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x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
VIRGINIA
|
|
54-1692118
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
4350 CONGRESS STREET, SUITE 700
CHARLOTTE, NORTH CAROLINA
|
|
28209
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
|
|
Page
Number(s)
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
8-25
|
|
|
|
|
25-44
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
EXHIBITS
|
|
|
Item 1.
|
Financial Statements (Unaudited).
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
754,866
|
|
|
$
|
654,010
|
|
|
$
|
2,214,187
|
|
|
$
|
1,980,548
|
|
Cost of goods sold
|
479,077
|
|
|
415,038
|
|
|
1,411,216
|
|
|
1,250,938
|
|
||||
Gross profit
|
275,789
|
|
|
238,972
|
|
|
802,971
|
|
|
729,610
|
|
||||
Selling, general and administrative expenses
|
105,582
|
|
|
86,302
|
|
|
329,269
|
|
|
254,988
|
|
||||
Research and development expenses
|
21,763
|
|
|
21,012
|
|
|
63,423
|
|
|
61,384
|
|
||||
Gain on sales of businesses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,298
|
)
|
||||
Acquisition and integration related costs
|
—
|
|
|
6,749
|
|
|
—
|
|
|
44,337
|
|
||||
Operating profit
|
148,444
|
|
|
124,909
|
|
|
410,279
|
|
|
491,199
|
|
||||
Interest and financing expenses
|
(15,792
|
)
|
|
(15,946
|
)
|
|
(98,895
|
)
|
|
(46,860
|
)
|
||||
Other (expenses) income, net
|
(3,008
|
)
|
|
2,990
|
|
|
(6,512
|
)
|
|
740
|
|
||||
Income from continuing operations before income taxes and equity in net income of unconsolidated investments
|
129,644
|
|
|
111,953
|
|
|
304,872
|
|
|
445,079
|
|
||||
Income tax expense
|
18,495
|
|
|
12,394
|
|
|
53,596
|
|
|
61,535
|
|
||||
Income from continuing operations before equity in net income of unconsolidated investments
|
111,149
|
|
|
99,559
|
|
|
251,276
|
|
|
383,544
|
|
||||
Equity in net income of unconsolidated investments (net of tax)
|
19,044
|
|
|
14,953
|
|
|
55,263
|
|
|
44,790
|
|
||||
Net income from continuing operations
|
130,193
|
|
|
114,512
|
|
|
306,539
|
|
|
428,334
|
|
||||
Income (loss) from discontinued operations (net of tax)
|
—
|
|
|
23,185
|
|
|
—
|
|
|
(357,843
|
)
|
||||
Net income
|
130,193
|
|
|
137,697
|
|
|
306,539
|
|
|
70,491
|
|
||||
Net income attributable to noncontrolling interests
|
(11,523
|
)
|
|
(9,477
|
)
|
|
(33,323
|
)
|
|
(28,906
|
)
|
||||
Net income attributable to Albemarle Corporation
|
$
|
118,670
|
|
|
$
|
128,220
|
|
|
$
|
273,216
|
|
|
$
|
41,585
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.07
|
|
|
$
|
0.93
|
|
|
$
|
2.46
|
|
|
$
|
3.56
|
|
Discontinued operations
|
—
|
|
|
0.21
|
|
|
—
|
|
|
(3.19
|
)
|
||||
|
$
|
1.07
|
|
|
$
|
1.14
|
|
|
$
|
2.46
|
|
|
$
|
0.37
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.06
|
|
|
$
|
0.93
|
|
|
$
|
2.43
|
|
|
$
|
3.53
|
|
Discontinued operations
|
—
|
|
|
0.20
|
|
|
—
|
|
|
(3.16
|
)
|
||||
|
$
|
1.06
|
|
|
$
|
1.13
|
|
|
$
|
2.43
|
|
|
$
|
0.37
|
|
Weighted-average common shares outstanding – basic
|
110,476
|
|
|
112,429
|
|
|
111,049
|
|
|
112,343
|
|
||||
Weighted-average common shares outstanding – diluted
|
111,975
|
|
|
113,448
|
|
|
112,456
|
|
|
113,131
|
|
||||
Cash dividends declared per share of common stock
|
$
|
0.32
|
|
|
$
|
0.305
|
|
|
$
|
0.96
|
|
|
$
|
0.915
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
130,193
|
|
|
$
|
137,697
|
|
|
$
|
306,539
|
|
|
$
|
70,491
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
56,179
|
|
|
47,712
|
|
|
199,303
|
|
|
95,425
|
|
||||
Pension and postretirement benefits
|
(7
|
)
|
|
206
|
|
|
2
|
|
|
626
|
|
||||
Net investment hedge
|
(9,681
|
)
|
|
(7,395
|
)
|
|
(37,600
|
)
|
|
(10,312
|
)
|
||||
Interest rate swap
|
529
|
|
|
525
|
|
|
1,587
|
|
|
1,576
|
|
||||
Total other comprehensive income, net of tax
|
47,020
|
|
|
41,048
|
|
|
163,292
|
|
|
87,315
|
|
||||
Comprehensive income
|
177,213
|
|
|
178,745
|
|
|
469,831
|
|
|
157,806
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(11,653
|
)
|
|
(9,500
|
)
|
|
(34,146
|
)
|
|
(29,364
|
)
|
||||
Comprehensive income attributable to Albemarle Corporation
|
$
|
165,560
|
|
|
$
|
169,245
|
|
|
$
|
435,685
|
|
|
$
|
128,442
|
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,045,339
|
|
|
$
|
2,269,756
|
|
Trade accounts receivable, less allowance for doubtful accounts (2017 – $6,378; 2016 – $15,312)
|
520,076
|
|
|
486,035
|
|
||
Other accounts receivable
|
50,071
|
|
|
41,985
|
|
||
Inventories
|
610,212
|
|
|
450,263
|
|
||
Other current assets
|
101,626
|
|
|
58,579
|
|
||
Total current assets
|
2,327,324
|
|
|
3,306,618
|
|
||
Property, plant and equipment, at cost
|
4,167,065
|
|
|
3,910,522
|
|
||
Less accumulated depreciation and amortization
|
1,682,780
|
|
|
1,550,382
|
|
||
Net property, plant and equipment
|
2,484,285
|
|
|
2,360,140
|
|
||
Investments
|
530,227
|
|
|
457,533
|
|
||
Other assets
|
148,573
|
|
|
142,320
|
|
||
Goodwill
|
1,616,478
|
|
|
1,540,032
|
|
||
Other intangibles, net of amortization
|
416,413
|
|
|
354,564
|
|
||
Total assets
|
$
|
7,523,300
|
|
|
$
|
8,161,207
|
|
Liabilities And Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
361,937
|
|
|
$
|
281,874
|
|
Accrued expenses
|
276,953
|
|
|
322,165
|
|
||
Current portion of long-term debt
|
382,358
|
|
|
247,544
|
|
||
Dividends payable
|
35,142
|
|
|
34,104
|
|
||
Income taxes payable
|
46,627
|
|
|
254,416
|
|
||
Total current liabilities
|
1,103,017
|
|
|
1,140,103
|
|
||
Long-term debt
|
1,407,171
|
|
|
2,121,718
|
|
||
Postretirement benefits
|
50,446
|
|
|
50,538
|
|
||
Pension benefits
|
309,787
|
|
|
298,695
|
|
||
Other noncurrent liabilities
|
199,273
|
|
|
194,810
|
|
||
Deferred income taxes
|
414,034
|
|
|
412,739
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Albemarle Corporation shareholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value, issued and outstanding – 110,495 in 2017 and 112,524 in 2016
|
1,105
|
|
|
1,125
|
|
||
Additional paid-in capital
|
1,858,753
|
|
|
2,084,418
|
|
||
Accumulated other comprehensive loss
|
(249,943
|
)
|
|
(412,412
|
)
|
||
Retained earnings
|
2,288,904
|
|
|
2,121,931
|
|
||
Total Albemarle Corporation shareholders’ equity
|
3,898,819
|
|
|
3,795,062
|
|
||
Noncontrolling interests
|
140,753
|
|
|
147,542
|
|
||
Total equity
|
4,039,572
|
|
|
3,942,604
|
|
||
Total liabilities and equity
|
$
|
7,523,300
|
|
|
$
|
8,161,207
|
|
(In Thousands, Except Share Data)
|
|
|
|
|
|
Additional
Paid-in Capital
|
|
Accumulated Other
Comprehensive (Loss) Income
|
|
Retained Earnings
|
|
Total Albemarle
Shareholders’ Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||
Common Stock
|
|
||||||||||||||||||||||||||||||
|
Shares
|
|
Amounts
|
|
|
|
|
|
|
||||||||||||||||||||||
Balance at January 1, 2017
|
|
112,523,790
|
|
|
$
|
1,125
|
|
|
$
|
2,084,418
|
|
|
$
|
(412,412
|
)
|
|
$
|
2,121,931
|
|
|
$
|
3,795,062
|
|
|
$
|
147,542
|
|
|
$
|
3,942,604
|
|
Net income
|
|
|
|
|
|
|
|
|
|
273,216
|
|
|
273,216
|
|
|
33,323
|
|
|
306,539
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
162,469
|
|
|
|
|
162,469
|
|
|
823
|
|
|
163,292
|
|
|||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
(106,243
|
)
|
|
(106,243
|
)
|
|
(27,791
|
)
|
|
(134,034
|
)
|
|||||||||||
Stock-based compensation and other
