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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Albemarle Corporation | NYSE:ALB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.90 | 1.65% | 116.88 | 118.07 | 114.83 | 116.23 | 1,723,564 | 00:59:06 |
☒
|
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
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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Large accelerated filer
|
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☒
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Accelerated filer
|
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☐
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Non-accelerated filer
|
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☐
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Smaller reporting company
|
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☐
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Emerging growth company
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☐
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Title of each class
|
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Trading Symbol
|
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Name of each exchange on which registered
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COMMON STOCK, $.01 Par Value
|
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ALB
|
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New York Stock Exchange
|
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|
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Page
Number(s)
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8-24
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25-37
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EXHIBITS
|
|
|
Item 1.
|
Financial Statements (Unaudited).
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net sales
|
$
|
738,845
|
|
|
$
|
832,064
|
|
Cost of goods sold
|
496,827
|
|
|
548,578
|
|
||
Gross profit
|
242,018
|
|
|
283,486
|
|
||
Selling, general and administrative expenses
|
101,877
|
|
|
113,355
|
|
||
Research and development expenses
|
16,097
|
|
|
14,977
|
|
||
Operating profit
|
124,044
|
|
|
155,154
|
|
||
Interest and financing expenses
|
(16,885
|
)
|
|
(12,586
|
)
|
||
Other income, net
|
8,314
|
|
|
11,291
|
|
||
Income before income taxes and equity in net income of unconsolidated investments
|
115,473
|
|
|
153,859
|
|
||
Income tax expense
|
18,442
|
|
|
37,514
|
|
||
Income before equity in net income of unconsolidated investments
|
97,031
|
|
|
116,345
|
|
||
Equity in net income of unconsolidated investments (net of tax)
|
26,604
|
|
|
35,181
|
|
||
Net income
|
123,635
|
|
|
151,526
|
|
||
Net income attributable to noncontrolling interests
|
(16,431
|
)
|
|
(17,957
|
)
|
||
Net income attributable to Albemarle Corporation
|
$
|
107,204
|
|
|
$
|
133,569
|
|
Basic earnings per share
|
$
|
1.01
|
|
|
$
|
1.26
|
|
Diluted earnings per share
|
$
|
1.01
|
|
|
$
|
1.26
|
|
Weighted-average common shares outstanding – basic
|
106,227
|
|
|
105,799
|
|
||
Weighted-average common shares outstanding – diluted
|
106,512
|
|
|
106,356
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
123,635
|
|
|
$
|
151,526
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Foreign currency translation
|
(81,986
|
)
|
|
(10,855
|
)
|
||
Pension and postretirement benefits
|
9
|
|
|
7
|
|
||
Net investment hedge
|
2,081
|
|
|
3,304
|
|
||
Cash flow hedge
|
(51,460
|
)
|
|
—
|
|
||
Interest rate swap
|
648
|
|
|
641
|
|
||
Total other comprehensive loss, net of tax
|
(130,708
|
)
|
|
(6,903
|
)
|
||
Comprehensive (loss) income
|
(7,073
|
)
|
|
144,623
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(16,477
|
)
|
|
(17,910
|
)
|
||
Comprehensive (loss) income attributable to Albemarle Corporation
|
$
|
(23,550
|
)
|
|
$
|
126,713
|
|
|
March 31,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
553,228
|
|
|
$
|
613,110
|
|
Trade accounts receivable, less allowance for doubtful accounts (2020 – $3,700; 2019 – $3,711)
|
518,703
|
|
|
612,651
|
|
||
Other accounts receivable
|
73,765
|
|
|
67,551
|
|
||
Inventories
|
853,500
|
|
|
768,984
|
|
||
Other current assets
|
155,985
|
|
|
162,813
|
|
||
Total current assets
|
2,155,181
|
|
|
2,225,109
|
|
||
Property, plant and equipment, at cost
|
6,973,817
|
|
|
6,817,843
|
|
||
Less accumulated depreciation and amortization
|
1,947,848
|
|
|
1,908,370
|
|
||
Net property, plant and equipment
|
5,025,969
|
|
|
4,909,473
|
|
||
Investments
|
543,670
|
|
|
579,813
|
|
||
Other assets
|
219,202
|
|
|
213,061
|
|
||
Goodwill
|
1,559,055
|
|
|
1,578,785
|
|
||
Other intangibles, net of amortization
|
344,561
|
|
|
354,622
|
|
||
Total assets
|
$
|
9,847,638
|
|
|
$
|
9,860,863
|
|
Liabilities And Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
573,075
|
|
|
$
|
574,138
|
|
Accrued expenses
|
491,579
|
|
|
553,160
|
|
||
Current portion of long-term debt
|
35,615
|
|
|
187,336
|
|
||
Dividends payable
|
40,715
|
|
|
38,764
|
|
||
Current operating lease liability
|
23,826
|
|
|
23,137
|
|
||
Income taxes payable
|
28,116
|
|
|
32,461
|
|
||
Total current liabilities
|
1,192,926
|
|
|
1,408,996
|
|
||
Long-term debt
|
3,105,225
|
|
|
2,862,921
|
|
||
Postretirement benefits
|
50,673
|
|
|
50,899
|
|
||
Pension benefits
|
285,851
|
|
|
292,073
|
|
||
Other noncurrent liabilities
|
768,757
|
|
|
754,536
|
|
||
Deferred income taxes
|
402,681
|
|
|
397,858
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Albemarle Corporation shareholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value, issued and outstanding – 106,319 in 2020 and 106,040 in 2019
|
1,063
|
|
|
1,061
|
|
||
