UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 10-K
________________________________________
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2024
or
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 001-12658
ALBEMARLE CORPORATION
(Exact name of registrant as specified in its charter)
Virginia
54-1692118
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
4250 Congress Street, Suite 900
Charlotte, North Carolina 28209
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (980) - 299-5700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol
Name of each exchange on which
registered
COMMON STOCK, $.01 Par Value
ALB
New York Stock Exchange
DEPOSITARY SHARES, each representing a 1/20th interest in a
share of 7.25% Series A Mandatory Convertible Preferred Stock
ALB PR A
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b))
by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements
of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of
incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period
pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant
was approximately $11.2 billion based on the last reported sale price of common stock on June 28, 2024, the last business day
of the registrant’s most recently completed second quarter.
Number of shares of common stock outstanding as of February 5, 2025: 117,573,461
Documents Incorporated by Reference
Portions of Albemarle Corporation’s definitive Proxy Statement for its 2025 Annual Meeting of Shareholders to be filed
with the U.S. Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended, are incorporated by reference into Part III of this Annual Report on Form 10-K.
Index to Form 10-K
Year Ended December 31, 2024
Page
PART I
Item 1.
Business
3
Item 1A.
Risk Factors
9
Item 1B.
Unresolved Staff Comments
30
Item 1C.
Cybersecurity
30
Item 2.
Properties
31
Item 3.
Legal Proceedings
54
Item 4.
Mine Safety Disclosures
54
Executive Officers of the Registrant
55
PART II
Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
56
Item 6.
[Reserved]
57
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
57
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
84
Item 8.
Financial Statements and Supplementary Data
86
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
144
Item 9A.
Controls and Procedures
144
Item 9B.
Other Information
144
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
144
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
145
Item 11.
Executive Compensation
145
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
145
Item 13.
Certain Relationships and Related Transactions, and Director Independence
145
Item 14.
Principal Accountant Fees and Services
145
PART IV
Item 15.
Exhibits and Financial Statement Schedules
146
Item 16.
Form 10-K Summary
152
Signatures
153
Albemarle Corporation and Subsidiaries
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PART I
Item 1.
Business.
Albemarle Corporation was incorporated in Virginia in 1993. Our principal executive offices are located at 4250
Congress Street, Suite 900, Charlotte, North Carolina 28209. Unless the context otherwise indicates, the terms “Albemarle,”
“we,” “us,” “our” or “the Company” mean Albemarle Corporation and its consolidated subsidiaries.
Albemarle is a world leader in transforming essential resources into critical ingredients for mobility, energy, connectivity,
and health. Our purpose is to enable a more resilient world. We partner to pioneer new ways to move, power, connect, and
protect. The end markets we serve include grid storage, automotive, aerospace, conventional energy, electronics, construction,
agriculture and food, pharmaceuticals and medical devices. We believe that our world-class resources with reliable and
consistent supply, our leading process chemistry, high-impact innovation, customer centricity and focus on people and planet
will enable us to maintain a leading position in the industries in which we operate.
We and our joint ventures currently operate more than 25 production and research and development (“R&D”) facilities,
as well as a number of administrative and sales offices, around the world. As of December 31, 2024, we served approximately
1,900 customers in approximately 70 countries. For information regarding our unconsolidated joint ventures, see Note 8,
“Investments,” to our consolidated financial statements included in Part II, Item 8 of this report.
Effective November 1, 2024, we transitioned our operating structure from two core global business units - Energy
Storage and Specialties - to a fully integrated functional model designed to increase agility, deliver significant cost savings and
maintain long-term competitiveness. In addition, our Ketjen business continues to be operated under a separate, wholly-owned
subsidiary. We will continue to report results across three existing operating segments: Energy Storage, Specialties and Ketjen.
Business Segments
During 2024, we managed and reported our operations under three reportable segments: Energy Storage, Specialties and
Ketjen. The segments are organized based on their similar markets, customers, economic characteristics and production
processes. Financial results and discussion about our segments included in this report are organized according to these
categories except where noted.
For financial information regarding our reportable segments and geographic area information, see Note 25, “Segment and
Geographic Area Information,” to our consolidated financial statements included in Part II, Item 8 of this report.
Energy Storage Segment
Our Energy Storage business enables better lithium use through reliable supply and consistent quality. We develop and
manufacture a broad range of basic lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride.
Lithium is a key component in products and processes used in a variety of applications and industries, which include lithium
batteries used in consumer electronics and electric vehicles, power grids and solar panels, high performance greases, specialty
glass used in consumer appliances and electronics, organic synthesis processes in the areas of steroid chemistry and vitamins,
various life science applications, as well as intermediates in the pharmaceutical industry, among other applications.
In addition to developing and supplying lithium compounds, we provide technical services, including the handling and use
of reactive lithium products. We also offer our customers recycling services for lithium-containing by-products resulting from
synthesis with organolithium products, lithium metal and other reagents. We plan to continue to focus on the development of
new products and applications.
Competition
The global lithium market is highly competitive and growing very rapidly. It is characterized by aggressive expansion
and entry from existing and new players, including automotive OEMs, commodity traders, junior miners, and large, well-
capitalized diversified miners. Producers are primarily located in the Americas, Africa, Asia and Australia. Major competitors
in lithium compounds include Sociedad Quimica y Minera de Chile S.A., Sichuan Tianqi Lithium, Jiangxi Ganfeng Lithium,
Rio Tinto plc, Pilbara Minerals, Arcadium Lithium, Tesla and a large number of additional Chinese companies. Competition in
the global lithium market is increasingly based on index-based market pricing and differentiated via product quality, product
diversity, reliability of supply and customer service.
Albemarle Corporation and Subsidiaries
3
Raw Materials and Significant Supply Sources
We obtain lithium: (a) by purchasing lithium concentrate from our 49%-owned joint venture, Windfield Holdings Pty.
Ltd. (“Windfield”), which directly owns 100% of the equity of Talison Lithium Pty. Ltd., a company incorporated in Australia
(“Talison”) that owns the Greenbushes mine, and from our 50%-owned unincorporated joint venture, MARBL Lithium Joint
Venture (“MARBL”) in Western Australia, which owns the Wodgina hard rock lithium mine project (“Wodgina”); and (b)
through solar evaporation of our ponds at the Salar de Atacama, in Chile, and in Silver Peak, Nevada. In addition, we hold
mineral rights in defined areas of Kings Mountain, North Carolina with available lithium resources and we own undeveloped
land with access to a lithium resource in Antofalla, within the Catamarca Province of Argentina. See Item 2. Properties, for
additional disclosures of our lithium mineral properties.
Specialties Segment
Our Specialties business optimizes our portfolio of bromine and highly specialized lithium solutions. Our Specialties
business serves a variety of industries, including energy, mobility, connectivity, and health. Specialty products are essential in
both internal combustion and electric vehicles, from high-voltage cables and powertrains to airbags and tires. We enable digital
innovation focused on safety and reliability, including fire safety compounds. Our fire safety technology enables the use of
plastics in high performance, high heat applications by enhancing the flame resistant properties of these materials. End market
products that benefit from our fire safety technology include plastic enclosures for consumer electronics, printed circuit boards,
wire and cable products, electrical connectors, textiles and foam insulation. In energy, infrastructure for renewable grid and
electrified transport is enabled by our fire safety solutions. In health, our lithium specialties products are precursors for many
pharmaceuticals, while bromine specialties are used to help ensure safer food and water supplies. Other bromine-based
specialty chemicals products include elemental bromine, alkyl bromides, inorganic bromides, brominated powdered activated
carbon and a number of bromine fine chemicals. Our value-added lithium specialties products include butyllithium and lithium
aluminum hydride. We also develop and manufacture cesium products for the chemical and pharmaceutical industries, and
zirconium, barium and titanium products for various pyrotechnical applications, including airbag initiators. A number of
customers of our Specialties business operate in cyclical industries, including the consumer electronics and oil field industries.
As a result, demand from our customers in such industries is also cyclical.
Competition
Our Specialties business serves markets in the Americas, Asia, Europe and the Middle East, each of which is highly
competitive. Product performance and quality, price and contract terms are the primary factors in determining which qualified
supplier is awarded a contract. R&D, product and process improvements, specialized customer services, the ability to attract
and retain skilled personnel and maintenance of a good safety record have also been important factors to compete effectively in
the marketplace. Our most significant competitors are Lanxess AG, Israel Chemicals Ltd and Arcadium Lithium, as well as
producers in India and China.
Raw Materials and Significant Supply Sources
The bromine we use is originally sourced from two locations: Arkansas and the Dead Sea. Our bromine production
operations in Arkansas are supported by an active brine rights leasing program. In addition, through our 50% interest in Jordan
Bromine Company Limited (“JBC”), a consolidated joint venture established in 1999 with operations in Safi, Jordan, we
acquire bromine that is originally sourced from the Dead Sea. JBC processes the bromine at its facilities into a variety of end
products. See Item 2. Properties, for additional disclosures for our mineral properties. The lithium concentrate used in our
lithium specialties products are originally sourced from the same sources as the Energy Storage lithium concentrate noted
above.
Ketjen Segment
Our three main product lines in this segment are (i) Clean Fuels Technologies (“CFT”), which is primarily composed of
hydroprocessing catalysts (“HPC”) together with isomerization and alkylation catalysts; (ii) fluidized catalytic cracking
(“FCC”) catalysts and additives; and (iii) performance catalyst solutions (“PCS”), which is primarily composed of
organometallics and curatives.
We offer a wide range of HPC products, which are applied throughout the oil refining industry. Their application enables
the upgrading of oil fractions to clean fuels and other usable oil feedstocks and products by removing sulfur, nitrogen and other
impurities from the feedstock. In addition, they improve product properties by adding hydrogen and in some cases improve the
performance of downstream catalysts and processes. We continuously seek to add more value to refinery operations by offering
HPC products that meet our customers’ requirements for profitability and performance in the very demanding refining market.
Albemarle Corporation and Subsidiaries
4
We provide our customers with customized FCC catalyst systems, which assist in the high yield cracking of refinery
petroleum streams into derivative, higher-value products such as transportation fuels and petrochemical feedstocks like
propylene. Our FCC additives are used to reduce emissions of sulfur dioxide and nitrogen oxide in FCC units and to increase
liquefied petroleum gas olefins yield, such as propylene, and to boost octane in gasoline. Ketjen offers unique refinery catalysts
to crack and treat the lightest to the heaviest feedstocks while meeting refinery yield and product needs.
Within our PCS product line, we manufacture organometallic co-catalysts (e.g., aluminum, magnesium, and zinc alkyls)
used in the manufacture of alpha-olefins (e.g., hexene, octene, decene), polyolefins (e.g., polyethylene and polypropylene), and
electronics. Our curatives include a range of curing agents used in polyurethanes, epoxies and other engineered resins.
There were more than 700 refineries world-wide as of December 31, 2024. We expect to continue to see some less
profitable, typically smaller, refineries shutting down and, over the long-term, being replaced by larger scale and more complex
refineries, with growth concentrated in the Middle East, India and South-East Asia. Advances in sustainable aviation fuels,
petroleum products and renewable diesel are expected to continue. We estimate that there are currently approximately 600 FCC
units being operated globally, each of which requires a constant supply of FCC catalysts. In addition, we estimate that there are
approximately 4,000 HPC units being operated globally, each of which typically requires replacement HPC catalysts once every
one to four years.
Competition
Our Ketjen segment serves the global market including the Americas, Asia, Europe and the Middle East, each of which is
highly competitive. Competition in these markets is driven by a variety of factors. Product performance, quality, price, contract
terms, product and process improvements, specialized customer services, the ability to attract and retain skilled technical
support, and the maintenance of a good safety record are the primary factors to compete effectively in the catalysts marketplace.
In addition, through our research and development programs, we strive to differentiate our business by developing value-added
products based on proprietary technologies.
Our major competitors in the CFT catalysts market include Shell Catalysts & Technologies, Advanced Refining
Technologies and Haldor Topsoe. Our major competitors in the FCC catalysts market include W.R. Grace & Co. and BASF
Corporation. In the PCS market, our major competitors include Nouryon, Lanxess AG and Arxada.
Raw Materials and Significant Supply Sources
The major raw materials we use in our Ketjen operations include sodium silicate, sodium aluminate, kaolin, aluminum,
ethylene, alpha-olefins, isobutylene, toluene and metals, such as lanthanum, molybdenum, nickel and cobalt, most of which are
readily available from numerous independent suppliers and are purchased or provided under contracts at prices we believe are
competitive. The cost of raw materials is generally based on market prices, although we may use contracts with price caps or
other tools, as appropriate, to mitigate price volatility.
Human Capital
Our main human capital management objectives are to attract, retain and develop the highest quality talent and ensure
they feel safe, supported and empowered to do the best work they can do. We believe providing an inclusive workplace
facilitates opportunities for innovation, fosters good decision-making practices, and promotes employee engagement and high
productivity across our organization.
As of December 31, 2024, we had approximately 8,300 employees, including employees of our consolidated joint
ventures, of whom 3,300, or 39%, are employed in the U.S. and the Americas; 2,900, or 35%, are employed in Asia Pacific;
1,500, or 19%, are employed in Europe; and 600, or 7%, are employed in the Middle East or other areas. Approximately 28% of
these employees are represented by unions or works councils. We strive to foster positive relationships with our employees and
their representatives.
Health and Safety
The health and safety of our employees is a part of our core values at Albemarle and is integral to how we conduct
business. Our employees, contractors, and visitors are instructed to follow a comprehensive set of written health and safety
policies and procedures at both corporate and local sites. Our internal incident and issues management system gives all
employees the ability to report incidents anonymously without fear of retaliation, and allow us to be more proactive in
developing safety programs that address at-risk conditions or behaviors, which could lead to an incident. We routinely audit
ourselves against our policies, procedures and standards, using internal and third-party resources. We also include health and
safety metrics in our annual incentive plan to further incentivize our employees’ commitment to safety. In 2024, we maintained
Albemarle Corporation and Subsidiaries
5
our Occupational Safety and Health Act (“OSHA”) occupational injury and illness incident rate of 0.13 for our employees and
nested contractors, compared to 0.14 in 2023. In addition, we provide all employees and their dependents with access to our
Employee Assistance Program, which provides free mental and behavioral health resources.
Talent and Culture
Investing in talent is a critical process for Albemarle because it allows us to be proactive and anticipate key
organizational needs for talent and capabilities. This enables us to efficiently and effectively ensure that we have the right talent
pipeline to drive Albemarle’s success into the future. We also provide leadership development through performance coaching,
comprehensive feedback, plant training including health, safety and environmental topics, and experiential development and
mentoring. Our leadership development is a cornerstone to our talent management strategy. We also invest in our people
through enhanced training and development opportunities and by seeking to foster an equitable workplace and an inclusive
culture that enables employees to feel a sense of belonging and reach their full potential.
It is important for us to have a workforce of highly engaged employees who understand how their work connects to
Albemarle’s purpose and values. We have measured employee engagement through an empowerment survey, which tracks job
satisfaction and how likely an employee is to recommend Albemarle to people they know. In addition, we are committed to
empowering and supporting the next generation of talent in their career development by engaging in various initiatives to attract
people from all backgrounds to our internship, co-op and rotational development programs.
Our incentive program is designed to provide incentives and rewards for achieving Albemarle’s annual goals and
objectives. The Executive Compensation and Talent Development Committee of the Board has the overall responsibility of
evaluating the performance of the CEO and approving the compensation structure for senior management and other key
employees. The Executive Compensation and Talent Development Committee determines performance goals under our
incentive program annually to ensure our executive officers execute on short-term financial and strategic initiatives that drive
our business strategy and long-term shareholder value.
We develop holistic inclusion and belonging initiatives to foster a values-driven workplace where all individuals feel a
sense of belonging as they grow in their professions. We continue to pursue strategies and partnerships to attract highly
qualified applicants from all backgrounds, offer cross-cultural learning sessions for our employees, and assess promotion,
retention, and turnover data to identify potential opportunities for greater inclusion efforts.
We seek to provide employees with a desirable workplace that will enable us to attract and retain top talent. We believe
employees should be fairly compensated through wages and benefits, based on experience, expertise, performance, and the
criticality of their roles in the Company. We also perform an annual review of our pay practices to ensure that they are fair and
equitable. In addition, we have established employee resource groups, known as Connect groups, to promote an atmosphere of
inclusion and encouragement in which every employee’s voice can be heard. These Connect groups provide opportunities for
employees to share their backgrounds and experiences, and to use them to benefit others through mentoring and volunteering in
the local community, among other activities.
Human Rights
Albemarle is guided by its Code of Conduct, which sets forth the high ethical standards we have for all employees and
encourages a ‘Speak Up’ culture. We understand our responsibility to uphold the human rights of our employees, workers in
our supply chain, members of our communities and other stakeholders. We recognize the human rights of our stakeholders as
expressed in the International Bill of Human Rights and the International Labor Organization’s (ILO) Declaration on
Fundamental Principles and Rights at Work. We acknowledge the human rights of Indigenous Peoples in culturally sensitive
locations, such as Chile and Western Australia, where our sites are located on Indigenous Peoples’ lands through clear policy
commitments, due diligence initiatives, formal community agreements and accessible grievance mechanisms for reporting
concerns.
Albemarle offers multiple avenues for employees and stakeholders to raise concerns. We maintain internal investigation
standards to thoroughly review and address concerns that may arise. We take measures to maintain confidentiality, protect the
integrity of all investigations, and prevent retaliation against those who speak up in good faith. In conducting investigations, we
are committed to the U.N. Guiding Principles on Business and Human Rights.
Sales, Marketing and Distribution
We have an international strategic account program that uses cross-functional teams to serve large global customers. This
program emphasizes creative strategies to improve and strengthen strategic customer relationships with emphasis on creating
Albemarle Corporation and Subsidiaries
6
value for customers and promoting post-sale service. Complementing this program are regional Albemarle sales and technical
personnel who serve our global customer base. We also utilize sales representatives and specialists in specific market areas
when necessary or required by law.
Research and Development
We believe that in order to generate revenue growth, maintain our margins and remain competitive, we must continually
invest in research and development, product and process improvements and specialized customer services. Our research and
development efforts support each of our business segments. The objective of our research and development efforts is to develop
innovative chemistries and technologies with applications relevant within targeted key markets through both process and new
product development. Through research and development, we continue to seek increased margins by introducing value-added
products and proprietary processes and innovative green chemistry technologies. Our green chemistry efforts focus on the
development of products in a manner that minimizes waste and the use of raw materials and energy, avoids the use of toxic
reagents and solvents and utilizes safe, environmentally friendly manufacturing processes. Green chemistry is encouraged with
our researchers through periodic focus group discussions and special rewards and recognition for outstanding new green
developments.
Intellectual Property
Our intellectual property, including our patents, licenses and trade names, is an important component of our business. As
of December 31, 2024, we owned more than 1,650 active patents and more than 400 pending patent applications in key
strategic markets worldwide. We also have acquired rights under patents and inventions of others through licenses, and we
license certain patents and inventions to third parties. The Company believes the duration of its intellectual property rights is
adequate relative to the expected lives of its products and services.
Regulation
Our business is subject to a broad array of employee health and safety laws and regulations, including those under the
OSHA. We also are subject to similar state laws and regulations as well as local laws and regulations for our non-U.S.
operations. We devote significant resources and have developed and implemented comprehensive programs to promote the
health and safety of our employees, and we maintain an active health, safety and environmental program. We finished 2024
with an OSHA occupational injury and illness incident rate of 0.13 for Albemarle employees and nested contractors, compared
to 0.14 in 2023.
Our business and our customers are subject to significant requirements under the European Community Regulation for
the Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”). REACH imposes obligations on
European Union manufacturers and importers of chemicals and other products into the European Union to compile and file
comprehensive reports, including testing data, on each chemical substance, and perform chemical safety assessments.
Additionally, substances of high concern, as defined under REACH, are subject to an authorization process. Authorization may
result in restrictions in the use of products by application or even banning the product. REACH regulations impose significant
additional responsibilities on chemical producers, importers, downstream users of chemical substances and preparations, and
the entire supply chain. Our significant manufacturing presence and sales activities in the European Union require significant
compliance costs and may result in increases in the costs of raw materials we purchase and the products we sell. Increases in the
costs of our products could result in a decrease in their overall demand; additionally, customers may seek products with lower
regulatory compliance requirements, which could also result in a decrease in the demand of certain products subject to the
REACH regulations.
The Toxic Substances Control Act (“TSCA”), as amended in June 2016, requires chemicals to be assessed against a risk-
based safety standard and calls for the elimination of unreasonable risks identified during risk evaluation. This regulation and
other pending initiatives at the U.S. state level, as well as initiatives in Canada, Asia and other regions, will potentially require
toxicological testing and risk assessments of a wide variety of chemicals, including chemicals used or produced by us. These
assessments may result in heightened concerns about the chemicals involved and additional requirements being placed on the
production, handling, labeling or use of the subject chemicals. Such concerns and additional requirements could also increase
the cost incurred by our customers to use our chemical products and otherwise limit the use of these products, which could lead
to a decrease in demand for these products.
Historically, there has been scrutiny of certain brominated fire safety solutions by regulatory authorities, legislative
bodies and environmental interest groups in various countries. We manufacture a broad range of brominated fire safety solution
products, which are used in a variety of applications. Concern about the impact of some of our products on human health or the
environment may lead to regulation or reaction in our markets independent of regulation.
Albemarle Corporation and Subsidiaries
7
Environmental Regulation
We are subject to numerous foreign, federal, state and local environmental laws and regulations, including those
governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes
and the cleanup of contaminated properties. Ongoing compliance with such laws and regulations is an important consideration
for us. Key aspects of our operations are subject to these laws and regulations. In addition, we incur substantial capital and
operating costs in our efforts to comply with them.
We use and generate hazardous substances and wastes in our operations and may become subject to claims for personal
injury and/or property damage relating to the release of such substances into the environment. In addition, some of our current
properties are, or have been, used for industrial purposes, which could contain currently unknown contamination that could
expose us to governmental requirements or claims relating to environmental remediation, personal injury and/or property
damage. Liabilities associated with the investigation and cleanup of hazardous substances, as well as personal injury, property
damages or natural resource damages arising from the release of, or exposure to, such hazardous substances, may be imposed in
many situations without regard to violations of laws or regulations or other fault, and may also be imposed jointly and severally
(so that a responsible party may be held liable for more than its share of the losses involved, or even the entire loss). Such
liabilities also may be imposed on many different entities with a relationship to the hazardous substances at issue, including, for
example, entities that formerly owned or operated the property affected by the hazardous substances and entities that arranged
for the disposal of the hazardous substances at the affected property, as well as entities that currently own or operate such
property. We are subject to such laws, including the federal Comprehensive Environmental Response, Compensation and
Liability Act, commonly known as CERCLA or Superfund, in the U.S., and similar foreign and state laws. We may have
liability as a potentially responsible party (“PRP”) with respect to active off-site locations under CERCLA or state equivalents.
We have sought to resolve our liability as a PRP at these sites through indemnification by third parties and settlements, which
would provide for payment of our allocable share of remediation costs. Because the cleanup costs are estimates and are subject
to revision as more information becomes available about the extent of remediation required, and in some cases we have asserted
a defense to any liability, our estimates could change. Moreover, liability under CERCLA and equivalent state statutes may be
joint and several, which could require us to pay in excess of our pro rata share of remediation costs. Our understanding of the
financial strength of other PRPs has been considered, where appropriate, in estimating our liabilities. Accruals for these matters
are included in the environmental reserve. Our management is actively involved in evaluating environmental matters and, based
on information currently available to us, we have concluded that our outstanding environmental liabilities for unresolved waste
sites currently known to us should not have a material effect on our operations.
See “Safety and Environmental Matters” in Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations for further details.
Climate Change and Natural Resources
The growing concerns about climate change and the related increasingly stringent regulations may provide us with new or
expanded business opportunities. We provide solutions to companies pursuing alternative fuel products and technologies (such
as renewable fuels), pollution control technologies (including mercury emissions), alternative transportation vehicles and
energy storage technologies and other similar solutions. As demand for, and legislation mandating or incentivizing the use of,
alternative fuel technologies that limit or eliminate greenhouse gas emissions increase, we continue to monitor the market and
offer solutions where we have appropriate technology and believe we are well positioned to take advantage of opportunities that
may arise from such demand or legislation.
