x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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VIRGINIA
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54-1692118
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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COMMON STOCK, $.01 Par Value
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NEW YORK STOCK EXCHANGE
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Large accelerated filer
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x
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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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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Item 1.
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Business.
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Item 1A.
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Risk Factors.
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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•
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fluctuations in foreign currency exchange rates may affect product demand and may adversely affect the profitability in U.S. dollars of products and services we provide in international markets where payment for our products and services is made in the local currency;
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•
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transportation and other shipping costs may increase, or transportation may be inhibited;
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•
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increased cost or decreased availability of raw materials;
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•
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changes in foreign laws and tax rates or U.S. laws and tax rates with respect to foreign income may unexpectedly increase the rate at which our income is taxed, impose new and additional taxes on remittances, repatriation or other payments by subsidiaries, or cause the loss of previously recorded tax benefits;
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•
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foreign countries may adopt other restrictions on foreign trade or investment, including currency exchange controls;
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•
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trade sanctions could result in losing access to customers and suppliers in those countries;
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•
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unexpected adverse changes in foreign laws or regulatory requirements may occur;
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•
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agreements may be difficult to enforce and receivables difficult to collect;
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•
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compliance with a variety of foreign laws and regulations may be burdensome;
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•
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compliance with anti-bribery and anti-corruption laws (such as the Foreign Corrupt Practices Act) as well as anti-money-laundering laws may be costly;
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•
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unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export licenses;
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•
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general economic conditions in the countries in which we operate could have an adverse effect on our earnings from operations in those countries;
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•
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foreign operations may experience staffing difficulties and labor disputes;
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•
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termination or substantial modification of international trade agreements;
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•
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foreign governments may nationalize private enterprises;
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•
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increased sovereign risk (such as default by or deterioration in the economies and credit worthiness of local governments) may occur; and
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•
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our business and profitability in a particular country could be affected by political or economic repercussions from terrorist activities and the response to such activities, the possibility of hyperinflationary conditions and political instability in certain countries.
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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Albemarle Corporation and Subsidiaries
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•
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potential disruption of our ongoing business and distraction of management;
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•
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unforeseen claims and liabilities, including unexpected environmental exposures;
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•
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unforeseen adjustments, charges and write-offs;
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•
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problems enforcing the indemnification obligations of sellers of businesses or joint venture partners for claims and liabilities;
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•
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unexpected losses of customers of, or suppliers to, the acquired business;
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•
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difficulty in conforming the acquired businesses’ standards, processes, procedures and controls with our operations;
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•
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in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;
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•
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variability in financial information arising from the implementation of purchase price accounting;
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•
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inability to coordinate new product and process development;
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Albemarle Corporation and Subsidiaries
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•
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loss of senior managers and other critical personnel and problems with new labor unions and cultural challenges associated with integrating employees from the acquired company into our organization; and
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•
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challenges arising from the increased scope, geographic diversity and complexity of our operations.
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Albemarle Corporation and Subsidiaries
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•
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reducing flexibility in planning for, or reacting to, changes in our businesses, the competitive environment and the industries in which we operate, and to technological and other changes;
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•
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lowering credit ratings;
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Albemarle Corporation and Subsidiaries
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•
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reducing access to capital and increasing borrowing costs generally or for any additional indebtedness to finance future operating and capital expenses and for general corporate purposes;
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•
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reducing funds available for operations, capital expenditures and other activities; and
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•
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creating competitive disadvantages relative to other companies with lower debt levels.
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Albemarle Corporation and Subsidiaries
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Location
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Business Segment
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Principal Use
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Owned/Leased
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Amsterdam, the Netherlands
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Refining Solutions
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Production of refinery catalysts, research and product development activities
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Owned
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Baton Rouge, Louisiana
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Lithium and Advanced Materials; Bromine Specialties
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Research and product development activities, and production of flame retardants, catalysts and additives
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Owned; on leased land
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Bitterfeld, Germany
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Refining Solutions
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Refinery catalyst regeneration, rejuvenation, and sulfiding
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Owned by Eurecat S.A., a joint venture owned 50% by each of IFP Investissements and us
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Cambridge, U.K.
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Lithium and Advanced Materials
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Production of performance catalysts
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Leased
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Greenbushes, Australia
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Lithium and Advanced Materials
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Production of lithium spodumene minerals and lithium concentrate
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Owned by Windfield Holdings Pty Ltd, a joint venture in which we own 49%, and Sichuan Tianqi Lithium Industries Inc. which owns the remaining interest
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Jubail, Saudi Arabia
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Lithium and Advanced Materials
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Manufacturing and marketing of organometallics
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Owned by Saudi Organometallic Chemicals Company LLC, a joint venture owned 50% by each of Saudi Specialty Chemicals Company (a SABIC affiliate) and us
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Kings Mountain, North Carolina
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Lithium and Advanced Materials
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Production of technical and battery grade lithium hydroxide
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Owned
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La Negra, Chile
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Lithium and Advanced Materials
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Production of lithium carbonate and lithium chloride
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Owned
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Langelsheim, Germany
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Lithium and Advanced Materials
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Production of butyllithium, lithium chloride, specialty products, lithium hydrides, cesium, special metals
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Owned
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Louvain-la-Neuve, Belgium
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Lithium and Advanced Materials; Bromine Specialties; Refining Solutions; All Other
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Regional offices and research and customer technical service activities
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Owned
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La Voulte, France
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Refining Solutions
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Refinery catalysts regeneration and treatment, research and development activities
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Owned by Eurecat S.A., a joint venture owned 50% by each of IFP Investissements and us
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Albemarle Corporation and Subsidiaries
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Location
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Business Segment
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Principal Use
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Owned/Leased
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Magnolia, Arkansas
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Bromine Specialties
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Production of flame retardants, bromine, inorganic bromides, agricultural intermediates and tertiary amines
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Owned
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McAlester, Oklahoma
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Refining Solutions
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Refinery catalyst regeneration, rejuvenation, pre-reclaim burn off, as well as specialty zeolites and additives marketing activities
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Owned by Eurecat S.A., a joint venture owned 50% by each of IFP Investissements and us
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Meishan, China
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Lithium and Advanced Materials
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Production of lithium carbonate and lithium hydroxide
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Owned
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Mobile, Alabama
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Lithium and Advanced Materials
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Production of tin stabilizers
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Owned by PMC Group, Inc. which operates the plant for Stannica LLC, a joint venture owned 50% by each of PMC Group Inc. and us
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New Johnsonville, Tennessee
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Lithium and Advanced Materials
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Production of specialty products
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Owned
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Niihama, Japan
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Refining Solutions
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Production of refinery catalysts
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Leased by Nippon Ketjen Company Limited, a joint venture owned 50% by each of Sumitomo Metal Mining Company Limited and us
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Pasadena, Texas
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Lithium and Advanced Materials; All Other
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Production of aluminum alkyls, alkenyl succinic anhydride, orthoalkylated anilines, and other specialty chemicals
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Owned
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Pasadena, Texas
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Refining Solutions
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Production of refinery catalysts, research and development activities
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Owned
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Pasadena, Texas
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Refining Solutions
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Refinery catalysts regeneration services
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Owned by Eurecat U.S. Incorporated, a joint venture in which we own a 57.5% interest and a consortium of entities in various proportions owns the remaining interest
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Safi, Jordan
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Bromine Specialties
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Production of bromine and derivatives and flame retardants
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Owned and leased by JBC, a joint venture owned 50% by each of Arab Potash Company Limited and us
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Salar de Atacama, Chile
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Lithium and Advanced Materials
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Production of lithium brine and potash
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Owned; however ownership will revert to the Chilean government once we have sold all remaining amounts under our contract with the Chilean government pursuant to which we obtain lithium brine in Chile
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Santa Cruz, Brazil
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Refining Solutions
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Production of catalysts, research and product development activities
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Owned by Fábrica Carioca de Catalisadores S.A, a joint venture owned 50% by each of Petrobras Química S.A.—PETROQUISA and us
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Silver Peak, Nevada
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Lithium and Advanced Materials
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Production of lithium brine and lithium carbonate
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Owned
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South Haven, Michigan
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All Other
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Production of custom fine chemistry products including pharmaceutical actives
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Owned
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Taichung, Taiwan
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Lithium and Advanced Materials
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Production of butyllithium
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Owned
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Takaishi City, Osaka, Japan
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Lithium and Advanced Materials
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Production of aluminum alkyls
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Owned by Nippon Aluminum Alkys, a joint venture owned 50% by each of Mitsui Chemicals, Inc. and us
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Albemarle Corporation and Subsidiaries
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Location
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Business Segment
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Principal Use
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Owned/Leased
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Twinsburg, Ohio
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Bromine Specialties
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Production of bromine-activated carbon
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Leased
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Tyrone, Pennsylvania
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All Other
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Production of custom fine chemistry products, agricultural intermediates, performance polymer products and research and development activities
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Owned
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Xinyu, China
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Lithium and Advanced Materials
|
|
Production of lithium carbonate and lithium hydroxide
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Owned
|
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Yeosu, South Korea
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Lithium and Advanced Materials
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Research and product development activities/small scale production of catalysts and catalyst components
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Owned
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Name
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Age
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Position
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Luther C. Kissam IV
|
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52
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Chairman, President and Chief Executive Officer
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Matthew K. Juneau
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56
|
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Executive Vice President, Corporate Strategy and Investor Relations
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Karen G. Narwold
|
|
57
|
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Executive Vice President, Chief Administrative Officer
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Scott A. Tozier
|
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51
|
|
Executive Vice President, Chief Financial Officer
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Donald J. LaBauve, Jr.
|
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50
|
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Vice President, Corporate Controller, Chief Accounting Officer
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Albemarle Corporation and Subsidiaries
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Item 5.
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Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
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Common Stock Price Range
|
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Dividends
Declared Per
Share of
Common Stock
|
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High
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Low
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2015
|
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||||||
First Quarter
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$
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62.23
|
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$
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46.78
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$
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0.29
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Second Quarter
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$
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64.99
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$
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52.23
|
|
|
$
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0.29
|
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Third Quarter
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$
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55.83
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$
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41.37
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$
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0.29
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Fourth Quarter
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$
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57.99
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$
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44.10
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$
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0.29
|
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2016
|
|
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||||||
First Quarter
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$
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64.33
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$
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45.78
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$
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0.305
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Second Quarter
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$
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84.99
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$
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63.40
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$
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0.305
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Third Quarter
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$
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87.29
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$
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75.11
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$
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0.305
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Fourth Quarter
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$
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92.24
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|
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$
|
76.32
|
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$
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0.305
|
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Albemarle Corporation and Subsidiaries
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Item 6.
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Selected Financial Data.
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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•
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changes in economic and business conditions;
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•
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changes in financial and operating performance of our major customers and industries and markets served by us;
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•
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the timing of orders received from customers;
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•
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the gain or loss of significant customers;
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•
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competition from other manufacturers;
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•
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changes in the demand for our products or the end-user markets in which our products are sold;
|
•
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limitations or prohibitions on the manufacture and sale of our products;
|
•
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availability of raw materials;
|
•
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increases in the cost of raw materials and energy, and our ability to pass through such increases;
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Albemarle Corporation and Subsidiaries
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•
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changes in our markets in general;
|
•
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fluctuations in foreign currencies;
|
•
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changes in laws and government regulation impacting our operations or our products;
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•
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the occurrence of regulatory proceedings, claims or litigation;
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•
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the occurrence of cyber-security breaches, terrorist attacks, industrial accidents, natural disasters or climate change;
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•
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hazards associated with chemicals manufacturing;
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•
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the inability to maintain current levels of product or premises liability insurance or the denial of such coverage;
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•
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political unrest affecting the global economy, including adverse effects from terrorism or hostilities;
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•
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political instability affecting our manufacturing operations or joint ventures;
|
•
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changes in accounting standards;
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•
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the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs;
|
•
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changes in the jurisdictional mix of our earnings and changes in tax laws and rates;
|
•
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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;
|
•
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volatility and uncertainties in the debt and equity markets;
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•
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technology or intellectual property infringement, including cyber-security breaches, and other innovation risks;
|
•
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decisions we may make in the future;
|
•
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the ability to successfully execute, operate and integrate acquisitions and divestitures; and
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•
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the other factors detailed from time to time in the reports we file with the SEC.
|
•
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In the first quarter, we increased our quarterly dividend for the 22nd consecutive year, to $0.305 per share.
|
•
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Effective January 1, 2016, our former Performance Chemicals reportable segment was split into two separate reportable segments: (1) Lithium and Advanced Materials and (2) Bromine Specialties. This split did not affect the existing Refining Solutions reportable segment.
|
•
|
On January 4, 2016, we closed the sale of the metal sulfides business for cash proceeds of approximately
$137 million
and recorded a gain of
$11.5 million
before income taxes in 2016 related to the sale.
|
Albemarle Corporation and Subsidiaries
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•
|
On February 1, 2016, we closed the sale of the minerals-based flame retardants and specialty chemicals business for cash proceeds of approximately
$187 million
and recorded a gain of
$112.3 million
before income taxes in 2016 related to the sale.
|
•
|
We were granted approval by the Environmental Assessment Commission of the Antofagasta Region to increase our currently authorized lithium brine extraction rate at the Company's facility in the Salar de Atacama, Chile.
|
•
|
We amended our lithium production rights agreement with the Chilean Economic Development Agency (“CORFO”) to provide us with sufficient lithium to support the production of technical and battery grade lithium carbonate and lithium chloride over a 27-year period at our expanding battery grade manufacturing facilities in La Negra, Antofagasta.
|
•
|
We announced that we are discontinuing production of hexabromocyclododecane (“HBCD”)-based flame retardants to focus on supplying GreenCrest
®
polymeric fire safety solutions, a sustainable alternative to HBCD.
|
•
|
We relocated our corporate and principle executive headquarters from Baton Rouge, LA to Charlotte, NC.
|
•
|
We entered an agreement with Bolland Minera S.A., for the exclusive exploration and acquisition rights to a lithium resource in Antofalla, within the Catamarca Province of Argentina.
|
•
|
We announced that Tianqi Lithium Corporation (“Tianqi”) gave notice of its decision to exercise an option to acquire a 20% indirect ownership interest in Rockwood Lithium GmbH, a wholly-owned German subsidiary of Albemarle, and its subsidiaries. In February 2017, we announced that Albemarle and Tianqi terminated the option agreement, and as a result we will retain 100% of the ownership interest in Rockwood Lithium GmbH.
|
•
|
On December 14, 2016, we completed the sale of the Chemetall Surface Treatment business to BASF SE for cash proceeds of approximately $3.1 billion, net of purchase price adjustments, and recorded an after-tax gain of
$135.0 million
in 2016 related to the sale.
|
•
|
We repaid the $1.25 billion September 2015 Term Loan Agreement in full, primarily with proceeds from the sales of the Chemetall Surface Treatment business, the metal sulfides business and the minerals-based flame retardants and specialty chemicals business.
|
•
|
On December 31, 2016, we completed the acquisition of the lithium hydroxide and lithium carbonate conversion business of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. for a purchase price of approximately $145 million.
|
•
|
We achieved earnings from continuing operations of
$478.6 million
during
2016
as compared to
$327.6 million
for
2015
. Cash flows from operations in
2016
were
$733.4 million
. Earnings from continuing operations for
2016
includes pension and other postretirement benefit (“OPEB”) actuarial
losses
of
$18.3 million
after income taxes, compared to pension and OPEB actuarial
gains
of
$21.4 million
after income taxes in
2015
.
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
261,394
|
|
|
$
|
187,364
|
|
|
$
|
202,874
|
|
|
$
|
651,632
|
|
|
$
|
131,301
|
|
|
$
|
(139,258
|
)
|
|
$
|
643,675
|
|
Depreciation and amortization
|
101,966
|
|
|
39,562
|
|
|
36,089
|
|
|
177,617
|
|
|
7,302
|
|
|
6,056
|
|
|
190,975
|
|
|||||||
(Gain) loss on sales of businesses, net
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123,831
|
)
|
|
1,533
|
|
|
(122,298
|
)
|
|||||||
Acquisition and integration related costs
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,384
|
|
|
57,384
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,181
|
|
|
65,181
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,263
|
|
|
96,263
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(202,131
|
)
|
|
(202,131
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,589
|
|
|
25,589
|
|
|||||||
Other
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,579
|
|
|
3,579
|
|
|||||||
Adjusted EBITDA
|
$
|
363,360
|
|
|
$
|
226,926
|
|
|
$
|
238,963
|
|
|
$
|
829,249
|
|
|
$
|
14,772
|
|
|
$
|
(85,804
|
)
|
|
$
|
758,217
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
148,821
|
|
|
$
|
186,474
|
|
|
$
|
161,585
|
|
|
$
|
496,880
|
|
|
$
|
32,781
|
|
|
$
|
(194,755
|
)
|
|
$
|
334,906
|
|
Depreciation and amortization
|
84,069
|
|
|
36,179
|
|
|
34,039
|
|
|
154,287
|
|
|
18,183
|
|
|
8,703
|
|
|
181,173
|
|
|||||||
Utilization of inventory markup
(d)
|
79,977
|
|
|
—
|
|
|
—
|
|
|
79,977
|
|
|
3,029
|
|
|
—
|
|
|
83,006
|
|
|||||||
Restructuring and other, net
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,804
|
)
|
|
(6,804
|
)
|
|||||||
Acquisition and integration related costs
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132,299
|
|
|
132,299
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,650
|
|
|
81,650
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,134
|
|
|
11,134
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,476
|
)
|
|
(32,476
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,300
|
)
|
|
(35,300
|
)
|
|||||||
Other
(f)
|
—
|
|
|
—
|
|
|
1,971
|
|
|
1,971
|
|
|
—
|
|
|
4,441
|
|
|
6,412
|
|
|||||||
Adjusted EBITDA
|
$
|
312,867
|
|
|
$
|
222,653
|
|
|
$
|
197,595
|
|
|
$
|
733,115
|
|
|
$
|
53,993
|
|
|
$
|
(31,108
|
)
|
|
$
|
756,000
|
|
(a)
|
See “
Gain on Sales of Businesses, Net
” on page 34 for a description of these costs.
|
(b)
|
See “
Acquisition and Integration Related Costs
” on page 34 for a description of these costs.
|
(c)
|
Includes amounts recorded in (1) Research and development expenses related to the write-off of fixed assets of $1.4 million and (2) Selling, general and administrative expenses related to the net loss on the sales of properties of $0.9 million and (3) Other income (expenses), net related to environmental charges related to a site formerly owned by Albemarle of $2.4 million, partially offset by a gain related to a previously disposed of site in China of $1.1 million.
|
(d)
|
In connection with the acquisition of Rockwood, the Company valued Rockwood’s existing inventory at fair value as of the Acquisition Closing Date, which resulted in a markup of the underlying net book value of the inventory totaling approximately $103.4 million. The inventory markup was expensed over the estimated remaining selling period. For the year ended
December 31, 2015
,
$55.9 million
was included in Cost of goods sold, and Equity in net income of unconsolidated investments was reduced by
$27.1 million
, related to the utilization of the inventory markup.
|
(e)
|
See “
Restructuring and Other, Net
” on page 33 for a description of this gain.
|
(f)
|
Refining Solutions includes an impairment charge of approximately $2.0 million related to our unconsolidated investment in Fábrica Carioca de Catalisadores SA. Corporate includes approximately $4.4 million of financing-related fees expensed in connection with the acquisition of Rockwood.
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
(a)
|
Estimated costs of approximately $20.5 million ($13.6 million after income taxes) in connection with action we initiated to reduce the high cost supply capacity of certain aluminum alkyl products, primarily through the termination of a third party manufacturing contract.
|
Albemarle Corporation and Subsidiaries
|
||
|
(b)
|
An impairment charge of $3.0 million ($1.9 million after income taxes) for certain capital project costs also related to aluminum alkyls capacity which we do not expect to recover.
|
(c)
|
Other net charges of $2.4 million ($1.4 million after income taxes), mainly in connection with a write-off of certain multi-product facility project costs that we do not expect to recover in future periods.
