Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) November 15, 2012

 

 

ALBEMARLE CORPORATION

(Exact name of Registrant as specified in charter)

 

 

 

Virginia   001-12658   54-1692118

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(IRS employer

identification no.)

451 Florida Street, Baton Rouge, Louisiana   70801
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number, including area code

(225) 388-8011

Not applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Section 8 — Other Events

 

Item 8.01. Other Events.

Albemarle Corporation (NYSE: ALB), a leader in the global specialty chemicals market, announced today that it plans to change its method of accounting for deferred actuarial gains and losses relating to its global pension and other postretirement benefit (OPEB) plans to a more preferable method in accordance with generally accepted accounting principles in the United States (GAAP). This new accounting method, referred to as mark-to-market (MTM) accounting, will be adopted in the fourth quarter 2012 and will be retrospectively applied to the Company’s financial results for all periods to be presented in its annual report on Form 10-K for the year ended December 31, 2012.

Albemarle has historically recognized actuarial gains and losses from its pension and OPEB plans in its consolidated balance sheets as Accumulated other comprehensive income (loss) within consolidated shareholders’ equity, with amortization of these gains and losses that exceed 10 percent of the greater of plan assets or projected benefit obligations recognized each quarter in its consolidated statements of income over the average future service period of active employees. Under MTM accounting, these gains and losses will now be recognized in the year in which they occur. Also, the gain/loss subject to amortization and expected return on assets components of Albemarle’s pension expense has historically been calculated using a five year smoothing of asset gains and losses referred to as the market-related value. Under MTM accounting, the market-related value of assets will equal the actual market value as of the date of measurement.

Under MTM accounting, the Company’s pre-tax pension and OPEB costs for the nine-month period ended September 30, 2012 would have been lower than previously reported amounts by approximately $45 million. These lower costs would have resulted in an increase in diluted earnings per share of approximately $0.32 for the nine months ended September 30, 2012. See the accompanying financial schedules for adjusted consolidated statements of income which show the effect of the accounting change for the nine months ended September 30, 2012 and the years ended December 31, 2011 and 2010, including selected quarterly information.

With the new method of accounting, the Company’s pension and OPEB costs will consist of three elements: (1) ongoing items comprised of service costs and amortization of prior service costs/benefits; (2) interest costs and expected return on plan assets; and (3) MTM gains and losses recognized in the fourth quarter of each year resulting from changes in actuarial assumptions and discount rates and the differences between actual and expected return on plan assets. Additionally, any interim remeasurements triggered by significant plan changes such as curtailments or settlements will be recognized as MTM adjustments in the quarter in which the event occurs.

As a result of the retrospective application of this change, Albemarle’s diluted earnings per share for the year ended December 31, 2011 decreased $0.49 from $4.77 to $4.28. Excluding net charges amounting to $85.8 million ($54.2 million after income taxes, or $0.59 per share) that related to pension and OPEB plan actuarial net losses as well as other non-operating pension and OPEB items comprised of interest costs and expected return on assets, diluted earnings per share for 2011 would have increased from $4.28 to $4.88. See the accompanying financial schedules for a reconciliation of the non-GAAP financial measure diluted earnings per share excluding special items to diluted earnings per share computed in accordance with GAAP for the nine months ended September 30, 2012 and the years ended December 31, 2011 and 2010, including selected quarterly information.

Albemarle’s operating segment results follow internal management reporting, which is used for making operating decisions and assessing performance. Historically, total pension and OPEB costs have been allocated to each of its reporting segments. In conjunction with the change to MTM, service costs (which represent the benefits earned by active employees during the period) and amortization of prior service costs/credits will continue to be

 

2


allocated to each segment. Interest costs, expected return on assets, and MTM actuarial gains and losses will be included in corporate unallocated results. Management believes this allocation will better reflect the operating results of each of its reporting segments. See the accompanying financial schedules for adjusted segment income which show the effect of the accounting change on reported segment income for the nine months ended September 30, 2012 and the years ended December 31, 2011 and 2010, including selected quarterly information.

Certain exhibits to this Form 8-K include presentations of diluted earnings per share which excludes special items, as well as segment income. These are financial measures that are not required by, nor presented in accordance with, GAAP, but are included to provide additional useful measurements to review our operations, provide transparency to investors and enable period-to-period comparability of financial performance.

