512,104 |
|
|
Selling, general and administrative expenses |
128,942 |
|
|
121,516 |
|
|
241,510 |
|
|
214,703 |
|
|
Research and development expenses |
17,386 |
|
|
13,976 |
|
|
33,469 |
|
|
28,612 |
|
|
|
|
|
|
|
|
|
|
(Gain) loss on sale of business/interest in properties |
— |
|
|
(429,408) |
|
|
8,400 |
|
|
(429,408) |
|
|
|
|
|
|
|
|
|
|
Operating profit |
434,096 |
|
|
542,333 |
|
|
746,075 |
|
|
698,197 |
|
|
Interest and financing expenses |
(41,409) |
|
|
(7,152) |
|
|
(69,243) |
|
|
(51,034) |
|
|
Other income, net |
8,767 |
|
|
14 |
|
|
24,263 |
|
|
11,326 |
|
|
Income before income taxes and equity in net income of
unconsolidated investments |
401,454 |
|
|
535,195 |
|
|
701,095 |
|
|
658,489 |
|
|
Income tax expense |
89,018 |
|
|
106,985 |
|
|
169,548 |
|
|
129,092 |
|
|
Income before equity in net income of unconsolidated
investments |
312,436 |
|
|
428,210 |
|
|
531,547 |
|
|
529,397 |
|
|
Equity in net income of unconsolidated investments (net of
tax) |
128,156 |
|
|
17,998 |
|
|
190,592 |
|
|
34,509 |
|
|
Net income |
440,592 |
|
|
446,208 |
|
|
722,139 |
|
|
563,906 |
|
|
Net income attributable to noncontrolling interests |
(33,819) |
|
|
(21,608) |
|
|
(61,983) |
|
|
(43,629) |
|
|
Net income attributable to Albemarle Corporation |
$ |
406,773 |
|
|
$ |
424,600 |
|
|
$ |
660,156 |
|
|
$ |
520,277 |
|
|
Basic earnings per share |
$ |
3.47 |
|
|
$ |
3.63 |
|
|
$ |
5.64 |
|
|
$ |
4.54 |
|
|
Diluted earnings per share |
$ |
3.46 |
|
|
$ |
3.62 |
|
|
$ |
5.61 |
|
|
$ |
4.51 |
|
|
Weighted-average common shares outstanding – basic |
117,116 |
|
|
116,809 |
|
|
117,091 |
|
|
114,700 |
|
|
Weighted-average common shares outstanding – diluted |
117,724 |
|
|
117,436 |
|
|
117,689 |
|
|
115,383 |
|
See accompanying Notes to the Condensed Consolidated Financial
Statements.
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net income |
$ |
440,592 |
|
|
$ |
446,208 |
|
|
$ |
722,139 |
|
|
$ |
563,906 |
|
|
Other comprehensive (loss) income, net of tax: |
|
|
|
|
|
|
|
|
Foreign currency translation and other |
(117,821) |
|
|
20,564 |
|
|
(123,710) |
|
|
(7,578) |
|
|
|
|
|
|
|
|
|
|
Net investment hedge |
— |
|
|
— |
|
|
— |
|
|
5,110 |
|
|
Cash flow hedge |
(2,509) |
|
|
823 |
|
|
1,508 |
|
|
(777) |
|
|
Interest rate swap |
6,749 |
|
|
650 |
|
|
7,399 |
|
|
1,300 |
|
|
|
|
|
|
|
|
|
|
Total other comprehensive (loss) income, net of tax |
(113,581) |
|
|
22,037 |
|
|
(114,803) |
|
|
(1,945) |
|
|
Comprehensive income |
327,011 |
|
|
468,245 |
|
|
607,336 |
|
|
561,961 |
|
|
Comprehensive income attributable to noncontrolling
interests |
(33,757) |
|
|
(21,532) |
|
|
(61,868) |
|
|
(43,553) |
|
|
Comprehensive income attributable to Albemarle
Corporation |
$ |
293,254 |
|
|
$ |
446,713 |
|
|
$ |
545,468 |
|
|
$ |
518,408 |
|
See accompanying Notes to the Condensed Consolidated Financial
Statements.
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
2022 |
|
2021 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents
|
$ |
930,596 |
|
|
$ |
439,272 |
|
|
Trade accounts receivable, less allowance for doubtful accounts
(2022 – $2,532; 2021 – $2,559)
|
962,215 |
|
|
556,922 |
|
|
Other accounts receivable |
124,409 |
|
|
66,184 |
|
|
Inventories |
1,216,213 |
|
|
812,920 |
|
|
Other current assets |
116,671 |
|
|
132,683 |
|
|
|
|
|
|
Total current assets |
3,350,104 |
|
|
2,007,981 |
|
|
Property, plant and equipment, at cost |
8,465,403 |
|
|
8,074,746 |
|
|
Less accumulated depreciation and amortization |
2,257,379 |
|
|
2,165,130 |
|
|
Net property, plant and equipment |
6,208,024 |
|
|
5,909,616 |
|
|
Investments |
903,861 |
|
|
897,708 |
|
|
|
|
|
|
|
|
|
|
Other assets |
230,346 |
|
|
252,239 |
|
|
Goodwill |
1,542,767 |
|
|
1,597,627 |
|
|
Other intangibles, net of amortization |
285,303 |
|
|
308,947 |
|
|
Total assets |
$ |
12,520,405 |
|
|
$ |
10,974,118 |
|
|
Liabilities And Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
1,091,583 |
|
|
$ |
647,986 |
|
|
Accrued expenses |
330,941 |
|
|
763,293 |
|
|
|
|
|
|
Current portion of long-term debt |
251,304 |
|
|
389,920 |
|
|
Dividends payable |
46,097 |
|
|
45,469 |
|
|
|
|
|
|
|
|
|
|
Income taxes payable |
61,837 |
|
|
27,667 |
|
|
Total current liabilities |
1,781,762 |
|
|
1,874,335 |
|
|
Long-term debt |
3,205,730 |
|
|
2,004,319 |
|
|
Postretirement benefits |
43,079 |
|
|
43,693 |
|
|
Pension benefits |
205,890 |
|
|
229,187 |
|
|
|
|
|
|
|
|
|
|
Other noncurrent liabilities |
591,021 |
|
|
663,698 |
|
|
Deferred income taxes |
391,948 |
|
|
353,279 |
|
|
Commitments and contingencies (Note 10) |
|
|
|
|
Equity: |
|
|
|
|
Albemarle Corporation shareholders’ equity: |
|
|
|
|
Common stock, $.01 par value, issued and outstanding – 117,122 in
2022 and 117,015 in 2021
|
1,171 |
|
|
1,170 |
|
|
Additional paid-in capital |
2,927,086 |
|
|
2,920,007 |
|
|
Accumulated other comprehensive loss |
(507,138) |
|
|
(392,450) |
|
|
Retained earnings |
3,664,172 |
|
|
3,096,539 |
|
|
Total Albemarle Corporation shareholders’ equity |
6,085,291 |
|
|
5,625,266 |
|
|
Noncontrolling interests |
215,684 |
|
|
180,341 |
|
|
Total equity |
6,300,975 |
|
|
5,805,607 |
|
|
Total liabilities and equity |
$ |
12,520,405 |
|
|
$ |
10,974,118 |
|
See accompanying Notes to the Condensed Consolidated Financial
Statements.