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
|
|
Year Ended December 31,
|
|
Percentage Change
|
|||||||||||||
|
|
2015
|
|
%
|
|
2014
|
|
%
|
|
2015 vs. 2014
|
|||||||
|
|
(In thousands, except percentages)
|
|||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Lithium and Advanced Materials
|
|
$
|
834,590
|
|
|
29.5
|
%
|
|
$
|
312,788
|
|
|
12.8
|
%
|
|
167
|
%
|
Bromine Specialties
|
|
775,729
|
|
|
27.4
|
%
|
|
808,857
|
|
|
33.1
|
%
|
|
(4
|
)%
|
||
Refining Solutions
|
|
729,261
|
|
|
25.8
|
%
|
|
852,139
|
|
|
34.8
|
%
|
|
(14
|
)%
|
||
All Other
|
|
471,434
|
|
|
16.7
|
%
|
|
471,764
|
|
|
19.3
|
%
|
|
—
|
%
|
||
Corporate
|
|
15,415
|
|
|
0.6
|
%
|
|
—
|
|
|
—
|
%
|
|
*
|
|
||
Total net sales
|
|
$
|
2,826,429
|
|
|
100.0
|
%
|
|
$
|
2,445,548
|
|
|
100.0
|
%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Lithium and Advanced Materials
|
|
$
|
312,867
|
|
|
41.4
|
%
|
|
$
|
81,596
|
|
|
14.5
|
%
|
|
283
|
%
|
Bromine Specialties
|
|
222,653
|
|
|
29.5
|
%
|
|
224,976
|
|
|
40.0
|
%
|
|
(1
|
)%
|
||
Refining Solutions
|
|
197,595
|
|
|
26.1
|
%
|
|
256,485
|
|
|
45.6
|
%
|
|
(23
|
)%
|
||
All Other
|
|
53,993
|
|
|
7.1
|
%
|
|
73,973
|
|
|
13.2
|
%
|
|
(27
|
)%
|
||
Corporate
|
|
(31,108
|
)
|
|
(4.1
|
)%
|
|
(74,875
|
)
|
|
(13.3
|
)%
|
|
(58
|
)%
|
||
Total adjusted EBITDA
|
|
$
|
756,000
|
|
|
100.0
|
%
|
|
$
|
562,155
|
|
|
100.0
|
%
|
|
34
|
%
|
Albemarle Corporation and Subsidiaries
|
||
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
148,821
|
|
|
$
|
186,474
|
|
|
$
|
161,585
|
|
|
$
|
496,880
|
|
|
$
|
32,781
|
|
|
$
|
(194,755
|
)
|
|
$
|
334,906
|
|
Depreciation and amortization
|
84,069
|
|
|
36,179
|
|
|
34,039
|
|
|
154,287
|
|
|
18,183
|
|
|
8,703
|
|
|
181,173
|
|
|||||||
Utilization of inventory markup
(a)
|
79,977
|
|
|
—
|
|
|
—
|
|
|
79,977
|
|
|
3,029
|
|
|
—
|
|
|
83,006
|
|
|||||||
Restructuring and other, net
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,804
|
)
|
|
(6,804
|
)
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132,299
|
|
|
132,299
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,650
|
|
|
81,650
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,134
|
|
|
11,134
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,476
|
)
|
|
(32,476
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,300
|
)
|
|
(35,300
|
)
|
|||||||
Other
(d)
|
—
|
|
|
—
|
|
|
1,971
|
|
|
1,971
|
|
|
—
|
|
|
4,441
|
|
|
6,412
|
|
|||||||
Adjusted EBITDA
|
$
|
312,867
|
|
|
$
|
222,653
|
|
|
$
|
197,595
|
|
|
$
|
733,115
|
|
|
$
|
53,993
|
|
|
$
|
(31,108
|
)
|
|
$
|
756,000
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
65,806
|
|
|
$
|
189,059
|
|
|
$
|
223,815
|
|
|
$
|
478,680
|
|
|
$
|
60,495
|
|
|
$
|
(405,859
|
)
|
|
$
|
133,316
|
|
Depreciation and amortization
|
15,790
|
|
|
35,917
|
|
|
32,670
|
|
|
84,377
|
|
|
13,478
|
|
|
2,552
|
|
|
100,407
|
|
|||||||
Restructuring and other, net
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,947
|
|
|
25,947
|
|
|||||||
Acquisition and integration related costs
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,158
|
|
|
30,158
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,358
|
|
|
41,358
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,484
|
|
|
18,484
|
|
|||||||
Loss from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,531
|
|
|
69,531
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,462
|
|
|
125,462
|
|
|||||||
Other
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,492
|
|
|
17,492
|
|
|||||||
Adjusted EBITDA
|
$
|
81,596
|
|
|
$
|
224,976
|
|
|
$
|
256,485
|
|
|
$
|
563,057
|
|
|
$
|
73,973
|
|
|
$
|
(74,875
|
)
|
|
$
|
562,155
|
|
(a)
|
In connection with the acquisition of Rockwood, the Company valued Rockwood’s existing inventory at fair value as of the Acquisition Closing Date, which resulted in a markup of the underlying net book value of the inventory totaling approximately $103.4 million. The inventory markup was expensed over the estimated remaining selling period. For the year ended
December 31, 2015
,
$55.9 million
was included in Cost of goods sold, and Equity in net income of unconsolidated investments was reduced by
$27.1 million
, related to the utilization of the inventory markup.
|
(b)
|
See “
Restructuring and Other, Net
” on page 39 for a description of this gain.
|
(c)
|
See “
Acquisition and Integration Related Costs
” on page 40 for a description of these costs.
|
(d)
|
Refining Solutions includes an impairment charge of approximately $2.0 million related to our unconsolidated investment in Fábrica Carioca de Catalisadores SA. Corporate includes approximately $4.4 million of financing-related fees expensed in connection with the acquisition of Rockwood.
|
(e)
|
Financing-related fees expense in connection with the acquisition of Rockwood.
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
•
|
Discount Rate—The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.
|
•
|
Expected Return on Plan Assets—We project the future return on plan assets based on prior performance and future expectations for the types of investments held by the plans as well as the expected long-term allocation of plan assets for these investments. These projected returns reduce the net benefit costs recorded currently.
|
•
|
Rate of Compensation Increase—For salary-related plans, we project employees’ annual pay increases, which are used to project employees’ pension benefits at retirement.
|
•
|
Mortality Assumptions—Assumptions about life expectancy of plan participants are used in the measurement of related plan obligations.
|
Albemarle Corporation and Subsidiaries
|
||
|
|
(Favorable) Unfavorable
|
||||||||||||||
|
1% Increase
|
|
1% Decrease
|
||||||||||||
|
Increase (Decrease)
in Benefit Obligation
|
|
Increase (Decrease)
in Benefit Cost
|
|
Increase (Decrease)
in Benefit Obligation
|
|
Increase (Decrease)
in Benefit Cost
|
||||||||
Actuarial Assumptions
|
|
|
|
|
|
|
|
||||||||
Discount Rate:
|
|
|
|
|
|
|
|
||||||||
Pension
|
$
|
(102,744
|
)
|
|
$
|
3,671
|
|
|
$
|
124,185
|
|
|
$
|
(5,054
|
)
|
Other postretirement benefits
|
$
|
(5,117
|
)
|
|
$
|
265
|
|
|
$
|
6,128
|
|
|
$
|
(334
|
)
|
Expected return on plan assets:
|
|
|
|
|
|
|
|
||||||||
Pension
|
*
|
|
|
$
|
(5,852
|
)
|
|
*
|
|
|
$
|
5,852
|
|
||
Other postretirement benefits
|
*
|
|
|
$
|
(16
|
)
|
|
*
|
|
|
$
|
16
|
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
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
|
Albemarle Corporation and Subsidiaries
|
||
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||
Long-term debt obligations
(a)
|
$
|
247,544
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
388,939
|
|
|
$
|
727,440
|
|
|
$
|
775,000
|
|
Expected interest payments on long-term debt obligations
(b)
|
53,821
|
|
|
53,950
|
|
|
53,891
|
|
|
50,526
|
|
|
43,217
|
|
|
475,464
|
|
||||||
Operating lease obligations (rental)
|
12,065
|
|
|
10,153
|
|
|
7,878
|
|
|
6,369
|
|
|
5,490
|
|
|
19,240
|
|
||||||
Take or pay / throughput agreements
(c)
|
34,569
|
|
|
14,474
|
|
|
12,420
|
|
|
11,470
|
|
|
10,919
|
|
|
27,656
|
|
||||||
Letters of credit and guarantees
|
23,619
|
|
|
5,052
|
|
|
795
|
|
|
199
|
|
|
315
|
|
|
21,357
|
|
||||||
Capital projects
|
44,364
|
|
|
142
|
|
|
109
|
|
|
10
|
|
|
12
|
|
|
545
|
|
||||||
Total
|
$
|
415,982
|
|
|
$
|
83,771
|
|
|
$
|
325,093
|
|
|
$
|
457,513
|
|
|
$
|
787,393
|
|
|
$
|
1,319,262
|
|
(a)
|
Amounts represent the expected principal payments of our long-term debt and do not include any fair value adjustments, premiums or discounts. In the first quarter of 2017, we have repaid approximately $743.7 million of senior notes using a portion the proceeds from the sale of the Chemetall Surface Treatment business. This will reduce our long-term debt obligation in the above table by $250.0 million in 2019, $174.7 million in 2020 and $319.0 million in 2021.
|
(b)
|
Interest on our fixed rate borrowings was calculated based on the stated rates of such borrowings. A weighted average interest rate of approximately 1.60% was used for our remaining long-term debt obligations. In the first quarter of 2017, we have repaid approximately
|
Albemarle Corporation and Subsidiaries
|
||
|
(c)
|
These amounts primarily relate to contracts entered into with certain third party vendors in the normal course of business to secure raw materials for our production processes. In order to secure materials, sometimes for long durations, these contracts mandate a minimum amount of product to be purchased at predetermined rates over a set timeframe.
|
Albemarle Corporation and Subsidiaries
|
||
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Albemarle Corporation and Subsidiaries
|
||
|
Albemarle Corporation and Subsidiaries
|
||
|
/
S
/ L
UTHER
C. K
ISSAM
IV
|
|
Luther C. Kissam IV
|
Chairman, President and Chief Executive Officer
|
(principal executive officer)
|
February 27, 2017
|
Albemarle Corporation and Subsidiaries
|
||
|
/s/ PricewaterhouseCoopers LLP
|
New Orleans, Louisiana
|
February 27, 2017
|
Albemarle Corporation and Subsidiaries
|
||
CONSOLIDATED STATEMENTS OF INCOME
|
(In Thousands, Except Per Share Amounts)
|
|||||||||||
Year Ended December 31
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
2,677,203
|
|
|
$
|
2,826,429
|
|
|
$
|
2,445,548
|
|
Cost of goods sold
|
1,706,627
|
|
|
1,966,196
|
|
|
1,674,700
|
|
|||
Gross profit
|
970,576
|
|
|
860,233
|
|
|
770,848
|
|
|||
Selling, general and administrative expenses
|
380,464
|
|
|
300,440
|
|
|
355,135
|
|
|||
Research and development expenses
|
80,475
|
|
|
89,187
|
|
|
88,310
|
|
|||
Restructuring and other, net
|
—
|
|
|
(6,804
|
)
|
|
25,947
|
|
|||
Gain on sales of businesses, net
|
(122,298
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition and integration related costs
|
57,384
|
|
|
132,299
|
|
|
30,158
|
|
|||
Operating profit
|
574,551
|
|
|
345,111
|
|
|
271,298
|
|
|||
Interest and financing expenses
|
(65,181
|
)
|
|
(81,650
|
)
|
|
(41,358
|
)
|
|||
Other income (expenses), net
|
5,894
|
|
|
47,283
|
|
|
(16,761
|
)
|
|||
Income from continuing operations before income taxes and equity in net income of unconsolidated investments
|
515,264
|
|
|
310,744
|
|
|
213,179
|
|
|||
Income tax expense
|
96,263
|
|
|
11,134
|
|
|
18,484
|
|
|||
Income from continuing operations before equity in net income of unconsolidated investments
|
419,001
|
|
|
299,610
|
|
|
194,695
|
|
|||
Equity in net income of unconsolidated investments (net of tax)
|
59,637
|
|
|
27,978
|
|
|
35,742
|
|
|||
Net income from continuing operations
|
478,638
|
|
|
327,588
|
|
|
230,437
|
|
|||
Income (loss) from discontinued operations (net of tax)
|
202,131
|
|
|
32,476
|
|
|
(69,531
|
)
|
|||
Net income
|
680,769
|
|
|
360,064
|
|
|
160,906
|
|
|||
Net income attributable to noncontrolling interests
|
(37,094
|
)
|
|
(25,158
|
)
|
|
(27,590
|
)
|
|||
Net income attributable to Albemarle Corporation
|
$
|
643,675
|
|
|
$
|
334,906
|
|
|
$
|
133,316
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.93
|
|
|
$
|
2.72
|
|
|
$
|
2.57
|
|
Discontinued operations
|
1.80
|
|
|
0.29
|
|
|
(0.88
|
)
|
|||
|
$
|
5.73
|
|
|
$
|
3.01
|
|
|
$
|
1.69
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.90
|
|
|
$
|
2.71
|
|
|
$
|
2.57
|
|
Discontinued operations
|
1.78
|
|
|
0.29
|
|
|
(0.88
|
)
|
|||
|
$
|
5.68
|
|
|
$
|
3.00
|
|
|
$
|
1.69
|
|
Weighted-average common shares outstanding—basic
|
112,379
|
|
|
111,182
|
|
|
78,696
|
|
|||
Weighted-average common shares outstanding—diluted
|
113,239
|
|
|
111,556
|
|
|
79,102
|
|
|||
Cash dividends declared per share of common stock
|
$
|
1.22
|
|
|
$
|
1.16
|
|
|
$
|
1.10
|
|
Albemarle Corporation and Subsidiaries
|
||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
(In Thousands)
|
|||||||||||
Year Ended December 31
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
680,769
|
|
|
$
|
360,064
|
|
|
$
|
160,906
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation
|
(20,825
|
)
|
|
(412,970
|
)
|
|
(168,673
|
)
|
|||
Pension and postretirement benefits
|
834
|
|
|
(758
|
)
|
|
(487
|
)
|
|||
Net investment hedge
|
26,133
|
|
|
50,861
|
|
|
11,384
|
|
|||
Interest rate swap
|
2,116
|
|
|
2,101
|
|
|
(20,962
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
8,258
|
|
|
(360,766
|
)
|
|
(178,738
|
)
|
|||
Comprehensive income (loss)
|
689,027
|
|
|
(702
|
)
|
|
(17,832
|
)
|
|||
Comprehensive income attributable to noncontrolling interests
|
(36,477
|
)
|
|
(23,267
|
)
|
|
(27,510
|
)
|
|||
Comprehensive income (loss) attributable to Albemarle Corporation
|
$
|
652,550
|
|
|
$
|
(23,969
|
)
|
|
$
|
(45,342
|
)
|
Albemarle Corporation and Subsidiaries
|
||
CONSOLIDATED BALANCE SHEETS
|
(In Thousands)
|
|||||||
December 31
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,269,756
|
|
|
$
|
213,734
|
|
Trade accounts receivable, less allowance for doubtful accounts (2016—$15,312; 2015—$3,390)
|
486,035
|
|
|
397,912
|
|
||
Other accounts receivable
|
41,985
|
|
|
74,989
|
|
||
Inventories
|
450,263
|
|
|
439,513
|
|
||
Other current assets
|
58,579
|
|
|
62,922
|
|
||
Assets held for sale
|
—
|
|
|
641,932
|
|
||
Total current assets
|
3,306,618
|
|
|
1,831,002
|
|
||
Property, plant and equipment, at cost
|
3,910,522
|
|
|
3,700,472
|
|
||
Less accumulated depreciation and amortization
|
1,550,382
|
|
|
1,379,377
|
|
||
Net property, plant and equipment
|
2,360,140
|
|
|
2,321,095
|
|
||
Investments
|
457,533
|
|
|
435,584
|
|
||
Noncurrent assets held for sale
|
—
|
|
|
2,971,455
|
|
||
Other assets
|
142,320
|
|
|
194,398
|
|
||
Goodwill
|
1,540,032
|
|
|
1,460,552
|
|
||
Other intangibles, net of amortization
|
354,564
|
|
|
383,868
|
|
||
Total assets
|
$
|
8,161,207
|
|
|
$
|
9,597,954
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
281,874
|
|
|
$
|
239,572
|
|
Accrued expenses
|
322,165
|
|
|
313,259
|
|
||
Current portion of long-term debt
|
247,544
|
|
|
674,994
|
|
||
Dividends payable
|
34,104
|
|
|
32,306
|
|
||
Liabilities held for sale
|
—
|
|
|
329,598
|
|
||
Income taxes payable
|
254,416
|
|
|
26,956
|
|
||
Total current liabilities
|
1,140,103
|
|
|
1,616,685
|
|
||
Long-term debt
|
2,121,718
|
|
|
3,142,163
|
|
||
Postretirement benefits
|
50,538
|
|
|
49,647
|
|
||
Pension benefits
|
298,695
|
|
|
299,983
|
|
||
Noncurrent liabilities held for sale
|
—
|
|
|
464,207
|
|
||
Other noncurrent liabilities
|
194,810
|
|
|
239,104
|
|
||
Deferred income taxes
|
412,739
|
|
|
384,852
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Albemarle Corporation shareholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value (authorized 150,000 shares), issued and outstanding — 112,524 in 2016 and 112,219 in 2015
|
1,125
|
|
|
1,122
|
|
||
Additional paid-in capital
|
2,084,418
|
|
|
2,059,151
|
|
||
Accumulated other comprehensive loss
|
(412,412
|
)
|
|
(421,288
|
)
|
||
Retained earnings
|
2,121,931
|
|
|
1,615,407
|
|
||
Total Albemarle Corporation shareholders’ equity
|
3,795,062
|
|
|
3,254,392
|
|
||
Noncontrolling interests
|
147,542
|
|
|
146,921
|
|
||
Total equity
|
3,942,604
|
|
|
3,401,313
|
|
||
Total liabilities and equity
|
$
|
8,161,207
|
|
|
$
|
9,597,954
|
|
Albemarle Corporation and Subsidiaries
|
||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
(In Thousands, Except Share Data)
|
|||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Total Albemarle
Shareholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||||
Shares
|
|
Amounts
|
|
||||||||||||||||||||||||||||
Balance at January 1, 2014
|
|
80,052,842
|
|
|
$
|
801
|
|
|
$
|
9,957
|
|
|
$
|
116,245
|
|
|
$
|
1,500,358
|
|
|
$
|
1,627,361
|
|
|
$
|
115,415
|
|
|
$
|
1,742,776
|
|
Net income
|
|
|
|
|
|
|
|
|
|
133,316
|
|
|
133,316
|
|
|
27,590
|
|
|
160,906
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(178,658
|
)
|
|
|
|
(178,658
|
)
|
|
(80
|
)
|
|
(178,738
|
)
|
|||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
(86,364
|
)
|
|
(86,364
|
)
|
|
(15,535
|
)
|
|
(101,899
|
)
|
|||||||||||
Noncontrolling interests’ share of contributed capital in subsidiary
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
1,780
|
|
|
1,780
|
|
||||||||||||
Stock-based compensation and other
|
|
|
|
|
|
13,556
|
|
|
|
|
|
|
13,556
|
|
|
|
|
13,556
|
|
||||||||||||
Exercise of stock options
|
|
77,546
|
|
|
1
|
|
|
2,712
|
|
|
|
|
|
|
2,713
|
|
|
|
|
2,713
|
|
||||||||||
Shares repurchased
|
|
(2,190,254
|
)
|
|
(22
|
)
|
|
(13,319
|
)
|
|
|
|
(136,659
|
)
|
|
(150,000
|
)
|
|
|
|
(150,000
|
)
|
|||||||||
Tax benefit related to stock plans
|
|
|
|
|
|
826
|
|
|
|
|
|
|
826
|
|
|
|
|
826
|
|
||||||||||||
Issuance of common stock, net
|
|
141,937
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(51,547
|
)
|
|
(1
|
)
|
|
(3,284
|
)
|
|
|
|
|
|
(3,285
|
)
|
|
|
|
(3,285
|
)
|
||||||||||
Balance at December 31, 2014
|
|
78,030,524
|
|
|
$
|
780
|
|
|
$
|
10,447
|
|
|
$
|
(62,413
|
)
|
|
$
|
1,410,651
|
|
|
$
|
1,359,465
|
|
|
$
|
129,170
|
|
|
$
|
1,488,635
|
|
Balance at January 1, 2015
|
|
78,030,524
|
|
|
$
|
780
|
|
|
$
|
10,447
|
|
|
$
|
(62,413
|
)
|
|
$
|
1,410,651
|
|
|
$
|
1,359,465
|
|
|
$
|
129,170
|
|
|
$
|
1,488,635
|
|
Net income
|
|
|
|
|
|
|
|
|
|
334,906
|
|
|
334,906
|
|
|
25,158
|
|
|
360,064
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(358,875
|
)
|
|
|
|
(358,875
|
)
|
|
(1,891
|
)
|
|
(360,766
|
)
|
|||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
(130,150
|
)
|
|
(130,150
|
)
|
|
(23,286
|
)
|
|
(153,436
|
)
|
|||||||||||
Stock-based compensation and other
|
|
|
|
|
|
13,696
|
|
|
|
|
|
|
13,696
|
|
|
|
|
13,696
|
|
||||||||||||
Exercise of stock options
|
|
18,000
|
|
|
—
|
|
|
517
|
|
|
|
|
|
|
517
|
|
|
|
|
517
|
|
||||||||||
Tax deficiency related to stock plans
|
|
|
|
|
|
(167
|
)
|
|
|
|
|
|
(167
|
)
|
|
|
|
(167
|
)
|
||||||||||||
Issuance of common stock, net
|
|
85,900
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Acquisition of Rockwood
|
|
34,113,064
|
|
|
341
|
|
|
2,036,209
|
|
|
|
|
|
|
2,036,550
|