In addition to potential business opportunities, we acknowledge our responsibility to address the impact of our operations
on the environment. We are investing in technology and people to reduce energy consumption, greenhouse gas emissions and
air emissions. Albemarle supports the goals of the Paris Agreement to avoid climate change by limiting global warming. Our
ambition is to achieve net-zero carbon emissions by 2050. We have established greenhouse gas emission targets for each of our
businesses, including reducing the scope 1 and 2 carbon-intensity of our Specialties and Ketjen businesses by 35% by 2030
(from a 2019 baseline), and growing our Energy Storage business in a carbon-intensity neutral manner through 2030.
Water is a critical input to Albemarle’s production operations. As water is a scarce resource, we understand the need to
responsibly manage our water consumption not only for the preservation of the environment, but also for the viability of our
local communities. We are investing in new process technologies to reduce our water footprint and expand capacity sustainably
in locations with high water risk. Our goal is to reduce our intensity of freshwater usage by 25% by 2030 (from a 2019 baseline)
in areas of high or extremely high water risk, such as Chile and Jordan, as defined by the World Resources Institute.
Our businesses are dependent on the availability and responsible management of natural resources. We manage our
natural resources to operate efficiently and preserve the environment for our local communities and the world. Our natural
Albemarle Corporation and Subsidiaries
8
resource management includes mineral resource transparency with local communities, governments, regulators and other key
stakeholders, as well as leveraging industry best practices in lithium production for the assurance of responsible mining. We
attempt to maximize the recovery of our extracted minerals and recycle or reuse by-products where possible. In addition, we
work with local communities, regulatory agencies and wildlife organizations to preserve and restore land and biodiversity
before, during and after all operations commence.
Recent Acquisitions, Joint Ventures and Divestitures
The following is a summary of our significant acquisitions and joint venture agreement restructurings over the last three
years.
On October 18, 2023, the Company closed on the restructuring of the MARBL joint venture with Mineral Resources
Limited (“MRL”). Under the amended agreements, Albemarle acquired the remaining 40% ownership of the Kemerton lithium
hydroxide processing facility in Australia that was jointly owned with MRL through the MARBL joint venture. Following this
restructuring, Albemarle and MRL each own 50% of Wodgina, and MRL operates the Wodgina mine on behalf of the joint
venture. During the fourth quarter of 2023, Albemarle paid MRL approximately $380 million in cash, which includes
$180 million of consideration for the remaining ownership of Kemerton as well as a payment for the economic effective date of
the transaction being retroactive to April 1, 2022.
On October 25, 2022, the Company completed the acquisition of all of the outstanding equity of Guangxi Tianyuan New
Energy Materials Co., Ltd. (“Qinzhou”), for approximately $200 million in cash. Qinzhou’s operations include a recently
constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi, which began commercial
production in the first half of 2022. The plant has a designed annual conversion capacity of up to 25,000 metric tons of lithium
carbonate equivalent (“LCE”) and produces battery-grade lithium carbonate and lithium hydroxide.
These transactions reflect our commitment to investing in future growth of our high priority businesses.
Available Information
Our website address is www.albemarle.com. We make available free of charge through our website our Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as well as beneficial
ownership reports on Forms 3, 4 and 5 filed pursuant to Section 16 of the Exchange Act, as soon as reasonably practicable after
such documents are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). The
information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings we
make with the SEC. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other
information regarding SEC registrants, including Albemarle.
Our Corporate Governance Guidelines, Code of Conduct and the charters of the Audit and Finance, Capital Investment,
Sustainability, Safety and Public Policy, Executive Compensation and Talent Development, and Nominating and Governance
Committees of our Board of Directors are also available on our website and are available in print to any shareholder upon
request by writing to Investor Relations, 4250 Congress Street, Suite 900, Charlotte, North Carolina 28209, or by calling
(980) 299-5700.
Item 1A.
Risk Factors.
Risk Factor Summary
The following is a summary of some of the principal risks that could adversely affect our business, financial condition or
results of operations. This summary should be read together with the more detailed description of each risk contained below.
Risks Related to Our Business
•
Our substantial international operations subject us to risks of doing business in foreign countries, which could
adversely affect our business, financial condition and results of operations.
•
Our inability to secure key raw materials, or to pass through increases in costs and expenses for other raw materials
and energy, on a timely basis or at all, including due to climate change, could have an adverse effect on the margins of
our products and our results of operations.
•
Competition within our industry may place downward pressure on the prices and margins of our products and may
adversely affect our businesses and results of operations.
Albemarle Corporation and Subsidiaries
9
•
Our research and development efforts may not succeed in addressing changes in our customers’ needs, and our
competitors may develop more effective or successful products.
•
The development of non-lithium battery technologies could adversely affect us.
•
Development projects are inherently risky and may require more capital than anticipated, which could adversely affect
our business. The development of our mines and operations are also subject to other project specific risks.
•
Downturns in our customers’ industries, which may be cyclical or affected by changes in governing administrations,
could adversely affect our sales and profitability.
•
Our results are subject to fluctuation because of irregularities in the demand for our HPC catalysts and certain of our
agrichemicals.
•
Regulation, or the threat of regulation, of some of our products could have an adverse effect on our sales and
profitability.
•
We could be subject to damages based on claims brought against us by our customers or lose customers as a result of
the failure of our products to meet certain quality specifications.
•
Our business is subject to hazards common to chemical and natural resource extraction businesses, any of which could
injure our employees or other persons, damage our facilities or other properties, interrupt our production and adversely
affect our reputation and results of operations.
•
Our business could be adversely affected by environmental, health and safety laws and regulations.
•
Our operations could be adversely affected by local communities and/or other stakeholders.
•
We may be subject to indemnity claims and liable for other payments relating to properties or businesses we have
divested.
•
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar foreign anti-
corruption laws, and in the past have paid fines in order to resolve self-reported potential violations of such laws.
•
We are subject to extensive foreign government regulation that can negatively impact our business.
•
Our inability to protect our intellectual property rights, or being accused of infringing on intellectual property rights of
third parties, could have a material adverse effect on our business, financial condition and results of operations.
•
Our inability to acquire or develop additional lithium reserves that are economically viable could have a material
adverse effect on our future profitability.
•
There is risk to the growth of lithium markets.
•
Demand and market prices for lithium will greatly affect the value of our investment in our lithium resources and
conversion plants and our revenues and profitability generally.
•
If we are unable to retain key personnel or attract new skilled personnel, it could have an adverse effect on our
business.
•
Some of our employees are unionized, represented by works councils or are employed subject to local laws that are
less favorable to employers than the laws of the U.S.
•
Our joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations,
which may adversely affect our results of operations and may force us to dedicate additional resources to these joint
ventures.
Risks Related to Our Financial Condition
•
Our required capital expenditures can be complex, may experience delays or other difficulties, and the costs may
exceed our estimates.
•
We will need a significant amount of cash to service our indebtedness and our ability to generate cash depends on
many factors beyond our control.
•
Because a significant portion of our operations is conducted through our subsidiaries and joint ventures, our ability to
service our debt may be dependent on our receipt of distributions or other payments from our subsidiaries and joint
ventures.
•
Restrictive covenants in our debt instruments may adversely affect our business.
•
Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost
of financing, the market price of our securities and our debt service obligations.
•
Write-offs or impairment of our goodwill, intangible assets or long-lived assets can result in significant charges to
earnings.
Albemarle Corporation and Subsidiaries
10
•
Our business could suffer if we are not successful in executing our strategy and initiatives in connection with our
comprehensive review of our cost and operating structure.
•
We are exposed to fluctuations in currency exchange rates, which may adversely affect our operating results and net
income.
•
Significant or prolonged periods of higher interest rates may have an adverse effect on our results of operations,
financial condition and cash flows.
•
Inflationary trends in the price of our input costs, such as raw materials, transportation and energy, could adversely
affect our business and financial results.
•
Changes in, or the interpretation of, tax legislation or rates throughout the world could materially impact our results.
•
Future events may impact our deferred tax asset position and U.S. deferred federal income taxes on undistributed
earnings of international affiliates that are considered to be indefinitely reinvested.
•
Our business and financial results may be adversely affected by various legal and regulatory proceedings.
•
Although our pension plans currently meet minimum funding requirements, events could occur that would require us
to make significant contributions to the plans and reduce the cash available for our business.
•
We may not be able to consummate future acquisitions or integrate acquisitions into our business, which could result
in unanticipated expenses and losses.
•
We may continue to expand our business through acquisitions and we may incur additional indebtedness, including
indebtedness related to acquisitions.
General Risk Factors
•
Adverse conditions in the economy, and volatility and disruption of financial markets can negatively impact our
customers, suppliers and other business partners and therefore have a material adverse effect on our business and
results of operations.
•
Our business and operations could suffer in the event of cybersecurity breaches, information technology system
failures, or network disruptions.
•
The occurrence or threat of extraordinary events, including domestic and international terrorist attacks, may disrupt our
operations and decrease demand for our products.
•
National or international disputes, political instability, terrorism war or armed hostilities, could impact our results of
operations.
•
Natural disasters or other unanticipated catastrophes could impact our operations and could have a material adverse
effect on our results of operations, financial position, and cash flows.
•
Our insurance may not fully cover all potential exposures.
•
We may be exposed to certain regulatory and financial risks related to climate change.
•
Failure to meet sustainability expectations or standards or achieve our sustainability goals could adversely affect our
business, results of operations, financial condition, or stock price.
Risk Factors
You should consider carefully the following risks when reading the information, including the financial information,
contained in this Annual Report on Form 10-K.
Risks Related to Our Business
Our substantial international operations subject us to risks of doing business in foreign countries, which could adversely
affect our business, financial condition and results of operations.
We conduct a substantial portion of our business outside the U.S., with approximately 83% of our net sales to foreign
countries. We operate in, and/or sell our products to customers in, approximately 70 countries. We currently have many
production, research and development and administrative facilities as well as sales offices located outside the U.S., as detailed
in Item 2. Properties. Accordingly, our business is subject to risks related to the differing legal, political, social and regulatory
requirements and economic conditions of many jurisdictions. Risks inherent in international operations include the following:
•
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;
Albemarle Corporation and Subsidiaries
11
•
transportation and other shipping costs may increase, or transportation may be inhibited;
•
increased cost or decreased availability of raw materials;
•
increased regulations on, or reduced access to, scarce resources, such as freshwater;
•
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;
•
delays in obtaining or renewing, or the inability to obtain, maintain or renew, or the renegotiation, cancellation,
revocation or forced modification of existing contracts, leases, licenses, permits or other agreements and/or approvals;
•
trade sanctions by or against foreign countries in which we do business could result in our losing access to customers
and suppliers in those countries;
•
unexpected adverse changes in foreign laws or regulatory requirements may occur;
•
our agreements with counterparties in foreign countries may be difficult for us to enforce and related receivables may
be difficult for us to collect;
•
compliance with the variety of foreign laws and regulations may be unduly burdensome;
•
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;
•
compliance with changing cybersecurity rules and evolving data privacy rules and regulation, such as the European
Union’s General Data Protection Regulation, could increase our cost of doing business;
•
unexpected adverse changes in export regulations, duties, quotas and tariffs and difficulties in obtaining export licenses
may occur;
•
general economic conditions in the countries in which we operate could have an adverse effect on our earnings from
operations in those countries;
•
changes in the strength of our relationships with local communities and indigenous populations in the areas in which we
operate may impact our community support;
•
our foreign operations may experience staffing difficulties and labor disputes;
•
termination or substantial modification of international trade agreements may adversely affect our access to raw
materials and to markets for our products outside the U.S.;
•
foreign governments may nationalize or expropriate private enterprises;
•
increased sovereign risk (such as default by or deterioration in the economies and credit worthiness of local
governments) may occur; and
•
political or economic repercussions from terrorist activities, including the possibility of hyperinflationary conditions
and political instability, may occur in certain countries in which we do business.
The U.S. and foreign countries may also adopt or increase restrictions on foreign trade or investment, including currency
exchange controls, tariffs or other taxes, or limitations on imports or exports (including recent and proposed changes in U.S.
trade policy and resulting retaliatory actions by other countries).
In addition, certain of our operations and ongoing capital projects are in regions of the world such as Asia, the Middle
East and South America that are of high risk due to significant civil, political and security instability. Unanticipated events,
such as geopolitical changes, could result in a write-down of our investment in the affected joint venture or a delay or cause
cancellation of those capital projects, which could negatively impact our future growth and profitability. Our success as a global
business will depend, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions
by developing, implementing and maintaining policies and strategies that are effective in each location where we and our joint
ventures do business.
Furthermore, we are subject to rules and regulations related to anti-bribery and antitrust prohibitions of the U.S. and other
countries, as well as export controls and economic embargoes, violations of which may carry substantial penalties. For
example, export control and economic embargo regulations limit the ability of our subsidiaries to market, sell, distribute or
otherwise transfer their products or technology to prohibited countries or persons. Failure to comply with these regulations
could subject us or our subsidiaries to fines and enforcement actions and/or have an adverse effect on our reputation and the
value of our common stock. Relating to anti-bribery prohibitions, in September 2023, we finalized agreements with regulatory
agencies to resolve self-reported potential violations of the U.S. Foreign Corrupt Practices Act; see “We could be adversely
affected by violations of the U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws.” below.
Albemarle Corporation and Subsidiaries
12
Because we conduct substantial operations in China, risks associated with regulatory activity and political and social events
in China could negatively affect our business and operating results.
In 2024, net sales shipped to China represented 36% of our total net sales. Additionally, we own four production facilities
located in China, including the lithium conversion plant in Meishan, China, which began production in 2024. In addition to the
risks described above under “Our substantial international operations subject us to risks of doing business in foreign countries,
which could adversely affect our business, financial condition and results of operations.”, our operations in China expose us to
risks particular to conducting business in that country. For example, over the past several years the U.S. and China have applied
tariffs to certain of each other’s exports, including tariffs on Chinese electric vehicles and lithium-ion batteries announced by
the U.S. presidential administration in 2024, which have resulted in, and may continue to cause, shifting trade flows and
restrictions on certain sales of goods into China and domestic demand for products manufactured in China. The current U.S.
presidential administration has indicated that it may impose additional tariffs on China and other countries. Additionally,
geopolitical disputes (including as a result of China-Taiwan and U.S.-Taiwan relations) between the U.S. and China may lead to
further restrictions on trade and/or obstacles to conducting business in China. Recently, Australia and China have improved
relations and resolved trade disputes. However, as we ship a significant portion of our lithium from Australia into China for
further processing, any tensions or a regression in relations between the countries could have a material impact on our
operations. Furthermore, the Chinese government has, from time to time, curtailed manufacturing operations, with little or no
notice, in industrial regions out of growing concern over air quality and in response to COVID-19 outbreaks. The Chinese
government has also instituted energy intensity and energy consumption targets in a number of provinces in its efforts to reduce
energy consumption, resulting in energy quotas and shortages in energy supply that can be disruptive to construction and
manufacturing operations. These and other risks may have an adverse effect on our sales to Chinese customers and/or result in
our not realizing a return on, or losing some, or all, of our strategic investments in China.
In December 2021, the United States adopted the Uyghur Forced Labor Prevention Act (“UFLPA”) which creates a
rebuttable presumption that any goods, wares, articles, and merchandise mined, produced, or manufactured in whole or in part
in the Xinjiang Uyghur Administrative Region of China or that are produced by certain entities are prohibited from importation
into the United States and are not entitled to entry. These import restrictions came into effect on June 21, 2022. While we are
not presently aware of any direct impacts these restrictions will have on its supply chain, the UFLPA may materially and
negatively impact our ability to import the goods and products we rely on to manufacture our products and operate our
business.
Our inability to secure key raw materials, or to pass through increases in costs and expenses for other raw materials and
energy, on a timely basis or at all, including due to climate change, could have an adverse effect on the margins of our
products and our results of operations.
The long-term profitability of our operations will, in part, depend on our ability to continue to economically obtain
resources, including energy and raw materials. For example, our lithium and bromine businesses rely upon our continued ability
to produce, or otherwise obtain, lithium and bromine of sufficient quality and in adequate amounts to meet our customers’
demand. If we fail to secure and retain the rights to continue to access these key raw materials, we may have to restrict or
suspend our operations that rely upon these key resources, which could harm our business, results of operations and financial
condition. In addition, in some cases access to these raw materials by us and our competitors is subject to decisions or actions
by governmental authorities, which could adversely impact us. Furthermore, other raw material and energy costs account for a
significant percentage of our total costs of products sold, even if they can be obtained on commercially reasonable terms. Our
raw material and energy costs can be volatile and may increase significantly. Increases are primarily driven by tightening of
market conditions and major increases in the pricing of key constituent materials for our products such as crude oil, chlorine
and metals (including molybdenum and rare earths, which are used in the refinery catalysts business). We generally attempt to
pass through changes in the prices of raw materials and energy to our customers, but we may be unable to do so (or may be
delayed in doing so). In addition, raising prices we charge to our customers in order to offset increases in the prices we pay for
raw materials could cause us to suffer a loss of sales volumes. Our inability to efficiently and effectively pass through price
increases, or inventory impacts resulting from price volatility, could adversely affect our margins.
Competition within our industry may place downward pressure on the prices and margins of our products and may
adversely affect our businesses and results of operations.
We compete against a number of highly competitive global specialty chemical producers. Competition is based on several
key criteria, including product performance and quality, product price, product availability and security of supply, climate-
related performance and responsiveness of product development in cooperation with customers and customer service. Some of
our competitors are larger than us and may have greater financial resources. These competitors may also be able to maintain
significantly greater operating and financial flexibility. As a result, these competitors may be better able to withstand changes in
Albemarle Corporation and Subsidiaries
13
conditions within our industry. Competitors’ pricing decisions could compel us to decrease our prices, which could negatively
affect our margins and profitability. Our ability to maintain or increase our profitability is, and will continue to be, dependent
upon our ability to offset decreases in the prices and margins of our products by improving production efficiency and volume
and other productivity enhancements, shifting to production of higher margin chemical products and improving existing
products through innovation and research and development. If we are unable to do so or to otherwise maintain our competitive
position, we could lose market share to our competitors.
In addition, Albemarle’s brands, product image and trademarks represent the unique product identity of each of our
products and are important symbols of the Company’s reputation. Accordingly, the performance of our business could be
adversely affected by any marketing and promotional materials used by our competitors that make adverse claims, whether with
or without merit, against our Company or its products, imply or assert immoral or improper conduct by us, or are otherwise
disparaging of our Company or its products. Further, our own actions could hurt such brands, product image and trademarks if
our products underperform or we otherwise draw negative publicity.
Our research and development efforts may not succeed in addressing changes in our customers’ needs, and our competitors
may develop more effective or successful products.
Our industries and the end markets into which we sell our products experience technological change and product
improvement. Manufacturers periodically introduce new products or require new technological capacity to develop customized
products. Our future growth depends on our ability to gauge the direction of the commercial and technological progress in all
key end markets in which we sell our products and upon our ability to fund and successfully develop, manufacture and market
products in such changing end markets. As a result, we must commit substantial resources each year to research and
development. There is no assurance that we will be able to continue to identify, develop, market and, in certain cases, secure
regulatory approval for innovative products in a timely manner or at all, as may be required to replace or enhance existing
products, and any such inability could have a material adverse effect on our profit margins and our competitive position.
In addition, our customers use our specialty chemicals for a broad range of applications. Changes in our customers’
products or processes may enable our customers to reduce consumption of the specialty chemicals that we produce or make our
specialty chemicals unnecessary. Customers may also find alternative materials or processes that do not require our products.
Should a customer decide to use a different material due to price, performance or other considerations, we may not be able to
supply a product that meets the customer’s new requirements. Consequently, it is important that we develop new products to
replace the sales of products that mature and decline in use. Our business, results of operations, cash flows and margins could
be materially adversely affected if we are unable to manage successfully the maturation of our existing products and the
introduction of new products.
Despite our efforts, we may not be successful in developing new products and/or technology, either alone or with third
parties, or licensing intellectual property rights from third parties on a commercially competitive basis. Our new products may
not be accepted by our customers or may fail to receive regulatory approval. Moreover, new products may have lower margins
than the products they replace. Furthermore, ongoing investments in research and development for the future do not yield an
immediate beneficial impact on our operating results and therefore could result in higher costs without a proportional increase
in revenues.
The development of non-lithium battery technologies could adversely affect us.
The development and adoption of new battery technologies that rely on inputs other than lithium compounds could
significantly impact our prospects and future revenues. Current and next generation high energy density batteries for use in
electric vehicles rely on lithium compounds as a critical input. Alternative materials and technologies are being researched with
the goal of making batteries lighter, more efficient, faster charging and less expensive, and some of these could be less reliant
on lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable and on
what time horizon. Commercialized battery technologies that use no, or significantly less, lithium could materially and
adversely impact our prospects and future revenues.
Development projects are inherently risky and may require more capital than anticipated, which could adversely affect our
business. The development of our mines and operations are also subject to other unique risks.
Mine development projects typically require a number of years and significant expenditures during the development
phase before production is possible. There are many risks and uncertainties inherent in all development projects including, but
not limited to, unexpected or difficult geological formations or conditions, potential delays, cost overruns, lower levels of
production during ramp-up periods, shortages of material or labor, construction defects, breakdowns and injuries to persons and
property. The development of our mines and operations are also subject to other unique risks including, but not limited to,
Albemarle Corporation and Subsidiaries
14
underground fires or floods, ventilating harmful gases, fall-of-ground accidents, and seismic activity resulting from unexpected
or difficult geological formations or conditions. While we anticipate taking all measures that we deem reasonable and prudent
in connection with the development of our mines to safely manage production, there is no assurance that these risks will not
cause schedule delays, revised mine plans, injuries to persons and property, or increased capital costs, any of which may have a
material adverse impact on our cash flows, results of operations and financial condition. Additionally, although we devote
significant time and resources to our project planning, approval and review processes, many of our development projects are
highly complex and rely on factors that are outside of our control, which may cause us to underestimate the time and capital
required to complete a development project.
Our decision to develop a project is typically based on the results of feasibility studies, which estimate the anticipated
economic returns of a project. In addition, the economic feasibility of development projects is based on many factors, including
the accuracy of estimated mineral resources and reserves, estimated capital and operating costs, and estimated future prices of
lithium and bromine.
New development projects have no operating history upon which to base estimates of future cash flow. The actual costs,
production rates and economic returns of our development projects may differ materially from our estimates, which may have a
material adverse impact on our cash flows, results of operations and financial condition.
Downturns in our customers’ industries, which may be cyclical or affected by changes in governing administrations, could
adversely affect our sales and profitability.
Downturns in the businesses that use our specialty chemicals may adversely affect our sales. Many of our customers are
in industries, including the electronics, building and construction, oilfield and automotive industries, that are cyclical in nature,
or which are subject to secular market downturns or may face adverse effects of evolving regulatory regimes. Historically,
cyclical or secular industry downturns have resulted in diminished demand for our products, excess manufacturing capacity and
lower average selling prices, and we may experience similar problems in the future.
Additionally, certain of these industries are subject to regulatory schemes that may shift with changes in the political
climate. The results of elections in the United States or other countries in which our customers are located and changes in
governing administrations and legislative bodies may result in consequent changes to these regulatory regimes that could cause
a decline within these industries, leading to a diminished demand for our products. For example, the new U.S. presidential
administration has indicated that it may halt government infrastructure spending to establish charging points for EV users,
eliminate certain tax cuts available in connection with EV purchases, and rescind requirements pertaining to reducing
greenhouse gas emissions, all or any of which measures may have a detrimental affect on the U.S. EV industry. A decline in our
customers’ industries may have a material adverse effect on our sales and profitability.
Our results are subject to fluctuation because of irregularities in the demand for our HPC catalysts and certain of our
agrichemicals.
Our HPC catalysts are used by petroleum refiners in their processing units to reduce the quantity of sulfur and other
impurities in petroleum products. The effectiveness of HPC catalysts diminishes with use, requiring the HPC catalysts to be
replaced, on average, once every one to four years. The sales of our HPC catalysts, therefore, are largely dependent on the
useful life cycle of the HPC catalysts in the processing units and may vary materially by quarter. In addition, the timing and
profitability of HPC catalysts sales can have a significant impact on revenue and profit in any one quarter. Sales of our
agrichemicals are also subject to fluctuation as demand varies depending on climate and other environmental conditions, which
may prevent or reduce farming for extended periods. In addition, crop pricing and the timing of when farms alternate from one
crop to another crop in a particular year can also alter sales of agrichemicals.
