Document
false--12-31Q1202000009159130.037371100037000000.36750.3850.010.011060400001063190001060400001063190000.05450.04150.018750.011250.016250.03450.05450.04150.011250.016250.03453850000239800018310005659000569600035330003811000227500015850004342000593800032740001169000962000P1YP2YP1Y0 0000915913 2020-01-01 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember 2020-01-01 2020-03-31 0000915913 2020-05-04 0000915913 2019-01-01 2019-03-31 0000915913 2020-03-31 0000915913 2019-12-31 0000915913 us-gaap:ParentMember 2019-01-01 2019-03-31 0000915913 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000915913 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000915913 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000915913 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000915913 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000915913 us-gaap:RetainedEarningsMember 2019-12-31 0000915913 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000915913 us-gaap:CommonStockMember 2018-12-31 0000915913 us-gaap:CommonStockMember 2019-03-31 0000915913 us-gaap:CommonStockMember 2020-03-31 0000915913 us-gaap:RetainedEarningsMember 2019-03-31 0000915913 us-gaap:NoncontrollingInterestMember 2018-12-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0000915913 us-gaap:RetainedEarningsMember 2020-03-31 0000915913 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000915913 us-gaap:ParentMember 2019-12-31 0000915913 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:NoncontrollingInterestMember 2019-12-31 0000915913 us-gaap:NoncontrollingInterestMember 2019-03-31 0000915913 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000915913 2018-12-31 0000915913 us-gaap:ParentMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000915913 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000915913 us-gaap:CommonStockMember 2019-12-31 0000915913 2019-03-31 0000915913 us-gaap:ParentMember 2020-03-31 0000915913 us-gaap:NoncontrollingInterestMember 2020-03-31 0000915913 us-gaap:RetainedEarningsMember 2018-12-31 0000915913 us-gaap:ParentMember 2018-12-31 0000915913 us-gaap:ParentMember 2019-03-31 0000915913 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000915913 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember us-gaap:BuildingAndBuildingImprovementsMember 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember us-gaap:ConstructionInProgressMember 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember us-gaap:MachineryAndEquipmentMember 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember alb:LongTermMineralRightsAndProductionEquipmentCostsMember 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember alb:LithiumHydroxideConversionAssetsMember 2020-01-01 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember us-gaap:LandImprovementsMember 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember 2019-10-31 2019-10-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember alb:MineralReservesMember 2020-03-31 0000915913 alb:LithiumHydroxideConversionAssetsMember 2019-10-31 2019-10-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-01-01 2020-03-31 0000915913 alb:WodginaLithiumOperationsPty.Ltd.Member 2019-10-31 2019-10-31 0000915913 us-gaap:TrademarksAndTradeNamesMember 2019-12-31 0000915913 us-gaap:OtherIntangibleAssetsMember 2020-01-01 2020-03-31 0000915913 alb:PatentsAndTechnologyMember 2019-12-31 0000915913 alb:CustomerListsAndRelationshipsMember 2020-01-01 2020-03-31 0000915913 us-gaap:TrademarksAndTradeNamesMember 2020-03-31 0000915913 alb:PatentsAndTechnologyMember 2020-01-01 2020-03-31 0000915913 us-gaap:TrademarksAndTradeNamesMember 2020-01-01 2020-03-31 0000915913 alb:CustomerListsAndRelationshipsMember 2020-03-31 0000915913 us-gaap:OtherIntangibleAssetsMember 2020-03-31 0000915913 alb:PatentsAndTechnologyMember 2020-03-31 0000915913 us-gaap:OtherIntangibleAssetsMember 2019-12-31 0000915913 alb:CustomerListsAndRelationshipsMember 2019-12-31 0000915913 us-gaap:OperatingSegmentsMember alb:LithiumMember 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:CatalystsMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2019-12-31 0000915913 us-gaap:OperatingSegmentsMember alb:LithiumMember 2019-12-31 0000915913 us-gaap:OperatingSegmentsMember alb:CatalystsMember 2019-12-31 0000915913 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:MineralResourcesLimitedWodginaProjectMember alb:CatalystsMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:CatalystsMember 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:LithiumMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:MineralResourcesLimitedWodginaProjectMember alb:LithiumMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:BromineSpecialtiesMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:MineralResourcesLimitedWodginaProjectMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:BromineSpecialtiesMember 2019-12-31 0000915913 us-gaap:OperatingSegmentsMember alb:BromineSpecialtiesMember 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:MineralResourcesLimitedWodginaProjectMember alb:BromineSpecialtiesMember 2020-01-01 2020-03-31 0000915913 2020-02-28 0000915913 us-gaap:SubsequentEventMember 2020-05-04 0000915913 alb:LithiumMember 2020-03-31 0000915913 alb:LithiumMember 2019-12-31 0000915913 alb:JointVentureWindfieldHoldingsMember 2020-03-31 0000915913 alb:JointVentureWindfieldHoldingsMember 2019-12-31 0000915913 alb:OtherVariableInterestEntitiesExcludingWindfieldHoldingsMember 2020-03-31 0000915913 alb:OtherVariableInterestEntitiesExcludingWindfieldHoldingsMember 2019-12-31 0000915913 alb:FivePointFourFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2020-03-31 0000915913 alb:VariablerateforeignbankloansMember 2019-12-31 0000915913 alb:FivePointFourFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2019-12-31 0000915913 alb:ThreePointFourFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2020-03-31 0000915913 alb:OnePointEightSevenFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2020-03-31 0000915913 alb:OnePointSixTwoFivePercentNotesMember us-gaap:UnsecuredDebtMember 2020-03-31 0000915913 alb:OnePointOneTwoFivePercentNoteMember us-gaap:UnsecuredDebtMember 2019-12-31 0000915913 alb:FloatingRateNotesMember us-gaap:UnsecuredDebtMember 2020-03-31 0000915913 us-gaap:CapitalLeaseObligationsMember 2020-03-31 0000915913 alb:ThreePointFourFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2019-12-31 0000915913 us-gaap:RevolvingCreditFacilityMember 2020-03-31 0000915913 alb:VariablerateforeignbankloansMember 2020-03-31 0000915913 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0000915913 alb:OnePointEightSevenFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2019-12-31 0000915913 us-gaap:CommercialPaperMember 2019-12-31 0000915913 us-gaap:CapitalLeaseObligationsMember 2019-12-31 0000915913 alb:FloatingRateNotesMember us-gaap:UnsecuredDebtMember 2019-12-31 0000915913 alb:FourPointOneFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2019-12-31 0000915913 alb:OnePointOneTwoFivePercentNoteMember us-gaap:UnsecuredDebtMember 2020-03-31 0000915913 