|
|
17,582
|
|
|
2,054,132
|
|
|||||||||
Noncontrolling interest assumed in acquisition of Shanghai Chemetall
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,843
|
|
|
4,843
|
|
|||||||||||||
Purchase of noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,655
|
)
|
|
(4,655
|
)
|
|||||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(28,137
|
)
|
|
—
|
|
|
(1,550
|
)
|
|
|
|
|
|
(1,550
|
)
|
|
|
|
(1,550
|
)
|
||||||||||
Balance at December 31, 2015
|
|
112,219,351
|
|
|
$
|
1,122
|
|
|
$
|
2,059,151
|
|
|
$
|
(421,288
|
)
|
|
$
|
1,615,407
|
|
|
$
|
3,254,392
|
|
|
$
|
146,921
|
|
|
$
|
3,401,313
|
|
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
|
|
|
|
|
|
|
|
|
|
643,675
|
|
|
643,675
|
|
|
37,094
|
|
|
680,769
|
|
|||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
8,876
|
|
|
|
|
8,876
|
|
|
(618
|
)
|
|
8,258
|
|
|||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
(137,151
|
)
|
|
(137,151
|
)
|
|
(35,855
|
)
|
|
(173,006
|
)
|
|||||||||||
Stock-based compensation and other
|
|
|
|
|
|
16,251
|
|
|
|
|
|
|
16,251
|
|
|
|
|
16,251
|
|
||||||||||||
Exercise of stock options
|
|
212,343
|
|
|
2
|
|
|
9,400
|
|
|
|
|
|
|
9,402
|
|
|
|
|
9,402
|
|
||||||||||
Tax benefit related to stock plans
|
|
|
|
|
|
1,811
|
|
|
|
|
|
|
1,811
|
|
|
|
|
1,811
|
|
||||||||||||
Issuance of common stock, net
|
|
131,596
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(39,500
|
)
|
|
—
|
|
|
(2,194
|
)
|
|
|
|
|
|
(2,194
|
)
|
|
|
|
(2,194
|
)
|
||||||||||
Balance at December 31, 2016
|
|
112,523,790
|
|
|
$
|
1,125
|
|
|
$
|
2,084,418
|
|
|
$
|
(412,412
|
)
|
|
$
|
2,121,931
|
|
|
$
|
3,795,062
|
|
|
$
|
147,542
|
|
|
$
|
3,942,604
|
|
Albemarle Corporation and Subsidiaries
|
||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In Thousands)
|
|||||||||||
Year Ended December 31
|
2016
|
|
2015
|
|
2014
|
||||||
Cash and cash equivalents at beginning of year
|
$
|
213,734
|
|
|
$
|
2,489,768
|
|
|
$
|
477,239
|
|
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
680,769
|
|
|
360,064
|
|
|
160,906
|
|
|||
Adjustments to reconcile net income to cash flows from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
226,169
|
|
|
260,076
|
|
|
103,572
|
|
|||
(Gain) loss associated with restructuring and other
|
—
|
|
|
(6,804
|
)
|
|
6,333
|
|
|||
(Gain) loss on sales of businesses, net
|
(510,278
|
)
|
|
—
|
|
|
85,515
|
|
|||
Stock-based compensation
|
17,031
|
|
|
15,188
|
|
|
14,267
|
|
|||
Excess tax benefits realized from stock-based compensation arrangements
|
(2,121
|
)
|
|
(121
|
)
|
|
(826
|
)
|
|||
Equity in net income of unconsolidated investments (net of tax)
|
(61,534
|
)
|
|
(30,999
|
)
|
|
(35,742
|
)
|
|||
Dividends received from unconsolidated investments and nonmarketable securities
|
43,759
|
|
|
59,912
|
|
|
40,688
|
|
|||
Pension and postretirement expense (benefit)
|
41,546
|
|
|
(38,817
|
)
|
|
133,681
|
|
|||
Pension and postretirement contributions
|
(20,068
|
)
|
|
(21,613
|
)
|
|
(13,916
|
)
|
|||
Unrealized gain on investments in marketable securities
|
(3,655
|
)
|
|
(1,239
|
)
|
|
(825
|
)
|
|||
Deferred income taxes
|
21,121
|
|
|
(136,298
|
)
|
|
(64,947
|
)
|
|||
Changes in current assets and liabilities, net of effects of acquisitions and divestitures:
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
(42,816
|
)
|
|
(8,788
|
)
|
|
36,221
|
|
|||
Decrease (increase) in inventories
|
25,974
|
|
|
27,649
|
|
|
(6,486
|
)
|
|||
Decrease in other current assets excluding deferred income taxes
|
1,808
|
|
|
12,756
|
|
|
5,809
|
|
|||
Increase in accounts payable
|
43,953
|
|
|
23,745
|
|
|
28,296
|
|
|||
Increase (decrease) in accrued expenses and income taxes payable
|
210,276
|
|
|
(96,896
|
)
|
|
(6,680
|
)
|
|||
Other, net
|
61,469
|
|
|
(57,126
|
)
|
|
6,743
|
|
|||
Net cash provided by operating activities
|
733,403
|
|
|
360,689
|
|
|
492,609
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition of Rockwood, net of cash acquired
|
—
|
|
|
(2,051,645
|
)
|
|
—
|
|
|||
Other acquisitions, net of cash acquired
|
(126,747
|
)
|
|
(48,845
|
)
|
|
—
|
|
|||
Cash payments related to acquisitions and other
|
(81,987
|
)
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(196,654
|
)
|
|
(227,649
|
)
|
|
(110,576
|
)
|
|||
Decrease in restricted cash
|
—
|
|
|
57,550
|
|
|
—
|
|
|||
Cash proceeds from divestitures, net
|
3,325,571
|
|
|
8,883
|
|
|
104,718
|
|
|||
Return of capital from unconsolidated investment
|
—
|
|
|
98,000
|
|
|
—
|
|
|||
Payment for settlement of interest rate swap
|
—
|
|
|
—
|
|
|
(33,425
|
)
|
|||
Sales of marketable securities, net
|
305
|
|
|
998
|
|
|
649
|
|
|||
Repayments from (long-term advances to) joint ventures
|
—
|
|
|
2,156
|
|
|
(7,499
|
)
|
|||
Net cash provided by (used in) investing activities
|
2,920,488
|
|
|
(2,160,552
|
)
|
|
(46,133
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of senior notes
|
—
|
|
|
—
|
|
|
1,888,197
|
|
|||
Proceeds from borrowings of other long-term debt
|
—
|
|
|
2,250,000
|
|
|
—
|
|
|||
Repayments of long-term debt
|
(1,252,302
|
)
|
|
(2,626,241
|
)
|
|
(6,017
|
)
|
|||
Other (repayments) borrowings, net
|
(163,721
|
)
|
|
54,625
|
|
|
(5,825
|
)
|
|||
Dividends paid to shareholders
|
(135,353
|
)
|
|
(119,302
|
)
|
|
(84,102
|
)
|
|||
Dividends paid to noncontrolling interests
|
(35,855
|
)
|
|
(23,286
|
)
|
|
(15,535
|
)
|
|||
Purchase of noncontrolling interest
|
—
|
|
|
(4,784
|
)
|
|
—
|
|
|||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(150,000
|
)
|
|||
Proceeds from exercise of stock options
|
9,401
|
|
|
517
|
|
|
2,713
|
|
|||
Excess tax benefits realized from stock-based compensation arrangements
|
2,121
|
|
|
121
|
|
|
826
|
|
|||
Withholding taxes paid on stock-based compensation award distributions
|
(2,194
|
)
|
|
(1,549
|
)
|
|
(3,284
|
)
|
|||
Debt financing costs
|
—
|
|
|
(4,544
|
)
|
|
(17,644
|
)
|
|||
Other
|
—
|
|
|
(3,882
|
)
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(1,577,903
|
)
|
|
(478,325
|
)
|
|
1,609,329
|
|
|||
Net effect of foreign exchange on cash and cash equivalents
|
(19,966
|
)
|
|
2,154
|
|
|
(43,276
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
2,056,022
|
|
|
(2,276,034
|
)
|
|
2,012,529
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,269,756
|
|
|
$
|
213,734
|
|
|
$
|
2,489,768
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
Discount Rate—The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.
|
•
|
Expected Return on Plan Assets—We project the future return on plan assets based on prior performance and future expectations for the types of investments held by the plans, as well as the expected long-term allocation of plan assets for these investments. These projected returns reduce the net benefit costs recorded currently.
|
•
|
Rate of Compensation Increase—For salary-related plans, we project employees’ annual pay increases, which are used to project employees’ pension benefits at retirement.
|
•
|
Mortality Assumptions—Assumptions about life expectancy of plan participants are used in the measurement of related plan obligations.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Total purchase price
|
$
|
5,725,321
|
|
|
|
||
Net assets acquired:
|
|
||
Cash and cash equivalents
|
$
|
1,555,139
|
|
Trade and other accounts receivable
|
262,947
|
|
|
Inventories
|
290,496
|
|
|
Other current assets
|
86,267
|
|
|
Property, plant and equipment
|
1,383,480
|
|
|
Investments
|
529,453
|
|
|
Other assets
|
25,538
|
|
|
Definite-lived intangible assets:
|
|
||
Patents and technology
|
227,840
|
|
|
Trade names and trademarks
|
234,610
|
|
|
Customer lists and relationships
|
1,280,142
|
|
|
Indefinite-lived intangible assets:
|
|
||
Trade names and trademarks
|
104,380
|
|
|
Other
|
26,670
|
|
|
Current liabilities
|
(406,532
|
)
|
|
Long-term debt
|
(1,319,132
|
)
|
|
Pension benefits
|
(316,086
|
)
|
|
Other noncurrent liabilities
|
(195,052
|
)
|
|
Deferred income taxes
|
(845,884
|
)
|
|
Noncontrolling interests
|
(17,582
|
)
|
|
Total identifiable net assets
|
2,906,694
|
|
|
Goodwill
|
2,818,627
|
|
|
Total net assets acquired
(a)
|
$
|
5,725,321
|
|
(a)
|
Total net assets acquired includes amounts for the Chemetall Surface Treatment business, which is reported as discontinued operations. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands, except per share amounts)
|
||||||
Pro forma Net sales
|
$
|
3,684,665
|
|
|
$
|
3,870,428
|
|
Pro forma Net income
|
$
|
527,997
|
|
|
$
|
353,313
|
|
Pro forma Net income per share:
|
|
|
|
||||
Basic
|
$
|
4.75
|
|
|
$
|
3.13
|
|
Diluted
|
$
|
4.73
|
|
|
$
|
3.12
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net sales
|
$
|
813,285
|
|
|
$
|
824,906
|
|
Cost of goods sold
|
416,934
|
|
|
488,267
|
|
||
Operating expenses, net
(a)
|
268,402
|
|
|
239,316
|
|
||
Interest and financing expenses
(b)
|
38,227
|
|
|
51,072
|
|
||
Other income, net
|
(2,485
|
)
|
|
(4,214
|
)
|
||
Gain on sale of discontinued operations
|
(387,980
|
)
|
|
—
|
|
||
Income before income taxes
|
480,187
|
|
|
50,465
|
|
||
Income tax expense
(c)
|
278,056
|
|
|
17,989
|
|
||
Income from discontinued operations (net of tax)
|
$
|
202,131
|
|
|
$
|
32,476
|
|
(a)
|
Operating expenses, net for discontinued operations includes mark-to market actuarial (losses) gains of
($8.5) million
and
$8.9 million
during the years ended December 31, 2016 and 2015, respectively.
|
(b)
|
Interest and financing expenses included the allocation of interest expense not directly attributab
le 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. There was no interest expense allocated to discontinued operations for the year ended
December 31, 2014
, as the Chemetall Surface Treatment business was not owned by the Company during this period.
|
(c)
|
Income tax expense for the year ended
December 31, 2016
included a charge of
$253.0 million
related to the gain on sale of discontinued operations.
|
|
December 31,
|
||
|
2015
|
||
Assets
|
|
||
Current assets
|
$
|
237,447
|
|
Net property, plant and equipment
|
163,643
|
|
|
Goodwill
|
1,433,259
|
|
|
Other intangibles, net of amortization
|
1,349,179
|
|
|
All other noncurrent assets
|
25,374
|
|
|
Assets held for sale
|
$
|
3,208,902
|
|
Liabilities
|
|
||
Current liabilities
|
$
|
200,892
|
|
Deferred income taxes
|
351,465
|
|
|
All other noncurrent liabilities
|
112,742
|
|
|
Liabilities held for sale
|
$
|
665,099
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Depreciation and amortization
|
$
|
35,194
|
|
|
$
|
78,903
|
|
Capital expenditures
|
$
|
19,281
|
|
|
$
|
23,738
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
||
|
December 31, 2014
|
||
Net sales
|
$
|
154,273
|
|
|
|
||
Loss from discontinued operations
|
$
|
(90,439
|
)
|
Income tax benefit
|
(20,908
|
)
|
|
Loss from discontinued operations (net of tax)
|
$
|
(69,531
|
)
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||
|
2015
|
||
Assets
|
|
||
Current assets
|
$
|
156,421
|
|
Net property, plant and equipment
|
115,865
|
|
|
Goodwill
|
46,794
|
|
|
Other intangibles, net of amortization
|
66,324
|
|
|
All other noncurrent assets
|
19,081
|
|
|
Assets held for sale
|
$
|
404,485
|
|
Liabilities
|
|
||
Current liabilities
|
$
|
72,756
|
|
Deferred income taxes
|
24,947
|
|
|
All other noncurrent liabilities
|
31,003
|
|
|
Liabilities held for sale
|
$
|
128,706
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Income taxes (net of refunds of $9,270, $7,333 and $6,035 in 2016, 2015 and 2014, respectively)
(a)
|
$
|
143,404
|
|
|
$
|
162,408
|
|
|
$
|
56,174
|
|
Interest (net of capitalization)
|
$
|
96,948
|
|
|
$
|
153,271
|
|
|
$
|
33,604
|
|
|
|
|
|
|
|
||||||
Supplemental non-cash disclosures related to investing activities:
|
|
|
|
|
|
||||||
Capital expenditures included in Accounts payable
|
$
|
33,622
|
|
|
$
|
45,826
|
|
|
$
|
20,373
|
|
(a)
|
Cash paid for income taxes during 2015 included approximately
$111 million
of taxes paid on repatriation of earnings from legacy Rockwood entities.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Basic earnings per share from continuing operations
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income from continuing operations
|
$
|
478,638
|
|
|
$
|
327,588
|
|
|
$
|
230,437
|
|
Net income from continuing operations attributable to noncontrolling interests
|
(37,094
|
)
|
|
(25,158
|
)
|
|
(27,590
|
)
|
|||
Net income from continuing operations attributable to Albemarle Corporation
|
$
|
441,544
|
|
|
$
|
302,430
|
|
|
$
|
202,847
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average common shares for basic earnings per share
|
112,379
|
|
|
111,182
|
|
|
78,696
|
|
|||
Basic earnings per share from continuing operations
|
$
|
3.93
|
|
|
$
|
2.72
|
|
|
$
|
2.57
|
|
Diluted earnings per share from continuing operations
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income from continuing operations
|
$
|
478,638
|
|
|
$
|
327,588
|
|
|
$
|
230,437
|
|
Net income from continuing operations attributable to noncontrolling interests
|
(37,094
|
)
|
|
(25,158
|
)
|
|
(27,590
|
)
|
|||
Net income from continuing operations attributable to Albemarle Corporation
|
$
|
441,544
|
|
|
$
|
302,430
|
|
|
$
|
202,847
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average common shares for basic earnings per share
|
112,379
|
|
|
111,182
|
|
|
78,696
|
|
|||
Incremental shares under stock compensation plans
|
860
|
|
|
374
|
|
|
406
|
|
|||
Weighted-average common shares for diluted earnings per share
|
113,239
|
|
|
111,556
|
|
|
79,102
|
|
|||
Diluted earnings per share from continuing operations
|
$
|
3.90
|
|
|
$
|
2.71
|
|
|
$
|
2.57
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Value added tax/consumption tax
|
$
|
15,324
|
|
|
$
|
23,758
|
|
Other
|
26,661
|
|
|
51,231
|
|
||
Total
(a)
|
$
|
41,985
|
|
|
$
|
74,989
|
|
(a)
|
As of December 31, 2015,
$8.3 million
of Other accounts receivable were classified as Assets held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Finished goods
|
$
|
289,102
|
|
|
$
|
264,025
|
|
Raw materials and work in process
(a)
|
109,706
|
|
|
122,038
|
|
||
Stores, supplies and other
|
51,455
|
|
|
53,450
|
|
||
Total inventories
(b)
|
$
|
450,263
|
|
|
$
|
439,513
|
|
(a)
|
Included
$47.1 million
and
$39.1 million
at December 31, 2016 and 2015, respectively, of work in process related to the Lithium product category.
|
(b)
|
As of December 31, 2015,
$162.8 million
of Inventories were classified as Assets held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Income tax receivables
|
$
|
15,085
|
|
|
$
|
22,649
|
|
Prepaid expenses
|
42,240
|
|
|
38,609
|
|
||
Other
|
1,254
|
|
|
1,664
|
|
||
Total
(a)
|
$
|
58,579
|
|
|
$
|
62,922
|
|
(a)
|
As of December 31, 2015,
$11.9 million
of Other current assets were classified as Assets held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Useful
Lives
(Years)
|
|
December 31,
|
||||||
2016
|
|
2015
|
||||||||
Land
|
|
—
|
|
$
|
120,842
|
|
|
$
|
120,702
|
|
Land improvements
|
|
5 – 30
|
|
59,387
|
|
|
57,833
|
|
||
Buildings and improvements
|
|
10 – 45
|
|
256,603
|
|
|
236,577
|
|
||
Machinery and equipment
(a)
|
|
2 – 45
|
|
2,501,481
|
|
|
2,216,085
|
|
||
Long-term mineral rights and production equipment costs
|
|
7 – 60
|
|
654,006
|
|
|
652,871
|
|
||
Construction in progress
|
|
—
|
|
318,203
|
|
|
416,404
|
|
||
Total
(b)
|
|
|
|
$
|
3,910,522
|
|
|
$
|
3,700,472
|
|
(a)
|
Consists primarily of (1) short-lived production equipment components, office and building equipment and other equipment with estimated lives ranging 2 – 7 years, (2) production process equipment (intermediate components) with estimated lives ranging 8 – 19 years, (3) production process equipment (major unit components) with estimated lives ranging 20 – 29 years, and (4) production process equipment (infrastructure and other) with estimated lives ranging 30 – 45 years.
|
(b)
|
As of December 31, 2015,
$424.1 million
of Property, plant and equipment, at cost, was classified as Assets held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Joint ventures
(a)
|
|
$
|
429,794
|
|
|
$
|
411,119
|
|
Nonmarketable securities
|
|
169
|
|
|
208
|
|
||
Marketable equity securities
|
|
27,570
|
|
|
24,257
|
|
||
Total
|
|
$
|
457,533
|
|
|
$
|
435,584
|
|
(a)
|
Balance at December 31, 2015 excludes our investment in Magnifin Magnesiaprodukte GmbH & Co. KG (“Magnifin”) and two investments included in the sale of the Chemetall Surface Treatment business, which are included in Assets held for sale. Refer to Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31,
|
|||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|||
*
|
|
Windfield Holdings Pty. Ltd. - a joint venture with Sichuan Tianqi Lithium Industries, Inc., that mines lithium ore and produces lithium concentrate
|
49
|
%
|
|
49
|
%
|
|
—
|
%
|
*
|
|
Nippon Aluminum Alkyls - a joint venture with Mitsui Chemicals, Inc. that produces aluminum alkyls
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
*
|
|
Magnifin Magnesiaprodukte GmbH & Co. KG - a joint venture with Radex Heraklith Industriebeteiligung AG that produces specialty magnesium hydroxide products
(a)
|
—
|
%
|
|
50
|
%
|
|
50
|
%
|
*
|
|
Nippon Ketjen Company Limited - a joint venture with Sumitomo Metal Mining Company Limited that produces refinery catalysts
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
*
|
|
Eurecat S.A. - a joint venture with IFP Investissements for refinery catalysts regeneration services
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
*
|
|
Fábrica Carioca de Catalisadores S.A. - a joint venture with Petrobras Quimica S.A. - PETROQUISA that produces catalysts and includes catalysts research and product development activities
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
(a)
|
On February 1, 2016, we sold our investment in Magnifin as part of the sale of the minerals-based flame retardants and specialty chemicals business. Refer to Note 3, “Divestitures,” for additional information.
