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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________ 
FORM 10-Q
_________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 1-12658
_________________________________________________ 

ALBEMARLE CORPORATION
(Exact name of registrant as specified in its charter)
_________________________________________________ 
Virginia 54-1692118
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
4250 Congress Street, Suite 900
Charlotte, North Carolina 28209
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code - (980) 299-5700
_________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
COMMON STOCK, $.01 Par ValueALBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Number of shares of common stock, $.01 par value, outstanding as of April 26, 2023: 117,336,441


Table of Contents
ALBEMARLE CORPORATION
INDEX – FORM 10-Q
 
  Page
Number(s)
EXHIBITS
2

Table of Contents
PART I. FINANCIAL INFORMATION
 
Item 1.Financial Statements (Unaudited).
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
 Three Months Ended
March 31,
 20232022
Net sales$2,580,252 $1,127,728 
Cost of goods sold1,303,712 678,698 
Gross profit1,276,540 449,030 
Selling, general and administrative expenses154,306 112,568 
Research and development expenses20,471 16,083 
Loss on sale of interest in properties 8,400 
Operating profit1,101,763 311,979 
Interest and financing expenses(26,777)(27,834)
Other income, net82,492 15,496 
Income before income taxes and equity in net income of unconsolidated investments1,157,478 299,641 
Income tax expense276,963 80,530 
Income before equity in net income of unconsolidated investments880,515 219,111 
Equity in net income of unconsolidated investments (net of tax)396,188 62,436 
Net income1,276,703 281,547 
Net income attributable to noncontrolling interests(38,123)(28,164)
Net income attributable to Albemarle Corporation$1,238,580 $253,383 
Basic earnings per share$10.57 $2.16 
Diluted earnings per share$10.51 $2.15 
Weighted-average common shares outstanding – basic117,232 117,066 
Weighted-average common shares outstanding – diluted117,841 117,653 
See accompanying Notes to the Condensed Consolidated Financial Statements.
3

Table of Contents
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
(Unaudited)

 Three Months Ended
March 31,
 20232022
Net income$1,276,703 $281,547 
Other comprehensive income (loss), net of tax:
Foreign currency translation and other46,216 (5,889)
Cash flow hedge1,101 4,017 
Interest rate swap 650 
Total other comprehensive income (loss), net of tax47,317 (1,222)
Comprehensive income1,324,020 280,325 
Comprehensive income attributable to noncontrolling interests(38,115)(28,111)
Comprehensive income attributable to Albemarle Corporation$1,285,905 $252,214 
See accompanying Notes to the Condensed Consolidated Financial Statements.
4

Table of Contents
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
March 31,December 31,
20232022
Assets
Current assets:
Cash and cash equivalents
$1,586,734 $1,499,142 
Trade accounts receivable, less allowance for doubtful accounts (2023 – $3,283; 2022 – $2,534)
1,351,915 1,190,970 
Other accounts receivable312,560 185,819 
Inventories3,180,825 2,076,031 
Other current assets225,541 234,955 
Total current assets6,657,575 5,186,917 
Property, plant and equipment, at cost9,830,257 9,354,330 
Less accumulated depreciation and amortization2,476,768 2,391,333 
Net property, plant and equipment7,353,489 6,962,997 
Investments1,391,229 1,150,553 
Other assets243,405 250,558 
Goodwill1,634,152 1,617,627 
Other intangibles, net of amortization284,508 287,870 
Total assets$17,564,358 $15,456,522 
Liabilities And Equity
Current liabilities:
Accounts payable to third parties$1,758,254 $1,533,624 
Accounts payable to related parties1,012,822 518,377 
Accrued expenses403,336 505,894 
Current portion of long-term debt2,167 2,128 
Dividends payable46,753 46,116 
Income taxes payable282,037 134,876 
Total current liabilities3,505,369 2,741,015 
Long-term debt3,233,393 3,214,972 
Postretirement benefits33,062 32,751 
Pension benefits160,343 159,571 
Other noncurrent liabilities686,655 636,596 
Deferred income taxes486,466 480,770 
Commitments and contingencies (Note 9)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 117,299 in 2023 and 117,168 in 2022
1,173 1,172 
Additional paid-in capital2,931,961 2,940,840 
Accumulated other comprehensive loss(513,337)(560,662)
Retained earnings6,792,938 5,601,277 
Total Albemarle Corporation shareholders’ equity9,212,735 7,982,627 
Noncontrolling interests246,335 208,220 
Total equity9,459,070 8,190,847 
Total liabilities and equity$17,564,358 $15,456,522 
See accompanying Notes to the Condensed Consolidated Financial Statements.
5