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 March 31, 2022 |
117,112,394 |
|
|
$ |
1,171 |
|
|
$ |
2,915,387 |
|
|
$ |
(393,619) |
|
|
$ |
3,303,661 |
|
|
$ |
5,826,600 |
|
|
$ |
208,452 |
|
|
$ |
6,035,052 |
|
|
Net income |
|
|
|
|
|
|
|
|
406,773 |
|
|
406,773 |
|
|
33,819 |
|
|
440,592 |
|
|
Other comprehensive loss |
|
|
|
|
|
|
(113,519) |
|
|
|
|
(113,519) |
|
|
(62) |
|
|
(113,581) |
|
|
Cash dividends declared, $0.395 per common share
|
|
|
|
|
|
|
|
|
(46,262) |
|
|
(46,262) |
|
|
(26,525) |
|
|
(72,787) |
|
|
Stock-based compensation |
|
|
|
|
11,424 |
|
|
|
|
|
|
11,424 |
|
|
|
|
11,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options |
7,289 |
|
|
— |
|
|
436 |
|
|
|
|
|
|
436 |
|
|
|
|
436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock, net |
3,066 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
Withholding taxes paid on stock-based compensation award
distributions |
(1,001) |
|
|
— |
|
|
(161) |
|
|
|
|
|
|
(161) |
|
|
|
|
(161) |
|
|
Balance at June 30, 2022 |
117,121,748 |
|
|
$ |
1,171 |
|
|
$ |
2,927,086 |
|
|
$ |
(507,138) |
|
|
$ |
3,664,172 |
|
|
$ |
6,085,291 |
|
|
$ |
215,684 |
|
|
$ |
6,300,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
Net income |
|
|
|
|
|
|
|
|
424,600 |
|
|
424,600 |
|
|
21,608 |
|
|
446,208 |
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
22,113 |
|
|
|
|
22,113 |
|
|
(76) |
|
|
22,037 |
|
|
Cash dividends declared, $0.39 per common share
|
|
|
|
|
|
|
|
|
(45,608) |
|
|
(45,608) |
|
|
(17,479) |
|
|
(63,087) |
|
|
Stock-based compensation |
|
|
|
|
5,104 |
|
|
|
|
|
|
5,104 |
|
|
|
|
5,104 |
|
|
Fees related to the public issuance of common stock |
|
|
|
|
(9) |
|
|
|
|
|
|
(9) |
|
|
|
|
(9) |
|
|
Exercise of stock options |
223,685 |
|
|
2 |
|
|
13,150 |
|
|
|
|
|
|
13,152 |
|
|
|
|
13,152 |
|
|
Issuance of common stock, net |
3,783 |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
Withholding taxes paid on stock-based compensation award
distributions |
(1,132) |
|
|
— |
|
|
(187) |
|
|
|
|
|
|
(187) |
|
|
|
|
(187) |
|
|
Balance at June 30, 2021 |
116,944,511 |
|
|
$ |
1,169 |
|
|
$ |
2,907,981 |
|
|
$ |
(328,001) |
|
|
$ |
3,584,400 |
|
|
$ |
6,165,549 |
|
|
$ |
200,222 |
|
|
$ |
6,365,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2021 |
117,015,333 |
|
|
$ |
1,170 |
|
|
$ |
2,920,007 |
|
|
$ |
(392,450) |
|
|
$ |
3,096,539 |
|
|
$ |
5,625,266 |
|
|
$ |
180,341 |
|
|
$ |
5,805,607 |
|
|
Net income |
|
|
|
|
|
|
|
|
660,156 |
|
|
660,156 |
|
|
61,983 |
|
|
722,139 |
|
|
Other comprehensive loss |
|
|
|
|
|
|
(114,688) |
|
|
|
|
(114,688) |
|
|
(115) |
|
|
(114,803) |
|
|
Cash dividends declared, $0.79 per common share
|
|
|
|
|
|
|
|
|
(92,523) |
|
|
(92,523) |
|
|
(26,525) |
|
|
(119,048) |
|
|
Stock-based compensation |
|
|
|
|
16,808 |
|
|
|
|
|
|
16,808 |
|
|
|
|
16,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options |
7,789 |
|
|
— |
|
|
468 |
|
|
|
|
|
|
468 |
|
|
|
|
468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock, net |
154,696 |
|
|
2 |
|
|
385 |
|
|
|
|
|
|
387 |
|
|
|
|
387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withholding taxes paid on stock-based compensation award
distributions |
(56,070) |
|
|
(1) |
|
|
(10,582) |
|
|
|
|
|
|
(10,583) |
|
|
|
|
(10,583) |
|
|
Balance at June 30, 2022 |
117,121,748 |
|
|
$ |
1,171 |
|
|
$ |
2,927,086 |
|
|
$ |
(507,138) |
|
|
$ |
3,664,172 |
|
|
$ |
6,085,291 |
|
|
$ |
215,684 |
|
|
$ |
6,300,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020 |
106,842,369 |
|
|
$ |
1,069 |
|
|
$ |
1,438,038 |
|
|
$ |
(326,132) |
|
|
$ |
3,155,252 |
|
|
$ |
4,268,227 |
|
|
$ |
200,367 |
|
|
$ |
4,468,594 |
|
|
Net income |
|
|
|
|
|
|
|
|
520,277 |
|
|
520,277 |
|
|
43,629 |
|
|
563,906 |
|
|
Other comprehensive loss |
|
|
|
|
|
|
(1,869) |
|
|
|
|
(1,869) |
|
|
(76) |
|
|
(1,945) |
|
|
Cash dividends declared, $0.78 per common share
|
|
|
|
|
|
|
|
|
(91,129) |
|
|
(91,129) |
|
|
(43,698) |
|
|
(134,827) |
|
|
Stock-based compensation |
|
|
|
|
9,778 |
|
|
|
|
|
|
9,778 |
|
|
|
|
9,778 |
|
|
Fees related to public issuance of common stock |
|
|
|
|
(911) |
|
|
|
|
|
|
(911) |
|
|
|
|
(911) |
|
|
Exercise of stock options |
241,649 |
|
|
2 |
|
|
14,333 |
|
|
|
|
|
|
14,335 |
|
|
|
|
14,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock, net |
9,906,090 |
|
|
99 |
|
|
1,453,789 |
|
|
|
|
|
|
1,453,888 |
|
|
|
|
1,453,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withholding taxes paid on stock-based compensation award
distributions |
(45,597) |
|
|
(1) |
|
|
(7,046) |
|
|
|
|
|
|
(7,047) |
|
|
|
|
(7,047) |
|
|
Balance at June 30, 2021 |
116,944,511 |
|
|
$ |
1,169 |
|
|
$ |
2,907,981 |
|
|
$ |
(328,001) |
|
|
$ |
3,584,400 |
|
|
$ |
6,165,549 |
|
|
$ |
200,222 |
|
|
$ |
6,365,771 |
|
See accompanying Notes to the Condensed Consolidated Financial
Statements.