Additional paid-in capital
|
1,393,681
|
|
|
1,383,446
|
|
||
Accumulated other comprehensive loss
|
(526,489
|
)
|
|
(395,735
|
)
|
||
Retained earnings
|
3,009,749
|
|
|
2,943,478
|
|
||
Total Albemarle Corporation shareholders’ equity
|
3,878,004
|
|
|
3,932,250
|
|
||
Noncontrolling interests
|
163,521
|
|
|
161,330
|
|
||
Total equity
|
4,041,525
|
|
|
4,093,580
|
|
||
Total liabilities and equity
|
$
|
9,847,638
|
|
|
$
|
9,860,863
|
|
(In Thousands, Except Share Data)
|
|
|
|
|
Additional
Paid-in Capital
|
|
Accumulated Other
Comprehensive Loss
|
|
Retained Earnings
|
|
Total Albemarle
Shareholders’ Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||
Common Stock
|
|
|||||||||||||||||||||||||||||
Shares
|
|
Amounts
|
|
|
|
|
|
|
||||||||||||||||||||||
Balance at January 1, 2020
|
106,040,215
|
|
|
$
|
1,061
|
|
|
$
|
1,383,446
|
|
|
$
|
(395,735
|
)
|
|
$
|
2,943,478
|
|
|
$
|
3,932,250
|
|
|
$
|
161,330
|
|
|
$
|
4,093,580
|
|
Net income
|
|
|
|
|
|
|
|
|
107,204
|
|
|
107,204
|
|
|
16,431
|
|
|
123,635
|
|
|||||||||||
Other comprehensive (loss) income
|
|
|
|
|
|
|
(130,754
|
)
|
|
|
|
(130,754
|
)
|
|
46
|
|
|
(130,708
|
)
|
|||||||||||
Cash dividends declared, $0.385 per common share
|
|
|
|
|
|
|
|
|
(40,933
|
)
|
|
(40,933
|
)
|
|
(14,286
|
)
|
|
(55,219
|
)
|
|||||||||||
Stock-based compensation
|
|
|
|
|
3,867
|
|
|
|
|
|
|
3,867
|
|
|
|
|
3,867
|
|
||||||||||||
Exercise of stock options
|
193,537
|
|
|
2
|
|
|
10,193
|
|
|
|
|
|
|
10,195
|
|
|
|
|
10,195
|
|
||||||||||
Issuance of common stock, net
|
132,320
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
(47,458
|
)
|
|
(1
|
)
|
|
(3,824
|
)
|
|
|
|
|
|
(3,825
|
)
|
|
|
|
(3,825
|
)
|
||||||||||
Balance at March 31, 2020
|
106,318,614
|
|
|
$
|
1,063
|
|
|
$
|
1,393,681
|
|
|
$
|
(526,489
|
)
|
|
$
|
3,009,749
|
|
|
$
|
3,878,004
|
|
|
$
|
163,521
|
|
|
$
|
4,041,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at January 1, 2019
|
105,616,028
|
|
|
$
|
1,056
|
|
|
$
|
1,368,897
|
|
|
$
|
(350,682
|
)
|
|
$
|
2,566,050
|
|
|
$
|
3,585,321
|
|
|
$
|
173,787
|
|
|
$
|
3,759,108
|
|
Net income
|
|
|
|
|
|
|
|
|
133,569
|
|
|
133,569
|
|
|
17,957
|
|
|
151,526
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
(6,856
|
)
|
|
|
|
(6,856
|
)
|
|
(47
|
)
|
|
(6,903
|
)
|
|||||||||||
Cash dividends declared, $0.3675 per common share
|
|
|
|
|
|
|
|
|
(38,935
|
)
|
|
(38,935
|
)
|
|
—
|
|
|
(38,935
|
)
|
|||||||||||
Stock-based compensation
|
|
|
|
|
7,277
|
|
|
|
|
|
|
7,277
|
|
|
|
|
7,277
|
|
||||||||||||
Exercise of stock options
|
114,128
|
|
|
1
|
|
|
2,675
|
|
|
|
|
|
|
2,676
|
|
|
|
|
2,676
|
|
||||||||||
Issuance of common stock, net
|
340,111
|
|
|
3
|
|
|
(3
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Increase in ownership interest of noncontrolling interest
|
|
|
|
|
(523
|
)
|
|
|
|
|
|
(523
|
)
|
|
68
|
|
|
(455
|
)
|
|||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
(120,256
|
)
|
|
(1
|
)
|
|
(10,254
|
)
|
|
|
|
|
|
(10,255
|
)
|
|
|
|
(10,255
|
)
|
||||||||||
Balance at March 31, 2019
|
105,950,011
|
|
|
$
|
1,059
|
|
|
$
|
1,368,069
|
|
|
$
|
(357,538
|
)
|
|
$
|
2,660,684
|
|
|
$
|
3,672,274
|
|
|
$
|
191,765
|
|
|
$
|
3,864,039
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash and cash equivalents at beginning of year
|
$
|
613,110
|
|
|
$
|
555,320
|
|
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
123,635
|
|
|
151,526
|
|
||
Adjustments to reconcile net income to cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
53,694
|
|
|
49,283
|
|
||
Gain on sale of property
|
—
|
|
|
(11,079
|
)
|
||
Stock-based compensation and other
|
2,501
|
|
|
5,556
|
|
||
Equity in net income of unconsolidated investments (net of tax)
|
(26,604
|
)
|
|
(35,181
|
)
|
||
Dividends received from unconsolidated investments and nonmarketable securities
|
—
|
|
|
3,034
|
|
||
Pension and postretirement (benefit) expense
|
(1,719
|
)
|
|
578
|
|
||
Pension and postretirement contributions
|
(6,113
|
)
|
|
(3,555
|
)
|
||
Unrealized gain on investments in marketable securities
|
(627
|
)
|
|
(476
|
)
|
||
Deferred income taxes
|
4,790
|
|
|
7,580
|
|
||
Working capital changes
|
17,730
|
|
|
(122,939
|
)
|
||
Other, net
|
(12,233
|
)
|
|
10,589
|
|
||
Net cash provided by operating activities
|
155,054
|
|
|
54,916
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisitions, net of cash acquired
|
(22,572
|
)
|
|
—
|
|
||
Capital expenditures
|
(214,529
|
)
|
|
(216,132
|
)
|
||
Proceeds from sale of property and equipment
|
—
|
|
|
10,356
|
|
||
Sales of marketable securities, net
|
2,589
|
|
|
1,090
|
|
||
Investments in equity and other corporate investments
|
(356
|
)
|
|
(2,509
|
)
|
||
Net cash used in investing activities
|
(234,868
|
)
|
|
(207,195
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from borrowings of credit agreements
|
250,000
|
|
|
—
|
|
||
Other (repayments) borrowings, net
|
(151,872
|
)
|
|
118,223
|
|
||
Dividends paid to shareholders
|
(38,982
|
)
|
|
(35,387
|
)
|
||
Dividends paid to noncontrolling interests
|
(14,286
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
10,195
|
|
|
2,676
|
|
||
Withholding taxes paid on stock-based compensation award distributions
|
(3,825
|
)
|
|
(10,255
|
)
|
||
Debt financing costs
|
(214
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
51,016
|
|
|
75,257
|
|
||
Net effect of foreign exchange on cash and cash equivalents
|
(31,084
|
)
|
|
(13,024
|
)
|
||
Decrease in cash and cash equivalents
|
(59,882
|
)
|
|
(90,046
|
)
|
||
Cash and cash equivalents at end of period
|
$
|
553,228
|
|
|
$
|
465,274
|
|
(a)
|
Represents 60% ownership interest in finance lease acquired. See Note 10, “Leases,” for further information on the Company’s leases.