Table of Contents
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(In Thousands, Except Share Data)Additional
Paid-in Capital
Accumulated Other
Comprehensive Loss
Retained EarningsTotal Albemarle
Shareholders’ Equity
Noncontrolling
Interests
Total Equity
Common Stock
SharesAmounts
Balance at December 31, 2022117,168,366 $1,172 $2,940,840 $(560,662)$5,601,277 $7,982,627 $208,220 $8,190,847 
Net income1,238,580 1,238,580 38,123 1,276,703 
Other comprehensive income (loss)47,325 47,325 (8)47,317 
Cash dividends declared, $0.40 per common share
(46,919)(46,919) (46,919)
Stock-based compensation9,658 9,658 9,658 
Exercise of stock options1,220  81 81 81 
Issuance of common stock, net205,172 2 (2)  
Withholding taxes paid on stock-based compensation award distributions(75,366)(1)(18,616)(18,617)(18,617)
Balance at March 31, 2023117,299,392 $1,173 $2,931,961 $(513,337)$6,792,938 $9,212,735 $246,335 $9,459,070 
Balance at December 31, 2021117,015,333 $1,170 $2,920,007 $(392,450)$3,096,539 $5,625,266 $180,341 $5,805,607 
Net income253,383 253,383 28,164 281,547 
Other comprehensive loss(1,169)(1,169)(53)(1,222)
Cash dividends declared, $0.395 per common share
(46,261)(46,261) (46,261)
Stock-based compensation5,384 5,384 5,384 
Exercise of stock options500  32 32 32 
Issuance of common stock, net151,630 2 385 387 387 
Withholding taxes paid on stock-based compensation award distributions(55,069)(1)(10,421)(10,422)(10,422)
Balance at March 31, 2022117,112,394 $1,171 $2,915,387 $(393,619)$3,303,661 $5,826,600 $208,452 $6,035,052 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
20232022
Cash and cash equivalents at beginning of year$1,499,142 $439,272 
Cash flows from operating activities:
Net income 1,276,703 281,547 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization87,271 66,574 
Loss on sale of investment in properties 8,400 
Stock-based compensation and other10,540 4,245 
Equity in net income of unconsolidated investments (net of tax)(396,188)(62,436)
Dividends received from unconsolidated investments and nonmarketable securities547,552 39,168 
Pension and postretirement benefit1,954 (4,250)
Pension and postretirement contributions(2,825)(3,890)
Unrealized (gain) loss on investments in marketable securities(45,732)1,469 
Deferred income taxes14,098 27,747 
Working capital changes(764,071)(219,397)
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL7,665 65,100 
Other, net(15,987)1,899 
Net cash provided by operating activities720,980 206,176 
Cash flows from investing activities:
Capital expenditures(415,608)(231,698)
(Purchases) sales of marketable securities, net(122,267)3,751 
Investments in equity and other corporate investments(1,133)(146)
Net cash used in investing activities(539,008)(228,093)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt and credit agreements 280,000 
Other debt repayments, net(713)(166,615)
Dividends paid to shareholders(46,282)(45,637)
Dividends paid to noncontrolling interests(53,145) 
Proceeds from exercise of stock options81 419 
Withholding taxes paid on stock-based compensation award distributions(18,617)(10,422)
Other (126)
Net cash (used in) provided by financing activities(118,676)57,619 
Net effect of foreign exchange on cash and cash equivalents24,296 (11,649)
Increase in cash and cash equivalents87,592 24,053 
Cash and cash equivalents at end of period$1,586,734 $463,325 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

NOTE 1—Basis of Presentation:
In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Albemarle Corporation and our wholly-owned, majority-owned and controlled subsidiaries (collectively, “Albemarle,” “we,” “us,” “our” or the “Company”) contain all adjustments necessary for a fair statement, in all material respects, of our consolidated balance sheets as of March 31, 2023 and December 31, 2022, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three-month period ended March 31, 2023 and 2022 and our condensed consolidated statements of cash flows for the three-month periods ended March 31, 2023 and 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 15, 2023. The December 31, 2022 consolidated balance sheet data herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). The results of operations for the three-month period ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made to the accompanying condensed consolidated financial statements and the notes thereto to conform to the current presentation.