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
2022 |
|
2021 |
|
Cash and cash equivalents at beginning of year |
$ |
439,272 |
|
|
$ |
746,724 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
722,139 |
|
|
563,906 |
|
|
Adjustments to reconcile net income to cash flows from operating
activities: |
|
|
|
|
Depreciation and amortization |
137,567 |
|
|
123,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (gain) on sale of business/investment in
properties |
8,400 |
|
|
(429,408) |
|
|
|
|
|
|
Stock-based compensation and other |
15,232 |
|
|
8,425 |
|
|
Equity in net income of unconsolidated investments (net of
tax) |
(190,592) |
|
|
(34,509) |
|
|
Dividends received from unconsolidated investments and
nonmarketable securities |
156,964 |
|
|
27,420 |
|
|
Pension and postretirement benefit |
(8,273) |
|
|
(8,465) |
|
|
Pension and postretirement contributions |
(7,685) |
|
|
(20,266) |
|
|
Unrealized gain on investments in marketable securities |
3,061 |
|
|
(2,384) |
|
|
Loss on early extinguishment of debt |
19,219 |
|
|
28,955 |
|
|
Deferred income taxes |
39,476 |
|
|
27,708 |
|
|
Working capital changes |
(888,036) |
|
|
7,942 |
|
|
Non-cash transfer of 40% value of construction in progress of
Kemerton plant to MRL |
96,314 |
|
|
96,185 |
|
|
Other, net |
(43,475) |
|
|
(3,339) |
|
|
Net cash provided by operating activities |
60,311 |
|
|
385,853 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
(502,607) |
|
|
(396,915) |
|
|
|
|
|
|
Cash proceeds from divestitures, net |
— |
|
|
290,467 |
|
|
|
|
|
|
|
|
|
|
Sales of marketable securities, net |
3,402 |
|
|
4,553 |
|
|
|
|
|
|
Investments in equity and other corporate investments |
(767) |
|
|
(286) |
|
|
Net cash used in investing activities |
(499,972) |
|
|
(102,181) |
|
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance of common stock |
— |
|
|
1,453,888 |
|
|
Repayments of long-term debt and credit agreements |
(455,000) |
|
|
(1,173,823) |
|
|
Proceeds from borrowings of long-term debt and credit
agreements |
1,964,216 |
|
|
— |
|
|
Other debt repayments, net |
(390,601) |
|
|
(325,316) |
|
|
Fees related to early extinguishment of debt |
(9,767) |
|
|
(24,877) |
|
|
Dividends paid to shareholders |
(91,894) |
|
|
(86,637) |
|
|
Dividends paid to noncontrolling interests |
(26,525) |
|
|
(43,698) |
|
|
|
|
|
|
Proceeds from exercise of stock options |
855 |
|
|
14,335 |
|
|
Withholding taxes paid on stock-based compensation award
distributions |
(10,583) |
|
|
(7,047) |
|
|
|
|
|
|
Other |
(4,172) |
|
|
(1,359) |
|
|
Net cash provided by (used in) financing activities |
976,529 |
|
|
(194,534) |
|
|
Net effect of foreign exchange on cash and cash
equivalents |
(45,544) |
|
|
(12,290) |
|
|
Increase in cash and cash equivalents |
491,324 |
|
|
76,848 |
|
|
Cash and cash equivalents at end of period |
$ |
930,596 |
|
|
$ |
823,572 |
|
See accompanying Notes to the Condensed Consolidated Financial
Statements.
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 consolidated balance sheets as of
June 30, 2022 and December 31, 2021, our consolidated
statements of income, consolidated statements of comprehensive
income and consolidated statements of changes in equity for the
three- and six-month periods ended June 30, 2022 and 2021 and
our condensed consolidated statements of cash flows for the
six-month periods ended June 30, 2022 and 2021. 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, 2021, which was filed with the U.S.
Securities and Exchange Commission (“SEC”) on February 22, 2022.
The December 31, 2021 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-and six-month periods ended June 30, 2022 are
not necessarily indicative of the results to be expected for the
full year.
Interest and financing expenses for the six-month period ended June
30, 2022 includes an expense of $17.5 million for the
correction of out of period errors regarding overstated capitalized
interest values in prior periods. For the years ended December 31,
2021, 2020 and 2019, Interest expense was understated by
$11.4 million, $5.5 million and $0.6 million,
respectively. The Company does not believe these adjustments are
material to the consolidated financial statements for any of the
prior periods presented or to the six-month period ended June 30,
2022, in which they were corrected.
NOTE 2—Acquisitions:
On September 30, 2021, the Company signed a definitive agreement to
acquire all of the outstanding equity of Guangxi Tianyuan New
Energy Materials Co., Ltd. (“Tianyuan”), for approximately
$200 million in cash. Tianyuan's operations include a recently
constructed lithium processing plant strategically positioned near
the Port of Qinzhou in Guangxi. The plant has designed annual
conversion capacity of up to 25,000 metric tons of LCE and is
capable of producing battery-grade lithium carbonate and lithium
hydroxide. The plant began commercial production in the first half
of 2022. The Company expects the transaction, which is subject to
customary closing conditions, to close in the second half of
2022.
NOTE 3—Divestitures:
On June 1, 2021, the Company completed the sale of 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 acquired 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. During the three- and six-month periods ended June 30,
2021 we recorded a gain of $429.4 million ($331.6 million
after income taxes) related to the sale of this business.
Historical financial statements include results from this business
until divested on June 1, 2021.
We determined that the FCS business met the assets held for sale
criteria in accordance with ASC 360,
Property, Plant and Equipment
during the first quarter of 2021. The results of operations of the
business classified as held for sale are included in the
consolidated statements of income through June 1, 2021. 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.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
NOTE 4—Goodwill and Other Intangibles:
The following table summarizes the changes in goodwill by
reportable segment for the six months ended June 30, 2022 (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lithium |
|
Bromine |
|
Catalysts |
|
|
|
Total |
|
Balance at December 31, 2021
|
$ |
1,394,182 |
|
|
$ |
20,319 |
|
|
$ |
183,126 |
|
|
|
|
$ |
1,597,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments |
(44,093) |
|
|
— |
|
|
(10,767) |
|
|
|
|
(54,860) |
|
|
Balance at June 30, 2022 |
$ |
1,350,089 |
|
|
$ |
20,319 |
|
|
$ |
172,359 |
|
|
|
|
$ |
1,542,767 |
|
The following table summarizes the changes in other intangibles and
related accumulated amortization for the six months ended
June 30, 2022 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Lists and Relationships |
|
Trade Names and Trademarks(a)
|
|
Patents and Technology |
|
Other |
|
Total |
|
Gross Asset Value |
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2021
|
$ |
428,379 |
|
|
$ |
17,883 |
|
|
$ |
57,313 |
|
|
$ |
36,705 |
|
|
$ |
540,280 |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments and other |
(21,646) |
|
|
(567) |
|
|
(2,087) |
|
|
2,149 |
|
|
(22,151) |
|
|
Balance at June 30, 2022
|
$ |
406,733 |
|
|
$ |
17,316 |
|
|
$ |
55,226 |
|
|
$ |
38,854 |
|
|
$ |
518,129 |
|
|
Accumulated Amortization |
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2021
|
$ |
(163,283) |
|
|
$ |
(7,983) |
|
|
$ |
(39,796) |
|
|
$ |
(20,271) |
|
|
$ |
(231,333) |
|
|
Amortization |
(10,687) |
|
|
— |
|
|
(698) |
|
|
(455) |
|
|
(11,840) |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments and other |
8,140 |
|
|
155 |
|
|
1,326 |
|
|
726 |
|
|
10,347 |
|
|
Balance at June 30, 2022
|
$ |
(165,830) |
|
|
$ |
(7,828) |
|
|
$ |
(39,168) |
|
|
$ |
(20,000) |
|
|
$ |
(232,826) |
|
|
Net Book Value at December 31, 2021
|
$ |
265,096 |
|
|
$ |
9,900 |
|
|
$ |
17,517 |
|
|
$ |
16,434 |
|
|
$ |
308,947 |
|
|
Net Book Value at June 30, 2022
|
$ |
240,903 |
|
|
$ |
9,488 |
|
|
$ |
16,058 |
|
|
$ |
18,854 |
|
|
$ |
285,303 |
|
(a) Net Book Value includes only
indefinite-lived intangible assets.