us-gaap:CommercialPaperMember 2020-03-31 0000915913 alb:FourPointOneFivePercentSeniorNotesMember us-gaap:SeniorNotesMember 2020-03-31 0000915913 alb:OnePointSixTwoFivePercentNotesMember us-gaap:UnsecuredDebtMember 2019-12-31 0000915913 alb:A2019CreditAgreementMember us-gaap:SubsequentEventMember 2020-04-01 2020-04-30 0000915913 alb:OnePointEightSevenFivePercentSeniorNotesMember 2020-03-31 0000915913 us-gaap:CommercialPaperMember 2020-01-01 2020-03-31 0000915913 alb:A2018CreditAgreementMember 2020-01-01 2020-03-31 0000915913 us-gaap:CommercialPaperMember 2020-03-31 0000915913 us-gaap:CommercialPaperMember 2020-01-01 2020-03-31 0000915913 alb:OnePointSixTwoFivePercentNotesMember 2020-03-31 0000915913 alb:OnePointSixTwoFivePercentNotesMember 2019-12-31 0000915913 alb:ThreePointFourFivePercentSeniorNotesMember 2020-03-31 0000915913 alb:FivePointFourFivePercentSeniorNotesMember 2019-12-31 0000915913 alb:OnePointOneTwoFivePercentNoteMember 2019-12-31 0000915913 alb:FourPointOneFivePercentSeniorNotesMember 2020-03-31 0000915913 alb:FourPointOneFivePercentSeniorNotesMember 2019-12-31 0000915913 alb:OnePointEightSevenFivePercentSeniorNotesMember 2019-12-31 0000915913 alb:FloatingRateNotesMember 2019-12-31 0000915913 alb:FivePointFourFivePercentSeniorNotesMember 2020-03-31 0000915913 alb:OnePointOneTwoFivePercentNoteMember 2020-03-31 0000915913 alb:ThreePointFourFivePercentSeniorNotesMember 2019-12-31 0000915913 alb:FloatingRateNotesMember 2020-03-31 0000915913 srt:MaximumMember 2020-01-01 2020-03-31 0000915913 srt:MinimumMember 2020-01-01 2020-03-31 0000915913 us-gaap:OtherNoncurrentLiabilitiesMember 2019-12-31 0000915913 us-gaap:OtherNoncurrentLiabilitiesMember 2020-03-31 0000915913 srt:MaximumMember alb:NonrealestateMember 2020-03-31 0000915913 srt:MaximumMember 2020-03-31 0000915913 srt:MaximumMember us-gaap:BuildingMember 2020-03-31 0000915913 srt:MinimumMember 2020-03-31 0000915913 srt:MinimumMember us-gaap:BuildingMember 2020-03-31 0000915913 srt:MinimumMember alb:NonrealestateMember 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:ReportableSegmentsSubtotalMember 2019-01-01 2019-03-31 0000915913 us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:CatalystsMember 2019-01-01 2019-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:BromineSpecialtiesMember 2019-01-01 2019-03-31 0000915913 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-03-31 0000915913 us-gaap:CorporateNonSegmentMember 2020-01-01 2020-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:LithiumMember 2019-01-01 2019-03-31 0000915913 us-gaap:OperatingSegmentsMember alb:ReportableSegmentsSubtotalMember 2020-01-01 2020-03-31 0000915913 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000915913 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-03-31 0000915913 us-gaap:OtherNonoperatingIncomeExpenseMember 2020-01-01 2020-03-31 0000915913 us-gaap:OtherNonoperatingIncomeExpenseMember 2019-01-01 2019-03-31 0000915913 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-01-01 2020-03-31 0000915913 us-gaap:CostOfSalesMember 2020-01-01 2020-03-31 0000915913 us-gaap:CostOfSalesMember 2019-01-01 2019-03-31 0000915913 us-gaap:PensionPlansDefinedBenefitMember 2019-01-01 2019-03-31 0000915913 us-gaap:PensionPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000915913 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000915913 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2019-01-01 2019-03-31 0000915913 us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2020-03-31 0000915913 us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0000915913 us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0000915913 us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2019-12-31 0000915913 us-gaap:AccruedLiabilitiesMember us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2020-03-31 0000915913 us-gaap:AccruedLiabilitiesMember us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0000915913 alb:OtherNetMember us-gaap:ForwardContractsMember 2020-01-01 2020-03-31 0000915913 alb:OtherNetMember us-gaap:ForwardContractsMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccruedLiabilitiesMember us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2019-12-31 0000915913 us-gaap:OtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0000915913 us-gaap:OtherLiabilitiesMember us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0000915913 us-gaap:OtherAssetsMember us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0000915913 us-gaap:OtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2019-12-31 0000915913 us-gaap:OtherCurrentAssetsMember us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2020-03-31 0000915913 us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-03-31 0000915913 us-gaap:ForwardContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-01-01 2020-03-31 0000915913 us-gaap:OtherNonoperatingIncomeExpenseMember us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2020-01-01 2020-03-31 0000915913 us-gaap:OtherNonoperatingIncomeExpenseMember us-gaap:ForwardContractsMember us-gaap:NondesignatedMember 2019-01-01 2019-03-31 0000915913 us-gaap:FairValueInputsLevel3Member 2019-12-31 0000915913 us-gaap:FairValueInputsLevel1Member 2019-12-31 0000915913 us-gaap:FairValueInputsLevel2Member 2019-12-31 0000915913 us-gaap:FairValueInputsLevel2Member 2020-03-31 0000915913 us-gaap:FairValueInputsLevel1Member 2020-03-31 0000915913 us-gaap:FairValueInputsLevel3Member 2020-03-31 0000915913 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000915913 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000915913 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000915913 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000915913 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000915913 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000915913 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000915913 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000915913 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000915913 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000915913 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000915913 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000915913 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000915913 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000915913 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000915913 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000915913 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000915913 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000915913 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000915913 us-gaap:EquityMethodInvesteeMember 2020-03-31 0000915913 us-gaap:EquityMethodInvesteeMember 2019-12-31 0000915913 us-gaap:EquityMethodInvesteeMember 2019-01-01 2019-03-31 0000915913 us-gaap:EquityMethodInvesteeMember 2020-01-01 2020-03-31 0000915913 alb:MineralResourcesLimitedWodginaProjectMember alb:LithiumHydroxideConversionAssetsMember 2019-10-31 2020-03-31 alb:segment xbrli:shares iso4217:USD xbrli:pure iso4217:USD xbrli:shares iso4217:AUD