|
|
Lithium
|
|
Bromine Specialties
|
|
Catalysts
|
|
All Other
|
|
Total
|
||||||||||
Balance at December 31, 2019
|
$
|
1,370,846
|
|
|
$
|
20,319
|
|
|
$
|
181,034
|
|
|
$
|
6,586
|
|
|
$
|
1,578,785
|
|
Acquisitions(a)
|
(12,382
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,382
|
)
|
|||||
Foreign currency translation adjustments and other
|
(5,335
|
)
|
|
—
|
|
|
(2,013
|
)
|
|
—
|
|
|
(7,348
|
)
|
|||||
Balance at March 31, 2020
|
$
|
1,353,129
|
|
|
$
|
20,319
|
|
|
$
|
179,021
|
|
|
$
|
6,586
|
|
|
$
|
1,559,055
|
|
(a)
|
Represents preliminary purchase price adjustments for the Wodgina Project 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, 2019
|
$
|
422,462
|
|
|
$
|
18,087
|
|
|
$
|
55,020
|
|
|
$
|
41,282
|
|
|
$
|
536,851
|
|
Foreign currency translation adjustments and other
|
(1,606
|
)
|
|
(357
|
)
|
|
(310
|
)
|
|
(2,581
|
)
|
|
(4,854
|
)
|
|||||
Balance at March 31, 2020
|
$
|
420,856
|
|
|
$
|
17,730
|
|
|
$
|
54,710
|
|
|
$
|
38,701
|
|
|
$
|
531,997
|
|
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2019
|
$
|
(116,749
|
)
|
|
$
|
(7,938
|
)
|
|
$
|
(36,197
|
)
|
|
$
|
(21,345
|
)
|
|
$
|
(182,229
|
)
|
Amortization
|
(5,544
|
)
|
|
—
|
|
|
(341
|
)
|
|
(215
|
)
|
|
(6,100
|
)
|
|||||
Foreign currency translation adjustments and other
|
420
|
|
|
14
|
|
|
130
|
|
|
329
|
|
|
893
|
|
|||||
Balance at March 31, 2020
|
$
|
(121,873
|
)
|
|
$
|
(7,924
|
)
|
|
$
|
(36,408
|
)
|
|
$
|
(21,231
|
)
|
|
$
|
(187,436
|
)
|
Net Book Value at December 31, 2019
|
$
|
305,713
|
|
|
$
|
10,149
|
|
|
$
|
18,823
|
|
|
$
|
19,937
|
|
|
$
|
354,622
|
|
Net Book Value at March 31, 2020
|
$
|
298,983
|
|
|
$
|
9,806
|
|
|
$
|
18,302
|
|
|
$
|
17,470
|
|
|
$
|
344,561
|
|
(a)
|
Net Book Value includes only indefinite-lived intangible assets.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Basic earnings per share
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Albemarle Corporation
|
$
|
107,204
|
|
|
$
|
133,569
|
|
Denominator:
|
|
|
|
||||
Weighted-average common shares for basic earnings per share
|
106,227
|
|
|
105,799
|
|
||
Basic earnings per share
|
$
|
1.01
|
|
|
$
|
1.26
|
|
|
|
|
|
||||
Diluted earnings per share
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Albemarle Corporation
|
$
|
107,204
|
|
|
$
|
133,569
|
|
Denominator:
|
|
|
|
||||
Weighted-average common shares for basic earnings per share
|
106,227
|
|
|
105,799
|
|
||
Incremental shares under stock compensation plans
|
285
|
|
|
557
|
|
||
Weighted-average common shares for diluted earnings per share
|
106,512
|
|
|
106,356
|
|
||
Diluted earnings per share
|
$
|
1.01
|
|
|
$
|
1.26
|
|
|
March 31,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
Finished goods(a)
|
$
|
562,231
|
|
|
$
|
495,639
|
|
Raw materials and work in process(b)
|
221,173
|
|
|
205,781
|
|
||
Stores, supplies and other
|
70,096
|
|
|
67,564
|
|
||
Total
|
$
|
853,500
|
|
|
$
|
768,984
|
|
(a)
|
Increase primarily due to the build-up of inventory in Lithium and Catalysts for forecasted sales during the remainder of 2020.
|
(b)
|
Included $117.8 million and $109.3 million at March 31, 2020 and December 31, 2019, respectively, of work in process in our Lithium segment.
|
|
March 31,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
1.125% notes, net of unamortized discount and debt issuance costs of $4,342 at March 31, 2020 and $5,659 at December 31, 2019
|
$
|
547,156
|
|
|
$
|
549,241
|
|
1.625% notes, net of unamortized discount and debt issuance costs of $5,938 at March 31, 2020 and $5,696 at December 31, 2019
|
545,560
|
|
|
549,204
|
|
||
1.875% Senior notes, net of unamortized discount and debt issuance costs of $1,585 at March 31, 2020 and $1,831 at December 31, 2019.