NOTE 5—Income Taxes:
The effective income tax rate for the three-month and six-month
periods ended June 30, 2022 was 22.2% and 24.2%, respectively,
compared to 20.0% and 19.6% for the three-month and six-month
periods ended June 30, 2021, respectively. The three-month
period ended June 30, 2022 included a tax benefit related to
global intangible low-taxed income and net discrete tax expenses
related to withholding taxes and foreign return to provisions. The
Company’s effective income tax rate fluctuates based on, among
other factors, the amount 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 and six-month periods
ended June 30, 2022 and June 30, 2021 was impacted by a
variety of factors, primarily global intangible low-taxed income
and the location in which income was earned. In addition, the
three- and six-month periods ended June 30, 2021 includes a
$97.8 million tax expense recorded for the gain on the sale of
the FCS business.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
NOTE 6—Earnings Per Share:
Basic and diluted earnings per share for the three-month and
six-month periods ended June 30, 2022 and 2021 are calculated
as follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Basic earnings per share |
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Net income attributable to Albemarle Corporation |
$ |
406,773 |
|
|
$ |
424,600 |
|
|
$ |
660,156 |
|
|
$ |
520,277 |
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted-average common shares for basic earnings per
share |
117,116 |
|
|
116,809 |
|
|
117,091 |
|
|
114,700 |
|
|
Basic earnings per share |
$ |
3.47 |
|
|
$ |
3.63 |
|
|
$ |
5.64 |
|
|
$ |
4.54 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Net income attributable to Albemarle Corporation |
$ |
406,773 |
|
|
$ |
424,600 |
|
|
$ |
660,156 |
|
|
$ |
520,277 |
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted-average common shares for basic earnings per
share |
117,116 |
|
|
116,809 |
|
|
117,091 |
|
|
114,700 |
|
|
Incremental shares under stock compensation plans |
608 |
|
|
627 |
|
|
598 |
|
|
683 |
|
|
Weighted-average common shares for diluted earnings per
share |
117,724 |
|
|
117,436 |
|
|
117,689 |
|
|
115,383 |
|
|
Diluted earnings per share |
$ |
3.46 |
|
|
$ |
3.62 |
|
|
$ |
5.61 |
|
|
$ |
4.51 |
|
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.
On May 3, 2022, the Company declared a cash dividend of
$0.395, an increase from the prior year regular quarterly dividend.
This dividend was paid on July 1, 2022 to shareholders of
record at the close of business as of June 10, 2022. On
July 18, 2022, the Company declared a cash dividend of $0.395
per share, which is payable on October 3, 2022 to shareholders
of record at the close of business as of September 16,
2022.
NOTE 7—Inventories:
The following table provides a breakdown of inventories at
June 30, 2022 and December 31, 2021 (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
2022 |
|
2021 |
|
Finished goods |
$ |
853,838 |
|
|
$ |
473,836 |
|
|
Raw materials and work in process(a)
|
272,051 |
|
|
259,221 |
|
|
Stores, supplies and other |
90,324 |
|
|
79,863 |
|
|
Total |
$ |
1,216,213 |
|
|
$ |
812,920 |
|
(a)Included
$129.8 million and $149.4 million at June 30, 2022 and
December 31, 2021, respectively, of work in process in our Lithium
segment.
NOTE 8—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 carrying amount of our 49%
equity interest in Windfield, which is our most significant VIE,
was $463.0 million and $462.3 million at June 30, 2022 and
December 31, 2021, 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 $7.7 million
at June 30, 2022 and $8.0 million at December 31, 2021. The
Company’s unconsolidated VIEs are reported in Investments on the
consolidated balance
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
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.
As part of the proceeds from the sale of the FCS business on June
1, 2021, Grace issued Albemarle 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 PIK dividends at an annual rate
of 12% beginning two years after issuance. This preferred equity
had a fair value of $248.4 million and $246.5 million at
June 30, 2022 and December 31, 2021, respectively, which is
reported in Investments in the consolidated balance
sheets.
NOTE 9—Long-Term Debt:
Long-term debt at June 30, 2022 and December 31, 2021
consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
2022 |
|
2021 |
|
1.125% notes due 2025
|
$ |
399,153 |
|
|
$ |
426,571 |
|
|
1.625% notes due 2028
|
529,200 |
|
|
565,550 |
|
|
|
|
|
|
3.45% Senior notes due 2029
|
171,612 |
|
|
171,612 |
|
|
4.15% Senior notes due 2024
|
— |
|
|
425,000 |
|
|
4.65% Senior notes due 2027
|
650,000 |
|
|
— |
|
|
5.05% Senior notes due 2032
|
600,000 |
|
|
— |
|
|
5.45% Senior notes due 2044
|
350,000 |
|
|
350,000 |
|
|
5.65% Senior notes due 2052
|
450,000 |
|
|
— |
|
|
|
|
|
|
Credit facilities |
250,000 |
|
|
— |
|
|
Commercial paper notes |
— |
|
|
388,500 |
|
|
|
|
|
|
Variable-rate foreign bank loans |
2,953 |
|
|
5,226 |
|
|
|
|
|
|
Finance lease obligations |
73,537 |
|
|
75,431 |
|
|
Other |
11,087 |
|
|
— |
|
|
Unamortized discount and debt issuance costs |
(30,508) |
|
|
(13,651) |
|
|
Total long-term debt |
3,457,034 |
|
|
2,394,239 |
|
|
Less amounts due within one year |
251,304 |
|
|
389,920 |
|
|
Long-term debt, less current portion |
$ |
3,205,730 |
|
|
$ |
2,004,319 |
|
On May 13, 2022, the Company issued a series of notes
(collectively, the “2022 Notes”) as follows:
•$650.0 million
aggregate principal amount of senior notes, bearing interest at a
rate of 4.65% payable semi-annually on June 1 and December 1 of
each year, beginning on December 1, 2022. The effective interest
rate on these senior notes is approximately 4.84%. These senior
notes mature on June 1, 2027.
•$600.0 million
aggregate principal amount of senior notes, bearing interest at a
rate of 5.05% payable semi-annually on June 1 and December 1 of
each year, beginning on December 1, 2022. The effective interest
rate on these senior notes is approximately 5.18%. These senior
notes mature on June 1, 2032.
•$450.0 million
aggregate principal amount of senior notes, bearing interest at a
rate of 5.65% payable semi-annually on June 1 and December 1 of
each year, beginning on December 1, 2022. The effective interest
rate on these senior notes is approximately 5.71%. These senior
notes mature on June 1, 2052.
The net proceeds from the issuance of the 2022 Notes were used to
repay the balance of the commercial paper notes, the remaining
balance of $425.0 million of the 4.15% Senior Notes due 2024
(the “2024 Notes”) and for general corporate purposes. The 2024
Notes were originally due to mature on December 15, 2024 and bore
interest at a rate of 4.15%. During the three and six months ended
June 30, 2022, the Company recorded a loss on early
extinguishment of debt of $19.2 million in Interest and
financing expenses, representing the tender premiums, fees,
unamortized discounts and unamortized deferred financing costs from
the redemption of the 2024 Notes. In addition, the loss on early
extinguishment of debt includes the accelerated amortization of the
interest rate swap associated with the 2024 Notes from Accumulated
other comprehensive income.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
In addition, during 2022 the Company drew $250 million under
its 2019 Credit Facility for general corporate purposes. The
applicable margin on the 2019 Credit Facility was 1.125% at
June 30, 2022.