Our presentations of diluted earnings per share which excludes special items should not be considered as alternatives to diluted earnings per share as determined in accordance with GAAP. Also, segment income should not be considered as an alternative to net income attributable to Albemarle Corporation as determined in accordance with GAAP. The Company has included in the press release certain reconciliation information for these measures to their most directly comparable financial measures calculated and reported in accordance with GAAP.

The text of the release announcing this change in accounting method is filed as Exhibit 99.7 to this Form 8-K, and is incorporated herein by reference.

Section 9 — Financial Statements and Exhibits

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits.

 

99.1    Albemarle Corporation and Subsidiaries Consolidated Statements of Income – As Previously Reported and As Adjusted
99.2    Albemarle Corporation and Subsidiaries Consolidated Statements of Income – Quarterly – As Previously Reported and As Adjusted
99.3    Albemarle Corporation and Subsidiaries Segment Income Reconciliation – As Previously Reported and As Adjusted
99.4    Albemarle Corporation and Subsidiaries Segment Income Reconciliation – Quarterly – As Previously Reported and As Adjusted
99.5    Albemarle Corporation and Subsidiaries Earnings Per Diluted Share Excluding Special Items – As Previously Reported and As Adjusted
99.6    Albemarle Corporation and Subsidiaries Earnings Per Diluted Share Excluding Special Items – Quarterly – As Previously Reported and As Adjusted
99.7    Press release, dated November 15, 2012, issued by the Company.

 

3


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 15, 2012

 

ALBEMARLE CORPORATION
By:  

/s/ Karen G. Narwold

  Karen G. Narwold
  Senior Vice President, General Counsel and Corporate Secretary

 

4


EXHIBIT INDEX

 

Exhibit

Number

  

Exhibit

99.1    Albemarle Corporation and Subsidiaries Consolidated Statements of Income – As Previously Reported and As Adjusted
99.2    Albemarle Corporation and Subsidiaries Consolidated Statements of Income – Quarterly – As Previously Reported and As Adjusted
99.3    Albemarle Corporation and Subsidiaries Segment Income Reconciliation – As Previously Reported and As Adjusted
99.4    Albemarle Corporation and Subsidiaries Segment Income Reconciliation – Quarterly – As Previously Reported and As Adjusted
99.5    Albemarle Corporation and Subsidiaries Earnings Per Diluted Share Excluding Special Items – As Previously Reported and As Adjusted
99.6    Albemarle Corporation and Subsidiaries Earnings Per Diluted Share Excluding Special Items – Quarterly – As Previously Reported and As Adjusted
99.7    Press release, dated November 15, 2012, issued by the Company.

 

5

Albemarle Corporation and Subsidiaries Consolidated Statements of Income

Exhibit 99.1

Albemarle Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

Nine Months Ended September 30, 2012

   As Previously
Reported
    Effect of
Accounting
Change
    As Adjusted  

Net sales

   $ 2,057,824      $ —        $ 2,057,824   

Cost of goods sold

     1,352,495        (12,689     1,339,806   
  

 

 

   

 

 

   

 

 

 

Gross profit

     705,329        12,689        718,018   

Selling, general and administrative expenses

     215,298        (26,155     189,143   

Research and development expenses

     59,791        —          59,791   

Restructuring and other charges

     101,211        (6,508     94,703   
  

 

 

   

 

 

   

 

 

 

Operating profit

     329,029        45,352        374,381   

Interest and financing expenses

     (25,134     —          (25,134

Other income, net

     1,564        —          1,564   
  

 

 

   

 

 

   

 

 

 

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

     305,459        45,352        350,811   

Income tax expense

     76,804        16,578        93,382   
  

 

 

   

 

 

   

 

 

 

Income before equity in net income of unconsolidated investments

     228,655        28,774        257,429   

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

     29,233        —          29,233   
  

 

 

   

 

 

   

 

 

 

Net income

   $ 257,888      $ 28,774      $ 286,662   

Net income attributable to noncontrolling interests

     (12,852     —          (12,852
  

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 245,036      $ 28,774      $ 273,810   
  

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 2.75      $ 0.32      $ 3.07   
  

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 2.72      $ 0.32      $ 3.04   
  

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – basic

     89,246        —          89,246   
  

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – diluted

     89,959        —          89,959   
  

 

 

   

 

 

   

 

 

 

Cash dividends declared per share of common stock

   $ 0.60      $ —        $ 0.60   
  

 

 

   

 

 

   

 

 

 


   Exhibit 99.1

 

Albemarle Corporation and Subsidiaries

  

 

