x
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QUARTERLY 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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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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Emerging growth company
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¨
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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COMMON STOCK, $.01 Par Value
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ALB
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NEW YORK STOCK EXCHANGE
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Page
Number(s)
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8-22
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22-33
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EXHIBITS
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|
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Item 1.
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Financial Statements (Unaudited).
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
832,064
|
|
|
$
|
821,629
|
|
Cost of goods sold
|
548,578
|
|
|
516,650
|
|
||
Gross profit
|
283,486
|
|
|
304,979
|
|
||
Selling, general and administrative expenses
|
113,355
|
|
|
101,370
|
|
||
Research and development expenses
|
14,977
|
|
|
20,986
|
|
||
Operating profit
|
155,154
|
|
|
182,623
|
|
||
Interest and financing expenses
|
(12,586
|
)
|
|
(13,538
|
)
|
||
Other income (expenses), net
|
11,291
|
|
|
(30,476
|
)
|
||
Income before income taxes and equity in net income of unconsolidated investments
|
153,859
|
|
|
138,609
|
|
||
Income tax expense
|
37,514
|
|
|
20,361
|
|
||
Income before equity in net income of unconsolidated investments
|
116,345
|
|
|
118,248
|
|
||
Equity in net income of unconsolidated investments (net of tax)
|
35,181
|
|
|
20,677
|
|
||
Net income
|
151,526
|
|
|
138,925
|
|
||
Net income attributable to noncontrolling interests
|
(17,957
|
)
|
|
(7,165
|
)
|
||
Net income attributable to Albemarle Corporation
|
$
|
133,569
|
|
|
$
|
131,760
|
|
Basic earnings per share
|
$
|
1.26
|
|
|
$
|
1.19
|
|
Diluted earnings per share
|
$
|
1.26
|
|
|
$
|
1.18
|
|
Weighted-average common shares outstanding – basic
|
105,799
|
|
|
110,681
|
|
||
Weighted-average common shares outstanding – diluted
|
106,356
|
|
|
111,867
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
151,526
|
|
|
$
|
138,925
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Foreign currency translation
|
(10,855
|
)
|
|
64,891
|
|
||
Pension and postretirement benefits
|
7
|
|
|
3
|
|
||
Net investment hedge
|
3,304
|
|
|
(14,421
|
)
|
||
Interest rate swap
|
641
|
|
|
642
|
|
||
Total other comprehensive (loss) income, net of tax
|
(6,903
|
)
|
|
51,115
|
|
||
Comprehensive income
|
144,623
|
|
|
190,040
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(17,910
|
)
|
|
(7,351
|
)
|
||
Comprehensive income attributable to Albemarle Corporation
|
$
|
126,713
|
|
|
$
|
182,689
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
465,274
|
|
|
$
|
555,320
|
|
Trade accounts receivable, less allowance for doubtful accounts (2019 – $4,486; 2018 – $4,460)
|
603,542
|
|
|
605,712
|
|
||
Other accounts receivable
|
57,019
|
|
|
52,059
|
|
||
Inventories
|
756,193
|
|
|
700,540
|
|
||
Other current assets
|
105,148
|
|
|
84,790
|
|
||
Total current assets
|
1,987,176
|
|
|
1,998,421
|
|
||
Property, plant and equipment, at cost
|
4,983,385
|
|
|
4,799,063
|
|
||
Less accumulated depreciation and amortization
|
1,813,195
|
|
|
1,777,979
|
|
||
Net property, plant and equipment
|
3,170,190
|
|
|
3,021,084
|
|
||
Investments
|
563,030
|
|
|
528,722
|
|
||
Other assets
|
211,073
|
|
|
80,135
|
|
||
Goodwill
|
1,561,092
|
|
|
1,567,169
|
|
||
Other intangibles, net of amortization
|
378,501
|
|
|
386,143
|
|
||
Total assets
|
$
|
7,871,062
|
|
|
$
|
7,581,674
|
|
Liabilities And Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
482,433
|
|
|
$
|
522,516
|
|
Accrued expenses
|
263,868
|
|
|
257,323
|
|
||
Current portion of long-term debt
|
425,684
|
|
|
307,294
|
|
||
Dividends payable
|
38,716
|
|
|
35,169
|
|
||
Current operating lease liability
|
21,299
|
|
|
—
|
|
||
Income taxes payable
|
46,191
|
|
|
60,871
|
|
||
Total current liabilities
|
1,278,191
|
|
|
1,183,173
|
|
||
Long-term debt
|
1,393,904
|
|
|
1,397,916
|
|
||
Postretirement benefits
|
45,862
|
|
|
46,157
|
|
||
Pension benefits
|
282,082
|
|
|
285,396
|
|
||
Other noncurrent liabilities
|
616,007
|
|
|
526,942
|
|
||
Deferred income taxes
|
390,977
|
|
|
382,982
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Albemarle Corporation shareholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value, issued and outstanding – 105,950 in 2019 and 105,616 in 2018
|
1,059
|
|
|
1,056
|
|
||
Additional paid-in capital
|
1,368,069
|
|
|
1,368,897
|
|
||
Accumulated other comprehensive loss
|
(357,538
|
)
|
|
(350,682
|
)
|
||
Retained earnings
|
2,660,684
|
|
|
2,566,050
|
|
||
Total Albemarle Corporation shareholders’ equity
|
3,672,274
|
|
|
3,585,321
|
|
||
Noncontrolling interests
|
191,765
|
|
|
173,787
|
|
||
Total equity
|
3,864,039
|
|
|
3,759,108
|
|
||
Total liabilities and equity
|
$
|
7,871,062
|
|
|
$
|
7,581,674
|
|
(In Thousands, Except Share Data)
|
|
|
|
|
|
Additional
Paid-in Capital
|
|
Accumulated Other
Comprehensive (Loss) Income
|
|
Retained Earnings
|
|
Total Albemarle
Shareholders’ Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||
Common Stock
|
|
||||||||||||||||||||||||||||||
|
Shares
|
|
Amounts
|
|
|
|
|
|
|
||||||||||||||||||||||
Balance at January 1, 2019
|
|
105,616,028
|
|
|
$
|
1,056
|
|
|
$
|
1,368,897
|
|
|
$
|
(350,682
|
)
|
|
$
|
2,566,050
|
|
|
$
|
3,585,321
|
|
|
$
|
173,787
|
|
|
$
|
3,759,108
|
|
Net income
|
|
|
|
|
|
|
|
|
|
133,569
|
|
|
133,569
|
|
|
17,957
|
|
|
151,526
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(6,856
|
)
|
|
|
|
(6,856
|
)
|
|
(47
|
)
|
|
(6,903
|
)
|
|||||||||||
Cash dividends declared, $0.3675 per common share
|
|
|
|
|
|
|
|
|
|
(38,935
|
)
|
|
(38,935
|
)
|
|
—
|
|
|
(38,935
|
)
|
|||||||||||
Stock-based compensation and other
|
|
|
|
|
|
7,277
|
|
|
|
|
|
|
7,277
|
|
|
|
|
7,277
|
|
||||||||||||
Exercise of stock options
|
|
114,128
|
|
|
1
|
|
|
2,675
|
|
|
|
|
|
|
2,676
|
|
|
|
|
2,676
|
|
||||||||||
Issuance of common stock, net
|
|
340,111
|
|
|
3
|
|
|
(3
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Increase in ownership interest of noncontrolling interest
|
|
|
|
|
|
(523
|
)
|
|
|
|
|
|
(523
|
)
|
|
68
|
|
|
(455
|
)
|
|||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(120,256
|
)
|
|
(1
|
)
|
|
(10,254
|
)
|
|
|
|
|
|
(10,255
|
)
|
|
|
|
(10,255
|
)
|
||||||||||
Balance at March 31, 2019
|
|
105,950,011
|
|
|
$
|
1,059
|
|
|
$
|
1,368,069
|
|
|
$
|
(357,538
|
)
|
|
$
|
2,660,684
|
|
|
$
|
3,672,274
|
|
|
$
|
191,765
|
|
|
$
|
3,864,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at January 1, 2018
|
|
110,546,674
|
|
|
$
|
1,105
|
|
|
$
|
1,863,949
|
|
|
$
|
(225,668
|
)
|
|
$
|
2,035,163
|
|
|
$
|
3,674,549
|
|
|
$
|
143,147
|
|
|
$
|
3,817,696
|
|
Net income
|
|
|
|
|
|
|
|
|
|
131,760
|
|
|
131,760
|
|
|
7,165
|
|
|
138,925
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
50,929
|
|
|
|
|
50,929
|
|
|
186
|
|
|
51,115
|
|
|||||||||||
Cash dividends declared, $0.335 per common share
|
|
|
|
|
|
|
|
|
|
(37,103
|
)
|
|
(37,103
|
)
|
|
(7,378
|
)
|
|
(44,481
|
)
|
|||||||||||
