Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment and Geographic Area Information

Segment and Geographic Area 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 to evaluate performance and make resource allocation decisions. The segment information for the prior year periods have been recast to conform to the current year presentation.

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 the Company’s core businesses. On June 1, 2021, the Company 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 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 additional useful measurements to review the Company’s operations, provides transparency to investors and enables period-to-period comparability of financial performance. Total adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Total 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 years ended December 31, 2023, 2022 and 2021 were as follows (in thousands). Prior period amounts have been recast to reflect the current segment structure.

	Year Ended December 31,
	2023		2022		2021
Net sales:
Energy Storage	$	7,078,998	$	4,660,945	$	1,067,430
Specialties	1,482,425		1,759,587		1,424,197
Ketjen	1,055,780		899,572		761,235
Total segment net sales	9,617,203		7,320,104		3,252,862
All Other	—		—		75,095
Total net sales	$	9,617,203	$	7,320,104	$	3,327,957
Adjusted EBITDA:
Energy Storage	$	2,407,393	$	3,032,260	$	371,384
Specialties	298,506		527,318		468,836
Ketjen	103,872		28,732		106,941
Total segment adjusted EBITDA	2,809,771		3,588,310		947,161

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):

	Year Ended December 31,
	2023		2022		2021
Total segment adjusted EBITDA	$	2,809,771	$	3,588,310	$	947,161
All other adjusted EBITDA	—		—		29,858
Corporate expenses, net	(43,486)		(112,453)		(106,045)
Depreciation and amortization	(429,944)		(300,841)		(254,000)
Interest and financing expenses(a)	(116,072)		(122,973)		(61,476)
Income tax expense	(430,277)		(390,588)		(29,446)
Gain (loss) on change in interest in properties/sale of business, net(b)	71,190		(8,400)		295,971
Acquisition and integration related costs(c)	(26,767)		(16,259)		(12,670)
Goodwill impairment(d)	(6,765)		—		—
Non-operating pension and OPEB items	7,971		57,032		78,814
Mark-to-market (loss) gain on public equity securities(e)	(44,732)		4,319		—
Legal accrual(f)	(218,510)		—		(657,412)
Albemarle Foundation contribution(g)	—		—		(20,000)
Indemnification adjustments(h)	—		—		(39,381)
Other(i)	1,097		(8,331)		(47,702)
Net income attributable to Albemarle Corporation	$	1,573,476	$	2,689,816	$	123,672

(a)Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million and $29.0 million for the years ended December 31, 2022 and 2021, respectively. See Note 14, “Long-term Debt,” for additional information. In addition, Interest and financing expenses for the year ended December 31, 2022 includes the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest in prior periods.

(b)Gain recorded during the year ended December 31, 2023 resulting from the restructuring of the MARBL joint venture with MRL. See Note 10, “Investments,” for further details. $8.4 million and $132.4 million of expense recorded during the years ended December 31, 2022 and 2021, respectively, 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 initially recorded in Accrued liabilities prior to being transferred to MRL, which held a 40% ownership interest in these Kemerton assets during those periods. See Note 2, “Acquisitions,” for additional information. In addition, the year ended December 31, 2021, includes a $428.4 million gain related to the FCS divestiture. See Note 3, “Divestitures,” for additional information on this gain.

(c)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).

(d)Goodwill impairment charge recorded in SG&A during the year ended December 31, 2023 related to our PCS business. See Note 12, “Goodwill and Other Intangibles,” for further details.

(e)(Loss) gain recorded in Other income (expenses), net for the years ended December 31, 2023 and 2022 resulting from the change in fair value of investments in public equity securities.

(f)Loss recorded in SG&A for the agreements to resolve a previously disclosed legal matter with the DOJ and SEC during the year ended December 31, 2023. In addition, during the year ended December 31, 2021 the Company recorded a loss in Other income (expenses), net for related to the settlement of an arbitration ruling for a prior legal matter. See Note 17, “Commitments and Contingencies,” for further details on both matters.

(g)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.

(h)Included in Other income (expenses), net to revise an indemnification estimate for an ongoing tax-related matter of a previously disposed business in Germany. A corresponding discrete tax benefit of $27.9 million was recorded in Income tax expense during the same period, netting to an expected cash obligation of approximately $11.5 million.

(i)Included amounts for the year ended December 31, 2023 recorded in:

•Cost of goods sold - $15.1 million loss recorded to settle an arbitration matter with a regulatory agency in Chile, partially offset by a $4.1 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations.

