

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
	(In thousands)
Net sales:
Lithium	$	317,563		$	243,821		$	615,595		$	460,050
Bromine Specialties	220,514			203,945			446,153			423,136
Catalysts	284,966			258,255			545,683			511,813
All Other	30,748			30,704			67,913			63,123
Corporate	83			533			159			1,199
Total net sales	$	853,874		$	737,258		$	1,675,503		$	1,459,321

Adjusted EBITDA:
Lithium	$	141,617		$	115,200		$	272,631		$	215,052
Bromine Specialties	69,367			62,075			139,336			130,563
Catalysts	75,102			67,427			142,932			137,176
All Other	(101		)	2,444			3,761			7,600
Corporate	(27,423		)	(28,205		)	(51,380		)	(60,074		)
Total adjusted EBITDA	$	258,562		$	218,941		$	507,280		$	430,317

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 June 30, 2018
Net income (loss) attributable to Albemarle Corporation	$	117,292	$	59,673	$	280,887		$	457,852		$	(2,079	)	$	(153,312	)	$	302,461
Depreciation and amortization	24,325		9,694		12,920			46,939			1,978			1,557			50,474
Gain on sale of business^(a)	—		—		(218,705		)	(218,705		)	—			—			(218,705		)
Acquisition and integration related costs^(b)	—		—		—			—			—			6,510			6,510
Interest and financing expenses	—		—		—			—			—			13,308			13,308
Income tax expense	—		—		—			—			—			80,102			80,102
Non-operating pension and OPEB items	—		—		—			—			—			(2,204		)	(2,204		)
Legal accrual^(c)	—		—		—			—			—			10,416			10,416
Albemarle Foundation contribution^(d)	—		—		—			—			—			15,000			15,000
Other^(e)	—		—		—			—			—			1,200			1,200
Adjusted EBITDA	$	141,617	$	69,367	$	75,102		$	286,086		$	(101	)	$	(27,423	)	$	258,562
Three months ended June 30, 2017
Net income (loss) attributable to Albemarle Corporation	$	81,819	$	51,739	$	53,994		$	187,552		$	152		$	(84,371	)	$	103,333
Depreciation and amortization	21,460		10,336		13,433			45,229			2,292			1,601			49,122
Utilization of inventory markup^(f)	11,921		—		—			11,921			—			—			11,921
Restructuring and other^(g)	—		—		—			—			—			4,235			4,235
Acquisition and integration related costs^(b)	—		—		—			—			—			6,479			6,479
Interest and financing expenses	—		—		—			—			—			14,590			14,590
Income tax expense	—		—		—			—			—			23,130			23,130
Non-operating pension and OPEB items	—		—		—			—			—			(1,053		)	(1,053		)
Multiemployer plan shortfall contributions^(h)	—		—		—			—			—			4,940			4,940
Other⁽ⁱ⁾	—		—		—			—			—			2,244			2,244
Adjusted EBITDA	$	115,200	$	62,075	$	67,427		$	244,702		$	2,444		$	(28,205	)	$	218,941