CONSOLIDATED STATEMENTS OF INCOME

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

Year Ended December 31, 2011

   As Previously
Reported
    Effect of
Accounting
Change
    As Adjusted  

Net sales

   $ 2,869,005      $ —        $ 2,869,005   

Cost of goods sold

     1,891,946        22,112        1,914,058   
  

 

 

   

 

 

   

 

 

 

Gross profit

     977,059        (22,112     954,947   

Selling, general and administrative expenses

     312,136        47,934        360,070   

Research and development expenses

     77,083        —          77,083   
  

 

 

   

 

 

   

 

 

 

Operating profit

     587,840        (70,046     517,794   

Interest and financing expenses

     (37,574     —          (37,574

Other income, net

     357        —          357   
  

 

 

   

 

 

   

 

 

 

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

     550,623        (70,046     480,577   

Income tax expense

     130,014        (25,880     104,134   
  

 

 

   

 

 

   

 

 

 

Income before equity in net income of unconsolidated investments

     420,609        (44,166     376,443   

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

     43,754        —          43,754   
  

 

 

   

 

 

   

 

 

 

Net income

   $ 464,363      $ (44,166   $ 420,197   

Net income attributable to noncontrolling interests

     (28,083     —          (28,083
  

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 436,280      $ (44,166   $ 392,114   
  

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 4.82      $ (0.49   $ 4.33   
  

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 4.77      $ (0.49   $ 4.28   
  

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – basic

     90,522        —          90,522   
  

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – diluted

     91,522        —          91,522   
  

 

 

   

 

 

   

 

 

 

Cash dividends declared per share of common stock

   $ 0.67      $ —        $ 0.67   
  

 

 

   

 

 

   

 

 

 


   Exhibit 99.1

 

Albemarle Corporation and Subsidiaries

  

 

CONSOLIDATED STATEMENTS OF INCOME

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

Year Ended December 31, 2010

   As Previously
Reported
    Effect of
Accounting
Change
    As Adjusted  

Net sales

   $ 2,362,764      $ —        $ 2,362,764   

Cost of goods sold

     1,616,842        4,012        1,620,854   
  

 

 

   

 

 

   

 

 

 

Gross profit

     745,922        (4,012     741,910   

Selling, general and administrative expenses

     265,722        8,893        274,615   

Research and development expenses

     58,394        —          58,394   

Restructuring and other charges

     6,958        —          6,958   
  

 

 

   

 

 

   

 

 

 

Operating profit

     414,848        (12,905     401,943   

Interest and financing expenses

     (25,533     —          (25,533

Other income, net

     2,788        —          2,788   
  

 

 

   

 

 

   

 

 

 

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

     392,103        (12,905     379,198   

Income tax expense

     92,719        (4,963     87,756   
  

 

 

   

 

 

   

 

 

 

Income before equity in net income of unconsolidated investments

     299,384        (7,942     291,442   

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

     37,975        —          37,975   
  

 

 

   

 

 

   

 

 

 

Net income

   $ 337,359      $ (7,942   $ 329,417   

Net income attributable to noncontrolling interests

     (13,639     —          (13,639
  

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 323,720      $ (7,942   $ 315,778   
  

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 3.54      $ (0.08   $ 3.46   
  

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 3.51      $ (0.08   $ 3.43   
  

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – basic

     91,393        —          91,393   
  

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – diluted

     92,184        —          92,184   
  

 

 

   

 

 

   

 

 

 

Cash dividends declared per share of common stock

   $ 0.56      $ —        $ 0.56   
  

 

 

   

 

 

   

 

 

 
Albemarle Corporation and Subsidiaries Consolidated Statements of Income

Exhibit 99.2

Albemarle Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME – QUARTERLY – AS PREVIOUSLY REPORTED

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

    2012     2011  
    1st Quarter     2nd Quarter     3rd Quarter     1st Quarter     2nd Quarter     3rd Quarter     4th Quarter  

Net sales

  $ 711,704      $ 684,894      $ 661,226      $ 696,530      $ 742,108      $ 722,977      $ 707,390   

Cost of goods sold

    463,817        442,209        446,469        463,514        490,159        464,965        473,308   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    247,887        242,685        214,757        233,016        251,949        258,012        234,082   

Selling, general and administrative expenses

    80,692        74,624        59,982        73,039        82,907        77,169        79,021   

Research and development expenses

    19,049        20,911        19,831        17,615        19,947        20,534        18,987   

Restructuring and other charges

    —          94,703        6,508        —          —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