|
431,820
|
|
|
434,241
|
|
||
3.45% Senior notes, net of unamortized discount and debt issuance costs of $3,274 at March 31, 2020 and $3,533 at December 31, 2019
|
296,725
|
|
|
296,467
|
|
||
4.15% Senior notes, net of unamortized discount and debt issuance costs of $2,275 at March 31, 2020 and $2,398 at December 31, 2019
|
422,724
|
|
|
422,603
|
|
||
5.45% Senior notes, net of unamortized discount and debt issuance costs of $3,811 at March 31, 2020 and $3,850 at December 31, 2019
|
346,189
|
|
|
346,150
|
|
||
Floating rate notes, net of unamortized debt issuance costs of $962 at March 31, 2020 and $1,169 at December 31, 2019
|
199,037
|
|
|
198,831
|
|
||
Revolving credit facility
|
250,000
|
|
|
—
|
|
||
Commercial paper notes
|
35,000
|
|
|
186,700
|
|
||
Variable-rate foreign bank loans
|
7,300
|
|
|
7,296
|
|
||
Finance lease obligations
|
59,329
|
|
|
59,524
|
|
||
Total long-term debt
|
3,140,840
|
|
|
3,050,257
|
|
||
Less amounts due within one year
|
35,615
|
|
|
187,336
|
|
||
Long-term debt, less current portion
|
$
|
3,105,225
|
|
|
$
|
2,862,921
|
|
Beginning balance at December 31, 2019
|
$
|
42,592
|
|
Expenditures
|
(918
|
)
|
|
Accretion of discount
|
216
|
|
|
Foreign currency translation adjustments
|
(183
|
)
|
|
Ending balance at March 31, 2020
|
41,707
|
|
|
Less amounts reported in Accrued expenses
|
9,379
|
|
|
Amounts reported in Other noncurrent liabilities
|
$
|
32,328
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating lease cost
|
$
|
8,740
|
|
|
$
|
9,421
|
|
Finance lease cost:
|
|
|
|
||||
Amortization of right of use assets
|
154
|
|
|
178
|
|
||
Interest on lease liabilities
|
650
|
|
|
33
|
|
||
Total finance lease cost
|
804
|
|
|
211
|
|
||
|
|
|
|
||||
Short-term lease cost
|
2,883
|
|
|
1,966
|
|
||
Variable lease cost
|
1,948
|
|
|
1,086
|
|
||
Total lease cost
|
$
|
14,375
|
|
|
$
|
12,684
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
11,177
|
|
|
$
|
8,930
|
|
Operating cash flows from finance leases
|
380
|
|
|
33
|
|
||
Financing cash flows from finance leases
|
172
|
|
|
171
|
|
||
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
||||
Operating leases
|
16,021
|
|
|
—
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Operating leases:
|
|
|
|
||||
Other assets
|
$
|
141,827
|
|
|
$
|
133,864
|
|
|
|
|
|
||||
Current operating lease liability
|
23,826
|
|
|
23,137
|
|
||
Other noncurrent liabilities
|
119,233
|
|
|
114,686
|
|
||
Total operating lease liabilities
|
143,059
|
|
|
137,823
|
|
||
Finance leases:
|
|
|
|
||||
Net property, plant and equipment
|
59,320
|
|
|
59,494
|
|
||
|
|
|
|
||||
Current portion of long-term debt
|
615
|
|
|
636
|
|
||
Long-term debt
|
58,713
|
|
|
58,888
|
|
||
Total finance lease liabilities
|
59,328
|
|
|
59,524
|
|
||
Weighted average remaining lease term (in years):
|
|
|
|
||||
Operating leases
|
15.8
|
|
|
11.4
|
|
||
Finance leases
|
28.2
|
|
|
28.3
|
|
||
Weighted average discount rate (%):
|
|
|
|
||||
Operating leases
|
4.08
|
%
|
|
3.84
|
%
|
||
Finance leases
|
4.56
|
%
|
|
4.56
|
%
|
|
Operating Leases
|
|
Finance Leases
|
||||
Remainder of 2020
|
$
|
23,100
|
|
|
$
|
1,652
|
|
2021
|
18,498
|
|
|
2,129
|
|
||
2022
|
14,652
|
|
|
4,408
|
|
||
2023
|
13,205
|
|
|
4,408
|
|
||
2024
|
12,181
|
|
|
4,408
|
|
||
Thereafter
|
148,998
|
|
|
94,324
|
|
||
Total lease payments
|
230,634
|
|
|
111,329
|
|
||
Less imputed interest
|
87,575
|
|
|
52,001
|
|
||
Total
|
$
|
143,059
|
|
|
$
|
59,328
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
|
(In thousands)
|
||||||
Net sales:
|
|
|
|
||||
Lithium
|
$
|
236,818
|
|
|
$
|
291,886
|
|
Bromine Specialties
|
231,592
|
|
|
249,052
|
|
||
Catalysts
|
207,207
|
|
|
251,648
|
|
||
All Other
|
63,228
|
|
|
39,478
|
|
||
Total net sales
|
$
|
738,845
|
|
|
$
|
832,064
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
Lithium
|
$
|
78,637
|
|
|
$
|
115,616
|
|
Bromine Specialties
|
83,262
|
|
|
78,597
|
|
||
Catalysts
|
47,470
|
|
|
60,071
|
|
||
All Other
|
22,824
|
|
|
7,243
|
|
||
Corporate
|
(35,828
|
)
|
|
(35,660
|
)
|
||
Total adjusted EBITDA
|
$
|
196,365
|
|
|
$
|
225,867
|
|
|
Lithium
|
|
Bromine Specialties
|
|
Catalysts
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
53,240
|
|
|
$
|
71,665
|
|
|
$
|
34,892
|
|
|
$
|
159,797
|
|
|
$
|
20,846
|
|
|
$
|
(73,439
|
)
|
|
$
|
107,204
|
|
Depreciation and amortization
|
25,397
|
|
|
11,597
|
|
|
12,578
|
|
|
49,572
|
|
|
1,978
|
|
|
2,144
|
|
|
53,694
|
|
|||||||
Restructuring and other(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,847
|
|
|
1,847
|
|
|||||||
Acquisition and integration related costs(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,951
|
|
|
2,951
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,885
|
|
|
16,885
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,442
|
|
|
18,442
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,908
|
)
|
|
(2,908
|
)
|
|||||||
Other(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,750
|
)
|
|
(1,750
|
)
|
|||||||
Adjusted EBITDA
|
$
|
78,637
|
|
|
$
|
83,262
|
|
|
$
|
47,470
|
|
|
$
|
209,369
|
|
|
$
|
22,824
|
|
|
$
|
(35,828
|
)
|
|
$
|
196,365
|
|
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
93,169
|
|
|
$
|
67,480
|
|
|
$
|
47,859
|
|
|
$
|
208,508
|
|
|
$
|
5,206
|
|
|
$
|
(80,145
|
)
|
|
$
|
133,569
|
|
Depreciation and amortization
|
22,092
|
|
|
11,117
|
|
|
12,212
|
|
|
45,421
|
|
|
2,037
|
|
|
1,825
|
|
|
49,283
|
|
|||||||