|
|
|
|
|
|
12,477
|
|
|
|
|
|
|
12,477
|
|
|
|
|
12,477
|
|
||||||||||||
Exercise of stock options
|
|
159,432
|
|
|
2
|
|
|
7,009
|
|
|
|
|
|
|
7,011
|
|
|
|
|
7,011
|
|
||||||||||
Shares repurchased
|
|
(2,341,083
|
)
|
|
(23
|
)
|
|
(249,977
|
)
|
|
|
|
|
|
|
(250,000
|
)
|
|
|
|
(250,000
|
)
|
|||||||||
Issuance of common stock, net
|
|
241,755
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Termination of Tianqi Lithium Corporation option agreement
|
|
|
|
|
|
13,144
|
|
|
|
|
|
|
13,144
|
|
|
(13,144
|
)
|
|
—
|
|
|||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(89,057
|
)
|
|
(1
|
)
|
|
(8,316
|
)
|
|
|
|
|
|
(8,317
|
)
|
|
|
|
(8,317
|
)
|
||||||||||
Balance at September 30, 2017
|
|
110,494,837
|
|
|
$
|
1,105
|
|
|
$
|
1,858,753
|
|
|
$
|
(249,943
|
)
|
|
$
|
2,288,904
|
|
|
$
|
3,898,819
|
|
|
$
|
140,753
|
|
|
$
|
4,039,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at January 1, 2016
|
|
112,219,351
|
|
|
$
|
1,122
|
|
|
$
|
2,059,151
|
|
|
$
|
(421,288
|
)
|
|
$
|
1,615,407
|
|
|
$
|
3,254,392
|
|
|
$
|
146,921
|
|
|
$
|
3,401,313
|
|
Net income
|
|
|
|
|
|
|
|
|
|
41,585
|
|
|
41,585
|
|
|
28,906
|
|
|
70,491
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
86,857
|
|
|
|
|
86,857
|
|
|
458
|
|
|
87,315
|
|
|||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
(102,832
|
)
|
|
(102,832
|
)
|
|
(23,874
|
)
|
|
(126,706
|
)
|
|||||||||||
Stock-based compensation and other
|
|
|
|
|
|
12,882
|
|
|
|
|
|
|
12,882
|
|
|
|
|
12,882
|
|
||||||||||||
Exercise of stock options
|
|
162,438
|
|
|
1
|
|
|
6,778
|
|
|
|
|
|
|
6,779
|
|
|
|
|
6,779
|
|
||||||||||
Tax benefit related to stock plans
|
|
|
|
|
|
1,369
|
|
|
|
|
|
|
1,369
|
|
|
|
|
1,369
|
|
||||||||||||
Issuance of common stock, net
|
|
120,160
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(35,701
|
)
|
|
—
|
|
|
(2,010
|
)
|
|
|
|
|
|
(2,010
|
)
|
|
|
|
(2,010
|
)
|
||||||||||
Balance at September 30, 2016
|
|
112,466,248
|
|
|
$
|
1,124
|
|
|
$
|
2,078,169
|
|
|
$
|
(334,431
|
)
|
|
$
|
1,554,160
|
|
|
$
|
3,299,022
|
|
|
$
|
152,411
|
|
|
$
|
3,451,433
|
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Cash and cash equivalents at beginning of year
|
$
|
2,269,756
|
|
|
$
|
213,734
|
|
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
306,539
|
|
|
70,491
|
|
||
Adjustments to reconcile net income to cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
144,087
|
|
|
176,499
|
|
||
Gain on acquisition
|
(6,025
|
)
|
|
—
|
|
||
Gain on sales of businesses, net
|
—
|
|
|
(122,298
|
)
|
||
Stock-based compensation
|
15,595
|
|
|
13,818
|
|
||
Equity in net income of unconsolidated investments (net of tax)
|
(55,263
|
)
|
|
(46,224
|
)
|
||
Dividends received from unconsolidated investments and nonmarketable securities
|
11,900
|
|
|
34,982
|
|
||
Pension and postretirement expense
|
67
|
|
|
7,911
|
|
||
Pension and postretirement contributions
|
(9,607
|
)
|
|
(13,649
|
)
|
||
Unrealized gain on investments in marketable securities
|
(2,007
|
)
|
|
(3,281
|
)
|
||
Loss on early extinguishment of debt
|
52,801
|
|
|
—
|
|
||
Deferred income taxes
|
4,677
|
|
|
404,728
|
|
||
Working capital changes
|
(398,913
|
)
|
|
(79,684
|
)
|
||
Other, net
|
10,993
|
|
|
10,821
|
|
||
Net cash provided by operating activities
|
74,844
|
|
|
454,114
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisitions, net of cash acquired
|
(45,406
|
)
|
|
—
|
|
||
Cash payments related to acquisitions and other
|
—
|
|
|
(81,988
|
)
|
||
Capital expenditures
|
(187,519
|
)
|
|
(141,301
|
)
|
||
Cash proceeds from divestitures, net
|
6,857
|
|
|
310,599
|
|
||
Sales of marketable securities, net
|
450
|
|
|
822
|
|
||
Repayments from joint ventures
|
1,250
|
|
|
—
|
|
||
Net cash (used in) provided by investing activities
|
(224,368
|
)
|
|
88,132
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayments of long-term debt
|
(753,209
|
)
|
|
(382,730
|
)
|
||
Proceeds from borrowings of long-term debt
|
27,000
|
|
|
—
|
|
||
Other borrowings (repayments), net
|
79,203
|
|
|
(9,026
|
)
|
||
Fees related to early extinguishment of debt
|
(46,959
|
)
|
|
—
|
|
||
Dividends paid to shareholders
|
(105,205
|
)
|
|
(101,061
|
)
|
||
Dividends paid to noncontrolling interests
|
(27,791
|
)
|
|
(23,873
|
)
|
||
Repurchases of common stock
|
(250,000
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
7,011
|
|
|
6,779
|
|
||
Withholding taxes paid on stock-based compensation award distributions
|
(8,317
|
)
|
|
(2,008
|
)
|
||
Net cash used in financing activities
|
(1,078,267
|
)
|
|
(511,919
|
)
|
||
Net effect of foreign exchange on cash and cash equivalents
|
3,374
|
|
|
(10,462
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(1,224,417
|
)
|
|
19,865
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,045,339
|
|
|
$
|
233,599
|
|
|
Three Months Ended
September 30, 2016 |
|
Nine Months Ended
September 30, 2016 |
||||
Net sales
|
$
|
211,347
|
|
|
$
|
637,889
|
|
Cost of goods sold
|
100,061
|
|
|
333,832
|
|
||
Operating expenses, net
|
70,604
|
|
|
203,052
|
|
||
Interest and financing expenses
(a)
|
9,864
|
|
|
29,912
|
|
||
Other expenses (income), net
|
134
|
|
|
(1,636
|
)
|
||
Income before income taxes
|
30,684
|
|
|
72,729
|
|
||
Income tax expense
(b)
|
7,499
|
|
|
430,572
|
|
||
Income (loss) from discontinued operations (net of tax)
|
$
|
23,185
|
|
|
$
|
(357,843
|
)
|
(a)
|
Interest and financing expenses included the allocation of interest expense not directly attributable to other operations as well as interest expense related to debt to be assumed by the buyer. The allocation of interest expense to discontinued operations was based on the ratio of net assets held for sale to the sum of total net assets plus consolidated debt.
|
(b)
|
Income tax expense for the nine-month period ended
September 30, 2016
included a discrete non-cash charge of
($381.5) million
due to a change in the Company’s assertion over book and tax basis differences related to a U.S. entity being sold. In addition, Income tax expense for the
three-month and nine-month
periods ended
September 30, 2016
included discrete non-cash benefits (charges) of
$5.4 million
and
($29.8) million
, respectively, rel
ated to a change in the Company’s assertion over reinvestment of foreign undistributed earnings.
|
|
Nine Months Ended
September 30, 2016 |
||
Depreciation and amortization
|
$
|
35,194
|
|
Capital expenditures
|
$
|
15,525
|
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
All Other
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
1,348,261
|
|
|
$
|
20,319
|
|
|
$
|
164,866
|
|
|
$
|
6,586
|
|
|
$
|
1,540,032
|
|
Acquisitions
(a)
|
(21,427
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,427
|
)
|
|||||
Foreign currency translation adjustments and other
|
77,707
|
|
|
—
|
|
|
20,166
|
|
|
—
|
|
|
97,873
|
|
|||||
Balance at September 30, 2017
|
$
|
1,404,541
|
|
|
$
|
20,319
|
|
|
$
|
185,032
|
|
|
$
|
6,586
|
|
|
$
|
1,616,478
|
|
(a)
|
Primarily represents preliminary purchase price adjustments related to the preliminary appraisal of intangible assets during the measurement period for the Jiangli New Materials acquisition. See Note 2, “Acquisitions,” for additional information.