Regulation, or the threat of regulation, of some of our products could have an adverse effect on our sales and profitability.
We manufacture or market a number of products that are or have been the subject of attention by regulatory authorities
and environmental interest groups. For example, there has been scrutiny of certain brominated fire safety solutions by
regulatory authorities, legislative bodies and environmental interest groups in various countries. We manufacture a broad range
of brominated fire safety solution products, which are used in a variety of applications to protect people, property and the
environment from injury and damage caused by fire. Concern about the impact of some of our products on human health or the
environment may lead to regulation, or reaction in our markets independent of regulation, that could reduce or eliminate
markets for such products.
Agencies in the European Union (“E.U.”) continue to evaluate the risks to human health and the environment associated
with certain brominated fire safety solutions such as tetrabromobisphenol A and decabromodiphenyl ethane, both of which we
Albemarle Corporation and Subsidiaries
15
manufacture. Additional government regulations, including limitations or bans on the use of brominated flame retardants, could
result in a decline in our net sales of brominated fire safety solutions and have an adverse effect on our sales and profitability. In
addition, the threat of additional regulation or concern about the impact of brominated fire safety solutions on human health or
the environment could lead to a negative reaction in our markets that could reduce or eliminate our markets for these products,
which could have an adverse effect on our sales and profitability.
Our business and our customers are subject to significant requirements under REACH, which imposes obligations on
E.U. manufacturers and importers of chemicals and other products into the E.U. to compile and file comprehensive reports,
including testing data, on each chemical substance, and perform chemical safety assessments. Additionally, substances of high
concern, as defined under REACH, are subject to an authorization process, which may result in restrictions in the use of
products by application or even banning the product. REACH regulations impose significant additional burdens on chemical
producers, importers, downstream users of chemical substances and preparations, and the entire supply chain. See “Regulation”
in Item 1. Business. Our significant manufacturing presence and sales activities in the E.U. require significant compliance costs
and may result in increases in the costs of raw materials we purchase and the products we sell. Increases in the costs of our
products could result in a decrease in their overall demand; additionally, customers may seek products with lower regulatory
compliance requirements, which could also result in a decrease in the demand of certain products subject to the REACH
regulations.
The U.S. Toxic Substances Control Act (TSCA) requires chemicals to be assessed against a risk-based safety standard
and calls for the elimination of unreasonable risks identified during risk evaluation. This regulation and other pending initiatives
at the U.S. state level, as well as initiatives in Canada, Asia and other regions, could potentially require toxicological testing and
risk assessments of a wide variety of chemicals, including chemicals used or produced by us. These assessments may result in
heightened concerns about the chemicals involved and additional requirements being placed on the production, handling,
labeling or use of the subject chemicals. Such concerns and additional requirements could also increase the cost incurred by our
customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand
for these products. Such a decrease in demand could have an adverse impact on our business and results of operations.
We could be subject to damages based on claims brought against us by our customers or lose customers as a result of the
failure of our products to meet certain quality specifications.
Our products enable important performance attributes of our customers’ products. If a product fails to perform in a
manner consistent with quality specifications or has a shorter useful life than guaranteed, a customer of ours could seek the
replacement of the product or damages for costs incurred as a result of the product failing to perform as guaranteed. These risks
apply to our refinery catalysts in particular because, in certain instances, we sell our refinery catalysts under agreements that
contain limited performance and life cycle guarantees. Also, because many of our products are integrated into our customers’
products, we may be requested to participate in, or fund in whole or in part the costs of, a product recall conducted by a
customer. For example, some of our businesses supply products to customers in the automotive industry. In the event one of
these customers conducts a product recall that it believes is related to one of our products, we may be asked to participate in, or
fund in whole or in part, such a recall.
Our customers often require our subsidiaries to represent that our products conform to certain product specifications
provided by our customers. Any failure to comply with such specifications could result in claims or legal action against us.
A successful claim or series of claims against us could have a material adverse effect on our financial condition and
results of operations and could result in our loss of one or more customers.
Our business is subject to hazards common to chemical and natural resource extraction businesses, any of which could
injure our employees or other persons, damage our facilities or other properties, interrupt our production and adversely
affect our reputation and results of operations.
Our business is subject to hazards common to chemical manufacturing, storage, handling and transportation, as well as
natural resource extraction, including explosions, fires, severe weather, natural disasters, mechanical failure, unscheduled
downtime, transportation interruptions, remediation, chemical spills, discharges or releases of toxic or hazardous substances or
gases and other risks. These hazards can cause personal injury and loss of life to our employees and other persons, severe
damage to, or destruction of, property and equipment and environmental contamination. In addition, the occurrence of
disruptions, shutdowns or other material operating problems at our facilities due to any of these hazards may diminish our
ability to meet our output goals. Accordingly, these hazards and their consequences could adversely affect our reputation and
have a material adverse effect on our operations as a whole, including our results of operations and cash flows, both during and
after the period of operational difficulties.
Albemarle Corporation and Subsidiaries
16
Our business could be adversely affected by environmental, health and safety laws and regulations.
The nature of our business, including historical operations at our current and former facilities, exposes us to risks of
liability under environmental laws and regulations due to the production, storage, use, transportation and sale of materials that
can cause contamination or personal injury if released into the environment. In the jurisdictions in which we operate, we are
subject to numerous U.S. and non-U.S. national, federal, state and local environmental, health and safety laws and regulations,
including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous
substances and wastes and the cleanup of contaminated properties. We currently use, and in the past have used, hazardous
substances at many of our facilities, and we have in the past been, and may in the future be, subject to claims relating to
exposure to hazardous materials. We also have generated, and continue to generate, hazardous wastes at a number of our
facilities. Some of our facilities also have lengthy histories of manufacturing or other activities that may have resulted in site
contamination. Liabilities associated with the investigation and cleanup of hazardous substances, as well as personal injury,
property damages or natural resource damages arising from the release of, or exposure to, such hazardous substances, may be
imposed in many situations without regard to violations of laws or regulations or other fault, and may also be imposed jointly
and severally (so that a responsible party may be held liable for more than its share of the losses involved, or even the entire
loss). Such liabilities may also be imposed on many different entities, including, for example, current and prior property owners
or operators, as well as entities that arranged for the disposal of the hazardous substances. Such liabilities may be material and
can be difficult to identify or quantify.
Further, some of the raw materials we handle are subject to government regulation. These regulations affect the
manufacturing processes, handling, uses and applications of our products. In addition, our production facilities and a number of
our distribution centers require numerous operating permits. Due to the nature of these requirements and changes in our
operations, our operations may exceed limits under permits or we may not have the proper permits to conduct our operations.
Ongoing compliance with such laws, regulations and permits is an important consideration for us and we incur substantial
capital and operating costs in our compliance efforts.
Compliance with environmental laws generally increases the costs of manufacturing, registration/approval requirements,
transportation and storage of raw materials and finished products, and storage and disposal of wastes, and could have a material
adverse effect on our results of operations. For example, we may be subject to carbon pricing or taxation proposals in some
jurisdictions where we operate. We may incur substantial costs, including fines, damages, criminal or civil sanctions and
remediation costs, or experience interruptions in our operations, for violations arising under these laws or permit requirements.
Additional information may arise in the future concerning the nature or extent of our liability with respect to identified sites,
and additional sites may be identified for which we are alleged to be liable, that could cause us to materially increase our
environmental accrual or the upper range of the costs we believe we could reasonably incur for such matters. Furthermore,
environmental laws are subject to change and have become increasingly stringent in recent years. We expect this trend to
continue and to require materially increased capital expenditures and operating and compliance costs.
Certain of our operations could be adversely affected by local communities and/or other stakeholders.
Relationships with local communities and other stakeholders may impact our operations, particularly in Chile and
Western Australia. We may become impacted by the interests of local communities and other stakeholders, including in some
cases, indigenous peoples. Certain of these communities or other stakeholders may have or may develop interests or objectives
which are different from, or even in conflict with, our objectives, including the use of our lands and waterways near our
operations. Our relationships with the communities near our sites and other stakeholders are critical to the future success of our
sites, as well as at any future development. There is an increasing level of public concern relating to the perceived effect of
mining activities on the environment and on communities impacted by such activities. Publicity adverse to our operations, or
the mining industry generally, could have an adverse effect on our development plans or future operations and may impact
relationships with the communities in which we ultimately operate and other associated stakeholders.
We may in the future, be subject to disputes with local communities, including indigenous peoples, regarding the use of
certain aspects of our assets, facilities and land and may in the future, be required to enter into settlement agreements providing
for such use, on terms that include, among others, lump sum payments, royalty payments or restrictions on our business.
In addition, disputes surrounding indigenous land claims regarding lands on or near our operations could interfere with
future operations and/or result in additional operating costs or restrictions, as well as adversely impact the use and enjoyment of
our real property rights with respect to our assets.
While we are committed to operating in a socially responsible manner, there can be no assurance that our efforts in this
respect will mitigate this potential risk. All the foregoing could have a material adverse effect on our business, financial
Albemarle Corporation and Subsidiaries
17
condition and results of operations, including, but not limited to, as a result of increased costs, reduced revenues, diversion of
management attention, reputational harm, disruptions to our operations and other reasons.
We may be subject to indemnity claims and liable for other payments relating to properties or businesses we have divested.
In connection with the sale of certain properties and businesses, we have agreed to indemnify the purchasers of such
properties for certain types of matters, such as certain breaches of representations and warranties, taxes and certain
environmental matters. With respect to environmental matters, the discovery of contamination arising from properties that we
have divested may expose us to indemnity obligations under the sale agreements with the buyers of such properties or cleanup
obligations and other damages under applicable environmental laws. We may not have insurance coverage for such indemnity
obligations or cash flows to make such indemnity or other payments. Further, we cannot predict the nature of and the amount of
any indemnity or other obligations we may have to the applicable purchaser. Such payments may be costly and may adversely
affect our financial condition and results of operations. For example, in 2021, we agreed to pay $665 million to settle claims
related to a legacy Rockwood Holdings, Inc. (“Rockwood”) business sold to a third party prior to our acquisition of Rockwood
in 2015.
At several of our properties where hazardous substances are known to exist (including some sites where hazardous
substances are being investigated or remediated), we believe we are entitled to contractual indemnification from one or more
former owners or operators; however, in the event we make a claim, the indemnifier may disagree with us regarding, or not
have the financial capacity to fulfill, its indemnity obligation. If our contractual indemnity is not upheld or effective, our accrual
and/or our costs for the investigation and cleanup of hazardous substances could increase materially.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption
laws, and in the past have paid fines in order to resolve self-reported potential violations of such laws.
The U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar foreign anti-corruption laws in other jurisdictions
around the world generally prohibit companies and their intermediaries from making improper payments or providing anything
of value to non-U.S. government officials for the purpose of obtaining or retaining business or securing an unfair advantage.
We operate in some parts of the world that have experienced governmental corruption to some degree, and, in certain
circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. Although we have
established formal policies or procedures for prohibiting or monitoring this conduct, we cannot assure you that our employees
or other agents will not engage in such conduct for which we might be held responsible. In the event that we believe or have
reason to believe that our employees, agents or distributors have or may have violated applicable anti-corruption laws,
including the FCPA, we may be required to investigate or have outside counsel investigate the relevant facts and circumstances,
which can be expensive and require significant time and attention from senior management. If we are found to be liable for
violations of the FCPA or other applicable anti-corruption laws (either due to our own acts or our inadvertence, or due to the
acts or inadvertence of others, including employees of our joint ventures), we could suffer from civil and criminal penalties or
other sanctions, which could have a material adverse effect on our business and results of operations.
In September 2023, following an internal investigation and voluntary self-reporting of potential violations of the FCPA,
we finalized agreements with the U.S. Department of Justice (“DOJ”) and the SEC relative to improper payments made, prior to
2018, by third-party sales representatives of our Refining Solutions business (now Ketjen). In connection with this resolution,
we entered into a non-prosecution agreement with the DOJ and an administrative resolution with the SEC, pursuant to which
we paid a total of $218.5 million in aggregate fines, disgorgement, and prejudgment interest. We also agreed to certain ongoing
compliance reporting obligations.
We are subject to extensive foreign government regulation that can negatively impact our business.
We are subject to government regulation in non-U.S. jurisdictions in which we conduct our business. The requirements
for compliance with these laws and regulations may be unclear or indeterminate and may involve significant costs, including
additional capital expenditures or increased operating expenses, or require changes in business practice, in each case that could
result in reduced profitability for our business. Our having to comply with these foreign laws or regulations may provide a
competitive advantage to competitors who are not subject to comparable restrictions or prevent us from taking advantage of
growth opportunities. Determination of noncompliance can result in penalties or sanctions that could also adversely impact our
operating results and financial condition.
Our inability to protect our intellectual property rights, or being accused of infringing on intellectual property rights of third
parties, could have a material adverse effect on our business, financial condition and results of operations.
Protection of our proprietary processes, methods and compounds and other technology is important to our business. We
generally rely on patent, trade secret, trademark and copyright laws of the U.S. and certain other countries in which our
Albemarle Corporation and Subsidiaries
18
products are produced or sold, as well as licenses and nondisclosure and confidentiality agreements, to protect our intellectual
property rights. The patent, trade secret, trademark and copyright laws of some countries, or their enforcement, may not protect
our intellectual property rights to the same extent as the laws of the U.S. Failure to protect our intellectual property rights may
result in the loss of valuable proprietary technologies. Additionally, some of our technologies are not covered by any patent or
patent application and, even if a patent application has been filed, it may not result in an issued patent. If patents are issued to
us, those patents may not provide meaningful protection against competitors or against competitive technologies. We cannot
assure you that our intellectual property rights will not be challenged, invalidated, circumvented or rendered unenforceable.
We also conduct research and development activities with third parties and license certain intellectual property rights
from third parties and we plan to continue to do so in the future. We endeavor to license or otherwise obtain intellectual
property rights on terms favorable to us. However, we may not be able to license or otherwise obtain intellectual property rights
on such terms or at all. Our inability to license or otherwise obtain such intellectual property rights could have a material
adverse effect on our ability to create a competitive advantage and create innovative solutions for our customers, which will
adversely affect our net sales and our relationships with our customers.
We could face patent infringement claims from our competitors or others alleging that our processes or products infringe
on their proprietary technologies. If we are found to be infringing on the proprietary technology of others, we may be liable for
damages and we may be required to change our processes, redesign our products partially or completely, pay to use the
technology of others, stop using certain technologies or stop producing the infringing product entirely. Even if we ultimately
prevail in an infringement suit, the existence of the suit could prompt customers to switch to products that are not the subject of
infringement suits. We may not prevail in intellectual property litigation and such litigation may result in significant legal costs
or otherwise impede our ability to produce and distribute key products.
We also rely upon unpatented proprietary manufacturing expertise, continuing technological innovation and other trade
secrets to develop and maintain our competitive position. While we generally enter into confidentiality agreements with our
employees and third parties to protect our intellectual property, we cannot assure you that our confidentiality agreements will
not be breached, that they will provide meaningful protection for our trade secrets and proprietary manufacturing expertise or
that adequate remedies will be available in the event of an unauthorized use or disclosure of our trade secrets or manufacturing
expertise. In addition, our trade secrets and know-how may be improperly obtained by other means, such as a breach of our
information technologies security systems or direct theft.
Our inability to acquire or develop additional lithium reserves that are economically viable could have a material adverse
effect on our future profitability.
Our lithium reserves will, without acquiring or developing additional reserves, decline as we continue to extract these raw
materials. Accordingly, our future profitability depends upon our ability to operate in a way that optimizes extraction of raw
materials from the reserves we have and acquire additional lithium reserves that are economically viable to replace the reserves
we will extract. Exploration and development of lithium resources are highly speculative in nature. Exploration projects involve
many risks, require substantial expenditures and may not result in the discovery of sufficient additional resources that can be
extracted profitably. Once a site with potential resources is discovered, it may take several years of development until
production is possible, during which time the economic viability of production may change. Substantial expenditures are
required to establish recoverable proven and probable reserves and to construct extraction and production facilities. As a result,
there is no assurance that current or future exploration programs will be successful and there is a risk that depletion of reserves
will not be offset by discoveries or acquisitions.
We utilize feasibility studies to estimate the anticipated economic returns of an exploration project. The actual project
profitability or economic feasibility may differ from such estimates as a result of factors such as, but not limited to, changes in
volumes, grades and characteristics of resources to be mined and processed; changes in labor costs or availability of adequate
and skilled labor force; the quality of the data on which engineering assumptions were made; adverse geotechnical conditions;
availability, supply and cost of water and power; fluctuations in inflation and currency exchange rates; delays in obtaining
environmental or other government permits or approvals or changes in the laws and regulations related to our operations or
project development; changes in royalty agreements, laws and/or regulations around royalties and other taxes; and weather or
severe climate impacts.
For our existing operations, we utilize geological, hydrogeological and metallurgical assumptions, financial projections
and price estimates. These estimates are periodically updated to reflect changes in our operations, including modifications to
our proven and probable reserves and mineralized material, revisions to environmental obligations, changes in legislation and/
or social, political or economic environment, and other significant events associated with natural resource extraction operations.
There are numerous uncertainties inherent in estimating quantities and qualities of lithium and costs to extract recoverable
Albemarle Corporation and Subsidiaries
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reserves, including many factors beyond our control, that could cause results to differ materially from expected financial and
operating results or result in future impairment charges. In addition, it cannot be assumed that any part or all of the inferred
mineral resources will ever be converted into mineral reserves, as defined by the SEC. See Item 2. Properties, for a discussion
and quantification of our current mineral resources and reserves.
There is risk to the growth of lithium markets.
Our lithium business is significantly dependent on the development and adoption of new applications for lithium batteries
and the growth in demand for plug-in hybrid electric vehicles and battery electric vehicles. As such, our business results
inherently depend on decarbonization of the global economy. To the extent that such development, adoption, decarbonization
and growth do not occur in the volume and/or manner that we contemplate, including for reasons described under the heading
“The development of non-lithium battery technologies could adversely affect us,” above, the long-term growth in the markets
for lithium products may be adversely affected, which would have a material adverse effect on our business, financial condition
and operating results.
Demand and market prices for lithium will greatly affect the value of our investment in our lithium resources and our
revenues and profitability generally.
Our ability to successfully develop our lithium resources and generate a return on investment will be affected by changes
in the demand for and market price of lithium-based end products, such as lithium hydroxide. The market price of these
products can fluctuate and is affected by numerous factors beyond our control, primarily world supply and demand. Such
external economic factors are influenced by changes in international investment patterns, various political developments and
macro-economic circumstances.
In addition, the price of lithium products is impacted by their purity and performance. We may not be able to effectively
mitigate against such fluctuations; although some of our long-term agreements include higher pricing, we are also party to
index-referenced and variable-priced contracts. Lithium prices significantly decreased by approximately 85% to 95% from their
high in January 2023 and remained at that lower level throughout 2024, which adversely impacted our financial results. High
volatility or further declines in the lithium prices could have a material and adverse effect on the revenues and profitability of
our Energy Storage business and on our company generally. In addition, a further decrease in lithium prices may lead to
additional inventory valuation charges in the valuation period prior to when the goods are sold. For example, As a result of the
decline in lithium market pricing, the Company recorded charges to reduce the value of certain finished goods and spodumene
to their net realizable value, including a charge of $604.1 million during the year ended December 31, 2023. The balance of
these adjustments to inventories was $104.0 million as of December 31, 2024.
Following the Wodgina acquisition in 2019, the Wodgina mine idled production of spodumene until market demand
supported bringing the mine back into production in 2022. Additionally, in 2024, the Company announced that it was placing
portions of its Kemerton project into care and maintenance and stopping construction on other portions, in an effort to optimize
its cost structure in light of the depressed levels of lithium prices. Depending on market conditions and the Company’s cost
structure, the Company may take additional actions in the future to idle production or halt construction activities at its mines or
processing facilities due to lack of market demand or for other reasons.
If we are unable to retain key personnel or attract new skilled personnel, it could have an adverse effect on our business.
Our success depends on our ability to attract and retain key personnel including our management team. In light of the
specialized and technical nature of our business, our performance is dependent on the continued service of, and on our ability to
attract and retain, qualified management, scientific, technical, marketing and support personnel. Competition for such personnel
is intense, and we may be unable to continue to attract or retain such personnel. In addition, because of our reliance on our
senior management team, the unanticipated departure, death or disability of any key member of our management team could
have an adverse effect on our business. Our future success depends, in part, on our ability to identify and develop or recruit
talent to succeed our senior management and other key positions throughout the organization. If we fail to identify and develop
or recruit successors, we are at risk of being harmed by the departures of these key employees. Effective succession planning is
also important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving key
employees could hinder our strategic planning and execution. In addition, the U.S. and other regions in which we operate are
experiencing an acute workforce shortage for skilled workers, which in turn has created a hyper-competitive wage environment
that may impact our ability to attract and retain employees.
Albemarle Corporation and Subsidiaries
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Some of our employees are unionized, represented by works councils or are employed subject to local laws that are less
favorable to employers than the laws of the U.S.
As of December 31, 2024, we had approximately 8,300 employees, including employees of our consolidated joint
ventures. Approximately 28% of these employees are represented by unions or works councils. In addition, a large number of
our employees are employed in countries in which employment laws provide greater bargaining or other rights to employees
than the laws of the U.S. Such employment rights require us to work collaboratively with the legal representatives of those
employees to effect any changes to labor arrangements. For example, most of our employees in Europe are represented by
works councils that must approve any changes in conditions of employment, including salaries and benefits and staff changes,
and may impede efforts to restructure our workforce. Although we believe that we have a good working relationship with our
employees, a strike, work stoppage, slowdown or significant dispute with our employees could result in a significant disruption
of our operations or higher labor costs.
Our joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations, which
may adversely affect our results of operations and may force us to dedicate additional resources to these joint ventures.
We currently participate in a number of joint ventures and may enter into additional joint ventures in the future. The
nature of a joint venture requires us to share control with unaffiliated third parties. We apply the equity method of accounting to
joint ventures when we have the ability to exercise significant influence over the operational decision-making authority and
financial policies of the investee but we do not exercise control. Our equity method investees are governed by their own board
of directors, whose members have fiduciary duties to the investees’' shareholders. While we have certain rights to appoint
representatives to the investees’ boards of directors, the interests of the investees’ shareholders may not align with our interests
or the interests of our shareholders and strategic and contractual disputes may arise.
We are generally dependent on the management team of our equity method investees to operate and control such projects
or businesses. While we may exert influence pursuant to our positions, as applicable, on the boards of directors and through
certain limited governance or oversight roles, such influence may be limited. If our joint venture partners do not fulfill their
obligations, the affected joint venture may not be able to operate according to its business plan. In that case, our results of
operations may be adversely affected and we may be required to materially change the level of our commitment to the joint
venture. Also, differences in views among joint venture participants may result in delayed decisions or failures to agree on
major issues. If these differences cause the joint ventures to deviate from their business plans, our results of operations could be
adversely affected.
Risks Related to Our Financial Condition
Our required capital expenditures can be complex, may experience delays or other difficulties, and the costs may exceed our
estimates.
Our capital expenditures generally consist of expenditures to maintain and improve existing equipment, facilities and
properties, and substantial investments in new or expanded equipment, facilities and properties. Execution of these capital
expenditures can be complex, and commencement of production requires start-up, commission and certification of product
quality by our customers, which may impact the expected output and timing of sales of product from such facilities.
Construction of large chemical operations is subject to numerous risks and uncertainties, including, among others, the ability to
complete a project on a timely basis and in accordance with the estimated budget for such projects and our ability to estimate
future demand for our products. In addition, our returns on these capital expenditures may not meet our expectations. Budgets
for certain projects can include government funding, which help support a portion of the anticipated construction costs. Any
change to the government budgetary priorities could adversely affect the funding for these projects or our ability to apply for
funding.
Future capital expenditures may be significantly higher, depending on the investment requirements of each of our
business lines, and may also vary substantially if we are required to undertake actions to compete with new technologies in our
industry. We may not have the capital necessary to undertake these capital investments. If we are unable to do so, we may not
be able to effectively compete in some of our markets.
Our indebtedness could adversely affect our financial health and our ability to execute our business strategy, and we will
need a significant amount of cash to service our indebtedness.