    148,146        52,447        128,436        142,362        149,095        160,309        136,074   

Interest and financing expenses

    (8,734     (8,486     (7,914     (9,592     (9,274     (9,710     (8,998

Other income (expenses), net

    (118     (688     2,370        338        (760     956        (177
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

    139,294        43,273        122,892        133,108        139,061        151,555        126,899   

Income tax expense

    35,466        14,747        26,591        32,172        30,154        38,097        29,591   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before equity in net income of unconsolidated investments

    103,828        28,526        96,301        100,936        108,907        113,458        97,308   

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

    8,586        12,712        7,935        12,831        14,787        9,500        6,636   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 112,414      $ 41,238      $ 104,236      $ 113,767      $ 123,694      $ 122,958      $ 103,944   

Net income attributable to noncontrolling interests

    (4,371     (3,506     (4,975     (7,187     (9,535     (6,860     (4,501
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

  $ 108,043      $ 37,732      $ 99,261      $ 106,580      $ 114,159      $ 116,098      $ 99,443   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

  $ 1.21      $ 0.42      $ 1.11      $ 1.16      $ 1.24      $ 1.29      $ 1.12   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

  $ 1.20      $ 0.42      $ 1.10      $ 1.15      $ 1.23      $ 1.28      $ 1.11   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – basic

    88,997        89,414        89,327        91,633        91,713        89,935        88,805   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – diluted

    89,947        90,051        89,879        92,517        92,795        90,958        89,819   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per share of common stock

  $ 0.20      $ 0.20      $ 0.20      $ 0.165      $ 0.165      $ 0.165      $ 0.175   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


   Exhibit 99.2

 

Albemarle Corporation and Subsidiaries

  

 

CONSOLIDATED STATEMENTS OF INCOME – QUARTERLY – AS ADJUSTED

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

    2012     2011  
    1st Quarter     2nd Quarter     3rd Quarter     1st Quarter     2nd Quarter     3rd Quarter     4th Quarter  

Net sales

  $ 711,704      $ 684,894      $ 661,226      $ 696,530      $ 742,108      $ 722,977      $ 707,390   

Cost of goods sold

    460,724        435,606        443,476        461,172        489,731        462,575        500,580   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    250,980        249,288        217,750        235,358        252,377        260,402        206,810   

Selling, general and administrative expenses

    74,004        61,735        53,404        68,343        82,307        72,394        137,026   

Research and development expenses

    19,049        20,911        19,831        17,615        19,947        20,534        18,987   

Restructuring and other charges

    —          94,703        —          —          —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

    157,927        71,939        144,515        149,400        150,123        167,474        50,797   

Interest and financing expenses

    (8,734     (8,486     (7,914     (9,592     (9,274     (9,710     (8,998

Other income (expenses), net

    (118     (688     2,370        338        (760     956        (177
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

    149,075        62,765        138,971        140,146        140,089        158,720        41,622   

Income tax expense (benefit)

    39,028        21,882        32,472        34,729        30,498        40,698        (1,791
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before equity in net income of unconsolidated investments

    110,047        40,883        106,499        105,417        109,591        118,022        43,413   

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

    8,586        12,712        7,935        12,831        14,787        9,500        6,636   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 118,633      $ 53,595      $ 114,434      $ 118,248      $ 124,378      $ 127,522      $ 50,049   

Net income attributable to noncontrolling interests

    (4,371     (3,506     (4,975     (7,187     (9,535     (6,860     (4,501
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

  $ 114,262      $ 50,089      $ 109,459      $ 111,061      $ 114,843      $ 120,662      $ 45,548   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

  $ 1.28      $ 0.56      $ 1.23      $ 1.21      $ 1.25      $ 1.34      $ 0.51   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

  $ 1.27      $ 0.56      $ 1.22      $ 1.20      $ 1.24      $ 1.33      $ 0.51   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – basic

    88,997        89,414        89,327        91,633        91,713        89,935        88,805   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding – diluted

    89,947        90,051        89,879        92,517        92,795        90,958        89,819   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per share of common stock

  $ 0.20      $ 0.20      $ 0.20      $ 0.165      $ 0.165      $ 0.165      $ 0.175   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Additional Information

It should be noted that Net income attributable to Albemarle Corporation (“earnings”) per diluted share which excludes special items, as well as segment income, are financial measures that are not required by, or presented in accordance with, GAAP. These measures are presented below to provide additional useful measurements to review our operations, provide transparency to investors and enable period-to-period comparability of financial performance. Also included in the presentations below are reconciliations of these non-GAAP measures to their most directly comparable financial measures calculated and reported in accordance with GAAP.