NOTE 2—Acquisitions:
On October 25, 2022, the Company completed the acquisition of all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. (“Qinzhou”), for approximately $200 million in cash, which includes a deferral of approximately $29 million to be paid in installments within a year of the acquisition closing date. Qinzhou's operations include a lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi, which began commercial production in the first half of 2022. The plant has designed annual conversion capacity of up to 25,000 metric tons of lithium carbonate equivalent (“LCE”) and is capable of producing battery-grade lithium carbonate and lithium hydroxide.
The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their estimated fair values at the acquisition closing date, which were based, in part, upon third-party appraisals for certain assets. The fair value of the assets and liabilities was primarily related to Property, plant and equipment of $106.6 million, Other intangibles of $16.3 million, net current liabilities of $5.5 million, and long-term liabilities of $7.1 million. The excess of the purchase price over the preliminary estimated fair value of the net assets acquired was approximately $76.1 million and was recorded as Goodwill.
The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to Goodwill, is based upon preliminary information and is subject to change within the measurement-period (up to one year from the acquisition date) as additional information concerning final asset and liability valuations is obtained. The primary area of the preliminary purchase price allocation that is not yet finalized relates to the fair value of the net working capital and Goodwill. The fair value of the assets acquired and liabilities assumed was based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. The discount rate is a significant assumption used in the valuation model. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the consolidated financial statements could be subject to possible impairment.
Goodwill arising from the acquisition was recorded within the Energy Storage segment and consists largely of anticipated synergies and economies of scale from the combined companies and overall strategic importance of the acquired businesses to Albemarle. The goodwill attributable to the acquisition will not be amortizable or deductible for tax purposes.

NOTE 3—Income Taxes:
The effective income tax rate for the three-month period ended March 31, 2023 was 23.9% compared to 26.9% for the three-month period ended March 31, 2022. The three-month period ended March 31, 2023 included tax expense related to an uncertain tax position in Chile offset by a tax benefit related to foreign derived intangible income, and net discrete tax expense related to foreign return to provisions offset by excess tax benefits realized from stock-based compensation arrangements. The Company’s effective income tax rate fluctuates based on, among other factors, the amount and location of income. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-month period ended March 31, 2023 was impacted by a variety of factors, primarily the location in which income was earned, foreign-derived intangible income and an uncertain tax position recorded in Chile. The difference between the U.S. federal statutory income tax
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
rate and our effective income tax rate for the three-month period ended March 31, 2022 was impacted by a variety of factors, primarily global intangible low-taxed income and the location in which income was earned.

NOTE 4—Earnings Per Share:
Basic and diluted earnings per share for the three-month periods ended March 31, 2023 and 2022 are calculated as follows (in thousands, except per share amounts):
Three Months Ended
March 31,
20232022
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation$1,238,580 $253,383 
Denominator:
Weighted-average common shares for basic earnings per share117,232 117,066 
Basic earnings per share$10.57 $2.16 
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation$1,238,580 $253,383 
Denominator:
Weighted-average common shares for basic earnings per share117,232 117,066 
Incremental shares under stock compensation plans609 587 
Weighted-average common shares for diluted earnings per share117,841 117,653 
Diluted earnings per share$10.51 $2.15 
At March 31, 2023 there were 51,316 common stock equivalents not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.
On February 23, 2023, the Company declared a cash dividend of $0.40, an increase from the prior year regular quarterly dividend. This dividend was paid on April 3, 2023 to shareholders of record at the close of business as of March 17, 2023. On May 2, 2023, the Company declared a cash dividend of $0.40 per share, which is payable on July 3, 2023 to shareholders of record at the close of business as of June 16, 2023.
NOTE 5—Inventories:
The following table provides a breakdown of inventories at March 31, 2023 and December 31, 2022 (in thousands):
March 31,December 31,
20232022
Finished goods$2,706,606 $1,679,473 
Raw materials and work in process(a)
368,669 296,998 
Stores, supplies and other105,550 99,560 
Total$3,180,825 $2,076,031 

(a)Includes $154.7 million and $133.2 million at March 31, 2023 and December 31, 2022, respectively, of work in process in our Energy Storage segment.
The Company records the balance of deferred profits on sales from its equity method investments to the Company to Inventories, specifically finished goods. Deferred profits from equity method investments totaled $552.8 million and $332.3 million as of March 31, 2023 and December 31, 2022, respectively.