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Summary of Balance Sheet Information:
|
|
|
|
|
||||
Current assets
|
|
$
|
383,203
|
|
|
$
|
331,630
|
|
Noncurrent assets
|
|
913,643
|
|
|
935,790
|
|
||
Total assets
|
|
$
|
1,296,846
|
|
|
$
|
1,267,420
|
|
|
|
|
|
|
||||
Current liabilities
|
|
$
|
138,474
|
|
|
$
|
106,966
|
|
Noncurrent liabilities
|
|
319,801
|
|
|
339,604
|
|
||
Total liabilities
|
|
$
|
458,275
|
|
|
$
|
446,570
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Summary of Statements of Income Information:
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
590,980
|
|
|
$
|
560,376
|
|
|
$
|
499,394
|
|
Gross profit
|
|
$
|
267,241
|
|
|
$
|
253,569
|
|
|
$
|
164,063
|
|
Income before income taxes
|
|
$
|
189,016
|
|
|
$
|
157,501
|
|
|
$
|
101,983
|
|
Net income
|
|
$
|
126,872
|
|
|
$
|
111,491
|
|
|
$
|
71,466
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred income taxes—noncurrent
(a)
|
$
|
61,132
|
|
|
$
|
75,813
|
|
Assets related to unrecognized tax benefits
(a)
|
15,076
|
|
|
50,875
|
|
||
Long-term advances to joint ventures
(b)
|
31,776
|
|
|
31,780
|
|
||
Other
|
34,336
|
|
|
35,930
|
|
||
Total
(c)
|
$
|
142,320
|
|
|
$
|
194,398
|
|
(a)
|
See Note 1, “Summary of Significant Accounting Policies” and Note 20, “Income Taxes.”
|
(b)
|
See Note 10, “Investments.”
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
(c)
|
As of December 31, 2015,
$8.6 million
of Other Assets were classified as Assets held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
All Other
|
|
Total
|
||||||||||
Balance at December 31, 2014
(a)
|
$
|
21,697
|
|
|
$
|
20,319
|
|
|
$
|
192,657
|
|
|
$
|
8,589
|
|
|
$
|
243,262
|
|
Acquisition of Rockwood
|
1,293,467
|
|
|
—
|
|
|
—
|
|
|
41,151
|
|
|
1,334,618
|
|
|||||
Reclass to assets held for sale
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,794
|
)
|
|
(46,794
|
)
|
|||||
Foreign currency translation adjustments
|
(47,659
|
)
|
|
—
|
|
|
(19,929
|
)
|
|
(2,946
|
)
|
|
(70,534
|
)
|
|||||
Balance at December 31, 2015
(a)(c)
|
1,267,505
|
|
|
20,319
|
|
|
172,728
|
|
|
—
|
|
|
1,460,552
|
|
|||||
Acquisition of Rockwood
(d)
|
(1,706
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,706
|
)
|
|||||
Other acquisitions
(e)
|
113,555
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113,555
|
|
|||||
Reclass from assets held for sale
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
6,586
|
|
|
6,586
|
|
|||||
Foreign currency translation adjustments
|
(31,093
|
)
|
|
—
|
|
|
(7,862
|
)
|
|
—
|
|
|
(38,955
|
)
|
|||||
Balance at December 31, 2016
|
$
|
1,348,261
|
|
|
$
|
20,319
|
|
|
$
|
164,866
|
|
|
$
|
6,586
|
|
|
$
|
1,540,032
|
|
(a)
|
The December 31, 2015 and 2014 balances have been recast to reflect a change in segments. See Note 25, “Segment and Geographic Area Information,” for further details.
|
(b)
|
Represents Goodwill of the minerals-based flame retardants and specialty chemicals, fine chemistry services and metal sulfides businesses. See Note 3, “Divestitures,” for additional information.
|
(c)
|
As of December 31, 2015,
$1.5 billion
of Goodwill was classified as Assets held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
(d)
|
Represents final purchase price adjustments for the Rockwood acquisition recorded for the year ended December 31, 2016. Excludes
$3.2 million
of final purchase price adjustments for businesses reported as discontinued operations.
|
(e)
|
Represents preliminary purchase price adjustments for the Jiangxi Jiangli New Materials Science and Technology Co. Ltd. acquisition recorded for the year ended December 31, 2016. See Note 2, “Acquisitions,” for additional information.
|
(f)
|
Represents Goodwill of the fine chemistry services business, which was reported in Assets held for sale on the consolidated balance sheets as of December 31, 2015, but reclassified back to Goodwill during the year end December 31, 2016. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Customer Lists and Relationships
|
|
Trade Names and Trademarks
(a)
|
|
Patents and Technology
|
|
Other
|
|
Total
|
||||||||||
Gross Asset Value
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2014
|
$
|
48,479
|
|
|
$
|
17,555
|
|
|
$
|
40,398
|
|
|
$
|
23,441
|
|
|
$
|
129,873
|
|
Acquisition of Rockwood
|
386,330
|
|
|
—
|
|
|
58,230
|
|
|
—
|
|
|
444,560
|
|
|||||
Reclass to assets held for sale
(b)
|
(16,608
|
)
|
|
—
|
|
|
(54,060
|
)
|
|
(1,454
|
)
|
|
(72,122
|
)
|
|||||
Foreign currency translation adjustments and other
|
(19,476
|
)
|
|
(632
|
)
|
|
(4,424
|
)
|
|
(4,208
|
)
|
|
(28,740
|
)
|
|||||
Balance at December 31, 2015
|
398,725
|
|
|
16,923
|
|
|
40,144
|
|
|
17,779
|
|
|
473,571
|
|
|||||
Reclass from assets held for sale
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,454
|
|
|
1,454
|
|
|||||
Foreign currency translation adjustments and other
|
(10,832
|
)
|
|
(409
|
)
|
|
(1,710
|
)
|
|
(389
|
)
|
|
(13,340
|
)
|
|||||
Balance at December 31, 2016
|
$
|
387,893
|
|
|
$
|
16,514
|
|
|
$
|
38,434
|
|
|
$
|
18,844
|
|
|
$
|
461,685
|
|
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2014
|
$
|
(22,931
|
)
|
|
$
|
(7,912
|
)
|
|
$
|
(32,831
|
)
|
|
$
|
(22,074
|
)
|
|
$
|
(85,748
|
)
|
Amortization
|
(11,441
|
)
|
|
(423
|
)
|
|
(4,654
|
)
|
|
(401
|
)
|
|
(16,919
|
)
|
|||||
Reclass to assets held for sale
(b)
|
596
|
|
|
—
|
|
|
3,880
|
|
|
1,322
|
|
|
5,798
|
|
|||||
Foreign currency translation adjustments and other
|
1,120
|
|
|
249
|
|
|
1,597
|
|
|
4,200
|
|
|
7,166
|
|
|||||
Balance at December 31, 2015
|
(32,656
|
)
|
|
(8,086
|
)
|
|
(32,008
|
)
|
|
(16,953
|
)
|
|
(89,703
|
)
|
|||||
Amortization
|
(18,034
|
)
|
|
—
|
|
|
(574
|
)
|
|
(431
|
)
|
|
(19,039
|
)
|
|||||
Reclass from assets held for sale
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,322
|
)
|
|
(1,322
|
)
|
|||||
Foreign currency translation adjustments and other
|
1,525
|
|
|
134
|
|
|
899
|
|
|
385
|
|
|
2,943
|
|
|||||
Balance at December 31, 2016
|
$
|
(49,165
|
)
|
|
$
|
(7,952
|
)
|
|
$
|
(31,683
|
)
|
|
$
|
(18,321
|
)
|
|
$
|
(107,121
|
)
|
Net Book Value at December 31, 2015
(d)
|
$
|
366,069
|
|
|
$
|
8,837
|
|
|
$
|
8,136
|
|
|
$
|
826
|
|
|
$
|
383,868
|
|
Net Book Value at December 31, 2016
|
$
|
338,728
|
|
|
$
|
8,562
|
|
|
$
|
6,751
|
|
|
$
|
523
|
|
|
$
|
354,564
|
|
(a)
|
Balances as of
December 31, 2015
and
2016
include only indefinite-lived intangible assets.
|
(b)
|
Represents Other intangibles and related amortization of the minerals-based flame retardants and specialty chemicals, fine chemistry services and metal sulfides businesses. See Note 3, “Divestitures,” for additional information.
|
(c)
|
Represents Other intangibles and related amortization of the fine chemistry services business, which was reported in Assets held for sale on the consolidated balance sheets as of December 31, 2015, but reclassified back to Other intangibles during the year end December 31, 2016. See Note 3, “Divestitures,” for additional information.
|
(d)
|
As of December 31, 2015,
$1.4 billion
of Other intangibles, net of amortization were classified as Assets held for sale in the consolidated balance sheets. See Note 3 “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Estimated Amortization Expense
|
||
2017
|
$
|
20,714
|
|
2018
|
$
|
22,019
|
|
2019
|
$
|
22,327
|
|
2020
|
$
|
21,671
|
|
2021
|
$
|
21,392
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Employee benefits, payroll and related taxes
|
$
|
92,478
|
|
|
$
|
91,970
|
|
Obligations in connection with acquisitions
(a)
|
47,082
|
|
|
128,881
|
|
||
Other
(b)
|
182,605
|
|
|
92,408
|
|
||
Total
(c)
|
$
|
322,165
|
|
|
$
|
313,259
|
|
(a)
|
As of December 31, 2016 included accruals related to net working capital amounts arising from the acquisition of the lithium business of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. The balance as of December 31, 2015 included accruals related to certain litigation matters and businesses divested by Rockwood prior to the Acquisition Closing Date.
|
(b)
|
No individual component exceeds
5%
of total current liabilities.
|
(c)
|
As of December 31, 2015,
$112.1 million
of Accrued expenses were classified as Liabilities held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Term loan facilities, net of unamortized debt issuance costs of $2,833 at December 31, 2015
|
$
|
—
|
|
|
$
|
1,247,167
|
|
1.875% Senior notes, net of unamortized discount and debt issuance costs of $7,823 at December 31, 2016 and $9,904 at December 31, 2015
|
719,617
|
|
|
759,151
|
|
||
3.00% Senior notes, net of unamortized discount and debt issuance costs of $1,286 at December 31, 2016 and $1,726 at December 31, 2015
|
248,714
|
|
|
248,274
|
|
||
4.15% Senior notes, net of unamortized discount and debt issuance costs of $3,859 at December 31, 2016 and $4,346 at December 31, 2015
|
421,141
|
|
|
420,654
|
|
||
4.50% Senior notes, net of unamortized discount and debt issuance costs of $2,380 at December 31, 2016 and $2,982 at December 31, 2015
|
347,620
|
|
|
347,018
|
|
||
5.45% Senior notes, net of unamortized discount and debt issuance costs of $4,313 at December 31, 2016 and $4,468 at December 31, 2015
|
345,687
|
|
|
345,532
|
|
||
Commercial paper notes
|
247,503
|
|
|
351,349
|
|
||
Variable-rate foreign bank loans
|
38,939
|
|
|
77,452
|
|
||
Variable-rate domestic bank loans
|
—
|
|
|
20,479
|
|
||
Miscellaneous
|
41
|
|
|
81
|
|
||
Total long-term debt
(a)
|
2,369,262
|
|
|
3,817,157
|
|
||
Less amounts due within one year
|
247,544
|
|
|
674,994
|
|
||
Long-term debt, less current portion
|
$
|
2,121,718
|
|
|
$
|
3,142,163
|
|
(a)
|
As of December 31, 2015,
$20.3 million
of long-term debt was classified as Liabilities held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
€700.0 million
aggregate principal amount of senior notes, issued on December 8, 2014, bearing interest at a rate of
1.875%
payable annually on December 8 of each year, beginning in 2015. The effective interest rate on these senior notes is approximately
2.10%
. These senior notes mature on December 8, 2021.
|
•
|
$250.0 million
aggregate principal amount of senior notes, issued on November 24, 2014, bearing interest at a rate of
3.00%
payable semi-annually on June 1 and December 1 of each year, beginning June 1, 2015. The effective interest rate on these senior notes is approximately
3.18%
. These senior notes mature on December 1, 2019.
|
•
|
$425.0 million
aggregate principal amount of senior notes, issued on November 24, 2014, bearing interest at a rate of
4.15%
payable semi-annually on June 1 and December 1 of each year, beginning June 1, 2015. The effective interest rate on these senior notes is approximately
5.06%
. These senior notes mature on December 1, 2024.
|
•
|
$350.0 million
aggregate principal amount of senior notes, issued on November 24, 2014, bearing interest at a rate of
5.45%
payable semi-annually on June 1 and December 1 of each year, beginning June 1, 2015. The effective interest rate on these senior notes is approximately
5.50%
. These senior notes mature on December 1, 2044.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
||||||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at January 1
|
$
|
682,839
|
|
|
$
|
245,747
|
|
|
$
|
729,652
|
|
|
$
|
53,112
|
|
Service cost
|
1,028
|
|
|
3,133
|
|
|
1,233
|
|
|
3,909
|
|
||||
Interest cost
|
30,514
|
|
|
6,570
|
|
|
30,235
|
|
|
6,405
|
|
||||
Plan amendments
|
—
|
|
|
—
|
|
|
—
|
|
|
864
|
|
||||
Actuarial loss (gain)
|
7,357
|
|
|
28,083
|
|
|
(54,140
|
)
|
|
(30,978
|
)
|
||||
Benefits paid
|
(56,050
|
)
|
|
(9,793
|
)
|
|
(37,512
|
)
|
|
(11,283
|
)
|
||||
Acquisitions
|
—
|
|
|
—
|
|
|
13,371
|
|
|
270,618
|
|
||||
Divestitures
|
—
|
|
|
(6,372
|
)
|
|
—
|
|
|
—
|
|
||||
Reclass to liabilities held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,608
|
)
|
||||
Employee contributions
|
—
|
|
|
245
|
|
|
—
|
|
|
256
|
|
||||
Foreign exchange gain
|
—
|
|
|
(21,724
|
)
|
|
—
|
|
|
(20,105
|
)
|
||||
Settlements/curtailments
|
—
|
|
|
(427
|
)
|
|
—
|
|
|
(161
|
)
|
||||
Other
|
—
|
|
|
818
|
|
|
—
|
|
|
(282
|
)
|
||||
Benefit obligation at December 31
|
$
|
665,688
|
|
|
$
|
246,280
|
|
|
$
|
682,839
|
|
|
$
|
245,747
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at January 1
|
$
|
555,084
|
|
|
$
|
64,911
|
|
|
$
|
598,250
|
|
|
$
|
9,444
|
|
Actual return on plan assets
|
37,725
|
|
|
12,534
|
|
|
(16,306
|
)
|
|
630
|
|
||||
Employer contributions
|
1,323
|
|
|
10,911
|
|
|
1,398
|
|
|
11,864
|
|
||||
Benefits paid
|
(56,050
|
)
|
|
(9,793
|
)
|
|
(37,512
|
)
|
|
(11,283
|
)
|
||||
Acquisitions
|
—
|
|
|
—
|
|
|
9,254
|
|
|
56,418
|
|
||||
Employee contributions
|
—
|
|
|
245
|
|
|
—
|
|
|
256
|
|
||||
Foreign exchange loss
|
—
|
|
|
(10,492
|
)
|
|
—
|
|
|
(2,189
|
)
|
||||
Settlements/curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
||||
Other
|
—
|
|
|
559
|
|
|
—
|
|
|
(68
|
)
|
||||
Fair value of plan assets at December 31
|
$
|
538,082
|
|
|
$
|
68,875
|
|
|
$
|
555,084
|
|
|
$
|
64,911
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status at December 31
|
$
|
(127,606
|
)
|
|
$
|
(177,405
|
)
|
|
$
|
(127,755
|
)
|
|
$
|
(180,836
|
)
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
||||||||
Amounts recognized in consolidated balance sheets:
|
|
|
|
|
|
|
|
||||||||
Current liabilities (accrued expenses)
|
$
|
(1,100
|
)
|
|
$
|
(5,216
|
)
|
|
$
|
(1,110
|
)
|
|
$
|
(7,498
|
)
|
Noncurrent liabilities (pension benefits)
|
(126,506
|
)
|
|
(172,189
|
)
|
|
(126,645
|
)
|
|
(173,338
|
)
|
||||
Net pension liability
|
$
|
(127,606
|
)
|
|
$
|
(177,405
|
)
|
|
$
|
(127,755
|
)
|
|
$
|
(180,836
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
$
|
(136
|
)
|
|
$
|
(322
|
)
|
|
$
|
(211
|
)
|
|
$
|
(1,046
|
)
|
Net amount recognized
|
$
|
(136
|
)
|
|
$
|
(322
|
)
|
|
$
|
(211
|
)
|
|
$
|
(1,046
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average assumptions used to determine benefit obligations at December 31:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
4.43
|
%
|
|
2.00
|
%
|
|
4.67
|
%
|
|
2.76
|
%
|
||||
Rate of compensation increase
|
—
|
%
|
|
3.18
|
%
|
|
—
|
%
|
|
3.16
|
%
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
Other Postretirement Benefits
|
|
Other Postretirement Benefits
|
||||
Change in benefit obligations:
|
|
|
|
||||
Benefit obligation at January 1
|
$
|
56,499
|
|
|
$
|
64,500
|
|
Service cost
|
115
|
|
|
137
|
|
||
Interest cost
|
2,483
|
|
|
2,573
|
|
||
Actuarial loss (gain)
|
1,529
|
|
|
(5,690
|
)
|
||
Benefits paid
|
(4,485
|
)
|
|
(5,021
|
)
|
||
Benefit obligation at December 31
|
$
|
56,141
|
|
|
$
|
56,499
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at January 1
|
$
|
3,292
|
|
|
$
|
4,439
|
|
Actual return on plan assets
|
442
|
|
|
280
|
|
||
Employer contributions
|
2,983
|
|
|
3,594
|
|
||
Benefits paid
|
(4,485
|
)
|
|
(5,021
|
)
|
||
Fair value of plan assets at December 31
|
$
|
2,232
|
|
|
$
|
3,292
|
|
|
|
|
|
||||
Funded status at December 31
|
$
|
(53,909
|
)
|
|
$
|
(53,207
|
)
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
Other Postretirement Benefits
|
|
Other Postretirement Benefits
|
||||
Amounts recognized in consolidated balance sheets:
|
|
|
|
||||
Current liabilities (accrued expenses)
|
$
|
(3,371
|
)
|
|
$
|
(3,560
|
)
|
Noncurrent liabilities (postretirement benefits)
|
(50,538
|
)
|
|
(49,647
|
)
|
||
Net postretirement liability
|
$
|
(53,909
|
)
|
|
$
|
(53,207
|
)
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive income (loss):
|
|
|
|
||||
Prior service benefit
|
$
|
143
|
|
|
$
|
239
|
|
Net amount recognized
|
$
|
143
|
|
|
$
|
239
|
|
|
|
|
|
||||
Weighted-average assumptions used to determine benefit obligations at December 31:
|
|
|
|
||||
Discount rate
|
4.35
|
%
|
|
4.59
|
%
|
||
Rate of compensation increase
|
3.50
|
%
|
|
3.50
|
%
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
||||||||||||
Service cost
|
$
|
1,028
|
|
|
$
|
3,133
|
|
|
$
|
1,233
|
|
|
$
|
3,909
|
|
|
$
|
7,029
|
|
|
$
|
1,746
|
|
Interest cost
|
30,514
|
|
|
6,570
|
|
|
30,235
|
|
|
6,405
|
|
|
30,491
|
|
|
1,571
|
|
||||||
Expected return on assets
|
(36,445
|
)
|
|
(4,027
|
)
|
|
(40,495
|
)
|
|
(3,670
|
)
|
|
(39,714
|
)
|
|
(427
|
)
|
||||||
Actuarial loss (gain)
|
5,988
|
|
|
19,418
|
|
|
2,665
|
|
|
(27,043
|
)
|
|
116,705
|
|
|
10,270
|
|
||||||
Amortization of prior service benefit
|
75
|
|
|
859
|
|
|
75
|
|
|
43
|
|
|
(727
|
)
|
|
50
|
|
||||||
Total net pension benefits cost (credit)
(a)
|
$
|
1,160
|
|
|
$
|
25,953
|
|
|
$
|
(6,287
|
)
|
|
$
|
(20,356
|
)
|
|
$
|
113,784
|
|
|
$
|
13,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average assumption percentages:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
4.67
|
%
|
|
2.76
|
%
|
|
4.19
|
%
|
|
2.22
|
%
|
|
5.14
|
%
|
|
3.41
|
%
|
||||||
Expected return on plan assets
|
6.89
|
%
|
|
6.66
|
%
|
|
6.88
|
%
|
|
5.76
|
%
|
|
6.91
|
%
|
|
4.00
|
%
|
||||||
Rate of compensation increase
|
—
|
%
|
|
3.16
|
%
|
|
—
|
%
|
|
3.15
|
%
|
|
3.50
|
%
|
|
3.16
|
%
|
(a)
|
For the years ended December 31, 2016 and 2015,
$10.8 million
and
$6.2 million
, respectively, of net pension benefits credit is included in Income (loss) from discontinued operations (net of tax) in the consolidated statements of income. See Note 3, “Divestitures,” for additional information.