•SG&A - $9.5 million of separation and other severance costs to employees in Corporate and the Ketjen business which are primarily expected to be paid out during 2023, $2.3 million of facility closure expenses related to offices in Germany, $1.9 million of charges primarily for environmental reserves at sites not part of our operations and $1.8 million of various expenses including for certain legal costs and shortfall contributions for a multiemployer plan financial improvement plan.

•Other income (expenses), net - $19.3 million gain from PIK dividends of preferred equity in a Grace subsidiary, a $7.3 million gain resulting from insurance proceeds of a prior legal matter and $5.5 million of gains from the sale of investments and the write-off of certain liabilities no longer required, partially offset by $3.6 million of charges for asset retirement obligations at a site not part of our operations and $0.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses.

Included amounts for the year ended December 31, 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 - $4.3 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, $2.8 million of shortfall contributions for our multiemployer plan financial improvement plan, $1.9 million of expense 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 (expenses), net - $3.0 million gain from the reversal of a liability related to a previous divestiture, a $2.0 million gain relating to the adjustment of an environmental reserve at non-operating businesses we previously divested and a $0.6 million gain related to a settlement received from a legal matter in a prior period, partially offset by a $3.2 million loss resulting from the adjustment of indemnification related to previously disposed businesses.

Included amounts for the year ended December 31, 2021 recorded in:

•Cost of goods sold - $10.5 million of expense related to a legal matter as part of a prior acquisition in our Lithium business.

•SG&A - $11.5 million of legal fees related to a legacy Rockwood legal matter noted above, $9.8 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, $3.8 million of charges for environmental reserves at a sites not part of our operations and $3.2 million of facility closure costs related to offices in Germany, and severance expenses in Germany and Belgium.

•Other income (expenses), net - $4.8 million of net expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.

	December 31,
	2023		2022		2021
			(In thousands)
Identifiable assets:
Energy Storage(a)	$	13,246,412	$	10,471,949	$	7,272,029
Specialties	1,696,307		1,396,583		1,344,038
Ketjen	1,355,743		1,214,482		1,149,592
Total segment identifiable assets	16,298,462		13,083,014		9,765,659
Corporate	1,972,190		2,373,508		1,208,459
Total identifiable assets	$	18,270,652	$	15,456,522	$	10,974,118

(a)Increase in Energy Storage identifiable assets each year primarily due to capital expenditures for growth and capacity increases.

	Year Ended December 31,
	2023		2022		2021
			(In thousands)
Depreciation and amortization:
Energy Storage	$	258,436	$	175,738	$	123,295
Specialties	86,673		67,705		66,658
Ketjen	76,023		51,417		51,588
Total segment depreciation and amortization	421,132		294,860		241,541
All Other	—		—		1,870
Corporate	8,812		5,981		10,589
Total depreciation and amortization	$	429,944	$	300,841	$	254,000
Capital expenditures:
Energy Storage	$	1,752,440	$	980,410	$	791,645
Specialties	214,039		183,658		92,194
Ketjen	132,510		66,319		49,312
Total segment capital expenditures	2,098,989		1,230,387		933,151
All Other	—		—		2,339
Corporate	50,292		31,259		18,177
Total capital expenditures	$	2,149,281	$	1,261,646	$	953,667

	Year Ended December 31,
	2023		2022		2021
			(In thousands)
Net Sales(a):
United States	$	930,838	$	888,612	$	730,738
Foreign(b)	8,686,365		6,431,492		2,597,219
Total	$	9,617,203	$	7,320,104	$	3,327,957

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

(b)In 2023, net sales to South Korea, China and Japan represented 32%, 30% and 15%, respectively, of total net sales. In 2022, net sales to China, South Korea and Japan represented 33%, 22% and 15%, respectively, of total net sales. In 2021, net sales to China, Japan and South Korea represented 18%, 14% and 11%, respectively, of total net sales.

During 2023 and 2022, one customer in the Energy Storage business represented more than 10% of the Company’s consolidated net sales.

	As of December 31,
	2023		2022		2021
			(In thousands)
Long-Lived Assets(a):
United States	$	1,912,243	$	1,371,347	$	1,040,252
Australia	4,610,963		3,253,069		2,736,590
Chile	2,258,619		2,057,270		1,923,821
China	819,119		438,090		139,537
Jordan	292,870		267,612		262,392
Netherlands	186,963		167,264		177,405
Germany	91,979		77,845		80,956
France	56,876		52,894		49,740
Brazil	33,730		31,855		29,474
Other foreign countries	87,489		77,747		62,667
Total	$	10,350,851	$	7,794,993	$	6,502,834

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