|
|
Customer Lists and Relationships
|
|
Trade Names and Trademarks
(a)
|
|
Patents and Technology
|
|
Other
|
|
Total
|
||||||||||
Gross Asset Value
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
$
|
387,893
|
|
|
$
|
16,514
|
|
|
$
|
38,434
|
|
|
$
|
18,844
|
|
|
$
|
461,685
|
|
Acquisitions
(b)
|
1,717
|
|
|
1,429
|
|
|
25,555
|
|
|
15,677
|
|
|
44,378
|
|
|||||
Foreign currency translation adjustments and other
|
28,461
|
|
|
913
|
|
|
3,245
|
|
|
5,277
|
|
|
37,896
|
|
|||||
Balance at September 30, 2017
|
$
|
418,071
|
|
|
$
|
18,856
|
|
|
$
|
67,234
|
|
|
$
|
39,798
|
|
|
$
|
543,959
|
|
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
$
|
(49,165
|
)
|
|
$
|
(7,952
|
)
|
|
$
|
(31,683
|
)
|
|
$
|
(18,321
|
)
|
|
$
|
(107,121
|
)
|
Amortization
|
(14,811
|
)
|
|
—
|
|
|
(1,288
|
)
|
|
(1,528
|
)
|
|
(17,627
|
)
|
|||||
Foreign currency translation adjustments and other
|
(3,620
|
)
|
|
(296
|
)
|
|
(1,816
|
)
|
|
2,934
|
|
|
(2,798
|
)
|
|||||
Balance at September 30, 2017
|
$
|
(67,596
|
)
|
|
$
|
(8,248
|
)
|
|
$
|
(34,787
|
)
|
|
$
|
(16,915
|
)
|
|
$
|
(127,546
|
)
|
Net Book Value at December 31, 2016
|
$
|
338,728
|
|
|
$
|
8,562
|
|
|
$
|
6,751
|
|
|
$
|
523
|
|
|
$
|
354,564
|
|
Net Book Value at September 30, 2017
|
$
|
350,475
|
|
|
$
|
10,608
|
|
|
$
|
32,447
|
|
|
$
|
22,883
|
|
|
$
|
416,413
|
|
(a)
|
Balances as of September 30, 2017 and December 31, 2016 include only indefinite-lived intangible assets.
|
(b)
|
Represents preliminary purchase price adjustments for the Jiangli New Materials acquisition and the acquisition of the remaining equity interest in Salmag. See Note 2, “Acquisitions,” for additional information.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Basic earnings per share from continuing operations
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
$
|
130,193
|
|
|
$
|
114,512
|
|
|
$
|
306,539
|
|
|
$
|
428,334
|
|
Net income from continuing operations attributable to noncontrolling interests
|
(11,523
|
)
|
|
(9,477
|
)
|
|
(33,323
|
)
|
|
(28,906
|
)
|
||||
Net income from continuing operations attributable to Albemarle Corporation
|
$
|
118,670
|
|
|
$
|
105,035
|
|
|
$
|
273,216
|
|
|
$
|
399,428
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares for basic earnings per share
|
110,476
|
|
|
112,429
|
|
|
111,049
|
|
|
112,343
|
|
||||
Basic earnings per share from continuing operations
|
$
|
1.07
|
|
|
$
|
0.93
|
|
|
$
|
2.46
|
|
|
$
|
3.56
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share from continuing operations
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
$
|
130,193
|
|
|
$
|
114,512
|
|
|
$
|
306,539
|
|
|
$
|
428,334
|
|
Net income from continuing operations attributable to noncontrolling interests
|
(11,523
|
)
|
|
(9,477
|
)
|
|
(33,323
|
)
|
|
(28,906
|
)
|
||||
Net income from continuing operations attributable to Albemarle Corporation
|
$
|
118,670
|
|
|
$
|
105,035
|
|
|
$
|
273,216
|
|
|
$
|
399,428
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares for basic earnings per share
|
110,476
|
|
|
112,429
|
|
|
111,049
|
|
|
112,343
|
|
||||
Incremental shares under stock compensation plans
|
1,499
|
|
|
1,019
|
|
|
1,407
|
|
|
788
|
|
||||
Weighted-average common shares for diluted earnings per share
|
111,975
|
|
|
113,448
|
|
|
112,456
|
|
|
113,131
|
|
||||
Diluted earnings per share from continuing operations
|
$
|
1.06
|
|
|
$
|
0.93
|
|
|
$
|
2.43
|
|
|
$
|
3.53
|
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Finished goods
(a)
|
$
|
420,059
|
|
|
$
|
289,102
|
|
Raw materials and work in process
(b)
|
135,025
|
|
|
109,706
|
|
||
Stores, supplies and other
|
55,128
|
|
|
51,455
|
|
||
Total
|
$
|
610,212
|
|
|
$
|
450,263
|
|
(a)
|
Increase primarily due to the Jiangli New Materials acquisition and other lithium sites, as well as the build up of inventory in our Refining Solutions segment for an increase in sales in the fourth quarter.
|
(b)
|
Included
$56.0 million
and
$47.1 million
at
September 30, 2017
and
December 31, 2016
, respectively, of work in process related to the Lithium product category.
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
1.875% Senior notes, net of unamortized discount and debt issuance costs of $4,167 at September 30, 2017 and $7,823 at December 31, 2016
|
$
|
456,665
|
|
|
$
|
719,617
|
|
3.00% Senior notes, net of unamortized discount and debt issuance costs of $1,286 at December 31, 2016
|
—
|
|
|
248,714
|
|
||
4.15% Senior notes, net of unamortized discount and debt issuance costs of $3,494 at September 30, 2017 and $3,859 at December 31, 2016
|
421,506
|
|
|
421,141
|
|
||
4.50% Senior notes, net of unamortized discount and debt issuance costs of $966 at September 30, 2017 and $2,380 at December 31, 2016
|
174,249
|
|
|
347,620
|
|
||
5.45% Senior notes, net of unamortized discount and debt issuance costs of $4,197 at September 30, 2017 and $4,313 at December 31, 2016
|
345,803
|
|
|
345,687
|
|
||
Commercial paper notes
|
382,250
|
|
|
247,503
|
|
||
Variable-rate foreign bank loans
|
8,695
|
|
|
38,939
|
|
||
Other
|
361
|
|
|
41
|
|
||
Total long-term debt
|
1,789,529
|
|
|
2,369,262
|
|
||
Less amounts due within one year
|
382,358
|
|
|
247,544
|
|
||
Long-term debt, less current portion
|
$
|
1,407,171
|
|
|
$
|
2,121,718
|
|
Beginning balance at December 31, 2016
|
$
|
34,919
|
|
Expenditures
|
(1,320
|
)
|
|
Accretion of discount
|
563
|
|
|
Foreign currency translation adjustments and other
|
2,384
|
|
|
Ending balance at September 30, 2017
|
36,546
|
|
|
Less amounts reported in Accrued expenses
|
2,476
|
|
|
Amounts reported in Other noncurrent liabilities
|
$
|
34,070
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Lithium and Advanced Materials
|
$
|
343,557
|
|
|
$
|
240,424
|
|
|
$
|
945,791
|
|
|
$
|
689,950
|
|
Bromine Specialties
|
212,923
|
|
|
194,496
|
|
|
636,059
|
|
|
597,912
|
|
||||
Refining Solutions
|
170,275
|
|
|
190,453
|
|
|
539,904
|
|
|
539,044
|
|
||||
All Other
|
28,021
|
|
|
28,272
|
|
|
91,144
|
|
|
150,987
|
|
||||
Corporate
|
90
|
|
|
365
|
|
|
1,289
|
|
|
2,655
|
|
||||
Total net sales
|
$
|
754,866
|
|
|
$
|
654,010
|
|
|
$
|
2,214,187
|
|
|
$
|
1,980,548
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Lithium and Advanced Materials
|
$
|
130,218
|
|
|
$
|
91,719
|
|
|
$
|
382,789
|
|
|
$
|
260,861
|
|
Bromine Specialties
|
63,936
|
|
|
51,807
|
|
|
194,499
|
|
|
179,977
|
|
||||
Refining Solutions
|
43,120
|
|
|
64,960
|
|
|
142,777
|
|
|
181,620
|
|
||||
All Other
|
306
|
|
|
5,470
|
|
|
7,906
|
|
|
14,810
|
|
||||
Corporate
|
(28,197
|
)
|
|
(25,627
|
)
|
|
(88,271
|
)
|
|
(66,435
|
)
|
||||
Total adjusted EBITDA
|
$
|
209,383
|
|
|
$
|
188,329
|
|
|
$
|
639,700
|
|
|
$
|
570,833
|
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
103,199
|
|
|
$
|
53,760
|
|
|
$
|
34,392
|
|
|
$
|
191,351
|
|
|
$
|
(1,776
|
)
|
|
$
|
(70,905
|
)
|
|
$
|
118,670
|
|
Depreciation and amortization
|
26,136
|
|
|
10,176
|
|
|
9,978
|
|
|
46,290
|
|
|
2,082
|
|
|
1,523
|
|
|
49,895
|
|
|||||||
Utilization of inventory markup
(a)
|
568
|
|
|
—
|
|
|
—
|
|
|
568
|
|
|
—
|
|
|
—
|
|
|
568
|
|
|||||||
Adjustment to gain on acquisition
(b)
|
1,408
|
|
|
—
|
|
|
—
|
|
|
1,408
|
|
|
—
|
|
|
—
|
|
|
1,408
|
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,635
|
|
|
5,635