Acquisition and integration related costs(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,285
|
|
|
5,285
|
|
|||||||
Gain on sale of property(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,079
|
)
|
|
(11,079
|
)
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,586
|
|
|
12,586
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,514
|
|
|
37,514
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
|
(583
|
)
|
|||||||
Other(e)
|
355
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
(1,063
|
)
|
|
(708
|
)
|
|||||||
Adjusted EBITDA
|
$
|
115,616
|
|
|
$
|
78,597
|
|
|
$
|
60,071
|
|
|
$
|
254,284
|
|
|
$
|
7,243
|
|
|
$
|
(35,660
|
)
|
|
$
|
225,867
|
|
(a)
|
Severance payments as part of a business reorganization plan, $0.7 million recorded in Cost of goods sold, $1.5 million recorded in Selling, general and administrative expenses and a $0.3 million gain recorded in Net income attributable to noncontrolling interest for the portion of severance expense allocated to our Jordanian joint venture partner.
|
(b)
|
Included acquisition and integration related costs relating to various significant projects. For the three-month periods ended March 31, 2020 and 2019, $3.0 million and $5.3 million was recorded in Selling, general and administrative expenses, respectively.
|
(c)
|
Included amounts for the three months ended March 31, 2020 recorded in:
|
▪
|
Other income, net - $2.6 million gain resulting from the settlement of a legal matter related to a business sold, partially offset by a $0.8 million loss resulting from the adjustment of indemnifications related to previously disposed businesses.
|
(d)
|
Gain recorded in Other income, net related to the sale of land in Pasadena, Texas not used as part of our operations.
|
(e)
|
Included amounts for the three months ended March 31, 2019 recorded in:
|
▪
|
Cost of goods sold - $0.4 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.
|
▪
|
Selling, general and administrative expenses - Severance payments as part of a business reorganization plan of $0.5 million.
|
▪
|
Other income, net - $1.6 million of a net gain resulting from the adjustment of indemnifications and other liabilities related to previously disposed businesses.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Pension Benefits Cost (Credit):
|
|
|
|
||||
Service cost
|
$
|
1,214
|
|
|
$
|
1,130
|
|
Interest cost
|
6,687
|
|
|
8,320
|
|
||
Expected return on assets
|
(10,063
|
)
|
|
(9,452
|
)
|
||
Amortization of prior service benefit
|
(51
|
)
|
|
6
|
|
||
Total net pension benefits (credit) cost
|
$
|
(2,213
|
)
|
|
$
|
4
|
|
Postretirement Benefits Cost:
|
|
|
|
||||
Service cost
|
$
|
26
|
|
|
$
|
24
|
|
Interest cost
|
468
|
|
|
549
|
|
||
Total net postretirement benefits cost
|
$
|
494
|
|
|
$
|
573
|
|
Total net pension and postretirement benefits (credit) cost
|
$
|
(1,719
|
)
|
|
$
|
577
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Recorded
Amount
|
|
Fair Value
|
|
Recorded
Amount
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Long-term debt
|
$
|
3,158,293
|
|
|
$
|
3,015,381
|
|
|
$
|
3,069,417
|
|
|
$
|
3,173,341
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Designated as hedging instruments(a)
|
$
|
—
|
|
|
$
|
44,556
|
|
|
$
|
5,369
|
|
|
$
|
—
|
|
Not Designated as hedging instruments(b)
|
38
|
|
|
4,352
|
|
|
2,032
|
|
|
3,613
|
|
||||
Total
|
$
|
38
|
|
|
$
|
48,908
|
|
|
$
|
7,401
|
|
|
$
|
3,613
|
|
(a)
|
Included $33.2 million in Accrued expenses and $11.4 million in Other liabilities at March 31, 2020 and $3.7 million in Other current assets and $1.7 million in Other assets at December 31, 2019.
|
(b)
|
Included less than $0.1 million in Other current assets and $4.4 million in Accrued expenses at March 31, 2020 and $2.0 million in Other current assets and $3.6 million in Accrued expenses at December 31, 2019.
|
(a)
|
Fluctuations in the value of our foreign currency forward contracts not designated as hedging instruments are generally expected to be offset by changes in the value of the underlying exposures being hedged, which are also reported in Other income, net.
|
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
|
|
March 31, 2020
|
|
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)
|
$
|
26,753
|
|
|
$
|
26,753
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities(b)
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value(b)(c)
|
$
|
4,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts(d)
|
$
|
38
|
|
|
$
|
38
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan(a)
|
$
|
26,753
|
|
|
$
|
26,753
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts(d)
|
$
|
48,908
|
|
|
$
|
—
|
|
|
$
|
48,908
|
|
|
$
|
—
|
|
|
December 31, 2019
|
|
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)
|
$
|
28,715
|
|
|
$
|
28,715
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities(b)
|
$
|
32
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value(b)(c)
|
$
|
4,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts(d)
|
$
|
7,401
|
|
|
$
|
—
|
|
|
$
|
7,401
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan(a)
|
$
|
28,715
|
|
|
$
|
28,715
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts(d)
|
$
|
3,613
|
|
|
$
|
—
|
|
|
$
|
3,613
|
|
|
$
|
—
|
|
(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 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. 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. See Note 13, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.