Six months ended June 30, 2018
Net income (loss) attributable to Albemarle Corporation	$	225,626		$	119,209	$	336,547		$	681,382		$	(319	)	$	(246,842	)	$	434,221
Depreciation and amortization	48,390			20,127		25,090			93,607			4,080			3,117			100,804
Gain on sale of business^(a)	—			—		(218,705		)	(218,705		)	—			—			(218,705		)
Acquisition and integration related costs^(b)	—			—		—			—			—			8,712			8,712
Interest and financing expenses	—			—		—			—			—			26,846			26,846
Income tax expense	—			—		—			—			—			100,463			100,463
Non-operating pension and OPEB items	—			—		—			—			—			(4,401		)	(4,401		)
Legal accrual^(c)	—			—		—			—			—			28,044			28,044
Albemarle Foundation contribution^(d)	—			—		—			—			—			15,000			15,000
Other^(e)	(1,385		)	—		—			(1,385		)	—			17,681			16,296
Adjusted EBITDA	$	272,631		$	139,336	$	142,932		$	554,899		$	3,761		$	(51,380	)	$	507,280
Six months ended June 30, 2017
Net income (loss) attributable to Albemarle Corporation	$	159,433		$	110,433	$	110,960		$	380,826		$	3,398		$	(229,678	)	$	154,546
Depreciation and amortization	40,525			20,130		26,216			86,871			4,202			3,119			94,192
Utilization of inventory markup^(f)	22,527			—		—			22,527			—			—			22,527
Restructuring and other^(g)	—			—		—			—			—			17,141			17,141
Gain on acquisition^(j)	(7,433		)	—		—			(7,433		)	—			—			(7,433		)
Acquisition and integration related costs^(b)	—			—		—			—			—			20,760			20,760
Interest and financing expenses^(k)	—			—		—			—			—			83,103			83,103
Income tax expense	—			—		—			—			—			35,101			35,101
Non-operating pension and OPEB items	—			—		—			—			—			(2,116		)	(2,116		)
Multiemployer plan shortfall contributions^(h)	—			—		—			—			—			4,940			4,940
Other⁽ⁱ⁾	—			—		—			—			—			7,556			7,556
Adjusted EBITDA	$	215,052		$	130,563	$	137,176		$	482,791		$	7,600		$	(60,074	)	$	430,317


(a)	See Note 2, “Divestitures,” for additional information.

(b)

Included amounts for the three-month and six-month periods ended June 30, 2018 recorded in (1) Cost of goods sold of $1.0 million and $1.9 million, respectively; and (2) Selling, general and administrative expenses of $5.5 million and $6.8 million, respectively, relating to various significant projects. Included amounts for the three-month and six-month periods ended June 30, 2017 recorded in (1) Cost of goods sold of $1.8 million and $10.7 million, respectively; and (2) Selling, general and administrative expenses of $4.7 million and $10.1 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.


(c)	Included in Other expenses, net. See Note 10, “Commitments and Contingencies,” for additional information.

(d)

Included in Selling, general and administrative expenses is a charitable contribution, using a portion of the proceeds received from the sale of the polyolefin catalysts and components portion of the PCS business, to the Albemarle Foundation, a non-profit organization that sponsors grants, health and social projects, educational initiatives, disaster relief, matching gift programs, scholarships and other charitable initiatives in locations where our employees live and operate. This contribution is in addition to the normal annual contribution made to the Albemarle Foundation by the Company, and is significant in size and nature in that it is intended to provide more long-term benefits in the communities where we live and operate.


(e)	Included amounts for the three months ended June 30, 2018 recorded in:


▪	Other expenses, net - $1.2 million related to the revision of previously recorded expenses of disposed businesses.

Included amounts for the six months ended June 30, 2018 recorded in:


▪	Cost of goods sold - $1.1 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian 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, net - $15.6 million of environmental charges related to a site formerly owned by Albemarle and $1.0 million related to the revision of previously recorded expenses of disposed businesses.

(f)

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 six-month periods ended June 30, 2017, $11.9 million and $22.5 million, respectively, was included in Cost of goods sold related to the utilization of the inventory markup.

(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 $4.2 million in Selling, general and administrative expenses for the three-month period ended June 30, 2017 and $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 six-month period ended June 30, 2017, primarily related to expected severance payments. The unpaid balance is recorded in Accrued expenses at June 30, 2018, with the expectation that the majority of these plans will be completed by the end of 2018.


(h)	Included shortfall contributions for our multiemployer plan financial improvement plan. See Note 12, “Pension Plans and Other Postretirement Benefits,” for additional information.

(i)

Included amounts for the three-month and six-month periods ended June 30, 2017 recorded in (1) Selling, general and administrative expenses related to a reversal of an accrual recorded as part of purchase accounting from a previous acquisition of $1.0 million; and (2) Other expenses, net related to final settlement claims associated with the previous disposal of a business of $2.0 million and the revision of tax indemnification expenses of $1.2 million primarily related to a competent authority agreement for a previously disposed business. Also included in Other expenses, net for the six-month period ended June 30, 2017 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.


(j)	Gain recorded in Other expenses, net related to the acquisition of the remaining 50% interest in the Sales de Magnesio Ltda. joint venture in Chile.

(k)

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.