Albemarle Corporation and Subsidiaries Segment Income Reconciliation

Exhibit 99.3

Albemarle Corporation and Subsidiaries

SEGMENT INCOME RECONCILIATION

 

(In Thousands; Unaudited)

 

Nine Months Ended September 30, 2012

   As Previously
Reported
    Effect of
Accounting
Change
    As Adjusted  

Segment income:

      

Polymer Solutions

   $ 161,189      $ 5,161      $ 166,350   

Catalysts

     209,932        3,448        213,380   

Fine Chemistry

     123,966        6,860        130,826   
  

 

 

   

 

 

   

 

 

 

Total segment income

     495,087        15,469        510,556   

Corporate & other

     (48,466     23,375        (25,091

Restructuring and other charges

     (101,211     6,508        (94,703

Interest and financing expenses

     (25,134     —          (25,134

Other income, net

     1,564        —          1,564   

Income tax expense

     (76,804     (16,578     (93,382
  

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 245,036      $ 28,774      $ 273,810   
  

 

 

   

 

 

   

 

 

 

 

Year Ended December 31, 2011

   As Previously
Reported
    Effect of
Accounting
Change
    As Adjusted  

Segment income:

      

Polymer Solutions

   $ 237,811      $ 3,478      $ 241,289   

Catalysts

     323,601        2,723        326,324   

Fine Chemistry

     139,578        4,842        144,420   
  

 

 

   

 

 

   

 

 

 

Total segment income

     700,990        11,043        712,033   

Corporate & other

     (97,479     (81,089     (178,568

Interest and financing expenses

     (37,574     —          (37,574

Other income, net

     357        —          357   

Income tax expense

     (130,014     25,880        (104,134
  

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 436,280      $ (44,166   $ 392,114   
  

 

 

   

 

 

   

 

 

 

 

Year Ended December 31, 2010

   As Previously
Reported
    Effect of
Accounting
Change
    As Adjusted  

Segment income:

      

Polymer Solutions

   $ 198,261      $ 2,300      $ 200,561   

Catalysts

     248,773        1,670        250,443   

Fine Chemistry

     72,148        4,074        76,222   
  

 

 

   

 

 

   

 

 

 

Total segment income

     519,182        8,044        527,226   

Corporate & other

     (73,040     (20,949     (93,989

Restructuring and other charges

     (6,958     —          (6,958

Interest and financing expenses

     (25,533     —          (25,533

Other income, net

     2,788        —          2,788   

Income tax expense

     (92,719     4,963        (87,756
  

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 323,720      $ (7,942   $ 315,778   
  

 

 

   

 

 

   

 

 

 
Albemarle Corporation and Subsidiaries Segment Income Reconciliation

Exhibit 99.4

Albemarle Corporation and Subsidiaries

SEGMENT INCOME RECONCILIATION – QUARTERLY – AS PREVIOUSLY REPORTED

 

(In Thousands; Unaudited)

 

     2012     2011  
     1st Quarter     2nd Quarter     3rd Quarter     1st Quarter     2nd Quarter     3rd Quarter     4th Quarter  

Segment income:

              

Polymer Solutions

   $ 53,555      $ 64,073      $ 43,561      $ 69,474      $ 77,167      $ 54,555      $ 36,615   

Catalysts

     82,156        67,103        60,673        72,592        65,603        101,852        83,554   

Fine Chemistry

     38,552        43,751        41,663        29,534        37,410        30,004        42,630   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total segment income

     174,263        174,927        145,897        171,600        180,180        186,411        162,799   

Corporate & other

     (21,902     (18,571     (7,993     (23,594     (25,833     (23,462     (24,590

Restructuring and other charges

     —          (94,703     (6,508     —          —          —          —     

Interest and financing expenses

     (8,734     (8,486     (7,914     (9,592     (9,274     (9,710     (8,998

Other income (expenses), net

     (118     (688     2,370        338        (760     956        (177

Income tax expense

     (35,466     (14,747     (26,591     (32,172     (30,154     (38,097     (29,591
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 108,043      $ 37,732      $ 99,261      $ 106,580      $ 114,159      $ 116,098      $ 99,443   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SEGMENT INCOME RECONCILIATION – QUARTERLY – AS ADJUSTED

 

(In Thousands; Unaudited)

