XML 36 R20.htm IDEA: XBRL DOCUMENT v3.22.2.2
Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information:During 2022, the Company’s three reportable segments include: (1) Lithium; (2) Bromine; 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. In August 2022, the Company announced plans to realign its Lithium and Bromine global business units into a new corporate structure designed to better meet customer needs and foster talent required to deliver in a competitive global environment. In addition, the Company announced its decision to retain its Catalysts business under a separate, wholly-owned subsidiary. The realignment is expected to be completed in the first quarter of 2023, and will
result in the following three reportable segments: (1) Energy Storage; (2) Specialties; and (3) Catalysts. The Company will continue to report its segments in its current structure until the new structure becomes effective.
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category included only the FCS business that did not fit into any of our core businesses. On June 1, 2021, we completed the sale of the FCS business. See Note 3, “Divestitures,” for additional information. Amounts in the “All Other” category represent activity in this business until divested on June 1, 2021.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and other post-employment benefit (“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 inter-segment 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 and financing expenses, income tax expenses, depreciation and amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items in a balanced manner and on a segment basis. These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, certain litigation and arbitration costs and charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses adjusted EBITDA for business and enterprise 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 (loss) 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.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
(In thousands)(In thousands)
Net sales:
Lithium$1,501,073 $359,229 $2,942,861 $958,539 
Bromine354,908 277,783 1,092,239 837,978 
Catalysts235,824 193,554 664,026 562,141 
All Other— — — 75,095 
Total net sales$2,091,805 $830,566 $4,699,126 $2,433,753 
Adjusted EBITDA:
Lithium$1,111,243 $125,416 $1,915,066 $341,293 
Bromine106,958 86,012 371,875 273,298 
Catalysts4,635 33,103 31,337 79,694 
All Other— — — 29,858 
Corporate(32,870)(26,962)(86,173)(81,892)
Total adjusted EBITDA$1,189,966 $217,569 $2,232,105 $642,251 

See below for a reconciliation of adjusted EBITDA, a non-GAAP financial measure, from Net (loss) income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
LithiumBromineCatalystsAll OtherCorporateConsolidated Total
Three months ended September 30, 2022
Net income (loss) attributable to Albemarle Corporation$1,063,426 $93,186 $(12,473)$— $(246,924)$897,215 
Depreciation and amortization47,758 13,772 12,689 — 3,494 77,713 
Acquisition and integration related costs(a)
— — — — 2,145 2,145 
Interest and financing expenses— — — — 29,691 29,691 
Income tax expense— — — — 196,938 196,938 
Non-operating pension and OPEB items— — — — (5,027)(5,027)
Other(b)
59 — 4,419 — (13,187)(8,709)
Adjusted EBITDA$1,111,243 $106,958 $4,635 $— $(32,870)$1,189,966 
Three months ended September 30, 2021
Net income (loss) attributable to Albemarle Corporation$92,449 $73,409 $20,039 $— $(578,678)$(392,781)
Depreciation and amortization34,256 12,603 13,064 — 2,159 62,082 
Restructuring and other(c)
— — — — 754 754 
Gain on sale of business(d)
— — — — 984 984 
Acquisition and integration related costs(a)
— — — — 1,553 1,553 
Interest and financing expenses— — — — 5,136 5,136 
Income tax expense— — — — (114,670)(114,670)
Non-operating pension and OPEB items— — — — (5,471)(5,471)
Legal accrual(e)
— — — — 657,412 657,412 
Other(f)
(1,289)— — — 3,859 2,570 
Adjusted EBITDA$125,416 $86,012 $33,103 $— $(26,962)$217,569 
Nine months ended September 30, 2022
Net income (loss) attributable to Albemarle Corporation$1,777,214 $332,208 $(11,867)$— $(540,184)$1,557,371 
Depreciation and amortization128,786 39,667 38,785 — 8,042 215,280 
Loss on sale of interest in properties(g)
8,400 — — — — 8,400 
Acquisition and integration related costs(a)
— — — — 9,244 9,244 
Interest and financing expenses(h)
— — — — 98,934 98,934 
Income tax expense— — — — 366,486 366,486 
Non-operating pension and OPEB items— — — — (15,345)(15,345)
Other(b)
666 — 4,419 — (13,350)(8,265)
Adjusted EBITDA$1,915,066 $371,875 $31,337 $— $(86,173)$2,232,105 
Nine months ended September 30, 2021
Net income (loss) attributable to Albemarle Corporation$237,293 $235,670 $41,401 $27,988 $(414,856)$127,496 
Depreciation and amortization99,559 37,628 38,293 1,870 8,415 185,765 
Restructuring and other(c)
— — — — 2,294 2,294 
Gain on sale of business(d)
— — — — (428,424)(428,424)
Acquisition and integration related costs(a)
— — — — 5,629 5,629 
Interest and financing expenses(h)
— — — — 56,170 56,170 
Income tax expense— — — — 14,422 14,422 
Non-operating pension and OPEB items— — — — (16,407)(16,407)
Legal accrual(e)
— — — — 657,412 657,412 
Albemarle Foundation contribution(i)
— — — — 20,000 20,000 
Other(f)
4,441 — — — 13,453 17,894 
Adjusted EBITDA$341,293 $273,298 $79,694 $29,858 $(81,892)$642,251 
(a)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).