|
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
||||
Amortization of prior service benefit
|
$
|
75
|
|
|
$
|
36
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
Other Postretirement Benefits
|
|
Other Postretirement Benefits
|
|
Other Postretirement Benefits
|
||||||
Service cost
|
$
|
115
|
|
|
$
|
137
|
|
|
$
|
216
|
|
Interest cost
|
2,483
|
|
|
2,573
|
|
|
3,040
|
|
|||
Expected return on assets
|
(187
|
)
|
|
(263
|
)
|
|
(342
|
)
|
|||
Actuarial loss (gain)
|
1,275
|
|
|
(5,707
|
)
|
|
3,868
|
|
|||
Amortization of prior service benefit
|
(95
|
)
|
|
(95
|
)
|
|
(95
|
)
|
|||
Total net postretirement benefits cost (credit)
(a)
|
$
|
3,591
|
|
|
$
|
(3,355
|
)
|
|
$
|
6,687
|
|
|
|
|
|
|
|
||||||
Weighted-average assumption percentages:
|
|
|
|
|
|
||||||
Discount rate
|
4.59
|
%
|
|
4.15
|
%
|
|
5.03
|
%
|
|||
Expected return on plan assets
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|||
Rate of compensation increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
(a)
|
For the year ended December 31, 2015,
$2.6 million
of net postretirement benefits credit is included in Income (loss) from discontinued operations (net of tax) in the consolidated statements of income. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Other Postretirement Benefits
|
||
Amortization of prior service benefit
|
$
|
(95
|
)
|
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
|
|
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)
|
||||||||
Pension Assets:
|
|
|
|
|
|
|
|
||||||||
Domestic Equity
(a)
|
$
|
146,683
|
|
|
$
|
143,987
|
|
|
$
|
2,696
|
|
|
$
|
—
|
|
International Equity
(b)
|
116,649
|
|
|
83,839
|
|
|
32,810
|
|
|
—
|
|
||||
Fixed Income
(c)
|
255,401
|
|
|
230,309
|
|
|
25,092
|
|
|
—
|
|
||||
Absolute Return Measured at Net Asset Value
(d)
|
86,112
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash
|
2,112
|
|
|
2,112
|
|
|
—
|
|
|
—
|
|
||||
Total Pension Assets
|
$
|
606,957
|
|
|
$
|
460,247
|
|
|
$
|
60,598
|
|
|
$
|
—
|
|
Postretirement Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed Income
(c)
|
$
|
2,232
|
|
|
$
|
—
|
|
|
$
|
2,232
|
|
|
$
|
—
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31, 2015
|
|
Quoted Prices in Active Markets for Identical Items (Level 1)
|
|
Quoted Prices in Active Markets for Similar Items (Level 2)
|
|
Unobservable Inputs (Level 3)
|
||||||||
Pension Assets:
|
|
|
|
|
|
|
|
||||||||
Domestic Equity
(a)
|
$
|
163,408
|
|
|
$
|
161,075
|
|
|
$
|
2,333
|
|
|
$
|
—
|
|
International Equity
(b)
|
115,949
|
|
|
84,019
|
|
|
31,930
|
|
|
—
|
|
||||
Fixed Income
(c)
|
254,560
|
|
|
231,411
|
|
|
23,149
|
|
|
—
|
|
||||
Absolute Return Measured at Net Asset Value
(d)
|
80,746
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash
|
5,332
|
|
|
5,332
|
|
|
—
|
|
|
—
|
|
||||
Total Pension Assets
|
$
|
619,995
|
|
|
$
|
481,837
|
|
|
$
|
57,412
|
|
|
$
|
—
|
|
Postretirement Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed Income
(c)
|
$
|
3,292
|
|
|
$
|
—
|
|
|
$
|
3,292
|
|
|
$
|
—
|
|
(a)
|
Consists primarily of U.S. stock funds that track or are actively managed and measured against the S&P 500 index.
|
(b)
|
Consists primarily of international equity funds which invest in common stocks and other securities whose value is based on an international equity index or an underlying equity security or basket of equity securities.
|
(c)
|
Consists primarily of debt obligations issued by governments, corporations, municipalities and other borrowers. Also includes insurance policies.
|
(d)
|
Consists primarily of funds with holdings in private investment companies. See additional information about the Absolute Return investments below. Holdings in private investment companies are measured at fair value using the net asset value per share as a practical expedient and have not been categorized in the fair value hierarchy as a result of the adoption of new accounting guidance effective January 1, 2016 on a retrospective basis. The fair value amounts of
$86.1 million
and
$80.7 million
as of December 31, 2016 and 2015, respectively, are included in this table to permit reconciliation to the reconciliation of plan assets table above. See Note 1, “Summary of Significant Accounting Policies,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
U.S. Pension Plans
|
|
Foreign Pension Plans
|
|
Other Postretirement Benefits
|
||||||
2017
|
$
|
39.6
|
|
|
$
|
9.2
|
|
|
$
|
4.7
|
|
2018
|
$
|
40.9
|
|
|
$
|
8.7
|
|
|
$
|
4.5
|
|
2019
|
$
|
41.9
|
|
|
$
|
8.2
|
|
|
$
|
4.3
|
|
2020
|
$
|
42.7
|
|
|
$
|
9.0
|
|
|
$
|
4.0
|
|
2021
|
$
|
43.1
|
|
|
$
|
9.6
|
|
|
$
|
3.8
|
|
2022-2026
|
$
|
219.2
|
|
|
$
|
51.2
|
|
|
$
|
18.2
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Liabilities related to uncertain tax positions
(a)
|
$
|
27,919
|
|
|
$
|
101,677
|
|
Executive deferred compensation plan obligation
|
22,037
|
|
|
21,631
|
|
||
Environmental liabilities
(b)
|
32,595
|
|
|
29,993
|
|
||
Asset retirement obligations
(b)
|
36,296
|
|
|
37,230
|
|
||
Tax indemnification liability
(c)
|
38,255
|
|
|
—
|
|
||
Other
(d)
|
37,708
|
|
|
48,573
|
|
||
Total
(e)
|
$
|
194,810
|
|
|
$
|
239,104
|
|
(a)
|
See Note 20, “Income Taxes.”
|
(b)
|
See Note 17, “Commitments and Contingencies.”
|
(c)
|
Indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold.
|
(d)
|
No individual component exceeds 5% of total liabilities.
|
(e)
|
As of December 31, 2015,
$20.2 million
of Other noncurrent liabilities were classified as Liabilities held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Balance, beginning of year
|
$
|
31,436
|
|
|
$
|
9,235
|
|
|
$
|
16,599
|
|
Expenditures
|
(2,667
|
)
|
|
(4,039
|
)
|
|
(4,548
|
)
|
|||
Acquisition of Rockwood
|
—
|
|
|
34,626
|
|
|
—
|
|
|||
Divestitures
|
—
|
|
|
(1,826
|
)
|
|
(1,954
|
)
|
|||
Accretion of discount
|
793
|
|
|
902
|
|
|
—
|
|
|||
Additions and revisions of estimates
|
4,004
|
|
|
150
|
|
|
34
|
|
|||
Reclass to liabilities held for sale
(a)
|
—
|
|
|
(5,253
|
)
|
|
—
|
|
|||
Foreign currency translation adjustments and other
|
1,353
|
|
|
(2,359
|
)
|
|
(896
|
)
|
|||
Balance, end of year
(b)
|
34,919
|
|
|
31,436
|
|
|
9,235
|
|
|||
Less amounts reported in Accrued expenses
|
2,324
|
|
|
1,443
|
|
|
4,394
|
|
|||
Amounts reported in Other noncurrent liabilities
|
$
|
32,595
|
|
|
$
|
29,993
|
|
|
$
|
4,841
|
|
(a)
|
Represents environmental liabilities of the metal sulfides and minerals-based flame retardants and specialty chemicals businesses. See Note 3, “Divestitures,” for additional information.
|
(b)
|
As of December 31, 2015,
$3.9 million
of environmental liabilities were classified as Liabilities held for sale in the consolidated balance sheets. See Note 3, “Divestitures,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Balance, beginning of year
|
$
|
37,230
|
|
|
$
|
15,085
|
|
Acquisition of Rockwood
|
—
|
|
|
17,265
|
|
||
Liabilities incurred
|
—
|
|
|
3,636
|
|
||
Accretion of discount
|
1,354
|
|
|
1,289
|
|
||
Liabilities settled
|
(370
|
)
|
|
—
|
|
||
Foreign currency translation adjustments and other
|
(1,918
|
)
|
|
(45
|
)
|
||
Balance, end of year
|
$
|
36,296
|
|
|
$
|
37,230
|
|
|
Operating Leases
|
||
2017
|
$
|
12,065
|
|
2018
|
$
|
10,153
|
|
2019
|
$
|
7,878
|
|
2020
|
$
|
6,369
|
|
2021
|
$
|
5,490
|
|
Thereafter
|
$
|
19,240
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||
Letters of credit and other guarantees
|
$
|
23,619
|
|
|
$
|
5,052
|
|
|
$
|
795
|
|
|
$
|
199
|
|
|
$
|
315
|
|
|
$
|
21,357
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding at December 31, 2015
|
1,676,927
|
|
|
$
|
50.76
|
|
|
6.1
|
|
$
|
14,152
|
|
Granted
|
141,661
|
|
|
56.56
|
|
|
|
|
|
|||
Exercised
|
(212,343
|
)
|
|
44.28
|
|
|
|
|
|
|||
Forfeited
|
(64,001
|
)
|
|
59.03
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
1,542,244
|
|
|
$
|
51.85
|
|
|
5.5
|
|
$
|
52,798
|
|
Exercisable at December 31, 2016
|
858,291
|
|
|
$
|
45.63
|
|
|
3.7
|
|
$
|
34,720
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Dividend yield
|
1.84
|
%
|
|
1.80
|
%
|
|
1.71
|
%
|
|||
Volatility
|
33.08
|
%
|
|
32.92
|
%
|
|
33.03
|
%
|
|||
Average expected life (years)
|
6
|
|
|
6
|
|
|
6
|
|
|||
Risk-free interest rate
|
1.96
|
%
|
|
2.17
|
%
|
|
2.94
|
%
|
|||
Fair value of options granted
|
$
|
16.06
|
|
|
$
|
16.04
|
|
|
$
|
19.56
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Shares
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
Nonvested, beginning of period
|
497,205
|
|
|
$
|
62.04
|
|
Granted
|
139,948
|
|
|
78.03
|
|
|
Vested
|
(80,970
|
)
|
|
61.75
|
|
|
Forfeited
|
(61,492
|
)
|
|
63.61
|
|
|
Nonvested, end of period
|
494,691
|
|
|
66.42
|
|
|
Shares
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
Nonvested, beginning of period
|
118,121
|
|
|
$
|
58.62
|
|
Granted
|
156,662
|
|
|
56.43
|
|
|
Vested
|
(53,875
|
)
|
|
57.34
|
|
|
Forfeited
|
(40,252
|
)
|
|
54.65
|
|
|
Nonvested, end of period
|
180,656
|
|
|
57.99
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Foreign
Currency Translation
(a)
|
|
Pension and Post-Retirement Benefits
(b)
|
|
Net Investment Hedge
|
|
Interest Rate Swap
(c)
|
|
Total
|
||||||||||
Accumulated other comprehensive income - balance at December 31, 2013
|
$
|
115,758
|
|
|
$
|
487
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,245
|
|
Other comprehensive (loss) income before reclassifications
|
(151,059
|
)
|
|
—
|
|
|
11,384
|
|
|
(21,174
|
)
|
|
(160,849
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive (loss) income
|
(17,614
|
)
|
|
(487
|
)
|
|
—
|
|
|
212
|
|
|
(17,889
|
)
|
|||||
Other comprehensive (loss) income, net of tax
|
(168,673
|
)
|
|
(487
|
)
|
|
11,384
|
|
|
(20,962
|
)
|
|
(178,738
|
)
|
|||||
Other comprehensive loss attributable to noncontrolling interests
|
80
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|||||
Accumulated other comprehensive (loss) income - balance at December 31, 2014
|
$
|
(52,835
|
)
|
|
$
|
—
|
|
|
$
|
11,384
|
|
|
$
|
(20,962
|
)
|
|
$
|
(62,413
|
)
|
Other comprehensive (loss) income before reclassifications
|
(412,997
|
)
|
|
(774
|
)
|
|
50,861
|
|
|
—
|
|
|
(362,910
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive (loss) income
|
27
|
|
|
16
|
|
|
—
|
|
|
2,101
|
|
|
2,144
|
|
|||||
Other comprehensive (loss) income, net of tax
|
(412,970
|
)
|
|
(758
|
)
|
|
50,861
|
|
|
2,101
|
|
|
(360,766
|
)
|
|||||
Other comprehensive loss attributable to noncontrolling interests
|
1,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,891
|
|
|||||
Accumulated other comprehensive (loss) income - balance at December 31, 2015
|
$
|
(463,914
|
)
|
|
$
|
(758
|
)
|
|
$
|
62,245
|
|
|
$
|
(18,861
|
)
|
|
$
|
(421,288
|
)
|
Other comprehensive (loss) income before reclassifications
|
(102,246
|
)
|
|
—
|
|
|
26,133
|
|
|
—
|
|
|
(76,113
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive (loss) income
|
81,421
|
|
|
834
|
|
|
—
|
|
|
2,116
|
|
|
84,371
|
|
|||||
Other comprehensive (loss) income, net of tax
|
(20,825
|
)
|
|
834
|
|
|
26,133
|
|
|
2,116
|
|
|
8,258
|
|
|||||
Other comprehensive loss attributable to noncontrolling interests
|
618
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
618
|
|
|||||
Accumulated other comprehensive (loss) income - balance at December 31, 2016
|
$
|
(484,121
|
)
|
|
$
|
76
|
|
|
$
|
88,378
|
|
|
$
|
(16,745
|
)
|
|
$
|
(412,412
|
)
|
(a)
|
Amounts reclassified from accumulated other comprehensive (loss) income for the years ended December 31, 2014 and 2016 are included in Income (loss) from discontinued operations (net of tax) for the years ended December 31, 2014 and 2016 and resulted from the release of cumulative foreign currency translation adjustments into earnings upon the sale of our antioxidant, ibuprofen and propofol businesses and assets which closed on September 1, 2014 and the sale of our Chemetall Surface Treatment business which closed on December 14, 2016. See Note 3, “Divestitures.”
|
(b)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive (loss) income consists of amortization of prior service benefit, which is a component of pension and postretirement benefits cost (credit). See Note 15, “Pension Plans and Other Postretirement Benefits.”
|
(c)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive (loss) income is included in interest expense.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
(a)
|
|
Interest Rate Swap
(b)
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, before tax
|
$
|
(20,849
|
)
|
|
$
|
839
|
|
|
$
|
41,209
|
|
|
$
|
3,336
|
|
Income tax benefit (expense)
|
24
|
|
|
(5
|
)
|
|
(15,076
|
)
|
|
(1,220
|
)
|
||||
Other comprehensive (loss) income, net of tax
|
$
|
(20,825
|
)
|
|
$
|
834
|
|
|
$
|
26,133
|
|
|
$
|
2,116
|
|
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, before tax
|
$
|
(451,762
|
)
|
|
$
|
(751
|
)
|
|
$
|
80,746
|
|
|
$
|
3,336
|
|
Income tax benefit (expense)
|
38,792
|
|
|
(7
|
)
|
|
(29,885
|
)
|
|
(1,235
|
)
|
||||
Other comprehensive (loss) income, net of tax
|
$
|
(412,970
|
)
|
|
$
|
(758
|
)
|
|
$
|
50,861
|
|
|
$
|
2,101
|
|
|
|
|
|
|
|
|
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, before tax
|
$
|
(163,319
|
)
|
|
$
|
(772
|
)
|
|
$
|
17,971
|
|
|
$
|
(33,091
|
)
|
Income tax (expense) benefit
|
(5,354
|
)
|
|
285
|
|
|
(6,587
|
)
|
|
12,129
|
|
||||
Other comprehensive (loss) income, net of tax
|
$
|
(168,673
|
)
|
|
$
|
(487
|
)
|
|
$
|
11,384
|
|
|
$
|
(20,962
|
)
|
(a)
|
Other comprehensive (loss) income, before tax, for the year ended December 31, 2014 includes
$12.8 million
related to the revaluation of our Euro-denominated senior notes and a
$5.2 million
gain on the settlement of related foreign currency forward contracts, both of which were designated as a hedge of our net investment in foreign operations. See Note 14, “Long-Term Debt” for additional information about these transactions.
|
(b)
|
Other comprehensive (loss) income, before tax, for the year ended December 31, 2014 includes a realized loss of
($33.4) million
on the settlement of our forward starting interest rate swap which was designated and accounted for as a cash flow hedge under ASC 815,
Derivatives and Hedging
. See Note 14, “Long-Term Debt” for additional information about this interest rate swap.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income from continuing operations before income taxes and equity in net income of unconsolidated investments:
|
|
|
|
|
|
||||||
Domestic
|
$
|
49,630
|
|
|
$
|
(15,861
|
)
|
|
$
|
45,689
|
|
Foreign
|
465,634
|
|
|
326,605
|
|
|
167,490
|
|
|||
Total
|
$
|
515,264
|
|
|
$
|
310,744
|
|
|
$
|
213,179
|
|
|
|
|
|
|
|
||||||
Current income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
7,717
|
|
|
$
|
76,778
|
|
|
$
|
36,708
|
|
State
|
1,407
|
|
|
(983
|
)
|
|
3,209
|
|
|||
Foreign
|
63,957
|
|
|
58,710
|
|
|
25,700
|
|
|||
Total
|
$
|
73,081
|
|
|
$
|
134,505
|
|
|
$
|
65,617
|
|
|
|
|
|
|
|
||||||
Deferred income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
12,230
|
|
|
$
|
(127,212
|
)
|
|
$
|
(32,890
|
)
|
State
|
(1,715
|
)
|
|
(1,267
|
)
|
|
(1,139
|
)
|
|||
Foreign
|
12,667
|
|
|
5,108
|
|
|
(13,104
|
)
|
|||
Total
|
$
|
23,182
|
|
|
$
|
(123,371
|
)
|
|
$
|
(47,133
|
)
|
|
|
|
|
|
|
||||||
Total income tax expense
|
$
|
96,263
|
|
|
$
|
11,134
|
|
|
$
|
18,484
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
% of Income Before Income Taxes
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal tax benefit
|
(0.1
|
)
|
|
1.4
|
|
|
0.2
|
|
Change in valuation allowance
|
3.7
|
|
|
5.7
|
|
|
1.0
|
|
Impact of foreign earnings, net
(a)
|
(19.3
|
)
|
|
(22.0
|
)
|
|
(24.8
|
)
|
Subpart F income
|
0.2
|
|
|
7.8
|
|
|
1.2
|
|
Deemed repatriation of foreign income
(b)
|
—
|
|
|
105.5
|
|
|
—
|
|
Undistributed earnings of foreign subsidiaries
(a)(b)
|
0.1
|
|
|
(114.8
|
)
|
|
(0.3
|
)
|
Nondeductible transaction costs
|
—
|
|
|
2.0
|
|
|
—
|
|
Depletion
|
(1.0
|
)
|
|
(1.8
|
)
|
|
(2.4
|
)
|
Revaluation of unrecognized tax benefits/reserve requirements
(c)
|
(0.4
|
)
|
|
(14.4
|
)
|
|
(0.6
|
)
|
Domestic manufacturing tax deduction
|
(0.9
|
)
|
|
(0.5
|
)
|
|
(2.2
|
)
|
Other items, net
|
1.4
|
|
|
(0.3
|
)
|
|
1.6
|
|
Effective income tax rate
|
18.7
|
%
|
|
3.6
|
%
|
|
8.7
|
%
|
(a)
|
During
2016
,
2015
and
2014
, we received actual and deemed distributions of
$308.4 million
,
$1.4 billion
and
$12.6 million
, respectively, from various foreign subsidiaries and joint ventures, and realized an expense, net of foreign tax credits, of
$67.5 million
,
$350.2 million
and
$2.8 million
, respectively, related to the repatriation of these earnings, which impacted our effective tax rate. Our statutory rate is decreased by of our share of the income of JBC, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The applicable provisions of the Jordanian law, and applicable regulations thereunder, do not have a termination provision and the exemption is indefinite. As a Free Zones company, JBC is not subject to income taxes on the profits of products exported from Jordan, and currently, substantially all of the profits are from exports. This gave us a rate benefit of
7.3%
,
8.2%
, and
12.4%
for 2016, 2015, and 2014, respectively.
|
(b)
|
In prior years, we designated the undistributed earnings of substantially all of our foreign subsidiaries as indefinitely reinvested. In 2015, we were not indefinitely reinvested in a portion of earnings from legacy Rockwood entities that were part of the repatriation planning, for which a deferred tax liability of
$387.0 million
was established in the opening balance sheet. This liability reversed upon the completion of the repatriation with
$356.2 million
impacting earnings and
$30.8 million
from foreign exchange differences. The reversal of this liability offsets the tax amount of
$327.9 million
from legacy Rockwood entities included in the deemed repatriation of foreign income.