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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 6—Investments:
MARBL Joint Venture Agreement Restructuring
On February 22, 2023, the Company announced that it has signed definitive agreements with Mineral Resources Limited (“MRL”) to restructure the parties' MARBL lithium joint venture in Australia (“MARBL”) and separately for MRL to invest in Albemarle conversion assets in China. This restructured agreement is intended to provide the Company with additional funding to support the expansion of lithium conversion capacity, while securing downstream conversion capacity for MRL.
In Australia, Albemarle will increase its interest in the first two conversion trains of the Kemerton processing plant from 60% to 85% by purchasing a 25% interest from MRL. Albemarle will operate Kemerton trains 1 and 2 on behalf of the joint venture. MRL will increase its interest in the Wodgina Lithium Mine Project from 40% to 50% by purchasing a 10% interest from Albemarle. MRL will operate the Wodgina mine on behalf of the joint venture. Consideration for Albemarle's increased stake in Kemerton will be offset by consideration for MRL's increased stake in Wodgina.
In China, MRL will acquire a 50% interest in Albemarle's Qinzhou and Meishan plants. Qinzhou has a designed annual capacity of up to 25,000 metric tonnes of LCE. The plant will undergo modifications to be able to convert Wodgina spodumene and is expected to commence that conversion in early 2024. The Meishan plant, which is under construction with a designed annual capacity of 50,000 metric tonnes of LCE, is scheduled to be completed in 2024. Albemarle will continue to operate Meishan and Qinzhou.
In addition, MRL committed to fund 50% of the capital costs for downstream conversion capacity. MRL is expected to pay approximately $350 million for its initial share of capital costs of this conversion capacity at closing. Albemarle expects to pay MRL a completion adjustment currently estimated to be between $100 million to $150 million reflecting a retroactive effective date of April 1, 2022.
These transactions are expected to close in stages beginning in the second quarter of 2023 and are subject to regulatory approval and other customary closing conditions. At this time the Company expects to record a gain as a result of these transactions in the period it closes.
Variable Interest Entities
The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Talison”), where the ownership parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Talison to be a variable interest entity (“VIE”), however this investment is not consolidated as the Company is not the primary beneficiary. The carrying amount of the Company’s 49% equity interest in Windfield, which is our most significant VIE, was $746.8 million and $694.5 million at March 31, 2023 and December 31, 2022, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs of which the Company is not the primary beneficiary was $7.7 million at March 31, 2023 and $6.7 million at December 31, 2022. The Company’s unconsolidated VIEs are reported in Investments on 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.
The following table summarizes the unaudited results of operations for the Talison joint venture, which met the significant subsidiary test for subsidiaries not consolidated or 50% or less owned persons under Rule 10-01 of Regulation S-X, for the three-month periods ended March 31, 2023 and 2022 (in thousands):
Three Months Ended
March 31,
20232022
Net sales$1,959,298 $392,833 
Gross profit1,901,700 354,442 
Income before income taxes1,784,150 292,552 
Net income1,248,902 204,787 
Other
As part of the proceeds from the sale of the fine chemistry services (“FCS”) business on June 1, 2021, W.R. Grace & Co. (“Grace”) issued Albemarle preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
preferred equity can be redeemed at Grace’s option under certain conditions and will accrue PIK dividends at an annual rate of 12% beginning two years after issuance. This preferred equity had a fair value of $266.3 million and $260.1 million at March 31, 2023 and December 31, 2022, respectively, which is reported in Investments in the consolidated balance sheets.

NOTE 7—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the three months ended March 31, 2023 (in thousands):
Energy StorageSpecialtiesKetjenTotal
Balance at December 31, 2022
$1,424,275 $20,319 $173,033 $1,617,627 
   Segment realignment(a)
(12,316)12,316   
   Foreign currency translation adjustments and other13,342  3,183 16,525 
Balance at March 31, 2023$1,425,301 $32,635 $176,216 $1,634,152 
(a)    Effective January 1, 2023, the Company realigned its Lithium and Bromine reportable segments into the Energy Storage and Specialties reportable segments. See Note 11, “Segment Information,” for additional details. As a result, the Company transferred goodwill from its legacy Lithium segment to the new Specialties reportable segment during the three months ended March 31, 2023.