In the first quarter of 2021, the Company made certain debt
principal payments using proceeds from the February 2021
underwritten public offering of common stock. As a result, included
in Interest and financing expenses for the three-month and
six-month periods ended June 30, 2021 is a loss on early
extinguishment of debt of $1.2 million and $29.0 million,
respectively, 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 the 1.875% Euro-denominated senior notes was designated as an
effective hedge of the 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 discontinued, we recorded a gain of $5.1 million (net
of income taxes) during the three-month and six-month periods ended
June 30, 2021 in accumulated other comprehensive
loss.
NOTE 10—Commitments and Contingencies:
Environmental
The following activity was recorded in environmental liabilities
for the six months ended June 30, 2022 (in
thousands):
|
|
|
|
|
|
|
Beginning balance at December 31, 2021
|
$ |
46,617 |
|
|
Expenditures |
(1,991) |
|
|
|
|
Accretion of discount |
521 |
|
|
Additions and changes in estimates |
2,811 |
|
|
Foreign currency translation adjustments and other |
(1,634) |
|
|
Ending balance at June 30, 2022
|
46,324 |
|
|
Less amounts reported in Accrued expenses |
9,728 |
|
|
Amounts reported in Other noncurrent liabilities |
$ |
36,596 |
|
Environmental remediation liabilities included discounted
liabilities of $38.5 million and $39.7 million at June 30,
2022 and December 31, 2021, respectively, discounted at rates with
a weighted-average of 3.5%, and with the undiscounted amount
totaling $67.6 million and $70.0 million at June 30, 2022 and
December 31, 2021, 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 $24 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.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
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.
On February 6, 2017, Huntsman, a subsidiary of Huntsman
Corporation, filed a lawsuit in New York state court against
Rockwood, Rockwood Specialties, Inc., certain former executives of
Rockwood and its subsidiaries—Seifollah Ghasemi, Thomas Riordan,
Andrew Ross, and Michael Valente, and Albemarle. The lawsuit arises
out of Huntsman’s acquisition of certain Rockwood subsidiaries in
connection with a stock purchase agreement (the “SPA”), dated
September 17, 2013. Before that transaction closed on October 1,
2014, Albemarle began discussions with Rockwood to purchase all
outstanding equity of Rockwood and did so in a transaction that
closed on January 12, 2015. Huntsman’s complaint asserted that
certain technology that Rockwood had developed for a production
facility in Augusta, Georgia, and which was among the assets that
Huntsman acquired pursuant to the SPA, did not work, and that
Rockwood and the defendant executives had intentionally misled
Huntsman about that technology in connection with the
Huntsman-Rockwood transaction. The complaint asserted claims for,
among other things, fraud, negligent misrepresentation, and breach
of the SPA, and sought certain costs for completing construction of
the production facility.
On March 10, 2017, Albemarle moved in New York state court to
compel arbitration, which was granted on January 8, 2018 (although
Huntsman unsuccessfully appealed that decision). Huntsman’s
arbitration demand asserted claims substantially similar to those
asserted in its state court complaint, and sought various forms of
legal remedies, including cost overruns, compensatory damages,
expectation damages, punitive damages, and restitution. After a
trial, the arbitration panel issued an award on October 28, 2021,
awarding approximately $600 million (including interest) to be
paid by Albemarle to Huntsman, in addition to the possibility of
attorney’s fees, costs and expenses. Following the arbitration
panel decision, Albemarle reached a settlement with Huntsman to pay
$665 million in two equal installments, with the first payment
made in December 2021. The second and final payment of
$332.5 million was made in May 2022.
As first 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”), the SEC, and the Dutch Public
Prosecutor (“DPP”), and are cooperating with the DOJ, the SEC, and
the DPP in their review of these matters. In connection with our
internal investigation, we have implemented, and are continuing to
implement, appropriate remedial measures. We have commenced
discussions with the SEC and DOJ about a potential resolution of
these matters.
At this time, we are unable to predict the duration, scope, result,
or related costs associated with the investigations. We also are
unable to predict what action may be taken by the DOJ, the SEC, or
the DPP, or what penalties or remedial actions they may ultimately
seek. Any determination that our operations or activities are not,
or were 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 such fines, penalties, disgorgement, equitable relief, or other
losses would have a material adverse effect on our financial
condition or liquidity. However, an adverse resolution could have a
material adverse effect on our results of operations in a
particular period.
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
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
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 $62.6 million and $66.8
million at June 30, 2022 and December 31, 2021, 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 in
2017.
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 11—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.
The following table provides details of our lease contracts for the
three-month and six-month periods ended June 30, 2022 and 2021
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Operating lease cost |
$ |
10,590 |
|
|
$ |
9,735 |
|
|
$ |
21,201 |
|
|
$ |
19,147 |
|
|
Finance lease cost: |
|
|
|
|
|
|
|
|
Amortization of right of use assets |
972 |
|
|
156 |
|
|
1,402 |
|
|
313 |
|
|
Interest on lease liabilities |
840 |
|
|
752 |
|
|
1,693 |
|
|
1,507 |
|
|
Total finance lease cost |
1,812 |
|
|
908 |
|
|
3,095 |
|
|
1,820 |
|
|
|
|
|
|
|
|
|
|
|
Short-term lease cost |
3,271 |
|
|
2,176 |
|
|
5,970 |
|
|
4,780 |
|
|
Variable lease cost |
1,914 |
|
|
1,813 |
|
|
2,631 |
|
|
4,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total lease cost |
$ |
17,587 |
|
|
$ |
14,632 |
|
|
$ |
32,897 |
|
|
$ |
29,925 |
|
Supplemental cash flow information related to our lease contracts
for the six-month periods ended
June 30, 2022
and
2021
is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
Cash paid for amounts included in the measurement of lease
liabilities: |
|
|
|
|
Operating cash flows from operating leases |
$ |
17,539 |
|
|
$ |
14,980 |
|
|
Operating cash flows from finance leases |
1,185 |
|
|
876 |
|
|
Financing cash flows from finance leases |
661 |
|
|
316 |
|
|
Right-of-use assets obtained in exchange for lease
obligations: |
|
|
|
|
Operating leases |
1,560 |
|
|
50,856 |
|
|
|
|
|
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
June 30, 2022
and December 31, 2021 is as follows (in thousands, except as
noted):
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
December 31, 2021 |
|
Operating leases: |
|
|
|
|
Other assets |
$ |
135,143 |
|
|
$ |
154,741 |
|
|
|
|
|
|
|
Accrued expenses |
30,669 |
|
|
31,603 |
|
|
Other noncurrent liabilities |
106,947 |
|
|
126,997 |
|
|
Total operating lease liabilities |
137,616 |
|
|
158,600 |
|
|
Finance leases: |
|
|
|
|
Net property, plant and equipment |
72,983 |
|
|
75,302 |
|
|
|
|
|
|
|
Current portion of long-term debt(a)
|
4,199 |
|
|
3,768 |
|
|
Long-term debt |
72,194 |
|
|
74,011 |
|
|
Total finance lease liabilities |
76,393 |
|
|
77,779 |
|
|
Weighted average remaining lease term (in years): |
|
|
|
|
Operating leases |
13.5 |
|
12.9 |
|
Finance leases |
24.5 |
|
24.5 |
|
Weighted average discount rate (%): |
|
|
|
|
Operating leases |
3.58 |
% |
|
3.44 |
% |
|
Finance leases |
4.46 |
% |
|
4.47 |
% |
(a) Balance includes accrued interest of
finance lease recorded in Accrued liabilities.