Cumulative adjustment from adoption of income tax standard update (Note 1)
|
|
|
|
|
|
|
|
|
|
(11,199
|
)
|
|
(11,199
|
)
|
|
|
|
(11,199
|
)
|
||||||||||||
Stock-based compensation and other
|
|
|
|
|
|
5,737
|
|
|
|
|
|
|
5,737
|
|
|
|
|
5,737
|
|
||||||||||||
Exercise of stock options
|
|
12,740
|
|
|
—
|
|
|
646
|
|
|
|
|
|
|
646
|
|
|
|
|
646
|
|
||||||||||
Issuance of common stock, net
|
|
319,440
|
|
|
3
|
|
|
(3
|
)
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Shares withheld for withholding taxes associated with common stock issuances
|
|
(122,740
|
)
|
|
(1
|
)
|
|
(15,008
|
)
|
|
|
|
|
|
(15,009
|
)
|
|
|
|
(15,009
|
)
|
||||||||||
Balance at March 31, 2018
|
|
110,756,114
|
|
|
$
|
1,107
|
|
|
$
|
1,855,321
|
|
|
$
|
(174,739
|
)
|
|
$
|
2,118,621
|
|
|
$
|
3,800,310
|
|
|
$
|
143,120
|
|
|
$
|
3,943,430
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents at beginning of year
|
$
|
555,320
|
|
|
$
|
1,137,303
|
|
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
151,526
|
|
|
138,925
|
|
||
Adjustments to reconcile net income to cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
49,283
|
|
|
50,330
|
|
||
Gain on sale of property
|
(11,079
|
)
|
|
—
|
|
||
Stock-based compensation
|
5,556
|
|
|
2,869
|
|
||
Equity in net income of unconsolidated investments (net of tax)
|
(35,181
|
)
|
|
(20,677
|
)
|
||
Dividends received from unconsolidated investments and nonmarketable securities
|
3,034
|
|
|
25,462
|
|
||
Pension and postretirement expense (benefit)
|
578
|
|
|
(890
|
)
|
||
Pension and postretirement contributions
|
(3,555
|
)
|
|
(3,548
|
)
|
||
Unrealized gain on investments in marketable securities
|
(476
|
)
|
|
(393
|
)
|
||
Deferred income taxes
|
7,580
|
|
|
29,067
|
|
||
Working capital changes
|
(122,939
|
)
|
|
(95,050
|
)
|
||
Other, net
|
10,589
|
|
|
(4,541
|
)
|
||
Net cash provided by operating activities
|
54,916
|
|
|
121,554
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(216,132
|
)
|
|
(131,815
|
)
|
||
Proceeds from sale of property and equipment
|
10,356
|
|
|
—
|
|
||
Sales of marketable securities, net
|
1,090
|
|
|
10
|
|
||
Investments in equity and other corporate investments
|
(2,509
|
)
|
|
(735
|
)
|
||
Net cash used in investing activities
|
(207,195
|
)
|
|
(132,540
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Other borrowings (repayments), net
|
118,223
|
|
|
(381,159
|
)
|
||
Dividends paid to shareholders
|
(35,387
|
)
|
|
(35,382
|
)
|
||
Dividends paid to noncontrolling interests
|
—
|
|
|
(7,378
|
)
|
||
Proceeds from exercise of stock options
|
2,676
|
|
|
646
|
|
||
Withholding taxes paid on stock-based compensation award distributions
|
(10,255
|
)
|
|
(15,009
|
)
|
||
Net cash provided by (used in) financing activities
|
75,257
|
|
|
(438,282
|
)
|
||
Net effect of foreign exchange on cash and cash equivalents
|
(13,024
|
)
|
|
4,153
|
|
||
Decrease in cash and cash equivalents
|
(90,046
|
)
|
|
(445,115
|
)
|
||
Cash and cash equivalents at end of period
|
$
|
465,274
|
|
|
$
|
692,188
|
|
|
Three Months Ended
|
||
|
March 31, 2019
|
||
Operating lease cost
|
$
|
9,421
|
|
Finance lease cost:
|
|
||
Amortization of right of use assets
|
178
|
|
|
Interest on lease liabilities
|
33
|
|
|
Total finance lease cost
|
211
|
|
|
|
|
||
Short-term lease cost
|
1,966
|
|
|
Variable lease cost
|
1,086
|
|
|
Total lease cost
|
$
|
12,684
|
|
|
March 31, 2019
|
||
Operating leases:
|
|
||
Other assets
|
$
|
130,628
|
|
|
|
||
Current operating lease liability
|
21,299
|
|
|
Other noncurrent liabilities
|
110,058
|
|
|
Total operating lease liabilities
|
131,357
|
|
|
Finance leases:
|
|
||
Net property, plant and equipment
|
4,105
|
|
|
|
|
||
Current portion of long-term debt
|
684
|
|
|
Long-term debt
|
3,601
|
|
|
Total finance lease liabilities
|
4,285
|
|
|
Weighted average remaining lease term (in years):
|
|
||
Operating leases
|
11.9
|
|
|
Finance leases
|
6.5
|
|
|
Weighted average discount rate (%):
|
|
||
Operating leases
|
3.88
|
%
|
|
Finance leases
|
2.90
|
%
|
|
Operating Leases
|
|
Finance Leases
|
||||
Remainder of 2019
|
$
|
18,801
|
|
|
$
|
607
|
|
2020
|
21,096
|
|
|
765
|
|
||
2021
|
12,435
|
|
|
676
|
|
||
2022
|
10,546
|
|
|
676
|
|
||
2023
|
10,198
|
|
|
676
|
|
||
Thereafter
|
93,911
|
|
|
1,352
|
|
||
Total lease payments
|
166,987
|
|
|
4,752
|
|
||
Less imputed interest
|
35,630
|
|
|
467
|
|
||
Total
|
$
|
131,357
|
|
|
$
|
4,285
|
|
|
Lithium
|
|
Bromine Specialties
|
|
Catalysts
|
|
All Other
|
|
Total
|
||||||||||
Balance at December 31, 2018
|
$
|
1,354,779
|
|
|
$
|
20,319
|
|
|
$
|
185,485
|
|
|
$
|
6,586
|
|
|
$
|
1,567,169
|
|
Foreign currency translation adjustments
|
(4,369
|
)
|
|
—
|
|
|
(1,708
|
)
|
|
—
|
|
|
(6,077
|
)
|
|||||
Balance at March 31, 2019
|
$
|
1,350,410
|
|
|
$
|
20,319
|
|
|
$
|
183,777
|
|
|
$
|
6,586
|
|
|
$
|
1,561,092
|
|
|
Customer Lists and Relationships
|
|
Trade Names and Trademarks(a)
|
|
Patents and Technology
|
|
Other
|
|
Total
|
||||||||||
Gross Asset Value
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018
|
$
|
428,372
|
|
|
$
|
18,453
|
|
|
$
|
55,801
|
|
|
$
|
43,708
|
|
|
$
|
546,334
|
|
Foreign currency translation adjustments
|
(1,662
|
)
|
|
(76
|
)
|
|
217
|
|
|
166
|
|
|
(1,355
|
)
|
|||||
Balance at March 31, 2019
|
$
|
426,710
|
|
|
$
|
18,377
|
|
|
$
|
56,018
|
|
|
$
|
43,874
|
|
|
$
|
544,979
|
|
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018
|
$
|
(95,797
|
)
|
|
$
|
(8,176
|
)
|
|
$
|
(35,248
|
)
|
|
$
|
(20,970
|
)
|
|
$
|
(160,191
|
)
|
Amortization
|
(5,808
|
)
|
|
—
|
|
|
(355
|
)
|
|
(664
|
)
|
|
(6,827
|
)
|
|||||
Foreign currency translation adjustments
|
412
|
|
|
25
|
|
|
113
|
|
|
(10
|
)
|
|
540
|
|
|||||
Balance at March 31, 2019
|
$
|
(101,193
|
)
|
|
$
|
(8,151
|
)
|
|
$
|
(35,490
|
)
|
|
$
|
(21,644
|
)
|
|
$
|
(166,478
|
)
|
Net Book Value at December 31, 2018
|
$
|
332,575
|
|
|
$
|
10,277
|
|
|
$
|
20,553
|
|
|
$
|
22,738
|
|
|
$
|
386,143
|
|
Net Book Value at March 31, 2019
|
$
|
325,517
|
|
|
$
|
10,226
|
|
|
$
|
20,528
|
|
|
$
|
22,230
|
|
|
$
|
378,501
|
|
(a)
|
Includes only indefinite-lived intangible assets.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Basic earnings per share
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Albemarle Corporation
|
$
|
133,569
|
|
|
$
|
131,760
|
|
Denominator:
|
|
|
|
||||
Weighted-average common shares for basic earnings per share
|
105,799
|
|
|
110,681
|
|
||
Basic earnings per share
|
$
|
1.26
|
|
|
$
|
1.19
|
|
|
|
|
|
||||
Diluted earnings per share
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Albemarle Corporation
|
$
|
133,569
|
|
|
$
|
131,760
|
|
Denominator:
|
|
|
|
||||
Weighted-average common shares for basic earnings per share
|
105,799
|
|
|
110,681
|
|
||
Incremental shares under stock compensation plans
|
557
|
|
|
1,186
|
|
||
Weighted-average common shares for diluted earnings per share
|
106,356
|
|
|
111,867
|
|
||
Diluted earnings per share
|
$
|
1.26
|
|
|
$
|
1.18
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Finished goods(a)
|
$
|
535,201
|
|
|
$
|
482,355
|
|
Raw materials and work in process(b)
|
159,429
|
|
|
158,290
|
|
||
Stores, supplies and other
|
61,563
|
|
|
59,895
|
|
||
Total
|
$
|
756,193
|
|
|
$
|
700,540
|
|
(a)
|
Increase primarily due to the build-up of inventory in our Lithium and Catalysts segments for a forecasted increase in sales in 2019.
|
(b)
|
Included $76.4 million and $71.4 million at March 31, 2019 and December 31, 2018, respectively, of work in process related to lithium brine.
