

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(In thousands)
Net sales:
Lithium and Advanced Materials	$	343,557		$	240,424		$	945,791		$	689,950
Bromine Specialties	212,923			194,496			636,059			597,912
Refining Solutions	170,275			190,453			539,904			539,044
All Other	28,021			28,272			91,144			150,987
Corporate	90			365			1,289			2,655
Total net sales	$	754,866		$	654,010		$	2,214,187		$	1,980,548

Adjusted EBITDA:
Lithium and Advanced Materials	$	130,218		$	91,719		$	382,789		$	260,861
Bromine Specialties	63,936			51,807			194,499			179,977
Refining Solutions	43,120			64,960			142,777			181,620
All Other	306			5,470			7,906			14,810
Corporate	(28,197		)	(25,627		)	(88,271		)	(66,435		)
Total adjusted EBITDA	$	209,383		$	188,329		$	639,700		$	570,833

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 and Advanced Materials			Bromine Specialties		Refining Solutions			Reportable Segments Total			All Other			Corporate			Consolidated Total
Three months ended September 30, 2017
Net income (loss) attributable to Albemarle Corporation	$	103,199		$	53,760	$	34,392		$	191,351		$	(1,776	)	$	(70,905	)	$	118,670
Depreciation and amortization	26,136			10,176		9,978			46,290			2,082			1,523			49,895
Utilization of inventory markup^(a)	568			—		—			568			—			—			568
Adjustment to gain on acquisition^(b)	1,408			—		—			1,408			—			—			1,408
Acquisition and integration related costs^(c)	—			—		—			—			—			5,635			5,635
Interest and financing expenses	—			—		—			—			—			15,792			15,792
Income tax expense	—			—		—			—			—			18,495			18,495
Non-operating pension and OPEB items	—			—		—			—			—			(1,028		)	(1,028		)
Multiemployer plan shortfall contributions^(d)	—			—		—			—			—			1,646			1,646
Other^(e)	(1,093		)	—		(1,250		)	(2,343		)	—			645			(1,698		)
Adjusted EBITDA	$	130,218		$	63,936	$	43,120		$	237,274		$	306		$	(28,197	)	$	209,383
Three months ended September 30, 2016
Net income (loss) attributable to Albemarle Corporation	$	66,166		$	41,621	$	55,981		$	163,768		$	3,806		$	(39,354	)	$	128,220
Depreciation and amortization	25,553			10,186		8,979			44,718			1,664			1,592			47,974
Acquisition and integration related costs^(c)	—			—		—			—			—			6,749			6,749
Interest and financing expenses	—			—		—			—			—			15,946			15,946
Income tax expense	—			—		—			—			—			12,394			12,394
Income from discontinued operations (net of tax)	—			—		—			—			—			(23,185		)	(23,185		)
Non-operating pension and OPEB items	—			—		—			—			—			(231		)	(231		)
Other^(f)	—			—		—			—			—			462			462
Adjusted EBITDA	$	91,719		$	51,807	$	64,960		$	208,486		$	5,470		$	(25,627	)	$	188,329
Nine months ended September 30, 2017
Net income (loss) attributable to Albemarle Corporation	$	292,655		$	164,193	$	115,329		$	572,177		$	1,622		$	(300,583	)	$	273,216
Depreciation and amortization	74,157			30,306		28,698			133,161			6,284			4,642			144,087
Utilization of inventory markup^(a)	23,095			—		—			23,095			—			—			23,095
Restructuring and other^(g)	—			—		—			—			—			17,141			17,141
Gain on acquisition^(b)	(6,025		)	—		—			(6,025		)	—			—			(6,025		)
Acquisition and integration related costs^(c)	—			—		—			—			—			26,395			26,395
Interest and financing expenses^(h)	—			—		—			—			—			98,895			98,895
Income tax expense	—			—		—			—			—			53,596			53,596
Non-operating pension and OPEB items	—			—		—			—			—			(3,144		)	(3,144		)
Multiemployer plan shortfall contributions^(d)	—			—		—			—			—			6,586			6,586
Other^(e)	(1,093		)	—		(1,250		)	(2,343		)	—			8,201			5,858
Adjusted EBITDA	$	382,789		$	194,499	$	142,777		$	720,065		$	7,906		$	(88,271	)	$	639,700
Nine months ended September 30, 2016
Net income (loss) attributable to Albemarle Corporation	$	186,373		$	150,221	$	154,767		$	491,361		$	133,012		$	(582,788	)	$	41,585
Depreciation and amortization	74,488			29,756		26,853			131,097			5,629			4,562			141,288
(Gain) loss on sales of businesses, net⁽ⁱ⁾	—			—		—			—			(123,831		)	1,533			(122,298		)
Acquisition and integration related costs^(c)	—			—		—			—			—			44,337			44,337
Interest and financing expenses	—			—		—			—			—			46,860			46,860
Income tax expense	—			—		—			—			—			61,535			61,535



