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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, 2022
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
_________________________________________________ 
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  
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
Number of shares of common stock, $.01 par value, outstanding as of April 30, 2022: 117,112,692


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

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,
 20222021
Net sales$1,127,728 $829,291 
Cost of goods sold678,698 565,604 
Gross profit449,030 263,687 
Selling, general and administrative expenses112,568 93,187 
Research and development expenses16,083 14,636 
Loss on sale of interest in properties8,400  
Operating profit311,979 155,864 
Interest and financing expenses(27,834)(43,882)
Other income, net15,496 11,312 
Income before income taxes and equity in net income of unconsolidated investments299,641 123,294 
Income tax expense80,530 22,107 
Income before equity in net income of unconsolidated investments219,111 101,187 
Equity in net income of unconsolidated investments (net of tax)62,436 16,511 
Net income281,547 117,698 
Net income attributable to noncontrolling interests(28,164)(22,021)
Net income attributable to Albemarle Corporation$253,383 $95,677 
Basic earnings per share$2.16 $0.85 
Diluted earnings per share$2.15 $0.84 
Weighted-average common shares outstanding – basic117,066 112,592 
Weighted-average common shares outstanding – diluted117,653 113,330 
See accompanying Notes to the Condensed Consolidated Financial Statements.
3

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

 Three Months Ended
March 31,
 20222021
Net income $281,547 $117,698 
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other(5,889)(28,142)
Net investment hedge 5,110 
Cash flow hedge4,017 (1,600)
Interest rate swap650 650 
Total other comprehensive loss, net of tax(1,222)(23,982)
Comprehensive income280,325 93,716 
Comprehensive income attributable to noncontrolling interests(28,111)(22,021)
Comprehensive income attributable to Albemarle Corporation$252,214 $71,695 
See accompanying Notes to the Condensed Consolidated Financial Statements.
4

ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
March 31,December 31,
20222021
Assets
Current assets:
Cash and cash equivalents
$463,325 $439,272 
Trade accounts receivable, less allowance for doubtful accounts (2022 – $2,548; 2021 – $2,559)
658,733 556,922 
Other accounts receivable71,225 66,184 
Inventories1,013,793 812,920 
Other current assets129,407 132,683 
Total current assets2,336,483 2,007,981 
Property, plant and equipment, at cost8,238,317 8,074,746 
Less accumulated depreciation and amortization2,209,664 2,165,130 
Net property, plant and equipment6,028,653 5,909,616 
Investments937,619 897,708 
Other assets240,279 252,239 
Goodwill1,575,617 1,597,627 
Other intangibles, net of amortization297,407 308,947 
Total assets$11,416,058 $10,974,118 
Liabilities And Equity
Current liabilities:
Accounts payable$845,710 $647,986 
Accrued expenses667,610 763,293 
Current portion of long-term debt503,795 389,920 
Dividends payable46,091 45,469 
Income taxes payable40,132 27,667 
Total current liabilities2,103,338 1,874,335 
Long-term debt1,985,696 2,004,319 
Postretirement benefits43,397 43,693 
Pension benefits217,820 229,187 
Other noncurrent liabilities649,878 663,698 
Deferred income taxes380,877 353,279 
Commitments and contingencies (Note 10)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 117,112 in 2022 and 117,015 in 2021
1,171 1,170 
Additional paid-in capital2,915,387 2,920,007 
Accumulated other comprehensive loss(393,619)(392,450)
Retained earnings3,303,661 3,096,539 
Total Albemarle Corporation shareholders’ equity5,826,600 5,625,266 
Noncontrolling interests208,452 180,341 
Total equity6,035,052 5,805,607 
Total liabilities and equity$11,416,058 $10,974,118 
See accompanying Notes to the Condensed Consolidated Financial Statements.
5