As of December 31, 2024, our aggregate long-term debt was $3.5 billion, primarily related to senior notes. We expect to
maintain significant levels of indebtedness going forward. Our indebtedness could have important consequences including:
Albemarle Corporation and Subsidiaries
21
•
making it more difficult for us to satisfy our obligations with respect to our debt, and any failure to comply with the
obligations under our debt instruments, including restrictive covenants, could result in an event of default under the
indenture governing our senior notes, the 2022 Credit Agreement or agreements governing future indebtedness;
•
increasing the risk of a credit ratings downgrade of our debt, which could increase future debt costs and limit the future
availability of debt financing;
•
increasing our vulnerability to adverse general economic and industry conditions;
•
reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business;
•
limiting our flexibility in planning for, or reacting to, changes in our business, the economy and our industry;
•
placing us at a competitive disadvantage compared to our competitors with less indebtedness;
•
making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital
expenditures and other purposes; and
•
potentially requiring us to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness, thereby reducing the availability of our cash flow to fund our other business needs.
Our ability to generate sufficient cash flow from operations or use existing cash balances to make scheduled payments on
our debt depends on our future performance, which is subject to a range of economic, competitive and business factors, many of
which are outside our control. Our business may not generate sufficient cash flow from operations to service our debt
obligations. If we are unable to service our debt obligations, we may need to refinance all or a portion of our indebtedness on or
before maturity, reduce or delay capital expenditures, sell assets or raise additional equity. We may not be able to refinance any
of our indebtedness, sell assets or raise additional equity on commercially reasonable terms or at all, which could cause us to
default on our obligations and impair our liquidity. Our inability to generate sufficient cash flow or use existing cash balances
to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms, could have a material adverse
effect on our business and financial condition.
Because a significant portion of our operations is conducted through our subsidiaries and joint ventures, our ability to
service our debt may be dependent on our receipt of distributions or other payments from our subsidiaries and joint
ventures.
A significant portion of our operations is conducted through our subsidiaries and joint ventures. As a result, our ability to
service our debt may be partially dependent on the earnings of our subsidiaries and joint ventures and the payment of those
earnings to us in the form of dividends, loans or advances and through repayment of loans or advances from us. Payments to us
by our subsidiaries and joint ventures are contingent upon our subsidiaries’ or joint ventures’ earnings and other business
considerations and may be subject to statutory or contractual restrictions. In addition, there may be significant tax and other
legal restrictions on the ability of our non-U.S. subsidiaries or joint ventures to remit money to us.
Restrictive covenants in our debt instruments may adversely affect our business.
Our senior credit facilities and the indentures governing our senior notes contain select restrictive covenants. These
covenants provide constraints on our financial flexibility. The 2022 Credit Agreement requires the Company to maintain (i) a
certain ratio of consolidated net funded debt (plus a proportionate amount of Windfield’s net funded debt) to Windfield-
Adjusted EBITDA (as defined in the agreement) and (ii) a certain ratio of consolidated EBITDA to consolidated interest
charges. In the past, we have been able to renegotiate and amend the covenants in 2022 Credit Agreement in order to maintain
compliance, but there can be no assurance that in the future we would be able to further amend them if needed. The failure to
comply with these or other covenants governing other indebtedness, including indebtedness incurred in the future, could result
in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition
and results of operations, including cross-defaults to other debt facilities. See “Financial Condition and Liquidity—Long-Term
Debt” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further
descriptions of our 2022 Credit Agreement covenants.
Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost of
financing, the market price of our securities and our debt service obligations.
Credit rating agencies rate our debt securities on factors that include our operating results, actions that we take, their view
of the general outlook for our industry and their view of the general outlook for the economy. Actions taken by the rating
agencies can include maintaining, upgrading or downgrading the current rating or placing us on a watch list for possible future
downgrades. During 2024, the Company’s ratings were downgraded by two of the three main credit ratings agencies, resulting
in the increase of the applicable margin for borrowings under the 2022 Credit Agreement to 1.20%. Further watches, reviews or
downgrades could occur. Downgrading the credit rating of our debt securities or placing us on a watch list for possible future
downgrades would likely increase our cost of future financing, including under our 2022 Credit Agreement and our commercial
paper program, limits our access to the capital markets and has an adverse effect on the market price of our securities.
Albemarle Corporation and Subsidiaries
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Borrowings under a portion of our debt facilities bear interest at floating rates, and are subject to adjustment based on the
ratings of our senior unsecured long-term debt. The downgrading of any of our ratings or an increase in any of the benchmark
interest rates would result in an increase of the interest expense on our variable rate borrowings.
Write-offs or impairment of our goodwill, intangible assets or long-lived assets can result in significant charges to earnings.
Under U.S. Generally Accepted Accounting Principles (“GAAP”), we review our intangible assets and long-lived assets
for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested
for impairment on October 31 of each year, or more frequently if required. Factors that may be considered a change in
circumstances, indicating that the carrying value of our goodwill, intangible assets or long-lived assets may not be recoverable,
include, but are not limited to, a decline in our stock price and market capitalization, reduced future cash flow estimates, and
slower growth rates in our industry. During 2024, we made the decision to stop construction of Kemerton conversion plant
Trains 3 and 4, and put Kemerton Train 2 into care and maintenance. We determined these actions to be a triggering event for a
review of impairment of our Energy Storage reporting unit goodwill and associated long-lived asset groups. Although this
review did not result in any impairment to goodwill or long-lived assets, the write-off of the assets with no future economic
value resulted in charges of $1.0 billion in 2024. As we continue our review of our cost and operating structure, we may be
required to record additional charges in our financial statements during the period in which any impairment of our goodwill,
intangible assets or long-lived assets is determined, negatively impacting our results of operations and financial condition.
Our business could suffer if we are not successful in executing our strategy and initiatives in connection with our
comprehensive review of our cost and operating structure.
In January 2024, we announced that we were undertaking proactive measures to optimize our cost structure in response to
changing end-market conditions, particularly in the lithium value chain. These measures have included an ongoing
comprehensive review of our cost and operating structure, in connection with which we placed Kemerton Train 2 in care and
maintenance and stopped construction on Kemerton Trains 3 and 4, and initiated a global workforce reduction that impacted
6-7% of total headcount. These actions are intended to deliver significant cost savings and enhance our long-term
competitiveness. However, there are no assurances that we will achieve these aims to the extent we expect, within the
anticipated timeframes or at all. In addition, any cost savings that we realize may be offset, in whole or in part, by reductions in
net sales or through increases in other expenses. Failure to realize the expected cost savings from our cost optimization efforts
could have an adverse effect on our business, financial condition, and results of operations.
We are exposed to fluctuations in currency exchange rates, which may adversely affect our operating results and net
income.
We conduct our business and incur costs in the local currency of most of the countries in which we operate. Changes in
exchange rates between foreign currencies and the U.S. Dollar will affect the recorded levels of our assets, liabilities, net sales,
cost of goods sold and operating margins and could result in exchange losses. The primary currencies to which we have
exposure are the Chinese Renminbi, Euro and Australian Dollar. Exchange rates between these currencies and the U.S. Dollar
in recent years have fluctuated significantly and may do so in the future. With respect to our potential exposure to foreign
currency fluctuations and devaluations, for the year ended December 31, 2024, approximately 39% of our net sales were
denominated in currencies other than the U.S. Dollar. Significant changes in these foreign currencies relative to the U.S. Dollar
could also have an adverse effect on our ability to meet interest and principal payments on any foreign currency-denominated
debt outstanding. In addition to currency translation risks, we incur currency transaction risks whenever one of our operating
subsidiaries or joint ventures enters into either a purchase or a sales transaction using a different currency from its functional
currency. Our operating results and net income may be affected by any volatility in currency exchange rates and our ability to
manage effectively our currency transaction and translation risks.
Significant or prolonged periods of higher interest rates may have an adverse effect on our results of operations, financial
condition and cash flows.
Interest rates may have a direct impact on our business to the extent we borrow under our unsecured credit facility, utilize
our commercial paper program, or incur other forms of variable rate indebtedness or new indebtedness based on current interest
rates. Borrowings under our unsecured credit facility bear interest at variable rates based on a benchmark rate depending on the
currency in which the loans are denominated, plus an applicable margin, which ranges from 0.910% to 1.375%, depending on
the Company’s credit rating. In May 2013, we entered into agreements to initiate a commercial paper program under which we
may issue unsecured commercial paper notes from time-to-time in a maximum aggregate principal amount outstanding at any
time of up to $1.5 billion (up from $750 million prior to the May 2023 increase).
Albemarle Corporation and Subsidiaries
23
In a rising interest rate environment, debt financing will become more expensive and may have higher transactional and
servicing costs. Although we may take steps to limit our exposure to variable rate debt, if interest rates remain relatively high or
increase in the future, we could see increases in our borrowing costs which could have a material adverse effect on our results
of operations, financial condition and cash flows.
Inflationary trends in the price of our input costs, such as raw materials, transportation and energy, could adversely affect
our business and financial results.
We have experienced, and may continue to experience, volatility and increases in the price of certain raw materials and in
transportation and energy costs as a result of global market and supply chain disruptions and the broader inflationary
environment.
If we are unable to increase the prices to our customers of our products to offset inflationary cost trends, or if we are
unable to achieve cost savings to offset such cost increases, we could fail to meet our cost expectations, and our profits and
operating results could be adversely affected. Our ability to price our products competitively to timely reflect higher input costs
is critical to maintain and grow our sales. Increases in prices of our products to customers or the impact of the broader
inflationary environment on our customers and may lead to declines in demand and sales volumes. Further, we may not be able
to accurately predict the volume impact of price increases, especially if our competitors are able to more successfully adjust to
such input cost volatility. Increasing our prices to our customers could result in long-term sales declines or loss of market share
if our customers find alternative suppliers or purchase less of our products, which could have an adverse long-term impact on
our results of operations.
Changes in, or the interpretation of, tax legislation or rates throughout the world could materially impact our results.
Our effective tax rate and related tax balance sheet attributes could be impacted by changes in tax legislation throughout
the world. For example, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), enacted August 16, 2022, among
other items, imposed a 15% alternative minimum tax on corporations with three-year average annual adjusted financial
statement income exceeding $1 billion and introduces or extends a number of tax credits to promote clean energy development.
We continue to monitor the effects of the Inflation Reduction Act and other regulatory developments on our financial condition,
operating results, and income tax rate. Currently, the majority of our net sales are generated from customers located outside the
U.S., and a substantial portion of our assets and employees are located outside of the U.S.
We have not accrued income taxes or foreign withholding taxes on undistributed earnings for most non-U.S. subsidiaries,
because those earnings are intended to be indefinitely reinvested in the operations of those subsidiaries. Certain tax proposals
with respect to such earnings could substantially increase our tax expense, which would substantially reduce our income and
have a material adverse effect on our results of operations and cash flows from operating activities.
Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax
rates, expirations of tax holidays or rulings, changes in the assessment regarding the realization of the valuation of deferred tax
assets, or changes in tax laws and regulations or their interpretation. Recent developments, including the European
Commission’s investigations on illegal state aid, as well as the Organisation for Economic Co-operation and Development
(“OECD”) project on Base Erosion and Profit Shifting may result in changes to long-standing tax principles, which could
adversely affect our effective tax rates or result in higher cash tax liabilities. The OECD developed a global tax framework
inclusive of a 15% global minimum tax under the Pillar Two Global Anti-Base Erosion Rules (“Pillar Two”). The E.U.’s Pillar
Two Directive was effective as of January 1, 2024 for certain aspects of the directive, with the remaining aspects effective on
January 1, 2025. Other major jurisdictions are actively considering and implementing changes to their tax laws to adopt certain
parts of the OECD’s proposals. We have assessed this framework and determined, based upon available guidance, that these
changes could have a material impact to our results of operations, but it is dependent on our ongoing mix of earnings. Any
future changes in OECD guidance or interpretations, including local country tax legislative changes thereof could impact our
initial assessment; therefore, we will continue to monitor and refine our assessment as further guidance is made available.
We are subject to the regular examination of our income tax returns by various tax authorities. Examinations in material
jurisdictions or changes in laws, rules, regulations or interpretations by local taxing authorities could result in impacts to tax
years open under statute or to foreign operating structures currently in place. We regularly assess the likelihood of adverse
outcomes resulting from these examinations or changes in laws, rules, regulations or interpretations to determine the adequacy
of our provision for taxes. It is possible the outcomes from these examinations will have a material adverse effect on our
financial condition and operating results.
Albemarle Corporation and Subsidiaries
24
Future events may impact our deferred tax asset position and U.S. deferred federal income taxes on undistributed earnings
of international affiliates that are considered to be indefinitely reinvested.
We evaluate our ability to utilize deferred tax assets and our need for valuation allowances based on available evidence.
This process involves significant management judgment about assumptions that are subject to change from period to period
based on changes in tax laws or variances between future projected operating performance and actual results. We are required
to establish a valuation allowance for deferred tax assets if we determine, based on available evidence at the time the
determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be utilized. In
making this determination, we evaluate all positive and negative evidence as of the end of each reporting period. Future
adjustments (either increases or decreases) to the deferred tax asset valuation allowance are determined based upon changes in
the expected realization of the net deferred tax assets. The utilization of our deferred tax assets ultimately depends on the
existence of sufficient taxable income in either the carry-back or carry-forward periods under the applicable tax law. Due to
significant estimates used to establish the valuation allowance and the potential for changes in facts and circumstances, it is
reasonably possible that we will be required to record adjustments to the valuation allowance in future reporting periods.
Changes to the valuation allowance or the amount of deferred tax liabilities could have a materially adverse effect on our
business, financial condition and results of operations. Further, should we change our assertion regarding the permanent
reinvestment of the undistributed earnings in foreign operations, a deferred tax liability may need to be established.
Our business and financial results may be adversely affected by various legal and regulatory proceedings.
We are involved from time to time in legal and regulatory proceedings, which may be material in the future. The outcome
of proceedings, lawsuits and claims may differ from our expectations, leading us to change estimates of liabilities and related
insurance receivables.
Legal and regulatory proceedings, whether with or without merit, and associated internal investigations, may be time-
consuming and expensive to prosecute, defend or conduct, may divert management’s attention and other resources, inhibit our
ability to sell our products, result in adverse judgments for damages, injunctive relief, penalties and fines, and otherwise
negatively affect our business.
Although our pension plans currently meet minimum funding requirements, events could occur that would require us to
make significant contributions to the plans and reduce the cash available for our business.
We have several defined benefit pension plans around the world, including in the U.S., U.K., Germany, Belgium and
Japan. We are required to make cash contributions to our pension plans to the extent necessary to comply with minimum
funding requirements imposed by the various countries’ benefit and tax laws. The amount of any such required contributions
will be determined annually based on an actuarial valuation of the plans as performed by the plans’ actuaries.
In previous years, we have made voluntary contributions to our U.S. qualified defined benefit pension plans. We
anticipate approximately $9 million of required cash contributions during 2025 for our defined benefit pension plans.
Additional voluntary pension contributions in and after 2025 may vary depending on factors such as asset returns, interest rates,
and legislative changes. The amounts we may elect or be required to contribute to our pension plans in the future may increase
significantly. These contributions could be substantial and would reduce the cash available for our business.
Further, an economic downturn or recession or market disruption in the capital and credit markets may adversely impact
the value of our pension plan assets, our results of operations, our statement of changes in stockholders’ equity and our
liquidity. Our funding obligations could change significantly based on the investment performance of the pension plan assets
and changes in actuarial assumptions for local statutory funding valuations. Any deterioration of the capital markets or returns
available in such markets may negatively impact our pension plan assets and increase our funding obligations for one or more
of these plans and negatively impact our liquidity. We cannot predict the impact of this or any further market disruption on our
pension funding obligations.
We may not be able to consummate future acquisitions or integrate acquisitions into our business, which could result in
unanticipated expenses and losses.
We believe that our customers are increasingly looking for strong, long-term relationships with a few key suppliers that
help them improve product performance, reduce costs, and support new product development. To satisfy these growing
customer requirements, our competitors have been consolidating within product lines through mergers and acquisitions.
As part of our business growth strategy, we have acquired businesses and entered into joint ventures in the past and
intend to pursue acquisitions and joint venture opportunities in the future. Our ability to implement this component of our
growth strategy will be limited by our ability to identify appropriate acquisition or joint venture candidates and our financial
Albemarle Corporation and Subsidiaries
25
resources, including available cash and borrowing capacity. The expense incurred in consummating acquisitions or entering
into joint ventures, the time it takes to integrate an acquisition or our failure to integrate businesses successfully, could result in
unanticipated expenses and losses. Furthermore, we may not be able to realize any of the anticipated benefits from acquisitions
or joint ventures.
The process of integrating acquired operations into our existing operations may result in unforeseen operating difficulties
and may require significant financial resources that would otherwise be available for the ongoing development or expansion of
existing operations. Some of the risks associated with the integration of acquisitions include:
•
potential disruption of our ongoing business and distraction of management;
•
unforeseen claims and liabilities, including unexpected environmental exposures and litigation arising from
acquisitions;
•
unforeseen adjustments, charges and write-offs;
•
problems enforcing the indemnification obligations of sellers of businesses or joint venture partners for claims and
liabilities;
•
unexpected losses of customers of, or suppliers to, the acquired business;
•
difficulty in conforming the acquired businesses’ standards, processes, procedures and controls with our operations;
•
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;
•
variability in financial information arising from the implementation of purchase price accounting;
•
inability to coordinate new product and process development;
•
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;
•
diversion of management’s attention from other business matters; and
•
challenges arising from the increased scope, geographic diversity and complexity of our operations.
Any such integration failure could disrupt our business and have a material adverse effect on our consolidated financial
condition and results of operations. Moreover, from time to time, we may enter into negotiations for a proposed acquisition, but
be unable or unwilling to consummate the acquisition under consideration. This could cause significant diversion of
management’s attention and out-of-pocket expenses.
We may continue to expand our business through acquisitions and we may incur additional indebtedness, including
indebtedness related to acquisitions.
We have historically expanded our business primarily through acquisitions. A part of our business strategy is to continue
to grow through acquisitions that complement our existing technologies and accelerate our growth. Our credit facilities have
limited financial maintenance covenants. In addition, the indenture and other agreements governing our senior notes do not
limit our ability to incur additional indebtedness in connection with acquisitions or otherwise. As a result, we may incur
substantial additional indebtedness in connection with acquisitions.
Any such additional indebtedness and the related debt service obligations (whether or not arising from acquisitions) could
have important consequences and risks for us, including:
•
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;
•
lowering credit ratings;
•
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;
•
to the extent that our debt is subject to floating interest rates, increasing our vulnerability to fluctuations in market
interest rates;
•
reducing funds available for operations, capital expenditures, share repurchases, dividends and other activities; and
•
creating competitive disadvantages relative to other companies with lower debt level.
Albemarle Corporation and Subsidiaries
26
General Risk Factors
Adverse conditions in the economy, and volatility and disruption of financial markets can negatively impact our customers,
suppliers and other business partners and therefore have a material adverse effect on our business and results of operations.
A global, regional or localized economic downturn may reduce customer demand or inhibit our ability to produce our
products, negatively impacting our operating results. Our business and operating results have been and will continue to be
sensitive to the many challenges that can affect national, regional and global economies, including economic downturns
(including credit market tightness, which can impact our liquidity as well as that of our customers, suppliers and other business
partners), declining consumer and business confidence, fluctuating commodity prices and volatile exchange rates. Our
customers may experience deterioration of their businesses, cash flow shortages and difficulty obtaining financing, leading
them to delay or cancel plans to purchase products, and they may not be able to fulfill their obligations in a timely fashion or
may seek to renegotiate current arrangements to suit their circumstances. Further, suppliers and other business partners may
experience similar conditions, which could impact their ability to fulfill their obligations to us. Also, it could be difficult to find
replacements for business partners without incurring significant delays or cost increases. Finally, any such adverse conditions in
the economy and financial markets could make it difficult for us to raise debt or equity capital on favorable terms.
Our business and operations could suffer in the event of cybersecurity breaches, information technology system failures, or
network disruptions.
We and our third-party service providers have been and will continue to be subject to advanced and persistent threats in
the areas of information and operational technology security and fraud, which may become more sophisticated over time. These
attempts, which might be related to industrial or other espionage, include covertly introducing malware to computers and
networks and impersonating authorized users, among others. We seek to detect and investigate all security incidents and to
prevent their recurrence, as well as work with third-party service providers on detection of, and alerting us to, any incidents
affecting us, but in some cases we might be unaware of an incident or its magnitude and effects. The theft, unauthorized use or
publication of our intellectual property and/or confidential business information could harm our competitive position, reduce
the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our
business. To the extent that a cybersecurity breach results in inappropriate disclosure of our employees’, customers’ or
licensees’ confidential or personal information, we may incur liability as a result. The devotion of additional resources to the
security of our information technology systems in the future could significantly increase the cost of doing business or otherwise
adversely impact our financial results.
In addition, risks associated with information technology systems failures or network disruptions, including risks
associated with upgrading our systems or in successfully integrating information technology and other systems in connection
with the integration of businesses we acquire, or vulnerabilities in our third-party service providers’ systems, could disrupt our
operations by impeding our processing of transactions, financial reporting and our ability to protect our customer or company
information, which could adversely affect our business and results of operations. Additionally, we face increased information
technology security and fraud risks due to our increased reliance on working remotely during the COVID-19 pandemic and
beyond, which may create additional information security vulnerabilities and/or magnify the impact of any disruption in
information technology systems. Finally, we can provide no assurance that the networks and systems that our third-party
service providers have established or use will be effective.
Although we have implemented certain processes, procedures and internal controls to help mitigate cybersecurity risks
and cyber intrusions, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident,
do not guarantee that our financial results, operations or confidential information will not be negatively impacted by such an
incident.
The occurrence or threat of extraordinary events, including domestic and international terrorist attacks, may disrupt our
operations and decrease demand for our products.
Chemical-related assets may be at greater risk of future terrorist attacks than other possible targets in the U.S. and around
the world. As a result, we are subject to existing federal rules and regulations (and may be subject to additional legislation or
regulations in the future) that impose site security requirements on chemical manufacturing facilities, which increase our
overhead expenses.
We are also subject to federal regulations that have heightened security requirements for the transportation of hazardous
chemicals in the U.S. We believe we have met these requirements but additional federal and local regulations that limit the
distribution of hazardous materials are being considered. We ship and receive materials that are classified as hazardous. Bans
on movement of hazardous materials through cities, like Washington, D.C., could affect the efficiency of our logistical
Albemarle Corporation and Subsidiaries
27
operations. Broader restrictions on hazardous material movements could lead to additional investment to produce hazardous
raw materials and change where and what products we manufacture.
The Chemical Facility Anti-Terrorism Standards program (“CFATS Program”), which is administered by the Department
of Homeland Security (“DHS”), identifies and regulates chemical facilities to ensure that they have security measures in place
to reduce the risks associated with potential terrorist attacks on chemical plants located in the U.S. DHS has enacted rules under
the CFATS Program that impose comprehensive federal security regulations for high-risk chemical facilities in possession of
specified quantities of chemicals of interest. These rules establish risk-based performance standards for the security of the
U.S.’s chemical facilities. They require covered chemical facilities to prepare Security Vulnerability Assessments, which
identify facility security vulnerabilities, and to develop and implement Site Security Plans, which include measures that satisfy
the identified risk-based performance standards. We have implemented all necessary changes to comply with the rules under the
CFATS Program to date, however, we cannot determine with certainty any future costs associated with any additional security
measures that DHS may require.
The occurrence of extraordinary events, including future terrorist attacks and the outbreak or escalation of hostilities,
cannot be predicted, and their occurrence can be expected to continue to negatively affect the economy in general, and the
markets for our products in particular. The resulting damage from a direct attack on our assets, or assets used by us, could
include loss of life and property damage. In addition, available insurance coverage may not be sufficient to cover all of the
damage incurred or, if available, may be prohibitively expensive.
National or international disputes, political instability, terrorism war or armed hostilities, could impact our results of
operations.
Geo-political events, national or international disputes, political instability, terrorism or other acts of violence, war or
armed hostilities may cause damage or disruption to our operations, international commerce and the global economy. Such geo-
political instability and uncertainty could have a negative impact on our ability to conduct business in certain regions based on
trade restrictions, embargoes and export control law restrictions, and logistics restrictions, and could increase the costs, risks
and adverse impacts from these new challenges. We may also be the subject of increased cybersecurity breaches arising from
geo-political instability. Any such events may also have the effect of heightening many of the other risks described herein, such
as those relating to capital markets, raw materials, energy and freight costs, our supply chain, information security and market
conditions, any of which could negatively affect our businesses, financial condition, results of operations and cash flows.
