Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment and Geographic Area Information

Segment and Geographic Area 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.

Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business that does not fit into any of our core businesses.

The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and 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 intersegment 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.

	Year Ended December 31,
	2020		2019		2018
	(In thousands)
Net sales:
Lithium	$	1,144,778	$	1,358,170	$	1,228,171
Bromine Specialties	964,962		1,004,216		917,880
Catalysts	797,914		1,061,817		1,101,554
All Other	221,255		165,224		127,186
Corporate	—		—		159
Total net sales	$	3,128,909	$	3,589,427	$	3,374,950
Adjusted EBITDA:
Lithium	$	393,093	$	524,934	$	530,773
Bromine Specialties	323,605		328,457		288,116
Catalysts	130,134		270,624		284,307
All Other	84,821		49,628		14,091
Corporate	(112,915)		(136,862)		(110,623)
Total adjusted EBITDA	$	818,738	$	1,036,781	$	1,006,664

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
2020
Net income (loss) attributable to Albemarle Corporation	$	277,711	$	274,495	$	80,149	$	632,355	$	76,323	$	(332,914)	$	375,764
Depreciation and amortization	112,854		50,310		49,985		213,149		8,498		10,337		231,984
Restructuring and other(a)	—		—		—		—		—		19,597		19,597
Acquisition and integration related costs(b)	—		—		—		—		—		17,263		17,263
Interest and financing expenses	—		—		—		—		—		73,116		73,116
Income tax expense	—		—		—		—		—		54,425		54,425
Non-operating pension and OPEB items	—		—		—		—		—		40,668		40,668
Other(c)	2,528		(1,200)		—		1,328		—		4,593		5,921
Adjusted EBITDA	$	393,093	$	323,605	$	130,134	$	846,832	$	84,821	$	(112,915)	$	818,738
2019
Net income (loss) attributable to Albemarle Corporation	$	341,767	$	279,945	$	219,686	$	841,398	$	41,188	$	(349,358)	$	533,228
Depreciation and amortization	99,424		47,611		50,144		197,179		8,440		7,865		213,484
Restructuring and other(a)	—		—		—		—		—		5,877		5,877
Gain on sale of property(d)	—		—		—		—		—		(14,411)		(14,411)
Acquisition and integration related costs(b)	—		—		—		—		—		20,684		20,684
Interest and financing expenses(e)	—		—		—		—		—		57,695		57,695
Income tax expense	—		—		—		—		—		88,161		88,161
Non-operating pension and OPEB items	—		—		—		—		—		26,970		26,970
Stamp duty(b)	64,766		—		—		64,766		—		—		64,766
Windfield tax settlement(f)	17,292		—		—		17,292		—		—		17,292
Other(g)	1,685		901		794		3,380		—		19,655		23,035
Adjusted EBITDA	$	524,934	$	328,457	$	270,624	$	1,124,015	$	49,628	$	(136,862)	$	1,036,781
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(h)	—		—		(210,428)		(210,428)		—		—		(210,428)
Acquisition and integration related costs(b)	—		—		—		—		—		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(i)	—		—		—		—		—		27,027		27,027
Environmental accrual(j)	—		—		—		—		—		15,597		15,597
Albemarle Foundation contribution(k)	—		—		—		—		—		15,000		15,000
Indemnification adjustments(l)	—		—		—		—		—		25,240		25,240
Other(m)	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

(a)During the year ended December 31, 2020, we recorded severance expenses as part of business reorganization plans, impacting each of our businesses and Corporate, primarily in the U.S., Belgium, Germany and with our Jordanian joint venture partner. We recorded expenses of $0.7 million in Cost of goods sold, $19.2 million in SG&A and a $0.3 million gain in Net income attributable to noncontrolling interests for the portion of severance expense allocated to our Jordanian joint venture partner. The balance of unpaid severance is recorded in Accrued expenses and is primarily expected to be paid through 2021. In addition, we recorded severance payments as part of a business reorganization plans of $5.9 million recorded in Selling, general and administrative expenses for the year

ended December 31, 2019 and $0.1 million and $3.7 million recorded in Cost of goods sold and Selling, general and administrative expenses, respectively, for the year ended December 31, 2018.

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

(c)Included amounts for the year ended December 31, 2020 recorded in:

•Cost of goods sold - $1.3 million of expense related to a legal matter as part of a prior acquisition in our Lithium business.

•SG&A - $3.1 million of shortfall contributions for our multiemployer plan financial improvement plan and $3.8 million of a net expense primarily relating to the increase of environmental reserves at non-operating businesses we have previously divested.