 

     2012     2011  
     1st Quarter     2nd Quarter     3rd Quarter     1st Quarter     2nd Quarter     3rd Quarter     4th Quarter  

Segment income:

              

Polymer Solutions

   $ 55,390      $ 65,669      $ 45,291      $ 70,304      $ 78,092      $ 55,436      $ 37,457   

Catalysts

     83,382        68,169        61,829        73,242        66,327        102,542        84,213   

Fine Chemistry

     40,991        45,872        43,963        30,689        38,697        31,231        43,803   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total segment income

     179,763        179,710        151,083        174,235        183,116        189,209        165,473   

Corporate & other

     (17,621     (3,862     (3,608     (19,191     (27,741     (19,095     (112,541

Restructuring and other charges

     —          (94,703     —          —          —          —          —     

Interest and financing expenses

     (8,734     (8,486     (7,914     (9,592     (9,274     (9,710     (8,998

Other income (expenses), net

     (118     (688     2,370        338        (760     956        (177

Income tax (expense) benefit

     (39,028     (21,882     (32,472     (34,729     (30,498     (40,698     1,791   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Albemarle Corporation

   $ 114,262      $ 50,089      $ 109,459      $ 111,061      $ 114,843      $ 120,662      $ 45,548   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Albemarle Corporation and Subsidiaries Earnings Per Diluted Share

Exhibit 99.5

Albemarle Corporation and Subsidiaries

EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEMS

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

Nine Months Ended September 30, 2012

   As Previously
Reported
     Effect of
Accounting
Change
    As Adjusted  

Net income attributable to Albemarle Corporation

   $ 245,036       $ 28,774      $ 273,810   

Diluted earnings per share

     2.72         0.32        3.04   

Special items per share

       

Non-operating pension and OPEB adjustments (a)

     —           (0.13     (0.13

Restructuring and other charges (b)

     0.82         (0.05     0.77   
  

 

 

    

 

 

   

 

 

 

Diluted earnings per share excluding special items

   $ 3.54       $ 0.14      $ 3.68   
  

 

 

    

 

 

   

 

 

 

 

(a) Non-operating pension and OPEB adjustments for the nine months ended September 30, 2012 included net benefits amounting to $18.9 million ($11.9 million after income taxes, or $0.13 per share) that related to pension and OPEB plan actuarial net gains as well as interest costs and expected return on assets.
(b) The nine months ended September 30, 2012 included charges amounting to $94.7 million ($73.6 million after income taxes, or $0.82 per share) in connection with our exit of the phosphorus flame retardants business. The nine months ended September 30, 2012 also includes $4.1 million, or $0.05 per share, in after-tax charges ($6.5 million before tax) related to a supplemental executive retirement plan (SERP) settlement, and $4.5 million, or $0.05 per share, of net tax benefits related principally to the release of various tax reserves.

 

Year Ended December 31, 2011

   As Previously
Reported
     Effect of
Accounting
Change
    As Adjusted  

Net income attributable to Albemarle Corporation

   $ 436,280       $ (44,166   $ 392,114   

Diluted earnings per share

     4.77         (0.49     4.28   

Special items per share

       

Non-operating pension and OPEB adjustments (a)

     —           0.59        0.59   
  

 

 

    

 

 

   

 

 

 

Diluted earnings per share excluding special items (b)

   $ 4.77       $ 0.11      $ 4.88   
  

 

 

    

 

 

   

 

 

 

 

(a) Non-operating pension and OPEB adjustments for the year ended December 31, 2011 included net charges amounting to $85.8 million ($54.2 million after income taxes, or $0.59 per share) that related to pension and OPEB plan actuarial net losses as well as interest costs and expected return on assets.
(b) Totals may not add due to rounding.

 

Year Ended December 31, 2010

   As Previously
Reported
     Effect of
Accounting
Change
    As Adjusted  

Net income attributable to Albemarle Corporation

   $ 323,720       $ (7,942   $ 315,778   

Diluted earnings per share

     3.51         (0.08     3.43   

Special items per share

       

Non-operating pension and OPEB adjustments (a)

     —           0.17        0.17   

Restructuring and other charges (b)

     0.05         —          0.05   
  

 

 

    

 

 

   

 

 

 

Diluted earnings per share excluding special items

   $ 3.56       $ 0.09      $ 3.65   
  

 

 

    

 

 

   

 

 

 

 