|
|
Foreign Currency Translation
|
|
Pension and Post-Retirement Benefits(a)
|
|
Net Investment Hedge
|
|
Cash Flow Hedge(b)
|
|
Interest Rate Swap(c)
|
|
Total
|
||||||||||||
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2019
|
$
|
(469,210
|
)
|
|
$
|
473
|
|
|
$
|
80,778
|
|
|
$
|
4,847
|
|
|
$
|
(12,623
|
)
|
|
$
|
(395,735
|
)
|
Other comprehensive (loss) income before reclassifications
|
(81,986
|
)
|
|
—
|
|
|
2,081
|
|
|
(51,460
|
)
|
|
—
|
|
|
(131,365
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
648
|
|
|
657
|
|
||||||
Other comprehensive (loss) income, net of tax
|
(81,986
|
)
|
|
9
|
|
|
2,081
|
|
|
(51,460
|
)
|
|
648
|
|
|
(130,708
|
)
|
||||||
Other comprehensive income attributable to noncontrolling interests
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
||||||
Balance at March 31, 2020
|
$
|
(551,242
|
)
|
|
$
|
482
|
|
|
$
|
82,859
|
|
|
$
|
(46,613
|
)
|
|
$
|
(11,975
|
)
|
|
$
|
(526,489
|
)
|
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2018
|
$
|
(407,646
|
)
|
|
$
|
(159
|
)
|
|
$
|
72,337
|
|
|
$
|
—
|
|
|
$
|
(15,214
|
)
|
|
$
|
(350,682
|
)
|
Other comprehensive (loss) income before reclassifications
|
(10,855
|
)
|
|
—
|
|
|
3,304
|
|
|
—
|
|
|
—
|
|
|
(7,551
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
641
|
|
|
648
|
|
||||||
Other comprehensive (loss) income, net of tax
|
(10,855
|
)
|
|
7
|
|
|
3,304
|
|
|
—
|
|
|
641
|
|
|
(6,903
|
)
|
||||||
Other comprehensive loss attributable to noncontrolling interests
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||||
Balance at March 31, 2019
|
$
|
(418,454
|
)
|
|
$
|
(152
|
)
|
|
$
|
75,641
|
|
|
$
|
—
|
|
|
$
|
(14,573
|
)
|
|
$
|
(357,538
|
)
|
(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 12, “Pension Plans and Other Postretirement Benefits,” for additional information.
|
(b)
|
We entered into a foreign currency forward contract, which was designated and accounted for as a cash flow hedge under ASC 815, Derivatives and Hedging. See Note 13, “Fair Value of Financial Instruments,” for additional information.
|
(c)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in interest expense.
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Cash Flow Hedge
|
|
Interest Rate Swap
|
||||||||||
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive (loss) income, before tax
|
$
|
(81,989
|
)
|
|
$
|
9
|
|
|
$
|
2,675
|
|
|
$
|
(51,460
|
)
|
|
$
|
834
|
|
Income tax benefit (expense)
|
3
|
|
|
—
|
|
|
(594
|
)
|
|
—
|
|
|
(186
|
)
|
|||||
Other comprehensive (loss) income, net of tax
|
$
|
(81,986
|
)
|
|
$
|
9
|
|
|
$
|
2,081
|
|
|
$
|
(51,460
|
)
|
|
$
|
648
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive (loss) income, before tax
|
$
|
(10,854
|
)
|
|
$
|
7
|
|
|
$
|
4,299
|
|
|
$
|
—
|
|
|
$
|
834
|
|
Income tax expense
|
(1
|
)
|
|
—
|
|
|
(995
|
)
|
|
—
|
|
|
(193
|
)
|
|||||
Other comprehensive (loss) income, net of tax
|
$
|
(10,855
|
)
|
|
$
|
7
|
|
|
$
|
3,304
|
|
|
$
|
—
|
|
|
$
|
641
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Sales to unconsolidated affiliates
|
$
|
7,217
|
|
|
$
|
4,291
|
|
Purchases from unconsolidated affiliates(a)
|
$
|
76,475
|
|
|
$
|
63,499
|
|
(a)
|
Purchases from unconsolidated affiliates primarily relate to purchases from our Windfield joint venture.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Receivables from unconsolidated affiliates
|
$
|
7,866
|
|
|
$
|
7,163
|
|
Payables to unconsolidated affiliates(a)
|
$
|
72,357
|
|
|
$
|
35,502
|
|
(a)
|
Increase in payables to unconsolidated affiliates primarily relates to the timing of payments due to our Windfield joint venture for purchases of spodumene.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Supplemental non-cash disclosure related to investing activities:
|
|
|
|
||||
Capital expenditures included in Accounts payable
|
$
|
176,464
|
|
|
$
|
111,225
|
|
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 to our customers;
|
•
|
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 actions, 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 through 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;
|
•
|
uncertainties as to the duration and impact of the novel coronavirus (“COVID-19”) pandemic; and
|
•
|
the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (“SEC”).
|
•
|
Our board of directors declared a quarterly dividend of $0.385 per share on February 28, 2020, which was paid on April 1, 2020 to shareholders of record at the close of business as of March 13, 2020.
|
•
|
In February 2020, Chairman and Chief Executive Officer Luke Kissam advised the Board of Directors that he will retire from his roles as an officer and director of Albemarle effective June 2020, for health reasons. On April 20, 2020, we announced that J. Kent Masters has been elected Chairman, President and Chief Executive Officer, effective immediately. Luke Kissam will stay on through June 2020 in an advisory capacity to ensure an orderly leadership transition. In addition, Mr. Kissam will continue to serve on the Board of Directors through the annual meeting of shareholders in 2021, as he was re-elected at our 2020 annual meeting of shareholders on May 5, 2020.
|
•
|
Our net sales for the quarter were $738.8 million, down 11% from net sales of $832.1 million in the first quarter of 2019.
|
•
|
Diluted earnings per share were $1.01, a decrease from first quarter 2019 results of $1.26 per diluted share.
|
•
|
Net cash provided by operations was $155.1 million, an increase of 182% from first quarter 2019.
