Albemarle Reports Net Sales Increase of 129% for First Quarter 2023

May 3, 2023

CHARLOTTE, N.C., May 3, 2023 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a global leader in providing essential elements for mobility, energy, connectivity and health, today announced its results for the first quarter ended March 31, 2023.

First-Quarter  2023 and Recent Highlights
(Unless otherwise stated, all percentage changes represent year-over-year comparisons)

  • Net sales of $2.6 billion, an increase of 129%
  • Net income of $1.2 billion, or $10.51 per diluted share, an increase of 389%
  • Adjusted diluted EPS of $10.32, an increase of 334%
  • Adjusted EBITDA of $1.6 billion, an increase of 269%
  • Selected U.S. lithium processing facility location in Richburg, South Carolina 
  • Signed definitive agreements with Mineral Resources Limited ("MinRes") to restructure the MARBL Lithium Joint Venture in Australia and separately for MinRes to invest in Albemarle's conversion assets in China
  • Reached final investment decision to build Kemerton trains III & IV
  • Adjusting 2023 guidance to reflect current lithium market pricing; Net sales are now expected to increase approximately 35% to 55% year-over-year and adjusted EBITDA now expected to range from (5%) to 15% year-over-year

"Compared to last year, first quarter net sales more than doubled, adjusted diluted earnings per share more than quadrupled providing a robust start to the year," commented Albemarle CEO Kent Masters. "We see strong sales volume growth for the rest of the year but have modified our guidance to reflect softening lithium market pricing. We remain confident in the underlying market strength of our world-class asset base and our long-term growth strategy."

2023 Corporate Outlook
The company is revising full-year 2023 outlook to reflect current lithium market pricing. Net sales are expected to increase 35% to 55% over prior year, primarily driven by a continued global shift to electric vehicles. The year-over-year change in Adjusted EBITDA is expected to be in the range of (5%) to 15% as higher net sales are partially offset by timing impacts of higher priced inventories. The company expects to maintain positive free cash flow. The company's capital expenditures are expected to be between $1.7 billion and $1.9 billion for 2023.


FY 2023 Guidance

as of Feb.15, 2023


FY 2023 Guidance

as of May 3, 2023

Net sales

$11.3 - $12.9 billion


$9.8 - $11.5 billion

Adjusted EBITDA (a)

$4.2 - $5.1 billion


$3.3 - $4.0 billion

Adjusted EBITDA Margin (a)

37% - 40%


34% - 35%

Adjusted Diluted EPS (a)

$26.00 - $33.00


$20.75 - $25.75

Net Cash from Operations

$2.1 - $2.4 billion


$1.7 - $2.3 billion

Capital Expenditures

$1.7 - $1.9 billion


$1.7 - $1.9 billion

 

(a)

The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort.  See "Additional Information regarding Non-GAAP Measures" for more information.

First Quarter 2023 Results

In millions, except per share amounts

Q1 2023


Q1 2022


$ Change


% Change

Net sales

$    2,580.3


$    1,127.7


$    1,452.5


128.8 %

Net income attributable to Albemarle Corporation

$    1,238.6


$       253.4


$       985.2


388.8 %

Adjusted EBITDA (a)

$    1,595.7


$       431.9


$    1,163.8


269.4 %

Diluted earnings per share

$       10.51


$         2.15


$         8.36


388.8 %

   Non-operating pension and OPEB items (a)


(0.04)





   Non-recurring and other unusual items (a)

(0.19)


0.26





Adjusted diluted earnings per share (a)(b)

$       10.32


$         2.38


$         7.94


333.6 %

 

(a)

See Non-GAAP Reconciliations for further details.

(b)

Totals may not add due to rounding.

 

Net sales for the first quarter of 2023 were $2.6 billion compared to $1.1 billion for the prior-year quarter. The 129% increase was driven by higher lithium prices and volumes. Net income attributable to Albemarle of $1.2 billion increased by $1.0 billion from the prior year's quarter. Adjusted EBITDA of $1.6 billion increased by $1.2 billion from the prior-year quarter primarily due to higher net sales.

The effective income tax rate for the first quarter of 2023 was 23.9% compared to 26.9% in the same period of 2022. On an adjusted basis, the effective income tax rates were 23.6% and 18.9% for the first quarter of 2023 and 2022, respectively, with the increase primarily due to changes in the geographic income mix.