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, 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 
Balance at December 31, 2020106,842,369 $1,069 $1,438,038 $(326,132)$3,155,252 $4,268,227 $200,367 $4,468,594 
Net income95,677 95,677 22,021 117,698 
Other comprehensive loss(23,982)(23,982)— (23,982)
Cash dividends declared, $0.39 per common share
(45,521)(45,521)(26,219)(71,740)
Stock-based compensation4,674 4,674 4,674 
Fees related to public issuance of common stock(902)(902)(902)
Exercise of stock options17,964 — 1,183 1,183 1,183 
Issuance of common stock, net9,902,307 99 1,453,789 1,453,888 1,453,888 
Withholding taxes paid on stock-based compensation award distributions(44,465)(1)(6,859)(6,860)(6,860)
Balance at March 31, 2021116,718,175 $1,167 $2,889,923 $(350,114)$3,205,408 $5,746,384 $196,169 $5,942,553 
See accompanying Notes to the Condensed Consolidated Financial Statements.
6

ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
20222021
Cash and cash equivalents at beginning of year$439,272 $746,724 
Cash flows from operating activities:
Net income 281,547 117,698 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization66,574 62,260 
Loss on sale of investment in properties8,400  
Stock-based compensation and other4,245 2,560 
Equity in net income of unconsolidated investments (net of tax)(62,436)(16,511)
Dividends received from unconsolidated investments and nonmarketable securities39,168 4,950 
Pension and postretirement benefit(4,250)(4,226)
Pension and postretirement contributions(3,890)(15,329)
Unrealized gain on investments in marketable securities1,469 (1,762)
Loss on early extinguishment of debt 27,798 
Deferred income taxes27,747 (19,384)
Working capital changes(219,397)(49,185)
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL65,100 43,223 
Other, net1,899 5,857 
Net cash provided by operating activities206,176 157,949 
Cash flows from investing activities:
Capital expenditures(231,698)(179,683)
Sales of marketable securities, net3,751 5,245 
Investments in equity and other corporate investments(146)(286)
Net cash used in investing activities(228,093)(174,724)
Cash flows from financing activities:
Proceeds from issuance of common stock 1,453,888 
Repayments of long-term debt and credit agreements (1,174,980)
Proceeds from borrowings of credit agreements280,000  
Other debt repayments, net(166,615)(325,159)
Fees related to early extinguishment of debt (23,719)
Dividends paid to shareholders(45,637)(41,130)
Dividends paid to noncontrolling interests (26,219)
Proceeds from exercise of stock options419 1,183 
Withholding taxes paid on stock-based compensation award distributions(10,422)(6,860)
Other(126)(253)
Net cash provided by (used in) financing activities57,619 (143,249)
Net effect of foreign exchange on cash and cash equivalents(11,649)(16,841)
Increase (decrease) in cash and cash equivalents24,053 (176,865)
Cash and cash equivalents at end of period$463,325 $569,859 
See accompanying Notes to the Condensed Consolidated Financial Statements.
7

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, 2022 and December 31, 2021, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three-month periods ended March 31, 2022 and 2021 and our condensed consolidated statements of cash flows for the three-month periods ended March 31, 2022 and 2021. 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, 2021, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on February 22, 2022. The December 31, 2021 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, 2022 are not necessarily indicative of the results to be expected for the full year.
Interest and financing expenses for the three-month period ended March 31, 2022 includes an expense of $17.5 million for the correction of out of period errors regarding overstated capitalized interest values in prior periods. For the years ended December 31, 2021, 2020 and 2019, Interest expense was understated by $11.4 million, $5.5 million and $0.6 million, respectively. The Company does not believe these adjustments are material to the consolidated financial statements for any of the prior periods presented or to the three-month period ended March 31, 2022, in which they were corrected.

NOTE 2—Acquisitions:
On September 30, 2021, the Company signed a definitive agreement to acquire all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. (“Tianyuan”), for approximately $200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi. The plant has designed annual conversion capacity of up to 25,000 metric tons of LCE and is capable of producing battery-grade lithium carbonate and lithium hydroxide. The plant is currently in the commissioning stage and is expected to begin commercial production in the first half of 2022. The Company expects the transaction, which is subject to customary closing conditions, to close in the third quarter of 2022.