|
(c)
|
During 2014, we released various tax reserves primarily related to the expiration of the applicable U.S. federal statute of limitations for 2009 through 2010 which provided a net benefit of approximately
$2.5 million
. In 2015, the main impact is from the release of reserves on the close of a U.S. federal audit, and lapse of statute of limitations. These releases provided a net benefit of approximately
$42.7 million
.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued employee benefits
|
$
|
32,622
|
|
|
$
|
25,519
|
|
Accrued expenses
|
10,065
|
|
|
24,581
|
|
||
Operating loss carryovers
|
91,934
|
|
|
116,686
|
|
||
Pensions
|
96,635
|
|
|
96,133
|
|
||
Tax credit carryovers
|
1,029
|
|
|
2,555
|
|
||
Other
|
34,866
|
|
|
35,557
|
|
||
Gross deferred tax assets
|
267,151
|
|
|
301,031
|
|
||
Valuation allowance
|
(69,900
|
)
|
|
(84,137
|
)
|
||
Deferred tax assets
|
197,251
|
|
|
216,894
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
(379,161
|
)
|
|
(364,657
|
)
|
||
Intangibles
|
(99,969
|
)
|
|
(108,047
|
)
|
||
Hedge of Net Investment of Foreign Subsidiary
|
(51,192
|
)
|
|
(36,537
|
)
|
||
Other
|
(18,536
|
)
|
|
(16,692
|
)
|
||
Deferred tax liabilities
|
(548,858
|
)
|
|
(525,933
|
)
|
||
|
|
|
|
||||
Net deferred tax liabilities
|
$
|
(351,607
|
)
|
|
$
|
(309,039
|
)
|
Classification in the consolidated balance sheets:
|
|
|
|
||||
Noncurrent deferred tax assets
|
$
|
61,132
|
|
|
$
|
75,813
|
|
Noncurrent deferred tax liabilities
|
(412,739
|
)
|
|
(384,852
|
)
|
||
Net deferred tax liabilities
|
$
|
(351,607
|
)
|
|
$
|
(309,039
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1
|
$
|
(84,137
|
)
|
|
$
|
(30,768
|
)
|
|
$
|
(33,757
|
)
|
Additions
(a)
|
(20,568
|
)
|
|
(59,889
|
)
|
|
(1,895
|
)
|
|||
Deductions
|
34,805
|
|
|
6,520
|
|
|
4,884
|
|
|||
Balance at December 31
|
$
|
(69,900
|
)
|
|
$
|
(84,137
|
)
|
|
$
|
(30,768
|
)
|
(a)
|
Additions for the year ended December 31, 2015 includes
$42.0 million
related to the acquisition of Rockwood.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1
|
$
|
95,715
|
|
|
$
|
24,969
|
|
|
$
|
29,143
|
|
Acquisition of Rockwood
|
—
|
|
|
124,758
|
|
|
—
|
|
|||
Divestitures
(a)
|
(55,881
|
)
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions related to prior years
|
548
|
|
|
4,329
|
|
|
—
|
|
|||
Reductions for tax positions related to prior years
|
(1,253
|
)
|
|
(46,211
|
)
|
|
(214
|
)
|
|||
Additions for tax positions related to current year
|
1,271
|
|
|
202
|
|
|
2,232
|
|
|||
Lapses in statutes of limitations/settlements
|
(12,591
|
)
|
|
(6,736
|
)
|
|
(5,057
|
)
|
|||
Foreign currency translation adjustment
|
(2,425
|
)
|
|
(5,596
|
)
|
|
(1,135
|
)
|
|||
Balance at December 31
|
$
|
25,384
|
|
|
$
|
95,715
|
|
|
$
|
24,969
|
|
(a)
|
Reclassified to Other noncurrent liabilities as a result of the indemnification of certain income tax liabilities associated with the Chemetall Surface Treatment entities sold. See Note 16, “Other Noncurrent Liabilities.”
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Exit of phosphorus flame retardants business
(a)
|
$
|
(6,804
|
)
|
|
$
|
—
|
|
Charges in connection with aluminum alkyl supply capacity reduction
(b)
|
—
|
|
|
23,521
|
|
||
Other, net
(c)
|
—
|
|
|
2,426
|
|
||
Total Restructuring and other, net
|
$
|
(6,804
|
)
|
|
$
|
25,947
|
|
(a)
|
In the third quarter of 2015, a gain of
$6.8 million
(
$5.4 million
after i
ncome taxes) was recognized upon the sale of land in Avonmouth, U.K., which was utilized by the phosphorus flame retardants business we exited in 2012. In 2012, charges in connection with our exit of the phosphorus flame retardants business were recorded in Restructuring and other, net, on our consolidated statements of income.
|
(b)
|
In 2014, we initiated action to reduce high cost supply capacity of certain aluminum alkyl products, primarily through the termination of a third party manufacturing contract. Based on the contract termination, we estimated costs of approximately
$14.0 million
(
$9.3 million
after income taxes) in the first quarter and
$6.5 million
(
$4.3 million
after income taxes) in the fourth quarter for contract termination and volume commitments. Additionally, in the first quarter of 2014 we recorded an impairment charge of
$3.0 million
(
$1.9 million
after income taxes) for certain capital project costs also related to aluminum alkyls capacity which we do not expect to recover.
|
(c)
|
The amount for 2014 mainly consists of charges recorded in the second quarter for certain multi-product facility project costs that we do not expect to recover in future periods, net of other credits recorded in the fourth quarter.
|
|
December 31,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Recorded Amount
|
|
Fair Value
|
|
Recorded Amount
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Long-term debt
|
$
|
2,381,370
|
|
|
$
|
2,472,813
|
|
|
$
|
3,834,217
|
|
|
$
|
3,793,179
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
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
|
|
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
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension assets
(d)
|
$
|
520,845
|
|
|
$
|
460,247
|
|
|
$
|
60,598
|
|
|
$
|
—
|
|
Pension assets measured at net asset value
(d)
|
$
|
86,112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Postretirement assets
(d)
|
$
|
2,232
|
|
|
$
|
—
|
|
|
$
|
2,232
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan
(a)
|
$
|
22,037
|
|
|
$
|
22,037
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(e)
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
182
|
|
|
$
|
—
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31, 2015
|
|
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)
|
$
|
21,631
|
|
|
$
|
21,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities
(b)
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value
(b)(c)
|
$
|
2,595
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension assets
(d)
|
$
|
539,249
|
|
|
$
|
481,837
|
|
|
$
|
57,412
|
|
|
$
|
—
|
|
Pension assets measured at net asset value
(d)
|
$
|
80,746
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Postretirement assets
(d)
|
$
|
3,292
|
|
|
$
|
—
|
|
|
$
|
3,292
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan
(a)
|
$
|
21,631
|
|
|
$
|
21,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(e)
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
—
|
|
(a)
|
We maintain an 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 consolidated balance sheets. The changes in fair value are reported in Other income (expenses), net, in our consolidated statements of income.
|
(c)
|
Holdings in 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 as a result of the adoption of new accounting guidance effective January 1, 2016 on a retrospective basis. The fair value amounts of
$5.5 million
and
$2.6 million
as of
December 31, 2016
and
2015
, respectively, are included in this table to permit reconciliation to the marketable equity securities presented in Note 10, “Investments.” See Note 1, “Summary of Significant Accounting Policies,” for additional information.
|
(d)
|
See Note 15 “Pension Plans and Other Postretirement Benefits” for further information about fair value measurements of our pension and postretirement plan assets.
|
(e)
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Sales to unconsolidated affiliates
|
$
|
29,651
|
|
|
$
|
24,180
|
|
|
$
|
45,415
|
|
Purchases from unconsolidated affiliates
|
130,287
|
|
|
115,697
|
|
|
64,631
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
Lithium and Advanced Materials
|
$
|
968,216
|
|
|
$
|
834,590
|
|
|
$
|
312,788
|
|
Bromine Specialties
|
792,425
|
|
|
775,729
|
|
|
808,857
|
|
|||
Refining Solutions
|
732,137
|
|
|
729,261
|
|
|
852,139
|
|
|||
All Other
|
180,988
|
|
|
471,434
|
|
|
471,764
|
|
|||
Corporate
|
3,437
|
|
|
15,415
|
|
|
—
|
|
|||
Total net sales
|
$
|
2,677,203
|
|
|
$
|
2,826,429
|
|
|
$
|
2,445,548
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA:
|
|
|
|
|
|
||||||
Lithium and Advanced Materials
|
$
|
363,360
|
|
|
$
|
312,867
|
|
|
$
|
81,596
|
|
Bromine Specialties
|
226,926
|
|
|
222,653
|
|
|
224,976
|
|
|||
Refining Solutions
|
238,963
|
|
|
197,595
|
|
|
256,485
|
|
|||
All Other
|
14,772
|
|
|
53,993
|
|
|
73,973
|
|
|||
Corporate
|
(85,804
|
)
|
|
(31,108
|
)
|
|
(74,875
|
)
|
|||
Total adjusted EBITDA
|
$
|
758,217
|
|
|
$
|
756,000
|
|
|
$
|
562,155
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Lithium and Advanced Materials
|
|
Bromine Specialties
|
|
Refining Solutions
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
261,394
|
|
|
$
|
187,364
|
|
|
$
|
202,874
|
|
|
$
|
651,632
|
|
|
$
|
131,301
|
|
|
$
|
(139,258
|
)
|
|
$
|
643,675
|
|
Depreciation and amortization
|
101,966
|
|
|
39,562
|
|
|
36,089
|
|
|
177,617
|
|
|
7,302
|
|
|
6,056
|
|
|
190,975
|
|
|||||||
(Gain) loss on sales of businesses, net
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123,831
|
)
|
|
1,533
|
|
|
(122,298
|
)
|
|||||||
Acquisition and integration related costs
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,384
|
|
|
57,384
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,181
|
|
|
65,181
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,263
|
|
|
96,263
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(202,131
|
)
|
|
(202,131
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,589
|
|
|
25,589
|
|
|||||||
Other
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,579
|
|
|
3,579
|
|
|||||||
Adjusted EBITDA
|
$
|
363,360
|
|
|
$
|
226,926
|
|
|
$
|
238,963
|
|
|
$
|
829,249
|
|
|
$
|
14,772
|
|
|
$
|
(85,804
|
)
|
|
$
|
758,217
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
148,821
|
|
|
$
|
186,474
|
|
|
$
|
161,585
|
|
|
$
|
496,880
|
|
|
$
|
32,781
|
|
|
$
|
(194,755
|
)
|
|
$
|
334,906
|
|
Depreciation and amortization
|
84,069
|
|
|
36,179
|
|
|
34,039
|
|
|
154,287
|
|
|
18,183
|
|
|
8,703
|
|
|
181,173
|
|
|||||||
Utilization of inventory markup
(d)
|
79,977
|
|
|
—
|
|
|
—
|
|
|
79,977
|
|
|
3,029
|
|
|
—
|
|
|
83,006
|
|
|||||||
Restructuring and other, net
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,804
|
)
|
|
(6,804
|
)
|
|||||||
Acquisition and integration related costs
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132,299
|
|
|
132,299
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,650
|
|
|
81,650
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,134
|
|
|
11,134
|
|
|||||||
Income from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,476
|
)
|
|
(32,476
|
)
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,300
|
)
|
|
(35,300
|
)
|
|||||||
Other
(f)
|
—
|
|
|
—
|
|
|
1,971
|
|
|
1,971
|
|
|
—
|
|
|
4,441
|
|
|
6,412
|
|
|||||||
Adjusted EBITDA
|
$
|
312,867
|
|
|
$
|
222,653
|
|
|
$
|
197,595
|
|
|
$
|
733,115
|
|
|
$
|
53,993
|
|
|
$
|
(31,108
|
)
|
|
$
|
756,000
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
65,806
|
|
|
$
|
189,059
|
|
|
$
|
223,815
|
|
|
$
|
478,680
|
|
|
$
|
60,495
|
|
|
$
|
(405,859
|
)
|
|
$
|
133,316
|
|
Depreciation and amortization
|
15,790
|
|
|
35,917
|
|
|
32,670
|
|
|
84,377
|
|
|
13,478
|
|
|
2,552
|
|
|
100,407
|
|
|||||||
Restructuring and other, net
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,947
|
|
|
25,947
|
|
|||||||
Acquisition and integration related costs
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,158
|
|
|
30,158
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,358
|
|
|
41,358
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,484
|
|
|
18,484
|
|
|||||||
Loss from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,531
|
|
|
69,531
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,462
|
|
|
125,462
|
|
|||||||
Other
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,492
|
|
|
17,492
|
|
|||||||
Adjusted EBITDA
|
$
|
81,596
|
|
|
$
|
224,976
|
|
|
$
|
256,485
|
|
|
$
|
563,057
|
|
|
$
|
73,973
|
|
|
$
|
(74,875
|
)
|
|
$
|
562,155
|
|
(a)
|
See Note 3, “Divestitures,” for additional information.
|
(b)
|
See Note 2, “Acquisitions,” for additional information.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
(c)
|
Includes amounts recorded in (1) Research and development expenses related to the write-off of fixed assets of
$1.4 million
; (2) Selling, general and administrative expenses related to the net loss on the sales of properties of
$0.9 million
and (3) Other income (expenses), net related to environmental charges related to a site formerly owned by Albemarle of
$2.4 million
, partially offset by a gain related to a previously disposed of site in China of
$1.1 million
.
|
(d)
|
In connection with the acquisition of Rockwood, the Company valued Rockwood’s existing inventory at fair value as of the Acquisition Closing Date, which resulted in a markup of the underlying net book value of the inventory totaling approximately
$103.4 million
. The inventory markup was expensed over the estimated remaining selling period. For the year ended December 31, 2015,
$55.9 million
was included in Cost of goods sold, and Equity in net income of unconsolidated investments was reduced by $
27.1 million
related to the utilization of the inventory markup.
|
(e)
|
See Note 21, “Restructuring and Other,” for additional information.
|
(f)
|
For the year ended December 31, 2015, Refining Solutions includes an impairment charge of approximately
$2.0 million
related to our unconsolidated investment in Fábrica Carioca de Catalisadores SA. For the years ended December 31, 2015 and 2014, Corporate includes approximately
$4.4 million
and
$17.5 million
, respectively, of financing-related fees expensed in connection with the acquisition of Rockwood.
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Identifiable assets:
|
|
|
|
|
|
||||||
Lithium and Advanced Materials
|
$
|
3,809,883
|
|
|
$
|
3,658,669
|
|
|
$
|
351,175
|
|
Bromine Specialties
|
724,218
|
|
|
699,929
|
|
|
734,071
|
|
|||
Refining Solutions
|
913,923
|
|
|
937,445
|
|
|
1,100,361
|
|
|||
Discontinued Operations
|
—
|
|
|
3,208,902
|
|
|
—
|
|
|||
All Other
|
130,595
|
|
|
517,695
|
|
|
268,555
|
|
|||
Corporate
(a)
|
2,582,588
|
|
|
575,314
|
|
|
2,748,275
|
|
|||
Total identifiable assets
|
$
|
8,161,207
|
|
|
$
|
9,597,954
|
|
|
$
|
5,202,437
|
|
Goodwill:
|
|
|
|
|
|
||||||
Lithium and Advanced Materials
|
$
|
1,348,261
|
|
|
$
|
1,267,505
|
|
|
$
|
21,697
|
|
Bromine Specialties
|
20,319
|
|
|
20,319
|
|
|
20,319
|
|
|||
Refining Solutions
|
164,866
|
|
|
172,728
|
|
|
192,657
|
|
|||
All Other
|
6,586
|
|
|
—
|
|
|
8,589
|
|
|||
Total goodwill
|
$
|
1,540,032
|
|
|
$
|
1,460,552
|
|
|
$
|
243,262
|
|
(a)
|
As of December 31, 2016, Corporate included the net proceeds received from the sale of the Chemetall Surface Treatment business completed on December 14, 2016, less the repayment of the term loans and commercial paper using those proceeds. As of December 31, 2014, Corporate included net proceeds received from the issuance of the 2014 Senior Notes, which, together with borrowings from our Commercial Paper Notes, August 2014 Term Loan Agreement and Cash Bridge Facility, were used to finance the cash portion of the Merger Consideration, pay related fees and expenses and repay our senior notes which matured on February 1, 2015. See Note 2, “Acquisitions,” Note 3, “Divestitures,” and Note 14, “Long-Term Debt” for additional details about these transactions.
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Lithium and Advanced Materials
|
$
|
101,966
|
|
|
$
|
84,069
|
|
|
$
|
15,790
|
|
Bromine Specialties
|
39,562
|
|
|
36,179
|
|
|
35,917
|
|
|||
Refining Solutions
|
36,089
|
|
|
34,039
|
|
|
32,670
|
|
|||
Discontinued Operations
|
35,194
|
|
|
78,903
|
|
|
3,165
|
|
|||
All Other
|
7,302
|
|
|
18,183
|
|
|
13,478
|
|
|||
Corporate
|
6,056
|
|
|
8,703
|
|
|
2,552
|
|
|||
Total depreciation and amortization
|
$
|
226,169
|
|
|
$
|
260,076
|
|
|
$
|
103,572
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Lithium and Advanced Materials
|
$
|
91,967
|
|
|
$
|
104,344
|
|
|
$
|
12,888
|
|
Bromine Specialties
|
46,414
|
|
|
54,994
|
|
|
39,392
|
|
|||
Refining Solutions
|
27,546
|
|
|
28,836
|
|
|
49,219
|
|
|||
Discontinued Operations
|
19,281
|
|
|
23,738
|
|
|
—
|
|
|||
All Other
|
9,251
|
|
|
13,054
|
|
|
9,053
|
|
|||
Corporate
|
2,195
|
|
|
2,683
|
|
|
24
|
|
|||
Total capital expenditures
|
$
|
196,654
|
|
|
$
|
227,649
|
|
|
$
|
110,576
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Net Sales:
|
|
|
|
|
|
||||||
United States
|
$
|
797,267
|
|
|
$
|
911,519
|
|
|
$
|
884,373
|
|
Foreign
(a)
|
1,879,936
|
|
|
1,914,910
|
|
|
1,561,175
|
|
|||
Total
|
$
|
2,677,203
|
|
|
$
|
2,826,429
|
|
|
$
|
2,445,548
|
|
(a)
|
In 2016, net sales to China represented 13% of total net sales. No net sales in any other foreign country exceed
10%
of total net sales. Also, net sales are attributed to countries based upon shipments to final destination.