The following table summarizes the changes in other intangibles and related accumulated amortization for the three months ended March 31, 2023 (in thousands):
Customer Lists and Relationships
Trade Names and Trademarks(a)
Patents and TechnologyOtherTotal
Gross Asset Value
  Balance at December 31, 2022
$412,670 $13,161 $46,399 $35,186 $507,416 
Foreign currency translation adjustments and other5,066 231 639 981 6,917 
  Balance at March 31, 2023
$417,736 $13,392 $47,038 $36,167 $514,333 
Accumulated Amortization
  Balance at December 31, 2022
$(177,627)$(3,587)$(23,790)$(14,542)$(219,546)
Amortization(6,529) (657)(248)(7,434)
Foreign currency translation adjustments and other(2,136)(43)(373)(293)(2,845)
  Balance at March 31, 2023
$(186,292)$(3,630)$(24,820)$(15,083)$(229,825)
Net Book Value at December 31, 2022
$235,043 $9,574 $22,609 $20,644 $287,870 
Net Book Value at March 31, 2023
$231,444 $9,762 $22,218 $21,084 $284,508 
(a)    Net Book Value includes only indefinite-lived intangible assets.


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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 8—Long-Term Debt:
Long-term debt at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
March 31,December 31,
20232022
1.125% notes due 2025
$408,959 $401,265 
1.625% notes due 2028
542,200 532,000 
3.45% Senior notes due 2029
171,612 171,612 
4.65% Senior notes due 2027
650,000 650,000 
5.05% Senior notes due 2032
600,000 600,000 
5.45% Senior notes due 2044
350,000 350,000 
5.65% Senior notes due 2052
450,000 450,000 
Variable-rate foreign bank loans3,056 2,997 
Finance lease obligations76,070 76,537 
Other11,510 11,378 
Unamortized discount and debt issuance costs(27,847)(28,689)
Total long-term debt3,235,560 3,217,100 
Less amounts due within one year2,167 2,128 
Long-term debt, less current portion$3,233,393 $3,214,972 

NOTE 9—Commitments and Contingencies:
Environmental
The following activity was recorded in environmental liabilities for the three months ended March 31, 2023 (in thousands):
Beginning balance at December 31, 2022
$38,245 
Expenditures(817)
Accretion of discount249 
Additions and changes in estimates1,869 
Foreign currency translation adjustments and other381 
Ending balance at March 31, 2023
39,927 
Less amounts reported in Accrued expenses7,441 
Amounts reported in Other noncurrent liabilities$32,486 
Environmental remediation liabilities included discounted liabilities of $32.1 million and $30.1 million at March 31, 2023 and December 31, 2022, respectively, discounted at rates with a weighted-average of 3.6% and 3.4%, respectively, and with the undiscounted amount totaling $60.8 million and $57.5 million at March 31, 2023 and December 31, 2022, respectively. For certain locations where the Company is operating groundwater monitoring and/or remediation systems, prior owners or insurers have assumed all or most of the responsibility.
The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities typically arise during the normal course of our operational and environmental management activities or at the time of acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at each relevant site, changes in risk assessment practices, remediation techniques and regulatory requirements can occur, therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites will be determined when evaluations are completed. Although it is difficult to quantify the potential financial impact of these remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility that future environmental remediation costs associated with our past operations could represent an additional $19 million before income taxes, in excess of amounts already recorded.
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Litigation
We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed as incurred.
As first reported in 2018, following receipt of information regarding potential improper payments being made by third-party sales representatives of our Refining Solutions business, within our Ketjen segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act, and other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third-party sales representatives in our Refining Solutions business, within our Ketjen segment, to the U.S. Department of Justice (“DOJ”), the SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, the SEC, and the DPP in their review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures. We have commenced discussions with the SEC, DOJ and DPP about a potential resolution of these matters.
At this time, we are unable to predict the duration, scope, result, or related costs associated with the investigations. We also are unable to predict what action may be taken by the DOJ, the SEC, or the DPP, or what penalties or remedial actions they may ultimately seek. Any determination that our operations or activities are not, or were not, in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any such fines, penalties, disgorgement, equitable relief, or other losses would have a material adverse effect on our financial condition or liquidity. However, an adverse resolution could have a material adverse effect on our results of operations in a particular period.
Indemnities
We are indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although we believe that the financial condition of those parties who may have indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party who may have obligations to indemnify us will adhere to their obligations and we may have to resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. The Company had approximately $67.4 million and $66.1 million at March 31, 2023 and December 31, 2022, respectively, recorded in Other noncurrent liabilities, primarily related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold in 2017.
Other
We have contracts with certain of our customers which serve as guarantees on product delivery and performance according to customer specifications that can cover both shipments on an individual basis, as well as blanket coverage of multiple shipments under certain customer supply contracts. The financial coverage provided by these guarantees is typically based on a percentage of net sales value.