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
738,845
|
|
|
$
|
832,064
|
|
|
$
|
(93,219
|
)
|
|
(11
|
)%
|
▪
$79.9 million of lower sales volume from each of our reportable segments
▪
$13.6 million of unfavorable pricing driven by Lithium
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Gross profit
|
$
|
242,018
|
|
|
$
|
283,486
|
|
|
$
|
(41,468
|
)
|
|
(15
|
)%
|
Gross profit margin
|
32.8
|
%
|
|
34.1
|
%
|
|
|
|
|
|||||
▪
Lower sales volume from each of our reportable segments and unfavorable pricing impacts driven by Lithium
▪
Lower raw material costs in our Catalysts segment from a reduction in metal prices
▪
Unfavorable currency exchange impacts resulting from the stronger U.S. Dollar against various currencies
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Selling, general and administrative expenses
|
$
|
101,877
|
|
|
$
|
113,355
|
|
|
$
|
(11,478
|
)
|
|
(10
|
)%
|
Percentage of Net sales
|
13.8
|
%
|
|
13.6
|
%
|
|
|
|
|
|||||
▪
Lower professional fees and other administrative costs resulting from our cost savings initiative
▪
$2.3 million of lower acquisition and integration related costs
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Research and development expenses
|
$
|
16,097
|
|
|
$
|
14,977
|
|
|
$
|
1,120
|
|
|
7
|
%
|
Percentage of Net sales
|
2.2
|
%
|
|
1.8
|
%
|
|
|
|
|
|||||
▪
Increased research and development spend in Bromine Specialties
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Interest and financing expenses
|
$
|
(16,885
|
)
|
|
$
|
(12,586
|
)
|
|
$
|
(4,299
|
)
|
|
34
|
%
|
▪
Increased debt balance in 2020, primarily related to the funding of the Wodgina Project acquisition
▪
The increase was partially offset by higher capitalized interest from continued capital expenditure spend in 2020
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Other income, net
|
$
|
8,314
|
|
|
$
|
11,291
|
|
|
$
|
(2,977
|
)
|
|
(26
|
)%
|
▪
$11.1 million gain related to the sale of land in Pasadena, Texas in 2019
▪
$2.3 million increase in losses related to the adjustment of indemnifications related to previously divested businesses
▪
$11.4 million increase in foreign exchange gains
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Income tax expense
|
$
|
18,442
|
|
|
$
|
37,514
|
|
|
$
|
(19,072
|
)
|
|
(51
|
)%
|
Effective income tax rate
|
16.0
|
%
|
|
24.4
|
%
|
|
|
|
|
|||||
▪
Change in geographic mix of earnings, mainly attributable to our share of the income of our Jordan Bromine Company Limited (“JBC”) joint venture, a Free Zones company under the laws of the Hashemite Kingdom of Jordan
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net income attributable to Albemarle Corporation
|
$
|
107,204
|
|
|
$
|
133,569
|
|
|
$
|
(26,365
|
)
|
|
(20
|
)%
|
Percentage of Net sales
|
14.5
|
%
|
|
16.1
|
%
|
|
|
|
|
|||||
Basic earnings per share
|
$
|
1.01
|
|
|
$
|
1.26
|
|
|
$
|
(0.25
|
)
|
|
(20
|
)%
|
Diluted earnings per share
|
$
|
1.01
|
|
|
$
|
1.26
|
|
|
$
|
(0.25
|
)
|
|
(20
|
)%
|
▪
No material impact to results from COVID-19 in the first quarter of 2020
▪
Decrease primarily due to decreased sales volume in each of our reportable segments and unfavorable price impacts in Lithium
▪
Lower raw material and royalty costs from lower sales volume
▪
Lower professional fees and other administrative costs resulting from our cost savings initiative
|
|
Lithium
|
|
Bromine Specialties
|
|
Catalysts
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
53,240
|
|
|
$
|
71,665
|
|
|
$
|
34,892
|
|
|
$
|
159,797
|
|
|
$
|
20,846
|
|
|
$
|
(73,439
|
)
|
|
$
|
107,204
|
|
Depreciation and amortization
|
25,397
|
|
|
11,597
|
|
|
12,578
|
|
|
49,572
|
|
|
1,978
|
|
|
2,144
|
|
|
53,694
|
|
|||||||
Restructuring and other(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,847
|
|
|
1,847
|
|
|||||||
Acquisition and integration related costs(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,951
|
|
|
2,951
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,885
|
|
|
16,885
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,442
|
|
|
18,442
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,908
|
)
|
|
(2,908
|
)
|
|||||||
Other(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,750
|
)
|
|
(1,750
|
)
|
|||||||
Adjusted EBITDA
|
$
|
78,637
|
|
|
$
|
83,262
|
|
|
$
|
47,470
|
|
|
$
|
209,369
|
|
|
$
|
22,824
|
|
|
$
|
(35,828
|
)
|
|
$
|
196,365
|
|
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
93,169
|
|
|
$
|
67,480
|
|
|
$
|
47,859
|
|
|
$
|
208,508
|
|
|
$
|
5,206
|
|
|
$
|
(80,145
|
)
|
|
$
|
133,569
|
|
Depreciation and amortization
|
22,092
|
|
|
11,117
|
|
|
12,212
|
|
|
45,421
|
|
|
2,037
|
|
|
1,825
|
|
|
49,283
|
|
|||||||
Acquisition and integration related costs(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,285
|
|
|
5,285
|
|
|||||||
Gain on sale of property(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,079
|
)
|
|
(11,079
|
)
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,586
|
|
|
12,586
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,514
|
|
|
37,514
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
|
(583
|
)
|
|||||||
Other(e)
|
355
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
(1,063
|
)
|
|
(708
|
)
|
|||||||
Adjusted EBITDA
|
$
|
115,616
|
|
|
$
|
78,597
|
|
|
$
|
60,071
|
|
|
$
|
254,284
|
|
|
$
|
7,243
|
|
|
$
|
(35,660
|
)
|
|
$
|
225,867
|
|
(a)
|
Severance payments as part of a business reorganization plan, $0.7 million recorded in Cost of goods sold, $1.5 million recorded in Selling, general and administrative expenses and a $0.3 million gain recorded in Net income attributable to noncontrolling interest for the portion of severance expense allocated to our Jordanian joint venture partner.