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,792
|
|
|
15,792
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,495
|
|
|
18,495
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,028
|
)
|
|
(1,028
|
)
|
|||||||
Multiemployer plan shortfall contributions
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,646
|
|
|
1,646
|
|
|||||||
Other
(e)
|
(1,093
|
)
|
|
—
|
|
|
(1,250
|
)
|
|
(2,343
|
)
|
|
—
|
|
|
645
|
|
|
(1,698
|
)
|
|||||||
Adjusted EBITDA
|
$
|
130,218
|
|
|
$
|
63,936
|
|
|
$
|
43,120
|
|
|
$
|
237,274
|
|
|
$
|
306
|
|
|
$
|
(28,197
|
)
|
|
$
|
209,383
|
|
Three months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
66,166
|
|
|
$
|
41,621
|
|
|
$
|
55,981
|
|
|
$
|
163,768
|
|
|
$
|
3,806
|
|
|
$
|
(39,354
|
)
|
|
$
|
128,220
|
|
Depreciation and amortization
|
25,553
|
|
|
10,186
|
|
|
8,979
|
|
|
44,718
|
|
|
1,664
|
|
|
1,592
|
|
|
47,974
|
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,749
|
|
|
6,749
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,946
|
|
|
15,946
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,394
|
|
|
12,394
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,185
|
)
|
|
(23,185
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(231
|
)
|
|
(231
|
)
|
|||||||
Other
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|
462
|
|
|||||||
Adjusted EBITDA
|
$
|
91,719
|
|
|
$
|
51,807
|
|
|
$
|
64,960
|
|
|
$
|
208,486
|
|
|
$
|
5,470
|
|
|
$
|
(25,627
|
)
|
|
$
|
188,329
|
|
Nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
292,655
|
|
|
$
|
164,193
|
|
|
$
|
115,329
|
|
|
$
|
572,177
|
|
|
$
|
1,622
|
|
|
$
|
(300,583
|
)
|
|
$
|
273,216
|
|
Depreciation and amortization
|
74,157
|
|
|
30,306
|
|
|
28,698
|
|
|
133,161
|
|
|
6,284
|
|
|
4,642
|
|
|
144,087
|
|
|||||||
Utilization of inventory markup
(a)
|
23,095
|
|
|
—
|
|
|
—
|
|
|
23,095
|
|
|
—
|
|
|
—
|
|
|
23,095
|
|
|||||||
Restructuring and other
(g)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,141
|
|
|
17,141
|
|
|||||||
Gain on acquisition
(b)
|
(6,025
|
)
|
|
—
|
|
|
—
|
|
|
(6,025
|
)
|
|
—
|
|
|
—
|
|
|
(6,025
|
)
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,395
|
|
|
26,395
|
|
|||||||
Interest and financing expenses
(h)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,895
|
|
|
98,895
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,596
|
|
|
53,596
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,144
|
)
|
|
(3,144
|
)
|
|||||||
Multiemployer plan shortfall contributions
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,586
|
|
|
6,586
|
|
|||||||
Other
(e)
|
(1,093
|
)
|
|
—
|
|
|
(1,250
|
)
|
|
(2,343
|
)
|
|
—
|
|
|
8,201
|
|
|
5,858
|
|
|||||||
Adjusted EBITDA
|
$
|
382,789
|
|
|
$
|
194,499
|
|
|
$
|
142,777
|
|
|
$
|
720,065
|
|
|
$
|
7,906
|
|
|
$
|
(88,271
|
)
|
|
$
|
639,700
|
|
Nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
186,373
|
|
|
$
|
150,221
|
|
|
$
|
154,767
|
|
|
$
|
491,361
|
|
|
$
|
133,012
|
|
|
$
|
(582,788
|
)
|
|
$
|
41,585
|
|
Depreciation and amortization
|
74,488
|
|
|
29,756
|
|
|
26,853
|
|
|
131,097
|
|
|
5,629
|
|
|
4,562
|
|
|
141,288
|
|
|||||||
(Gain) loss on sales of businesses, net
(i)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123,831
|
)
|
|
1,533
|
|
|
(122,298
|
)
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,337
|
|
|
44,337
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,860
|
|
|
46,860
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,535
|
|
|
61,535
|
|
Loss from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
357,843
|
|
|
357,843
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(779
|
)
|
|
(779
|
)
|
|||||||
Other
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|
462
|
|
|||||||
Adjusted EBITDA
|
$
|
260,861
|
|
|
$
|
179,977
|
|
|
$
|
181,620
|
|
|
$
|
622,458
|
|
|
$
|
14,810
|
|
|
$
|
(66,435
|
)
|
|
$
|
570,833
|
|
(a)
|
In connection with the acquisition of Jiangli New Materials, the Company valued inventory purchased from Jiangli New Materials at fair value, which resulted in a markup of the underlying net book value of the inventory totaling approximately
$23.1 million
. The inventory markup was expensed over the estimated remaining selling period. For the three-month and nine-month periods ended September 30, 2017,
$0.6 million
and
$23.1 million
, respectively, was included in Cost of goods sold related to the utilization of the inventory markup.
|
(b)
|
Gain recorded in Other (expenses) income, net related to the acquisition of the remaining
50%
interest in Salmag. See Note 2, “Acquisitions,” for additional information.
|
(c)
|
See Note 2, “Acquisitions,” for additional information.
|
(d)
|
Included shortfall contributions for our multiemployer plan financial improvement plan. See Note 13, “Pension Plans and Other Postretirement Benefits,” for additional information.
|
(e)
|
Included amounts for the three-month period ended September 30, 2017 recorded in:
|
▪
|
Cost of goods sold -
$1.3 million
reversal of deferred income related to an abandoned project at an unconsolidated investment.
|
▪
|
Other (expenses) income, net -
$1.1 million
related to a reversal of a liability associated with the previous disposal of a property, partially offset by the revision of tax indemnification expenses of
$0.7 million
primarily related to the filing of tax returns for a previously disposed business.
|
▪
|
Cost of goods sold -
$1.3 million
reversal of deferred income related to an abandoned project at an unconsolidated investment.
|
▪
|
Selling, general and administrative expenses -
$1.0 million
related to a reversal of an accrual recorded as part of purchase accounting from a previous acquisition.
|
▪
|
Other (expenses) income, net -
$3.2 million
of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle, a loss of
$2.1 million
associated with the previous disposal of a business, final settlement claims associated with the previous disposal of a business of
$2.0 million
and the revision of tax indemnification expenses of
$1.9 million
primarily related to the filing of tax returns and a competent authority agreement for a previously disposed business. This is partially offset by
$1.1 million
related to a reversal of a liability associated with the previous disposal of a property.
|
(f)
|
Includes the write-off of fixed assets of
$1.4 million
included in Research and development expenses, partially offset by a net gain of
$0.9 million
on the sales of properties included in Other (expenses) income, net.
|
(g)
|
During 2017, we initiated action to reduce costs in each of our reportable segments at several locations, primarily at our Lithium sites in Germany. Based on the restructuring plans, we have recorded expenses of
$2.9 million
in Cost of goods sold,
$8.4 million
in Selling, general and administrative expenses and
$5.8 million
in Research and development expenses for the nine-month period ended September 30, 2017, primarily related to expected severance payments. The unpaid balance is recorded in Accrued expenses at September 30, 2017, with the expectation that the majority of these plans will be completed by the end of 2017.
|
(h)
|
Included in Interest and financing expenses is a loss on early extinguishment of debt of
$52.8 million
. See Note 10, “Long-term Debt,” for additional information.