NOTE 3—Divestitures:
On June 1, 2021, the Company completed the sale of its fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue payment-in-kind (“PIK”) dividends at an annual rate of 12% beginning two years after issuance.
As part of the transaction, Grace acquired our manufacturing facilities located in South Haven, Michigan and Tyrone, Pennsylvania. The sale of the FCS business reflects the Company’s commitment to investing in its core, growth-oriented business segments. Historical financial statements include results from this business until divested on June 1, 2021.
We determined that the FCS business met the assets held for sale criteria in accordance with ASC 360, Property, Plant and Equipment during the first quarter of 2021. The results of operations of the business classified as held for sale are included in the consolidated statements of income through June 1, 2021. This business did not qualify for discontinued operations treatment because the Company’s management does not consider the sale as representing a strategic shift that had or will have a major effect on the Company’s operations and financial results.


8

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 4—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the three months ended March 31, 2022 (in thousands):
LithiumBromineCatalystsTotal
Balance at December 31, 2021
$1,394,182 $20,319 $183,126 $1,597,627 
   Foreign currency translation adjustments(17,666) (4,344)(22,010)
Balance at March 31, 2022$1,376,516 $20,319 $178,782 $1,575,617 

The following table summarizes the changes in other intangibles and related accumulated amortization for the three months ended March 31, 2022 (in thousands):
Customer Lists and Relationships
Trade Names and Trademarks(a)
Patents and TechnologyOtherTotal
Gross Asset Value
  Balance at December 31, 2021
$428,379 $17,883 $57,313 $36,705 $540,280 
Foreign currency translation adjustments and other(9,652)(117)(498)685 (9,582)
  Balance at March 31, 2022
$418,727 $17,766 $56,815 $37,390 $530,698 
Accumulated Amortization
  Balance at December 31, 2021
$(163,283)$(7,983)$(39,796)$(20,271)$(231,333)
    Amortization(5,437) (368)(216)(6,021)
Foreign currency translation adjustments and other3,560 70 481 (48)4,063 
  Balance at March 31, 2022
$(165,160)$(7,913)$(39,683)$(20,535)$(233,291)
Net Book Value at December 31, 2021
$265,096 $9,900 $17,517 $16,434 $308,947 
Net Book Value at March 31, 2022
$253,567 $9,853 $17,132 $16,855 $297,407 
(a)    Net Book Value includes only indefinite-lived intangible assets.

NOTE 5—Income Taxes:
The effective income tax rate for the three-month period ended March 31, 2022 was 26.9% compared to 17.9% for the three-month period ended March 31, 2021. The three-month period ended March 31, 2022 included tax expenses related to global intangible low-taxed income and net discrete tax expenses related to foreign return to provisions, partially offset by a benefit for 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 periods ended March 31, 2022 and March 31, 2021 was impacted by a variety of factors, primarily global intangible low-taxed income and the location in which income was earned.


9

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 6—Earnings Per Share:
Basic and diluted earnings per share for the three-month periods ended March 31, 2022 and 2021 are calculated as follows (in thousands, except per share amounts):
Three Months Ended
March 31,
20222021
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation$253,383 $95,677 
Denominator:
Weighted-average common shares for basic earnings per share117,066 112,592 
Basic earnings per share$2.16 $0.85 
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation$253,383 $95,677 
Denominator:
Weighted-average common shares for basic earnings per share117,066 112,592 
Incremental shares under stock compensation plans587 738 
Weighted-average common shares for diluted earnings per share117,653 113,330 
Diluted earnings per share$2.15 $0.84 
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. The Company also granted to the underwriters an option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before deducting expenses, underwriting discounts and commissions. The net proceeds were used for debt repayments and general corporate purposes.
On February 24, 2022, the Company declared a cash dividend of $0.395, an increase from the prior year regular quarterly dividend. This dividend was paid on April 1, 2022 to shareholders of record at the close of business as of March 18, 2022. On May 3, 2022, the Company declared a cash dividend of $0.395 per share, which is payable on July 1, 2022 to shareholders of record at the close of business as of June 10, 2022.
NOTE 7—Inventories:
The following table provides a breakdown of inventories at March 31, 2022 and December 31, 2021 (in thousands):
March 31,December 31,
20222021
Finished goods$656,475 $473,836 
Raw materials and work in process(a)
276,150 259,221 
Stores, supplies and other81,168 79,863 
Total$1,013,793 $812,920 

(a)Included $156.1 million and $149.4 million at March 31, 2022 and December 31, 2021, respectively, of work in process in our Lithium segment.