Maturities of lease liabilities at June 30, 2022 were as
follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Leases |
|
Finance Leases |
|
Remainder of 2022 |
$ |
17,928 |
|
|
$ |
3,038 |
|
|
2023 |
31,878 |
|
|
6,077 |
|
|
2024 |
19,464 |
|
|
6,077 |
|
|
2025 |
11,921 |
|
|
6,077 |
|
|
2026 |
9,783 |
|
|
5,442 |
|
|
Thereafter |
122,295 |
|
|
97,215 |
|
|
Total lease payments |
213,269 |
|
|
123,926 |
|
|
Less imputed interest |
75,653 |
|
|
47,533 |
|
|
Total |
$ |
137,616 |
|
|
$ |
76,393 |
|
NOTE 12—Segment Information:
Our three reportable segments include: (1) Lithium; (2) Bromine;
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.
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 included
only the FCS business that did not fit into any of our core
businesses. On June 1, 2021, we completed the sale of the FCS
business. See Note 3, “Divestitures,” for additional information.
Amounts in the “All Other” category represent activity in this
business until divested on June 1, 2021.
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 and financing
expenses, income tax expenses, depreciation and amortization, as
adjusted on a consistent basis for certain non-operating,
non-recurring or unusual items in a balanced manner and on a
segment basis. These non-operating, non-recurring or unusual items
may include acquisition and integration related costs, gains or
losses on sales of businesses, restructuring charges, facility
divestiture charges, certain litigation and arbitration costs and
charges, non-operating pension and OPEB items and other significant
non-recurring items. In addition, management uses adjusted EBITDA
for business and enterprise 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 (loss)
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
June 30, |
|
Six Months Ended
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
(In thousands) |
|
(In thousands) |
|
Net sales: |
|
|
|
|
|
|
|
|
Lithium |
$ |
891,516 |
|
|
$ |
320,334 |
|
|
$ |
1,441,788 |
|
|
$ |
599,310 |
|
|
Bromine |
377,752 |
|
|
279,748 |
|
|
737,331 |
|
|
560,195 |
|
|
Catalysts |
210,325 |
|
|
148,344 |
|
|
428,202 |
|
|
368,587 |
|
|
All Other |
— |
|
|
25,470 |
|
|
— |
|
|
75,095 |
|
|
|
|
|
|
|
|
|
|
Total net sales |
$ |
1,479,593 |
|
|
$ |
773,896 |
|
|
$ |
2,607,321 |
|
|
$ |
1,603,187 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Lithium |
$ |
495,208 |
|
|
$ |
109,441 |
|
|
$ |
803,823 |
|
|
$ |
215,877 |
|
|
Bromine |
135,683 |
|
|
92,646 |
|
|
264,917 |
|
|
187,286 |
|
|
Catalysts |
9,792 |
|
|
21,164 |
|
|
26,702 |
|
|
46,591 |
|
|
All Other |
— |
|
|
8,379 |
|
|
— |
|
|
29,858 |
|
|
Corporate |
(30,474) |
|
|
(37,002) |
|
|
(53,303) |
|
|
(54,930) |
|
|
Total adjusted EBITDA |
$ |
610,209 |
|
|
$ |
194,628 |
|
|
$ |
1,042,139 |
|
|
$ |
424,682 |
|
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 (loss) income attributable to Albemarle
Corporation, the most directly comparable financial measure
calculated and reported in accordance with U.S. GAAP (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lithium |
|
Bromine |
|
Catalysts |
|
Reportable Segments Total |
|
All Other |
|
Corporate |
|
Consolidated Total |
|
Three months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Albemarle Corporation |
$ |
452,099 |
|
|
$ |
122,461 |
|
|
$ |
(3,383) |
|
|
$ |
571,177 |
|
|
$ |
— |
|
|
$ |
(164,404) |
|
|
$ |
406,773 |
|
|
Depreciation and amortization |
42,502 |
|
|
13,222 |
|
|
13,175 |
|
|
68,899 |
|
|
— |
|
|
2,094 |
|
|
70,993 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration related costs(a)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,375 |
|
|
5,375 |
|
|
Interest and financing expenses(b)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
41,409 |
|
|
41,409 |
|
|
Income tax expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
89,018 |
|
|
89,018 |
|
|
Non-operating pension and OPEB items |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,038) |
|
|
(5,038) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other(c)
|
607 |
|
|
— |
|
|
— |
|
|
607 |
|
|
— |
|
|
1,072 |
|
|
1,679 |
|
|
Adjusted EBITDA |
$ |
495,208 |
|
|
$ |
135,683 |
|
|
$ |
9,792 |
|
|
$ |
640,683 |
|
|
$ |
— |
|
|
$ |
(30,474) |
|
|
$ |
610,209 |
|
|
Three months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Albemarle Corporation |
$ |
74,593 |
|
|
$ |
80,148 |
|
|
$ |
8,446 |
|
|
$ |
163,187 |
|
|
$ |
7,972 |
|
|
$ |
253,441 |
|
|
$ |
424,600 |
|
|
Depreciation and amortization |
33,497 |
|
|
12,498 |
|
|
12,718 |
|
|
58,713 |
|
|
407 |
|
|
2,303 |
|
|
61,423 |
|
|
Restructuring and other(d)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
766 |
|
|
766 |
|
|
Gain on sale of business(e)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(429,408) |
|
|
(429,408) |
|
|
Acquisition and integration related costs(a)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,915 |
|
|
1,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing expenses(b)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,152 |
|
|
7,152 |
|
|
Income tax expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
106,985 |
|
|
106,985 |
|
|
Non-operating pension and OPEB items |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,471) |
|
|
(5,471) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Albemarle Foundation contribution(f)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20,000 |
|
|
20,000 |
|
|
Other(g)
|
1,351 |
|
|
— |
|
|
— |
|
|
1,351 |
|
|
— |
|
|
5,315 |
|
|
6,666 |
|
|
Adjusted EBITDA |
$ |
109,441 |
|
|
$ |
92,646 |
|
|
$ |
21,164 |
|
|
$ |
223,251 |
|
|
$ |
8,379 |
|
|
$ |
(37,002) |
|
|
$ |
194,628 |
|
|
Six months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Albemarle Corporation |
$ |
713,788 |
|
|
$ |
239,022 |
|
|
$ |
606 |
|
|
$ |
953,416 |
|
|
$ |
— |
|
|
$ |
(293,260) |
|
|
$ |
660,156 |
|
|
Depreciation and amortization |
81,028 |
|
|
25,895 |
|
|
26,096 |
|
|
133,019 |
|
|
— |
|
|
4,548 |
|
|
137,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of interest in properties(h)
|
8,400 |
|
|
— |
|
|
— |
|
|
8,400 |
|
|
— |
|
|
— |
|
|
8,400 |
|
|
Acquisition and integration related costs(a)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,099 |
|
|
7,099 |
|
|
Interest and financing expenses(b)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
69,243 |
|
|
69,243 |
|
|
Income tax expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
169,548 |
|
|
169,548 |
|
|
Non-operating pension and OPEB items |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(10,318) |
|
|
(10,318) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other(c)
|
607 |
|
|
— |
|
|
— |
|
|
607 |
|
|
— |
|
|
(163) |
|
|
444 |
|
|
Adjusted EBITDA |
$ |
803,823 |
|
|
$ |
264,917 |
|
|
$ |
26,702 |
|
|
$ |
1,095,442 |
|
|
$ |
— |
|
|
$ |
(53,303) |
|
|
$ |
1,042,139 |
|
|
Six months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Albemarle Corporation |
$ |
144,965 |
|
|
$ |
162,261 |
|
|
$ |
21,362 |
|
|
$ |
328,588 |
|
|
$ |
27,988 |
|
|
$ |
163,701 |
|
|
$ |
520,277 |
|
|
Depreciation and amortization |
65,303 |
|
|
25,025 |
|
|
25,229 |
|
|
115,557 |
|
|
1,870 |
|
|
6,256 |
|
|
123,683 |
|
|
Restructuring and other(d)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,540 |
|
|
1,540 |
|
|
Gain on sale of business(e)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(429,408) |
|
|
(429,408) |
|
|
Acquisition and integration related costs(a)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,076 |
|
|
4,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing expenses(b)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
51,034 |
|
|
51,034 |
|
|
Income tax expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
129,092 |
|
|
129,092 |
|
|
Non-operating pension and OPEB items |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(10,936) |
|
|
(10,936) |
|
|
Albemarle Foundation contribution(f)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20,000 |
|
|
20,000 |
|
|
Other(g)
|
5,609 |
|
|
— |
|
|
— |
|
|
5,609 |
|
|
— |
|
|
9,715 |
|
|
15,324 |
|
|
Adjusted EBITDA |
$ |
215,877 |
|
|
$ |
187,286 |
|
|
$ |
46,591 |
|
|
$ |
449,754 |
|
|
$ |
29,858 |
|
|
$ |
(54,930) |
|
|
$ |
424,682 |
|
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
(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 $19.2 million for the three and six
months ended June 30, 2022, and $1.2 million and
$29.0 million for the three and six months ended June 30,
2021, respectively. See Note 9, “Long-term Debt,” for additional
information. In addition, Interest and financing expenses for the
six months ended June 30, 2022 includes the correction of an out of
period error of $17.5 million related to the overstatement of
capitalized interest in prior periods. See Note 1, “Basis of
Presentation,” for further details.