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Long-Lived Assets:
|
|
|
|
|
|
||||||
United States
|
$
|
850,689
|
|
|
$
|
800,214
|
|
|
$
|
698,863
|
|
Chile
|
922,878
|
|
|
916,965
|
|
|
—
|
|
|||
Netherlands
|
145,917
|
|
|
155,128
|
|
|
167,965
|
|
|||
Jordan
|
227,222
|
|
|
230,460
|
|
|
227,805
|
|
|||
Australia
|
288,553
|
|
|
280,222
|
|
|
—
|
|
|||
Brazil
|
46,380
|
|
|
39,299
|
|
|
59,474
|
|
|||
Germany
|
117,027
|
|
|
137,890
|
|
|
75,813
|
|
|||
China
|
31,564
|
|
|
4,773
|
|
|
5,310
|
|
|||
France
|
39,470
|
|
|
39,344
|
|
|
37,347
|
|
|||
Korea
|
65,963
|
|
|
72,685
|
|
|
80,362
|
|
|||
United Kingdom
|
3,665
|
|
|
3,665
|
|
|
3,665
|
|
|||
Other foreign countries
|
54,271
|
|
|
55,234
|
|
|
48,819
|
|
|||
Total
|
$
|
2,793,599
|
|
|
$
|
2,735,879
|
|
|
$
|
1,405,423
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Lithium and Advanced Materials:
|
|
|
|
|
|
||||||
Lithium
|
$
|
668,852
|
|
|
$
|
508,844
|
|
|
$
|
—
|
|
Performance Catalyst Solutions
|
299,364
|
|
|
325,746
|
|
|
312,788
|
|
|||
Total Lithium and Advanced Materials
|
$
|
968,216
|
|
|
$
|
834,590
|
|
|
$
|
312,788
|
|
|
|
|
|
|
|
||||||
Bromine Specialties
|
$
|
792,425
|
|
|
$
|
775,729
|
|
|
$
|
808,857
|
|
|
|
|
|
|
|
||||||
Refining Solutions
|
$
|
732,137
|
|
|
$
|
729,261
|
|
|
$
|
852,139
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
657,211
|
|
|
$
|
669,327
|
|
|
$
|
654,010
|
|
|
$
|
696,655
|
|
Gross profit
|
$
|
242,534
|
|
|
$
|
248,104
|
|
|
$
|
238,972
|
|
|
$
|
240,966
|
|
Gain on sales of businesses, net
(a)
|
$
|
(121,324
|
)
|
|
$
|
(974
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition and integration related costs
(b)
|
$
|
18,558
|
|
|
$
|
19,030
|
|
|
$
|
6,749
|
|
|
$
|
13,047
|
|
Net income from continuing operations
|
$
|
218,236
|
|
|
$
|
95,586
|
|
|
$
|
114,512
|
|
|
$
|
50,304
|
|
Income (loss) from discontinued operations (net of tax)
(c)
|
17,312
|
|
|
(398,340
|
)
|
|
23,185
|
|
|
559,974
|
|
||||
Net income attributable to noncontrolling interests
|
(7,362
|
)
|
|
(12,067
|
)
|
|
(9,477
|
)
|
|
(8,188
|
)
|
||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
228,186
|
|
|
$
|
(314,821
|
)
|
|
$
|
128,220
|
|
|
$
|
602,090
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.88
|
|
|
$
|
0.74
|
|
|
$
|
0.93
|
|
|
$
|
0.37
|
|
Discontinued operations
|
0.15
|
|
|
(3.54
|
)
|
|
0.21
|
|
|
4.98
|
|
||||
|
$
|
2.03
|
|
|
$
|
(2.80
|
)
|
|
$
|
1.14
|
|
|
$
|
5.35
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used to compute basic earnings per share
|
112,260
|
|
|
112,339
|
|
|
112,429
|
|
|
112,487
|
|
||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.87
|
|
|
$
|
0.74
|
|
|
$
|
0.93
|
|
|
$
|
0.37
|
|
Discontinued operations
|
0.15
|
|
|
(3.52
|
)
|
|
0.20
|
|
|
4.93
|
|
||||
|
$
|
2.02
|
|
|
$
|
(2.78
|
)
|
|
$
|
1.13
|
|
|
$
|
5.30
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used to compute diluted earnings per share
|
112,770
|
|
|
113,175
|
|
|
113,448
|
|
|
113,563
|
|
Albemarle Corporation and Subsidiaries
|
||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
692,313
|
|
|
$
|
718,290
|
|
|
$
|
693,216
|
|
|
$
|
722,610
|
|
Gross profit
|
$
|
191,384
|
|
|
$
|
212,031
|
|
|
$
|
219,045
|
|
|
$
|
237,773
|
|
Restructuring and other, net
(d)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,804
|
)
|
|
$
|
—
|
|
Acquisition and integration related costs
(b)
|
$
|
57,825
|
|
|
$
|
22,832
|
|
|
$
|
36,514
|
|
|
$
|
15,128
|
|
Net income from continuing operations
(e)
|
$
|
49,253
|
|
|
$
|
49,218
|
|
|
$
|
59,842
|
|
|
$
|
169,275
|
|
(Loss) income from discontinued operations (net of tax)
|
(2,104
|
)
|
|
10,148
|
|
|
11,030
|
|
|
13,402
|
|
||||
Net income attributable to noncontrolling interests
|
(4,034
|
)
|
|
(7,219
|
)
|
|
(5,480
|
)
|
|
(8,425
|
)
|
||||
Net income attributable to Albemarle Corporation
|
$
|
43,115
|
|
|
$
|
52,147
|
|
|
$
|
65,392
|
|
|
$
|
174,252
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
(e)
|
$
|
0.42
|
|
|
$
|
0.37
|
|
|
$
|
0.48
|
|
|
$
|
1.43
|
|
Discontinued operations
|
(0.02
|
)
|
|
0.09
|
|
|
0.10
|
|
|
0.12
|
|
||||
|
$
|
0.40
|
|
|
$
|
0.46
|
|
|
$
|
0.58
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used to compute basic earnings per share
|
108,130
|
|
|
112,189
|
|
|
112,202
|
|
|
112,207
|
|
||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
(e)
|
$
|
0.42
|
|
|
$
|
0.37
|
|
|
$
|
0.48
|
|
|
$
|
1.43
|
|
Discontinued operations
|
(0.02
|
)
|
|
0.09
|
|
|
0.10
|
|
|
0.12
|
|
||||
|
$
|
0.40
|
|
|
$
|
0.46
|
|
|
$
|
0.58
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used to compute diluted earnings per share
|
108,464
|
|
|
112,607
|
|
|
112,544
|
|
|
112,608
|
|
(a)
|
Included in Gain on sales of businesses, net for the year ended December 31, 2016 is
$11.5 million
and
$112.3 million
related to the sales of the metal sulfides business and the minerals-based flame retardants and specialty chemicals business, respectively, both of which closed in the first quarter of 2016. In addition, Gain on sales of businesses, net for the year ended December 31, 2016 includes a loss of
$1.5 million
on the sale of our wafer reclaim business. See Note 3, “Divestitures,” for additional information.
|
(b)
|
See Note 2, “Acquisitions,” for additional information.
|
(c)
|
Included in Income (loss) from discontinued operations (net of tax) for the second quarter of 2016 is a nonrecurring, non-cash tax charge of
$416.7 million
related to the change in the Company’s assertion over book and tax basis differences for certain entities included in the sale of the Chemetall Surface Treatment business. In the fourth quarter of 2016, this non-cash tax charge was reversed as a result of the completion of the sale. In addition, the fourth quarter of 2016 includes an after-tax gain of
$135.0 million
as a result of the sale of the Chemetall Surface Treatment business.
|
(d)
|
See Note 21, “Restructuring and Other.”
|
(e)
|
The fourth quarter of 2015 includes an income tax benefit of
$43.1 million
primarily related to the release of certain tax reserves associated with lapses in statutes of limitations and audit closures.
|
Albemarle Corporation and Subsidiaries
|
||
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Albemarle Corporation and Subsidiaries
|
||
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)(3)
|
|
Exhibits
|
|
|
|
|
|
The following documents are filed as exhibits to this Annual Report on Form 10-K pursuant to Item 601 of Regulation S-K:
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of July 15, 2014, among Albemarle Corporation, Albemarle Holdings Corporation and Rockwood Holdings, Inc. [filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on July 18, 2014, and incorporated herein by reference].
|
Albemarle Corporation and Subsidiaries
|
||
|
|
|
|
2.2
|
|
Share Purchase Agreement, dated as of June 17, 2016, between Albemarle Corporation and BASF SE [filed as Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (No. 1-12658), filed on August 5, 2016, and incorporated herein by reference].
|
|
|
|
*2.3
|
|
First Amendment to the Share Purchase Agreement, dated December 7, 2016, between Albemarle Corporation and BASF SE.
|
|
|
|
*2.4
|
|
Second Amendment to the Share Purchase Agreement, dated December 14, 2016, between Albemarle Corporation and BASF SE.
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation (including Amendment thereto) of Albemarle Corporation [filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-119723) filed on October 13, 2004, and incorporated herein by reference].
|
|
|
|
3.2
|
|
Amended and Restated Bylaws, effective January 12, 2015, of Albemarle Corporation [filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 12, 2015, and incorporated herein by reference].
|
|
|
|
4.1
|
|
Indenture, dated as of January 20, 2005, between Albemarle Corporation and The Bank of New York, as trustee [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 20, 2005, and incorporated herein by reference].
|
|
|
|
4.2
|
|
Second Supplemental Indenture, dated as of December 10, 2010, between Albemarle Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York [filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 10, 2010, and incorporated herein by reference].
|
|
|
|
4.3
|
|
Third Supplemental Indenture, dated as of November 24, 2014, among Albemarle Corporation, Albemarle Holdings Corporation (now Rockwood Holdings, Inc.) and Albemarle Holdings II Corporation (now Rockwood Specialties Group, Inc.) and U.S. Bank National Association, as trustee [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by reference].
|
|
|
|
4.4
|
|
Fourth Supplemental Indenture, dated as of January 29, 2015, among Albemarle Corporation, Rockwood Holdings, Inc. (as successor by merger to Albemarle Holdings Corporation), Rockwood Specialties Group, Inc. (as successor by merger to Albemarle Holdings II Corporation), The Bank of New York Mellon Trust Company, N.A., a national banking association, as successor to The Bank of New York, as resigning trustee, and U.S. Bank National Association, as successor trustee [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 29, 2015, and incorporated herein by reference].
|
|
|
|
4.5
|
|
Form of Global Security for the 4.50% Senior Notes due 2020 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 10, 2010, and incorporated herein by reference].
|
|
|
|
4.6
|
|
Form of Global Security for the 3.000% Senior Notes due 2019 [filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by reference].
|
|
|
|
4.7
|
|
Form of Global Security for the 4.150% Senior Notes due 2024 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by reference].
|
|
|
|
4.8
|
|
Form of Global Security for the 5.450% Senior Notes due 2044 [filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by reference].
|
|
|
|
4.9
|
|
Form of Global Security for the 1.875% Senior Notes due 2021 [filed as Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.1
|
|
2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors of Albemarle Corporation [filed as Annex A to the Company’s definitive Proxy Statement on Schedule 14A (No. 1-12658) filed on March 28, 2013, and incorporated herein by reference].
|
|
|
|
Albemarle Corporation and Subsidiaries
|
||
|
10.2
|
|
First Amendment to the Albemarle Corporation Stock Compensation and Deferral Election Plan [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.3
|
|
Compensation Arrangement with Luther C. Kissam, IV, dated August 29, 2003 [filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.4
|
|
Albemarle Corporation 2003 Incentive Plan, adopted January 31, 2003 and approved by the shareholders on March 26, 2003 [filed as Annex A to the Company’s Definitive Proxy Statement on Schedule 14A (No. 1-12658) filed on February 26, 2003, and incorporated herein by reference].
|
|
|
|
10.5
|
|
First Amendment to the Albemarle Corporation 2003 Incentive Plan, dated as of December 13, 2006 [filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 18, 2006, and incorporated herein by reference].
|
|
|
|
10.6
|
|
Notice of Performance Unit Award [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 25, 2013, and incorporated herein by reference].
|
|
|
|
10.7
|
|
Notice of Restricted Stock Unit Award [filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 25, 2013, and incorporated herein by reference].
|
|
|
|
10.8
|
|
Notice of Option Grant [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 25, 2013, and incorporated herein by reference].
|
|
|
|
10.9
|
|
Notice of Performance-Based Restricted Stock Unit Award [filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28, 2014, and incorporated herein by reference].
|
|
|
|
10.10
|
|
Notice of Restricted Stock Unit Award [filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28, 2014, and incorporated herein by reference].
|
|
|
|
10.11
|
|
Notice of Option Grant [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28, 2014, and incorporated herein by reference].
|
|
|
|
10.12
|
|
Notice of TSR Performance Unit Award [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28, 2014, and incorporated herein by reference].
|
|
|
|
10.13
|
|
Notice of Option Grant [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 2, 2015, and incorporated herein by reference].
|
|
|
|
10.14
|
|
Notice of TSR Performance Unit Award [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 2, 2015, and incorporated herein by reference].
|
|
|
|
10.15
|
|
Notice of Restricted Stock Unit Award (2015) [filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.16
|
|
Notice of Option Grant [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 2, 2016, and incorporated herein by reference].
|
|
|
|
10.17
|
|
Notice of Restricted Stock Unit Award [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 2, 2016, and incorporated herein by reference].
|
|
|
|
10.18
|
|
Notice of TSR Performance Unit Award [filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 2, 2016, and incorporated herein by reference].
|
|
|
|
10.19
|
|
Form Notice of Option Grant under the Albemarle Corporation 2008 Incentive Plan [filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
|
|
|
|
Albemarle Corporation and Subsidiaries
|
||
|
10.20
|
|
Form Notice of Restricted Stock Unit Award under the Albemarle Corporation 2008 Incentive Plan [filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
|
|
|
|
10.21
|
|
Form Notice of TSR Performance Unit Award under the Albemarle Corporation 2008 Incentive Plan [filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
|
|
|
|
10.22
|
|
Amended and Restated Albemarle Corporation Supplemental Executive Retirement Plan, effective as of January 1, 2005 [filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.23
|
|
First Amendment to the Albemarle Corporation Supplemental Executive Retirement Plan, dated December 1, 2010 [filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.24
|
|
Second Amendment to the Albemarle Corporation Supplemental Executive Retirement Plan, dated December 18, 2011 [filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.25
|
|
Third Amendment to the Albemarle Corporation Supplemental Executive Retirement Plan, dated December 2, 2013 [filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.26
|
|
Form of Severance Compensation Agreement (Pension-Eligible Employees) [filed as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.27
|
|
Form of Severance Compensation Agreement (Non-Pension-Eligible Employees) [filed as Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.28
|
|
Form of Amendment to Severance Compensation Agreement [filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.29
|
|
Second Amendment to Severance Compensation Agreement between Luther C. Kissam, IV and Albemarle Corporation [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
|
|
|
|
10.30
|
|
Form of Second Amendment to Severance Compensation Agreement between each of Karen Narwold, Scott Tozier, and Matthew Juneau, and Albemarle Corporation [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
|
|
|
|
10.31
|
|
Albemarle Corporation Severance Pay Plan, as revised effective as of December 13, 2006 [filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 18, 2006, and incorporated herein by reference].
|
|
|
|
10.32
|
|
Amended and Restated Albemarle Corporation Benefits Protection Trust, effective as of December 13, 2006 [filed as Exhibit 10.9 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 18, 2006, and incorporated herein by reference].
|
|
|
|
10.33
|
|
Albemarle Corporation Employee Relocation Policy [filed as Exhibit 10.33 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.34
|
|
Albemarle Corporation 2008 Incentive Plan, as amended and restated as of April 20, 2010 [filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-8 (No. 333-166828) filed on May 14, 2010, and incorporated herein by reference].
|
|
|
|
Albemarle Corporation and Subsidiaries
|
||
|
10.35
|
|
Amended and Restated Albemarle Corporation Executive Deferred Compensation Plan, effective as of January 1, 2013 [filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.36
|
|
First Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of November 14, 2014 [filed as Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.37
|
|
Second Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of February 12, 2015 [filed as Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.38
|
|
Third Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of July 31, 2015 [filed as Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.39
|
|
Fourth Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of December 17, 2015 [filed as Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.40
|
|
Share Purchase Agreement dated August 31, 2006 among Albemarle Corporation, Albemarle Overseas Development Corporation and International Chemical Investors, SA [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.41
|
|
Credit Agreement, dated as of February 7, 2014, among Albemarle Corporation and Albemarle Global Finance Company SCA, as borrowers, certain of the Company’s subsidiaries that from time to time become parties thereto, the several banks and other financial institutions as may from time to time become parties thereto, and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 7, 2014, and incorporated herein by reference].
|
|
|
|
10.42
|
|
Credit Agreement, dated as of August 15, 2014, among Albemarle Corporation as borrower, certain of Albemarle Corporation’s subsidiaries that from time to time become parties thereto, as guarantors, the several banks and other financial institutions that may from time to time become parties thereto, and Bank of America, N.A., as Administrative Agent [filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-4 (No. 333-198415) filed on August 28, 2014, and incorporated herein by reference].
|
|
|
|
10.43
|
|
First Amendment to Credit Agreement, dated as of August 15, 2014, among Albemarle Corporation and Albemarle Global Finance Company SCA, as borrowers, the several banks and other financial institutions that may from time to time become parties thereto, and Bank of America, N.A., as Administrative Agent [filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-4 (No. 333-198415) filed on August 28, 2014, and incorporated herein by reference].
|
|
|
|
10.44
|
|
Cash Bridge Credit Agreement, dated as of December 2, 2014, among Albemarle Corporation as Borrower, the Lenders party thereto, and Bank of America, N.A., as Administrative Agent [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 8, 2014, and incorporated herein by reference].
|
|
|
|
10.45
|
|
Consent, dated November 24, 2014, of Bank of America, N.A., as Administrative Agent, to Albemarle Corporation, regarding the Credit Agreement, dated as of February 7, 2014 [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 8, 2014, and incorporated herein by reference].
|
|
|
|
10.46
|
|
Consent, dated November 24, 2014, of Bank of America, N.A., as Administrative Agent, to Albemarle Corporation, regarding the Credit Agreement, dated as of August 15, 2014 [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 8, 2014, and incorporated herein by reference].
|
|
|
|
Albemarle Corporation and Subsidiaries
|
||
|
10.47
|
|
First Amendment to Credit Agreement (Term Loan), dated as of December 22, 2014, among Albemarle Corporation, as borrower, certain of Albemarle Corporation’s subsidiaries that from time to time become parties thereto, as guarantors, the several banks and other financial institutions as may from time to time become parties thereto, and Bank of America, N.A., as Administrative Agent [filed as Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.48
|
|
Second Amendment to Credit Agreement and Increase of Aggregate Commitments, dated as of December 22, 2014, among Albemarle Corporation and Albemarle Global Finance Company SCA, as borrowers, the several banks and other financial institutions as may from time to time become parties thereto, and Bank of America, N.A., as Administrative Agent [filed as Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.49
|
|
Third Amendment to Credit Agreement, dated as of September 14, 2015, among Albemarle Corporation and Albemarle Global Finance Company SCA, as borrowers, the several banks and other financial institutions as may from time to time become parties thereto, and Bank of America, N.A., as Administrative Agent [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (No. 1-12658), and incorporated herein by reference].
|
|
|
|
10.50
|
|
Term Loan Agreement, dated as of September 14, 2015, among Albemarle Corporation, as borrower, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on September 14, 2015, and incorporated herein by reference].
|
|
|
|
*12.1
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
*21.1
|
|
Subsidiaries of the Company.
|
|
|
|
*23.1
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
|
*31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
*31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
*32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*99.1
|
|
Five-Year Summary.
|
|
|
|
*101
|
|
Interactive Data Files (Annual Report on Form 10-K, for the fiscal year ended December 31, 2016, furnished in XBRL (eXtensible Business Reporting Language)).
|
|
|
|
|
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income for the fiscal years ended December 31, 2016, 2015 and 2014, (ii) the Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended December 31, 2016, 2015 and 2014, (iii) the Consolidated Balance Sheets at December 31, 2016 and 2015, (iv) the Consolidated Statements of Changes in Equity for the fiscal years ended December 31, 2016, 2015 and 2014, (v) the Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2016, 2015 and 2014 and (vi) the Notes to Consolidated Financial Statements.
|
*
|
Included with this filing.
|
Item 16.
|
Form 10-K Summary.
|
Albemarle Corporation and Subsidiaries
|
||
|
|
|
|
A
LBEMARLE
C
ORPORATION
(Registrant)
|
||
|
|
|
By:
|
|
/
S
/ L
UTHER
C. K
ISSAM
IV
|
|
|
(Luther C. Kissam IV)
|
|
|
Chairman, President and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
/
S
/ L
UTHER
C. K
ISSAM
IV
|
|
Chairman, President and Chief Executive Officer (principal executive
|
(Luther C. Kissam IV)
|
|
officer)
|
|
|
|
/
S
/ S
COTT
A. T
OZIER
|
|
Executive Vice President, Chief Financial Officer (principal financial
|
(Scott A. Tozier)
|
|
officer)
|
|
|
|
/
S
/ D
ONALD
J. L
A
B
AUVE
, J
R
.
|
|
Vice President, Corporate Controller and Chief Accounting Officer (principal accounting officer)
|
(Donald J. LaBauve, Jr.)
|
|
|
|
|
|
/
S
/ W
ILLIAM
H. H
ERNANDEZ
|
|
Director
|
(William H. Hernandez)
|
|
|
|
|
|
/
S
/ D
OUGLAS
L. M
AINE
|
|
Director
|
(Douglas L. Maine)
|
|
|
|
|
|
/
S
/ J. K
ENT
M
ASTERS
|
|
Director
|
(J. Kent Masters)
|
|
|
|
|
|
/
S
/ J
IM
W. N
OKES
|
|
Director
|
(Jim W. Nokes)
|
|
|
|
|
|
/
S
/ J
AMES
J. O’B
RIEN
|
|
Director
|
(James J. O’Brien)
|
|
|
|
|
|
/
S
/ B
ARRY
W. P
ERRY
|
|
Director
|
(Barry W. Perry)
|
|
|
|
|
|
/
S
/ J
OHN
S
HERMAN
, J
R
.
|
|
Director
|
(John Sherman, Jr.)
|
|
|
|
|
|
/
S
/ G
ERALD
A
.