The U.S. government and other nations have imposed significant restrictions on most companies’ ability to do business in
Russia as a result of the military conflict between Russia and Ukraine. It is not possible to predict the broader or longer-term
consequences of this conflict, which could include further sanctions, embargoes, regional instability, energy shortages,
geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates and financial
markets. We currently do not sell our products into Russia nor have assets or any operations in the country, however, a
significant escalation or expansion of economic disruption or the conflict’s current scope could have a material adverse effect
on our results of operations due to its impact in the countries in which we do conduct business.
At this time, the current situation in the Middle East has resulted in our business operations continuing as normal with
some shipping and raw material delays. However, the geo-political climate remains volatile and a disruption could occur at any
time, potentially causing a financial impact to our business.
Natural disasters or other unanticipated catastrophes could impact our operations and could have a material adverse effect
on our results of operations, financial position, and cash flows.
The occurrence of natural disasters, such as hurricanes, floods, droughts, extreme heat, storms or earthquakes; pandemics,
such as the COVID-19 pandemic; or other unanticipated catastrophes at any of the locations in which we or our key partners,
suppliers, or customers do business could cause interruptions in our operations. Historically, major hurricanes have caused
significant disruption to the operations on the U.S. Gulf Coast for many of our customers and certain of our suppliers of raw
materials, which has had an adverse impact on volume and cost for some of our products. Our operations in Chile could be
subject to significant rain events and earthquakes, and our operations in Asia could be subject to weather events such as
typhoons. A global or regional pandemic or similar outbreak in a region in which we or our key partners, customers, or
suppliers operate could disrupt business, depending on factors including, but not limited to, the duration and severity of the
pandemic, government restrictions on businesses and individuals, impact on demand for our products, impact on the supply
chain network, and the health and safety of our employees and the communities in which we do business. If similar or other
weather events, natural disasters, or other catastrophic events occur in the future, they could negatively affect the results of
operations at our sites in the affected regions as well as have adverse impacts on the global economy.
Albemarle Corporation and Subsidiaries
28
Our insurance may not fully cover all potential exposures.
We maintain property, business interruption, casualty, and other insurance, but such insurance may not cover all risks
associated with the hazards of our business and is subject to limitations, including deductibles and coverage limits. We may
incur losses beyond the limits, or outside the coverage, of our insurance policies, including liabilities for environmental
remediation. In addition, from time to time, various types of insurance for companies in the specialty chemical industry have
not been available on commercially acceptable terms or, in some cases, have not been available at all. We are potentially at
additional risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial
markets could adversely impact the ratings and survival of some insurers. Future downgrades in the ratings of enough insurers
could adversely impact both the availability of appropriate insurance coverage and its cost. In the future, we may not be able to
obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain.
We may be exposed to certain physical, transitional, regulatory and financial risks related to climate change.
Impacts of climate change include changes in rainfall and in storm patterns and intensities, water shortages, significantly
changing sea levels and increasing atmospheric and water temperatures, among others. For example, there have been concerns
regarding the declining water level of the Dead Sea, from which our joint venture, JBC, produces bromine. Climate changes
and unprecedented weather events may pose a risk to business operations in vulnerable areas. In some regions including China,
extreme heat and drought conditions could also impact the availability of hydropower resulting in decreased production and/or
increased costs. Storms could cause business interruptions, incur additional restoration costs, and impact product availability
and pricing. Disruptions to the global supply chain due to climate related impacts or geopolitical events are possible and exist as
external risk factors that we can respond to but not control. These events could limit the supply of key raw materials to us, or
could have significant impacts to pricing. We work with numerous independent suppliers to mitigate lack of availability from a
single supplier, however in some cases products with limited numbers of suppliers may become difficult to obtain.
Potential transition risks related to climate change include increased battery regulation, potential loss of customers due to
climate-related performance, and increased costs related to carbon pricing. Growing concerns about climate change may result
in the imposition of additional regulations or restrictions to which we may become subject. A number of governments or
governmental bodies have introduced or are contemplating regulatory changes in response to climate change, including
regulating greenhouse gas emissions. Potentially, additional U.S. federal regulation will be forthcoming with respect to
greenhouse gas emissions (including carbon dioxide) and/or “cap and trade” legislation that could impact our operations. In
addition, we have operations in the E.U., Brazil, China, Japan, Jordan, Saudi Arabia, Singapore and the United Arab Emirates,
which have implemented, or may implement, measures to achieve objectives under the 2015 Paris Climate Agreement, an
international agreement linked to the United Nations Framework Convention on Climate Change (“UNFCC”), which set targets
for reducing greenhouse gas emissions. Significant regional or national differences in approaches to environmental laws and
regulations could affect us disproportionately compared to our competitors and result in a competitive disadvantage to us.
The outcome of new legislation or regulation in the U.S. and other jurisdictions in which we operate may result in new or
additional requirements, additional charges to fund energy efficiency activities, and fees or restrictions on certain activities. We
may have heightened credit risk due to our exposure to climate risks. While certain climate change initiatives may result in new
business opportunities for us in the area of alternative fuel technologies and emissions control, compliance with these initiatives
may also result in additional costs to us, including, among other things, increased production costs, additional taxes, reduced
emission allowances or additional restrictions on production or operations. Any adopted future climate change regulations could
also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Even without
such regulation, increased public awareness and adverse publicity about potential impacts on climate change emanating from us
or our industry could harm us. We may not be able to recover the cost of compliance with new or more stringent laws and
regulations, which could adversely affect our business and negatively impact our growth. Furthermore, the potential impact of
climate change and related regulation, market trends or litigation on the Company is highly uncertain and there can be no
assurance that it will not have an adverse effect on our financial condition and results of operations.
Failure to meet sustainability expectations or standards or achieve our sustainability goals could adversely affect our
business, results of operations, financial condition, or stock price.
In recent years, there has been an increased focus from stakeholders, regulators and the public in general on sustainability
matters, including greenhouse gas emissions and climate-related risks, renewable energy, water stewardship, waste
management, diversity, equality and inclusion, responsible sourcing and supply chain, human rights, and social responsibility.
Given our commitment to sustainability, we actively manage these issues and have established and publicly announced certain
goals, commitments, and targets which we may refine further in the future. These goals, commitments, and targets reflect our
current plans and aspirations and are not guarantees that we will be able to achieve them. Evolving stakeholder expectations,
regulatory obligations, economic conditions and our efforts to manage these issues, report on them, and accomplish our goals
Albemarle Corporation and Subsidiaries
29
present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material
adverse impact, including on our reputation and stock price.
Meeting the sustainability goals we have set and publicly disclosed will require significant resources and expenditures,
and we may face pressure to make commitments, establish additional goals, and take actions to meet them beyond our current
plans. If customers and potential customers are dissatisfied with our sustainability goals or our progress towards meeting them,
then they may choose not to buy our products and services, which could lead to reduced revenue, and our reputation could be
harmed. In addition, we could experience reduced revenue and reputational harm if we are targeted by anti-sustainability groups
or influential individuals who disagree with our public positions on social or environmental issues. Additionally, lawsuits or
regulatory actions based on allegations that certain public statements regarding sustainability-related matters by companies are
false and misleading “greenwashing” campaigns could adversely impact our operations and could have an adverse impact on
our financial condition.
We may be unable to satisfactorily meet evolving standards, regulations and disclosure requirements related to
sustainability. Such matters can affect the willingness or ability of investors to make an investment in our Company, as well as
our ability to meet regulatory requirements, including proposed rules related to greenhouse gas emissions. Any failure, or
perceived failure, to meet evolving stakeholder expectations, additional regulations and industry standards or achieve our
sustainability goals, commitments, and targets could have an adverse effect on our business, results of operations, financial
condition, or stock price.
Item 1B.
Unresolved Staff Comments.
NONE
Item 1C.
Cybersecurity.
Albemarle recognizes the importance of maintaining the security and integrity of our information systems and the data we
collect, process, and store. We have implemented a comprehensive cybersecurity program based on the National Institute of
Standards and Technology Cybersecurity Framework (“CSF”). As such, we map the CSF to corresponding legal, regulatory,
and industry security practices, which guide our global policies and procedures to prevent, identify, protect, detect, respond, and
recover from cybersecurity threats and incidents. Our cybersecurity program is managed by our Cybersecurity Director and is
overseen by our Chief Information Officer (“CIO”), who assumes responsibility for the Chief Information Security Officer
(“CISO”) role. The cybersecurity program is integrated into our overall enterprise risk management framework and thus is
factored into our long-term strategy and business continuity plans. Our Cybersecurity Director brings extensive experience in
cybersecurity, including service in U.S. Army Cyber Operations, and has led initiatives in threat management, risk mitigation,
and security architecture to strengthen enterprise resilience. His expertise in incident response and security strategy ensures our
cybersecurity program remains aligned with industry best practices and evolving cyber threats.
The Audit and Finance Committee (“AFC”) of our Board of Directors oversees information security matters and the
Company’s cybersecurity program. Our CIO reports on cybersecurity related matters, including the status of ongoing initiatives,
incident reporting, compliance with regulatory requirements and industry standards, and emerging threats in global
cybersecurity, on an as needed basis, but at least annually, to the AFC and executive leadership. The AFC and executive
leadership offer guidance on certain matters and approval for material initiatives. In addition, the full Board of Directors is
updated on cybersecurity matters as needed depending on the nature and materiality of a cybersecurity matter.
All information assets are inventoried, classified, prioritized, and protected based on the respective risk, with appropriate
cybersecurity controls applied to each. We have also implemented and maintain a documents management program which
governs the classification, protection, and use of sensitive company data within the Albemarle environment.
All business-requested technologies and third-party service providers must successfully complete a thorough
cybersecurity and contract review before being approved for use, after which they are continuously monitored as part of our
supply chain risk management program. Cybersecurity risks and potential costs are evaluated as a part of business operations,
and the respective business impacts are continuously assessed to address evolving threats and vulnerabilities. We engage a
third-party global firm to conduct an annual cyber assessment using the CSF, and we engage external vendors to validate our
security controls and procedures through periodic penetration tests.
Albemarle Corporation and Subsidiaries
30
We follow a zero-trust architecture approach and enforce the use of multi-factor authentication and virtual private
network technologies for all external access to provide secure support for our remote workers. Information security training is
part of our compliance program, and includes mandatory security training for new hires, mandatory yearly security training for
all staff, and periodic phishing tests to raise awareness and response actions.
Our team of cybersecurity professionals are responsible for maintaining a global information systems environment that
focuses on least privilege, least functionality, and network segmentation throughout the landscape using a layered approach (i.e.
a defense-in-depth strategy). This includes a security operations center and cybersecurity analysts who provide 24/7 network
monitoring.
As further discussed in Item 1A. Risk Factors, a material cybersecurity incident could significantly increase the cost of
doing business or otherwise adversely impact our financial results and condition. To date we have not had a cybersecurity
incident that has had, or is reasonably likely to have, a material effect on our financial results or business operations; however,
we monitor and work to continuously improve our cybersecurity program as threats become more frequent and sophisticated.
Our manufacturing sites have formal business continuity plans that address site-specific priority responses, each
determined through business impact analyses that integrate within our overall corporate crisis management response plan and
enterprise risk management program. We conduct an annual incident response tabletop exercise as well as periodic exercises of
formalized site business continuity plans. Lessons learned from the outcomes of these exercises are then assessed and used to
inform and improve our formal cyber response procedures and business continuity plans.
In the event of, or the reasonably likely threat of, a cybersecurity incident, our cyber response procedures outline the tasks
and timeline for the escalation of the incident to key members of the organization, including the information technology team,
business unit management, and Albemarle executives and other key management. These individuals would participate in a
special event management plan activation meeting to gain an understanding as to how the incident was detected and analysis of
the incident. Each member of management involved would be responsible for assessing the risks, impact, and necessary
response as determined by their role. The procedures include key considerations each manager should consider in their
assessment as well as their responsibility for involvement in remediation efforts and post-incident strategic reviews. Specific
legal and executive role procedures include the assessment of necessary internal communication and external reporting. The
Chief Executive Officer, with the support of other executive officers, is responsible for approval of incident reporting and
informing and updating the Board of Directors.
Item 2.
Properties.
We operate globally, with our principal executive offices located in Charlotte, North Carolina and regional shared
services offices located in Budapest, Hungary and Dalian, China. Each of these properties are leased. We and our affiliates also
operate regional sales and administrative offices in various locations throughout the world, which are generally leased.
We believe that our production facilities, research and development facilities, and sales and administrative offices are
generally well maintained, effectively used and are adequate to operate our business. During 2024, the Company’s
manufacturing plants operated at approximately 78% capacity, in the aggregate.
Set forth below is information regarding our production facilities operated by us and our affiliates. Additional details
regarding our significant mineral properties can be found below the table.
Energy Storage
Chengdu, China
Production of technical and battery-grade lithium hydroxide
Owned
Greenbushes, Australia(a)
Production of lithium spodumene minerals and lithium concentrate
Owned(c)
Kemerton, Australia
Production of technical and battery-grade lithium hydroxide
Owned
Kings Mountain, NC
Production of technical and battery-grade lithium hydroxide, lithium salts and
battery-grade lithium metal products
Owned
La Negra, Chile
Production of technical and battery-grade lithium carbonate
Owned
Meishan, China
Production of technical and battery-grade lithium hydroxide
Owned
Qinzhou, China
Production of lithium carbonate and technical and battery-grade lithium hydroxide
Owned
Location
Principal Use
Owned/Leased
Albemarle Corporation and Subsidiaries
31
Salar de Atacama, Chile(a)
Production of lithium brine and potash
Owned(d)
Silver Peak, NV(a)
Production of lithium brine, technical-grade lithium carbonate and lithium hydroxide
Owned
Wodgina, Australia(a)
Production of lithium spodumene minerals and lithium concentrate
Owned and leased(c)
Xinyu, China
Production of technical and battery-grade lithium hydroxide
Owned
Specialties
Baton Rouge, LA
Research and product development activities, and production of fire safety solutions
Leased
Langelsheim, Germany
Production of butyllithium, lithium chloride, specialty products, lithium hydrides,
cesium and special metals
Owned
Magnolia, AR(a)
Production of fire safety solutions, bromine, inorganic bromides, agricultural
intermediates and tertiary amines
Owned
New Johnsonville, TN
Production of butyllithium and specialty products
Owned
Safi, Jordan(a)
Production of bromine and derivatives and fire safety solutions
Owned and leased(c)
Taichung, Taiwan
Production of butyllithium
Owned
Twinsburg, OH
Production of bromine-activated carbon
Leased
Ketjen(b)
Amsterdam, the Netherlands
Production of refinery catalysts, research and product development activities
Owned
Bayport, TX
Production of refinery catalysts, research and product development activities
Owned
Niihama, Japan
Production of refinery catalysts
Leased(c)
Pasadena, TX
Production of variety of chemical products, including aluminum and magnesium
alkyls and alkyltes
Owned
Santa Cruz, Brazil
Production of catalysts, research and product development activities
Owned(c)
Location
Principal Use
Owned/Leased
(a) See below for further discussion of these significant mineral extraction facilities.
(b) Immaterial production facilities owned by unconsolidated joint ventures are not listed.
(c) Owned or leased by joint venture.
(d) 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.
Mineral Properties
Set forth below are details regarding our mineral properties operated by us and our affiliates, which have been prepared in
accordance with the requirements of subpart 1300 of Regulation S-K issued by the SEC. The following terms used in this
Annual Report on Form 10-K are defined and used in accordance with subpart 1300 of Regulation S-K:
Mineral resource - a concentration or occurrence of material of economic interest in or on the Earth's crust in such form,
grade or quality, and quantity that there are reasonable prospects for economic extraction.
Measured mineral resource - that part of a mineral resource for which quantity and grade or quality are estimated on the
basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral
resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine
planning and final evaluation of the economic viability of the deposit.
Indicated mineral resource - that part of a mineral resource for which quantity and grade or quality are estimated on the
basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral
resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and
evaluation of the economic viability of the deposit.
Inferred mineral resource - that part of a mineral resource for which quantity and grade or quality are estimated on the
basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral
resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in
a manner useful for evaluation of economic viability.
Mineral reserve - an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the
opinion of the qualified person, can be the basis of an economically viable project.
Albemarle Corporation and Subsidiaries
32
Proven mineral reserve - the economically mineable part of a measured mineral resource and can only result from
conversion of a measured mineral resource.
Probable mineral reserve – the economically mineable part of an indicated and, in some cases, a measured mineral
resource.
Cut-off grade - the grade (i.e., the concentration of metal or mineral in rock) that determines the destination of the
material during mining. For purposes of establishing “prospects of economic extraction,” the cut-off grade is the grade that
distinguishes material deemed to have no economic value from material deemed to have economic value.
Under subpart 1300 of Regulation S-K, mineral resources may not be classified as “mineral reserves” unless the
determination has been made by a qualified person (“QP”) that the mineral resources can be the basis of an economically viable
project.
Except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated
economic value. Inferred mineral resources are estimates based on limited geological evidence and sampling and have a too
high of a degree of uncertainty as to their existence to apply relevant technical and economic factors likely to influence the
prospects of economic extraction in a manner useful for evaluation of economic viability. Estimates of inferred mineral
resources may not be converted to a mineral reserve. It cannot be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. A significant amount of exploration must be completed in order to determine
whether an inferred mineral resource may be upgraded to a higher category. Therefore, it cannot be assumed that all or any part
of an inferred mineral resource exists, that it can be the basis of an economically viable project, that it will ever be upgraded to
a higher category, or that all or any part of the mineral resources will ever be converted into mineral reserves. See risk factor -
“Our inability to acquire or develop additional reserves that are economically viable could have a material adverse effect on our
future profitability,” in Item 1A. Risk Factors.
Overview
Albemarle Corporation and Subsidiaries
33
At December 31, 2024, we had the following mineral extraction sites:
Location
Business Segment
Ownership %
Extraction Type
Stage
Argentina
Antofalla
Energy Storage
100%
Brine
Exploration
Australia
Greenbushes
Energy Storage
49%
Hard rock
Production
Wodgina(a)
Energy Storage
50%
Hard rock
Production
Chile
Salar de Atacama(b)
Energy Storage
100%
Brine
Production
Jordan
Safi(b)
Specialties
50%
Brine
Production
United States
Kings Mountain, NC
Energy Storage
100%
Hard rock
Exploration
Magnolia, AR(b)
Specialties
100%
Brine
Production
Silver Peak, NV(b)
Energy Storage
100%
Brine
Production
(a) Production of spodumene concentrate at the Wodgina mine resumed in the second quarter of 2022 after it had been idled in 2019,
following the acquisition of our interest in Wodgina. On October 18, 2023, we completed the restructuring of our MARBL joint venture,
which reduced our ownership percentage of Wodgina from 60% to 50%.
(b) Site includes on-site, or otherwise near-by, exclusive conversion facilities. See individual property disclosure below for further details.
Aggregate annual production from our mineral extraction facilities is shown in the below table. Amounts represent
Albemarle’s attributable portion based on ownership percentages noted above and are shown in thousands of metric tonnes of
lithium metal and bromine production. Lithium and bromine are extracted as brine or hard rock concentrate at the extraction
facilities. These are then further converted into various compounds and products at on-site processing facilities or other
conversion facilities owned by Albemarle around the world. In addition, the brine or concentrate can be used by tolling entities
for further processing.
Aggregate Annual Production (metric tonnes in thousands)
Year Ended December 31,
2024
2023
2022
Lithium (lithium metal)(a)
Australia
Greenbushes(b)
19
21
19
Wodgina(c)
6
7
3
Chile
Salar de Atacama(d)
13
10
10
United States
Silver Peak, NV
1
1
1
Total lithium metal
39
39
33
Bromine
Jordan
Safi(e)(f)
56
58
60
United States
Magnolia, AR(g)
65
82
73
Total bromine
121
140
133
Albemarle Corporation and Subsidiaries
34
(a) Lithium production amounts shown as lithium metal. Conversion to LCE is 0.1878 metric tonne of lithium metal to 1 metric tonne of
LCE.
(b) Production from Greenbushes represents 49% of production of the Greenbushes mine, which is attributable to the Company’s interest in
the Windfield joint venture.
(c) Production of spodumene concentrate at the Wodgina mine resumed in the second quarter of 2022 after it had been idled in 2019.
Production amounts presented from Wodgina represent 60% of production of the Wodgina mine which is attributable to the Company’s
interest in the MARBL joint venture until October 18, 2023, when we reduced our ownership percentage to 50% following the
restructuring of the MARBL joint venture with MRL. The above production amounts reflect that change in ownership percentage
beginning on October 18, 2023.
(d) The Salar de Atacama operation also produces potash (potassium chloride), bischofite, halite and sylvinite as byproducts. However, the
Company does not consider production of these byproducts as material to the economics of the operation.
(e) Production from Safi represents the 50% production by the Jordan Bromine Project, which is attributable to the Company’s interest in
the JBC joint venture.
(f) The Safi operation also produces potassium hydroxide (“KOH”) as a byproduct. However, the Company does not consider production of
this byproduct as material to the economics of the operation.
(g) In addition, elemental sulfur and sodium hydrosulfide solution (“NaHS”) are manufactured from the sour gas produced by the Magnolia
operation. However, the Company does not consider these products as material to the economics of the operation.
See individual property disclosure below for further details regarding mineral rights, titles, property size, permits and
other information for our significant mineral extraction properties. The extracted brine or hard rock is processed at facilities on
location (as described below) or processed, or further processed, at other facilities throughout the world.
The following table provides a summary of our mineral resources, exclusive of reserves, at December 31, 2024. The
below mineral resource amounts are rounded and shown in thousands of metric tonnes. Where applicable, the amounts
represent Albemarle’s attributable portion based on ownership percentages noted. The relevant technical information supporting
mineral resources for each material property is included in the “Material Individual Properties” section below, as well as in the
technical report summaries filed as Exhibits 96.1 to 96.6 to this report.
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and Indicated
Mineral Resources
Inferred Mineral Resources
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Lithium - Hard Rock:
Australia
Greenbushes(a)
—
—
37,500
1.5%
37,600
1.5%
8,200
1.7%
Wodgina(b)
—
—
23,300
0.8%
23,300
0.8%
14,500
1.1%
United States
Kings Mountain, NC
—
—
63,860
1.4%
63,860
1.4%
27,610
1.2%
Amount
(‘000s
metric
tonnes)
Concentratio
n (mg/L)
Amount
(‘000s
metric
tonnes)
Concentratio
n (mg/L)
Amount
(‘000s
metric
tonnes)
Concentratio
n (mg/L)
Amount
(‘000s
metric
tonnes)
Concentratio
n (mg/L)
Lithium - Brine:
Argentina
Antofalla
521
427
382
381
903
406
888
364
Chile
Salar de Atacama
618
2,176
481
1,868
1,099
2,041
166
1,558
United States
Silver Peak, NV
7
169
11
155
17
160
102
130
(a) Through our Windfield joint venture, we own a 49% interest in the Greenbushes mine. We are therefore reporting 49% of Greenbushes’
mineral resources.
(b) Through our MARBL joint venture, we own a 50% interest in Wodgina. We are therefore reporting 50% of Wodgina’s mineral
resources.
The feedstock for the Safi, Jordan site, owned 50% by Albemarle through its JBC joint venture, is drawn from the Dead
Sea, a nonconventional reservoir owned by the nations of Israel and Jordan. As such, there are no specific resources owned by
JBC, but Albemarle’s joint venture partner, Arab Potash Company (“APC”) has exclusive rights granted by the Hashemite
Albemarle Corporation and Subsidiaries
35
Kingdom of Jordan to withdraw brine from the Dead Sea and process it to extract minerals. The measured resource of bromide
ion attributable to Albemarle’s 50% interest in its JBC joint venture is estimated to be approximately 173.93 million metric
tonnes. JBC is extracting approximately 1 percent of the bromine available in Jordan’s share of the Dead Sea. Bromide
concentration in the Dead Sea is estimated to average approximately 5,037 parts per million (“ppm”).