NOTE 10—Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides details of our lease contracts for the three-month periods ended March 31, 2023 and 2022 (in thousands):
Three Months Ended
March 31,
20232022
Operating lease cost$11,751 $10,611 
Finance lease cost:
Amortization of right of use assets845 430 
Interest on lease liabilities1,059 853 
Total finance lease cost1,904 1,283 
Short-term lease cost5,060 2,699 
Variable lease cost3,509 717 
Total lease cost$22,224 $15,310 
Supplemental cash flow information related to our lease contracts for the three-month periods ended March 31, 2023 and 2022 is as follows (in thousands):
Three Months Ended March 31,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$10,974 $8,637 
Operating cash flows from finance leases1,203 599 
Financing cash flows from finance leases500 515 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases10,337 999 


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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at March 31, 2023 and December 31, 2022 is as follows (in thousands, except as noted):
March 31, 2023December 31, 2022
Operating leases:
Other assets$128,229 $128,173 
Accrued expenses35,343 35,515 
Other noncurrent liabilities102,125 99,269 
Total operating lease liabilities137,468 134,784 
Finance leases:
Net property, plant and equipment80,591 81,356 
Current portion of long-term debt(a)
4,872 4,995 
Long-term debt73,903 74,409 
Total finance lease liabilities78,775 79,404 
Weighted average remaining lease term (in years):
Operating leases13.013.3
Finance leases22.622.8
Weighted average discount rate (%):
Operating leases3.72 %3.60 %
Finance leases4.41 %4.41 %
(a)    Balance includes accrued interest of finance lease recorded in Accrued liabilities.
Maturities of lease liabilities at March 31, 2023 were as follows (in thousands):
Operating LeasesFinance Leases
Remainder of 2023$31,554 $5,437 
202427,766 9,409 
202515,923 6,129 
202612,576 5,478 
202710,717 5,478 
Thereafter113,413 91,904 
Total lease payments211,949 123,835 
Less imputed interest74,481 45,060 
Total$137,468 $78,775 

NOTE 11—Segment Information:
Effective January 1, 2023, the Company realigned 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 renamed Ketjen. As a result, the Company’s three reportable segments include: (1) Energy Storage; (2) Specialties; and (3) Ketjen. 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
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
to evaluate performance and make resource allocation decisions. The segment information for the prior year period been recast to conform to the current year presentation.
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 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.
Segment information for the three-month periods ended March 31, 2023 and 2022 were as follows (in thousands). Prior period amounts have been recast to reflect the current segment structure.
Three Months Ended
March 31,
20232022
Net sales:
Energy Storage$1,943,682 $463,704 
Specialties418,778 446,147 
Ketjen217,792 217,877 
Total net sales$2,580,252 $1,127,728 
Adjusted EBITDA:
Energy Storage$1,406,181 $285,247 
Specialties162,158 152,602 
Ketjen14,543 16,910 
Total segment adjusted EBITDA1,582,882 454,759 
Corporate12,837 (22,829)
Total adjusted EBITDA$1,595,719 $431,930 
Depreciation and amortization:
Energy Storage$52,162 $35,046 
Specialties19,892 16,153 
Ketjen13,143 12,921 
Corporate2,074 2,454 
Total depreciation and amortization$87,271 $66,574 

