

	Three Months Ended March 31,
	2018			2017
	(In thousands)
Net sales:
Lithium	$	298,032		$	216,229
Bromine Specialties	225,639			219,191
Catalysts	260,717			253,558
All Other	37,165			32,419
Corporate	76			666
Total net sales	$	821,629		$	722,063

Adjusted EBITDA:
Lithium	$	131,014		$	99,852
Bromine Specialties	69,969			68,488
Catalysts	67,830			69,749
All Other	3,862			5,156
Corporate	(23,957		)	(31,869		)
Total adjusted EBITDA	$	248,718		$	211,376

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, 2018
Net income (loss) attributable to Albemarle Corporation	$	108,334		$	59,536	$	55,660	$	223,530		$	1,760	$	(93,530	)	$	131,760
Depreciation and amortization	24,065			10,433		12,170		46,668			2,102		1,560			50,330
Acquisition and integration related costs^(a)	—			—		—		—			—		2,201			2,201
Interest and financing expenses	—			—		—		—			—		13,538			13,538
Income tax expense	—			—		—		—			—		20,361			20,361
Non-operating pension and OPEB items	—			—		—		—			—		(2,197		)	(2,197		)
Legal accrual^(b)	—			—		—		—			—		17,628			17,628
Other^(c)	(1,385		)	—		—		(1,385		)	—		16,482			15,097
Adjusted EBITDA	$	131,014		$	69,969	$	67,830	$	268,813		$	3,862	$	(23,957	)	$	248,718
Three months ended March 31, 2017
Net income (loss) attributable to Albemarle Corporation	$	77,614		$	58,694	$	56,966	$	193,274		$	3,246	$	(145,307	)	$	51,213
Depreciation and amortization	19,065			9,794		12,783		41,642			1,910		1,518			45,070
Utilization of inventory markup^(d)	10,606			—		—		10,606			—		—			10,606
Restructuring and other, net^(e)	—			—		—		—			—		12,905			12,905
Gain on acquisition^(f)	(7,433		)	—		—		(7,433		)	—		—			(7,433		)
Acquisition and integration related costs^(a)	—			—		—		—			—		14,281			14,281
Interest and financing expenses^(g)	—			—		—		—			—		68,513			68,513
Income tax expense	—			—		—		—			—		11,971			11,971
Non-operating pension and OPEB items	—			—		—		—			—		(1,063		)	(1,063		)
Other^(h)	—			—		—		—			—		5,313			5,313
Adjusted EBITDA	$	99,852		$	68,488	$	69,749	$	238,089		$	5,156	$	(31,869	)	$	211,376

(a)

Included amounts for the three-month periods ended March 31, 2018 and 2017 recorded in (1) Cost of goods sold of $1.0 million and $8.9 million, respectively; and (2) Selling, general and administrative expenses of $1.2 million and $5.4 million, respectively, relating to various significant projects, including the Jiangxi Jiangli New Materials Science and Technology Co. Ltd. (“Jiangli New Materials”) acquisition, which contains unusual compensation related costs negotiated specifically as a result of this acquisition that are outside of the Company’s normal compensation arrangements.


(b)	Included in Other (expenses) income, see Note 10, “Commitments and Contingencies” for additional information.


(c)	Included amounts for the three months ended March 31, 2018 recorded in:


▪	Cost of goods sold - $1.1 million related to the write-off of fixed assets in our JBC joint venture.


▪	Selling, general and administrative expenses - $1.4 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.


▪	Other (expenses) income, net - $15.6 million of environmental charges related to a site formerly owned by Albemarle, partially offset by a net gain of $0.2 million related to the the reversal of previously recorded expenses of disposed businesses.

(d)

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 period ended March 31, 2017, $10.6 million was included in Cost of goods sold related to the utilization of the inventory markup.

(e)

During the first quarter of 2017, we initiated actions to reduce costs at several locations, primarily at our Lithium site in Germany. Based on the restructuring plans, we have recorded expenses of $2.9 million in Cost of goods sold, $4.2 million in Selling, general and administrative expenses and $5.8 million in Research and development expenses, primarily related to severance, expected to be incurred. The unpaid balance is recorded in Accrued expenses at March 31, 2018, with the expectation that the majority of these plans will be completed by the end of 2018.


(f)	Gain recorded in Other (expenses) income, net related to the acquisition of the remaining 50% interest in the Sales de Magnesio Ltda. joint venture in Chile. The calculation of the initial gain recorded during the three months ended March 31, 2017 was based on management’s preliminary estimates and assumptions available at that time.

(g)

During the first quarter of 2017, we repaid the 3.00% Senior notes in full, €307.0 million of the 1.875% Senior notes and $174.7 million of the 4.50% Senior notes, as well as related tender premiums of $45.2 million. As a result, included in Interest and financing expenses is a loss on early extinguishment of debt of $52.8 million, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of these senior notes.


(h)	Included in Other (expenses) income, net are $3.2 million of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle and a loss of $2.1 million associated with the previous disposal of a business.