|
(i)
|
See Note 3, “Divestitures,” for additional information.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Pension Benefits Cost (Credit):
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,067
|
|
|
$
|
842
|
|
|
$
|
3,090
|
|
|
$
|
3,123
|
|
Interest cost
|
8,375
|
|
|
9,115
|
|
|
24,983
|
|
|
27,978
|
|
||||
Expected return on assets
|
(9,960
|
)
|
|
(9,920
|
)
|
|
(29,799
|
)
|
|
(30,429
|
)
|
||||
Actuarial gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
||||
Amortization of prior service benefit
|
29
|
|
|
230
|
|
|
102
|
|
|
698
|
|
||||
Total net pension benefits (credit) cost
|
$
|
(489
|
)
|
|
$
|
267
|
|
|
$
|
(1,624
|
)
|
|
$
|
1,320
|
|
Postretirement Benefits Cost (Credit):
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
30
|
|
|
$
|
29
|
|
|
$
|
91
|
|
|
$
|
86
|
|
Interest cost
|
585
|
|
|
620
|
|
|
1,755
|
|
|
1,862
|
|
||||
Expected return on assets
|
(28
|
)
|
|
(46
|
)
|
|
(83
|
)
|
|
(140
|
)
|
||||
Amortization of prior service benefit
|
(24
|
)
|
|
(24
|
)
|
|
(72
|
)
|
|
(72
|
)
|
||||
Total net postretirement benefits cost
|
$
|
563
|
|
|
$
|
579
|
|
|
$
|
1,691
|
|
|
$
|
1,736
|
|
Total net pension and postretirement benefits cost
(a)
|
$
|
74
|
|
|
$
|
846
|
|
|
$
|
67
|
|
|
$
|
3,056
|
|
(a)
|
For the
three-month and nine-month
periods ended
September 30, 2016
,
$3.7 million
and
$4.9 million
, respectively, of net pension and postretirement benefits cost are included in Income (loss) from discontinued operations (net of tax) in the consolidated statements of income. See Note 3, “Divestitures,” for additional information.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Recorded
Amount
|
|
Fair Value
|
|
Recorded
Amount
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Long-term debt
|
$
|
1,797,714
|
|
|
$
|
1,913,900
|
|
|
$
|
2,381,370
|
|
|
$
|
2,472,813
|
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities
|
|
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
|
|
|
Level 3
|
Unobservable inputs for the asset or liability
|
|
September 30, 2017
|
|
Quoted Prices in Active Markets for Identical Items (Level 1)
|
|
Quoted Prices in Active Markets for Similar Items (Level 2)
|
|
Unobservable Inputs (Level 3)
|
||||||||
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments under executive deferred compensation plan
(a)
|
$
|
23,646
|
|
|
$
|
23,646
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities
(b)
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value
(b)(c)
|
$
|
5,113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan
(a)
|
$
|
23,646
|
|
|
$
|
23,646
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(d)
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
December 31, 2016
|
|
Quoted Prices in Active Markets for Identical Items (Level 1)
|
|
Quoted Prices in Active Markets for Similar Items (Level 2)
|
|
Unobservable Inputs (Level 3)
|
||||||||
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments under executive deferred compensation plan
(a)
|
$
|
22,037
|
|
|
$
|
22,037
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities
(b)
|
$
|
35
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value
(b)(c)
|
$
|
5,498
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan
(a)
|
$
|
22,037
|
|
|
$
|
22,037
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(d)
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
182
|
|
|
$
|
—
|
|
(a)
|
We maintain an Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.
|
(b)
|
Primarily consists of private equity securities classified as available-for-sale and are reported in Investments in the condensed consolidated balance sheets. The changes in fair value are reported in Other (expenses) income, net, in our consolidated statements of income.
|
(c)
|
Holdings in certain private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy.
|
(d)
|
As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. Unless otherwise noted, these derivative financial instruments are not designated as hedging instruments under ASC 815,
Derivatives and Hedging
. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2.
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
(a)
|
|
Net Investment Hedge
|
|
Interest Rate Swap
(b)
|
|
Total
|
||||||||||
Three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at June 30, 2017
|
$
|
(341,690
|
)
|
|
$
|
85
|
|
|
$
|
60,459
|
|
|
$
|
(15,687
|
)
|
|
$
|
(296,833
|
)
|
Other comprehensive income (loss) before reclassifications
|
56,179
|
|
|
—
|
|
|
(9,681
|
)
|
|
—
|
|
|
46,498
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
529
|
|
|
522
|
|
|||||
Other comprehensive income (loss), net of tax
|
56,179
|
|
|
(7
|
)
|
|
(9,681
|
)
|
|
529
|
|
|
47,020
|
|
|||||
Other comprehensive income attributable to noncontrolling interests
|
(130
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||||
Balance at September 30, 2017
|
$
|
(285,641
|
)
|
|
$
|
78
|
|
|
$
|
50,778
|
|
|
$
|
(15,158
|
)
|
|
$
|
(249,943
|
)
|
Three months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at June 30, 2016
|
$
|
(416,636
|
)
|
|
$
|
(338
|
)
|
|
$
|
59,328
|
|
|
$
|
(17,810
|
)
|
|
$
|
(375,456
|
)
|
Other comprehensive income (loss) before reclassifications
(c)
|
47,712
|
|
|
—
|
|
|
(7,395
|
)
|
|
—
|
|
|
40,317
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
206
|
|
|
—
|
|
|
525
|
|
|
731
|
|
|||||
Other comprehensive income (loss), net of tax
|
47,712
|
|
|
206
|
|
|
(7,395
|
)
|
|
525
|
|
|
41,048
|
|
|||||
Other comprehensive income attributable to noncontrolling interests
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||||
Balance at September 30, 2016
|
$
|
(368,947
|
)
|
|
$
|
(132
|
)
|
|
$
|
51,933
|
|
|
$
|
(17,285
|
)
|
|
$
|
(334,431
|
)
|
Nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
$
|
(484,121
|
)
|
|
$
|
76
|
|
|
$
|
88,378
|
|
|
$
|
(16,745
|
)
|
|
$
|
(412,412
|
)
|
Other comprehensive income (loss) before reclassifications
|
199,303
|
|
|
—
|
|
|
(37,600
|
)
|
|
—
|
|
|
161,703
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
2
|
|
|
—
|
|
|
1,587
|
|
|
1,589
|
|
|||||
Other comprehensive income (loss), net of tax
|
199,303
|
|
|
2
|
|
|
(37,600
|
)
|
|
1,587
|
|
|
163,292
|
|
|||||
Other comprehensive income attributable to noncontrolling interests
|
(823
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(823
|
)
|
|||||
Balance at September 30, 2017
|
$
|
(285,641
|
)
|
|
$
|
78
|
|
|
$
|
50,778
|
|
|
$
|
(15,158
|
)
|
|
$
|
(249,943
|
)
|
Nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2015
|
$
|
(463,914
|
)
|
|
$
|
(758
|
)
|
|
$
|
62,245
|
|
|
$
|
(18,861
|
)
|
|
$
|
(421,288
|
)
|
Other comprehensive income (loss) before reclassifications
|
95,425
|
|
|
—
|
|
|
(10,312
|
)
|
|
—
|
|
|
85,113
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
626
|
|
|
—
|
|
|
1,576
|
|
|
2,202
|
|
|||||
Other comprehensive income (loss), net of tax
|
95,425
|
|
|
626
|
|
|
(10,312
|
)
|
|
1,576
|
|
|
87,315
|
|
|||||
Other comprehensive income attributable to noncontrolling interests
|
(458
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(458
|
)
|
|||||
Balance at September 30, 2016
|
$
|
(368,947
|
)
|
|
$
|
(132
|
)
|
|
$
|
51,933
|
|
|
$
|
(17,285
|
)
|
|
$
|
(334,431
|
)
|
(a)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive loss consists of amortization of prior service benefit, which is a component of pension and postretirement benefits cost (credit). See Note 13, “Pension Plans and Other Postretirement Benefits.”
|
(b)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in interest expense.
|
(c)
|
Foreign currency translation includes an adjustment of
$12.5 million
to reduce our investment in the Windfield Holdings Pty. Ltd. joint venture related to the three month period ended March 31, 2016. See Note 1, “Basis of Presentation,” for further details.