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
1.875% Senior notes, net of unamortized discount and debt issuance costs of $2,576 at March 31, 2019 and $2,841 at December 31, 2018
|
$
|
440,098
|
|
|
$
|
444,155
|
|
4.15% Senior notes, net of unamortized discount and debt issuance costs of $2,762 at March 31, 2019 and $2,884 at December 31, 2018
|
422,238
|
|
|
422,116
|
|
||
4.50% Senior notes, net of unamortized discount and debt issuance costs of $514 at March 31, 2019 and $589 at December 31, 2018
|
174,701
|
|
|
174,626
|
|
||
5.45% Senior notes, net of unamortized discount and debt issuance costs of $3,966 at March 31, 2019 and $4,004 at December 31, 2018
|
346,034
|
|
|
345,996
|
|
||
Commercial paper notes
|
425,000
|
|
|
306,606
|
|
||
Variable-rate foreign bank loans
|
7,232
|
|
|
7,216
|
|
||
Finance lease obligations
|
4,285
|
|
|
4,495
|
|
||
Total long-term debt
|
1,819,588
|
|
|
1,705,210
|
|
||
Less amounts due within one year
|
425,684
|
|
|
307,294
|
|
||
Long-term debt, less current portion
|
$
|
1,393,904
|
|
|
$
|
1,397,916
|
|
Beginning balance at December 31, 2018
|
$
|
49,569
|
|
Expenditures
|
(2,080
|
)
|
|
Accretion of discount
|
223
|
|
|
Additions and changes in estimates
|
1,070
|
|
|
Foreign currency translation adjustments and other
|
(506
|
)
|
|
Ending balance at March 31, 2019
|
48,276
|
|
|
Less amounts reported in Accrued expenses
|
9,826
|
|
|
Amounts reported in Other noncurrent liabilities
|
$
|
38,450
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Net sales:
|
|
|
|
||||
Lithium
|
$
|
291,886
|
|
|
$
|
298,032
|
|
Bromine Specialties
|
249,052
|
|
|
225,639
|
|
||
Catalysts
|
251,648
|
|
|
260,717
|
|
||
All Other
|
39,478
|
|
|
37,165
|
|
||
Corporate
|
—
|
|
|
76
|
|
||
Total net sales
|
$
|
832,064
|
|
|
$
|
821,629
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
Lithium
|
$
|
115,616
|
|
|
$
|
131,014
|
|
Bromine Specialties
|
78,597
|
|
|
69,969
|
|
||
Catalysts
|
60,071
|
|
|
67,830
|
|
||
All Other
|
7,243
|
|
|
3,862
|
|
||
Corporate
|
(35,660
|
)
|
|
(23,957
|
)
|
||
Total adjusted EBITDA
|
$
|
225,867
|
|
|
$
|
248,718
|
|
|
Lithium
|
|
Bromine Specialties
|
|
Catalysts
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
93,169
|
|
|
$
|
67,480
|
|
|
$
|
47,859
|
|
|
$
|
208,508
|
|
|
$
|
5,206
|
|
|
$
|
(80,145
|
)
|
|
$
|
133,569
|
|
Depreciation and amortization
|
22,092
|
|
|
11,117
|
|
|
12,212
|
|
|
45,421
|
|
|
2,037
|
|
|
1,825
|
|
|
49,283
|
|
|||||||
Acquisition and integration related costs(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,285
|
|
|
5,285
|
|
|||||||
Gain on sale of property(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,079
|
)
|
|
(11,079
|
)
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,586
|
|
|
12,586
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,514
|
|
|
37,514
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
|
(583
|
)
|
|||||||
Other(c)
|
355
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
(1,063
|
)
|
|
(708
|
)
|
|||||||
Adjusted EBITDA
|
$
|
115,616
|
|
|
$
|
78,597
|
|
|
$
|
60,071
|
|
|
$
|
254,284
|
|
|
$
|
7,243
|
|
|
$
|
(35,660
|
)
|
|
$
|
225,867
|
|
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
108,334
|
|
|
$
|
59,536
|
|
|
$
|
55,660
|
|
|
$
|
223,530
|
|
|
$
|
1,760
|
|
|
$
|
(93,530
|
)
|
|
$
|
131,760
|
|
Depreciation and amortization
|
24,065
|
|
|
10,433
|
|
|
12,170
|
|
|
46,668
|
|
|
2,102
|
|
|
1,560
|
|
|
50,330
|
|
|||||||
Acquisition and integration related costs(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,201
|
|
|
2,201
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,538
|
|
|
13,538
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,361
|
|
|
20,361
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,197
|
)
|
|
(2,197
|
)
|
|||||||
Legal accrual(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,628
|
|
|
17,628
|
|
|||||||
Environmental accrual(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,597
|
|
|
15,597
|
|
|||||||
Other(f)
|
(1,385
|
)
|
|
—
|
|
|
—
|
|
|
(1,385
|
)
|
|
—
|
|
|
885
|
|
|
(500
|
)
|
|||||||
Adjusted EBITDA
|
$
|
131,014
|
|
|
$
|
69,969
|
|
|
$
|
67,830
|
|
|
$
|
268,813
|
|
|
$
|
3,862
|
|
|
$
|
(23,957
|
)
|
|
$
|
248,718
|
|
(a)
|
Included acquisition and integration related costs relating to various significant projects. For the three-month period ended March 31, 2019, $5.3 million was recorded in Selling, general and administrative expenses. For the three-month period ended March 31, 2018, $1.0 million and $1.2 million was recorded in Cost of goods sold and Selling, general and administrative expenses, respectively.
|
(b)
|
Gain recorded in Other income (expenses), net related to the sale of land in Pasadena, Texas not used as part of our operations.
|
(c)
|
Included amounts for the three months ended March 31, 2019 recorded in:
|
▪
|
Cost of goods sold - $0.4 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.
|
▪
|
Selling, general and administrative expenses - Expected severance payments as part of a business reorganization plan of $0.5 million, with the unpaid balance recorded in Accrued expenses as of March 31, 2019.
|
▪
|
Other income (expenses), net - $1.6 million of a net gain resulting from the revision of indemnifications and other liabilities related to previously disposed businesses.
|
(d)
|
Included in Other income (expenses), net is a charge of $17.6 million resulting from a jury rendered verdict against Albemarle related to certain business concluded under a 2014 sales agreement for products that Albemarle no longer manufactures.
|
(e)
|
Increase in environmental reserve to indemnify the buyer of a formerly owned site recorded in Other income (expenses), net. As defined in the agreement of sale, this indemnification has a set cutoff date in 2024, at which point we will no longer be required to provide financial coverage.
|
(f)
|
Included amounts for the three months ended March 31, 2018 recorded in:
|
▪
|
Cost of goods sold - $1.1 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian joint venture.
|
▪
|
Selling, general and administrative expenses - $1.4 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.