•Other expenses, net - $7.2 million gain related to the sale of our ownership percentage in the SOCC joint venture, $3.6 million of a net gain primarily relating to the sale of intangible assets in our Bromine business and property in Germany not used as part of our operations and a $2.5 million net gain resulting from the settlement of legal matters related to a business sold or a site in the process of being sold, partially offset by $9.6 million of losses resulting from the adjustment of indemnifications related to previously disposed businesses and $1.2 million of expenses related to other costs outside of our regular operations.

(d)Gain of $3.3 million recorded in Selling, general and administrative expenses related to the release of liabilities as part of the sale of a property and $11.1 million gain recorded in Other expenses, net related to the sale of land in Pasadena, Texas not used as part of our operations.

(e)Included in Interest and financing expenses is a loss on early extinguishment of debt of $4.8 million. See Note 14, “Long-Term Debt,” for additional information.

(f)Represents our 49% share of a tax settlement between our Windfield joint venture and an Australian taxing authority, recorded in Equity in net income of unconsolidated investments (net of tax). This is offset in Income tax expense by a discrete tax benefit related to seeking treaty relief from the competent authority to prevent double taxation.

(g)Included amounts for the year ended December 31, 2019 recorded in:

•Cost of goods sold - $0.7 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.

•Selling, general and administrative expenses - $1.8 million of shortfall contributions for our multiemployer plan financial improvement plan, $0.9 million of a write-off of uncollectible accounts receivable from a terminated distributor in the Bromine Specialties segment, $1.0 million related to the settlement of terminated agreements, primarily in the Catalysts segment, and $0.8 million related to the settlement of an ongoing audit in the Lithium segment.

•Other expenses, net - $3.1 million of unrecoverable vendor costs outside the operations of the business related to the construction of the future Kemerton production facility, $9.8 million of a net loss primarily resulting from the adjustment of indemnifications and other liabilities related to previously disposed businesses or purchase accounting, $3.6 million of asset retirement obligation charges related to the update of an estimate at a site formerly owned by Albemarle, and $1.2 million of non-operating pension costs from our 50% interest in JBC.

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

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

(j)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.

(k)Included 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.

(l)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 adjustment of indemnifications previously recorded from disposed businesses.

(m)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.

	December 31,
	2020		2019		2018
			(In thousands)
Identifiable assets:
Lithium(a)	$	7,134,229	$	6,570,791	$	4,605,070
Bromine Specialties	867,648		799,456		753,157
Catalysts	1,066,089		1,163,590		1,134,975
All Other	136,659		146,211		128,185
Corporate(b)	1,246,321		1,180,815		960,287
Total identifiable assets	$	10,450,946	$	9,860,863	$	7,581,674

(a)Increase in Lithium identifiable assets at December 31, 2020 and 2019 primarily due to capital expenditures for growth and capacity increases, as well as the acquisition of 60% interest in MRL’s Wodgina Project assets.

	Year Ended December 31,
	2020		2019		2018
			(In thousands)
Depreciation and amortization:
Lithium	$	112,854	$	99,424	$	95,193
Bromine Specialties	50,310		47,611		41,607
Catalysts	49,985		50,144		49,131
All Other	8,498		8,440		8,073
Corporate	10,337		7,865		6,694
Total depreciation and amortization	$	231,984	$	213,484	$	200,698
Capital expenditures:
Lithium	$	720,563	$	665,585	$	500,849
Bromine Specialties	57,486		82,208		79,357
Catalysts	44,448		57,939		52,019
All Other	6,792		7,309		5,232
Corporate	21,188		38,755		62,534
Total capital expenditures	$	850,477	$	851,796	$	699,991

	Year Ended December 31,
	2020		2019		2018
			(In thousands)
Net Sales(a):
United States	$	743,834	$	858,084	$	887,416
Foreign(b)	2,385,075		2,731,343		2,487,534
Total	$	3,128,909	$	3,589,427	$	3,374,950

(a)Net sales are attributed to countries based upon shipments to final destination.

(b)In 2020, net sales to Korea, China and Japan represented 14%, 14% and 13%, respectively, of total net sales. In 2019, net sales to Korea, China and Japan represented 17%, 13%, and 12%, respectively, of total net sales. In 2018, net sales to Korea, China and Japan represented 13%, 12%, and 10%, respectively, of total net sales.

	As of December 31,
	2020		2019		2018
			(In thousands)
Long-Lived Assets(a):
United States	$	1,007,793	$	1,003,496	$	929,291
Australia	2,362,377		1,981,642		407,141
Chile	1,814,658		1,687,090		1,406,478
Jordan	256,640		256,363		254,800
Netherlands	181,206		165,782		166,853
China	122,749		109,235		91,160
Germany	90,174		89,568		101,168
France	45,505		44,936		43,698
Brazil	24,393		37,165		40,464
Other foreign countries	66,273		68,499		65,937
Total	$	5,971,768	$	5,443,776	$	3,506,990

(a)    Long-lived assets are comprised of the Company’s Property, plant and equipment and joint ventures included in Investments.