There are no mineral resource estimates at the Magnolia, AR bromine extraction site. All bromine mineral accumulations
of economic interest and with reasonable prospects for eventual economic extraction within the Magnolia production lease area
are either currently on production or subject to an economically viable future development plan and are classified as mineral
reserves.
The following table provides a summary of our mineral reserves at December 31, 2024. The below mineral reserve
amounts are rounded and shown in thousands of metric tonnes. The amounts represent Albemarle’s attributable portion based
on ownership percentages noted above. The relevant technical information supporting mineral reserves for each material
property is included in the “Material Individual Properties” section below, as well as the in the technical report summaries
referenced in Exhibits 96.1 to 96.6 to this report.
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Amount
(‘000s
metric
tonnes)
Grade
(Li2O%)
Lithium - Hard Rock:
Australia
Greenbushes(a)
—
—
74,500
1.8%
74,500
1.8%
Wodgina(b)
—
—
55,950
1.3%
55,950
1.3%
Amount
(‘000s
metric
tonnes)
Concentration
(mg/L)
Amount
(‘000s
metric
tonnes)
Concentration
(mg/L)
Amount
(‘000s
metric
tonnes)
Concentration
(mg/L)
Lithium - Brine:
Chile
Salar de Atacama
311
2,405
147
2,023
458
2,270
United States
Silver Peak, NV
14
97
66
119
79
115
Bromine:
United States
Magnolia, AR(c)
2,468
467
2,935
(a) Through our Windfield joint venture, we own a 49% interest in the Greenbushes mine. We are therefore reporting 49% of Greenbushes’
mineral reserves.
(b) Through our MARBL joint venture, we own a 50% interest in Wodgina. We are therefore reporting 50% of Wodgina’s mineral
resources.
(c) The concentration of bromine at the Magnolia site varies based on the physical location of the field and can range over 6,600 mg/L.
All bromine reserves reported by Albemarle for the JBC project are classified as proven mineral reserves. The mineral
reserve estimate for the Safi, Jordan bromine site attributable to Albemarle’s 50% interest in its JBC joint venture is
approximately 2.0 million metric tonnes of bromine from the Dead Sea. This estimate is based on the time available under the
concession agreement with the Hashemite Kingdom of Jordan and the processing capability of the JBC plant. As only
approximately one percent of the available resource is consumed from the Dead Sea, as noted above, the reserve estimate is
based on the amount the JBC plant can produce over until the end of 2058, when the APC concession agreement ends. Bromide
ion concentration of concentrated bromide-enriched brine from the APC evaporation pond used to estimate the reserve from the
Dead Sea was approximately 8,742 ppm based on historical pumping.
Mineral resource and reserve estimates were prepared by a QP with an effective date provided in the individual technical
report summaries referenced in Exhibits 96.1 to 96.6 to this report. Differences between the amounts in the table above and
those amounts in the technical report summaries represent estimated depletion from the effective date of the report until
December 31, 2024. Our mineral resource and reserve estimates are based on many factors, including the area and volume
Albemarle Corporation and Subsidiaries
36
covered by our mining rights, assumptions regarding our extraction rates based upon an expectation of operating the mines on a
long-term basis and the quality of in-place reserves.
Internal Controls
The modeling and analysis of our mineral resources and reserves was developed by our site personnel and reviewed by
several levels of internal management, as well as the QP for each site. The development of such resources and reserves
estimates, including related assumptions, were prepared by a QP.
When determining resources and reserves, as well as the differences between resources and reserves, management
developed specific criteria, each of which must be met to qualify as a resource or reserve, respectively. These criteria, such as
demonstration of economic viability, points of reference and grade, are specific and attainable. The QP and management agree
on the reasonableness of the criteria for the purposes of estimating resources and reserves. Calculations using these criteria are
reviewed and validated by the QP.
Estimations and assumptions were developed independently for each significant mineral location. All estimates require a
combination of historical data and key assumptions and parameters. When possible, resources and data from public information
and generally accepted industry sources, such as governmental resource agencies, were used to develop these estimations.
Each site has developed quality control and quality assurance (“QC/QA”) procedures, which were reviewed by the QP, to
ensure the process for developing mineral resource and reserve estimates were sufficiently accurate. QC/QA procedures include
independent checks (duplicates) on samples by third party laboratories, blind blank/standard insertion into sample streams,
duplicate sampling, among others. In addition, the QPs reviewed the consistency of historical production at each site as part of
their analysis of the QC/QA procedures. See details of the controls for each site in the technical summary reports filed as
Exhibits 96.1 to 96.6 to this report.
We recognize the risks inherent in mineral resource and reserve estimates, such as the geological complexity, the
interpretation and extrapolation of field and well data, changes in operating approach, macroeconomic conditions and new data,
among others. The capital, operating and economic analysis estimates rely on a range of assumptions and forecasts that are
subject to change. In addition, certain estimates are based on mineral rights agreements with local and foreign governments.
Any changes to these access rights could impact the estimates of mineral resources and reserves calculated in these reports.
Overestimated resources and reserves resulting from these risks could have a material effect on future profitability.
Albemarle Corporation and Subsidiaries
37
Material Individual Properties
Greenbushes, Australia
The Greenbushes mine is a hard rock, open pit mine (latitude 33° 52´S, longitude 116° 04´ E) located approximately
250km south of Perth, Western Australia, 90km southeast of the port of Bunbury, a major bulk-handling port in the southwest
of Western Australia. The lithium mining operation is near the Greenbushes townsite located in the Shire of Bridgetown-
Greenbushes. Access to the Greenbushes Mine is via the paved South Western Highway between Bunbury and Bridgetown to
Greenbushes Township and via the paved Maranup Ford Road to the Greenbushes Mine.
Lithium production from the Greenbushes Mine has been undertaken continuously for more than 20 years. Modern
exploration has been undertaken on the property since the mid-1980s, first by Greenbushes Limited, then by Lithium Australia
Ltd and in turn by Sons of Gwalia prior to the acquisition of Greenbushes by Talison in 2007. Initial exploration focused largely
on tantalum, with the emphasis changing to lithium from around 2000. In 2014, Rockwood acquired a 49% ownership interest
in Windfield, which owns 100% of Talison, from Sichuan Tianqi Lithium Industries Inc. This 49% ownership in Windfield was
assumed by Albemarle in 2015 as part of the acquisition of Rockwood. We purchase lithium concentrate from Windfield, and
our investment in the joint venture is reported as an unconsolidated equity investment on our balance sheet.
About 55% of the tenements held by Talison are covered by Western Australia’s State Forest, which is under the authority
of the Western Australia Department of Biodiversity, Conservation and Attractions. The majority of the remaining land is
private land that covers about 40% of the surface rights. The remaining ground comprises crown land, road reserves and other
miscellaneous reserves. The tenements cover a total area of approximately 10,000 hectares and include the historic Greenbushes
tin, tantalum and current lithium mining areas. See section 3 of the Greenbushes technical report summary, filed as Exhibit 96.1
to this report, for a listing of tenements held by the Greenbushes site. Talison holds the mining rights for all lithium minerals on
these tenements. The operating open pit lithium mining and processing plant area covers approximately 3,500 hectares
comprising three mining leases. All lithium mining activities, including tailings storage, processing plant operations, open pits
Albemarle Corporation and Subsidiaries
38
and waste rock dumps, are currently carried out within the boundaries of the three mining leases plus two general purpose
leases. In order to keep the granted tenements in good standing, Talison is required to maintain permits, make an annual
contribution to the statutory Mining Rehabilitation Fund and pay a royalty on concentrate sales for lithium mineral production
as prescribed under the Mining Act 1978 in Western Australia. There are no private royalties that apply to the Greenbushes
property. Talison continues to review all tenements on an annual basis and ensures compliance with relevant regulatory
requirements and fees for maintenance of these tenements.
The Greenbushes pegmatite deposit consists of a primary pegmatite intrusion (Central Lode) with a smaller, sub-parallel
pegmatite to the east (Kapanga). The primary intrusion and its subsidiary dikes and pods are concentrated within shear zones
within a metamorphic belt consisting of granofels, ultramafic schists and amphibolites. The pegmatites are crosscut by mafic
dolerite dikes. The Central Lode pegmatite is over 3 kilometers long (north by northwest), up to 300 meters wide (normal to
dip), strikes north to north-west and dips moderately to steeply west to south-west. The Kapanga deposit sits approximately 300
m to the east of the Central Lode deposit with strike length of 1.8 km, thickness averaging 150 meters and dips between 40o and
60o toward the west. Current drilling has defined the Kapanga deposit to approximately 450 meters depth below surface. The
major minerals from the Greenbushes pegmatite are quartz, spodumene, albite and K-feldspar.
The main lithium-bearing minerals are spodumene (containing approximately 8% lithium oxide) and varieties kunzite and
hiddenite. Minor to trace lithium minerals include lepidolite mica, amblygonite and lithiophilite. Lithium is readily leached in
the weathering environment and thus is virtually non-existent in weathered pegmatite. Exploration drilling at Greenbushes has
been ongoing for over 40 years using reverse circulation and diamond drill holes.
Three lithium mineral processing plants are currently operating on the Greenbushes site, two chemical grade plants and a
technical grade plant. Tailings are discharged to the tailings storage facility without the need for any neutralization process.
Additional infrastructure on site includes power and water supply facilities, a laboratory, administrative offices, occupational
health/safety/training offices, dedicated mines rescue area, stores, storage sheds, workshops and engineering offices. The
Greenbushes site also leases production drills, excavators, trucks and various support equipment to extract the ore deposit by
open pit methods. Talison’s power is delivered by a local distribution system and reticulated and metered within the site. Water
is sourced from rainfall and stored in several process dams located on site. We consider the condition of all of our plants,
facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of
December 31, 2024, our 49% ownership interest of the gross asset value of the facilities at the Greenbushes site was
approximately $843.8 million. Greenbushes is currently constructing a new chemical grade plant with a target completion in
2025 and is developing plans for a fourth chemical grade plant to be constructed in 2027. Other planned upgrades to the
infrastructure include a new mine service area, a new mine access road, expansions of warehouse and laboratories and the
expansion of tailings facilities.
Talison ships the chemical-grade lithium concentrate in vessels to our facilities in Meishan, Qinzhou and Xinyu, China,
and by land transport to our Kemerton, Australia facility, to process into battery-grade lithium hydroxide. In addition, the output
from Talison can be used by tolling entities in China to produce both lithium carbonate and lithium hydroxide.
A summary of the Greenbushes facility’s lithium mineral resources, exclusive of reserves, and reserves as of December
31, 2024 is shown in the following tables. RPM Global USA Inc. (“RPM”), a third-party firm comprising mining experts in
accordance with Item 1302(b)(1) of Regulation S-K, served as the QP and prepared the estimates of lithium mineral resources
and reserves at the Greenbushes facility, with an effective date of June 30, 2024. A copy of the QP’s most recent technical
report summary with respect to the lithium mineral resource and reserve estimates at the Greenbushes facility, dated February
10, 2025, with an effective date of June 30, 2024, is filed as Exhibit 96.1 to this report. The amounts represent Albemarle’s
attributable portion based on a 49% ownership percentage, and are presented as metric tonnes of lithium ore in thousands.
The Greenbushes mineral resources, exclusive of reserves, estimates with depletion from production from the effective
date of the report through December 31, 2024 are summarized in the following table:
Amount (‘000s metric
tonnes)
Grade (Li2O%)
Indicated mineral resources
37,500
1.5%
Inferred mineral resources
8,200
1.7%
•
Amounts represent Albemarle’s attributable portion of mineral resources of 49%.
•
Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
Albemarle Corporation and Subsidiaries
39
•
Mineral resources have been reported as in situ (hard rock within an optimized pit shell and above the effective cut-off grade), with
reasonable prospects for eventual economic extraction remaining available.
•
Classification of the Mineral Resource has taken into account varying confidence levels and assessment, and whether the
appropriate account has been taken for all relevant factors, i.e., relative confidence in tonnage/grade, computations, confidence in
the continuity of geology and grade, quantity and distribution of the data and the results reflect the view of the QP.
•
The cut-off grade of 0.55% Li2O is based on estimated mining and processing costs and recovery factors.
•
The long-term price of $1,500/metric tonne of product over a timeline of 7 to 10 years is above the current spot price and was
selected based on the reasonable long-term prospect rather than the short-term viability (0.5 to 2 years).
•
Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add
due to rounding.
The Greenbushes indicated mineral resources of 37.6 million metric tonnes at December 31, 2024 increased by 1% from
37.1 million metric tonnes at December 31, 2023. The Greenbushes inferred mineral resources of 8.2 million metric tonnes at
December 31, 2024 increased by 41% from 5.8 million metric tonnes at December 31, 2023. The overall increase in mineral
resources was primarily driven by changes in the reporting cut-off grade, as well as the pit shell used to report the mineral
resources.
The Greenbushes mineral reserve estimates with depletion from production from the effective date of the report through
December 31, 2024 are summarized in the following table:
Amount (‘000s metric
tonnes)
Grade (Li2O%)
Probable mineral reserves:
Open Pit
72,000
1.8%
Stockpiles
900
2.4%
Tailings Storage Facilities
1,600
1.4%
•
Amounts represent Albemarle’s attributable portion of mineral resources and mineral reserves of 49%.
•
Mineral reserves are reported exclusive of mineral resources.
•
Mineral reserves are reported on a dry basis
•
Mineral reserves are reported considering a nominal set of assumptions for reporting purposes:
•
Based on a selling price of $1,300/metric tonne cost, insurance and freight (“CIF”) China/Korea/Japan (“CKJ”) of chemical
grade concentrate (6% Li2O) and concentrate transport and selling cost of $9.75/metric tonne.
•
Assumes a 98% global grade factor.
•
Diluted by approximately 13.0% through the removal of non-pegmatite blocks and ore blocks contaminated with iron oxide.
•
Assumes variable mining recoveries based on grade, oxidation, thickness, and search distance, sourced from the Company. The
total mining recoveries are 91.1% for the open cut pit and 100% for the tailings storage facilities.
•
The economic cut-off grade calculation is based on $2.67/metric tonne-ore incremental ore mining cost, $35.77/metric tonne-
ore processing cost, $10.03/metric tonne-ore general and administrative cost and $3.54/metric tonne sustaining capital cost.
•
The price, cost and mass yield parameters produce a calculated economic cut-off grade of 0.62% Li2O. However, due to the
internal constraints of the current operations, an elevated mineral reserves cut-off grade of 0.7% Li2O has been applied.
•
Where a mining block with Li2O grade greater than or equal to 0.7% and less than or equal to 1.9%, and with iron oxide
(Fe₂O₃) content greater than or equal to 2.9%, the block is reallocated as contaminated ore and is treated as stockpiled for
future processing for the purposes of reporting mineral reserves. Material above 1.9% is treated as direct ore feed.
•
The mass yield for ore processed through the Chemical and Technical plants is estimated based on formulas that vary
depending on the Li2O% grade of the plant feed. For chemical grade plant 1, the formula is mass yield % = 9.362 × Feed Li2O
%^1.319. For chemical grade plant 2 and chemical grade plant 3, the formula is mass yield % = (9.362 × Feed Li2O%^1.319)
+ (Feed Li2O% × 0.82). The tailings storage facility formula is mass yield % = 41.4 and the TRP formula is mass yield % =
13.6.
•
Costs estimated in Australian Dollars were converted to U.S. dollars based on an exchange rate of AUD 1.00:$0.68.
•
Waste tonnage within the Mineral Reserve pit is 748.9 million metric tonnes at a strip ratio of 6.3:1 (waste to ore – not
including stockpiles).
•
Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate, and numbers may not add
due to rounding. Mineral reserves metric tonnes are rounded to the nearest hundred thousand tonnes.
The Greenbushes total mineral reserves of 74.5 million metric tonnes at December 31, 2024 increased by 4% from
71.8 million metric tonnes at December 31, 2023. The increase in total mineral reserves was primarily driven by changes in
pit design and changes in the modifying factors to align with operational practices, partially offset by mine depletion from
2024 production.
The life of mine sustaining capital cost of $2.35/metric tonne of ore was used only for the purposes of pit
optimization and cut-off grade calculation. This sustaining capital cost was based on estimates of life of mine annual
Albemarle Corporation and Subsidiaries
40
sustaining capital costs for Greenbushes that were included in the 2025 budget. Subsequent to pit optimization, design and
scheduling, a detailed estimate of life of mine sustaining capital costs was prepared.
Additional information about key assumptions and parameters relating to the lithium mineral resources and reserves
at the Greenbushes facility is discussed in sections 11 and 12, respectively, of the Greenbushes technical report summary.
Wodgina, Australia
The Wodgina property, which includes a hard rock, open pit mine (latitude -21° 11' 25"S, longitude 118° 40' 25"E) is
located approximately 110 km south-southeast of Port Hedland, Western Australia between the Turner and Yule Rivers. The
area includes multiple prominent greenstone ridges up to 180 m above mean sea level surrounded by granitic plains and
lowlands. The property is accessible via National Highway 1 to National highway 95 to the Wodgina camp road. All roads to
site are paved. The nearest large regional airport is in Port Hedland which also hosts an international deep-water port facility. In
addition, a site dedicated all-weather airstrip is located near to site, capable of landing certain aircrafts.
The Wodgina pegmatite deposits were discovered in 1902. Since then, the pegmatite-hosted deposits have been mined for
tin, tantalum, beryl, and lithium by various companies. Mining occurred sporadically until Goldrim Mining formed a new
partnership with Pan West Tantalum Pty Ltd., who opened open pit mining at the site in 1989 and progressively expanded
during the 1990s. Active mining at the Mt. Cassiterite pit has been started and stopped regularly between 2008 and the present.
The mine was placed on care and maintenance in 2008, 2012, and most recently in 2019. In 2016, MRL acquired the mine and
upgraded the processing facilities and site infrastructure to 750ktpa spodumene plant producing 6% spodumene concentrate,
completed in 2019. On October 31, 2019, we completed the acquisition of a 60% interest in this hard rock lithium mine project
and formed an unincorporated joint venture with MRL, named MARBL. We formed MARBL for the exploration, development,
mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from Wodgina. On October
18, 2023, we closed on the restructuring of the MARBL joint venture with MRL, which resulted in the reduction of our
ownership interest in Wodgina to 50% from 60%.
Albemarle Corporation and Subsidiaries
41
Wodgina holds mining tenements within the Karriyarra native title claim and are subject to the Land Use Agreement dated
March 2001 between the Karriyarra People and Gwalia Tantalum Ltd (now Wodgina Lithium, a 100% subsidiary of MRL, our
MARBL joint venture partner). See section 3 of the Wodgina technical report summary, filed as Exhibit 96.2 to this report, for
a listing of all mining and exploration land tenements, which are in good standing and without any known impediments. Certain
tenements are due for renewal in 2026 and another in 2030. Drilling and exploration activities have been conducted throughout
the mining life of the Wodgina property.
The Wodgina mine is a pegmatite lithium deposit with spodumene the dominant mineral. The lithium mineralization
occurs as 10 - 30 cm long grey-white spodumene crystals within medium grained pegmatites comprising primarily of quartz,
feldspar, spodumene, and muscovite. Typically, the spodumene crystals are oriented orthogonal to the pegmatite contacts.
The facilities at Wodgina consist of a three stage crushing plant, the spodumene concentration plant, administrative
offices, an accommodation camp, a power station, gas pipeline, three mature and reliable water bore fields, extension for future
tailing storage and a fleet of owned and leased mine production equipment. The gas pipeline feeds the site power station to
provide the power to the facilities. Water is obtained from the dedicated water bore fields. We consider the condition of all of
our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly.
As of December 31, 2024, our 50% ownership interest of the gross asset value of the facilities at our Wodgina site was
approximately $338.3 million.
A summary of the Wodgina facility’s lithium mineral resources as of December 31, 2024 is shown in the following table.
RPM served as the QP and prepared the estimates of lithium mineral resources and reserves at the Wodgina facility, with an
effective date of December 31, 2024. A copy of the QP’s most recent technical report summary with respect to the lithium
mineral resource estimates at the Wodgina facility, dated February 10, 2025, with an effective date of June 30, 2024, is filed as
Exhibit 96.2 to this report. The mineral resource economic assumptions remain unchanged from June 30, 2024. The June 30,
2024 resource has been depleted for actual production and adjusted for the new 50% ownership percentage noted above, and is
reported as of December 31, 2024 in the below table. Mineral resources reported below represent a 50% interest in Wodgina,
which is attributable to the Company’s interest in the MARBL joint venture. Amounts are presented as metric tonnes of lithium
ore in thousands.
The Wodgina mineral resources, exclusive of reserves, estimates with depletion from production from the effective date of
the report through December 31, 2024 are summarized in the following table:
Amount (‘000s metric
tonnes)
Grade (Li2O%)
Indicated mineral resources
23,300
0.8%
Inferred mineral resources
14,500
1.1%
•
Amounts represent Albemarle’s attributable portion of mineral resources of 50%.
•
Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
•
Mineral resources have been reported as in situ (hard rock within an optimized pit shell and above the effective cut-off grade), with
reasonable prospects for eventual economic extraction remaining available.
•
Classification of the Mineral Resource has taken into account varying confidence levels and assessment, and whether the
appropriate account has been taken for all relevant factors, i.e., relative confidence in tonnage/grade, computations, confidence in
the continuity of geology and grade, quantity and distribution of the data and the results reflect the view of the QP.
•
The cut-off grade of 0.5% Li2O is based on estimated mining and processing costs and recovery factors.
•
The long-term price of $1,500/metric tonne of product over a timeline of 7 to 10 years is above the current spot price and was
selected based on the reasonable long-term prospect rather than the short-term viability (0.5 to 2 years).
•
Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add
due to rounding.
The Wodgina indicated mineral resources of 23.3 million metric tonnes at December 31, 2024 increased by 165% from
8.8 million metric tonnes at December 31, 2023. The Wodgina inferred mineral resources of 14.5 million metric tonnes at
December 31, 2024 decreased by 82% from 81.7 million metric tonnes at December 31, 2023. The net decrease in total mineral
resources was driven by new modeling completed in development of the current technical report summary, including the
establishment of mineral reserves, as well as depletion during the year,
This is the first period reporting mineral reserves at the Wodgina mine as it had previously been at an initial assessment
level. The Wodgina mineral reserve estimates with depletion from production from the effective date of the report through
December 31, 2024 are summarized in the following table:
Albemarle Corporation and Subsidiaries
42
Amount (‘000s metric
tonnes)
Grade (Li2O%)
Probable mineral reserves:
Open Cut
48,500
1.4%
Stockpiles
50
1.5%
Tailings Storage Facilities
7,400
1.0%
•
Amounts represent Albemarle’s attributable portion of mineral resources and mineral reserves of 50%.
•
Mineral reserves are reported exclusive of mineral resources.
•
Mineral reserves are reported on a dry basis
•
Mineral reserves are reported considering a nominal set of assumptions for reporting purposes:
•
Based on a selling price of $1,300/metric tonne CIF CKJ of chemical grade concentrate (benchmark 6% Li2O) and concentrate
transport and selling cost of $6.80/metric tonne.
•
Assumes a 98% global grade factor.
•
Assumes variable mining recoveries based on grade, oxidation, thickness, and search distance, sourced from the Company. The
total mining recoveries are 91.1% for the open cut pit and 100% for the tailings storage facilities.
•
Mineral resources were converted to mineral reserves using plant recovery equations, sourced from the Company and based on
plant data. The plant processing recovery equations depend on the material type, weathering, and in some circumstances, the
Li2O% grade of the plant feed.
•
Costs estimated in Australian Dollars were converted to U.S. dollars based on an exchange rate of AUD 1.00:$0.68.
•
The economic cut-off grade calculation is based on $2.80/metric tonne-ore incremental ore mining cost, $33.57/metric tonne-
ore processing cost, $15.66/metric tonne-ore general and administrative cost and $3.64/metric tonne sustaining capital cost.
Incremental ore mining costs are the costs associated with the run-of-mine loader, stockpile rehandling, grade control assays
and rockbreaker.
•
The price, cost and mass yield parameters produce a calculated economic cut-off grade of 0.75% Li2O.
•
Waste tonnage within the Mineral Reserve pit is 748.9 million metric tonnes at a strip ratio of 6.3:1 (waste to ore – not
including stockpiles).
•
Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate, and numbers may not add
due to rounding. Mineral reserves metric tonnes are rounded to the nearest hundred thousand tonnes.
