Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share

NOTE 3—Earnings Per Share:

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2012		2011		2010
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation	$	311,536	$	392,114	$	315,778
Denominator:
Weighted-average common shares for basic earnings per share		89,189		90,522		91,393
Basic earnings per share	$	3.49	$	4.33	$	3.46
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation	$	311,536	$	392,114	$	315,778
Denominator:
Weighted-average common shares for basic earnings per share		89,189		90,522		91,393
Incremental shares under stock compensation plans		695		1,000		791
Total shares		89,884		91,522		92,184
Diluted earnings per share	$	3.47	$	4.28	$	3.43

The Company’s policy on how to determine windfalls and shortfalls for purposes of calculating assumed stock award proceeds under the treasury stock method when determining the denominator for diluted earnings per share is to exclude the impact of pro forma deferred tax assets (i.e. the windfall or shortfall that would be recognized in the financial statements upon exercise of the award). At December 31, 2012, there were 222,700 common stock equivalents not included in the computation of diluted earnings per share.

We have the authority to issue 15,000,000 shares of preferred stock in one or more classes or series. As of December 31, 2012, no shares of preferred stock have been issued.

On October 13, 2011, our Board of Directors authorized an increase in the number of shares the Company is permitted to repurchase under our stock repurchase plan up to a maximum of five million shares. During the years ended December 31, 2012, 2011 and 2010, we repurchased 1,092,767, 3,000,000 and 400,356 shares of our common stock, respectively, pursuant to the terms of our share repurchase program. As of December 31, 2012, there were 3,907,233 shares available for repurchase under our authorized share repurchase plan. On February 12, 2013, our Board of Directors authorized another increase in the number of shares, pursuant to which the Company is now permitted to repurchase up to a maximum of fifteen million shares under the plan, including those shares previously authorized, but not yet repurchased.