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_________________________________________________ 
FORM 10-Q
_________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 2020
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 May 4, 2020: 106,318,614



ALBEMARLE CORPORATION
INDEX – FORM 10-Q
 
 
 
 
 
 
Page
Number(s)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8-24
 
 
 
25-37
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXHIBITS
 
 

2


PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements (Unaudited).
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)

 
Three Months Ended
March 31,
 
2020
 
2019
Net sales
$
738,845

 
$
832,064

Cost of goods sold
496,827

 
548,578

Gross profit
242,018

 
283,486

Selling, general and administrative expenses
101,877

 
113,355

Research and development expenses
16,097

 
14,977

Operating profit
124,044

 
155,154

Interest and financing expenses
(16,885
)
 
(12,586
)
Other income, net
8,314

 
11,291

Income before income taxes and equity in net income of unconsolidated investments
115,473

 
153,859

Income tax expense
18,442

 
37,514

Income before equity in net income of unconsolidated investments
97,031

 
116,345

Equity in net income of unconsolidated investments (net of tax)
26,604

 
35,181

Net income
123,635

 
151,526

Net income attributable to noncontrolling interests
(16,431
)
 
(17,957
)
Net income attributable to Albemarle Corporation
$
107,204

 
$
133,569

Basic earnings per share
$
1.01

 
$
1.26

Diluted earnings per share
$
1.01

 
$
1.26

Weighted-average common shares outstanding – basic
106,227

 
105,799

Weighted-average common shares outstanding – diluted
106,512

 
106,356

See accompanying Notes to the Condensed Consolidated Financial Statements.

3


ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In Thousands)
(Unaudited)

 
Three Months Ended
March 31,
 
2020
 
2019
Net income
$
123,635

 
$
151,526

Other comprehensive (loss) income, net of tax:
 
 
 
Foreign currency translation
(81,986
)
 
(10,855
)
Pension and postretirement benefits
9

 
7

Net investment hedge
2,081

 
3,304

Cash flow hedge
(51,460
)
 

Interest rate swap
648

 
641

Total other comprehensive loss, net of tax
(130,708
)
 
(6,903
)
Comprehensive (loss) income
(7,073
)
 
144,623

Comprehensive income attributable to noncontrolling interests
(16,477
)
 
(17,910
)
Comprehensive (loss) income attributable to Albemarle Corporation
$
(23,550
)
 
$
126,713

See accompanying Notes to the Condensed Consolidated Financial Statements.

4


ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
 
March 31,
 
December 31,
 
2020
 
2019
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
553,228

 
$
613,110

Trade accounts receivable, less allowance for doubtful accounts (2020 – $3,700; 2019 – $3,711)
518,703

 
612,651

Other accounts receivable
73,765

 
67,551

Inventories
853,500

 
768,984

Other current assets
155,985

 
162,813

Total current assets
2,155,181

 
2,225,109

Property, plant and equipment, at cost
6,973,817

 
6,817,843

Less accumulated depreciation and amortization
1,947,848

 
1,908,370

Net property, plant and equipment
5,025,969

 
4,909,473

Investments
543,670

 
579,813

Other assets
219,202

 
213,061

Goodwill
1,559,055

 
1,578,785

Other intangibles, net of amortization
344,561

 
354,622

Total assets
$
9,847,638

 
$
9,860,863

Liabilities And Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
573,075

 
$
574,138

Accrued expenses
491,579

 
553,160

Current portion of long-term debt
35,615

 
187,336

Dividends payable
40,715

 
38,764

Current operating lease liability
23,826

 
23,137

Income taxes payable
28,116

 
32,461

Total current liabilities
1,192,926

 
1,408,996

Long-term debt
3,105,225

 
2,862,921

Postretirement benefits
50,673

 
50,899

Pension benefits
285,851

 
292,073

Other noncurrent liabilities
768,757

 
754,536

Deferred income taxes
402,681

 
397,858

Commitments and contingencies (Note 9)

 

Equity:
 
 
 
Albemarle Corporation shareholders’ equity:
 
 
 
Common stock, $.01 par value, issued and outstanding – 106,319 in 2020 and 106,040 in 2019
1,063

 
1,061

Additional paid-in capital
1,393,681

 
1,383,446

Accumulated other comprehensive loss
(526,489
)
 
(395,735
)
Retained earnings
3,009,749

 
2,943,478

Total Albemarle Corporation shareholders’ equity
3,878,004

 
3,932,250

Noncontrolling interests
163,521

 
161,330

Total equity
4,041,525

 
4,093,580

Total liabilities and equity
$
9,847,638

 
$
9,860,863

See accompanying Notes to the Condensed Consolidated Financial Statements.

