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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 March 31, 2021
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 April 30, 2021: 116,721,826


Table of Contents
ALBEMARLE CORPORATION
INDEX – FORM 10-Q
 
  Page
Number(s)
EXHIBITS
2

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
March 31,
 20212020
Net sales$829,291 $738,845 
Cost of goods sold565,604 496,827 
Gross profit263,687 242,018 
Selling, general and administrative expenses93,187 101,877 
Research and development expenses14,636 16,097 
Operating profit155,864 124,044 
Interest and financing expenses(43,882)(16,885)
Other income, net11,312 8,314 
Income before income taxes and equity in net income of unconsolidated investments123,294 115,473 
Income tax expense22,107 18,442 
Income before equity in net income of unconsolidated investments101,187 97,031 
Equity in net income of unconsolidated investments (net of tax)16,511 26,604 
Net income117,698 123,635 
Net income attributable to noncontrolling interests(22,021)(16,431)
Net income attributable to Albemarle Corporation$95,677 $107,204 
Basic earnings per share$0.85 $1.01 
Diluted earnings per share$0.84 $1.01 
Weighted-average common shares outstanding – basic112,592 106,227 
Weighted-average common shares outstanding – diluted113,330 106,512 
See accompanying Notes to the Condensed Consolidated Financial Statements.
3

Table of Contents
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
 Three Months Ended
March 31,
 20212020
Net income $117,698 $123,635 
Other comprehensive income (loss), net of tax:
Foreign currency translation and other(28,142)(81,977)
Net investment hedge5,110 2,081 
Cash flow hedge(1,600)(51,460)
Interest rate swap650 648 
Total other comprehensive loss, net of tax(23,982)(130,708)
Comprehensive income (loss)93,716 (7,073)
Comprehensive income attributable to noncontrolling interests(22,021)(16,477)
Comprehensive income (loss) attributable to Albemarle Corporation$71,695 $(23,550)
See accompanying Notes to the Condensed Consolidated Financial Statements.
4

Table of Contents
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
March 31,December 31,
20212020
Assets
Current assets:
Cash and cash equivalents
$569,859 $746,724 
Trade accounts receivable, less allowance for doubtful accounts (2021 – $2,084; 2020 – $2,083)
532,964 530,838 
Other accounts receivable60,558 61,958 
Inventories685,779 750,237 
Other current assets93,844 116,427 
Assets held for sale66,390  
Total current assets2,009,394 2,206,184 
Property, plant and equipment, at cost7,433,593 7,427,641 
Less accumulated depreciation and amortization2,043,264 2,073,016 
Net property, plant and equipment5,390,329 5,354,625 
Investments663,448 656,244 
Noncurrent assets held for sale50,683  
Other assets212,258 219,268 
Goodwill1,629,169 1,665,520 
Other intangibles, net of amortization335,021 349,105 
Total assets$10,290,302 $10,450,946 
Liabilities And Equity
Current liabilities:
Accounts payable$492,532 $483,221 
Accrued expenses378,973 440,763 
Current portion of long-term debt616 804,677 
Dividends payable45,327 40,937 
Liabilities held for sale4,068  
Income taxes payable31,740 32,251 
Total current liabilities953,256 1,801,849 
Long-term debt2,030,032 2,767,381 
Postretirement benefits47,817 48,075 
Pension benefits316,652 340,818 
Other noncurrent liabilities619,309 629,377 
Deferred income taxes380,683 394,852 
Commitments and contingencies (Note 9)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 116,718 in 2021 and 106,842 in 2020
1,167 1,069 
Additional paid-in capital2,889,923 1,438,038 
Accumulated other comprehensive loss(350,114)(326,132)
Retained earnings3,205,408 3,155,252 
Total Albemarle Corporation shareholders’ equity5,746,384 4,268,227 
Noncontrolling interests196,169 200,367 
Total equity5,942,553 4,468,594 
Total liabilities and equity$10,290,302 $10,450,946 
See accompanying Notes to the Condensed Consolidated Financial Statements.
5