Business Segment Results
Beginning January 1, 2023, the company re-segmented its operating segments. The results from 2022 are restated to align with the new structure.

Energy Storage Results

In millions

Q1 2023


Q1 2022


$ Change


% Change

Net Sales

$        1,943.7


$           463.7


$        1,480.0


319.2 %

Adjusted EBITDA

$        1,406.2


$           285.2


$        1,120.9


393.0 %

 

Energy Storage net sales for the first quarter of 2023 were $1.9 billion, an increase of $1.5 billion (+319%) due to higher pricing net of FX (+301%) related to renegotiated contracts and increased market pricing. Volume was also higher (+18%) related to the La Negra III/IV expansion in Chile, production from our processing plant in Qinzhou, China, and higher tolling volumes to meet growing customer demand. Adjusted EBITDA of $1.4 billion increased $1.1 billion as higher pricing and volumes more than offset higher costs.

On February 22, 2023, Albemarle signed a definitive agreement with MinRes to restructure its MARBL Lithium Joint Venture in Australia to enable each partner to deliver long-term value to its customers. Albemarle also obtained new investment by MinRes in Albemarle's conversion assets in China. MinRes will acquire a 50% interest in Albemarle's 100%-owned Qinzhou and Meishan plants in China.

2023 Energy Storage Outlook
Energy Storage net sales are estimated to range between $6.9 to $8.4 billion. Energy Storage volumes are projected to be up 30% to 40% in 2023 compared to 2022. Full year realized pricing is expected to be up 20% to 30% vs. the prior year, assuming flat lithium market pricing as of mid-April 2023. Adjusted EBITDA anticipated to range between $2.7 and $3.4 billion as higher priced spodumene inventories more than offset higher pricing.

Albemarle continues to expand its global portfolio of conversion capacity and utilization of its world-class resource portfolio:

Chile

     –  The Salar Yield Improvement Project is on schedule for mechanical completion by the middle of 2023

Australia 

     –  Kemerton I is operating and producing product subject to customer qualification
     –  Kemerton II is progressing through commissioning
     –  Reached final investment decision to build Kemerton trains III & IV

China 

     –  Meishan construction progressing on budget and on schedule with mechanical completion expected in 2024

United States

     –  Richburg site in South Carolina selected for U.S. lithium processing facility
     –  Kings Mountain mine studies continue to progress
     –  Silver Peak new wells and expansion projects continue to progress

Specialties Results

In millions

Q1 2023


Q1 2022


$ Change


% Change

Net Sales

$           418.8


$           446.1


$           (27.4)


(6.1) %

Adjusted EBITDA

$           162.2


$           152.6


$               9.6


6.3 %

 

Specialties net sales for the first quarter of 2023 were $418.8 million, a decrease of $27.4 million (-6%) primarily due to lower volumes (-15%), partially offset by increased pricing net of FX (+9%) primarily in our lithium specialties division. Volumes were impacted by weaker demand across the product portfolio. Adjusted EBITDA of $162.2 million increased $9.6 million as higher pricing and lower freight costs were partially offset by lower volumes.

2023 Specialties Outlook
Albemarle is reaffirming its 2023 outlook for Specialties net sales to range between $1.8 billion to $1.9 billion, with adjusted EBITDA estimated from $555 million to $585 million. Adjusted EBITDA margins are expected to be approximately flat year-over-year.

Ketjen Results

In millions

Q1 2023


Q1 2022


$ Change


% Change

Net Sales

$           217.8


$           217.9


$             (0.1)


— %

Adjusted EBITDA

$             14.5


$             16.9


$             (2.4)


(14.0) %

 

Ketjen net sales of $217.8 million for the first quarter of 2023 were flat compared to the previous year due to higher pricing net of FX (+12%) offset by lower volumes (-12%). Adjusted EBITDA of $14.5 million declined $2.4 million due to higher raw material costs, combined with freeze related downtime and timing of some shipments that were pushed into the second quarter of 2023.