5


ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(In Thousands, Except Share Data)
 
 
 
 
Additional
Paid-in Capital
 
Accumulated Other
Comprehensive Loss
 
Retained Earnings
 
Total Albemarle
Shareholders’ Equity
 
Noncontrolling
Interests
 
Total Equity
Common Stock
 
Shares
 
Amounts
 
 
 
 
 
 
Balance at January 1, 2020
106,040,215

 
$
1,061

 
$
1,383,446

 
$
(395,735
)
 
$
2,943,478

 
$
3,932,250

 
$
161,330

 
$
4,093,580

Net income
 
 
 
 
 
 
 
 
107,204

 
107,204

 
16,431

 
123,635

Other comprehensive (loss) income
 
 
 
 
 
 
(130,754
)
 
 
 
(130,754
)
 
46

 
(130,708
)
Cash dividends declared, $0.385 per common share
 
 
 
 
 
 
 
 
(40,933
)
 
(40,933
)
 
(14,286
)
 
(55,219
)
Stock-based compensation
 
 
 
 
3,867

 
 
 
 
 
3,867

 
 
 
3,867

Exercise of stock options
193,537

 
2

 
10,193

 
 
 
 
 
10,195

 
 
 
10,195

Issuance of common stock, net
132,320

 
1

 
(1
)
 
 
 
 
 

 
 
 

Shares withheld for withholding taxes associated with common stock issuances
(47,458
)
 
(1
)
 
(3,824
)
 
 
 
 
 
(3,825
)
 
 
 
(3,825
)
Balance at March 31, 2020
106,318,614

 
$
1,063

 
$
1,393,681

 
$
(526,489
)
 
$
3,009,749

 
$
3,878,004

 
$
163,521

 
$
4,041,525

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2019
105,616,028

 
$
1,056

 
$
1,368,897

 
$
(350,682
)
 
$
2,566,050

 
$
3,585,321

 
$
173,787

 
$
3,759,108

Net income
 
 
 
 
 
 
 
 
133,569

 
133,569

 
17,957

 
151,526

Other comprehensive loss
 
 
 
 
 
 
(6,856
)
 
 
 
(6,856
)
 
(47
)
 
(6,903
)
Cash dividends declared, $0.3675 per common share
 
 
 
 
 
 
 
 
(38,935
)
 
(38,935
)
 

 
(38,935
)
Stock-based compensation
 
 
 
 
7,277

 
 
 
 
 
7,277

 
 
 
7,277

Exercise of stock options
114,128

 
1

 
2,675

 
 
 
 
 
2,676

 
 
 
2,676

Issuance of common stock, net
340,111

 
3

 
(3
)
 
 
 
 
 

 
 
 

Increase in ownership interest of noncontrolling interest
 
 
 
 
(523
)
 
 
 
 
 
(523
)
 
68

 
(455
)
Shares withheld for withholding taxes associated with common stock issuances
(120,256
)
 
(1
)
 
(10,254
)
 
 
 
 
 
(10,255
)
 
 
 
(10,255
)
Balance at March 31, 2019
105,950,011

 
$
1,059

 
$
1,368,069

 
$
(357,538
)
 
$
2,660,684

 
$
3,672,274

 
$
191,765

 
$
3,864,039

See accompanying Notes to the Condensed Consolidated Financial Statements.

6


ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
 
Three Months Ended
March 31,
 
2020
 
2019
Cash and cash equivalents at beginning of year
$
613,110

 
$
555,320

Cash flows from operating activities:
 
 
 
Net income
123,635

 
151,526

Adjustments to reconcile net income to cash flows from operating activities:
 
 
 
Depreciation and amortization
53,694

 
49,283

Gain on sale of property

 
(11,079
)
Stock-based compensation and other
2,501

 
5,556

Equity in net income of unconsolidated investments (net of tax)
(26,604
)
 
(35,181
)
Dividends received from unconsolidated investments and nonmarketable securities

 
3,034

Pension and postretirement (benefit) expense
(1,719
)
 
578

Pension and postretirement contributions
(6,113
)
 
(3,555
)
Unrealized gain on investments in marketable securities
(627
)
 
(476
)
Deferred income taxes
4,790

 
7,580

Working capital changes
17,730

 
(122,939
)
Other, net
(12,233
)
 
10,589

Net cash provided by operating activities
155,054

 
54,916

Cash flows from investing activities:
 
 
 
Acquisitions, net of cash acquired
(22,572
)
 

Capital expenditures
(214,529
)
 
(216,132
)
Proceeds from sale of property and equipment

 
10,356

Sales of marketable securities, net
2,589

 
1,090

Investments in equity and other corporate investments
(356
)
 
(2,509
)
Net cash used in investing activities
(234,868
)
 
(207,195
)
Cash flows from financing activities:
 
 
 
Proceeds from borrowings of credit agreements
250,000

 

Other (repayments) borrowings, net
(151,872
)
 
118,223

Dividends paid to shareholders
(38,982
)
 
(35,387
)
Dividends paid to noncontrolling interests
(14,286
)
 

Proceeds from exercise of stock options
10,195

 
2,676

Withholding taxes paid on stock-based compensation award distributions
(3,825
)
 
(10,255
)
Debt financing costs
(214
)
 

Net cash provided by financing activities
51,016

 
75,257

Net effect of foreign exchange on cash and cash equivalents
(31,084
)
 
(13,024
)
Decrease in cash and cash equivalents
(59,882
)
 
(90,046
)
Cash and cash equivalents at end of period
$
553,228

 
$
465,274

See accompanying Notes to the Condensed Consolidated Financial Statements.