(a) Non-operating pension and OPEB adjustments for the year ended December 31, 2010 included net charges amounting to $24.9 million ($15.8 million after income taxes, or $0.17 per share) that related to pension and OPEB plan actuarial net losses as well as interest costs and expected return on assets.
(b) The year ended December 31, 2010 included charges amounting to $7.0 million ($4.6 million after income taxes, or $0.05 per share) that related principally to reductions in force at our Bergheim, Germany site.
Albemarle Corporation and Subsidiaries Earnings Per Diluted Share

Exhibit 99.6

Albemarle Corporation and Subsidiaries

EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEMS – QUARTERLY – AS PREVIOUSLY REPORTED

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

     2012     2011  
     1st Quarter      2nd Quarter      3rd Quarter     1st Quarter      2nd Quarter      3rd Quarter      4th Quarter  

Net income attributable to Albemarle Corporation

   $ 108,043       $ 37,732       $ 99,261      $ 106,580       $ 114,159       $ 116,098       $ 99,443   

Diluted earnings per share

     1.20         0.42         1.10        1.15         1.23         1.28         1.11   

Special items per share

                   

Restructuring and other charges (a)

     —           0.82         0.05        —           —           —           —     

Discrete net tax benefits (b)

     —           —           (0.05     —           —           —           —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per share excluding special items

   $ 1.20       $ 1.24       $ 1.10      $ 1.15       $ 1.23       $ 1.28       $ 1.11   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) The quarter ended June 30, 2012 included charges amounting to $94.7 million ($73.6 million after income taxes, or $0.82 per share) in connection with our exit of the phosphorus flame retardants business.

The quarter ended September 30, 2012 included $4.1 million, or $0.05 per share, in after-tax charges ($6.5 million before tax) related to a SERP settlement.

 

(b) The quarter ended September 30, 2012 included $4.5 million, or $0.05 per share, of net tax benefits related principally to the release of various tax reserves.

EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEMS – QUARTERLY – AS ADJUSTED

 

(In Thousands, Except Per Share Amounts; Unaudited)

 

     2012     2011  
     1st Quarter     2nd Quarter     3rd Quarter     1st Quarter     2nd Quarter      3rd Quarter     4th Quarter  

Net income attributable to Albemarle Corporation

   $ 114,262      $ 50,089      $ 109,459      $ 111,061      $ 114,843       $ 120,662      $ 45,548   

Diluted earnings per share

     1.27        0.56        1.22        1.20        1.24         1.33        0.51   

Special items per share

               

Non-operating pension and OPEB adjustments (a)

     (0.02     (0.09     (0.02     (0.02     0.02         (0.02     0.63   

Restructuring and other charges (b)

     —          0.82        —          —          —           —          —     

Discrete net tax benefits (c)

     —          —          (0.05     —          —           —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Diluted earnings per share excluding special items (d)

   $ 1.25      $ 1.28      $ 1.15      $ 1.18      $ 1.26       $ 1.30      $ 1.13   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

(a) Non-operating pension and OPEB adjustments for the quarter ended March 31, 2012 included net benefits amounting to $2.7 million ($1.7 million after income taxes, or $0.02 per share) that related to interest costs and expected return on assets.

Non-operating pension and OPEB adjustments for the quarter ended June 30, 2012 included net benefits amounting to $13.3 million ($8.4 million after income taxes, or $0.09 per share) that related to pension and OPEB plan actuarial net gains as well as interest costs and expected return on assets.

Non-operating pension and OPEB adjustments for the quarter ended September 30, 2012 included net benefits amounting to $2.9 million ($1.8 million after income taxes, or $0.02 per share) that related to interest costs and expected return on assets.

Non-operating pension and OPEB adjustments for the quarter ended March 31, 2011 included net benefits amounting to $3.3 million ($2.1 million after income taxes, or $0.02 per share) that related to interest costs and expected return on assets.

Non-operating pension and OPEB adjustments for the quarter ended June 30, 2011 included net charges amounting to $3.2 million ($2.0 million after income taxes, or $0.02 per share) that related to pension and OPEB plan actuarial net losses as well as interest costs and expected return on assets.


   Exhibit 99.6

 

Albemarle Corporation and Subsidiaries

  

 

Non-operating pension and OPEB adjustments for the quarter ended September 30, 2011 included net benefits amounting to $3.2 million ($2.0 million after income taxes, or $0.02 per share) that related to interest costs and expected return on assets.

