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Table of Contents
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 September 30, 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 filerAccelerated 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 classTrading SymbolName of each exchange on which registered
COMMON STOCK, $.01 Par ValueALBNew York Stock Exchange
Number of shares of common stock, $.01 par value, outstanding as of October 31, 2020: 106,457,193


Table of Contents
ALBEMARLE CORPORATION
INDEX – FORM 10-Q
 
  Page
Number(s)
8-26
27-46
EXHIBITS
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Table of Contents
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
September 30,
Nine Months Ended
September 30,
 2020201920202019
Net sales$746,868 $879,747 $2,249,762 $2,596,863 
Cost of goods sold492,812 569,880 1,520,329 1,677,596 
Gross profit254,056 309,867 729,433 919,267 
Selling, general and administrative expenses96,092 108,135 304,918 348,205 
Research and development expenses13,532 15,585 43,839 44,024 
Operating profit144,432 186,147 380,676 527,038 
Interest and financing expenses(19,227)(11,108)(53,964)(35,295)
Other expenses, net(3,661)(11,316)(1,620)(7,090)
Income before income taxes and equity in net income of unconsolidated investments121,544 163,723 325,092 484,653 
Income tax expense30,653 25,341 64,526 93,266 
Income before equity in net income of unconsolidated investments90,891 138,382 260,566 391,387 
Equity in net income of unconsolidated investments (net of tax)26,154 33,236 83,872 106,727 
Net income117,045 171,618 344,438 498,114 
Net income attributable to noncontrolling interests(18,744)(16,548)(53,309)(55,277)
Net income attributable to Albemarle Corporation$98,301 $155,070 $291,129 $442,837 
Basic earnings per share$0.92 $1.46 $2.74 $4.18 
Diluted earnings per share$0.92 $1.46 $2.73 $4.16 
Weighted-average common shares outstanding – basic106,386 105,999 106,314 105,920 
Weighted-average common shares outstanding – diluted106,873 106,299 106,640 106,324 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2020201920202019
Net income $117,045 $171,618 $344,438 $498,114 
Other comprehensive income (loss), net of tax:
Foreign currency translation37,489 (100,069)18,350 (100,380)
Pension and postretirement benefits10 (5)27 8 
Net investment hedge(12,408)12,745 (16,083)13,012 
Cash flow hedge6,993  (6,822) 
Interest rate swap647 641 1,943 1,923 
Total other comprehensive income (loss), net of tax32,731 (86,688)(2,585)(85,437)
Comprehensive income149,776 84,930 341,853 412,677 
Comprehensive income attributable to noncontrolling interests(18,811)(16,426)(53,456)(55,135)
Comprehensive income attributable to Albemarle Corporation$130,965 $68,504 $288,397 $357,542 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
September 30,December 31,
20202019
Assets
Current assets:
Cash and cash equivalents
$702,073 $613,110 
Trade accounts receivable, less allowance for doubtful accounts (2020 – $2,154; 2019 – $3,711)
516,166 612,651 
Other accounts receivable61,522 67,551 
Inventories828,080 768,984 
Other current assets119,171 162,813 
Total current assets2,227,012 2,225,109 
Property, plant and equipment, at cost7,284,575 6,817,843 
Less accumulated depreciation and amortization2,041,851 1,908,370 
Net property, plant and equipment5,242,724 4,909,473 
Investments603,745 579,813 
Other assets211,534 213,061 
Goodwill1,603,049 1,578,785 
Other intangibles, net of amortization343,919 354,622 
Total assets$10,231,983 $9,860,863 
Liabilities And Equity
Current liabilities:
Accounts payable$465,644 $574,138 
Accrued expenses477,510 576,297 
Current portion of long-term debt603,787 187,336 
Dividends payable40,787 38,764 
Income taxes payable25,011 32,461 
Total current liabilities1,612,739 1,408,996 
Long-term debt2,940,533 2,862,921 
Postretirement benefits49,926 50,899 
Pension benefits285,942 292,073 
Other noncurrent liabilities612,013 754,536 
Deferred income taxes405,449 397,858 
Commitments and contingencies (Note 9)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 106,457 in 2020 and 106,040 in 2019
1,065 1,061 
Additional paid-in capital1,410,534 1,383,446 
Accumulated other comprehensive loss(398,467)(395,735)
Retained earnings3,111,749 2,943,478 
Total Albemarle Corporation shareholders’ equity4,124,881 3,932,250 
Noncontrolling interests200,500 161,330 
Total equity4,325,381 4,093,580 
Total liabilities and equity$10,231,983 $9,860,863 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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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 EarningsTotal Albemarle
Shareholders’ Equity
Noncontrolling
Interests
Total Equity