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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
See below for a reconciliation of total segment adjusted EBITDA to the companies consolidated Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
Three Months Ended
March 31,
20232022
Total segment adjusted EBITDA$1,582,882 $454,759 
Corporate expenses, net12,837 (22,829)
Depreciation and amortization(87,271)(66,574)
Interest and financing expenses(a)
(26,777)(27,834)
Income tax expense(276,963)(80,530)
Loss on sale of interest in properties, net(b)
 (8,400)
Acquisition and integration related costs(c)
(5,108)(1,724)
Non-operating pension and OPEB items(601)5,280 
Mark-to-market gain on public equity securities(d)
45,826  
Other(e)
(6,245)1,235 
Net income attributable to Albemarle Corporation$1,238,580 $253,383 
(a)Included in Interest and financing expenses for the three months ended March 31, 2022 is the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest in prior periods.
(b)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 MRL, which maintains a 40% ownership interest in these Kemerton assets.
(c)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).
(d)Gain recorded in Other income, net for the three months ended March 31, 2023, resulting from the increase in fair value of investments in public equity securities.
(e)Included amounts for the three months ended March 31, 2023 recorded in:
SG&A - $1.9 million of charges primarily for environmental reserves at sites not part of our operations and $0.7 million of facility closure expenses related to offices in Germany.
Other income, net - $3.6 million of charges for asset retirement obligations at a site not part of our operations.
Included amounts for the three months ended March 31, 2022 recorded in:
SG&A - $4.3 million of gains from the sale of legacy properties not part of our operations, partially offset by $2.8 million of charges for environmental reserves at sites not part of our operations and $0.7 million of facility closure expenses related to offices in Germany.
Other income, net - $0.6 million gain related to a settlement received from a legal matter in a prior period.

NOTE 12—Pension Plans and Other Postretirement Benefits:
The components of pension and postretirement benefits cost (credit) for the three-month periods ended March 31, 2023 and 2022 were as follows (in thousands):
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Three Months Ended
March 31,
20232022
Pension Benefits Cost (Credit):
Service cost$1,321 $985 
Interest cost8,542 5,605 
Expected return on assets(8,409)(11,212)
Amortization of prior service benefit20 24 
Total net pension benefits cost (credit)$1,474 $(4,598)
Postretirement Benefits Cost:
Service cost$12 $21 
Interest cost468 327 
Total net postretirement benefits cost$480 $348 
Total net pension and postretirement benefits cost (credit)$1,954 $(4,250)
All components of net benefit cost (credit), other than service cost, are included in Other income, net on the consolidated statements of income.
During the three-month periods ended March 31, 2023 and 2022, the Company made contributions of $2.7 million and $3.2 million, respectively, to its qualified and nonqualified pension plans.
The Company paid $0.2 million and $0.6 million in premiums to the U.S. postretirement benefit plan during the three-month periods ended March 31, 2023 and 2022, respectively.

NOTE 13—Fair Value of Financial Instruments:
In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions and other risk factors existing at the time of assessment. Fair value information for our financial instruments is as follows:
Long-Term Debt—the fair values of our notes are estimated using Level 1 inputs and account for the difference between the recorded amount and fair value of our long-term debt. The carrying value of our remaining long-term debt reported in the accompanying consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on prevailing variable market rates currently available in the countries in which we have borrowings.
March 31, 2023December 31, 2022
Recorded
Amount
Fair ValueRecorded
Amount
Fair Value
(In thousands)
Long-term debt$3,257,604 $3,073,954 $3,239,853 $2,993,027 
Foreign Currency Forward Contracts—during the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia. This derivative financial instrument is used to manage risk and is not used for trading or other speculative purposes. This foreign currency forward contract has been designated as a hedging instrument under ASC 815, Derivatives and Hedging. We had outstanding designated foreign currency forward contracts with notional values totaling the equivalent of $17.6 million and $64.5 million at March 31, 2023 and December 31, 2022, respectively.
We also enter into foreign currency forward contracts in connection with our risk management strategies that have not been designated as hedging instruments under ASC 815, Derivatives and Hedging, in an attempt to minimize the financial impact of changes in foreign currency exchange rates. These derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The fair values of our non-designated foreign currency forward contracts are estimated based on current settlement values. At March 31, 2023 and December 31, 2022, we had outstanding non-designated foreign currency forward contracts with notional values totaling $5.2 billion and $2.8 billion, respectively, hedging our exposure to various currencies including the Chinese Renminbi, Euro, Australian Dollar, Chilean Peso and Japanese Yen.