|
▪
|
Other income (expenses), net - $0.2 million of a net gain resulting from the revision of indemnifications and other liabilities related to previously disposed businesses.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Pension Benefits Cost (Credit):
|
|
|
|
||||
Service cost
|
$
|
1,130
|
|
|
$
|
1,268
|
|
Interest cost
|
8,320
|
|
|
8,027
|
|
||
Expected return on assets
|
(9,452
|
)
|
|
(10,764
|
)
|
||
Amortization of prior service benefit
|
6
|
|
|
22
|
|
||
Total net pension benefits cost (credit)
|
$
|
4
|
|
|
$
|
(1,447
|
)
|
Postretirement Benefits Cost (Credit):
|
|
|
|
||||
Service cost
|
$
|
24
|
|
|
$
|
29
|
|
Interest cost
|
549
|
|
|
542
|
|
||
Expected return on assets
|
—
|
|
|
(2
|
)
|
||
Amortization of prior service benefit
|
—
|
|
|
(12
|
)
|
||
Total net postretirement benefits cost
|
$
|
573
|
|
|
$
|
557
|
|
Total net pension and postretirement benefits cost (credit)
|
$
|
577
|
|
|
$
|
(890
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Recorded
Amount
|
|
Fair Value
|
|
Recorded
Amount
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Long-term debt
|
$
|
1,826,101
|
|
|
$
|
1,875,467
|
|
|
$
|
1,712,003
|
|
|
$
|
1,731,271
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Foreign currency forward contracts - Other accounts receivable
|
$
|
388
|
|
|
$
|
431
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Foreign currency forward contracts (losses) gains
|
$
|
(10,415
|
)
|
|
$
|
4,819
|
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities
|
|
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
|
|
|
Level 3
|
Unobservable inputs for the asset or liability
|
|
March 31, 2019
|
|
Quoted Prices in Active Markets for Identical Items (Level 1)
|
|
Quoted Prices in Active Markets for Similar Items (Level 2)
|
|
Unobservable Inputs (Level 3)
|
||||||||
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments under executive deferred compensation plan(a)
|
$
|
25,678
|
|
|
$
|
25,678
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities(b)
|
$
|
30
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value(b)(c)
|
$
|
7,165
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts(d)
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
388
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan(a)
|
$
|
25,678
|
|
|
$
|
25,678
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2018
|
|
Quoted Prices in Active Markets for Identical Items (Level 1)
|
|
Quoted Prices in Active Markets for Similar Items (Level 2)
|
|
Unobservable Inputs (Level 3)
|
||||||||
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments under executive deferred compensation plan(a)
|
$
|
26,292
|
|
|
$
|
26,292
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities(b)
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Private equity securities measured at net asset value(b)(c)
|
$
|
7,195
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts(d)
|
$
|
431
|
|
|
$
|
—
|
|
|
$
|
431
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligations under executive deferred compensation plan(a)
|
$
|
26,292
|
|
|
$
|
26,292
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
We maintain an Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.
|
(b)
|
Primarily consists of private equity securities classified as available-for-sale and are reported in Investments in the condensed consolidated balance sheets. The changes in fair value are reported in Other income (expenses), net, in our consolidated statements of income.
|
(c)
|
Holdings in certain private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy.
|
(d)
|
As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. Unless otherwise noted, these derivative financial instruments are not designated as hedging instruments under ASC 815, Derivatives and Hedging. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2.
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits(a)
|
|
Net Investment Hedge
|
|
Interest Rate Swap(b)
|
|
Total
|
||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018
|
$
|
(407,646
|
)
|
|
$
|
(159
|
)
|
|
$
|
72,337
|
|
|
$
|
(15,214
|
)
|
|
$
|
(350,682
|
)
|
Other comprehensive (loss) income before reclassifications
|
(10,855
|
)
|
|
—
|
|
|
3,304
|
|
|
—
|
|
|
(7,551
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
7
|
|
|
—
|
|
|
641
|
|
|
648
|
|
|||||
Other comprehensive (loss) income, net of tax
|
(10,855
|
)
|
|
7
|
|
|
3,304
|
|
|
641
|
|
|
(6,903
|
)
|
|||||
Other comprehensive loss attributable to noncontrolling interests
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|||||
Balance at March 31, 2019
|
$
|
(418,454
|
)
|
|
$
|
(152
|
)
|
|
$
|
75,641
|
|
|
$
|
(14,573
|
)
|
|
$
|
(357,538
|
)
|
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2017
|
$
|
(257,569
|
)
|
|
$
|
(21
|
)
|
|
$
|
46,551
|
|
|
$
|
(14,629
|
)
|
|
$
|
(225,668
|
)
|
Other comprehensive income (loss) before reclassifications
|
64,891
|
|
|
—
|
|
|
(14,421
|
)
|
|
—
|
|
|
50,470
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
3
|
|
|
—
|
|
|
642
|
|
|
645
|
|
|||||
Other comprehensive income (loss), net of tax
|
64,891
|
|
|
3
|
|
|
(14,421
|
)
|
|
642
|
|
|
51,115
|
|
|||||
Other comprehensive income attributable to noncontrolling interests
|
(186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|||||
Balance at March 31, 2018
|
$
|
(192,864
|
)
|
|
$
|
(18
|
)
|
|
$
|
32,130
|
|
|
$
|
(13,987
|
)
|
|
$
|
(174,739
|
)
|
(a)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive loss consists of amortization of prior service benefit, which is a component of pension and postretirement benefits cost (credit). See Note 11, “Pension Plans and Other Postretirement Benefits,” for additional information.
|
(b)
|
The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in interest expense.
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Interest Rate Swap
|
|
Foreign Currency Translation
|
|
Pension and Postretirement Benefits
|
|
Net Investment Hedge
|
|
Interest Rate Swap
|
||||||||||||||||
Other comprehensive (loss) income, before tax
|
$
|
(10,854
|
)
|
|
$
|
7
|
|
|
$
|
4,299
|
|
|
$
|
834
|
|
|
$
|
64,891
|
|
|
$
|
3
|
|
|
$
|
(18,734
|
)
|
|
$
|
834
|
|
Income tax (expense) benefit
|
(1
|
)
|
|
—
|
|
|
(995
|
)
|
|
(193
|
)
|
|
—
|
|
|
—
|
|
|
4,313
|
|
|
(192
|
)
|
||||||||
Other comprehensive (loss) income, net of tax
|
$
|
(10,855
|
)
|
|
$
|
7
|
|
|
$
|
3,304
|
|
|
$
|
641
|
|
|
$
|
64,891
|
|
|
$
|
3
|
|
|
$
|
(14,421
|
)
|
|
$
|
642
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Sales to unconsolidated affiliates
|
$
|
4,291
|
|
|
$
|
4,605
|
|
Purchases from unconsolidated affiliates(a)
|
$
|
63,499
|
|
|
$
|
68,916
|
|
(a)
|
Purchases from unconsolidated affiliates primarily relate to purchases from our Windfield joint venture.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Receivables from unconsolidated affiliates
|
$
|
2,136
|
|
|
$
|
14,348
|
|
Payables to unconsolidated affiliates
|
$
|
58,220
|
|
|
$
|
68,357
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Supplemental non-cash disclosure related to investing activities:
|
|
|
|
||||
Capital expenditures included in Accounts payable
|
$
|
111,225
|
|
|
$
|
74,906
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
changes in economic and business conditions;
|
•
|
changes in financial and operating performance of our major customers and industries and markets served by us;
|
•
|
the timing of orders received from customers;
|
•
|
the gain or loss of significant customers;
|
•
|
competition from other manufacturers;
|
•
|
changes in the demand for our products or the end-user markets in which our products are sold;
|
•
|
limitations or prohibitions on the manufacture and sale of our products;
|
•
|
availability of raw materials;
|
•
|
increases in the cost of raw materials and energy, and our ability to pass through such increases to our customers;
|
•
|
changes in our markets in general;
|
•
|
fluctuations in foreign currencies;
|
•
|
changes in laws and government regulation impacting our operations or our products;
|
•
|
the occurrence of regulatory actions, proceedings, claims or litigation;
|
•
|
the occurrence of cyber-security breaches, terrorist attacks, industrial accidents, natural disasters or climate change;
|
•
|
hazards associated with chemicals manufacturing;
|
•
|
the inability to maintain current levels of product or premises liability insurance or the denial of such coverage;
|
•
|
political unrest affecting the global economy, including adverse effects from terrorism or hostilities;
|
•
|
political instability affecting our manufacturing operations or joint ventures;
|
•
|
changes in accounting standards;
|
•
|
the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs;
|
•
|
changes in the jurisdictional mix of our earnings and changes in tax laws and rates;
|
•
|
changes in monetary policies, inflation or interest rates that may impact our ability to raise capital or increase our cost of funds, impact the performance of our pension fund investments and increase our pension expense and funding obligations;
|
•
|
volatility and uncertainties in the debt and equity markets;
|
•
|
technology or intellectual property infringement, including through cyber-security breaches, and other innovation risks;
|
•
|
decisions we may make in the future;
|
•
|
the ability to successfully execute, operate and integrate acquisitions and divestitures; and
|
•
|
the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (“SEC”).
|
•
|
Our board of directors declared a quarterly dividend of $0.3675 per share on February 26, 2019, which was paid on April 1, 2019 to shareholders of record at the close of business as of March 15, 2019.
|
•
|
Our net sales for the quarter were $832.1 million, up 1% from net sales of $821.6 million in the first quarter of 2018.
|
•
|
Diluted earnings per share were $1.26, an increase from first quarter 2018 results of $1.18 per diluted share.