2023 Ketjen Outlook 
Albemarle expects Ketjen net sales in 2023 to range between $1.0 billion and $1.1 billion, with adjusted EBITDA in the range of $100 million to $140 million. Adjusted EBITDA guidance is up from prior guidance as the segment is benefiting from a recovery in refining pricing and managing processing costs.

Balance Sheet and Liquidity
As of March 31, 2023, Albemarle had estimated liquidity of approximately $3.3 billion, including $1.6 billion of cash and equivalents, the full $1.5 billion under its revolver and $180.5 million available on other credit lines. Total debt was $3.2 billion, representing our debt covenant net debt to adjusted EBITDA of approximately 0.4 times.

Cash Flow and Capital Deployment
Cash from operations of $721.0 million increased $514.8 million versus the prior year period. This was driven by increased adjusted EBITDA and dividends received from equity investments, partially offset by working capital changes, that were primarily due to the increase in receivables and inventories from higher lithium pricing. Capital expenditures of $415.6 million increased by $183.9 million versus the prior year period as the company invested in lithium and bromine capacity to support growth.

Albemarle's primary capital allocation priorities are to invest in organic and inorganic opportunities to drive profitable growth, maintain its financial flexibility and investment grade credit rating, and fund its dividends.

Earnings Call

Date:

Thursday, May 4, 2023

Time:

9:00 AM Eastern time

Dial-in (U.S.):

1.833.470.1428

Dial-in (International):

1.404.662.2808

Passcode:

741195

 

The company's earnings presentation and supporting material are available on Albemarle's website at https://investors.albemarle.com.

About Albemarle
Albemarle Corporation (NYSE: ALB) leads the world in transforming essential resources into critical ingredients for mobility, energy, connectivity, and health. We partner to pioneer new ways to move, power, connect and protect with people and planet in mind. A reliable and high-quality global supply of lithium and bromine allow us to deliver advanced solutions for our customers.  Learn more about how the people of Albemarle are enabling a more resilient world at albemarle.com and on Twitter @AlbemarleCorp.

Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations, Securities and Exchange Commission ("SEC") filings and other information regarding the company, its businesses and the markets it serves.

Forward-Looking Statements
This press release contains statements concerning our expectations, anticipations and beliefs regarding the future, which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties, often contain words such as "anticipate," "believe," "estimate," "expect," "guidance," "intend," "may," "outlook," "should," "would," and "will". Forward-looking statements may include statements regarding expected: financial and operating results, production capacity, volumes, and pricing, demand for Albemarle's products, capital projects, acquisition and divestiture transactions, market and economic trends, and all other information relating to matters that are not historical facts. Factors that could cause Albemarle's actual results to differ materially from the outlook expressed or implied in any forward-looking statement include: changes in economic and business conditions; financial and operating performance of customers; timing and magnitude of customer orders; fluctuations in lithium market pricing; production volume shortfalls; increased competition; changes in the product demand; availability and cost of raw materials and energy; technological change and development; fluctuations in foreign currencies; changes in laws and government regulation; regulatory actions, proceedings, claims or litigation; cyber-security breaches, terrorist attacks, industrial accidents or natural disasters; political unrest; changes in inflation or interest rates; volatility in the debt and equity markets; acquisition and divestiture transactions; timing and success of projects; performance of Albemarle's partners in joint ventures and other projects; changes in credit ratings; and the other factors detailed from time to time in the reports Albemarle files with the SEC, including those described under "Risk Factors" in Albemarle's most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q, which are filed with the SEC and available on the investor section of Albemarle's website (investors.albemarle.com) and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release. Albemarle assumes no obligation to provide any revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Albemarle Corporation and Subsidiaries

Consolidated Statements of Income

(In Thousands Except Per Share Amounts) (Unaudited)


Three Months Ended


March 31,


2023


2022

Net sales

$ 2,580,252


$ 1,127,728

Cost of goods sold

1,303,712


678,698

Gross profit

1,276,540


449,030

Selling, general and administrative expenses

154,306


112,568

Research and development expenses

20,471


16,083

Loss on sale of interest in properties


8,400

Operating profit

1,101,763


311,979

Interest and financing expenses

(26,777)


(27,834)

Other income, net

82,492


15,496

Income before income taxes and equity in net income of unconsolidated investments

