

	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Net sales:
Lithium	$	1,228,171		$	1,018,885		$	668,852
Bromine Specialties	917,880			855,143			792,425
Catalysts	1,101,554			1,067,572			1,031,501
All Other	127,186			128,914			180,988
Corporate	159			1,462			3,437
Total net sales	$	3,374,950		$	3,071,976		$	2,677,203

Adjusted EBITDA:
Lithium	$	530,773		$	446,652		$	285,714
Bromine Specialties	288,116			258,901			226,926
Catalysts	284,307			283,883			316,609
All Other	14,091			13,878			14,772
Corporate	(110,623		)	(117,834		)	(85,804		)
Total adjusted EBITDA	$	1,006,664		$	885,480		$	758,217

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
2018
Net income (loss) attributable to Albemarle Corporation	$	428,212		$	246,509	$	445,604		$	1,120,325		$	6,018		$	(432,781	)	$	693,562
Depreciation and amortization	95,193			41,607		49,131			185,931			8,073			6,694			200,698
Restructuring and other^(a)	—			—		—			—			—			3,838			3,838
Gain on sale of business^(b)	—			—		(210,428		)	(210,428		)	—			—			(210,428		)
Acquisition and integration related costs^(c)	—			—		—			—			—			19,377			19,377
Interest and financing expenses	—			—		—			—			—			52,405			52,405
Income tax expense	—			—		—			—			—			144,826			144,826
Non-operating pension and OPEB items	—			—		—			—			—			5,285			5,285
Legal accrual^(d)	—			—		—			—			—			27,027			27,027
Environmental accrual^(e)	—			—		—			—			—			15,597			15,597
Albemarle Foundation contribution^(f)	—			—		—			—			—			15,000			15,000
Indemnification adjustments^(g)	—			—		—			—			—			25,240			25,240
Other^(h)	7,368			—		—			7,368			—			6,869			14,237
Adjusted EBITDA	$	530,773		$	288,116	$	284,307		$	1,103,196		$	14,091		$	(110,623	)	$	1,006,664
2017
Net income (loss) attributable to Albemarle Corporation	$	342,992		$	218,839	$	230,665		$	792,496		$	5,521		$	(743,167	)	$	54,850
Depreciation and amortization	87,879			40,062		54,468			182,409			8,357			6,162			196,928
Utilization of inventory markup⁽ⁱ⁾	23,095			—		—			23,095			—			—			23,095
Restructuring and other^(j)	—			—		—			—			—			17,056			17,056
Gain on acquisition^(k)	(6,221		)	—		—			(6,221		)	—			—			(6,221		)
Acquisition and integration related costs^(c)	—			—		—			—			—			33,954			33,954
Interest and financing expenses^(l)	—			—		—			—			—			115,350			115,350
Income tax expense	—			—		—			—			—			431,817			431,817
Non-operating pension and OPEB items	—			—		—			—			—			(16,125		)	(16,125		)
Note receivable reserve^(m)	—			—		—			—			—			28,730			28,730
Other⁽ⁿ⁾	(1,093		)	—		(1,250		)	(2,343		)	—			8,389			6,046
Adjusted EBITDA	$	446,652		$	258,901	$	283,883		$	989,436		$	13,878		$	(117,834	)	$	885,480
2016
Net income (loss) attributable to Albemarle Corporation	$	198,852		$	187,364	$	265,416		$	651,632		$	131,301		$	(139,258	)	$	643,675
Depreciation and amortization	86,862			39,562		51,193			177,617			7,302			6,056			190,975
(Gain) loss on sales of businesses, net^(b)	—			—		—			—			(123,831		)	1,533			(122,298		)
Acquisition and integration related costs^(c)	—			—		—			—			—			57,384			57,384
Interest and financing expenses	—			—		—			—			—			65,181			65,181
Income tax expense	—			—		—			—			—			96,263			96,263
Income from discontinued operations (net of tax)	—			—		—			—			—			(202,131		)	(202,131		)
Non-operating pension and OPEB items	—			—		—			—			—			25,589			25,589
Other^(o)	—			—		—			—			—			3,579			3,579
Adjusted EBITDA	$	285,714		$	226,926	$	316,609		$	829,249		$	14,772		$	(85,804	)	$	758,217


(a)	Expected severance payments as part of a business reorganization plan, $0.1 million recorded in Cost of goods sold and $3.7 million recorded in Selling, general and administrative expenses. These severance payments have been made during the year ended December 31, 2018.


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


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


(d)	Included in Other expenses, net. See Note 17, “Commitments and Contingencies,” for additional information.


(e)	Increase in environmental reserve to indemnify the buyer of a formerly owned site recorded in Other expenses, net. As defined in the agreement of sale, this indemnification has a set cutoff date in 2024, at which point we will no longer be required to provide financial coverage.

(f)

Including in Selling, general and administrative expenses is a charitable contribution, using a portion of the proceeds received from the Polyolefin Catalysts Divestiture, 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.