Table of Contents
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 January 1, 2021106,842,369 $1,069 $1,438,038 $(326,132)$3,155,252 $4,268,227 $200,367 $4,468,594 
Net income95,677 95,677 22,021 117,698 
Other comprehensive (loss) income(23,982)(23,982) (23,982)
Cash dividends declared, $0.39 per common share
(45,521)(45,521)(26,219)(71,740)
Stock-based compensation4,674 4,674 4,674 
Fees related to public issuance of common stock(902)(902)(902)
Exercise of stock options17,964  1,183 1,183 1,183 
Issuance of common stock, net9,902,307 99 1,453,789 1,453,888 1,453,888 
Shares withheld for withholding taxes associated with common stock issuances(44,465)(1)(6,859)(6,860)(6,860)
Balance at March 31, 2021116,718,175 $1,167 $2,889,923 $(350,114)$3,205,408 $5,746,384 $196,169 $5,942,553 
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 income107,204 107,204 16,431 123,635 
Other comprehensive loss(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 compensation3,867 3,867 3,867 
Exercise of stock options193,537 2 10,193 10,195 10,195 
Issuance of common stock, net132,320 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, 2020106,318,614 $1,063 $1,393,681 $(526,489)$3,009,749 $3,878,004 $163,521 $4,041,525 
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)
Three Months Ended
March 31,
20212020
Cash and cash equivalents at beginning of year$746,724 $613,110 
Cash flows from operating activities:
Net income 117,698 123,635 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization62,260 53,694 
Stock-based compensation and other2,560 2,501 
Equity in net income of unconsolidated investments (net of tax)(16,511)(26,604)
Dividends received from unconsolidated investments and nonmarketable securities4,950  
Pension and postretirement benefit(4,226)(1,719)
Pension and postretirement contributions(15,329)(6,113)
Unrealized gain on investments in marketable securities(1,762)(627)
Loss on early extinguishment of debt27,798  
Deferred income taxes(19,384)4,790 
Working capital changes(49,185)17,730 
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL43,223 36,723 
Other, net5,857 (48,956)
Net cash provided by operating activities157,949 155,054 
Cash flows from investing activities:
Acquisitions, net of cash acquired (22,572)
Capital expenditures(179,683)(214,529)
Sales of marketable securities, net5,245 2,589 
Investments in equity and other corporate investments(286)(356)
Net cash used in investing activities(174,724)(234,868)
Cash flows from financing activities:
Proceeds from issuance of common stock1,453,888  
Repayments of long-term debt and credit agreements(1,174,980) 
Proceeds from borrowings of credit agreements 250,000 
Other debt repayments, net(325,159)(151,872)
Fees related to early extinguishment of debt(23,719) 
Dividends paid to shareholders(41,130)(38,982)
Dividends paid to noncontrolling interests(26,219)(14,286)
Proceeds from exercise of stock options1,183 10,195 
Withholding taxes paid on stock-based compensation award distributions(6,860)(3,825)
Other(253)(214)
Net cash (used in) provided by financing activities(143,249)51,016 
Net effect of foreign exchange on cash and cash equivalents(16,841)(31,084)
Decrease in cash and cash equivalents(176,865)(59,882)
Cash and cash equivalents at end of period$569,859 $553,228 
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 March 31, 2021 and December 31, 2020, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three-month periods ended March 31, 2021 and 2020 and our condensed consolidated statements of cash flows for the three-month periods ended March 31, 2021 and 2020. Income tax expense for the three-month period ended March 31, 2021 includes expense of $7.9 million due to the correction of an out-of-period error regarding an overstated deferred tax liability for the three-month period ended December 31, 2017. The Company does not believe this adjustment is material to the consolidated financial statements for the three-month period ended March 31, 2021, or the three-month period or year ended December 31, 2017. 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, 2020, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on February 19, 2021. The December 31, 2020 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, 2021 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 while still protecting our employees and customers.