1,157,478


299,641

Income tax expense

276,963


80,530

Income before equity in net income of unconsolidated investments

880,515


219,111

Equity in net income of unconsolidated investments (net of tax)

396,188


62,436

Net income

1,276,703


281,547

Net income attributable to noncontrolling interests

(38,123)


(28,164)

Net income attributable to Albemarle Corporation

$ 1,238,580


$   253,383

Basic earnings per share

$       10.57


$         2.16

Diluted earnings per share

$       10.51


$         2.15





Weighted-average common shares outstanding – basic

117,232


117,066

Weighted-average common shares outstanding – diluted

117,841


117,653

 

Albemarle Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands) (Unaudited)


March 31,


December 31,


2023


2022

ASSETS




Current assets:




Cash and cash equivalents

$        1,586,734


$        1,499,142

Trade accounts receivable

1,351,915


1,190,970

Other accounts receivable

312,560


185,819

Inventories

3,180,825


2,076,031

Other current assets

225,541


234,955

Total current assets

6,657,575


5,186,917

Property, plant and equipment

9,830,257


9,354,330

Less accumulated depreciation and amortization

2,476,768


2,391,333

Net property, plant and equipment

7,353,489


6,962,997

Investments

1,391,229


1,150,553

Other assets

243,405


250,558

Goodwill

1,634,152


1,617,627

Other intangibles, net of amortization

284,508


287,870

Total assets

$      17,564,358


$      15,456,522

LIABILITIES AND EQUITY




Current liabilities:




Accounts payable to third parties

$        1,758,254


$        1,533,624

Accounts payable to related parties

1,012,822


518,377

Accrued expenses

403,336


505,894

Current portion of long-term debt

2,167


2,128

Dividends payable

46,753


46,116

Income taxes payable

282,037


134,876

Total current liabilities

3,505,369


2,741,015

Long-term debt

3,233,393


3,214,972

Postretirement benefits

33,062


32,751

Pension benefits

160,343


159,571

Other noncurrent liabilities

686,655


636,596

Deferred income taxes

486,466


480,770

Commitments and contingencies




Equity:




Albemarle Corporation shareholders' equity:




Common stock

1,173


1,172

Additional paid-in capital

2,931,961


2,940,840

Accumulated other comprehensive loss

(513,337)


(560,662)

Retained earnings

6,792,938


5,601,277

Total Albemarle Corporation shareholders' equity

9,212,735


7,982,627

Noncontrolling interests

246,335


208,220

Total equity

9,459,070


8,190,847

Total liabilities and equity

$      17,564,358


$      15,456,522

 

Albemarle Corporation and Subsidiaries

Selected Consolidated Cash Flow Data

(In Thousands) (Unaudited)


Three Months Ended

March 31,


2023


2022

Cash and cash equivalents at beginning of year

$   1,499,142


$      439,272

Cash flows from operating activities:




Net income

1,276,703


281,547

Adjustments to reconcile net income to cash flows from operating activities:




Depreciation and amortization

87,271


66,574

Loss on sale of interest in properties


8,400

Stock-based compensation and other

10,540


4,245

Equity in net income of unconsolidated investments (net of tax)

(396,188)


(62,436)

Dividends received from unconsolidated investments and nonmarketable
securities

547,552


39,168

Pension and postretirement benefit

1,954


(4,250)

Pension and postretirement contributions

(2,825)


(3,890)

Unrealized (gain) loss on investments in marketable securities

(45,732)


1,469

Deferred income taxes

14,098


27,747

Working capital changes

(764,071)


(219,397)

Non-cash transfer of 40% value of construction in progress of Kemerton plant
to MRL

7,665


65,100

Other, net

(15,987)


1,899

Net cash provided by operating activities

720,980


206,176

Cash flows from investing activities:




Capital expenditures

(415,608)


(231,698)

(Purchases) sales of marketable securities, net

(122,267)


3,751

Investments in equity and other corporate investments

(1,133)


(146)

Net cash used in investing activities

(539,008)


(228,093)

Cash flows from financing activities:




Proceeds from borrowings of credit agreements


280,000

Other debt repayments, net

(713)


(166,615)

Dividends paid to shareholders

(46,282)


(45,637)

Dividends paid to noncontrolling interests

(53,145)