Common Stock
SharesAmounts
Balance at June 30, 2020106,336,982 $1,064 $1,400,105 $(431,131)$3,054,434 $4,024,472 $181,689 $4,206,161 
Net income98,301 98,301 18,744 117,045 
Other comprehensive income32,664 32,664 67 32,731 
Cash dividends declared, $0.385 per common share
(40,986)(40,986) (40,986)
Stock-based compensation5,098 5,098 5,098 
Exercise of stock options96,356 1 6,115 6,116 6,116 
Issuance of common stock, net33,798     
Shares withheld for withholding taxes associated with common stock issuances(10,088) (784)(784)(784)
Balance at September 30, 2020106,457,048 $1,065 $1,410,534 $(398,467)$3,111,749 $4,124,881 $200,500 $4,325,381 
Balance at June 30, 2019105,971,464 $1,059 $1,373,213 $(349,411)$2,775,940 $3,800,801 $173,602 $3,974,403 
Net income155,070 155,070 16,548 171,618 
Other comprehensive loss(86,566)(86,566)(122)(86,688)
Cash dividends declared, $0.3675 per common share
(38,953)(38,953)(18,250)(57,203)
Stock-based compensation4,802 4,802 4,802 
Exercise of stock options36,000 1 1,608 1,609 1,609 
Issuance of common stock, net26,489     
Shares withheld for withholding taxes associated with common stock issuances(2,865) (204)(204)(204)
Balance at September 30, 2019106,031,088 $1,060 $1,379,419 $(435,977)$2,892,057 $3,836,559 $171,778 $4,008,337 
Balance at January 1, 2020106,040,215 $1,061 $1,383,446 $(395,735)$2,943,478 $3,932,250 $161,330 $4,093,580 
Net income291,129 291,129 53,309 344,438 
Other comprehensive (loss) income(2,732)(2,732)147 (2,585)
Cash dividends declared, $1.155 per common share
(122,858)(122,858)(14,286)(137,144)
Stock-based compensation14,970 14,970 14,970 
Exercise of stock options300,833 3 16,922 16,925 16,925 
Issuance of common stock, net179,368 2 (2)  
Shares withheld for withholding taxes associated with common stock issuances(63,368)(1)(4,802)(4,803)(4,803)
Balance at September 30, 2020106,457,048 $1,065 $1,410,534 $(398,467)$3,111,749 $4,124,881 $200,500 $4,325,381 
Balance at January 1, 2019105,616,028 $1,056 $1,368,897 $(350,682)$2,566,050 $3,585,321 $173,787 $3,759,108 
Net income442,837 442,837 55,277 498,114 
Other comprehensive loss(85,295)(85,295)(142)(85,437)
Cash dividends declared, $1.1025 per common share
(116,830)(116,830)(57,212)(174,042)
Stock-based compensation16,999 16,999 16,999 
Exercise of stock options161,909 2 4,812 4,814 4,814 
Issuance of common stock, net383,313 3 (3)  
Increase in ownership interest of noncontrolling interest(513)(513)68 (445)
Shares withheld for withholding taxes associated with common stock issuances(130,162)(1)(10,773)(10,774)(10,774)
Balance at September 30, 2019106,031,088 $1,060 $1,379,419 $(435,977)$2,892,057 $3,836,559 $171,778 $4,008,337 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
September 30,
20202019
Cash and cash equivalents at beginning of year$613,110 $555,320 
Cash flows from operating activities:
Net income 344,438 498,114 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization170,214 156,718 
Gain on sale of property (11,079)
Stock-based compensation and other15,864 15,169 
Equity in net income of unconsolidated investments (net of tax)(83,872)(106,727)
Dividends received from unconsolidated investments and nonmarketable securities61,309 62,982 
Pension and postretirement (benefit) expense(4,975)1,641 
Pension and postretirement contributions(10,323)(10,728)
Unrealized gain on investments in marketable securities(3,377)(1,701)
Deferred income taxes7,920 7,726 
Working capital changes(167,436)(289,587)
Other, net131,952 23,110 
Net cash provided by operating activities461,714 345,638 
Cash flows from investing activities:
Acquisitions, net of cash acquired(22,572) 
Capital expenditures(621,371)(608,456)
Proceeds from sale of property and equipment 10,356 
Sales of marketable securities, net1,208 1,177 
Investments in equity and other corporate investments(786)(2,569)
Net cash used in investing activities(643,521)(599,492)
Cash flows from financing activities:
Repayments of borrowings from credit agreements(250,000) 
Proceeds from borrowings of credit agreements452,163  
Other borrowings, net202,786 232,183 
Dividends paid to shareholders(120,836)(113,321)
Dividends paid to noncontrolling interests(14,286)(57,212)
Proceeds from exercise of stock options16,925 4,814 
Withholding taxes paid on stock-based compensation award distributions(4,803)(10,774)
Debt financing costs(2,751) 
Other (445)
Net cash provided by financing activities279,198 55,245 
Net effect of foreign exchange on cash and cash equivalents(8,428)(38,888)
Increase (decrease) in cash and cash equivalents88,963 (237,497)