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Interest Rate Swap
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Interest Rate Swap
|
||||||||||||||||
Other comprehensive income (loss), before tax
|
$
|
56,156
|
|
|
$
|
—
|
|
|
$
|
(15,266
|
)
|
|
$
|
834
|
|
|
$
|
47,787
|
|
|
$
|
209
|
|
|
$
|
(11,740
|
)
|
|
$
|
834
|
|
Income tax benefit (expense)
|
23
|
|
|
(7
|
)
|
|
5,585
|
|
|
(305
|
)
|
|
(75
|
)
|
|
(3
|
)
|
|
4,345
|
|
|
(309
|
)
|
||||||||
Other comprehensive income (loss), net of tax
|
$
|
56,179
|
|
|
$
|
(7
|
)
|
|
$
|
(9,681
|
)
|
|
$
|
529
|
|
|
$
|
47,712
|
|
|
$
|
206
|
|
|
$
|
(7,395
|
)
|
|
$
|
525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Interest Rate Swap
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Interest Rate Swap
|
||||||||||||||||
Other comprehensive income (loss), before tax
|
$
|
200,366
|
|
|
$
|
10
|
|
|
$
|
(59,292
|
)
|
|
$
|
2,502
|
|
|
$
|
96,326
|
|
|
$
|
635
|
|
|
$
|
(16,371
|
)
|
|
$
|
2,502
|
|
Income tax (expense) benefit
|
(1,063
|
)
|
|
(8
|
)
|
|
21,692
|
|
|
(915
|
)
|
|
(901
|
)
|
|
(9
|
)
|
|
6,059
|
|
|
(926
|
)
|
||||||||
Other comprehensive income (loss), net of tax
|
$
|
199,303
|
|
|
$
|
2
|
|
|
$
|
(37,600
|
)
|
|
$
|
1,587
|
|
|
$
|
95,425
|
|
|
$
|
626
|
|
|
$
|
(10,312
|
)
|
|
$
|
1,576
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sales to unconsolidated affiliates
|
$
|
7,309
|
|
|
$
|
5,047
|
|
|
$
|
23,753
|
|
|
$
|
19,452
|
|
Purchases from unconsolidated affiliates
|
$
|
51,983
|
|
|
$
|
30,591
|
|
|
$
|
148,502
|
|
|
$
|
93,372
|
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Supplemental non-cash disclosure related to investing activities:
|
|
|
|
||||
Capital expenditures included in Accounts payable
|
$
|
53,421
|
|
|
$
|
19,354
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
changes in economic and business conditions;
|
•
|
changes in financial and operating performance of our major customers and industries and markets served by us;
|
•
|
the timing of orders received from customers;
|
•
|
the gain or loss of significant customers;
|
•
|
competition from other manufacturers;
|
•
|
changes in the demand for our products or the end-user markets in which our products are sold;
|
•
|
limitations or prohibitions on the manufacture and sale of our products;
|
•
|
availability of raw materials;
|
•
|
increases in the cost of raw materials and energy, and our ability to pass through such increases;
|
•
|
changes in our markets in general;
|
•
|
fluctuations in foreign currencies;
|
•
|
changes in laws and government regulation impacting our operations or our products;
|
•
|
the occurrence of regulatory proceedings, claims or litigation;
|
•
|
the occurrence of cyber-security breaches, terrorist attacks, industrial accidents, natural disasters or climate change;
|
•
|
hazards associated with chemicals manufacturing;
|
•
|
the inability to maintain current levels of product or premises liability insurance or the denial of such coverage;
|
•
|
political unrest affecting the global economy, including adverse effects from terrorism or hostilities;
|
•
|
political instability affecting our manufacturing operations or joint ventures;
|
•
|
changes in accounting standards;
|
•
|
the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs;
|
•
|
changes in the jurisdictional mix of our earnings and changes in tax laws and rates;
|
•
|
changes in monetary policies, inflation or interest rates that may impact our ability to raise capital or increase our cost of funds, impact the performance of our pension fund investments and increase our pension expense and funding obligations;
|
•
|
volatility and uncertainties in the debt and equity markets;
|
•
|
technology or intellectual property infringement, including cyber-security breaches, and other innovation risks;
|
•
|
decisions we may make in the future;
|
•
|
the ability to successfully execute, operate and integrate acquisitions and divestitures; and
|
•
|
the other factors detailed from time to time in the reports we file with the SEC.
|
•
|
We announced that we have developed an innovative technology that could lead to a sustainable increase in total lithium production in Chile to as much as 125,000 metric tons of lithium carbonate equivalent annually, without the need for additional brine pumping at the Salar de Atacama. As a result of this development, we have requested that Chile's Economic Development Agency (“CORFO”) increase our lithium quota. As of the date of this Quarterly Report, CORFO is yet to consider the Company’s request.
|
•
|
Our board of directors declared a quarterly dividend of
$0.32
per share on
July 10, 2017
, which was paid on
October 2, 2017
to shareholders of record at the close of business as of
September 15, 2017
.
|
•
|
Our net sales for the quarter were
$754.9 million
, up
15%
from net sales of
$654.0 million
in the
third
quarter of
2016
. Net sales from our reportable segments for the quarter were $726.8 million, an increase of 16% from net sales of $625.4 million in the
third
quarter of
2016
.
|
•
|
Earnings per share were
$1.06
(on a diluted basis), an increase from
third
quarter
2016
results of
$0.93
per diluted share from continuing operations.
|
•
|
Cash provided by operating activities was
$129.3 million
in the
third
quarter, a decrease from
$201.3 million
in the
third
quarter 2016.
|
|
Three Months Ended September 30,
|
|
Percentage Change
|
|||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|||||
|
(In thousands, except percentages and per share amounts)
|
|||||||||
NET SALES
|
$
|
754,866
|
|
|
$
|
654,010
|
|
|
15
|
%
|
Cost of goods sold
|
479,077
|
|
|
415,038
|
|
|
15
|
%
|
||
GROSS PROFIT
|
275,789
|
|
|
238,972
|
|
|
15
|
%
|
||
GROSS PROFIT MARGIN
|
36.5
|
%
|
|
36.5
|
%
|
|
|
|||
Selling, general and administrative expenses
|
105,582
|
|
|
86,302
|
|
|
22
|
%
|
||
Research and development expenses
|
21,763
|
|
|
21,012
|
|
|
4
|
%
|
||
Acquisition and integration related costs
|
—
|
|
|
6,749
|
|
|
(100
|
)%
|
||
OPERATING PROFIT
|
148,444
|
|
|
124,909
|
|
|
19
|
%
|
||
OPERATING PROFIT MARGIN
|
19.7
|
%
|
|
19.1
|
%
|
|
|
|||
Interest and financing expenses
|
(15,792
|
)
|
|
(15,946
|
)
|
|
(1
|
)%
|
||
Other (expenses) income, net
|
(3,008
|
)
|
|
2,990
|
|
|
(201
|
)%
|
||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS
|
129,644
|
|
|
111,953
|
|
|
16
|
%
|
||
Income tax expense
|
18,495
|
|
|
12,394
|
|
|
49
|
%
|
||
Effective tax rate
|
14.3
|
%
|
|
11.1
|
%
|
|
|
|||
INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS
|
111,149
|
|
|
99,559
|
|
|
12
|
%
|
||
Equity in net income of unconsolidated investments (net of tax)
|
19,044
|
|
|
14,953
|
|
|
27
|
%
|
||
NET INCOME FROM CONTINUING OPERATIONS
|
130,193
|
|
|
114,512
|
|
|
14
|
%
|
||
Income from discontinued operations (net of tax)
|
—
|
|
|
23,185
|
|
|
(100
|
)%
|
||
NET INCOME
|
130,193
|
|
|
137,697
|
|
|
(5
|
)%
|
||
Net income attributable to noncontrolling interests
|
(11,523
|
)
|
|
(9,477
|
)
|
|
22
|
%
|
||
NET INCOME ATTRIBUTABLE TO ALBEMARLE CORPORATION
|
$
|
118,670
|
|
|
$
|
128,220
|
|
|
(7
|
)%
|
NET INCOME FROM CONTINUING OPERATIONS AS A PERCENTAGE OF NET SALES
|
17.2
|
%
|
|
17.5
|
%
|
|
|
|||
Basic earnings per share:
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
1.07
|
|
|
$
|
0.93
|
|
|
15
|
%
|
Discontinued operations
|
—
|
|
|
0.21
|
|
|
(100
|
)%
|
||
|
$
|
1.07
|
|
|
$
|
1.14
|
|
|
(6
|
)%
|
Diluted earnings per share:
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
1.06
|
|
|
$
|
0.93
|
|
|
14
|
%
|
Discontinued operations
|
—
|
|
|
0.20
|
|
|
(100
|
)%
|
||
|
$
|
1.06
|
|
|
$
|
1.13
|
|
|
(6
|
)%
|
|
Three Months Ended September 30,
|
|
Percentage Change
|
|||||||||||||
|
2017
|
|
%
|
|
2016
|
|
%
|
|
2017 vs. 2016
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|||||||
Lithium and Advanced Materials
|
$
|
343,557
|
|
|
45.5
|
%
|
|
$
|
240,424
|
|
|
36.8
|
%
|
|
43
|
%
|
Bromine Specialties
|
212,923
|
|
|
28.2
|
%
|
|
194,496
|
|
|
29.7
|
%
|
|
9
|
%
|