Proceeds from exercise of stock options

81


419

Withholding taxes paid on stock-based compensation award distributions

(18,617)


(10,422)

Other


(126)

Net cash (used in) provided by financing activities

(118,676)


57,619

Net effect of foreign exchange on cash and cash equivalents

24,296


(11,649)

Increase in cash and cash equivalents

87,592


24,053

Cash and cash equivalents at end of period

$   1,586,734


$      463,325

 

Albemarle Corporation and Subsidiaries

Consolidated Summary of Segment Results

(In Thousands) (Unaudited) 




Three Months Ended


March 31,


2023


2022

Net sales:




Energy Storage

$ 1,943,682


$   463,704

Specialties

418,778


446,147

Ketjen

217,792


217,877

Total net sales

$ 2,580,252


$ 1,127,728





Adjusted EBITDA:




Energy Storage

$ 1,406,181


$   285,247

Specialties

162,158


152,602

Ketjen

14,543


16,910

Total segment adjusted EBITDA

1,582,882


454,759

Corporate

12,837


(22,829)

Total adjusted EBITDA

$ 1,595,719


$   431,930

 

See accompanying non-GAAP reconciliations below.

Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net income attributable to Albemarle Corporation, adjusted diluted earnings per share, non-operating pension and other post-employment benefit ("OPEB") items per diluted share, non-recurring and other unusual items per diluted share, adjusted effective income tax rates, EBITDA, adjusted EBITDA (on a consolidated basis), EBITDA margin and adjusted EBITDA margin are financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. These non-GAAP measures should not be considered as alternatives to Net income attributable to Albemarle Corporation ("earnings") or other comparable measures calculated and reported in accordance with GAAP. These measures are presented here to provide additional useful measurements to review the company's operations, provide transparency to investors and enable period-to-period comparability of financial performance. The company's chief operating decision maker uses these measures to assess the ongoing performance of the company and its segments, as well as for business and enterprise planning purposes.

A description of other non-GAAP financial measures that Albemarle uses to evaluate its operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found on the following pages of this press release, which is also is available on Albemarle's website at https://investors.albemarle.com. The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the company's results calculated in accordance with GAAP.

ALBEMARLE CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliations

(Unaudited)

See below for a reconciliation of adjusted net income attributable to Albemarle Corporation, EBITDA and adjusted EBITDA (on a consolidated basis), which are non-GAAP financial measures, to Net income attributable to Albemarle Corporation ("earnings"), the most directly comparable financial measure calculated and reported in accordance with GAAP. Reconciliation of adjusted EBITDA on a segment basis is also provided. Adjusted net income attributable to Albemarle Corporation is defined as net income before the non-recurring, other unusual and non-operating pension and other post-employment benefit (OPEB) items as listed below. The non-recurring and 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, and other significant non-recurring items. EBITDA is defined as net income attributable to Albemarle Corporation before interest and financing expenses, income tax expense, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus or minus the non-recurring, other unusual and non-operating pension and OPEB items as listed below.


Three Months Ended


March 31,


2023


2022

In thousands, except percentages and per share amounts

$


% of
net
sales


$


% of
net
sales

Net income attributable to Albemarle Corporation

$   1,238,580




$      253,383



Add back:








Non-operating pension and OPEB items (net of tax)

374




(4,139)



Non-recurring and other unusual items (net of tax)

(22,774)




30,903



Adjusted net income attributable to Albemarle Corporation

$   1,216,180




$      280,147











Adjusted diluted earnings per share

$          10.32




$            2.38











Weighted-average common shares outstanding – diluted

117,841




117,653











Net income attributable to Albemarle Corporation

$   1,238,580


48.0 %


$      253,383


22.5 %

Add back:








Interest and financing expenses

26,777


1.0 %


27,834


2.5 %

Income tax expense

276,963


10.7 %


80,530


7.1 %

Depreciation and amortization

87,271


3.4 %


66,574


5.9 %

EBITDA

1,629,591


63.2 %


428,321


38.0 %

Non-operating pension and OPEB items

601


— %


(5,280)


(0.5) %

Non-recurring and other unusual items

(34,473)


(1.3) %


8,889


0.8 %

Adjusted EBITDA

$   1,595,719


61.8 %


$      431,930


38.3 %









Net sales

$   2,580,252




$   1,127,728



 

Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to Albemarle's operating segments and are included in the Corporate category. In addition, the company believes that these components of pension cost are mainly driven by market performance, and the company manages these separately from the operational performance of the company's businesses. In accordance with GAAP, these non-operating pension and OPEB items are included in Other income (expenses), net. Non-operating pension and OPEB items were as follows (in thousands):


Three Months Ended


March 31,


2023


2022

Interest cost

$       9,010


$       5,932

Expected return on assets

(8,409)


(11,212)

Total

$          601


$     (5,280)

 

In addition to the non-operating pension and OPEB items disclosed above, the company has identified certain other items and excluded them from Albemarle's adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):


Three Months Ended


March 31,


2023


2022

Acquisition and integration related costs(1)

$         0.03


$         0.01

Loss on sale of interest in properties(2)


0.07

Mark-to-market gain on public equity securities(3)

(0.29)


Other(4)

0.04


(0.01)

Tax related items(5)

0.03


0.19

Total non-recurring and other unusual items

$       (0.19)


$         0.26



(1)

Costs related to the acquisition, integration and divestitures for various significant projects, recorded in
Selling, general and administrative expenses for the three months ended March 31, 2023 and 2022 were
$5.1 million and $1.7 million ($4.0 million and $1.3 million after income taxes, or $0.03 and $0.01 per
share), respectively.



(2)

Included in Loss on sale of interest in properties for the three months ended March 31, 2022 is an
expense of $8.4 million ($0.07 per share after no income tax impact) related to a post-measurement
period Wodgina acquisition purchase price adjustment for a revised estimate of the obligation to construct
the lithium hydroxide conversion assets in Kemerton due to cost overruns from supply chain, labor and
COVID-19 pandemic related issues.



(3)

Gain of $45.8 million ($34.4 million after income taxes, or $0.29 per share) recorded in Other income, net
for the three months ended March 31, 2023, resulting from the increase in fair value of investments in
public equity securities.



(4)

Other adjustments for the three months ended March 31, 2023 included amounts recorded in:


 

  • Selling, general and administrative expenses - 1.9 million of charges primarily for environmental
    reserves at sites not part of our operations and $0.7 million of facility closure expenses related to
    offices in Germany.
  • Other income, net - $3.6 million of asset retirement obligation charges primarily for a site not part
    of our operations

 



After income taxes, these net gains totaled $4.8 million, or $0.04 per share.




Other adjustments for the three months ended March 31, 2022 included amounts recorded in:


 

  • Selling, general and administrative expenses - $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 $0.7 million of facility closure expenses related to
    offices in Germany.
  • Other income, net - $0.6 million gain related to a settlement received from a legal matter in a prior
    period.

 



After income taxes, these charges totaled $0.9 million, or $0.01 per share.



(5)

Included in Income tax expense for the three months ended March 31, 2023 are discrete net tax
expenses of $2.9 million, or $0.03 per share primarily related to foreign return to provisions offset by
excess tax benefits realized from stock-based compensation arrangements.




Included in Income tax expense for the three months ended March 31, 2022 are discrete net tax
expenses of $20.4 million, or $0.18 per share related to global intangible low-taxed income associated
with a payment made in 2022 for the settlement of a legacy legal matter. In addition, Income tax expense
included discrete net tax expenses of $1.6 million, or $0.01 per share. The discrete net expense was
primarily related to foreign return to provisions, partially offset by a benefit for excess tax benefits realized
from stock-based compensation arrangements..

 

See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).


Income before
income taxes and
equity in net income
of unconsolidated
investments


Income tax expense


Effective income tax
rate

Three months ended March 31, 2023






As reported

$                 1,157,478


$                    276,963


23.9 %

Non-recurring, other unusual and non-operating pension and OPEB
items

(33,872)


(11,472)



As adjusted

$                 1,123,606


$                    265,491


23.6 %







Three months ended March 31, 2022






As reported

$                    299,641


$                      80,530


26.9 %

Non-recurring, other unusual and non-operating pension and OPEB
items

3,609


(23,155)



As adjusted

$                    303,250


$                      57,375


18.9 %

 

 

 

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SOURCE Albemarle Corporation