S
TEINER
|
|
Director
|
(Gerald A. Steiner)
|
|
|
|
|
|
/
S
/ H
ARRIETT
T
EE
T
AGGART
|
|
Director
|
(Harriett Tee Taggart)
|
|
|
|
|
|
/
S
/ A
LEJANDRO
D. W
OLFF
|
|
Director
|
(Alejandro D. Wolff)
|
|
|
By:
|
/s/ Karen G. Narwold
|
|
Name: Karen G. Narwold
|
|
Title: Executive Vice President and
|
|
Chief Administrative Officer
|
By:
|
/s/ Carsten Rödder
|
|
Name: Carsten Rödder
|
|
Title: Vice President
|
By:
|
/s/ Dagmar Dülberg
|
|
Name: Dagmar Dülberg
|
|
Title: Vice President
|
By:
|
/s/ Matthew Lepore
|
|
Name: Matthew Lepore
|
|
Title: Sr. V.P. and General Counsel,
|
|
Chief Compliance Officer
|
By:
|
/s/ Karen Killeen
|
|
Name: Karen Killeen
|
|
Title: Assistant Secretary
|
By:
|
/s/ Georg Franzmann
|
|
Name: Georg Franzmann
|
|
Title: Director
|
By:
|
/s/ Michael Winter
|
|
Name: Michael Winter
|
|
Title: Director
|
By:
|
/s/ Eugene Over, Jr.
|
|
Name: Eugene Over, Jr.
|
|
Title: Gerant
|
By:
|
/s/ Dr. Wolfgang Zettel
|
|
Name: Dr. Wolfgang Zettel
|
|
Title: Managing Director
|
(a)
|
The definition of “Ancillary Agreements” in Section 1.01 of the Agreement is hereby deleted in its entirety and replaced with the following:
|
(b)
|
Section 1.01 of the Agreement is hereby amended by adding the following defined term in alphabetical order therein:
|
(c)
|
Section 1.01 of the Agreement is hereby amended by adding the following defined term in alphabetical order therein:
|
(d)
|
The definition of “RSGG Pre-Closing Tax Return” is deleted in its entirety and replaced with the following:
|
(e)
|
The definition of “Third-Party Indebtedness” in Section 1.01 of the Agreement is hereby deleted in its entirety and replaced with the following:
|
(a)
|
the Purchaser has informed the Seller that it shall elect to make the Section 338(h)(10) Election with respect to the Chemetall US Shares and that it expects to make an election under Section 338(g) of the Code with respect to each of Chemetall US’s non-U.S. Subsidiaries;
|
(b)
|
the Seller has informed the Purchaser that no Make-Whole Payment shall be required in connection with the Section 338 Elections, and as a result all
|
(c)
|
the Purchaser shall provide the Seller with the notice and determination set forth in clauses (i) through (iii) of Section 7.08(b) of the Agreement no later than 120 days after the Closing Date (rather than 60 days as set forth in Section 7.08(b) of the Agreement);
|
(d)
|
the Seller shall, within 30 days following the delivery of the notice described in clause (c) above and the determination pursuant to Section 7.08(b) of the Agreement, provide the Purchaser with the information set forth in clause (i) of Section 7.08(c) of the Agreement and the parties shall have no other obligations with respect to Section 7.08(c) of the Agreement;
|
(e)
|
Section 7.08(d) of the Agreement shall apply only with respect to any unresolved disagreement between the Purchaser and the Seller regarding such notice and determination pursuant to Section 7.08(b) of the Agreement, and only to the extent that the Purchase and the Seller are unable to resolve any disagreement regarding such notice and determination as reflected in the information provided by the Seller pursuant to clause (i) of Section 7.08(c) of the Agreement.
|
By:
|
/s/ Karen G. Narwold
|
|
Name: Karen G. Narwold
|
|
Title: Executive Vice President and
|
|
Chief Administrative Officer
|
By:
|
/s/ Stefan John
|
|
Name: Stefan John
|
|
Title: Senior Vice President
|
By:
|
/s/ Jürgen Herzog
|
|
Name: Jürgen Herzog
|
|
Title: Vice President
|
By:
|
/s/ Eugene Over, Jr.
|
|
Name: Eugene Over, Jr.
|
|
Title: Gerant
|
By:
|
/s/ Dr. Wolfgang Zettel
|
|
Name: Dr. Wolfgang Zettel
|
|
Title: Managing Director
|
By:
|
/s/ Matthew Lepore
|
|
Name: Matthew Lepore
|
|
Title: Sr. V.P., General Counsel and
|
|
Secretary
|
By:
|
/s/ Catherine A. Trinkle
|
|
Name: Catherine A. Trinkle
|
|
Title: Assistant Secretary
|
By:
|
/s/ Georg Franzmann
|
|
Name: Georg Franzmann
|
|
Title: Director
|
By:
|
/s/ Harald Fettkamp
|
|
Name: Harald Fettkamp
|
|
Title: Director
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations before adjustment for net income attributable to noncontrolling interests or equity in net income or losses of unconsolidated investments
|
$
|
515,264
|
|
|
$
|
310,744
|
|
|
$
|
213,179
|
|
|
$
|
538,442
|
|
|
$
|
368,212
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (before capitalized interest and loss on extinguishment of debt)
|
70,096
|
|
|
87,484
|
|
|
43,774
|
|
|
37,701
|
|
|
38,777
|
|
|||||
Portion (1/3) of rents representing interest factor
|
10,462
|
|
|
11,607
|
|
|
10,641
|
|
|
10,241
|
|
|
11,028
|
|
|||||
Total fixed charges
|
80,558
|
|
|
99,091
|
|
|
54,415
|
|
|
47,942
|
|
|
49,805
|
|
|||||
Amortization of capitalized interest
|
2,485
|
|
|
2,551
|
|
|
2,163
|
|
|
1,987
|
|
|
1,527
|
|
|||||
Distributed income of unconsolidated investments
|
43,759
|
|
|
59,912
|
|
|
40,688
|
|
|
21,632
|
|
|
26,908
|
|
|||||
Interest capitalized
|
(6,836
|
)
|
|
(11,187
|
)
|
|
(2,416
|
)
|
|
(6,142
|
)
|
|
(5,977
|
)
|
|||||
Net income attributable to noncontrolling interests (net of tax)
|
(37,094
|
)
|
|
(25,158
|
)
|
|
(27,590
|
)
|
|
(26,663
|
)
|
|
(18,591
|
)
|
|||||
Pre-tax income from continuing operations before adjustment for net income attributable to noncontrolling interests or equity in net income or losses of unconsolidated investments plus fixed charges, amortization of capitalized interest, less interest capitalized and net income attributable to noncontrolling interests that have not incurred fixed charges
|
$
|
598,136
|
|
|
$
|
435,953
|
|
|
$
|
280,439
|
|
|
$
|
577,198
|
|
|
$
|
421,884
|
|
Ratio of earnings to fixed charges
|
7.4
|
|
|
4.4
|
|
|
5.2
|
|
|
12.0
|
|
|
8.5
|
|
NAME
|
|
PLACE OF FORMATION
|
ACI Cyprus, L.L.C.
|
|
Delaware
|
Albemarle Australia Pty Ltd.
|
|
Australia
|
Albemarle Avonmouth Works Limited
|
|
United Kingdom
|
Albemarle Brazil Holdings LTDA.
|
|
Brazil
|
Albemarle Cambridge Chemicals Limited
|
|
United Kingdom
|
Albemarle Care Fund
|
|
Virginia
|
Albemarle Catalysts Company B.V.
|
|
Netherlands
|
Albemarle Chemical Canada Ltd.
|
|
Canada
|
Albemarle Chemicals (Shanghai) Company Limited
|
|
China
|
Albemarle Chemicals Korea, Ltd.
|
|
Korea
|
Albemarle Chemicals Ltd.
|
|
Cyprus
|
Albemarle Chemicals Private Limited
|
|
India
|
Albemarle Chemicals S.A.S.
|
|
France
|
Albemarle Chemicals South Africa (PTY) Ltd.
|
|
South Africa
|
Albemarle de Venezuela C.A.
|
|
Venezuela
|
Albemarle Dynamic B.V.
|
|
Netherlands
|
Albemarle Dynamic Holding Company CV
|
|
Netherlands
|
Albemarle Europe Sprl
|
|
Belgium
|
Albemarle Foundation
|
|
Virginia
|
Albemarle Global Finance Company SCA
|
|
Belgium
|
Albemarle Global Holdings Ltd
|
|
Seychelles
|
Albemarle Hilfe GmbH Unterstutzungskasse
|
|
Germany
|
Albemarle Holdings Company Limited
|
|
Turks & Caicos Islands
|
Albemarle Holdings Limited
|
|
China
|
Albemarle Hungary Ltd.
|
|
Hungary
|
Albemarle International Holdings CV
|
|
Netherlands
|
Albemarle Israel Limited
|
|
Israel
|
Albemarle Italy S.R.L.
|
|
Italy
|
Albemarle Japan Corporation
|
|
Japan
|
Albemarle Japan Holdings B.V.
|
|
Netherlands
|
Albemarle Knight Lux 1 Holdings Corporation
|
|
Delaware
|
Albemarle Korea Corporation
|
|
Korea
|
Albemarle Lithium Holding GmbH
|
|
Germany
|
Albemarle Management (Shanghai) Co., Ltd.
|
|
China
|
Albemarle Medway U.K. Limited
|
|
United Kingdom
|
Albemarle Middle East Corporation FZE
|
|
United Arab Emirates
|
Albemarle Netherlands B.V.
|
|
Netherlands
|
Albemarle Netherlands Holdings, CV
|
|
Netherlands
|
Albemarle New Holding GmbH
|
|
Germany
|
Albemarle Overseas Employment Corporation
|
|
Virginia
|
Albemarle Quimica LTDA
|
|
Brazil
|
Albemarle Saudi Trading Company
|
|
Saudi Arabia
|
Albemarle Singapore PTE LTD
|
|
Singapore
|
NAME
|
|
PLACE OF FORMATION
|
Albemarle Spain S.L.U.
|
|
Spain
|
Albemarle Taiwan Limited
|
|
Taiwan
|
Albemarle Virginia Corporation
|
|
Virginia
|
Chemetall Corporation
|
|
United States
|
DNVJ Vermögensverwaltung GmbH
|
|
Germany
|
Dynamit Nobel GmbH
|
|
Germany
|
Dynamit Nobel Unterstützungsfonds GmbH
|
|
Germany
|
Excalibur Realty Company
|
|
Delaware
|
Excalibur II Realty Company
|
|
Delaware
|
Foote Chile Holding Company
|
|
Delaware
|
Foote Minera e Inversiones Ltda.
|
|
Chile
|
Jiangxi Albemarle Lithium Co., Ltd.
|
|
China
|
Jordan Bromine Company Limited
|
|
Jordan
|
Knight Lux 1 S.à r.l.
|
|
Luxembourg
|
Knight Lux 2 S.à r.l.
|
|
Luxembourg
|
Metalon Environmental Management & Solutions GmbH
|
|
Germany
|
Ningbo Jinhai Albemarle Chemical and Industry Co., Ltd.
|
|
China
|
Rockwood Holdings, Inc.
|
|
Delaware
|
Rockwood Lithium, Inc.
|
|
Delaware
|
Rockwood Lithium GmbH
|
|
Germany
|
Rockwood Lithium India Pvt. Ltd.
|
|
India
|
Rockwood Lithium Japan K.K.
|
|
Japan
|
Rockwood Lithium Korea LLC
|
|
South Korea
|
Rockwood Lithium Shanghai Co., Ltd.
|
|
China
|
Rockwood Lithium Taiwan Co., Ltd.
|
|
Taiwan
|
Rockwood Lithium (UK) Ltd.
|
|
United Kingdom
|
Rockwood Litio Limitada
|
|
Chile
|
Rockwood Specialties GmbH
|
|
Germany
|
Rockwood Specialties Group, Inc.
|
|
Delaware
|
Rockwood Specialties LLC
|
|
Delaware
|
Rockwood Specialties Limited
|
|
United Kingdom
|
RT Lithium Limited
|
|
United Kingdom
|
RSG Immobilien GmbH
|
|
Germany
|
Shandong Sinobrom Albemarle Bromine Chemicals Company Limited
|
|
China
|
Sichuan Guorun New Materials Co., Ltd.
|
|
China
|
1.
|
I have reviewed this Annual Report on Form 10-K of Albemarle Corporation for the period ended
December 31, 2016
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date:
|
February 27, 2017
|
/s/ L
UTHER
C. K
ISSAM
IV
|
Luther C. Kissam IV
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Albemarle Corporation for the period ended
December 31, 2016
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date:
|
February 27, 2017
|
/s/ S
COTT
A. T
OZIER
|
Scott A. Tozier
|
Executive Vice President and Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ L
UTHER
C. K
ISSAM
IV
|
Luther C. Kissam IV
|
Chairman, President and Chief Executive Officer
|
February 27, 2017
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ S
COTT
A. T
OZIER
|
Scott A. Tozier
|
Executive Vice President and Chief Financial Officer
|
February 27, 2017
|
FIVE-YEAR SUMMARY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(In Thousands, Except for Per Share Amounts and Footnote Data)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31
|
|
2016
(a)
|
|
2015
(a)(b)
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Results of Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
2,677,203
|
|
|
$
|
2,826,429
|
|
|
$
|
2,445,548
|
|
|
$
|
2,394,270
|
|
|
$
|
2,519,154
|
|
Costs and expenses
(c)
|
|
2,102,652
|
|
|
2,481,318
|
|
|
2,174,250
|
|
|
1,817,595
|
|
|
2,119,371
|
|
|||||
Operating profit
|
|
574,551
|
|
|
345,111
|
|
|
271,298
|
|
|
576,675
|
|
|
399,783
|
|
|||||
Interest and financing expenses
|
|
(65,181
|
)
|
|
(81,650
|
)
|
|
(41,358
|
)
|
|
(31,559
|
)
|
|
(32,800
|
)
|
|||||
Other income (expenses), net
|
|
5,894
|
|
|
47,283
|
|
|
(16,761
|
)
|
|
(6,674
|
)
|
|
1,229
|
|
|||||
Income from continuing operations before income taxes and equity in net income of unconsolidated investments
|
|
515,264
|
|
|
310,744
|
|
|
213,179
|
|
|
538,442
|
|
|
368,212
|
|
|||||
Income tax expense
|
|
96,263
|
|
|
11,134
|
|
|
18,484
|
|
|
134,445
|
|
|
80,433
|
|
|||||
Income from continuing operations before equity in net income of unconsolidated investments
|
|
419,001
|
|
|
299,610
|
|
|
194,695
|
|
|
403,997
|
|
|
287,779
|
|
|||||
Equity in net income of unconsolidated investments (net of tax)
|
|
59,637
|
|
|
27,978
|
|
|
35,742
|
|
|
31,729
|
|
|
38,067
|
|
|||||
Net income from continuing operations
|
|
478,638
|
|
|
327,588
|
|
|
230,437
|
|
|
435,726
|
|
|
325,846
|
|
|||||
Income (loss) from discontinued operations (net of tax)
(d)
|
|
202,131
|
|
|
32,476
|
|
|
(69,531
|
)
|
|
4,108
|
|
|
4,281
|
|
|||||
Net income
|
|
680,769
|
|
|
360,064
|
|
|
160,906
|
|
|
439,834
|
|
|
330,127
|
|
|||||
Net income attributable to noncontrolling interests
|
|
(37,094
|
)
|
|
(25,158
|
)
|
|
(27,590
|
)
|
|
(26,663
|
)
|
|
(18,591
|
)
|
|||||
Net income attributable to Albemarle Corporation
|
|
$
|
643,675
|
|
|
$
|
334,906
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
|
$
|
311,536
|
|
Financial Position and Other Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(e)
|
|
$
|
8,161,207
|
|
|
$
|
9,597,954
|
|
|
$
|
5,202,437
|
|
|
$
|
3,582,448
|
|
|
$
|
3,434,340
|
|
Operations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
|
$
|
2,166,515
|
|
|
$
|
214,317
|
|
|
$
|
2,208,964
|
|
|
$
|
1,046,552
|
|
|
$
|
1,022,304
|
|
Current ratio
|
|
2.90
|
|
|
1.13
|
|
|
2.94
|
|
|
3.40
|
|
|
3.66
|
|
|||||
Depreciation and amortization
|
|
$
|
226,169
|
|
|
$
|
260,076
|
|
|
$
|
103,572
|
|
|
$
|
107,370
|
|
|
$
|
99,020
|
|
Capital expenditures
|
|
$
|
196,654
|
|
|
$
|
227,649
|
|
|
$
|
110,576
|
|
|
$
|
155,346
|
|
|
$
|
280,873
|
|
Acquisitions, net of cash acquired
|
|
$
|
208,734
|
|
|
$
|
2,100,490
|
|
|
$
|
—
|
|
|
$
|
2,565
|
|
|
$
|
3,360
|
|
Cash proceeds from divestitures, net
|
|
$
|
3,325,571
|
|
|
$
|
8,883
|
|
|
$
|
104,718
|
|
|
$
|
—
|
|
|
$
|
9,646
|
|
Research and development expenses
|
|
$
|
80,475
|
|
|
$
|
89,187
|
|
|
$
|
88,310
|
|
|
$
|
82,246
|
|
|
$
|
78,919
|
|
Gross profit as a % of net sales
|
|
36.3
|
|
|
30.4
|
|
|
31.5
|
|
|
35.5
|
|
|
35.7
|
|
|||||
Total long-term debt
(e)
|
|
$
|
2,369,262
|
|
|
$
|
3,817,157
|
|
|
$
|
2,913,465
|
|
|
$
|
1,076,515
|
|
|
$
|
696,337
|
|
Total equity
(f)
|
|
$
|
3,942,604
|
|
|
$
|
3,401,313
|
|
|
$
|
1,488,635
|
|
|
$
|
1,742,776
|
|
|
$
|
1,932,008
|
|
Total long-term debt as a % of total capitalization
|
|
37.5
|
|
|
52.9
|
|
|
66.2
|
|
|
38.2
|
|
|
26.5
|
|
|||||
Net debt as a % of total capitalization
(g)
|
|
2.5
|
|
|
51.4
|
|
|
22.2
|
|
|
25.6
|
|
|
10.2
|
|
|||||
Common Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
3.93
|
|
|
$
|
2.72
|
|
|
$
|
2.57
|
|
|
$
|
4.88
|
|
|
$
|
3.44
|
|
Discontinued operations
|
|
$
|
1.80
|
|
|
$
|
0.29
|
|
|
$
|
(0.88
|
)
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
Shares used to compute basic earnings per share
|
|
112,379
|
|
|
111,182
|
|
|
78,696
|
|
|
83,839
|
|
|
89,189
|
|
|||||
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
3.90
|
|
|
$
|
2.71
|
|
|
$
|
2.57
|
|
|
$
|
4.85
|
|
|
$
|
3.42
|
|
Discontinued operations
|
|
$
|
1.78
|
|
|
$
|
0.29
|
|
|
$
|
(0.88
|
)
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
Shares used to compute diluted earnings per share
|
|
113,239
|
|
|
111,556
|
|
|
79,102
|
|
|
84,322
|
|
|
89,884
|
|
|||||
Cash dividends declared per share
|
|
$
|
1.22
|
|
|
$
|
1.16
|
|
|
$
|
1.10
|
|
|
$
|
0.96
|
|
|
$
|
0.80
|
|
Total equity per share
(f)
|
|
$
|
35.04
|
|
|
$
|
30.31
|
|
|
$
|
19.08
|
|
|
$
|
21.77
|
|
|
$
|
21.73
|
|
Return on average total equity
|
|
17.5
|
%
|
|
13.7
|
%
|
|
8.3
|
%
|
|
22.5
|
%
|
|
17.3
|
%
|
(a)
|
On December 14, 2016 the Company sold the Chemetall Surface Treatment business, which qualifies for discontinued operations treatment because it represents a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, in the second quarter of 2016, the Company began accounting for this business as discontinued operations in the consolidated statements of income and excluded the business from segment results for the years ended December 31, 2016 and 2015, the periods this business was owned by Albemarle. Related assets and liabilities are classified as held for sale for 2016 and 2015.
|
(b)
|
On January 12, 2015, we completed the acquisition of Rockwood Holdings, Inc. (“Rockwood”). Results for 2015 include the operations of Rockwood commencing on January 13, 2015.
|
(c)
|
The year ended December 31, 2016 included gains before income taxes of $11.5 million and $112.3 million related to the sales of the metal sulfides business and the minerals-based flame retardants and specialty chemicals business, respectively.
|
(d)
|
Included in Income (loss) from discontinued operations (net of tax) for the year ended December 31, 2016 is a pre-tax gain of $388.0 million ($135.0 million after income taxes)
related to the sale of the Chemetall Surface Treatment business. T
he year ended December 31, 2014 includes a pre-tax loss of $85.5 million ($65.7 million after income taxes)
related to the sale of the
antioxidant, ibuprofen and propofol businesses
.
|
(e)
|
As a result of the adoption of new accounting guidance effective January 1, 2016 on a retrospective basis, unamortized debt issuance costs are now deducted from the carrying amount of the associated debt liability on the balance sheet. The reclassification of these unamortized debt issuance costs resulted in reductions of Long-term debt and Other assets on the consolidated balance sheets of $17.1 million in 2015, $20.6 million in 2014, $2.3 million in 2013 and $2.9 million in 2012.
|
(f)
|
Equity reflects the repurchase of common shares amounting to: 2016—0; 2015—0; 2014—2,190,254; 2013—9,198,056; and 2012—1,092,767. 2015 also includes the impact of 34,113,064 shares of common stock issued in connection with the acquisition of Rockwood.
|
(g)
|
We define net debt as total debt plus the portion of outstanding joint venture indebtedness guaranteed by us (or less the portion of outstanding joint venture indebtedness consolidated but not guaranteed by us), less cash and cash equivalents.
|