Non-operating pension and OPEB adjustments for the quarter ended December 31, 2011 included net charges amounting to $89.1 million ($56.3 million after income taxes, or $0.63 per share) that related to pension and OPEB plan actuarial net losses as well as interest costs and expected return on assets.

 

(b) The quarter ended June 30, 2012 included charges amounting to $94.7 million ($73.6 million after income taxes, or $0.82 per share) in connection with our exit of the phosphorus flame retardants business.
(c) The quarter ended September 30, 2012 included $4.5 million, or $0.05 per share, of net tax benefits related principally to the release of various tax reserves.
(d) Totals may not add due to rounding.
Press Release

Exhibit 99.7

 

LOGO

Albemarle announces change in pension accounting

BATON ROUGE, LA, November 15, 2012 – Albemarle Corporation (NYSE: ALB), a leader in the global specialty chemicals market, announced today that it plans to change its method of accounting for deferred actuarial gains and losses relating to its global pension and other postretirement benefit (OPEB) plans to a more preferable method in accordance with generally accepted accounting principles in the United States (GAAP). This new accounting method, referred to as mark-to-market (MTM) accounting, will be adopted in the fourth quarter 2012 and will be retrospectively applied to the Company’s financial results for all periods to be presented in its annual report on Form 10-K for the year ended December 31, 2012.

“We believe this accounting change will provide greater transparency to our operating results that will allow investors to more clearly evaluate the Company’s underlying operating performance by recognizing actuarial gains and losses from our pension and OPEB plans in the year in which the gains and losses occur, rather than amortizing them over future periods,” said Scott Tozier, Albemarle’s Senior Vice President and Chief Financial Officer. “This change will also improve transparency by recognizing the effects of economic and interest rate trends on pension and OPEB plan investments and assumptions in the year changes in these trends occur. This methodology is preferable under GAAP since it aligns more closely with fair value principles. Also, this accounting change has no impact on benefits received by participants of these plans or on the Company’s related funding obligations.”

Under MTM accounting, the Company’s pre-tax pension and OPEB costs for the nine-month period ended September 30, 2012 would have been lower than previously reported by approximately $45 million. These lower costs would have resulted in an increase in diluted earnings per share of approximately $0.32 for the nine months ended September 30, 2012.

About Albemarle

Albemarle Corporation, headquartered in Baton Rouge, Louisiana, is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services. Albemarle is committed to global sustainability and is advancing its eco-practices and solutions in its three business segments, Polymer Solutions, Catalysts and Fine Chemistry. Corporate Responsibility Magazine selected Albemarle to its prestigious “100 Best Corporate Citizens” list for 2010 and 2011. Albemarle employs approximately 4,000 people and serves customers in approximately 100 countries. Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, Regulation G reconciliations, SEC filings and other information regarding the Company, its businesses and markets served.

Forward-Looking Statements

Some of the information presented in this press release, including, without limitation, statements with respect to product development, changes in productivity, market trends, price and mix changes, expected growth, outlook and all other information relating to matters that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ from expectations include, without limitation: changes in economic and business conditions; changes in financial and operating performance of our major customers and industries and markets served by us; the timing of orders received from customers; the gain or loss of significant customers; competition from other manufacturers; changes in the demand for our products; limitations or prohibitions on the manufacture and sale of our products; availability of raw materials; changes in the


   Exhibit 99.7

 

cost of raw materials and energy and in our ability to pass through increases; acquisitions and divestitures, and changes in performance of acquired companies; fluctuations in foreign currencies; changes in laws and government regulation impacting our operations or our products; the occurrence of claims or litigation; the occurrence of natural disasters; the inability to maintain current levels of product or premises liability insurance or the denial of such coverage; political unrest, including terrorism or hostilities; political instability affecting our manufacturing operations or joint ventures; changes in accounting standards; the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs; changes in the jurisdictional mix of our earnings; changes in monetary policies or inflation or interest rates, which may impact our ability to raise capital or increase our cost of funds, the performance of our pension fund investments and our pension expense and funding obligations; volatility and substantial uncertainties in the debt and equity markets; technology or intellectual property infringement and other risks; decisions we may make in the future; and the other factors detailed from time to time in the reports we file with the SEC, including those described under “Risk Factors” in our Annual Report on Form 10-K and our 2012 Quarterly Reports on Form 10-Q.

Media Contact: Ashley Mendoza, (225) 388-7137, Ashley.Mendoza@albemarle.com

Investor Relations Contact: Lorin Crenshaw, (225) 388-7322, Lorin.Crenshaw@albemarle.com