Additional information about key assumptions and parameters relating to the lithium mineral resources and reserves at
the Wodgina facility is discussed in sections 11 and 12, respectively, of the Wodgina technical report summary.
Albemarle Corporation and Subsidiaries
43
Salar de Atacama/La Negra, Chile
The Salar de Atacama is located in the commune of San Pedro de Atacama, with the operations approximately 100
kilometers to the south of this commune, in the extreme east of the Antofagasta Region and close to the border with the
republics of Argentina and Bolivia. Access to the property is on the major four-lane paved Panamericana Route 5 north from
Antofagasta, Chile approximately 60 km northeast to B-385. On B-385, a two-lane paved highway, the Albemarle Salar de
Atacama project (latitude 23°38'31.52"S, longitude 68°19'30.31"W) is approximately 175 km to the east. The site has a small
private airport that serves the project. A small paved runway airport is also located near San Pedro de Atacama and a large
international airport is located in Antofagasta. The La Negra plant (latitude 23°45'20.31"S, longitude 70°18'36.92"W) has direct
access roads and is located approximately 20 km by paved four lane highway Route 28 southeast of Antofagasta turning north
approximately 3 km on Route 5.
In the early 1960s, water with high concentrations of salts was discovered in the Salar de Atacama Basin. In January 1975,
one of our predecessors, Foote Mineral Company, signed a long-term contract with the Chilean government for mineral rights
with respect to the Salar de Atacama consisting exclusively of the right to access lithium brine, covering an area of
approximately 16,700 hectares. See section 3 of the Salar de Atacama technical report summary, filed as Exhibit 96.3 to this
report, for a listing of mining concessions at the Salar de Atacama site. The contract originally permitted the production and
sale of up to 200,000 metric tons of lithium metal equivalent (“LME”), a calculated percentage of LCE. In 1981, the first
construction of evaporation ponds in the Salar de Atacama began. The following year, the construction of the lithium carbonate
plant in La Negra began. In 1990, the facilities at the Salar de Atacama were expanded with a new well system and the capacity
of the lithium carbonate plant in the La Negra plant was expanded. In 1998, the lithium chloride plant in La Negra began
operating, the same year that Chemetall purchased Foote Mineral Company. Subsequently, in 2004, Chemetall was acquired by
Rockwood, and in 2015, Rockwood was acquired by Albemarle. Effective January 1, 2017, the Chilean government and
Albemarle entered into an annex to the original agreement through which its duration was modified, extending it until the
balance of: (a) the original 200,000 metric tons of LME and an additional 262,132 metric tons of LME granted through this
Albemarle Corporation and Subsidiaries
44
annex have been exploited, processed, and sold, or (b) on January 1, 2044, whichever comes first. In addition, the amended
agreement provides for commission payments to the Chilean government based on sales price/metric ton on the amounts sold
under the additional quota granted, our support of research and development in Chile of lithium applications and solar energy,
and our support of local communities in Northern Chile. Albemarle currently operates its extraction and production facilities in
Chile under this mineral rights agreement with the Chilean government.
The Salar de Atacama is a salt flat, the largest in Chile, located in the Atacama Desert in northern Chile, which is the
driest non-polar place on the planet and thus has an extremely high annual rate of evaporation and extremely low annual
rainfall. Our extraction through evaporation process works as follows: snow in the Andes Mountains melts and flows into
underground pools of water containing brine, which generally have high concentrations of lithium. We then pump the water
containing brine above ground through a series of pumps and wells into a network of large evaporation ponds. Over the course
of approximately 18-24 months, the desert sun evaporates the water causing other salts to precipitate and leaving behind
concentrated lithium brine. If weather conditions are not favorable, the evaporation process may be prolonged. After we obtain
the lithium brine from the Salar de Atacama, we process it into lithium carbonate and lithium chloride at our manufacturing
facilities in nearby La Negra, Chile.
The filling materials of the Salar de Atacama Basin are dominated by the Vilama Formation and the more recently, in
geologic time, by evaporitic and clastic materials that are currently being deposited in the basin. These units house the basin's
aquifer system and are composed of evaporitic chemical sediments that include carbonate, gypsum and halite intervals
interrupted by volcanic deposits of large sheets of ignimbrite, volcanic ash and smaller classical deposits. Lithium-rich brines
are extracted from the halite aquifer that is located within the nucleus of the salt flat. The Salar de Atacama basin contains a
continental system of lithium-rich brine. These types of systems have six common (global) characteristics: arid climate; closed
basin that contains a salt flat (salt crust), a salt lake, or both; igneous and/or hydrothermal activity; tectonic subsidence; suitable
sources of lithium; and sufficient time to concentrate the lithium in the brine.
In the Salar de Atacama basin, lithium-rich brines are found in a halite aquifer. Carbonate and sulfates are found near the
edges of the basin. The concentrations of lithium in the Salar de Atacama basin range from approximately 1,000 mg/L to 7,700
mg/L, but are primarily contained between 1,500 mg/L and 6,000 mg/L. From 2017 through 2023, at least five drilling
campaigns were carried out in order to obtain geological and hydrogeological information at the Albemarle mining concession.
The facilities at the Salar de Atacama consist of extraction wells, evaporation and concentration ponds, leaching plants, a
potash plant, a drying plant, a salar yield improvement plant, services and general areas, including salt stockpiles, as well as a
fleet of owned and leased equipment. In addition, the site includes administrative offices, an operations building and a
laboratory. The extracted concentrated lithium brine is sent to the La Negra plant by truck for processing. The Salar de Atacama
has its own powerhouse that generates the energy necessary for the entire operation of the facilities. We also have permanent
and continuous groundwater exploitation rights for two wells that are for industrial use and to supply the Salar de Atacama
facilities. The La Negra facilities consist of three boron removal plants, three calcium and magnesium removal plants, three
lithium carbonate conversion plants, a lithium chloride plant, evaporation-sedimentation ponds, an offsite area where the raw
materials are housed and the inputs that are used in the process are prepared, a dry area where the various products are prepared,
as well as a fleet of owned and leased equipment. La Negra is supplied electricity from a local company and has rights to a well
in the Peine community for its water supply. We consider the condition of all of our plants, facilities and equipment to be
suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2024, the combined
gross asset value of our facilities at the Salar de Atacama and in La Negra, Chile (not inclusive of construction in process) was
approximately $2.1 billion.
A summary of the Salar de Atacama facility’s lithium mineral resources, exclusive of reserves, and reserves as of
December 31, 2024 are shown in the following tables. SRK Consulting (U.S.) Inc. (“SRK”) served as the QP and prepared the
estimates of lithium mineral resources (exclusive of reserves) and reserves at the Salar de Atacama facility. A copy of the QP’s
most recent technical report summary with respect to the lithium mineral resource and reserve estimates at the Salar de Atacama
facility, dated February 8, 2025, with an effective date of June 30, 2024, is filed as Exhibit 96.3 to this report. The mineral
resource economic assumptions remain unchanged from June 30, 2024. The June 30, 2024 resource has been depleted for actual
production and is reported as of December 31, 2024 in the below table. The amounts represent Albemarle’s attributable portion
based on a 100% ownership percentage, and are presented as metric tonnes of lithium metal in thousands.
The Salar de Atacama mineral resource, exclusive of reserves, estimates with depletion from production from the
effective date of the report to December 31, 2024 are summarized in the following table:
Albemarle Corporation and Subsidiaries
45
Amount (‘000s metric
tonnes)
Li Concentration (mg/L)
Measured mineral resources
618
2,176
Indicated mineral resources
481
1,868
Measured and Indicated mineral resources
1,099
2,041
Inferred mineral resources
166
1,558
•
Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
•
Given the dynamic reserve versus the static resource, a direct measurement of resources post-reserve extraction is not practical.
Therefore, as a simplification, to calculate mineral resources, exclusive of reserves, the quantity of lithium pumped in the life of
mine plan was subtracted from the overall resource without modification to lithium concentration. Measured and indicated resource
were deducted proportionate to their contribution to the overall mineral resource.
•
Resources are reported on an in situ basis.
•
Resources are reported above the elevation of 2,200 meters above sea level. Resources are reported as lithium metal.
•
Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate,
consistency of geological/grade distribution, survey information.
•
Resources have been calculated using drainable porosity estimated from measured values in Upper Halite and Volcano-sedimentary
units, and bibliographical values based on the lithology and QP’s experience in similar deposits.
•
The following assumptions were used in developing the 2024 resource model:
◦
The estimated economic cut-off grade utilized for resource reporting purposes is 904 mg/l lithium, based on the following
assumptions:
◦
A technical grade lithium carbonate price of $20,000/metric tonne CIF Asia. This is an 18% premium to the price utilized for
reserve reporting purposes. The 18% premium applied to the resource versus the reserve was selected to generate a resource
larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for
economic extraction.
◦
Recovery factors for the salar operation increase gradually over the span of 4 years, from the current 40% to the proposed salar
yield improvement program 60% recovery in 2027. After that point, evaporation pond recovery is a constant 60%. An
additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.
◦
An average annual brine pumping rate of 368 L/s is assumed to meet drawdown constraint consistent with Albemarle’s early
warning plan.
◦
Operating cost estimates are based on a combination of fixed brine extraction, general and administrative, and plant costs and
variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating cost is
calculated at approximately $5,334/metric tonne CIF Asia.
◦
Sustaining capital costs are included in the cut-off grade calculation and post the salar yield improvement program installation
average around $110 million per year.
◦
Royalties are included in the cut-off grade calculation and average approximately $4,172/metric tonne of lithium carbonate
produced.
•
Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add
due to rounding.
The Salar de Atacama measured and indicated mineral resources of 1.1 million metric tonnes at December 31, 2024
increased by 32% from 834,000 metric tonnes at December 31, 2023. Inferred mineral resources of 166,000 metric tonnes
decreased by 30% from 237,000 metric tonnes. The net increase in total mineral resources was driven by new modeling
completed in development of the current technical report summary as well as a decrease in the reserves due to reduced pumping
rates imposed by Albemarle’s early warning plan. The new model assumptions included a higher estimated economic cut-off
grade, lower pricing, a lower annual brine pumping rate and higher operating cost estimates. The model geology and updated
units redistributed volumes of brine and adjusted lithium concentration contained within the brine in comparison with the
previous geological units in the model. This redefinition along with new well sampling resulted in a conversion of resource
from inferred to measured and indicated.
Albemarle Corporation and Subsidiaries
46
The Salar de Atacama reserve estimates with depletion from production from the effective date of the report through
December 31, 2024 are summarized in the following table:
Amount (‘000s metric
tonnes)
Concentration (mg/L)
Proven mineral reserves:
In Situ
288
2,370
In Process
23
2,844
Probable mineral reserves:
In Situ
147
2,023
Total mineral reserves:
In Situ
435
2,240
In Process
23
2,844
•
In process reserves quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping. These reserves
represent the first 24 months of feed to the lithium process plant in the 2024 economic model.
•
Proven reserves have been estimated as the lithium mass pumped during Years 2024 through mid-2035 of the proposed life of mine
plan maintaining 10.5 years of proven reserve.
•
Probable reserves have been estimated as the lithium mass pumped from mid-2035 until the end of the proposed life of mine plan
(2041).
•
The ratio of in situ proven to probable reserves has remained consistent through depletion since the development of the reserve
model in 2024 with approximately 65% of the reserve designated as proven and 35% of the reserve designated as probable.
•
Reserves are reported as lithium metal on a 100% ownership basis.
•
This mineral reserve estimate was derived based on a production pumping plan truncated in September 2041 (i.e., approximately
16.75 years). This plan was truncated to reflect the termination date of Albemarle’s authorized brine extraction from the salar.
•
The 2024 reserve model used as the basis for depletion has not been updated. The following assumptions were used in developing
that model:
◦
The estimated economic cut-off grade for the project is 1,073 mg/l lithium, based on the assumptions discussed below. The
truncated production pumping plan remained well above the economic cut-off grade (i.e., the economic cut-off grade did not
result in a limiting factor to the estimation of the reserve).
◦
A technical grade lithium carbonate price of $17,000/metric tonne CIF Asia.
◦
Recovery factors for the salar operation increase gradually over the span of 4 years, from the current 40% to the proposed salar
yield improvement program 60% recovery in 2027. After that point, evaporation pond recovery remains relatively constant at
60%, An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.
◦
An average annual brine pumping rate of 368 L/s is assumed to meet drawdown constraint with activation of Albemarle’s early
warning plan.
◦
Operating cost estimates are based on a combination of fixed brine extraction, general and administrative, and plant costs and
variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating cost is
calculated at approximately $5,334/metric tonne CIF Asia.
◦
Sustaining capital costs are included in the cut-off grade calculation and post the salar yield improvement program installation,
average around $110 million per year.
◦
Royalties are included in the cut-off grade calculation and average approximately $4,172/metric tonne of lithium carbonate
produced.
•
Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate and numbers may not add
due to rounding.
The Salar de Atacama total mineral reserves of 458,000 metric tonnes at December 31, 2024 decreased by 14% from
531,000 metric tonnes at December 31, 2023. The decrease in total mineral reserves was driven by depletion during the year,
new modeling completed in development of the current technical report summary as well as a decrease in the reserves due to
reduced pumping rates imposed by Albemarle’s early warning plan. The new model assumptions included a higher estimated
economic cut-off grade, lower pricing, a lower annual brine pumping rate and higher operating cost estimates.
Additional information about key assumptions and parameters relating to the lithium mineral resources and reserves at the
Salar de Atacama facility is discussed in sections 11 and 12, respectively, of the Salar de Atacama technical report summary.
Albemarle Corporation and Subsidiaries
47
Silver Peak, Nevada
The Silver Peak site (latitude 37.751773°N, longitude 117.639027°W) is located in a rural area approximately 30 miles
southwest of Tonopah, in Esmeralda County, Nevada. It is located in the Clayton Valley, an arid valley historically covered
with dry lake beds (playas). The operation borders the small, unincorporated town of Silver Peak, Nevada. Albemarle uses the
Silver Peak site for the production of lithium brines, which are used to make lithium carbonate. Access to the site is off of the
paved highway SR-265 in the town of Silver Peak, Nevada. The administrative offices are located on the south side of the road.
The process facility is on the north side of the road and the brine operations are located approximately three miles east of Silver
Peak on Silver Peak Road and occupy both the north and south sides of the road. In addition, access to the site is also possible
via gravel/dirt roads from Tonopah, Nevada and Goldfield, Nevada.
Lithium brine extraction in the Clayton Valley began in the mid-1960’s by one of our predecessors, the Foote Mineral
Company. Since that time, lithium brine operations have been operated on a continuous basis. In 1998, Chemetall purchased
Foote Mineral Company. Subsequently, in 2004, Chemetall was acquired by Rockwood, and in 2015, Rockwood was acquired
by Albemarle. Our mineral rights in Silver Peak consist of our right to access lithium brine pursuant to our permitted and
certified senior water rights, a settlement agreement with the U.S. government, originally entered into in June 1991, and our
patented and unpatented land claims. Pursuant to the 1991 agreement, our water rights and our land claims, we have rights to all
lithium that we can remove economically from the Clayton Valley Basin in Nevada. See section 3 of the Silver Peak technical
report summary, filed as Exhibit 96.4 to this report, for a listing of patented and unpatented claims at the Silver Peak site. We
have been operating at the Silver Peak site since 1966. Our Silver Peak site covers a surface of over 13,500 acres, more than
10,500 acres of which we own through a subsidiary. The remaining acres are owned by the U.S. government from whom we
lease the land pursuant to unpatented land claims that are renewed annually. Actual surface disturbance associated with the
operations is 7,390 acres, primarily associated with the evaporation ponds. The manufacturing and administrative activities are
confined to an area approximately 20 acres in size.
Albemarle Corporation and Subsidiaries
48
We extract lithium brine from our Silver Peak site through substantially the same evaporation process we use at the Salar
de Atacama. We process the lithium brine extracted from our Silver Peak site into lithium carbonate at our plant in Silver Peak.
It is hypothesized that the current levels of lithium dissolved in brine originate from relatively recent dissolution of halite by
meteoric waters that have penetrated the playa in the last 10,000 years. The halite formed in the playa during the
aforementioned climatic periods of low precipitation and that the concentrated lithium was incorporated as liquid inclusions
into the halite crystals. There are no current exploration activities on the Silver Peak lithium operation.
The facilities at Silver Peak consist of extraction wells, evaporation and concentration ponds, a lithium carbonate plant, an
anhydrous lithium hydroxide plant (for processing lithium hydroxide monohydrate), a liming plant, wellfield and mill
maintenance, a shipping and packaging facility and administrative offices, as well as a fleet of owned and leased equipment.
Silver Peak is supplied electricity from a local company and we currently have two operating fresh water wells nearby that
supply water to the facilities. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate
for the businesses we conduct, and we maintain them regularly. As of December 31, 2024, the gross asset value of our facilities
at our Silver Peak site was approximately $191.9 million.
A summary of the Silver Peak facility’s lithium mineral resources, exclusive of reserves, and reserves as of December 31,
2024 is shown in the following tables. SRK served as the QP and prepared the estimates of lithium mineral resources (exclusive
of reserves) and reserves at the Silver Peak facility. A copy of the QP’s most recent technical report summary with respect to
the lithium mineral resource and reserve estimates at the Silver Peak facility, dated February 8, 2025, with an effective date of
June 30, 2024, is filed as Exhibit 96.4 to this report. The mineral resource economic assumptions remain unchanged from June
30, 2024. The June 30, 2024 resource has been depleted for actual production and is reported as of December 31, 2024 in the
below table. The amounts represent Albemarle’s attributable portion based on a 100% ownership percentage, and are presented
as metric tonnes of lithium metal in thousands.
The Silver Peak mineral resources, exclusive of reserves, estimates with depletion from production from the effective date
of the report through December 31, 2024 are summarized in the following table:
Amount (‘000s metric
tonnes)
Concentration (mg/L)
Measured mineral resources
7
169
Indicated mineral resources
11
155
Measured and Indicated mineral resources
17
160
Inferred mineral resources
102
130
•
Mineral resources are reported exclusive of mineral reserves on a 100% ownership basis. Mineral resources are not mineral reserves
and do not have demonstrated economic viability.
•
Given the dynamic reserve versus the static resource, a direct measurement of resources post-reserve extraction is not practical.
Therefore, as a simplification, to calculate mineral resources exclusive of reserves, the quantity of lithium pumped in the life of
mine plan was subtracted from the overall resource without modification to lithium concentration. Measured and Indicated
resources were deducted proportionate to their contribution to the overall mineral resource.
•
Resources are reported on an in situ basis.
•
Resources are reported as lithium metal.
•
The resources have been calculated from the block model above 740 meters above sea level.
•
Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate,
consistency of geological/grade distribution, survey information.
•
Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s
experience in similar deposits.
•
The following assumptions were used in developing the 2024 resource model:
◦
The estimated economic cut-off grade utilized for resource reporting purposes is 63 mg/L lithium, based on the assumptions
discussed below.
◦
A technical grade lithium carbonate price of $20,000/metric tonne CIF Asia. This is an 18% premium to the price utilized for
reserve reporting purposes. The 18% premium applied to the resource versus the reserve was selected to generate a resource
larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for
economic extraction.
◦
Recovery factors for the wellfield are = -206.23*(Li wellfield feed)2 +7.1903*(wellfield Li feed)+0.4609. An additional 78%
lithium recovery factor is applied to the lithium carbonate plant.
◦
A sustainable fixed brine pumping rate of 20,000 acre feet per year, ramped up from current levels.
◦
Operating cost estimates are based on a combination of fixed brine extraction, general and administrative, and plant costs and
variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is
calculated at approximately $6,829/metric tonne lithium carbonate CIF Asia.
Albemarle Corporation and Subsidiaries
49
◦
Sustaining capital costs are included in the cut-off grade calculation and include a fixed component of approximately $284
million through the ramp-up period to sustainably pumping 20,000 acre feet per year, then an estimated $20 million per year in
addition to the estimated number of wells replaced and new wells drilled per year.
•
Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not
add due to rounding.
The Silver Peak measured and indicated mineral resources of 17,100 metric tonnes at December 31, 2024 decreased by
66% from 50,200 metric tonnes at December 31, 2023. Inferred mineral resources of 102,000 metric tonnes increased by 14%
from 89,500 metric tonnes. The net decrease in total mineral resources was driven by new modeling completed in development
of the current technical report summary as well as a depletion based on actual production. The new model assumptions included
a higher estimated economic cut-off grade, new brine concentrations data, lower lithium pricing and higher operating and
capital cost estimates.
The Silver Peak reserve estimates with depletion from production from the effective date of the report through December
31, 2024 are summarized in the following table:
Amount (‘000s metric
tonnes)
Concentration (mg/L)
Proven mineral reserves:
In Situ
12
97
In Process
1
101
Probable mineral reserves:
In Situ
66
119
Total mineral reserves:
In Situ
78
115
In Process
1
101
•
In process reserves quantify the prior 24 months of pumping data and reflect the raw brine at the time of pumping. These reserves
represent the first 24 months of feed to the lithium process plant in the 2024 economic model.
•
Proven reserves have been estimated as the lithium mass pumped from the existing wells from 2025 through 2031 of the proposed
life of mine plan.
•
Probable reserves have been estimated as the lithium mass pumped from existing wells from 2032 and all new proposed production
wells from installation until the end of the proposed life of mine plan (2053).
•
The ratio of in situ Proven to Probable reserves has remained consistent through depletion since the development of the reserve
model in 2024, with approximately 16% of the reserve designated as proven and 84% of the reserve designated as probable.
•
Reserves are reported as lithium metal on a 100% ownership basis.
•
This mineral reserve estimate was derived based on a production pumping plan truncated at the end of 2053 (i.e., approximately 29
years). This plan was truncated to reflect the QP’s opinion on uncertainty associated with the production plan, as a direct conversion
of measured and indicated resources to proven and probable reserve is not possible in the same way as a typical hard rock mining
project.
•
The 2024 reserve model used as the basis for depletion has not been updated. The following assumptions were used in developing
that model:
◦
The estimated economic cut-off grade for the Silver Peak project is 76 mg/l lithium, based on the assumptions discussed
below. The production pumping plan was truncated due to technical uncertainty inherent in long-term production modeling and
remained well above the economic cut-off grade (i.e., the economic cut-off grade did not result in a limiting factor to the
estimation of the reserve).
◦
A technical grade lithium carbonate price of $17,000/metric tonne CIF Asia.
◦
Recovery factors for the wellfield are = -206.23*(Li wellfield feed)2 +7.1903*(wellfield Li feed) + 0.4609. An additional 78%
lithium recovery factor is applied to the lithium carbonate plant.
◦
A sustainable fixed brine pumping rate of 20,000 acre feet per year, ramped up from current levels over a period of 7 years.
◦
Operating cost estimates are based on a combination of fixed brine extraction, general and administrative, and plant costs and
variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs are
calculated at approximately $6,829/metric tonne lithium carbonate CIF Asia.
◦
Sustaining capital costs are included in the cut-off grade calculation and include a fixed component of approximately $284
million through the ramp-up period to sustainably pumping 20,000 acre feet per year, then an estimated $20 million per year in
addition to the estimated number of wells replaced and new wells drilled per year.
•
Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate (thousand tonnes), and
numbers may not add due to rounding.
The Silver Peak total mineral reserves of 79,400 metric tonnes at December 31, 2024 increased by 18% from 67,500
metric tonnes at December 31, 2023. The increase in total mineral reserves was driven by new modeling completed in
development of the current technical report summary, partially offset by depletion during the year. The new model assumptions
Albemarle Corporation and Subsidiaries
50
included a higher estimated economic cut-off grade, lower pricing, a lower annual brine pumping rate and higher operating cost
estimates.
Additional information about key assumptions and parameters relating to the lithium mineral resources and reserves at the
Silver Peak facility is discussed in sections 11 and 12, respectively, of the Silver Peak technical report summary.
Safi, Jordan
Our 50% interest in JBC, a consolidated joint venture established in 1999, with operations in Safi, Jordan, acquires
bromine that is originally sourced from the Dead Sea. JBC processes the bromine at its facilities into a variety of end products.