(c)Included
amounts for the three months ended June 30, 2022 recorded
in:
•Cost
of goods sold - $0.5 million of expense related to the
settlement of a legal matter resulting from a prior
acquisition.
•SG&A
- $1.1 million primarily related to facility closure expenses
of offices in Germany.
Included amounts for the six months ended June 30, 2022
recorded in:
•Cost
of goods sold - $0.5 million of expense related to the
settlement of a legal matter resulting from a prior
acquisition.
•SG&A
- $4.3 million of gains from the sale of legacy properties not
part of our operations, partially offset by $2.8 million of
charges for environmental reserves at sites not part of our
operations and $1.1 million primarily related to facility
closure expenses of offices in Germany.
•Other
income, net - $0.6 million gain related to a settlement
received from a legal matter in a prior period.
(d)In
2021, the Company recorded facility closure related to offices in
Germany, and severance expenses in Germany and Belgium, in
SG&A.
(e)See
Note 3, “Divestitures,” for additional information.
(f)Included
in SG&A is a charitable contribution, using a portion of the
proceeds received from the FCS 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 the Company’s employees live and the
Company operates. 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 these
communities.
(g)Included
amounts for the three months ended June 30, 2021 recorded
in:
•SG&A
- $4.0 million of a loss resulting from the sale of property,
plant and equipment, $1.6 million of charges for an
environmental reserve at a site not part of our operations and
$1.4 million of expenses primarily related to non-routine
labor and compensation related costs that are outside normal
compensation arrangements.
•Other
income, net - $0.3 million of a gain resulting from the
adjustment of indemnifications related to previously disposed
businesses.
Included amounts for the six months ended June 30, 2021
recorded in:
•SG&A
- $6.0 million of expenses primarily related to non-routine
labor and compensation related costs that are outside normal
compensation arrangements, a $4.0 million loss resulting from
the sale of property, plant and equipment and $1.6 million of
charges for an environmental reserve at a site not part of our
operations.
•Other
income, net - $3.6 million of expenses primarily related to
asset retirement obligation charges to update of an estimate at a
site formerly owned by Albemarle.
(h)Expense
recorded as a result of revised estimates of the obligation to
construct certain lithium hydroxide conversion assets in Kemerton,
Western Australia, due to cost overruns from supply chain, labor
and COVID-19 pandemic related issues. The corresponding obligation
was recorded in Accrued liabilities to be transferred to Mineral
Resources Limited (“MRL”), which maintains a 40% ownership interest
in these Kemerton assets.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
NOTE 13—Pension Plans and Other Postretirement
Benefits:
The components of pension and postretirement benefits cost (credit)
for the three-month and six-month periods ended June 30, 2022
and 2021 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Pension Benefits Cost (Credit): |
|
|
|
|
|
|
|
|
Service cost |
$ |
970 |
|
|
$ |
1,172 |
|
|
$ |
1,955 |
|
|
$ |
2,351 |
|
|
Interest cost |
5,568 |
|
|
5,120 |
|
|
11,173 |
|
|
10,239 |
|
|
Expected return on assets |
(10,932) |
|
|
(10,901) |
|
|
(22,144) |
|
|
(21,794) |
|
|
|
|
|
|
|
|
|
|
Amortization of prior service benefit |
23 |
|
|
29 |
|
|
47 |
|
|
58 |
|
|
Total net pension benefits credit |
$ |
(4,371) |
|
|
$ |
(4,580) |
|
|
$ |
(8,969) |
|
|
$ |
(9,146) |
|
|
Postretirement Benefits Cost: |
|
|
|
|
|
|
|
|
Service cost |
$ |
22 |
|
|
$ |
31 |
|
|
$ |
43 |
|
|
$ |
62 |
|
|
Interest cost |
326 |
|
|
310 |
|
|
653 |
|
|
619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net postretirement benefits cost |
$ |
348 |
|
|
$ |
341 |
|
|
$ |
696 |
|
|
$ |
681 |
|
|
Total net pension and postretirement benefits credit |
$ |
(4,023) |
|
|
$ |
(4,239) |
|
|
$ |
(8,273) |
|
|
$ |
(8,465) |
|
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 and six-month periods ended June 30,
2022, the Company made contributions of $3.1 million and $6.4
million, respectively, to its qualified and nonqualified pension
plans. During the three-month and six-month periods ended
June 30, 2021, the Company made contributions of $4.2 million
and $18.9 million, respectively, to its qualified and nonqualified
pension plans.
The Company paid $0.7 million and $1.3 million in premiums to the
U.S. postretirement benefit plan during the three-month and
six-month periods ended June 30, 2022 and 2021, respectively.
During the three-month and six-month periods ended June 30,
2021, the Company paid $0.8 million and $1.4 million, respectively,
in premiums to the U.S. postretirement benefit plan.
NOTE 14—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
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
December 31, 2021 |
|
Recorded
Amount |
|
Fair Value |
|
Recorded
Amount |
|
Fair Value |
|
(In thousands) |
|
Long-term debt |
$ |
3,481,309 |
|
|
$ |
3,319,347 |
|
|
$ |
2,405,021 |
|
|
$ |
2,593,590 |
|
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.