(b)Included amounts for the three months ended September 30, 2022 recorded in:
•Cost of goods sold - $2.7 million of expense related to one-time retention payments for certain employees during the Catalysts strategic review and business unit realignment.
•SG&A - $1.9 million of expense primarily related to one-time retention payments for certain employees during the Catalysts strategic review and business unit realignment and $1.3 million primarily related to facility closure expenses of offices in Germany.
•Other income, net - $10.6 million net gain related to the fair value adjustment of equity securities in a public company, a $3.0 million gain from the reversal of a liability related to a previous divestiture and $1.1 million of gain resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the nine months ended September 30, 2022 recorded in:
•Cost of goods sold - $2.7 million of expense related to one-time retention payments for certain employees during the Catalysts strategic review and business unit realignment, and $0.5 million related to the settlement of a legal matter resulting from a prior acquisition.
•SG&A - $3.2 million primarily related to facility closure expenses of offices in Germany, $2.8 million of charges for environmental reserves at sites not part of our operations and $1.9 million of expense primarily related to one-time retention payments for certain employees during the Catalysts strategic review, partially offset by $4.3 million of gains from the sale of legacy properties not part of our operations.
•Other income, net - $10.6 million net gain related to the fair value adjustment of equity securities in a public company, a $3.0 million gain from the reversal of a liability related to a previous divestiture, $1.1 million of gain resulting from the adjustment of indemnification related to previously disposed businesses and a $0.6 million gain related to a settlement received from a legal matter in a prior period.
(c)In 2021, the Company recorded facility closure related to offices in Germany, and severance expenses in Germany and Belgium, in SG&A.
(d)See Note 3, “Divestitures,” for additional information.
(e)Loss recorded in Other expense, net in the three and nine months ended September 30, 2021 related to the settlement of an arbitration ruling for a prior legal matter. See Note 10, “Commitments and Contingencies,” for further details.
(f)Included amounts for the three months ended September 30, 2021 recorded in:
•SG&A - $2.5 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
•Other income, net - $0.1 million of loss resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the nine months ended September 30, 2021 recorded in:
•SG&A - $8.6 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements, a $4.0 million loss resulting from the sale of property, plant and equipment and $1.6 million of charges for an environmental reserve at a site not part of our operations.
•Other income, net - $3.7 million of expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
(g)Expense recorded as a result of revised estimates of the obligation to construct certain lithium hydroxide conversion assets in Kemerton, Western Australia, due to cost overruns from supply chain, labor and COVID-19 pandemic related issues. The corresponding obligation was recorded in Accrued liabilities to be transferred to Mineral Resources Limited (“MRL”), which maintains a 40% ownership interest in these Kemerton assets.
(h)Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million and $29.0 million for the nine months ended September 30, 2022 and 2021, respectively. See Note 9, “Long-term Debt,” for additional information. In addition, Interest and financing expenses for the nine months ended September 30, 2022 includes the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest in prior periods. See Note 1, “Basis of Presentation,” for further details.
(i)Included in SG&A is a charitable contribution, using a portion of the proceeds received from the FCS 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 the Company’s employees live and the Company operates. 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 these communities.