7

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


NOTE 1—Basis of Presentation:
In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Albemarle Corporation and our wholly-owned, majority-owned and controlled subsidiaries (collectively, “Albemarle,” “we,” “us,” “our” or “the Company”) contain all adjustments necessary for a fair statement, in all material respects, of our condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, our consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in equity and condensed consolidated statements of cash flows for the three-month periods ended March 31, 2020 and 2019. All adjustments are of a normal and recurring nature. 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, 2019, which was filed with the Securities and Exchange Commission (“SEC”) on February 26, 2020. The December 31, 2019 condensed consolidated balance sheet data herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). The results of operations for the three-month period ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year.
The current novel coronavirus (“COVID-19”) pandemic is having an impact on overall global economic conditions. While we have not seen a material financial impact to date, the ultimate impact on our business will depend on the length and severity of the outbreak throughout the world. The Company has taken, and plans to continue to take, certain measures to maintain financial flexibility, including delaying certain capital expenditure projects and accelerating our cost savings initiative, while still protecting our employees and customers. In addition, on May 11, 2020, the Company amended its revolving, unsecured credit agreement dated as of June 21, 2018, as amended on August 14, 2019 (the “2018 Credit Agreement”) and unsecured credit facility entered into on August 14, 2019 (the “2019 Credit Facility”) (together “the Credit Agreements”) to modify its financial covenant based on the Company’s current expectations. As of March 31, 2020, the Company is in compliance with its financial covenant under its Credit Agreements and now expect to be in compliance with its financial covenant for at least one year from the issuance of these interim financial statements, following the amendment to the covenant. If conditions caused by the COVID-19 pandemic worsen and the Company’s earnings and cash flow from operations do not start to recover as contemplated in the Company's current plans, the Company may not be able to maintain compliance with its amended financial covenant and could have a material adverse effect on the Company. See Note 8, “Long-term Debt,” for further discussion of covenant amendment.
In addition, as of March 31, 2020, we assessed other accounting estimates based on forecasted financial information, including, but not limited to, our allowance for credit losses, the carrying value of our goodwill, intangible assets, and other long-lived assets. At this time we cannot predict the ultimate financial impact of COVID-19 on our business, and to what extent economic and operating conditions recover on a sustainable basis globally. Accordingly, if the impact is more severe or longer in duration than we have assumed, such impact could potentially result in impairments and increases in credit allowances.

NOTE 2—Acquisitions:
On October 31, 2019 (the “Acquisition Closing Date”), we completed the previously announced acquisition of a 60% interest in Mineral Resources Limited’s (“MRL”) Wodgina hard rock lithium mine project (“Wodgina Project”) for a total purchase price of approximately $1.3 billion. The purchase price is comprised of $820 million in cash and the transfer of 40% interest in certain lithium hydroxide conversion assets being built by Albemarle in Kemerton, Western Australia, valued at $480 million. The cash consideration was initially funded by the 2019 Credit Facility entered into on August 14, 2019. In addition, during the first quarter of 2020, we paid $22.6 million of agreed upon purchase price adjustments.
In addition, we have formed an unincorporated joint venture with MRL, MARBL, for the exploration, development, mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina Project and for the operation of the Kemerton assets. We are entitled to a pro rata portion of 60% of all minerals (other than iron ore and tantalum) recovered from the tenements and produced by the joint venture. The joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of assets, liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements. As part of this acquisition, MARBL Lithium Operations Pty. Ltd. (the “Manager”), an incorporated joint venture, has been formed to manage the Wodgina Project. We consolidate our 60% ownership interest in the Manager in our consolidated financial statements.

8

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

This acquisition provides access to a high-quality hard rock lithium source, further diversifying our global lithium resource base, and strengthens our position by increasing capacity to support future market demand. In the short-term, we have idled production of the Wodgina Project until market conditions support production economics.
The results of our 60% ownership interest in MARBL are reported within the Lithium segment. Included in Net income attributable to Albemarle Corporation for the three months ended March 31, 2020 is a loss of approximately $4.7 million attributable to the joint venture. There were no net sales attributable to the joint venture during this period. Included in Selling, general and administrative expenses on our consolidated statements of income for the three months ended March 31, 2020 is $0.4 million of costs directly related to this acquisition, primarily consisting of professional services and advisory fees. Pro forma financial information of the combined entities for periods prior to the acquisition is not presented due to the immaterial impact of the Net Sales and Net Income of the Wodgina Project on our consolidated statements of income.
Preliminary Purchase Price Allocation
The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their estimated fair values at the Acquisition Closing Date, which were based, in part, upon third-party appraisals for certain assets. The excess of the purchase price over the preliminary estimated fair value of the net assets acquired was approximately $19.4 million and was recorded as Goodwill.
The following table summarizes the consideration paid for the joint venture and the amounts of the assets acquired and liabilities assumed as of the acquisition date, which have been allocated on a preliminary basis (in thousands):
Total purchase price:
 
Cash paid
$
820,000

Fair value of 40% interest in Kemerton assets
480,000

Purchase agreement completion adjustment and other adjustments
23,566

Total purchase price
$
1,323,566

 
 
Net assets acquired:
 
Inventories
$
33,900

Other current assets
10,695

Property, plant and equipment:
 
Land improvements
2,912

Buildings and improvements
19,268

Machinery and equipment
163,808

Mineral rights and reserves
1,058,700

Construction in progress
103,700

Other assets
1,000

Current liabilities
(10,695
)
Long-term debt(a)
(55,806
)
Other noncurrent liabilities
(23,296
)
Total identifiable net assets
1,304,186

Goodwill
19,380

Total net assets acquired
$
1,323,566

(a)
Represents 60% ownership interest in finance lease acquired. See Note 10, “Leases,” for further information on the Company’s leases.
The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to Goodwill, is based upon preliminary information and is subject to change within the measurement-period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. Significant changes in our purchase price allocation since our initial preliminary estimates reported in the fourth quarter of 2019 were primarily related to an increase in the estimated fair values of mineral rights and reserves, which resulted in a decrease to recognized goodwill of approximately $12.4 million. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair value of Mineral rights and reserves and Goodwill. The fair value of the assets acquired and