NOTE 8—Investments:
The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), where the ownership parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”), however this investment is not consolidated as the Company is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $499.8 million and $462.3 million at March 31, 2022 and December 31, 2021, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs for which the Company is not the primary beneficiary was $8.0 million at March 31, 2022 and December 31, 2021. Our unconsolidated VIEs are reported in Investments on the consolidated balance sheets. The Company
10

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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.
As part of the proceeds from the sale of the FCS business on June 1, 2021, Grace issued Albemarle preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue PIK dividends at an annual rate of 12% beginning two years after issuance. This preferred equity had a fair value of $247.1 million and $246.5 million at March 31, 2022 and December 31, 2021, respectively, which is reported in Investments in the consolidated balance sheets.

NOTE 9—Long-Term Debt:
Long-term debt at March 31, 2022 and December 31, 2021 consisted of the following (in thousands):
March 31,December 31,
20222021
1.125% notes due 2025
$414,088 $426,571 
1.625% notes due 2028
549,000 565,550 
3.45% Senior notes due 2029
171,612 171,612 
4.15% Senior notes due 2024
425,000 425,000 
5.45% Senior notes due 2044
350,000 350,000 
Credit facilities280,000  
Commercial paper notes222,400 388,500 
Variable-rate foreign bank loans4,842 5,226 
Finance lease obligations74,504 75,431 
Other11,001  
Unamortized discount and debt issuance costs(12,956)(13,651)
Total long-term debt2,489,491 2,394,239 
Less amounts due within one year503,795 389,920 
Long-term debt, less current portion$1,985,696 $2,004,319 
Current portion of long-term debt at March 31, 2022 includes commercial paper notes with a weighted-average interest rate of approximately 1.12% and a weighted-average maturity of 17 days.
In the first quarter of 2021, the Company made certain debt principal payments using proceeds from the February 2021 underwritten public offering of common stock. As a result, included in Interest and financing expenses for the three-month period ended March 31, 2021 is a loss on early extinguishment of debt of $27.8 million, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of this debt.
Prior to repayment in the first quarter of 2021, the carrying value of the 1.875% Euro-denominated senior notes was designated as an effective hedge of the net investment in certain foreign subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency were recorded in accumulated other comprehensive loss. Upon repayment of these notes, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated. Prior to the net investment hedge being discontinued, we recorded a gain of $5.1 million (net of income taxes) during the three-month period ended March 31, 2021 in accumulated other comprehensive loss.


11

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 10—Commitments and Contingencies:
Environmental
The following activity was recorded in environmental liabilities for the three months ended March 31, 2022 (in thousands):
Beginning balance at December 31, 2021
$46,617 
Expenditures(728)
Accretion of discount259 
Additions and changes in estimates2,811 
Foreign currency translation adjustments and other(860)
Ending balance at March 31, 2022
48,099 
Less amounts reported in Accrued expenses9,925 
Amounts reported in Other noncurrent liabilities$38,174 
Environmental remediation liabilities included discounted liabilities of $39.3 million and $39.7 million at March 31, 2022 and December 31, 2021, respectively, discounted at rates with a weighted-average of 3.5%, and with the undiscounted amount totaling $69.1 million and $70.0 million at March 31, 2022 and December 31, 2021, 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 be an additional $10 million to $23 million before income taxes in excess of amounts already recorded. The variability of this range is primarily driven by possible environmental remediation activity at a formerly owned site where we indemnify the buyer through a set cutoff date in 2024.
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 Catalysts 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 Catalysts 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 about a potential resolution.
12

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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 $64.9 million and $66.8 million at March 31, 2022 and December 31, 2021, 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 11—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 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.