NOTE 2—Divestitures:
On February 25, 2021, the Company signed a definitive agreement to sell its fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue payment-in-kind (“PIK”) dividends at an annual rate of 12% beginning two years after issuance.
As part of the transaction, Grace will acquire our manufacturing facilities located in South Haven, Michigan and Tyrone, Pennsylvania. The sale of the FCS business reflects the Company’s commitment to investing in its core, growth-oriented business segments. The sale is expected to close in the second quarter of 2021, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities. We currently expect to record a gain in the second quarter of 2021 related to the sale of this business.
We determined that this business met the assets held for sale criteria in accordance with ASC 360, Property,Plant and Equipment during the first quarter of 2021. As such, the assets and liabilities of this business were included in Assets held for sale and Liabilities held for sale, respectively, in the consolidated balance sheet at March 31, 2021.

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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The carrying amounts of the major classes of assets and liabilities that were classified as held for sale at March 31, 2021 are as follows (in thousands):
March 31, 2021
Assets
Inventories$45,225 
Other current assets21,165 
Net property, plant and equipment44,080 
Goodwill and other noncurrent assets6,603 
Assets held for sale$117,073 
Liabilities
Current liabilities$4,068 
Liabilities held for sale$4,068 
The results of operations of the business classified as held for sale is included in the consolidated statements of income. This business did not qualify for discontinued operations treatment because the Company’s management does not consider the sale as representing a strategic shift that had or will have a major effect on the Company’s operations and financial results.

NOTE 3—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the three months ended March 31, 2021 (in thousands):
LithiumBromine SpecialtiesCatalystsAll OtherTotal
Balance at December 31, 2020
$1,441,781 $20,319 $196,834 $6,586 $1,665,520 
   Reclass to assets held for sale(a)
   (6,586)(6,586)
   Foreign currency translation adjustments and other(23,110) (6,655) (29,765)
Balance at March 31, 2021$1,418,671 $20,319 $190,179 $ $1,629,169 
(a)    Represents goodwill of the FCS business. See Note 2, “Divestitures,” 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 three months ended March 31, 2021 (in thousands):
Customer Lists and Relationships
Trade Names and Trademarks(a)
Patents and TechnologyOtherTotal
Gross Asset Value
  Balance at December 31, 2020
$448,748 $18,710 $58,096 $39,864 $565,418 
    Reclass to assets held for sale(b)
   (1,473)(1,473)
Foreign currency translation adjustments and other(10,530)(321)(633)(452)(11,936)
  Balance at March 31, 2021
$438,218 $18,389 $57,463 $37,939 $552,009 
Accumulated Amortization
  Balance at December 31, 2020
$(147,286)$(8,176)$(39,500)$(21,351)$(216,313)
    Amortization(5,837) (365)(227)(6,429)
Reclass to assets held for sale(b)
   1,456 1,456 
Foreign currency translation adjustments and other3,390 90 604 214 4,298 
  Balance at March 31, 2021
$(149,733)$(8,086)$(39,261)$(19,908)$(216,988)
Net Book Value at December 31, 2020
$301,462 $10,534 $18,596 $18,513 $349,105 
Net Book Value at March 31, 2021
$288,485 $10,303 $18,202 $18,031 $335,021 
(a)    Net Book Value includes only indefinite-lived intangible assets.
(b)    Represents other intangibles of the FCS business. See Note 2, “Divestitures,” for additional information.

NOTE 4—Income Taxes:
The effective income tax rate for the three-month period ended March 31, 2021 was 17.9% compared to 16.0% for the three-month period ended March 31, 2020. The three-month period ended March 31, 2021 included discrete tax expense recorded for an out-of-period adjustment for an overstated deferred tax liability for the three-month period ended December 31, 2017, offset by a benefit due to the release of a foreign valuation allowance. 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 periods ended March 31, 2021 and March 31, 2020 was impacted by a variety of factors, primarily stemming from the location in which income was earned. 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 for both periods.


