Investments

12 Months Ended

Dec. 31, 2022

Investments:

Investments include our share of unconsolidated joint ventures, nonmarketable securities and marketable equity securities. The following table details our investment balances at December 31, 2022 and 2021 (in thousands):


	December 31,
	2022		2021
Joint ventures	$	832,119	$	607,644
Available for sale debt securities	260,139		246,517
Nonmarketable securities	18,760		20,660
Marketable equity securities	39,535		37,187
Total	$	1,150,553	$	912,008

Our ownership positions in significant unconsolidated investments are shown below:


		December 31,
		2022		2021		2020
*	Windfield Holdings Pty. Ltd. - a joint venture with Sichuan Tianqi Lithium Industries, Inc., that mines lithium ore and produces lithium concentrate	49	%	49	%	49	%
*	Nippon Aluminum Alkyls - a joint venture with Mitsui Chemicals, Inc. that produces aluminum alkyls	50	%	50	%	50	%

*	Nippon Ketjen Company Limited - a joint venture with Sumitomo Metal Mining Company Limited that produces refinery catalysts	50	%	50	%	50	%
*	Eurecat S.A. - a joint venture with Axens Group for refinery catalysts regeneration services	50	%	50	%	50	%
*	Fábrica Carioca de Catalisadores S.A. - a joint venture with Petrobras Quimica S.A. - PETROQUISA that produces catalysts and includes catalysts research and product development activities	50	%	50	%	50	%

Our investment in the significant unconsolidated joint ventures above amounted to $813.9 million and $575.3 million as of December 31, 2022 and 2021, respectively, and the amount included in Equity in net income of unconsolidated investments (net of tax) in the consolidated statements of income totaled $771.6 million, $94.9 million and $126.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. Undistributed earnings attributable to our significant unconsolidated investments represented approximately $242.7 million and $271.9 million of our consolidated retained earnings at December 31, 2022 and 2021, respectively. All of the unconsolidated joint ventures in which we have investments are private companies and accordingly do not have a quoted market price available.

The following summary lists the assets, liabilities and results of operations for our significant unconsolidated joint ventures presented herein (in thousands):


	December 31,
	2022		2021
Summary of Balance Sheet Information:
Current assets	$	1,927,791	$	485,730
Noncurrent assets	1,659,692		1,590,958
Total assets	$	3,587,483	$	2,076,688
Current liabilities	$	770,211	$	209,621
Noncurrent liabilities	1,175,773		739,599
Total liabilities	$	1,945,984	$	949,220


	Year Ended December 31,
	2022		2021		2020
Summary of Statements of Income Information:
Net sales	$	4,290,223	$	827,848	$	597,082
Gross profit	$	3,765,304	$	443,129	$	266,026
Income before income taxes	$	3,301,875	$	269,788	$	225,436
Net income	$	2,314,094	$	187,084	$	157,628

We have evaluated each of the unconsolidated investments pursuant to current accounting guidance and none qualify for consolidation. Dividends received from our significant unconsolidated investments were $800.9 million, $78.4 million and $87.4 million in 2022, 2021 and 2020, respectively.

At December 31, 2022 and 2021, the carrying amount of our investments in unconsolidated joint ventures differed from the amount of underlying equity in net assets by approximately $5.6 million and $30.4 million, respectively. These amounts represent the differences between the value of certain assets of the joint ventures and our related valuation on a U.S. GAAP basis.

The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), which we acquired in the Rockwood acquisition. With regards to the Company’s ownership in Windfield, the parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”). However, the Company does not consolidate Windfield as it is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $694.5 million and $462.3 million at December 31, 2022 and 2021, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs for which the Company is not the primary beneficiary was $6.7 million and $8.0 million at December 31, 2022 and 2021, respectively. Our unconsolidated VIEs are reported in Investments in the consolidated balance sheets. The Company does not guarantee debt for, or have other financial support obligations to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.

Effective in 2022 the Company began recording the balance of deferred profits on sales from its equity method investments to the Company to Inventories, specifically finished goods. Historically this balance was recorded in Investments in the consolidated balance sheets. As a result, the historical balances have been reclassified to reflect the current period presentation. This change in presentation was made to better align the location of these deferred profits with their respective inventory balances until they are sold to a third party. Deferred profits from equity method investments totaled $332.3 million and $14.3 million at December 31, 2022 and 2021, respectively, with the increase primarily driven by increased pricing and volume of sales from the Talison joint venture. There was no impact to the statements of income, comprehensive income, changes in equity or cash flows for any period as a result of this change in presentation. In addition, the Company does not believe this change in presentation is material to the consolidated financial statements for any prior period.

In the fourth quarter of 2020, the Company divested its ownership interest in the Saudi Organometallic Chemicals Company LLC (“SOCC”) joint venture for cash proceeds of $11.0 million. As a result of this divestiture, the Company recorded a gain of $7.2 million in Other income (expenses), net during the year ended December 31, 2020.

The Company holds a 50% equity interest in Jordan Bromine Company Limited (“JBC”), reported in the Bromine segment. The Company consolidates this venture as it is considered the primary beneficiary due to its operational and financial control.

The Company holds a 60% interest in MRL’s Wodgina Project and formed an unincorporated joint venture with MRL. The joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of assets, liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements.

On June 1, 2021, the Company completed the sale of its FCS business to Grace for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue PIK dividends at an annual rate of 12% beginning June 1, 2023, two years after issuance. The fair value of this preferred equity was $260.1 million and $246.5 million at December 31, 2022 and 2021, respectively.

We maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of our Executive Deferred Compensation Plan (“EDCP”), subject to the claims of our creditors in the event of our insolvency. Assets of the Trust, in conjunction with our EDCP, are accounted for as trading securities in accordance with authoritative accounting guidance. The assets of the Trust consist primarily of mutual fund investments and are marked-to-market on a monthly basis through the consolidated statements of income. At December 31, 2022 and 2021, these marketable securities amounted to $27.3 million and $32.5 million, respectively.