|
(b)
|
Included acquisition and integration related costs relating to various significant projects. For the three-month periods ended March 31, 2020 and 2019, $3.0 million and $5.3 million was recorded in Selling, general and administrative expenses, respectively.
|
(c)
|
Included amounts for the three months ended March 31, 2020 recorded in:
|
▪
|
Other income, net - $2.6 million gain resulting from the settlement of a legal matter related to a business sold, partially offset by a $0.8 million loss resulting from the adjustment of indemnifications related to previously disposed businesses.
|
(d)
|
Gain recorded in Other income, net related to the sale of land in Pasadena, Texas not used as part of our operations.
|
(e)
|
Included amounts for the three months ended March 31, 2019 recorded in:
|
▪
|
Cost of goods sold - $0.4 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.
|
▪
|
Selling, general and administrative expenses - Severance payments as part of a business reorganization plan of $0.5 million.
|
▪
|
Other income, net - $1.6 million of a net gain resulting from the adjustment of indemnification and other liabilities related to previously disposed businesses.
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
236,818
|
|
|
$
|
291,886
|
|
|
$
|
(55,068
|
)
|
|
(19
|
)%
|
▪
$26.5 million in lower sales volume, primarily in battery- and tech-grade lithium carbonate due to higher inventory levels at certain customers and current economic conditions
▪
$25.5 million of unfavorable pricing impacts, primarily in battery- and tech-grade carbonate and hydroxide due to lower contract pricing reflecting 2020 price adjustments agreed to with customers
▪
$3.0 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
|
||||||||||||||
Adjusted EBITDA
|
$
|
78,637
|
|
|
$
|
115,616
|
|
|
$
|
(36,979
|
)
|
|
(32
|
)%
|
▪
Unfavorable pricing impacts and lower sales volume
▪
Increase in certain material costs
▪
Partially offset by various cost savings initiatives
▪
$3.0 million of favorable currency translation resulting from a weaker Chilean Peso
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
231,592
|
|
|
$
|
249,052
|
|
|
$
|
(17,460
|
)
|
|
(7
|
)%
|
▪
$28.8 million in lower sales volume related to logistics challenges
▪
$10.2 million in favorable pricing impacts in each bromine division
▪
$1.4 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
|
||||||||||||||
Adjusted EBITDA
|
$
|
83,262
|
|
|
$
|
78,597
|
|
|
$
|
4,665
|
|
|
6
|
%
|
▪
Favorable pricing impacts and product mix, partially offset by lower sales volume
▪
Lower production and raw material costs
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
207,207
|
|
|
$
|
251,648
|
|
|
$
|
(44,441
|
)
|
|
(18
|
)%
|
▪
$48.6 million of lower sales volume, primarily from lower fuel demand due to stay at home orders and travel restrictions in Asia related to COVID-19 pandemic
▪
$2.1 million of favorable pricing impacts, primarily in PCS and FCC
▪
$2.0 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
|
||||||||||||||
Adjusted EBITDA
|
$
|
47,470
|
|
|
$
|
60,071
|
|
|
$
|
(12,601
|
)
|
|
(21
|
)%
|
▪
Lower sales volume resulting from lower fuel demand
▪
Lower raw material costs from a reduction in metal prices
▪
Favorable pricing impacts and product mix
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
63,228
|
|
|
$
|
39,478
|
|
|
$
|
23,750
|
|
|
60
|
%
|
▪
Higher sales volume in our fine chemistry services business
|
||||||||||||||
Adjusted EBITDA
|
$
|
22,824
|
|
|
$
|
7,243
|
|
|
$
|
15,581
|
|
|
215
|
%
|
▪
Higher sales volume in our fine chemistry services business
|
In thousands
|
Q1 2020
|
|
Q1 2019
|
|
$ Change
|
|
% Change
|
|||||||
Adjusted EBITDA
|
$
|
(35,828
|
)
|
|
$
|
(35,660
|
)
|
|
$
|
(168
|
)
|
|
—
|
%
|
▪
$5.2 million of unfavorable currency exchange impacts
▪
Lower professional fees and other administrative costs resulting from our cost savings initiative
|
Issue Month/Year
|
|
Principal (in millions)
|
|
Interest Rate
|
|
Interest Payment Dates
|
|
Maturity Date
|
|
November 2019
|
|
€500.0
|
|
1.125%
|
|
November 25
|
|
November 25, 2025
|
|
November 2019
|
|
€500.0
|
|
1.625%
|
|
November 25
|
|
November 25, 2028
|
|
November 2019(a)
|
|
$300.0
|
|
3.45%
|
|
May 15 and November 15
|
|
November 15, 2029
|
|
November 2019(b)
|
|
$200.0
|
|
Floating Rate
|
|
February 15, May 15, August 15 and November 15
|
|
November 15, 2022
|
|
December 2014(a)
|
|
€393.0
|
|
1.875%
|
|
December 8
|
|
December 8, 2021
|
|
November 2014(a)
|
|
$425.0
|
|
4.15%
|
|
June 1 and December 1
|
|
December 1, 2024
|
|
November 2014(a)
|
|
$350.0
|
|
5.45%
|
|
June 1 and December 1
|
|
December 1, 2044
|
(a)
|
Denotes senior notes.
|
(b)
|
Borrowings bear interest at a floating rate based on the 3-month LIBOR plus 105 basis points. The applicable floating interest rate for the current interest period is 2.74%, with the interest rate reset on each interest payment date.
|
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 March 31, 2020, furnished in XBRL (eXtensible Business Reporting Language)).
|
#
|
Management contract or compensatory plan or arrangement.
|
*
|
Included with this filing.
|
|
|
|
|
|
|
|
|
|
ALBEMARLE CORPORATION
|
||
|
|
|
(Registrant)
|
||
|
|
|
|
||
Date:
|
May 11, 2020
|
|
By:
|
|
/S/ SCOTT A. TOZIER
|
|
|
|
|
|
Scott A. Tozier
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(principal financial officer)
|
1 Year Albemarle Chart |
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