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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 periods ended March 31, 2021 and 2020 are calculated as follows (in thousands, except per share amounts):
Three Months Ended
March 31,
20212020
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation$95,677 $107,204 
Denominator:
Weighted-average common shares for basic earnings per share112,592 106,227 
Basic earnings per share$0.85 $1.01 
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation$95,677 $107,204 
Denominator:
Weighted-average common shares for basic earnings per share112,592 106,227 
Incremental shares under stock compensation plans738 285 
Weighted-average common shares for diluted earnings per share113,330 106,512 
Diluted earnings per share$0.84 $1.01 

At March 31, 2021, there were 62,479 common stock equivalents not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. The Company also granted to the underwriters an option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before deducting expenses, underwriting discounts and commissions. The net proceeds were used for debt repayments and general corporate purposes. See Note 8, “Long-Term Debt,” for further details.
On February 25, 2021, the Company declared a cash dividend of $0.39, an increase from the prior year regular quarterly dividend. This dividend was paid on April 1, 2021 to shareholders of record at the close of business as of March 12, 2021. On May 4, 2021, the Company declared a cash dividend of $0.39 per share, which is payable on July 1, 2021 to shareholders of record at the close of business as of June 11, 2021.
NOTE 6—Inventories:
The following table provides a breakdown of inventories at March 31, 2021 and December 31, 2020 (in thousands):
March 31,December 31,
20212020
Finished goods$394,401 $454,162 
Raw materials and work in process(a)
216,150 219,896 
Stores, supplies and other75,228 76,179 
Total$685,779 $750,237 

(a)Included $136.4 million and $129.6 million at March 31, 2021 and December 31, 2020, 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
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $496.2 million and $479.6 million at March 31, 2021 and December 31, 2020, 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 $8.3 million and $8.0 million at March 31, 2021 and December 31, 2020, 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 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, 2021 and December 31, 2020 consisted of the following (in thousands):
March 31,December 31,
20212020
1.125% notes
$443,657 $610,800 
1.625% notes
589,700 610,800 
1.875% Senior notes
 480,007 
3.45% Senior notes
171,612 300,000 
4.15% Senior notes
425,000 425,000 
5.45% Senior notes
350,000 350,000 
Floating rate notes 200,000 
Credit facilities 223,900 
Commercial paper notes 325,000 
Variable-rate foreign bank loans7,296 7,702 
Finance lease obligations58,910 59,181 
Unamortized discount and debt issuance costs(15,527)(20,332)
Total long-term debt2,030,648 3,572,058 
Less amounts due within one year616 804,677 
Long-term debt, less current portion$2,030,032 $2,767,381 
In the first quarter of 2021, the Company made the following debt principal payments using proceeds from the February 2021 underwritten public offering of common stock:
123.8 million of the 1.125% notes due in November 2025
393.0 million, the remaining balance, of the 1.875% Senior notes originally due in December 2021
$128.4 million of the 3.45% Senior notes due in November 2029
$200.0 million, the remaining balance, of the floating rate notes originally due in November 2022
183.3 million, the outstanding balance, of the unsecured credit facility originally entered into on August 14, 2019, as amended and restated on December 15, 2020
$325.0 million, the outstanding balance, of the commercial paper notes
As a result, included in Interest and financing expenses for the three-month period ended March 31, 2021 is a loss on early extinguishment of debt of $27.8 million, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of this debt.
Prior to repayment in the first quarter of 2021, the carrying value of our 1.875% Euro-denominated senior notes was 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 were recorded in accumulated other comprehensive loss. Upon repayment of these notes, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated. Prior to the net investment hedge being
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
discontinued, during the three-month period ended March 31, 2021 and 2020, gains of $5.1 million and $2.1 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.