Cash and cash equivalents at end of period$702,073 $317,823 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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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 September 30, 2020 and December 31, 2019, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three-month and nine-month periods ended September 30, 2020 and 2019 and our condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2020 and 2019. Cost of goods sold for the three-month period ended September 30, 2019 includes expense of $7.0 million due to the correction of an out-of-period error regarding carbonate inventory values related to the three-month period ended June 30, 2019. The Company does not believe this adjustment is material to the consolidated financial statements for the three- or nine-month periods ended September 30, 2019, or the three- or six-month periods ended June 30, 2019. 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 and nine-month periods ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made to the accompanying condensed consolidated financial statements and the notes thereto to conform to the current presentation.
The current novel coronavirus (“COVID-19”) pandemic is having an impact on overall global economic conditions. While we have not seen a material impact to our operations to date, the ultimate impact on our business will depend on the length and severity of the outbreak throughout the world. The Company has taken, and plans to continue to take, certain measures to maintain financial flexibility, 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 September 30, 2020, the Company is in compliance with its financial covenant under its Credit Agreements and expects to be in compliance with its financial covenant for at least one year from the issuance of these interim financial statements. 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 September 30, 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 the COVID-19 pandemic 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 nine months of 2020, we paid $22.6 million of agreed upon purchase price adjustments. The stamp duty levied on the assets purchased of $61.5 million, originally recorded as an expense during the year ended December 31, 2019, was paid in the second quarter of 2020 and is included in Change in working capital on the condensed consolidated statement of cash flows.
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 from the Wodgina Project and for the operation of the
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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.
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 connection with the acquisition, we idled production of the Wodgina spodumene mine until demand supports bringing the mine back to production.
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-month and nine-month periods ended September 30, 2020 is a loss of approximately $4.7 million and $14.6 million, respectively, 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 (“SG&A”) on our consolidated statements of income for the three-month and nine-month periods ended September 30, 2020 and 2019 is $0.2 million and $1.0 million, respectively, and $1.3 million and $4.4 million, respectively, 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 $18.8 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
22,566 
Total purchase price
$1,322,566 
Net assets acquired:
Inventories
$33,900 
Other current assets
11,280 
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 
Current liabilities
(10,695)
Long-term debt(a)
(55,806)
Other noncurrent liabilities
(23,296)
Total identifiable net assets
1,303,771 
Goodwill
18,795 
Total net assets acquired
$1,322,566 
(a)     Represents 60% ownership interest in finance lease acquired. See Note 10, “Leases,” for further information on the Company’s leases.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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 $13.0 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 liabilities assumed were based on management’s 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 was 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. 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 nine months ended September 30, 2020 (in thousands):
LithiumBromine SpecialtiesCatalystsAll OtherTotal
Balance at December 31, 2019$1,370,846 $20,319 $181,034 $6,586 $1,578,785 
   Acquisitions(a)
(12,967)   (12,967)
   Foreign currency translation adjustments and other30,522  6,709  37,231 
Balance at September 30, 2020$1,388,401 $20,319 $187,743 $6,586 $1,603,049 
(a)    Represents preliminary purchase price adjustments for the Wodgina Project acquisition. See Note 2, “Acquisitions” for additional information.