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||
|
(In thousands, except percentages and per share amounts)
|
|||||||||
NET SALES
|
$
|
832,064
|
|
|
$
|
821,629
|
|
|
1
|
%
|
Cost of goods sold
|
548,578
|
|
|
516,650
|
|
|
6
|
%
|
||
GROSS PROFIT
|
283,486
|
|
|
304,979
|
|
|
(7
|
)%
|
||
GROSS PROFIT MARGIN
|
34.1
|
%
|
|
37.1
|
%
|
|
|
|||
Selling, general and administrative expenses
|
113,355
|
|
|
101,370
|
|
|
12
|
%
|
||
Research and development expenses
|
14,977
|
|
|
20,986
|
|
|
(29
|
)%
|
||
OPERATING PROFIT
|
155,154
|
|
|
182,623
|
|
|
(15
|
)%
|
||
OPERATING PROFIT MARGIN
|
18.6
|
%
|
|
22.2
|
%
|
|
|
|||
Interest and financing expenses
|
(12,586
|
)
|
|
(13,538
|
)
|
|
(7
|
)%
|
||
Other income (expenses), net
|
11,291
|
|
|
(30,476
|
)
|
|
(137
|
)%
|
||
INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS
|
153,859
|
|
|
138,609
|
|
|
11
|
%
|
||
Income tax expense
|
37,514
|
|
|
20,361
|
|
|
84
|
%
|
||
Effective tax rate
|
24.4
|
%
|
|
14.7
|
%
|
|
|
|||
INCOME BEFORE EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS
|
116,345
|
|
|
118,248
|
|
|
(2
|
)%
|
||
Equity in net income of unconsolidated investments (net of tax)
|
35,181
|
|
|
20,677
|
|
|
70
|
%
|
||
NET INCOME
|
151,526
|
|
|
138,925
|
|
|
9
|
%
|
||
Net income attributable to noncontrolling interests
|
(17,957
|
)
|
|
(7,165
|
)
|
|
151
|
%
|
||
NET INCOME ATTRIBUTABLE TO ALBEMARLE CORPORATION
|
$
|
133,569
|
|
|
$
|
131,760
|
|
|
1
|
%
|
PERCENTAGE OF NET SALES
|
16.1
|
%
|
|
16.0
|
%
|
|
|
|||
Basic earnings per share
|
$
|
1.26
|
|
|
$
|
1.19
|
|
|
6
|
%
|
Diluted earnings per share
|
$
|
1.26
|
|
|
$
|
1.18
|
|
|
7
|
%
|
|
Lithium
|
|
Bromine Specialties
|
|
Catalysts
|
|
Reportable Segments Total
|
|
All Other
|
|
Corporate
|
|
Consolidated Total
|
||||||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
93,169
|
|
|
$
|
67,480
|
|
|
$
|
47,859
|
|
|
$
|
208,508
|
|
|
$
|
5,206
|
|
|
$
|
(80,145
|
)
|
|
$
|
133,569
|
|
Depreciation and amortization
|
22,092
|
|
|
11,117
|
|
|
12,212
|
|
|
45,421
|
|
|
2,037
|
|
|
1,825
|
|
|
49,283
|
|
|||||||
Acquisition and integration related costs(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,285
|
|
|
5,285
|
|
|||||||
Gain on sale of property(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,079
|
)
|
|
(11,079
|
)
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,586
|
|
|
12,586
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,514
|
|
|
37,514
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
|
(583
|
)
|
|||||||
Other(c)
|
355
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
(1,063
|
)
|
|
(708
|
)
|
|||||||
Adjusted EBITDA
|
$
|
115,616
|
|
|
$
|
78,597
|
|
|
$
|
60,071
|
|
|
$
|
254,284
|
|
|
$
|
7,243
|
|
|
$
|
(35,660
|
)
|
|
$
|
225,867
|
|
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss) attributable to Albemarle Corporation
|
$
|
108,334
|
|
|
$
|
59,536
|
|
|
$
|
55,660
|
|
|
$
|
223,530
|
|
|
$
|
1,760
|
|
|
$
|
(93,530
|
)
|
|
$
|
131,760
|
|
Depreciation and amortization
|
24,065
|
|
|
10,433
|
|
|
12,170
|
|
|
46,668
|
|
|
2,102
|
|
|
1,560
|
|
|
50,330
|
|
|||||||
Acquisition and integration related costs(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,201
|
|
|
2,201
|
|
|||||||
Interest and financing expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,538
|
|
|
13,538
|
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,361
|
|
|
20,361
|
|
|||||||
Non-operating pension and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,197
|
)
|
|
(2,197
|
)
|
|||||||
Legal accrual(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,628
|
|
|
17,628
|
|
|||||||
Environmental accrual(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,597
|
|
|
15,597
|
|
|||||||
Other(f)
|
(1,385
|
)
|
|
—
|
|
|
—
|
|
|
(1,385
|
)
|
|
—
|
|
|
885
|
|
|
(500
|
)
|
|||||||
Adjusted EBITDA
|
$
|
131,014
|
|
|
$
|
69,969
|
|
|
$
|
67,830
|
|
|
$
|
268,813
|
|
|
$
|
3,862
|
|
|
$
|
(23,957
|
)
|
|
$
|
248,718
|
|
(a)
|
Included acquisition and integration related costs relating to various significant projects. For the three-month period ended March 31, 2019, $5.3 million was recorded in Selling, general and administrative expenses. For the three-month period ended March 31, 2018, $1.0 million and $1.2 million was recorded in Cost of goods sold and Selling, general and administrative expenses, respectively.
|
(b)
|
Gain recorded in Other income (expenses), net related to the sale of land in Pasadena, Texas not used as part of our operations.
|
(c)
|
Included amounts for the three months ended March 31, 2019 recorded in:
|
▪
|
Cost of goods sold - $0.4 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.
|
▪
|
SG&A expenses - Expected severance payments as part of a business reorganization plan of $0.5 million, with the unpaid balance recorded in Accrued expenses as of March 31, 2019.
|
▪
|
Other income (expenses), net - $1.6 million of a net gain resulting from the revision of indemnifications and other liabilities related to previously disposed businesses.
|
(d)
|
Included in Other income (expenses), net is a charge of $17.6 million resulting from a jury rendered verdict against Albemarle related to certain business concluded under a 2014 sales agreement for products that Albemarle no longer manufactures.
|
(e)
|
Increase in environmental reserve to indemnify the buyer of a formerly owned site recorded in Other income (expenses), net. As defined in the agreement of sale, this indemnification has a set cutoff date in 2024, at which point we will no longer be required to provide financial coverage.
|
(f)
|
Included amounts for the three months ended March 31, 2018 recorded in:
|
▪
|
Cost of goods sold - $1.1 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian joint venture.
|
▪
|
SG&A expenses - $1.4 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.
|
▪
|
Other income (expenses), net - $0.2 million of a net gain resulting from the revision of indemnifications and other liabilities related to previously disposed businesses.
|
Issue Month/Year
|
|
Principal (in millions)
|
|
Interest Rate
|
|
Interest Payment Dates
|
|
Maturity Date
|
|
December 2014
|
|
€393.0
|
|
1.875%
|
|
December 8
|
|
December 8, 2021
|
|
November 2014
|
|
$425.0
|
|
4.15%
|
|
June 1
|
December 1
|
|
December 1, 2024
|
November 2014
|
|
$350.0
|
|
5.45%
|
|
June 1
|
December 1
|
|
December 1, 2044
|
December 2010
|
|
$175.3
|
|
4.50%
|
|
June 15
|
December 15
|
|
December 15, 2020
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 6.
|
Exhibits.
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
101
|
|
|
Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended March 31, 2019, furnished in XBRL (eXtensible Business Reporting Language)).
|
|
|
|
|
|
|
|
|
|
ALBEMARLE CORPORATION
|
||
|
|
|
(Registrant)
|
||
|
|
|
|
||
Date:
|
May 8, 2019
|
|
By:
|
|
/S/ SCOTT A. TOZIER
|
|
|
|
|
|
Scott A. Tozier
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(principal financial officer)
|
1.
|
Grant Date. Pursuant to the Plan, the Company, on February [__], 2019 (the “Grant Date”), granted Participant an Award (“Award”) in the form of «# of Units» TSR Performance Units (which number of Units is also referred to herein as the “Target Units”), subject to the terms and conditions of the Plan and subject to the terms and conditions set forth herein.
|
2.
|
Accounts. TSR Performance Units granted to Participant shall be credited to an account (the “Account”) established and maintained for Participant. The Account of Participant shall be the record of TSR Performance Units granted to the Participant under the Plan, is solely for accounting purposes and shall not require a segregation of any Company assets.
|
3.
|
Definitions. Terms used in this Award Notice shall have the following meanings:
|
(a)
|
“TSR” means “Total Shareholder Return.”
|
(b)
|
“TSR %” is calculated using the following formula:
|
(c)
|
“Starting Stock Price” means the average closing price of the Company’s Common Stock over the 20-trading-day period commencing January 1, 2019.