9

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

liabilities assumed are based on management’s preliminary estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. The fair value of the mineral reserves of $1,025.9 million is determined using an excess earnings approach, which requires management to estimate future cash flows, net of capital investments in the specific operation. Management’s cash flow projections involved the use of significant estimates and assumptions with respect to the expected production of the mine over the estimated time period, sales prices, shipment volumes, and expected profit margins. The present value of the projected net cash flows represents the preliminary fair value assigned to mineral reserves. The discount rate is a significant assumption used in the valuation model.
While the Company believes that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired and liabilities assumed, it will evaluate any necessary information prior to finalization of the amounts. During the measurement-period, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect of measurement-period adjustments to the estimated fair values will be recognized in the reporting period in which they are determined. The impact of all changes that do not qualify as measurement-period adjustments will be included in current period earnings. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the consolidated financial statements could be subject to possible impairment.
Goodwill arising from the acquisition consists largely of anticipated synergies and economies of scale from the combined companies and overall strategic importance of the acquired businesses to Albemarle. The goodwill attributable to the acquisition will not be amortizable or deductible for tax purposes.

NOTE 3—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the three months ended March 31, 2020 (in thousands):
 
Lithium
 
Bromine Specialties
 
Catalysts
 
All Other
 
Total
Balance at December 31, 2019
$
1,370,846

 
$
20,319

 
$
181,034

 
$
6,586

 
$
1,578,785

   Acquisitions(a)
(12,382
)
 

 

 

 
(12,382
)
   Foreign currency translation adjustments and other
(5,335
)
 

 
(2,013
)
 

 
(7,348
)
Balance at March 31, 2020
$
1,353,129

 
$
20,319

 
$
179,021

 
$
6,586

 
$
1,559,055



(a)
Represents preliminary purchase price adjustments for the Wodgina Project acquisition. See Note 2, “Acquisitions” for additional information.


10

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

The following table summarizes the changes in other intangibles and related accumulated amortization for the three months ended March 31, 2020 (in thousands):
 
Customer Lists and Relationships
 
Trade Names and Trademarks(a)
 
Patents and Technology
 
Other
 
Total
Gross Asset Value
 
 
 
 
 
 
 
 
 
  Balance at December 31, 2019
$
422,462

 
$
18,087

 
$
55,020

 
$
41,282

 
$
536,851

Foreign currency translation adjustments and other
(1,606
)
 
(357
)
 
(310
)
 
(2,581
)
 
(4,854
)
  Balance at March 31, 2020
$
420,856

 
$
17,730

 
$
54,710

 
$
38,701

 
$
531,997

Accumulated Amortization
 
 
 
 
 
 
 
 
 
  Balance at December 31, 2019
$
(116,749
)
 
$
(7,938
)
 
$
(36,197
)
 
$
(21,345
)
 
$
(182,229
)
    Amortization
(5,544
)
 

 
(341
)
 
(215
)
 
(6,100
)
Foreign currency translation adjustments and other
420

 
14

 
130

 
329

 
893

  Balance at March 31, 2020
$
(121,873
)
 
$
(7,924
)
 
$
(36,408
)
 
$
(21,231
)
 
$
(187,436
)
Net Book Value at December 31, 2019
$
305,713

 
$
10,149

 
$
18,823

 
$
19,937

 
$
354,622

Net Book Value at March 31, 2020
$
298,983

 
$
9,806

 
$
18,302

 
$
17,470

 
$
344,561


(a)
Net Book Value includes only indefinite-lived intangible assets.

NOTE 4—Income Taxes:
The effective income tax rate for the three-month period ended March 31, 2020 was 16.0%, compared to 24.4% for the three-month period ended March 31, 2019. The Company’s effective income tax rate fluctuates based on, among other factors, its level and location of income. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-months ended March 31, 2020 was impacted by a variety of factors, primarily stemming from the location in which income was earned. For the three-month period ended March 31, 2020, this was mainly attributable to our share of the income of our Jordan Bromine Company Limited (“JBC”) joint venture, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-months ended March 31, 2019 was impacted by a variety of factors, primarily stemming from the location in which income was earned and discrete net tax expenses primarily related to uncertain tax positions.


11

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

NOTE 5—Earnings Per Share:
Basic and diluted earnings per share for the three-month periods ended March 31, 2020 and 2019 are calculated as follows (in thousands, except per share amounts):
 
Three Months Ended
March 31,
 
2020
 
2019
Basic earnings per share
 
 
 
Numerator:
 
 
 
Net income attributable to Albemarle Corporation
$
107,204

 
$
133,569

Denominator:
 
 
 
Weighted-average common shares for basic earnings per share
106,227

 
105,799

Basic earnings per share
$
1.01

 
$
1.26

 
 
 
 
Diluted earnings per share
 
 
 
Numerator:
 
 
 
Net income attributable to Albemarle Corporation
$
107,204

 
$
133,569

Denominator:
 
 
 
Weighted-average common shares for basic earnings per share
106,227

 
105,799

Incremental shares under stock compensation plans
285

 
557

Weighted-average common shares for diluted earnings per share
106,512

 
106,356

Diluted earnings per share
$
1.01

 
$
1.26


At March 31, 2020, there were 303,093 common stock equivalents not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.
On February 28, 2020, the Company increased the regular quarterly dividend by 5% to $0.385 per share and declared a cash dividend of said amount for the first quarter of 2020, which was paid on April 1, 2020 to shareholders of record at the close of business as of March 13, 2020. On May 5, 2020, the Company declared a cash dividend of $0.385 per share, which is payable on July 1, 2020 to shareholders of record at the close of business as of June 12, 2020.
NOTE 6—Inventories:
The following table provides a breakdown of inventories at March 31, 2020 and December 31, 2019 (in thousands):
 
March 31,
 
December 31,
 
2020
 
2019
Finished goods(a)
$
562,231

 
$
495,639

Raw materials and work in process(b)
221,173

 
205,781

Stores, supplies and other
70,096

 
67,564

Total
$
853,500

 
$
768,984



(a)
Increase primarily due to the build-up of inventory in Lithium and Catalysts for forecasted sales during the remainder of 2020.
(b)
Included $117.8 million and $109.3 million at March 31, 2020 and December 31, 2019, respectively, of work in process in our Lithium segment.