13

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following table provides details of our lease contracts for the three-month periods ended March 31, 2022 and 2021 (in thousands):
Three Months Ended
March 31,
20222021
Operating lease cost$10,611 $9,412 
Finance lease cost:
Amortization of right of use assets430 157 
Interest on lease liabilities853 755 
Total finance lease cost1,283 912 
Short-term lease cost2,699 2,604 
Variable lease cost717 2,365 
Total lease cost$15,310 $15,293 
Supplemental cash flow information related to our lease contracts for the three-month periods ended March 31, 2022 and 2021 is as follows (in thousands):
Three Months Ended March 31,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$8,637 $8,381 
Operating cash flows from finance leases599 439 
Financing cash flows from finance leases515 159 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases999 707 


14

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, 2022 and December 31, 2021 is as follows (in thousands, except as noted):
March 31, 2022December 31, 2021
Operating leases:
Other assets$144,594 $154,741 
Accrued expenses35,285 31,603 
Other noncurrent liabilities116,736 126,997 
Total operating lease liabilities152,021 158,600 
Finance leases:
Net property, plant and equipment74,398 75,302 
Current portion of long-term debt(a)
3,996 3,768 
Long-term debt73,109 74,011 
Total finance lease liabilities77,105 77,779 
Weighted average remaining lease term (in years):
Operating leases12.812.9
Finance leases24.424.5
Weighted average discount rate (%):
Operating leases3.48 %3.44 %
Finance leases4.46 %4.47 %
(a)    Balance includes accrued interest of finance lease recorded in Accrued liabilities.
Maturities of lease liabilities at March 31, 2022 were as follows (in thousands):
Operating LeasesFinance Leases
Remainder of 2022$29,496 $4,015 
202334,363 6,156 
202420,847 6,156 
202512,298 6,156 
20269,784 5,497 
Thereafter122,294 97,469 
Total lease payments229,082 125,449 
Less imputed interest77,061 48,344 
Total$152,021 $77,105 

NOTE 12—Segment Information:
Our three reportable segments include: (1) Lithium; (2) Bromine; and (3) Catalysts. 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.
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 our core businesses. On June 1, 2021, we completed the sale
15

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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, All Other, 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.
Three Months Ended
March 31,
20222021
(In thousands)
Net sales:
Lithium$550,272 $278,976 
Bromine359,579 280,447 
Catalysts217,877 220,243 
All Other 49,625 
Total net sales$1,127,728 $829,291 
Adjusted EBITDA:
Lithium$308,615 $106,436 
Bromine129,234 94,640 
Catalysts16,910 25,427 
All Other 21,479 
Corporate(22,829)(17,928)
Total adjusted EBITDA$431,930 $230,054 

16

ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net (loss) income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
LithiumBromineCatalystsReportable Segments TotalAll OtherCorporateConsolidated Total
Three months ended March 31, 2022
Net income (loss) attributable to Albemarle Corporation$261,689 $116,561 $3,989 $382,239 $ $(128,856)$253,383 
Depreciation and amortization38,526 12,673 12,921 64,120  2,454 66,574 
Loss on sale of interest in properties(a)
8,400   8,400   8,400 
Acquisition and integration related costs(b)
     1,724 1,724 
Interest and financing expenses(c)
     27,834 27,834 
Income tax expense     80,530 80,530 
Non-operating pension and OPEB items     (5,280)(5,280)
Other(d)
     (1,235)(1,235)
Adjusted EBITDA$308,615 $129,234 $16,910 $454,759 $ $(22,829)$431,930 
Three months ended March 31, 2021
Net income (loss) attributable to Albemarle Corporation$74,630 $82,113 $12,916 $169,659 $20,016 $(93,998)$95,677 
Depreciation and amortization31,806 12,527 12,511