(g)	Included in Other expenses, net is $19.7 million related to the proposed settlement of an ongoing audit of a previously disposed business in Germany, and $5.5 million related to the revision of indemnifications previously recorded from disposed businesses.


(h)	Included amounts for the year ended December 31, 2018 recorded in:


•	Cost of goods sold - $4.9 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian joint venture and $8.8 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.

•

Selling, general and administrative expenses - $2.3 million of shortfall contributions for our multiemployer plan financial improvement plan and a $1.2 million contribution, using a portion of the proceeds received from the Polyolefin Catalysts Divestiture, to schools in the state of Louisiana for qualified tuition purposes. This contribution is significant in size and is intended to provide long-term benefits for families in the Louisiana community. This was partially offset by a $1.5 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.


•	Other expenses, net - $1.5 million gain related to the reversal of previously recorded liabilities of disposed businesses.

(i)

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 utilization of this inventory markup was included in Costs of goods sold during the year ended December 31, 2017, the estimated remaining selling period.

(j)

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 $5.7 million in Research and development expenses, primarily related to expected severance payments. The unpaid balance is recorded in Accrued expenses at December 31, 2018, with the expectation that the remaining balance will be paid by the end of 2019.


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


(l)	Included in Interest and financing expenses is a loss on early extinguishment of debt of $52.8 million. See Note 14, “Long-Term Debt,” for additional information.


(m)	Reserve recorded in Other expenses, net against a note receivable on one of our European entities no longer deemed probable of collection.


(n)	Included amounts for the year ended December 31, 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 - $3.3 million of shortfall contributions for our multiemployer plan financial improvement plan, partially offset by $1.0 million related to a reversal of an accrual recorded as part of purchase accounting from a previous acquisition.

•

Other expenses, net - $3.2 million of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle, losses of $8.7 million related to adjustments of settlements and indemnifications of previously disposed businesses, the revision of tax indemnification expenses of $3.7 million primarily related to the filing of tax returns and a competent authority agreement for a previously disposed business and $1.0 million related to the settlement of a legal claim. This is partially offset by gains of $10.6 million and $1.1 million related to the reversal of liabilities recorded as part of purchase accounting from a previous acquisition and the previous disposal of a property, respectively.


(o)	Included amounts for the year ended December 31, 2016 recorded in:


•	Selling, general and administrative expenses - $0.9 million related to the net loss on the sales of properties.


•	Research and development expenses - $1.4 million related to the write-off of fixed assets in China.


•	Other expenses, net -$2.4 million related to environmental charges related to a site formerly owned by Albemarle, partially offset by a gain related to a previously disposed of site in China of $1.1 million.



	December 31,
	2018		2017		2016
			(In thousands)
Identifiable assets:
Lithium^(a)	$	4,605,070	$	3,979,615	$	3,499,302
Bromine Specialties	753,157		745,007		724,218
Catalysts	1,134,975		1,332,599		1,224,504
All Other	128,185		126,486		130,595
Corporate^(a)(b)	960,287		1,567,065		2,582,588
Total identifiable assets	$	7,581,674	$	7,750,772	$	8,161,207
Goodwill:
Lithium	$	1,354,779	$	1,389,089	$	1,326,980
Bromine Specialties	20,319		20,319		20,319
Catalysts	185,485		194,361		186,147
All Other	6,586		6,586		6,586
Total goodwill	$	1,567,169	$	1,610,355	$	1,540,032


(a)	The identifiable assets at December 31, 2017, have been revised to correct an error in the previously reported amounts, which understated the Lithium segment and overstated the Corporate category by $238.5 million. There is no impact to the financial statements or total identifiable assets at December 31, 2017.

(b)

Decrease in Corporate identifiable assets at December 31, 2018 primarily due to the net use of cash and cash equivalents for items such as capital expenditures, share repurchases and commercial paper repayments. As of December 31, 2016, Corporate included the net proceeds received from the sale of the Chemetall Surface Treatment business completed on December 14, 2016, less the repayment of the term loans and commercial paper using those proceeds. See Note 3, “Divestitures,” and Note 14, “Long-Term Debt” for additional details about these transactions.



	Year Ended December 31,
	2018		2017		2016
			(In thousands)
Depreciation and amortization:
Lithium	$	95,193	$	87,879	$	86,862
Bromine Specialties	41,607		40,062		39,562
Catalysts	49,131		54,468		51,193
Discontinued Operations	—		—		35,194
All Other	8,073		8,357		7,302
Corporate	6,694		6,162		6,056
Total depreciation and amortization	$	200,698	$	196,928	$	226,169
Capital expenditures:
Lithium	$	500,849	$	192,318	$	72,038
Bromine Specialties	79,357		46,427		46,414
Catalysts	52,019		46,808		47,475
Discontinued Operations	—		—		19,281
All Other	5,232		3,657		9,251
Corporate	62,534		28,493		2,195
Total capital expenditures	$	699,991	$	317,703	$	196,654