|
(d)
|
“Ending Stock Price” means the average closing price of the Company’s Common Stock over the 20-trading-day period ending December 31, 2021.
|
(e)
|
“Reinvested Dividends” means the value of reinvested dividends paid on the Company’s Common Stock over the Measurement Period (as defined in paragraph 5).
|
(f)
|
“TSR Relative to Peer Group” is the TSR % of the Company as compared to the TSR % of the Peer Group.
|
(g)
|
“Peer Group” is the group of companies listed on Exhibit A. If a company in the Peer Group has its common stock delisted or if it no longer exists as a separate entity, the TSR % will be retroactively calculated for the remainder of the Performance Period without such company.
|
4.
|
Terms and Conditions. No Award shall be earned and Participant’s interest in the TSR Performance Units granted hereunder shall be forfeited, except to the extent that the requirements of this Notice are satisfied.
|
5.
|
Performance Criteria. Participant’s TSR Performance Units shall be earned on the Award Date based on the following formula (to the nearest whole TSR Performance Unit). Such TSR Performance Units shall be subject to the terms and conditions set forth in the following paragraphs of this Notice of Award.
|
(a)
|
The Measurement Period is the 2019, 2020 and 2021 calendar period.
|
(b)
|
Earned Award = TSR % of Target Units x TSR Performance Units
|
(c)
|
TSR % of Target Units. The TSR % of Target Units is determined according to the following table (awards to be interpolated between the TSR %s below):
|
(d)
|
The Company shall retain discretion to decrease Awards but may not increase any Awards, directly or indirectly, hereunder.
|
(e)
|
For purposes of this Award, the number of earned TSR Performance Units will be rounded to the nearest whole number.
|
(f)
|
Notwithstanding anything herein to the contrary, if the Company’s TSR for the Measurement Period is negative, no more than 100% of the TSR Performance Units may be earned and become vested and non-forfeitable hereunder.
|
6.
|
Value of Units. The value of each TSR Performance Unit shall be equal to the value of one share of the Company’s Common Stock.
|
7.
|
Value of Stock. For purposes of this Award, the value of the Company’s Common Stock is the Fair Market Value (as defined in the Plan) on the date any TSR Performance Units become vested and payable hereunder.
|
8.
|
Earned Awards. As soon as practicable after the end of the Measurement Period, a determination shall be made by the Committee of the number of whole TSR Performance Units that Participant has earned. The date as of which the Committee determines the number of TSR Performance Units earned shall be the “Award Date.”
|
9.
|
Restrictions. Except as provided herein, the earned TSR Performance Units shall remain unvested and forfeitable.
|
10.
|
Vesting. Participant’s interest in one-half of the earned TSR Performance Units shall become vested and non-forfeitable on the Award Date and will be paid as soon as practicable thereafter. The final one-half of the earned TSR Performance Units shall become vested and non-forfeitable as of January 1 of the first calendar year following the calendar year that contains the Award Date.
|
11.
|
During the Measurement Period. Notwithstanding anything in this Notice of Award to the contrary, if a Participant separates from service prior to the end of the Measurement Period on account of a Qualifying Termination Event, then a pro-rata number (as determined in accordance with the following sentence) of the Participant’s TSR Performance Units shall be earned under paragraph 8 above as of the Award Date, based on the criteria set forth in paragraph 5 above, and any remaining TSR Performance Units shall be forfeited. The pro-rata number of TSR Performance Units earned pursuant to the preceding sentence shall be equal to 1/36th of the Units granted, for each full month of service performed by the Participant during the Measurement Period. The number of TSR Performance Units earned shall be determined by the Committee in its sole and absolute discretion within the limits provided in the Plan and the earned TSR Performance Units shall be fully vested as of the Award Date, and payable pursuant to paragraphs 15-17 hereof.
|
12.
|
After the Measurement Period. Notwithstanding anything in this Notice of Award to the contrary, if after the Measurement Period ends, but prior to the Award Date, Participant experiences a Qualifying Termination Event, such Participant shall earn his TSR Performance Units pursuant to paragraph 8 and such earned Units shall be fully vested as of the Award Date and payable pursuant to paragraphs 15-17 hereof.
|
13.
|
During the Vesting Period. Notwithstanding anything in this Notice of Award to the contrary if, after the Award Date, but prior to the forfeiture of the TSR Performance Units under paragraph 14, Participant experiences a Qualifying Termination Event, then all earned TSR Performance Units that are forfeitable shall become non-forfeitable as of the date of the Qualifying Termination Event and shall be paid pursuant to paragraphs 15-17 hereof.
|
14.
|
Forfeiture. Except as provided in paragraph 24 hereof, all TSR Performance Units that are forfeitable shall be forfeited if Participant’s employment with the Company or an Affiliate terminates for any reason except a Qualifying Termination Event.
|
15.
|
Time of Payment. Payment of Participant’s TSR Performance Units shall be made as soon as practicable after the Units have become non-forfeitable (or the Award Date, if later), but in no event later than March 15th of the calendar year after the year in which the Units become earned and non-forfeitable.
|
16.
|
Form of Payment. The vested TSR Performance Units shall be paid in whole shares of the Company’s Common Stock.
|
17.
|
Death of Participant. If Participant dies prior to the payment of his earned and vested TSR Performance Units, an amount equal to the amount of the Participant’s non-forfeitable TSR Performance Units shall be paid to his or her Beneficiary. Participant shall have the right to designate a Beneficiary in accordance with procedures established under the Plan for such purpose. If Participant fails to designate a Beneficiary, or if at the time of the Participant’s
|
18.
|
Taxes. The Company will withhold from the Award the number of shares of Common Stock necessary to satisfy Federal tax-withholding requirements and state and local tax-withholding requirements with respect to the state and locality designated by the Participant as their place of residence in the Company's system of record at the time the Award becomes taxable, except to the extent otherwise determined to be required by the Company, subject, however, to any special rules or provisions that may apply to Participants who are non-US employees (working inside or outside of the United States) or US employees working outside of the United States. It is the Participant's responsibility to properly report all income and remit all Federal, state, and local taxes that may be due to the relevant taxing authorities as the result of receiving this Award.
|
19.
|
No Right to Continued Employment. Neither this Award nor the granting, earning or vesting of TSR Performance Units shall confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment at any time.
|
20.
|
Change in Capital Structure. In accordance with the terms of the Plan, the terms of this Award shall be adjusted as the Committee determines is equitable in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
|
21.
|
Governing Law. This Award shall be governed by the laws of the Commonwealth of Virginia and applicable Federal law. All disputes arising under this Award shall be adjudicated solely within the state or Federal courts located within the Commonwealth of Virginia.
|
22.
|
Conflicts. (a) In the event of any conflict between the provisions of the Plan as in effect on the Grant Date and the provisions of this Award, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Grant Date.
|
23.
|
Binding Effect. Subject to the limitations stated above and in the Plan, this Award shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company.
|
24.
|
Change in Control. The provisions of this paragraph 24 shall apply in the event of a Change in Control (as defined in the Plan) prior to the forfeiture of the TSR Performance Units under paragraph 14.
|
(i)
|
a change in the Participant’s position which in the Participant’s reasonable judgment does not represent a promotion of the Participant’s status or position immediately prior to the Change in Control or the assignment to the Participant of any duties or responsibilities, or diminution of duties or responsibilities, which in the Participant’s reasonable judgment are inconsistent with the Participant’s position in effect immediately prior to the Change in Control;
|
(ii)
|
a reduction by the Company in the annual rate of the Participant’s base salary as in effect immediately prior to the date of a Change in Control;
|
(iii)
|
the Company’s requiring the Participant’s office nearest to the Participant’s principal residence to be located at a different place which is more than thirty-five (35) miles from where such office is located immediately prior to a Change in Control;
|
(iv)
|
the failure by the Company to continue in effect compensation or benefit plans in which the Participant participates, which in the aggregate provide the Participant compensation and benefits substantially equivalent to those prior to a Change in Control; or
|
(v)
|
the failure of the Company to obtain a satisfactory agreement from any applicable successor entity to assume and agree to perform under any Severance Compensation Agreement.
|
25.
|
Qualifying Termination Event and Other Terms
|
1.
|
Grant Date. Pursuant to the Plan, the Company, on February [__], 2019 (the “Grant Date”), granted Participant an Award (“Award”) in the form of «# of Units» ROIC Performance Units (which number of Units is also referred to herein as the “Target Units”), subject to the terms and conditions of the Plan and subject to the terms and conditions set forth herein.
|
2.
|
Accounts. ROIC Performance Units granted to Participant shall be credited to an account (the “Account”) established and maintained for Participant. The Account of Participant shall be the record of ROIC Performance Units granted to the Participant under the Plan, is solely for accounting purposes and shall not require a segregation of any Company assets.
|
3.