||
Refining Solutions
|
170,275
|
|
|
22.6
|
%
|
|
190,453
|
|
|
29.1
|
%
|
|
(11
|
)%
|
||
All Other
|
28,021
|
|
|
3.7
|
%
|
|
28,272
|
|
|
4.3
|
%
|
|
(1
|
)%
|
||
Corporate
|
90
|
|
|
—
|
%
|
|
365
|
|
|
0.1
|
%
|
|
(75
|
)%
|
||
Total net sales
|
$
|
754,866
|
|
|
100.0
|
%
|
|
$
|
654,010
|
|
|
100.0
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|||||||
Lithium and Advanced Materials
|
$
|
130,218
|
|
|
62.2
|
%
|
|
$
|
91,719
|
|
|
48.7
|
%
|
|
42
|
%
|
Bromine Specialties
|
63,936
|
|
|
30.5
|
%
|
|
51,807
|
|
|
27.5
|
%
|
|
23
|
%
|
||
Refining Solutions
|
43,120
|
|
|
20.6
|
%
|
|
64,960
|
|
|
34.5
|
%
|
|
(34
|
)%
|
||
All Other
|
306
|
|
|
0.2
|
%
|
|
5,470
|
|
|
2.9
|
%
|
|
(94
|
)%
|
||
Corporate
|
(28,197
|
)
|
|
(13.5
|
)%
|
|
(25,627
|
)
|
|
(13.6
|
)%
|
|
10
|
%
|
||
Total adjusted EBITDA
|
$
|
209,383
|
|
|
100.0
|
%
|
|
$
|
188,329
|
|
|
100.0
|
%
|
|
11
|
%
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
103,199
|
|
|
$
|
53,760
|
|
|
$
|
34,392
|
|
|
$
|
191,351
|
|
|
$
|
(1,776
|
)
|
|
$
|
(70,905
|
)
|
|
$
|
118,670
|
|
Depreciation and amortization
|
26,136
|
|
|
10,176
|
|
|
9,978
|
|
|
46,290
|
|
|
2,082
|
|
|
1,523
|
|
|
49,895
|
|
|||||||
Utilization of inventory markup
(a)
|
568
|
|
|
—
|
|
|
—
|
|
|
568
|
|
|
—
|
|
|
—
|
|
|
568
|
|
|||||||
Adjustment to gain on acquisition
(b)
|
1,408
|
|
|
—
|
|
|
—
|
|
|
1,408
|
|
|
—
|
|
|
—
|
|
|
1,408
|
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,635
|
|
|
5,635
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,792
|
|
|
15,792
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,495
|
|
|
18,495
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,028
|
)
|
|
(1,028
|
)
|
|||||||
Multiemployer plan shortfall contributions
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,646
|
|
|
1,646
|
|
|||||||
Other
(e)
|
(1,093
|
)
|
|
—
|
|
|
(1,250
|
)
|
|
(2,343
|
)
|
|
—
|
|
|
645
|
|
|
(1,698
|
)
|
|||||||
Adjusted EBITDA
|
$
|
130,218
|
|
|
$
|
63,936
|
|
|
$
|
43,120
|
|
|
$
|
237,274
|
|
|
$
|
306
|
|
|
$
|
(28,197
|
)
|
|
$
|
209,383
|
|
Three months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
66,166
|
|
|
$
|
41,621
|
|
|
$
|
55,981
|
|
|
$
|
163,768
|
|
|
$
|
3,806
|
|
|
$
|
(39,354
|
)
|
|
$
|
128,220
|
|
Depreciation and amortization
|
25,553
|
|
|
10,186
|
|
|
8,979
|
|
|
44,718
|
|
|
1,664
|
|
|
1,592
|
|
|
47,974
|
|
|||||||
Acquisition and integration related costs
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,749
|
|
|
6,749
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,946
|
|
|
15,946
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,394
|
|
|
12,394
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,185
|
)
|
|
(23,185
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(231
|
)
|
|
(231
|
)
|
|||||||
Other
(g)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|
462
|
|
|||||||
Adjusted EBITDA
|
$
|
91,719
|
|
|
$
|
51,807
|
|
|
$
|
64,960
|
|
|
$
|
208,486
|
|
|
$
|
5,470
|
|
|
$
|
(25,627
|
)
|
|
$
|
188,329
|
|
(a)
|
In connection with the acquisition of Jiangli New Materials, the Company valued inventory purchased from Jiangli New Materials at fair value, which resulted in a markup of the underlying net book value of the inventory totaling approximately
$23.1 million
. The inventory markup was expensed over the estimated remaining selling period. For the three-month period ended September 30, 2017,
$0.6 million
was included in Cost of goods sold related to the utilization of the inventory markup.
|
(b)
|
Adjustment to gain recorded in Other (expenses) income, net related to the acquisition of the remaining 50% interest in Salmag. See Item 1 Financial Statements - Note 2, “Acquisitions,” for additional information.
|
(c)
|
Acquisition and integration related costs of
$1.8 million
and
$3.8 million
were included in Cost of goods sold and SG&A expenses, respectively, for the three-month period ended
September 30, 2017
, related to various significant projects, including the Jiangli New Materials acquisition, which contains unusual compensation related costs negotiated specifically as a result of this acquisition that are outside of the Company’s normal compensation arrangements.
|
(d)
|
Included in Other (expenses) income, net, is
$1.6 million
for additional capital reserve contributions to a multiemployer plan, which is subject to a financial improvement plan, to indemnify previously divested businesses.
|
(e)
|
Included amounts recorded in:
|
▪
|
Cost of goods sold -
$1.3 million
reversal of deferred income related to an abandoned project at an unconsolidated investment.
|
▪
|
Other (expenses) income, net -
$1.1 million
related to a reversal of a liability associated with the previous disposal of a property, partially offset by the revision of tax indemnification expenses of
$0.7 million
primarily related to the filing of tax returns for a previously disposed business.
|
(f)
|
See “
Acquisition and Integration Related Costs
” on page 30 for a description of these items.
|
(g)
|
Includes the write-off of fixed assets of
$1.4 million
included in Research and development expenses, partially offset by a net gain of
$0.9 million
on the sales of properties included in Other (expenses) income, net.
|
|
Nine Months Ended September 30,
|
|
Percentage Change
|
|||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|||||
|
(In thousands, except percentages and per share amounts)
|
|||||||||
NET SALES
|
$
|
2,214,187
|
|
|
$
|
1,980,548
|
|
|
12
|
%
|
Cost of goods sold
|
1,411,216
|
|
|
1,250,938
|
|
|
13
|
%
|
||
GROSS PROFIT
|
802,971
|
|
|
729,610
|
|
|
10
|
%
|
||
GROSS PROFIT MARGIN
|
36.3
|
%
|
|
36.8
|
%
|
|
|
|||
Selling, general and administrative expenses
|
329,269
|
|
|
254,988
|
|
|
29
|
%
|
||
Research and development expenses
|
63,423
|
|
|
61,384
|
|
|
3
|
%
|
||
Gain on sales of businesses, net
|
—
|
|
|
(122,298
|
)
|
|
(100
|
)%
|
||
Acquisition and integration related costs
|
—
|
|
|
44,337
|
|
|
(100
|
)%
|
||
OPERATING PROFIT
|
410,279
|
|
|
491,199
|
|
|
(16
|
)%
|
||
OPERATING PROFIT MARGIN
|
18.5
|
%
|
|
24.8
|
%
|
|
|
|||
Interest and financing expenses
|
(98,895
|
)
|
|
(46,860
|
)
|
|
111
|
%
|
||
Other (expenses) income, net
|
(6,512
|
)
|
|
740
|
|
|
*
|
|
||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS
|
304,872
|
|
|
445,079
|
|
|
(32
|
)%
|
||
Income tax expense
|
53,596
|
|
|
61,535
|
|
|
(13
|
)%
|
||
Effective tax rate
|
17.6
|
%
|
|
13.8
|
%
|
|
|
|||
INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS
|
251,276
|
|
|
383,544
|
|
|
(34
|
)%
|
||
Equity in net income of unconsolidated investments (net of tax)
|
55,263
|
|
|
44,790
|
|
|
23
|
%
|
||
NET INCOME FROM CONTINUING OPERATIONS
|
306,539
|
|
|
428,334
|
|
|
(28
|
)%
|
||
Loss from discontinued operations (net of tax)
|
—
|
|
|
(357,843
|
)
|
|
(100
|
)%
|
||
NET INCOME
|
306,539
|
|
|
70,491
|
|
|
*
|
|
||
Net income attributable to noncontrolling interests
|
(33,323
|
)
|
|
(28,906
|
)
|
|
15
|
%
|
||
NET INCOME ATTRIBUTABLE TO ALBEMARLE CORPORATION
|
$
|
273,216
|
|
|
$
|
41,585
|
|
|
*
|
|
NET INCOME FROM CONTINUING OPERATIONS AS A PERCENTAGE OF NET SALES
|
13.8
|
%
|
|
21.6
|
%
|
|
|
|||
Basic earnings (loss) per share:
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
2.46
|
|
|
$
|
3.56
|
|
|
(31
|
)%
|
Discontinued operations
|
—
|
|
|
(3.19
|
)
|
|
(100
|
)%
|
||
|
$
|
2.46
|
|
|
$
|
0.37
|
|
|
*
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
2.43
|
|
|
$
|
3.53
|
|
|
(31
|
)%
|
Discontinued operations
|
—
|
|
|
(3.16
|
)
|
|
(100
|
)%
|
||
|
$
|
2.43
|
|
|
$
|
0.37
|
|
|
*
|
|
|
Nine Months Ended September 30,
|
|
Percentage Change
|
|||||||||||||
|
2017
|
|
%
|
|
2016
|
|
%
|
|
2017 vs. 2016
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|||||||
Lithium and Advanced Materials
|
$
|
945,791
|
|
|
42.7
|
%
|
|
$
|
689,950
|
|
|
34.8
|
%
|
|
37
|
%
|
Bromine Specialties
|
636,059
|
|
|
28.7
|
%
|
|
597,912
|
|
|
30.2
|
%
|
|
6
|
%
|
||
Refining Solutions
|
539,904
|
|
|
24.4
|
%
|
|
539,044
|
|
|
27.2
|
%
|