There were no outstanding designated foreign currency forward
contracts at June 30, 2022. At December 31, 2021, we had
outstanding designated foreign currency forward contracts with
notional values totaling the equivalent of $36.5
million.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
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 June 30, 2022 and December 31, 2021, we
had outstanding non-designated foreign currency forward contracts
with notional values totaling $452.9 million and $618.1 million,
respectively, hedging our exposure to various currencies including
the Chilean peso, Euro, Chinese Renminbi, Japanese Yen, Australian
Dollar and Singapore Dollar.
The following table summarizes the fair value of our foreign
currency forward contracts included in the consolidated balance
sheets as of June 30, 2022 and December 31, 2021 (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
December 31, 2021 |
|
Assets |
|
Liabilities |
|
Assets |
|
Liabilities |
|
Designated as hedging instruments |
|
|
|
|
|
|
|
|
Other current assets |
$ |
— |
|
|
$ |
— |
|
|
$ |
237 |
|
|
$ |
— |
|
|
Accrued expenses |
— |
|
|
— |
|
|
— |
|
|
57 |
|
|
Total designated as hedging instruments |
— |
|
|
— |
|
|
237 |
|
|
57 |
|
|
Not designated as hedging instruments |
|
|
|
|
|
|
|
|
Other current assets |
49 |
|
|
— |
|
|
2,901 |
|
|
— |
|
|
Accrued expenses |
— |
|
|
4,928 |
|
|
— |
|
|
248 |
|
|
Total not designated as hedging instruments |
49 |
|
|
4,928 |
|
|
2,901 |
|
|
248 |
|
|
Total |
$ |
49 |
|
|
$ |
4,928 |
|
|
$ |
3,138 |
|
|
$ |
305 |
|
The following table summarizes the net gains (losses) recognized
for our foreign currency forward contracts during the three-month
and six-month periods ended June 30, 2022 and 2021 (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Designated as hedging instruments |
|
|
|
|
|
|
|
|
(Loss) income recognized in Other comprehensive loss |
$ |
(2,508) |
|
|
$ |
823 |
|
|
$ |
1,509 |
|
|
$ |
(777) |
|
|
Not designated as hedging instruments |
|
|
|
|
|
|
|
|
(Loss) income recognized in Other income, net(a)
|
$ |
(23,298) |
|
|
$ |
2,048 |
|
|
$ |
(27,270) |
|
|
$ |
1,857 |
|
(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 six-month periods ended June 30, 2022 and
2021, we recorded net cash settlements of $19.8 million and $0.4
million, respectively, in Other, net, in our condensed consolidated
statements of cash flows.
Unrealized gains and losses related to the cash flow hedges will be
reclassified to earnings over the life of the related assets when
settled and the related assets are placed into
service.
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 15—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:
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
|
|
|
|
|
|
|
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 |
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 June 30, 2022 and
December 31, 2021 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
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: |
|
|
|
|
|
|
|
|
Available for sale debt securities(a)
|
$ |
248,364 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
248,364 |
|
|
Investments under executive deferred compensation
plan(b)
|
$ |
26,027 |
|
|
$ |
26,027 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Private equity securities measured at net asset
value(c)(d)
|
$ |
4,719 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Foreign currency forward contracts(e)
|
$ |
49 |
|
|
$ |
— |
|
|
$ |
49 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Obligations under executive deferred compensation
plan(b)
|
$ |
26,027 |
|
|
$ |
26,027 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Foreign currency forward contracts(e)
|
$ |
4,928 |
|
|
$ |
— |
|
|
$ |
4,928 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 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: |
|
|
|
|
|
|
|
|
Available for sale debt securities(a)
|
$ |
246,517 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
246,517 |
|
|
Investments under executive deferred compensation
plan(b)
|
$ |
32,491 |
|
|
$ |
32,491 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Private equity securities measured at net asset
value(c)(d)
|
$ |
4,696 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Foreign currency forward contracts(e)
|
$ |
3,138 |
|
|
$ |
— |
|
|
$ |
3,138 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Obligations under executive deferred compensation
plan(b)
|
$ |
32,491 |
|
|
$ |
32,491 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Foreign currency forward contracts(e)
|
$ |
305 |
|
|
$ |
— |
|
|
$ |
305 |
|
|
$ |
— |
|
(a)Preferred
equity of a Grace subsidiary acquired as a portion of the proceeds
of the FCS sale on June 1, 2021. See Note 2, “Divestitures,” for
further details on the material terms and conditions. A third-party
estimate of the fair value was prepared using expected future cash
flows over the period up to when the asset is likely to be
redeemed, applying a discount rate that appropriately captures a
market participant's view of the risk associated with the
investment. These are considered to be Level 3 inputs.
(b)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.
(c)Primarily
consists of private equity securities reported in Investments in
the consolidated balance sheets. The changes in fair value are
reported in Other expense, net, in our consolidated statements of
income.
(d)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.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
(e)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 14,
“Fair Value of Financial Instruments,” for further details about
our foreign currency forward contracts.
The following tables set forth the reconciliation of the beginning
and ending balance for the Level 3 recurring fair value
measurements (in thousands):
|
|
|
|
|
|
|
Available for Sale Debt Securities |
|
Beginning balance at December 31, 2021
|
$ |
246,517 |
|
|
Fair value adjustment |
(4,521) |
|
|
Accretion of discount |
6,368 |
|
|
Ending balance at June 30, 2022
|
$ |
248,364 |
|
NOTE 16—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):
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Translation and Other |
|
|
|
Net Investment Hedge(a)
|
|
Cash Flow Hedge(b)
|
|
Interest Rate Swap(c)
|
|
|
|
Total |
|
Three months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2022 |
$ |
(397,510) |
|
|
|
|
$ |
— |
|
|
$ |
10,640 |
|
|
$ |
(6,749) |
|
|
|
|
$ |
(393,619) |
|
|
Other comprehensive loss before reclassifications |
(117,840) |
|
|
|
|
— |
|
|
(2,509) |
|
|
— |
|
|
|
|
(120,349) |
|
|
Amounts reclassified from accumulated other comprehensive
loss |
19 |
|
|
|
|
— |
|
|
— |
|
|
6,749 |
|
|
|
|
6,768 |
|
|
Other comprehensive loss, net of tax |
(117,821) |
|
|
|
|
— |
|
|
(2,509) |
|
|
6,749 |
|
|
|
|
(113,581) |
|
|
Other comprehensive income attributable to noncontrolling
interests |
62 |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
62 |
|
|
Balance at June 30, 2022 |
$ |
(515,269) |
|
|
|
|
$ |
— |
|
|
$ |
8,131 |
|
|
$ |
— |
|
|
|
|
$ |
(507,138) |
|
|
Three months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2021 |
$ |
(345,591) |
|
|
|
|
$ |
— |
|
|
$ |
4,849 |
|
|
$ |
(9,372) |
|
|
|
|
$ |
(350,114) |
|
|
Other comprehensive income before reclassifications |
20,539 |
|
|
|
|
— |
|
|
823 |
|
|
— |
|
|
|
|
21,362 |
|
|
Amounts reclassified from accumulated other comprehensive
loss |
25 |
|
|
|
|
— |
|
|
— |
|
|
650 |
|
|
|
|
675 |
|
|
Other comprehensive income, net of tax |
20,564 |
|
|
|
|
— |
|
|
823 |
|
|
650 |
|
|
|
|
22,037 |
|
|
Other comprehensive income attributable to noncontrolling
interests |
76 |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
76 |
|
|
Balance at June 30, 2021 |
$ |
(324,951) |
|
|
|
|
$ |
— |
|
|
$ |
5,672 |
|
|
$ |
(8,722) |
|
|
|
|
$ |
(328,001) |
|
|
Six months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|