|
Definitions. Terms used in this Award Notice shall have the following meanings:
|
(a)
|
“Measurement Period” means the 2019, 2020 and 2021 calendar period.
|
(b)
|
“ROIC” (Return on Invested Capital) shall be calculated for each calendar year during the Measurement Period and is determined as the amount derived pursuant to the following quotient:
|
(c)
|
“3-Year ROIC” means the Company’s annual ROIC averaged for the Measurement Period.
|
(d)
|
“Net Income” means the Net Income Attributable to Albemarle Corporation as disclosed in the Company’s Annual Report on Form 10-K for the applicable year.
|
(e)
|
“Interest Income” means interest income included in the determination of “Other (expenses) income, net” as disclosed in the Company’s Annual Report on Form 10-K for the applicable year. For purposes of this Award Notice, Interest Income shall be adjusted to be net of tax.
|
(f)
|
“Interest Expense” means “Interest and financing expenses” as disclosed in the Company’s Annual Report on Form 10-K for the applicable year. For purposes of this Award Notice, Interest Expense shall be adjusted to be net of tax.
|
(g)
|
“Prior Year End Total Capital” means Total Capital on the last day of the previous year.
|
(h)
|
“Current Year End Total Capital” means Total Capital on the last day of the current year.
|
4.
|
Terms and Conditions. No Award shall be earned and Participant’s interest in the ROIC Performance Units granted hereunder shall be forfeited, except to the extent that the requirements of this Notice are satisfied.
|
5.
|
Performance Criteria. Except as otherwise provided herein, Participant’s ROIC Performance Units shall be earned on the Award Date in a percentage determined by the performance level for the 3-Year ROIC achieved during the Measurement Period, as set forth on Exhibit A. This Award is not intended to constitute qualified performance-based compensation under Code Section 162(m) and shall not be subject to the provisions of the Plan applicable to such Awards. The performance criteria set forth on Exhibit A may be adjusted by the Committee in its sole and absolute discretion to reflect any extraordinary or significant events that affect ROIC.
|
6.
|
Value of Units. The value of each ROIC Performance Unit shall be equal to the value of one share of the Company’s Common Stock.
|
7.
|
Value of Stock. For purposes of this Award, the value of the Company’s Common Stock is the Fair Market Value (as defined in the Plan) on the date any ROIC Performance Units become vested and payable hereunder.
|
8.
|
Earned Awards. As soon as practicable after the end of the Measurement Period, a determination shall be made by the Committee of the number of whole ROIC Performance Units that Participant has earned. The date as of which the Committee determines the number of ROIC Performance Units earned shall be the “Award Date.”
|
9.
|
Restrictions. Except as provided herein, the earned ROIC Performance Units shall remain unvested and forfeitable.
|
10.
|
Vesting. Participant’s interest in one-half of the earned ROIC Performance Units shall become vested and non-forfeitable on the Award Date and will be paid as soon as practicable thereafter. The final one-half of the earned ROIC Performance Units shall
|
11.
|
During the Measurement Period. Notwithstanding anything in this Notice of Award to the contrary, if a Participant separates from service prior to the end of the Measurement Period on account of a Qualifying Termination Event, then a pro-rata number (as determined in accordance with the following sentence) of the Participant’s ROIC Performance Units shall be earned under paragraph 8 above as of the Award Date, based on the actual level of achievement of the performance criteria set forth on Exhibit A, and any remaining ROIC Performance Units shall be forfeited. The pro-rata number of ROIC Performance Units earned pursuant to the preceding sentence shall be equal to 1/36th of the Units granted, for each full month of service performed by the Participant during the Measurement Period. The number of ROIC Performance Units earned shall be determined by the Committee in its sole and absolute discretion within the limits provided in the Plan and the earned ROIC Performance Units shall be fully vested as of the Award Date, and payable pursuant to paragraphs 15-17 hereof.
|
12.
|
After the Measurement Period. Notwithstanding anything in this Notice of Award to the contrary, if after the Measurement Period ends, but prior to the Award Date, Participant experiences a Qualifying Termination Event, such Participant shall earn his ROIC Performance Units pursuant to paragraph 8 and such earned Units shall be fully vested as of the Award Date and payable pursuant to paragraphs 15-17 hereof.
|
13.
|
During the Vesting Period. Notwithstanding anything in this Notice of Award to the contrary if, after the Award Date, but prior to the forfeiture of the ROIC Performance Units under paragraph 14, Participant experiences a Qualifying Termination Event, then all earned ROIC Performance Units that are forfeitable shall become non-forfeitable as of the date of the Qualifying Termination Event and shall be paid pursuant to paragraphs 15-17 hereof.
|
14.
|
Forfeiture. Except as provided in paragraph 24 hereof, all ROIC Performance Units that are forfeitable shall be forfeited if Participant’s employment with the Company or an Affiliate terminates for any reason except a Qualifying Termination Event.
|
15.
|
Time of Payment. Payment of Participant’s ROIC Performance Units shall be made as soon as practicable after the Units have become non-forfeitable (or the Award Date, if later), but in no event later than March 15th of the calendar year after the year in which the Units become earned and non-forfeitable.
|
16.
|
Form of Payment. The vested ROIC Performance Units shall be paid in whole shares of the Company’s Common Stock.
|
17.
|
Death of Participant. If Participant dies prior to the payment of his earned and vested ROIC Performance Units, an amount equal to the amount of the Participant’s non-forfeitable ROIC Performance Units shall be paid to his or her Beneficiary. Participant shall have the right to designate a Beneficiary in accordance with procedures established under the Plan for such purpose. If Participant fails to designate a Beneficiary, or if at the time of the Participant’s death there is no surviving Beneficiary, any amounts payable will be paid to the Participant’s estate.
|
18.
|
Taxes. The Company will withhold from the Award the number of shares of Common Stock necessary to satisfy Federal tax-withholding requirements and state and local tax-withholding requirements with respect to the state and locality designated by the Participant as their place of residence in the Company's system of record at the time the Award becomes taxable, except to the extent otherwise determined to be required by the Company, subject, however, to any special rules or provisions that may apply to Participants who are non-US employees (working inside or outside of the United States) or US employees working outside of the United States. It is the Participant's responsibility to properly report all income and remit all Federal, state, and local taxes that may be due to the relevant taxing authorities as the result of receiving this Award.
|
19.
|
No Right to Continued Employment. Neither this Award nor the granting, earning or vesting of ROIC Performance Units shall confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment at any time.
|
20.
|
Change in Capital Structure. In accordance with the terms of the Plan, the terms of this Award shall be adjusted as the Committee determines is equitable in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
|
21.
|
Governing Law. This Award shall be governed by the laws of the Commonwealth of Virginia and applicable Federal law. All disputes arising under this Award shall be adjudicated solely within the state or Federal courts located within the Commonwealth of Virginia.
|
22.
|
Conflicts. (a) In the event of any conflict between the provisions of the Plan as in effect on the Grant Date and the provisions of this Award, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Grant Date.
|
23.
|
Binding Effect. Subject to the limitations stated above and in the Plan, this Award shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company.
|
24.
|
Change in Control. The provisions of this paragraph 24 shall apply in the event of a Change in Control (as defined in the Plan) prior to the forfeiture of the ROIC Performance Units under paragraph 14.
|
(i)
|
a change in the Participant’s position which in the Participant’s reasonable judgment does not represent a promotion of the Participant’s status or position immediately prior to the Change in Control or the assignment to the Participant of any duties or responsibilities, or diminution of duties or responsibilities, which in the Participant’s reasonable judgment are inconsistent with the Participant’s position in effect immediately prior to the Change in Control;
|
(ii)
|
a reduction by the Company in the annual rate of the Participant’s base salary as in effect immediately prior to the date of a Change in Control;
|
(iii)
|
the Company’s requiring the Participant’s office nearest to the Participant’s principal residence to be located at a different place which is more than thirty-five (35) miles from where such office is located immediately prior to a Change in Control;
|
(iv)
|
the failure by the Company to continue in effect compensation or benefit plans in which the Participant participates, which in the aggregate provide the Participant compensation and benefits substantially equivalent to those prior to a Change in Control; or
|
(v)
|
the failure of the Company to obtain a satisfactory agreement from any applicable successor entity to assume and agree to perform under any Severance Compensation Agreement.
|
25.
|
Qualifying Termination Event and Other Terms
|
Performance Level
|
3-Year ROIC Achieved in Measurement Period
|
Percentage of Target Units Earned*
|
Poor
|
Less than 9%
|
0%
|
Threshold
|
9%
|
50%
|
Target
|
10%
|
100%
|
Superior
|
12%
|
200%
|
1.
|
Grant Date. Pursuant to the Plan, the Company, on , 2019 (the “Grant Date”), granted Participant an incentive award (“Award”) in the form of XXXX Restricted Stock Units, subject to the terms and conditions of the Plan and subject to the terms and conditions set forth herein.
|
2.