|
—
|
%
|
||
All Other
|
91,144
|
|
|
4.1
|
%
|
|
150,987
|
|
|
7.6
|
%
|
|
(40
|
)%
|
||
Corporate
|
1,289
|
|
|
0.1
|
%
|
|
2,655
|
|
|
0.2
|
%
|
|
(51
|
)%
|
||
Total net sales
|
$
|
2,214,187
|
|
|
100.0
|
%
|
|
$
|
1,980,548
|
|
|
100.0
|
%
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|||||||
Lithium and Advanced Materials
|
$
|
382,789
|
|
|
59.8
|
%
|
|
$
|
260,861
|
|
|
45.7
|
%
|
|
47
|
%
|
Bromine Specialties
|
194,499
|
|
|
30.4
|
%
|
|
179,977
|
|
|
31.5
|
%
|
|
8
|
%
|
||
Refining Solutions
|
142,777
|
|
|
22.3
|
%
|
|
181,620
|
|
|
31.8
|
%
|
|
(21
|
)%
|
||
All Other
|
7,906
|
|
|
1.3
|
%
|
|
14,810
|
|
|
2.6
|
%
|
|
(47
|
)%
|
||
Corporate
|
(88,271
|
)
|
|
(13.8
|
)%
|
|
(66,435
|
)
|
|
(11.6
|
)%
|
|
33
|
%
|
||
Total adjusted EBITDA
|
$
|
639,700
|
|
|
100.0
|
%
|
|
$
|
570,833
|
|
|
100.0
|
%
|
|
12
|
%
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
292,655
|
|
|
$
|
164,193
|
|
|
$
|
115,329
|
|
|
$
|
572,177
|
|
|
$
|
1,622
|
|
|
$
|
(300,583
|
)
|
|
$
|
273,216
|
|
Depreciation and amortization
|
74,157
|
|
|
30,306
|
|
|
28,698
|
|
|
133,161
|
|
|
6,284
|
|
|
4,642
|
|
|
144,087
|
|
|||||||
Utilization of inventory markup
(a)
|
23,095
|
|
|
—
|
|
|
—
|
|
|
23,095
|
|
|
—
|
|
|
—
|
|
|
23,095
|
|
|||||||
Restructuring and other
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,141
|
|
|
17,141
|
|
|||||||
Gain on acquisition
(c)
|
(6,025
|
)
|
|
—
|
|
|
—
|
|
|
(6,025
|
)
|
|
—
|
|
|
—
|
|
|
(6,025
|
)
|
|||||||
Acquisition and integration related costs
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,395
|
|
|
26,395
|
|
|||||||
Interest and financing expenses
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,895
|
|
|
98,895
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,596
|
|
|
53,596
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,144
|
)
|
|
(3,144
|
)
|
|||||||
Multiemployer plan shortfall contributions
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,586
|
|
|
6,586
|
|
|||||||
Other
(g)
|
(1,093
|
)
|
|
—
|
|
|
(1,250
|
)
|
|
(2,343
|
)
|
|
—
|
|
|
8,201
|
|
|
5,858
|
|
|||||||
Adjusted EBITDA
|
$
|
382,789
|
|
|
$
|
194,499
|
|
|
$
|
142,777
|
|
|
$
|
720,065
|
|
|
$
|
7,906
|
|
|
$
|
(88,271
|
)
|
|
$
|
639,700
|
|
Nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
186,373
|
|
|
$
|
150,221
|
|
|
$
|
154,767
|
|
|
$
|
491,361
|
|
|
$
|
133,012
|
|
|
$
|
(582,788
|
)
|
|
$
|
41,585
|
|
Depreciation and amortization
|
74,488
|
|
|
29,756
|
|
|
26,853
|
|
|
131,097
|
|
|
5,629
|
|
|
4,562
|
|
|
141,288
|
|
|||||||
(Gain) loss on sales of businesses, net
(h)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123,831
|
)
|
|
1,533
|
|
|
(122,298
|
)
|
|||||||
Acquisition and integration related costs
(i)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,337
|
|
|
44,337
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,860
|
|
|
46,860
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,535
|
|
|
61,535
|
|
|||||||
Loss from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
357,843
|
|
|
357,843
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(779
|
)
|
|
(779
|
)
|
|||||||
Other
(j)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|
462
|
|
|||||||
Adjusted EBITDA
|
$
|
260,861
|
|
|
$
|
179,977
|
|
|
$
|
181,620
|
|
|
$
|
622,458
|
|
|
$
|
14,810
|
|
|
$
|
(66,435
|
)
|
|
$
|
570,833
|
|
(a)
|
In connection with the acquisition of Jiangli New Materials, the Company valued inventory purchased from Jiangli New Materials at fair value, which resulted in a markup of the underlying net book value of the inventory totaling approximately
$23.1 million
. The inventory markup was expensed over the estimated remaining selling period. For the nine-month period ended September 30, 2017,
$23.1 million
was included in Cost of goods sold related to the utilization of the inventory markup.
|
(b)
|
During 2017, we initiated action to reduce costs in each of our reportable segments at several locations, primarily at our Lithium sites in Germany. Based on the restructuring plans, we have recorded expenses of
$2.9 million
in Cost of goods sold,
$8.4 million
in SG&A expenses and
$5.8 million
in Research and development expenses, primarily related to restructuring costs. The unpaid balance is recorded in Accrued expenses at September 30, 2017, with the expectation that the majority of this plan will be completed by the end of 2017.
|
(c)
|
Gain recorded in Other (expenses) income, net related to the acquisition of the remaining 50% interest in Salmag. See Item 1 Financial Statements - Note 2, “Acquisitions,” for additional information.
|
(d)
|
Acquisition and integration related costs of
$12.5 million
and
$13.9 million
were included in Cost of goods sold and SG&A expenses, respectively, for the nine-month period ended September 30, 2017 primarily resulting from the Jiangli New Materials acquisition, including unusual compensation related costs negotiated specifically as a result of this acquisition that are outside the Company’s normal compensation arrangements.
|
(e)
|
Included in Interest and financing expenses is a loss of early extinguishment of debt of
$52.8 million
. See Item 1 Financial Statements - Note 10, “Long-term Debt,” for additional information.
|
(f)
|
Included in SG&A expenses is $2.0 million for additional capital reserve contributions to a multiemployer plan, which is subject to a financial improvement plan. In addition, additional capital reserve contributions for this multiemployer plan of
$4.6 million
, included in Other (expenses) income, net, have been made to indemnify previously divested businesses.
|
(g)
|
Included amounts recorded in:
|
▪
|
Cost of goods sold -
$1.3 million
reversal of deferred income related to an abandoned project at an unconsolidated investment.
|
▪
|
Selling, general and administrative expenses -
$1.0 million
related to a reversal of an accrual recorded as part of purchase accounting from a previous acquisition.
|
▪
|
Other expenses (income), net -
$3.2 million
of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle, a loss of
$2.1 million
associated with the previous disposal of a business, final settlement claims associated with the previous disposal of a business of
$2.0 million
and the revision of tax indemnification expenses of
$1.9 million
primarily related to the filing of tax returns and a competent authority agreement for a previously disposed business. This is partially offset by
$1.1 million
related to a reversal of a liability associated with the previous disposal of a property.
|
(h)
|
See “
Gain on Sales of Businesses, Net
” on page 36 for a description of these items.
|
(i)
|
See “
Acquisition and Integration Related Costs
” on page 36 for a description of these items.
|
(j)
|
Includes the write-off of fixed assets of $1.4 million included in Research and development expenses, partially offset by a net gain of $0.9 million on the sales of properties included in Other (expenses) income, net.
|
Issue Month/Year
|
|
Principal (in millions)
|
|
Interest Rate
|
|
Interest Payment Dates
|
|
Maturity Date
|
|
December 2014
|
|
€393.0
|
|
1.875%
|
|
December 8
|
|
December 8, 2021
|
|
November 2014
|
|
$425.0
|
|
4.15%
|
|
June 1
|
December 1
|
|
December 1, 2024
|
November 2014
|
|
$350.0
|
|
5.45%
|
|
June 1
|
December 1
|
|
December 1, 2044
|
December 2010
|
|
$175.3
|
|
4.50%
|
|
June 15
|
December 15
|
|
December 15, 2020
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 6.
|
Exhibits.
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
101
|
|
|
Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2017, furnished in XBRL (eXtensible Business Reporting Language)).
|
|
|
|
|
|
|
|
|
|
ALBEMARLE CORPORATION
|
||
|
|
|
(Registrant)
|
||
|
|
|
|
||
Date:
|
November 8, 2017
|
|
By:
|
|
/
S
/ S
COTT
A. T
OZIER
|
|
|
|
|
|
Scott A. Tozier
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(principal financial officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
No Suppliers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|