NOTE 7—Investments:
The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), where the ownership parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”), however this investment is not consolidated as the Company is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $364.8 million and $397.2 million at March 31, 2020 and December 31, 2019, 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 $7.5 million and $7.6 million at March 31, 2020 and December 31, 2019, respectively. Our unconsolidated VIEs are reported in Investments on the condensed consolidated balance sheets. The Company does not guarantee debt for, or have other financial support obligations to, these

12

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

entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.

NOTE 8—Long-Term Debt:
Long-term debt at March 31, 2020 and December 31, 2019 consisted of the following (in thousands):
 
March 31,
 
December 31,
 
2020
 
2019
1.125% notes, net of unamortized discount and debt issuance costs of $4,342 at March 31, 2020 and $5,659 at December 31, 2019
$
547,156

 
$
549,241

1.625% notes, net of unamortized discount and debt issuance costs of $5,938 at March 31, 2020 and $5,696 at December 31, 2019
545,560

 
549,204

1.875% Senior notes, net of unamortized discount and debt issuance costs of $1,585 at March 31, 2020 and $1,831 at December 31, 2019.
431,820

 
434,241

3.45% Senior notes, net of unamortized discount and debt issuance costs of $3,274 at March 31, 2020 and $3,533 at December 31, 2019
296,725

 
296,467

4.15% Senior notes, net of unamortized discount and debt issuance costs of $2,275 at March 31, 2020 and $2,398 at December 31, 2019
422,724

 
422,603

5.45% Senior notes, net of unamortized discount and debt issuance costs of $3,811 at March 31, 2020 and $3,850 at December 31, 2019
346,189

 
346,150

Floating rate notes, net of unamortized debt issuance costs of $962 at March 31, 2020 and $1,169 at December 31, 2019
199,037

 
198,831

Revolving credit facility
250,000

 

Commercial paper notes
35,000

 
186,700

Variable-rate foreign bank loans
7,300

 
7,296

Finance lease obligations
59,329

 
59,524

Total long-term debt
3,140,840

 
3,050,257

Less amounts due within one year
35,615

 
187,336

Long-term debt, less current portion
$
3,105,225

 
$
2,862,921


Current portion of long-term debt at March 31, 2020 consisted primarily of commercial paper notes with a weighted-average interest rate of approximately 1.72% and a weighted-average maturity of 22 days.
In the first quarter of 2020, the Company borrowed $250.0 million under the 2018 Credit Agreement to pay approximately $152 million in short-term commercial paper notes and for other general corporate purposes. The applicable interest rate for the amount borrowed was 2.08%.
In April 2020, the Company borrowed $200.0 million under the 2019 Credit Facility to be used for general corporate purposes. The applicable interest rate for the amount borrowed was 1.125%.
The carrying value of our 1.875% Euro-denominated senior notes has been designated as an effective hedge of our net investment in certain foreign subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency are recorded in accumulated other comprehensive loss. During the three-month periods ended March 31, 2020 and 2019, gains of $2.1 million and $3.3 million (net of income taxes), respectively, were recorded in accumulated other comprehensive loss in connection with the revaluation of these senior notes to our reporting currency.
As of March 31, 2020, the Company was in compliance with its debt covenant under the Credit Agreements. As a result of the uncertainty of the overall financial impact of the COVID-19 pandemic, the Company amended the Credit Agreements on May 11, 2020 to modify its financial covenant based on the Company’s current expectations. The amendment effects changes to certain provisions of the Credit Agreements, including: (a) conversion of the consolidated funded debt to consolidated EBITDA ratio to a consolidated net funded debt to consolidated EBITDA ratio; (b) carving-out third party sales of accounts receivables from the Securitization Transaction definition; (c) setting the consolidated net funded debt to consolidated EBITDA ratio to 4.00:1 for the fiscal quarter ending June 30, 2020, 4.50:1 for the fiscal quarters through September 30, 2021, 4.00:1 for the fiscal quarter ending December 31, 2021, and 3:50:1 for fiscal quarters thereafter; and (d) reducing the priority debt basket to 24% of Consolidated Net Tangible Assets, as defined in the Credit Agreements, through and including December 31, 2021. As

13

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

part of this amendment, the Company has agreed to pay a 10 basis point fee on the consenting lenders commitments under the Credit Agreements. If conditions caused by the COVID-19 pandemic worsen and the Company’s earnings and cash flow from operations do not start to recover as contemplated in the Company's current plans, the Company may not be able to maintain compliance with its amended financial covenants and it will require the Company to seek additional amendments to the Credit Agreements. If the Company is not able to obtain such necessary additional amendments, this would lead to an event of default and its lenders could require the Company to repay its outstanding debt. In that situation, the Company may not be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.

NOTE 9—Commitments and Contingencies:
Environmental
We had the following activity in our recorded environmental liabilities for the three months ended March 31, 2020 (in thousands):
Beginning balance at December 31, 2019
$
42,592

Expenditures
(918
)
Accretion of discount
216

Foreign currency translation adjustments
(183
)
Ending balance at March 31, 2020
41,707

Less amounts reported in Accrued expenses
9,379

Amounts reported in Other noncurrent liabilities
$
32,328


Environmental remediation liabilities included discounted liabilities of $35.1 million and $35.6 million at March 31, 2020 and December 31, 2019, respectively, discounted at rates with a weighted-average of 3.7%, with the undiscounted amount totaling $68.8 million and $69.2 million at March 31, 2020 and December 31, 2019, 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 $30 million before income taxes, in excess of amounts already recorded. The variability of this range is primarily driven by possible environmental remediation activity at a formerly owned site where we indemnify the buyer through a set cutoff date in 2024.
We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Litigation
We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed as incurred.
As previously reported in 2018, following receipt of information regarding potential improper payments being made by third party sales representatives of our Refining Solutions business, within our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act and other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported

14

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

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 DPP in their review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures.
At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ, the SEC, or DPP. We are unable to predict what, if any, action may be taken by the DOJ, the SEC, or DPP, or what penalties or remedial actions they may seek to impose. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any fines, penalties, disgorgement, equitable relief or other losses would have a material adverse effect on our financial condition or liquidity.
Indemnities
We are indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although we believe that the financial condition of those parties who may have indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party who may have obligations to indemnify us will adhere to their obligations and we may have to resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. The Company had approximately $31.6 million and $31.0 million at March 31, 2020 and December 31, 2019, respectively, recorded in Other noncurrent liabilities, related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold.
Other
We have contracts with certain of our customers, which serve as guarantees on product delivery and performance according to customer specifications that can cover both shipments on an individual basis as well as blanket coverage of multiple shipments under certain customer supply contracts. The financial coverage provided by these guarantees is typically based on a percentage of net sales value.

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

15

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

The following table provides details of our lease contracts for the three-month periods ended March 31, 2020 and 2019 (in thousands):
 
Three Months Ended March 31,
 
2020
 
2019
Operating lease cost
$
8,740

 
$
9,421

Finance lease cost:
 
 
 
Amortization of right of use assets
154

 
178

Interest on lease liabilities
650

 
33

Total finance lease cost
804

 
211

 
 
 
 
Short-term lease cost
2,883

 
1,966

Variable lease cost
1,948

 
1,086

Total lease cost
$
14,375

 
$
12,684

Supplemental cash flow information related to our lease contracts for the three-month periods ended March 31, 2020 and 2019 is as follows (in thousands):
 
Three Months Ended March 31,
 
2020
 
2019
Cash paid for amounts included in the measurement of lease liabilities:
 
 
 
Operating cash flows from operating leases
$
11,177

 
$
8,930

Operating cash flows from finance leases
380

 
33

Financing cash flows from finance leases
172

 
171

Right-of-use assets obtained in exchange for lease obligations:
 
 
 
Operating leases
16,021

 



16

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

Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at March 31, 2020 and December 31, 2019 is as follows (in thousands, except as noted):
 
March 31, 2020
 
December 31, 2019
Operating leases:
 
 
 
Other assets
$
141,827

 
$
133,864

 
 
 
 
Current operating lease liability
23,826

 
23,137

Other noncurrent liabilities
119,233

 
114,686

Total operating lease liabilities
143,059

 
137,823

Finance leases:
 
 
 
Net property, plant and equipment
59,320

 
59,494

 
 
 
 
Current portion of long-term debt
615

 
636

Long-term debt
58,713

 
58,888

Total finance lease liabilities
59,328

 
59,524

Weighted average remaining lease term (in years):
 
 
 
Operating leases
15.8

 
11.4

Finance leases
28.2

 
28.3

Weighted average discount rate (%):
 
 
 
Operating leases
4.08
%
 
3.84
%
Finance leases
4.56
%
 
4.56
%

Maturities of lease liabilities as of March 31, 2020 were as follows (in thousands):
 
Operating Leases
 
Finance Leases
Remainder of 2020
$
23,100

 
$
1,652

2021
18,498

 
2,129

2022
14,652

 
4,408

2023
13,205

 
4,408

2024
12,181

 
4,408

Thereafter
148,998

 
94,324

Total lease payments
230,634

 
111,329

Less imputed interest
87,575

 
52,001

Total
$
143,059

 
$
59,328



NOTE 11—Segment Information:
Our three reportable segments include: (1) Lithium; (2) Bromine Specialties; and (3) Catalysts. Each segment has a dedicated team of sales, research and development, process engineering, manufacturing and sourcing, and business strategy personnel and has full accountability for improving execution through greater asset and market focus, agility and responsiveness. This business structure aligns with the markets and customers we serve through each of the segments. This structure also facilitates the continued standardization of business processes across the organization, and is consistent with the manner in which information is presently used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions.
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business that does not fit into any of our core businesses.

17

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

The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and OPEB service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes inter-segment transfers of raw materials at cost and allocations for certain corporate costs.
The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company has reported adjusted EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance with U.S. GAAP.
 
Three Months Ended
March 31,
 
2020
 
2019
 
(In thousands)
Net sales:
 
 
 
Lithium
$
236,818

 
$
291,886

Bromine Specialties
231,592

 
249,052

Catalysts
207,207

 
251,648

All Other
63,228

 
39,478

Total net sales
$
738,845

 
$
832,064

 
 
 
 
Adjusted EBITDA:
 
 
 
Lithium
$
78,637

 
$
115,616

Bromine Specialties
83,262

 
78,597

Catalysts
47,470

 
60,071

All Other
22,824

 
7,243

Corporate
(35,828
)
 
(35,660
)
Total adjusted EBITDA
$
196,365

 
$
225,867



18

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

See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
 
Lithium
 
Bromine Specialties
 
Catalysts
 
Reportable Segments Total
 
All Other
 
Corporate
 
Consolidated Total
Three months ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to Albemarle Corporation
$
53,240

 
$
71,665

 
$
34,892

 
$
159,797

 
$
20,846

 
$
(73,439
)
 
$
107,204

Depreciation and amortization
25,397

 
11,597

 
12,578

 
49,572

 
1,978

 
2,144

 
53,694

Restructuring and other(a)

 

 

 

 

 
1,847

 
1,847

Acquisition and integration related costs(b)

 

 

 

 

 
2,951

 
2,951

Interest and financing expenses

 

 

 

 

 
16,885

 
16,885

Income tax expense

 

 

 

 

 
18,442

 
18,442

Non-operating pension and OPEB items

 

 

 

 

 
(2,908
)
 
(2,908
)
Other(c)

 

 

 

 

 
(1,750
)
 
(1,750
)
Adjusted EBITDA
$
78,637

 
$
83,262

 
$
47,470

 
$
209,369

 
$
22,824

 
$
(35,828
)
 
$
196,365

Three months ended March 31, 2019