Loss from discontinued operations (net of tax)	—		—		—		—		—		357,843			357,843
Non-operating pension and OPEB items	—		—		—		—		—		(779		)	(779		)
Other^(f)	—		—		—		—		—		462			462
Adjusted EBITDA	$	260,861	$	179,977	$	181,620	$	622,458	$	14,810	$	(66,435	)	$	570,833

(a)

In connection with the acquisition of Jiangli New Materials, the Company valued inventory purchased from Jiangli New Materials at fair value, which resulted in a markup of the underlying net book value of the inventory totaling approximately $23.1 million. The inventory markup was expensed over the estimated remaining selling period. For the three-month and nine-month periods ended September 30, 2017, $0.6 million and $23.1 million, respectively, was included in Cost of goods sold related to the utilization of the inventory markup.


(b)	Gain recorded in Other (expenses) income, net related to the acquisition of the remaining 50% interest in Salmag. See Note 2, “Acquisitions,” for additional information.


(c)	See Note 2, “Acquisitions,” for additional information.


(d)	Included shortfall contributions for our multiemployer plan financial improvement plan. See Note 13, “Pension Plans and Other Postretirement Benefits,” for additional information.


(e)	Included amounts for the three-month period ended September 30, 2017 recorded in:


▪	Cost of goods sold - $1.3 million reversal of deferred income related to an abandoned project at an unconsolidated investment.


▪	Other (expenses) income, net - $1.1 million related to a reversal of a liability associated with the previous disposal of a property, partially offset by the revision of tax indemnification expenses of $0.7 million primarily related to the filing of tax returns for a previously disposed business.

Included amounts for the nine-month period ended September 30, 2017 recorded in:


▪	Cost of goods sold - $1.3 million reversal of deferred income related to an abandoned project at an unconsolidated investment.


▪	Selling, general and administrative expenses - $1.0 million related to a reversal of an accrual recorded as part of purchase accounting from a previous acquisition.

▪

Other (expenses) income, net - $3.2 million of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle, a loss of $2.1 million associated with the previous disposal of a business, final settlement claims associated with the previous disposal of a business of $2.0 million and the revision of tax indemnification expenses of $1.9 million primarily related to the filing of tax returns and a competent authority agreement for a previously disposed business. This is partially offset by $1.1 million related to a reversal of a liability associated with the previous disposal of a property.


(f)	Includes the write-off of fixed assets of $1.4 million included in Research and development expenses, partially offset by a net gain of $0.9 million on the sales of properties included in Other (expenses) income, net.

(g)

During 2017, we initiated action to reduce costs in each of our reportable segments at several locations, primarily at our Lithium sites in Germany. Based on the restructuring plans, we have recorded expenses of $2.9 million in Cost of goods sold, $8.4 million in Selling, general and administrative expenses and $5.8 million in Research and development expenses for the nine-month period ended September 30, 2017, primarily related to expected severance payments. The unpaid balance is recorded in Accrued expenses at September 30, 2017, with the expectation that the majority of these plans will be completed by the end of 2017.


(h)	Included in Interest and financing expenses is a loss on early extinguishment of debt of $52.8 million. See Note 10, “Long-term Debt,” for additional information.


(i)	See Note 3, “Divestitures,” for additional information.