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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 nine months ended September 30, 2020 (in thousands):
Customer Lists and Relationships
Trade Names and Trademarks(a)
Patents and TechnologyOtherTotal
Gross Asset Value
  Balance at December 31, 2019$422,462 $18,087 $55,020 $41,282 $536,851 
Foreign currency translation adjustments and other12,699 104 1,355 (1,524)12,634 
  Balance at September 30, 2020$435,161 $18,191 $56,375 $39,758 $549,485 
Accumulated Amortization
  Balance at December 31, 2019$(116,749)$(7,938)$(36,197)$(21,345)$(182,229)
    Amortization(16,789) (1,022)(752)(18,563)
Foreign currency translation adjustments and other(3,729)(113)(929)(3)(4,774)
  Balance at September 30, 2020$(137,267)$(8,051)$(38,148)$(22,100)$(205,566)
Net Book Value at December 31, 2019$305,713 $10,149 $18,823 $19,937 $354,622 
Net Book Value at September 30, 2020$297,894 $10,140 $18,227 $17,658 $343,919 
(a)    Net Book Value includes only indefinite-lived intangible assets.

NOTE 4—Income Taxes:
The effective income tax rate for the three-month and nine-month periods ended September 30, 2020 was 25.2% and 19.8%, respectively, compared to 15.5% and 19.2% for the three-month and nine-month periods ended September 30, 2019, respectively. The Company’s effective income tax rate fluctuates based on, among other factors, its level and location of income. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-month and nine-month periods ended September 30, 2020 was impacted by a variety of factors, primarily stemming from the location in which income was earned. For the three-month and nine-month periods ended September 30, 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 three-month and nine-month periods ended September 30, 2020 also include discrete tax expenses recorded for foreign uncertain tax positions and foreign return to accrual adjustments. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-month and nine-month periods ended September 30, 2019 was impacted by a variety of factors, primarily stemming from the location in which income was earned. For the three-month and nine-month periods ended September 30, 2019, this was mainly attributable to our share of the income of our JBC joint venture.


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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 and nine-month periods ended September 30, 2020 and 2019 are calculated as follows (in thousands, except per share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation$98,301 $155,070 $291,129 $442,837 
Denominator:
Weighted-average common shares for basic earnings per share106,386 105,999 106,314 105,920 
Basic earnings per share$0.92 $1.46 $2.74 $4.18 
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation$98,301 $155,070 $291,129 $442,837 
Denominator:
Weighted-average common shares for basic earnings per share106,386 105,999 106,314 105,920 
Incremental shares under stock compensation plans487 300 326 404 
Weighted-average common shares for diluted earnings per share106,873 106,299 106,640 106,324 
Diluted earnings per share$0.92 $1.46 $2.73 $4.16 
At September 30, 2020, there were 45,706 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. On July 14, 2020, the Company declared a cash dividend of $0.385, which was paid on October 1, 2020 to shareholders of record at the close of business as of September 18, 2020. On October 27, 2020, the Company declared a cash dividend of $0.385 per share, which is payable on January 4, 2021 to shareholders of record at the close of business as of December 11, 2020.
NOTE 6—Inventories:
The following table provides a breakdown of inventories at September 30, 2020 and December 31, 2019 (in thousands):
September 30,December 31,
20202019
Finished goods$525,071 $495,639 
Raw materials and work in process(a)
228,637 205,781 
Stores, supplies and other74,372 67,564 
Total$828,080 $768,984 

(a)Included $124.3 million and $109.3 million at September 30, 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 $428.4 million and $397.2 million at September 30, 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 $7.1 million and $7.6 million at September 30, 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
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Table of Contents
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.

NOTE 8—Long-Term Debt:
Long-term debt at September 30, 2020 and December 31, 2019 consisted of the following (in thousands):
September 30,December 31,
20202019
1.125% notes, net of unamortized discount and debt issuance costs of $4,121 at September 30, 2020 and $5,659 at December 31, 2019
$577,479 $549,241 
1.625% notes, net of unamortized discount and debt issuance costs of $5,846 at September 30, 2020 and $5,696 at December 31, 2019
575,754 549,204 
1.875% Senior notes, net of unamortized discount and debt issuance costs of $1,172 at September 30, 2020 and $1,831 at December 31, 2019.
455,888 434,241 
3.450% Senior notes, net of unamortized discount and debt issuance costs of $3,153 at September 30, 2020 and $3,533 at December 31, 2019
296,847 296,467 
4.15% Senior notes, net of unamortized discount and debt issuance costs of $2,032 at September 30, 2020 and $2,398 at December 31, 2019
422,968 422,603 
5.45% Senior notes, net of unamortized discount and debt issuance costs of $3,734 at September 30, 2020 and $3,850 at December 31, 2019
346,266 346,150 
Floating rate notes, net of unamortized debt issuance costs of $815 at September 30, 2020 and $1,169 at December 31, 2019
199,185 198,831 
Credit facilities213,196  
Commercial paper notes390,000 186,700 
Variable-rate foreign bank loans7,570 7,296 
Finance lease obligations59,167 59,524 
Total long-term debt3,544,320 3,050,257 
Less amounts due within one year603,787 187,336 
Long-term debt, less current portion