|
Accounts. Restricted Stock Units granted to Participant shall be credited to an account (the “Account”) established and maintained for Participant. A Participant’s Account shall be the record of Restricted Stock Units granted to the Participant under the Plan, is solely for accounting purposes and shall not require a segregation of any Company assets.
|
3.
|
Terms and Conditions. Except as otherwise provided herein, the Restricted Stock Units shall remain nonvested and subject to substantial risk of forfeiture.
|
4.
|
Value of Units. The value of each Restricted Stock Unit on any date shall be equal to the value of one share of the Company’s Common Stock on such date.
|
5.
|
Value of Stock. For purposes of this Award, the value of the Company’s Common Stock is the Fair Market Value of the Stock (as defined in the Plan) on the relevant date.
|
6.
|
Vesting. Participant’s interest in one half of the Restricted Stock Units shall become vested and non-forfeitable on the third anniversary of the Grant Date. The final one half of the Restricted Stock Units shall become vested and non-forfeitable as of the fourth anniversary of the Grant Date.
|
7.
|
Upon a Qualifying Termination Event. Notwithstanding anything in this Notice of Award to the contrary, if, prior to the forfeiture of the Restricted Stock Units under paragraph 8, Participant experiences a Qualifying Termination Event (as defined below), Restricted Stock Units that are forfeitable shall become vested as to a pro-rata portion of the Award, as determined in accordance with the following sentence. The pro-rata portion of the Award that shall vest pursuant to the preceding sentence shall be equal to 1/36th of the Restricted Stock Units subject to the Award, for each full month of service performed by the Participant after the Grant Date and prior to the Qualifying Termination Event. The non-vested portion of the Award shall be forfeited.
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8.
|
Forfeiture. Except as provided in paragraph 18, all Restricted Stock Units that are forfeitable shall be forfeited if Participant’s employment with the Company or an Affiliate terminates for any reason except a Qualifying Termination Event.
|
9.
|
Time of Payment. Payment of Participant’s Restricted Stock Units shall be made as soon as practicable after the Units have vested, but in no event later than March 15th of the calendar year after the year in which the Units vest.
|
10.
|
Form of Payment. The vested Restricted Stock Units shall be paid in whole shares of the Company’s Common Stock.
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11.
|
Death of Participant. If Participant dies prior to the payment of his or her non-forfeitable Restricted Stock Units, such Units shall be paid to his or her Beneficiary. Participant shall have the right to designate a Beneficiary in accordance with procedures established under the Plan for such purpose. If Participant fails to designate a Beneficiary, or if at the time of the Participant’s death there is no surviving Beneficiary, any amounts payable will be paid to the Participant’s estate.
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12.
|
Taxes. The Company will withhold from the Award the number of shares of Common Stock necessary to satisfy Federal tax-withholding requirements and state and local tax-withholding requirements with respect to the state and locality designated by the Participant as their place of residence in the Company's system of record at the time the Award becomes taxable, except to the extent otherwise determined to be required by the Company, subject, however, to any special rules or provisions that may apply to Participants who are non-US employees (working inside or outside of the United States) or US employees working outside of the United States. It is the Participant's responsibility to properly report all income and remit all Federal, state, and local taxes that may be due to the relevant taxing authorities as the result of receiving this Award.
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13.
|
No Right to Continued Employment. Neither this Award nor the granting or vesting of Restricted Stock Units shall confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment at any time.
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14.
|
Change in Capital Structure. In accordance with the terms of the Plan, the terms of this Award shall be adjusted as the Committee determines is equitable in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
|
15.
|
Governing Law. This Award shall be governed by the laws of the Commonwealth of Virginia and applicable Federal law. All disputes arising under this Award shall be adjudicated solely within the state or Federal courts located within the Commonwealth of Virginia.
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16.
|
Conflicts.
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17.
|
Binding Effect. Subject to the limitations stated above and in the Plan, this Award shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company.
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18.
|
Change in Control. In the event of a Change in Control (as defined in the Plan) prior to the forfeiture of the Restricted Stock Units under paragraph 8, the provisions of this paragraph 18 shall apply in addition to the provisions of Article 17 (and related provisions) of the Plan.
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19.
|
Qualifying Termination Event and Other Terms.
|
1.
|
Grant Date. Pursuant to the Plan, the Company, on __________ ___, 2019 (the “Grant Date”), granted Participant an incentive award (“Award”) in the form of XXXX Restricted Stock Units, subject to the terms and conditions of the Plan and subject to the terms and conditions set forth herein.
|
2.
|
Accounts. Restricted Stock Units granted to Participant shall be credited to an account (the “Account”) established and maintained for Participant. A Participant’s Account shall be the record of Restricted Stock Units granted to the Participant under the Plan, is solely for accounting purposes and shall not require a segregation of any Company assets.
|
3.
|
Terms and Conditions. Except as otherwise provided herein, the Restricted Stock Units shall remain nonvested and subject to substantial risk of forfeiture.
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4.
|
Value of Units. The value of each Restricted Stock Unit on any date shall be equal to the value of one share of the Company’s Common Stock on such date.
|
5.
|
Value of Stock. For purposes of this Award, the value of the Company’s Common Stock is the Fair Market Value of the Stock (as defined in the Plan) on the relevant date.
|
6.
|
Vesting. Participant’s interest in the Restricted Stock Units shall become vested and non-forfeitable on the third anniversary of the Grant Date.
|
7.
|
Upon a Qualifying Termination Event. Notwithstanding anything in this Notice of Award to the contrary, if, prior to the forfeiture of Restricted Stock Units under paragraph 8, Participant experiences a Qualifying Termination Event (as defined below), Restricted Stock Units that are forfeitable shall become non-forfeitable as of the date of the Qualifying Termination Event.
|
8.
|
Forfeiture. All Restricted Stock Units that are forfeitable shall be forfeited if Participant’s employment with the Company or an Affiliate terminates for any reason except the Participant’s death or Disability or as provided in paragraph 18.
|
9.
|
Time of Payment. Payment of Participant’s Restricted Stock Units shall be made as soon as practicable after the Units have become vested, but in no event later than March 15th of the calendar year after the year in which the Units vest.
|
10.
|
Form of Payment. The vested Restricted Stock Units shall be paid in whole shares of the Company’s Common Stock.
|
11.
|
Death of Participant. If Participant dies prior to the payment of his or her non-forfeitable Restricted Stock Units, such Units shall be paid to his or her Beneficiary. Participant shall have the right to designate a Beneficiary in accordance with procedures established under the Plan for such purpose. If Participant fails to designate a Beneficiary, or if at the time of the Participant’s death there is no surviving Beneficiary, any amounts payable will be paid to the Participant’s estate.
|
12.
|
Taxes. The Company will withhold from the Award the number of shares of Common Stock necessary to satisfy Federal tax-withholding requirements and state and local tax-withholding requirements with respect to the state and locality designated by the Participant as their place of residence in the Company's system of record at the time the Award becomes taxable, except to the extent otherwise determined to be required by the Company, subject, however, to any special rules or provisions that may apply to Participants who are non-US employees (working inside or outside of the United States) or US employees working outside of the United States. It is the Participant's responsibility to properly report all income and remit all Federal, state, and local taxes that may be due to the relevant taxing authorities as the result of receiving this Award.
|
13.
|
No Right to Continued Employment. Neither this Award nor the granting or vesting of Restricted Stock Units shall confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment at any time.
|
14.
|
Change in Capital Structure. In accordance with the terms of the Plan, the terms of this Award shall be adjusted as the Committee determines is equitable in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
|
15.
|
Governing Law. This Award shall be governed by the laws of the Commonwealth of Virginia and applicable Federal law. All disputes arising under this Award shall be
|
16.
|
Conflicts. (a) In the event of any conflict between the provisions of the Plan as in effect on the Grant Date and the provisions of this Award, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Grant Date.
|
17.
|
Binding Effect. Subject to the limitations stated above and in the Plan, this Award shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company.
|
18.
|
Change in Control. In the event of a Change in Control (as defined in the Plan) prior to the forfeiture of the Restricted Stock Units under paragraph 8, the provisions of this paragraph 18 shall apply in addition to the provisions of Article 17 (and related provisions) of the Plan.
|
19.
|
Qualifying Termination Event and Other Terms.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Albemarle Corporation for the period ended March 31, 2019;
|
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:
|
May 8, 2019
|
/s/ LUTHER C. KISSAM IV
|
Luther C. Kissam IV
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Albemarle Corporation for the period ended March 31, 2019;
|
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:
|
May 8, 2019
|
/s/ SCOTT A. TOZIER
|
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/ LUTHER C. KISSAM IV
|
Luther C. Kissam IV
|
Chairman, President and Chief Executive Officer
|
May 8, 2019
|
(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/ SCOTT A. TOZIER
|
Scott A. Tozier
|
Executive Vice President and Chief Financial Officer
|
May 8, 2019
|