NOTE 9—Commitments and Contingencies:
Environmental
We had the following activity in our recorded environmental liabilities for the three months ended March 31, 2021 (in thousands):
Beginning balance at December 31, 2020
$45,771 
Expenditures(394)
Accretion of discount242 
Foreign currency translation adjustments and other(605)
Ending balance at March 31, 2021
45,014 
Less amounts reported in Accrued expenses9,209 
Amounts reported in Other noncurrent liabilities$35,805 
Environmental remediation liabilities included discounted liabilities of $38.7 million and $39.2 million at March 31, 2021 and December 31, 2020, respectively, discounted at rates with a weighted-average of 3.5%, and with the undiscounted amount totaling $72.3 million and $73.6 million at March 31, 2021 and December 31, 2020, 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 $35 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 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”), SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, 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.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ, SEC, or DPP. We are unable to predict what, if any, action may be taken by the DOJ, 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 $29.5 million and $30.5 million at March 31, 2021 and December 31, 2020, respectively, recorded in Other noncurrent liabilities, primarily related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold.
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.


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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, 2021 and 2020 (in thousands):
Three Months Ended
March 31,
20212020
Operating lease cost$9,412 $8,740 
Finance lease cost:
Amortization of right of use assets157 154 
Interest on lease liabilities755 650 
Total finance lease cost912 804 
Short-term lease cost2,604 2,883 
Variable lease cost2,365 1,948 
Total lease cost$15,293 $14,375 
Supplemental cash flow information related to our lease contracts for the three-month periods ended March 31, 2021 and 2020 is as follows (in thousands):
Three Months Ended March 31,
20212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$8,381 $11,177 
Operating cash flows from finance leases439 380 
Financing cash flows from finance leases159 172 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases707 16,021 

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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, 2021 and December 31, 2020 is as follows (in thousands, except as noted):
March 31, 2021December 31, 2020
Operating leases:
Other assets$128,211 $136,292 
Accrued expenses19,784 22,297 
Other noncurrent liabilities111,719 116,765 
Total operating lease liabilities131,503 139,062 
Finance leases:
Net property, plant and equipment58,701 58,963 
Current portion of long-term debt(a)
2,046 1,752 
Long-term debt58,294 58,543 
Total finance lease liabilities60,340 60,295 
Weighted average remaining lease term (in years):
Operating leases15.715.3
Finance leases27.427.5
Weighted average discount rate (%):
Operating leases3.96 %3.94 %
Finance leases4.56 %4.56 %
(a)    Balance includes accrued interest of finance lease recorded in Accrued liabilities.
Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands):
Operating LeasesFinance Leases
Remainder of 2021$17,556 $1,631 
202220,458 4,454 
202321,684 4,454 
202410,680 4,454 
20259,563 4,454 
Thereafter131,824 89,916 
Total lease payments211,765 109,363 
Less imputed interest80,262 49,023 
Total$131,503 $60,340 

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.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the FCS business that does not fit into any of our core businesses. In February 2021, we announced that we signed a definitive agreement to sell the FCS business. See Note 2, “Divestitures,” for additional information.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and other post-employment benefit (“OPEB”) service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes inter-segment transfers of raw materials at cost and allocations for certain corporate costs.
The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines adjusted EBITDA as earnings before interest, 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,
20212020
(In thousands)
Net sales:
Lithium$278,976 $236,818 
Bromine Specialties280,447 231,592 
Catalysts220,243 207,207 
All Other49,625 63,228 
Total net sales$829,291 $738,845 
Adjusted EBITDA:
Lithium$106,436 $78,637 
Bromine Specialties94,640 83,262 
Catalysts25,427 47,470 
All Other21,479 22,824 
Corporate(17,928)(35,828)
Total adjusted EBITDA$230,054 $196,365 
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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):
LithiumBromine SpecialtiesCatalystsReportable Segments TotalAll OtherCorporateConsolidated Total
Three months ended March 31, 2021
Net income (loss) attributable to Albemarle Corporation$74,630 $82,113 $12,916 $169,659 $20,016 $(93,998)$95,677 
Depreciation and amortization31,806 12,527 12,511 56,844 1,463 3,953 62,260 
Acquisition and integration related costs(a)
     2,162 2,162 
Interest and financing expenses(b)
     43,882 43,882 
Income tax expense     22,107 22,107 
Non-operating pension and OPEB items     (5,465)(5,465)
Other(c)