The JBC operation (latitude 31°8'34.85"N , longitude 35°31'34.68"E) is located in Safi, Jordan, and is located on a 33 hectare
area on the southeastern edge of the Dead Sea, about 6 kilometers north of the of the APC plant. JBC also has a 2 hectare
storage facility within the free-zone industrial area at the Port of Aqaba. The Jordan Valley Highway/Route 65 is the primary
method of access for supplies and personnel to JBC. The Port of Aqaba is the main entry point for supplies and equipment for
JBC, where imported shipping containers are offloaded from ships and are transported by truck to JBC via the Jordan Valley
Highway. Aqaba is approximately 205 km south of JBC via Highway 65. Major international airports can be readily accessed
either at Amman or Aqaba. Jordan’s railway transport runs north-south through Jordan and is not used to transport JBC
employees and product.
In 1958, the Government of the Hashemite Kingdom of Jordan granted APC a concession for exclusive rights to exploit
the minerals and salts from the Dead Sea brine until 2058; at that time, APC factories and installations would become the
property of the Government. APC was granted its exclusive mineral rights under the Concession Ratification Law No. 16 of
1958. APC produces potash from the brine extracted from the Dead Sea. A concentrated bromide-enriched brine extracted from
APC’s evaporation ponds is the feed material for the JBC plant. Following the formation of the joint venture, the JBC bromine
plant began operations in 2002. Expansion of the facilities to double its bromine production capacity went into operation in
2017.
Albemarle Corporation and Subsidiaries
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The climate, geology and location provide a setting that makes the Dead Sea a valuable large-scale natural resource for
potash and bromine. Today, the Dead Sea has an estimated surface area of 569 km2 and a brine volume of 106 km3. The Dead
Sea is the world’s saltiest natural lake, containing high concentrations of ions compared to that of regular seawater and an
unusually high amount of magnesium and bromine. There is an estimated 666 million tonnes of bromine in the Dead Sea.
Mining methods consist of all activities necessary to extract brine from the Dead Sea and extract Bromine. The low
rainfall, low humidity and high temperatures in the Dead Sea area provide ideal conditions for recovering potash from the brine
by solar evaporation. JBC obtains its feedbrine from APC’s evaporation pond and this supply is intimately linked to the APC
operation. As evaporation takes place the specific gravity of the brine increases until its constituent salts progressively
crystallize and precipitate out of solution, starting with sodium chloride (common salt) precipitating out to the bottom of the
ponds (pre-carnallite ponds). Brine is transferred to other pans in succession where its specific gravity increases further,
ultimately precipitating out of the sodium chloride. Carnallite precipitation takes place at the evaporation pond where it is
harvested from the brine and pumped as slurry to a process plant (where the potassium chloride is separated from the
magnesium chloride). JBC extracts the bromide-rich, “carnallite-free” brine through a pumping station. This brine feeds the
bromine and magnesium plants. There is no exploration as typically conducted for the characterization of a mineral deposit.
Infrastructure and facilities to support the operation of the bromine production plant at the Safi site is compact and
contained in an approximately 33 hectare area. Fresh water is sourced from the Mujib Reservoir, a man-made reservoir. JBC is
supplied electricity from the National Electric Power Company of Jordan. JBC ships product in bulk through a storage terminal
in Aqaba. There are above ground storage tanks as well as pumps and piping for loading these products onto ships. JBC main
activities at Aqaba are raw material/product storing, importing, and exporting. An evaporation pond collects the waste streams
from pipe flushing, housekeeping, and other activities. We consider the condition of all of our plants, facilities and equipment
to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2024, our 50%
ownership interest of the gross asset value of the facilities at the Safi, Jordan site was approximately $261.2 million.
A summary of the Safi facility’s bromine mineral resources and reserves as of December 31, 2024 is provided below. RPS
Energy Canada Ltd (“RPS”), a third-party firm comprising mining experts in accordance with Item 1302(b)(1) of Regulation S-
K, served as the QP and prepared the estimates of bromine mineral resources and reserves at the Safi facility, with an effective
date of December 31, 2024. A copy of the QP’s amended technical report summary with respect to the bromine mineral
resource and reserve estimates at the Safi facility, dated February 12, 2025, is filed as Exhibit 96.5 to this report.
The feedstock is drawn from the Dead Sea, a nonconventional reservoir owned by the nations of Israel and Jordan. As
such, there are no specific resources owned by JBC, but Albemarle’s joint venture partner, APC, has exclusive rights granted by
the Hashemite Kingdom of Jordan to withdraw brine from the Dead Sea and process it to extract minerals. Revenues are based
on a forecast bromine price ranging from $1,661 to $3,020 per metric tonne and the operating cost is approximately $364 per
metric tonne. The measured resource of bromide ion attributable to Albemarle’s 50% interest in its JBC joint venture is
estimated to be approximately 173.93 million metric tonnes. JBC is extracting approximately 1 percent of the bromine available
in Jordan’s share of the Dead Sea. Bromide concentration in the Dead Sea is estimated to average approximately 5,037 ppm.
The cut-off grade of the Albemarle bromine operations has been estimated to be at 1,000 ppm. The bromide ion concentration
in the brine extracted which feeds the bromine plants, significantly exceeds the selected cut-off grade.
The Safi measured mineral resources of 173.93 million metric tonnes of bromide ion at December 31, 2024 decreased by
1% from 175.69 million metric tonnes at December 31, 2023. The decrease in measured mineral resources was driven by
depletion and evaporation in the Dead Sea during the year.
All bromine reserves reported by Albemarle for the JBC project are classified as proven mineral reserves. The mineral
reserve estimate attributable to Albemarle’s 50% interest in its JBC joint venture is approximately 2.0 million metric tonnes of
bromine from the Dead Sea. This estimate is based on the time available under the concession agreement with the Hashemite
Kingdom of Jordan and the processing capability of the JBC plant. As only approximately one percent of the available resource
is consumed from the Dead Sea, as noted above, the reserve estimate is based on the amount the JBC plant can produce over
until the end of 2058, when the APC concession agreement ends. Revenues are based on a forecast bromine price ranging from
$1,661 to $3,020 per metric tonne and the operating cost is approximately $364 per metric tonne. At the plant process recovery
of 87 percent (bromine from bromide), product bromine is estimated at approximately 118,000 metric tonnes per year. Bromide
ion concentration of concentrated bromide-enriched brine from the APC evaporation pond used to estimate the reserve from the
Dead Sea was approximately 8,742 ppm based on historical pumping. The cut-off grade of the Albemarle bromine operations
has been estimated to be at 1,000 ppm. The bromide ion concentration in the brine extracted which feeds the bromine plants,
significantly exceeds the selected cut-off grade.
Albemarle Corporation and Subsidiaries
52
The Safi total mineral reserves of 2.0 million of bromne metric tonnes at December 31, 2024 decreased by 3% from 2.07
million metric tonnes at December 31, 2023. The decrease in total mineral reserves was driven by depletion during the year.
The end date of the forecast remained unchanged due to the concession agreement.
Additional information about key assumptions and parameters relating to the bromine mineral resources and reserves at
the Safi facility is discussed in sections 11 and 12, respectively, of the Safi technical report summary.
Magnolia, Arkansas
Magnolia is located in the southwest Arkansas, north of the center of Columbia County, approximately 50 miles east of
Texarkana and 135 miles south of Little Rock. Our facilities include two separate production plants, the South Plant and the
West Plant. The South Plant (latitude 33.1775°N, longitude 93.2161°W) is accessible via U.S. Route 79 and paved local roads.
The West Plant (latitude 33.2648°N, longitude 93.3151°W) is accessible by U.S. Route 371 and paved local roads. The
decentralized well sites around the brine fields are accessed via paved Arkansas Highways 19, 98, 160 and 344.
In Magnolia, bromine is recovered from underground brine wells and then processed into a variety of end products at the
plant on location. Albemarle has more than 50 brine production and injection wells that are currently active on the property.
Albemarle’s area of bromine operation is comprised of over 9,500 individual leases with local landowners comprising a total
area of over 99,500 acres. The leases have been acquired over time as field development extended across the field. Each lease
continues for a period of 25 years or longer until after a two year period where brine is not injected or produced from/to a well
within two miles of lease land areas, as long as lease rentals are continuing to be paid. See section 3 of the Magnolia technical
report summary, filed as Exhibit 96.6 to this report, for a map of leases and burdens on those leases at the Magnolia site.
Bromine extraction began in Magnolia in 1965 as the first brine supply well was drilled, and additional wells were put
into production over the next few years. In 1987, a predecessor company took over operations of certain brine supply and
injection wells, which Albemarle continues to operate to this day. Albemarle has continued to drill new production and
injection wells, as needed, to maintain production profile targets.
In Magnolia, bromine exists as sodium bromide in the formation waters or brine of the Jurassic age Smackover
Formation, a geological formation in Arkansas, in the subsurface at 7,000 to 8,500 feet below sea level. The mineralization
occurs within the highly saline Smackover Formation waters or brine where the bromide has an abnormally rich composition.
The bromine concentration is more than twice as high as that found in normal evaporated seawater. The bromine mineralization
of the brine is distributed throughout the porous intervals of the upper and middle Smackover on the property. The strong
permeability and porosity of the Smackover grainstones provide excellent continuity of the bromine mineralization within the
brine.
Albemarle Corporation and Subsidiaries
53
The facilities at Magnolia consist of brine production and injection wells, brine ponds, two bromine processing plants,
pipelines between the plants and wells, a laboratory, storage and warehouses, administrative offices, as well as a fleet of owned
and leased equipment. Our Magnolia facilities are supplied electricity from a local company and we currently have several
operating freshwater wells nearby that supply water to the facilities. In addition, both plants have dedicated rail spurs that
provide access to several rail lines to transport product throughout the country. We consider the condition of all of our plants,
facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of
December 31, 2024, the gross asset value of our facilities at our Magnolia site was approximately $1.1 billion.
A summary of the Magnolia facility’s bromine mineral reserves as of December 31, 2024 is shown in the following table.
RPS served as the QP and prepared the estimates of bromine mineral reserves at the Magnolia facility, with an effective date of
December 31, 2024. A copy of the QP’s most recent technical report summary with respect to the bromine mineral resource and
reserve estimates at the Magnolia facility, dated February 12, 2025, is filed as Exhibit 96.6 to this report. The amounts represent
Albemarle’s attributable portion based on a 100% ownership percentage, and are presented as metric tonnes in thousands.
There are no mineral resource estimates at the Magnolia, AR bromine extraction site. All bromine mineral accumulations
of economic interest and with reasonable prospects for eventual economic extraction within the Magnolia production lease area
are either currently on production or subject to an economically viable future development plan and are classified as mineral
reserves.
Amount (‘000s metric
tonnes)
Proven mineral reserves
2,468
Probable mineral reserves
467
Total mineral reserves
2,935
•
Reserves are reported as bromine, on an in situ basis.
•
The estimated economic cut-off grade utilized for reserve reporting purposes is 1,000 mg/L bromine, with a bromine price ranging
from $1,660 to $3,020 per metric tonne and operating costs ranging from $756 to $1,094 per metric tonne.
•
Recovery factors for the Magnolia are 82% and 88% for the proven mineral reserves and total mineral reserves, respectively.
•
The concentration of bromine at the Magnolia site varies based on the physical location of the field and can range up to over 6,600
mg/L.
The Magnolia total mineral reserves of 2.9 million metric tonnes at December 31, 2024 decreased by 12% from 3.3
million metric tonnes at December 31, 2023. The decrease in total mineral reserves was driven by depletion of the reserve
during the year as well as lower pricing and higher costs used in the model.
Additional information about key assumptions and parameters relating to the bromine mineral reserves at the Magnolia
facility is discussed in section 12 of the Magnolia technical report summary.
Item 3.
Legal Proceedings.
We are involved in litigation incidental to our business and are a party to a number of legal actions and claims, various
governmental proceedings and private civil lawsuits, including, but not limited to, those related to environmental and hazardous
material exposure matters, product liability and breach of contract. Some of the legal proceedings include claims for
compensatory as well as punitive damages. While the final outcome of these matters cannot be predicted with certainty,
considering, among other things, the legal defenses available and liabilities that have been recorded along with applicable
insurance, it is currently the opinion of management that none of these pending items will have a material adverse effect on our
financial condition, results of operations or liquidity.
In addition, the information set forth under Note 15, “Commitments and Contingencies – Litigation” to the Consolidated
Financial Statements of this Annual Report on Form 10-K is incorporated herein by reference.
An unexpected adverse resolution of one or more of these items, however, could have a material adverse effect on our
financial condition, results of operations or liquidity in that particular period.
Item 4.
Mine Safety Disclosures.
NONE
Albemarle Corporation and Subsidiaries
54
Executive Officers of the Registrant.
The names, ages and biographies of our executive officers, as of February 12, 2025, are set forth below. The term of
office of each officer is until the meeting of the Board of Directors following the next annual shareholders’ meeting in May
2025.
Name
Age
Position
J. Kent Masters
64
Chairman and Chief Executive Officer
Neal R. Sheorey
48
Executive Vice President, Chief Financial Officer
Melissa H. Anderson
60
Executive Vice President, Chief People and Transformation Officer
Netha N. Johnson
54
Executive Vice President, Chief Operations Officer
Eric W. Norris
58
Executive Vice President, Chief Commercial Officer
Stacy G. Grant
37
Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
Cynthia R. Lima
63
Senior Vice President, Chief External Affairs and Communications Officer
Mark R. Mummert
57
Senior Vice President, Chief Capital, Resources and Supply Chain Officer
Michael J. Simmons
61
President, Ketjen Global Business Unit
Donald J. LaBauve, Jr.
58
Vice President, Corporate Controller and Chief Accounting Officer
J. Kent Masters has served as Chairman and Chief Executive Officer of Albemarle since April 2020. He joined the
Albemarle board of directors in 2015 as part of the Company’s Rockwood Holdings Inc. acquisition and served as lead
independent director from 2018 until April 2020. Before joining Albemarle, Mr. Masters served as operating partner of Advent
International, an international private equity group. Prior to Advent, he was chief executive officer of Foster Wheeler AG, a
global engineering and construction contractor and power equipment supplier, from 2011 to 2014. He is also a former member
of the executive board of Linde AG, a global leader in manufacturing and sales of industrial gases. He serves on the board of
directors of Vibrantz Technologies, a global technology leader in color solutions, functional coatings and specialty minerals. He
is also a member of the Charlotte Executive Leadership Council.
Neal R. Sheorey joined Albemarle in November 2023 as Executive Vice President and Chief Financial Officer. Prior to
joining Albemarle, Mr. Sheorey served for more than 20 years in progressive leadership roles in finance, business and corporate
organizations for The Dow Chemical Company (“Dow”), a global materials science company. He served as vice president of
Dow’s Coatings and Performance Monomers business unit, where he was responsible for the group’s strategy, profitability and
growth initiatives. Previously, Mr. Sheorey served as Dow’s vice president of investor relations, senior director of corporate
development and global finance director for the Chemicals business group.
Melissa Anderson joined Albemarle Executive Vice President and Chief People Officer in January of 2021. In
November 2024, she assumed responsibility for enterprise transformation. In this role, she is responsible for leading the
transition to a fully integrated functional model along with execution of the Human Resources’ strategic plan and key
initiatives. Prior to joining Albemarle, Ms. Anderson served as executive vice president, administration and chief human
resources officer for Duke Energy, an American electric power holding company, from January 2015 to August 2020.
Previously, she served in senior leadership roles at Domtar Corporation, The Pantry, Inc. and with IBM Corporation. She serves
on the board of directors of Vulcan Materials and as a member of the advisory board of the HR Policy Association. Ms.
Anderson is a member of the advisory board for the Center for Executive Succession at the University of South Carolina’s
Darla Moore School of Business. She also serves on the board of directors for the Society for Human Resource Management
(SHRM), previously serving as its chair.
Netha N. Johnson joined the company in 2018 as president of Albemarle’s Bromine Specialties business and was
appointed Chief Operations Officer in November 2024. Prior to joining Albemarle, Mr. Johnson served in several progressive
leadership roles with 3M Company. He served as vice president and general manager, Electrical Markets Division, where he
was directly responsible for 3M’s electrical and renewable energy solutions. Prior to that, he served as 3M’s vice president,
Advanced Materials Division. Mr. Johnson has more than 25 years of diverse leadership experience, with extensive work
experience in Singapore, Malaysia, Taiwan, Japan and Germany. Preceding his business career, he served as a U.S. Naval
Officer. Mr. Johnson is a member of the board of directors of Xcel Energy, where he serves as a member of the Finance
Committee and the Operations, Nuclear, Environmental and Safety Committee.
Albemarle Corporation and Subsidiaries
55
Eric Norris is Executive Vice President and Chief Commercial Officer for Albemarle. He joined Albemarle in January
2018 as chief strategy officer and was appointed president of the lithium global business (now Energy Storage) in August 2018.
In his current role, Mr. Norris is responsible for enterprise sales, commercial excellence, field and digital marketing, as well as
product management. Prior to joining Albemarle, Mr. Norris served as president of Health and Nutrition for FMC Corporation.
Following FMC’s announcement to acquire DuPont Agricultural Chemical assets, he led the divestiture of FMC Health and
Nutrition to DuPont. Previously, Mr. Norris served as vice president and global business director for FMC Health and Nutrition,
and vice president and global business director for FMC Lithium. During his 16-year FMC career, he served in additional
leadership roles in investor relations and corporate development and was director of FMC Healthcare Ventures. Prior to FMC,
Mr. Norris founded and led an internet-based firm offering formulation and design tools to the chemical industry. He started his
career in a range of leadership roles with the Rohm and Haas Company. Mr. Norris is a member of the board of directors of
Communities in Schools of Charlotte-Mecklenburg.
Stacy G. Grant joined Albemarle in May of 2023 as vice president and deputy general counsel, global corporate affairs
and has more than 10 years of broad legal experience, navigating complex legal and regulatory landscapes. She led the legal
team’s support for mergers and acquisition work, as well as issues regarding supply chain, labor and employment, capital
projects and IT. Prior to Albemarle, she served as Honeywell International’s vice president and general counsel – M&A and
ventures. In this role, Ms. Grant was the chief transactional legal advisor across the corporation with a focus on standardizing
processes, advising internal stakeholders and transaction execution. In addition to her corporate experience, she held roles
within the law firms of Moore & Van Allen PLLC, King & Spalding and Cravath, Swaine & Moore LLP.
Cynthia Lima joined Albemarle in February 2023 as Chief Communications Officer. Prior to joining Albemarle, Ms.
Lima founded a communications and public affairs consultancy and held senior positions at domestic and global public
relations agencies. Ms. Lima also served at the U.S. Department of State as a principal media advisor to the secretary of state
and as a senate-confirmed presidential appointee at the U.S. Department of Veterans Affairs. Ms. Lima is a founding member
and chair of the board of directors for The Heather Abbott Foundation. She also serves on the board of directors for the
Albemarle Foundation and the board of trustees for the Charlotte Regional Business Alliance.
Mark R. Mummert joined Albemarle in 2019 as chief operating officer for the Energy Storage business before being
appointed as Senior Vice President, Chief Capital, Resources and Supply Chain Officer in November 2024. Before joining
Albemarle, Mr. Mummert held progressive leadership roles in supply chain and global operations at FMC Corporation. His
industry experience also includes 20 years with Rohm and Haas Company in various manufacturing and engineering roles.
Additionally, Mr. Mummert spent time with Dow where he improved S&OP in supply chain and embedded operational
excellence principles at manufacturing sites. Mr. Mummert serves on the board of directors for Talison Spodumene Mine at
Greenbushes, Western Australia.
Michael J. Simmons joined Albemarle as President, Ketjen global business unit in June 2023. Mr. Simmons has more
than 30 years of experience as an operating executive, including serving as a senior partner at Vantage Consulting, a business
advisory service specializing in strategy, execution and leadership for energy, financial, and medical clients, from January 2018
to June 2023, and serving as a group president at Shawcor from 2012 to 2017. He served as a private equity partner for Q
Investments from 2006 to 2021. He began his career at GE, becoming chief executive officer of the PII Pipeline Solutions unit
of GE Oil & Gas from 2005 to 2007.
Donald J. LaBauve, Jr. was appointed Albemarle’s Corporate Controller and Chief Accounting Officer in November
2024. Mr. LaBauve served as the chief financial officer of the lithium global business (now Energy Storage) since November
2019. He previously served as vice president, corporate controller and chief accounting officer from February 2014 to
November 2019 after having previously served as vice president, finance - business operations. Since joining Albemarle in
1990, Mr. LaBauve has held various staff and leadership positions of increasing responsibility within the finance function.
PART II
Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “ALB.” There were
117,573,461 shares of common stock held by 1,930 shareholders of record as of February 5, 2025. On each of February 22,
2024 and May 7, 2024, we declared a dividend of $0.40 per share and on each of July 16, 2024 and October 28, 2024, we
declared a dividend of $0.405 per share. In each quarter of 2023, we declared a dividend of $0.40 per share and, in each quarter
of 2022, we declared a dividend of $0.395 per share. We expect to continue to declare and pay comparable dividends to our
Albemarle Corporation and Subsidiaries
56
shareholders in the future, however, dividends are declared solely at the discretion of our Board of Directors and there is no
guarantee that the Board of Directors will continue to declare dividends in the future.
Stock Performance Graph
The graph below shows the cumulative total shareholder return assuming the investment of $100 in our common stock on
December 31, 2019 and the reinvestment of all dividends thereafter. The information contained in the graph below is furnished
and therefore not to be considered “filed” with the SEC, and is not incorporated by reference into any document that
incorporates this Annual Report on Form 10-K by reference.
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Some of the information presented in this Annual Report on Form 10-K, including the documents incorporated by
reference herein, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are based on our current expectations, which are in turn based on assumptions that
we believe are reasonable based on our current knowledge of our business and operations. We have used words such as
“ambition,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “should,” “would,” “will” and
variations of such words and similar expressions to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and
assumptions, which are difficult to predict and many of which are beyond our control. There can be no assurance that our actual
results will not differ materially from the results and expectations expressed or implied in the forward-looking statements.
Factors that could cause actual results to differ materially from the outlook expressed or implied in any forward-looking
statement include, without limitation, information related to:
•
changes in economic and business conditions;
•
product development;
•
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;
•
fluctuations in lithium market pricing, which could impact our revenues and profitability particularly due to our
increased exposure to index-referenced and variable-priced contracts for battery grade lithium sales;
•
inflationary trends in our input costs, such as raw materials, transportation and energy, and their effects on our
business and financial results;
Albemarle Corporation and Subsidiaries
57
•
changes with respect to contract renegotiations;
•
potential production volume shortfalls;
•
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;
•
technological change and development;
•
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 (including with respect to the U.S. Foreign
Corrupt Practices Act and foreign anti-corruption laws);
•
the occurrence of cyber-security breaches, terrorist attacks, industrial accidents or natural disasters;
•
the effects of climate change, including any regulatory changes to which we might be subject;
•
hazards associated with chemicals manufacturing;
•
the inability to maintain current levels of insurance, including 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 or interpretation;
•
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;
•
the ability to apply for and obtain government funding to to support new operations;
•
volatility and uncertainties in the debt and equity markets;
•
technology or intellectual property infringement, including cyber-security breaches, and other innovation risks;
•
decisions we may make in the future;
•
future acquisition and divestiture transactions, including the ability to successfully execute, operate and integrate
acquisitions and divestitures and incurring additional indebtedness;
•
expected benefits and expenses related to our new operating structure and asset optimization activities;
•
timing of active and proposed restructuring and cost optimization projects;
•
impact of any future pandemics;
•
impacts of the situation in the Middle East and the military conflict between Russia and Ukraine, and the global
response to it;
•
performance of our partners in joint ventures and other projects;
•
changes in credit ratings; and
•
the other factors detailed from time to time in the reports we file with the SEC.
We assume no obligation to provide any revisions to any forward-looking statements should circumstances change,
except as otherwise required by securities and other applicable laws. The following discussion should be read together with our
consolidated financial statements and related notes included in this Annual Report on Form 10-K.
The following is a discussion and analysis of our results of operations for the years ended December 31, 2024, 2023 and
2022. A discussion of our consolidated financial condition and sources of additional capital is included under a separate
heading “Financial Condition and Liquidity.”
Albemarle Corporation and Subsidiaries
58
Overview
We are a world leader in transforming essential resources into critical ingredients for mobility, energy, connectivity, and
health. Our purpose is to enable a more resilient world. We partner to pioneer new ways to move, power, connect, and protect.
The end markets we serve include grid storage, automotive, aerospace, conventional energy, electronics, construction,
agriculture and food, pharmaceuticals and medical devices. We believe that our world-class resources with reliable and
consistent supply, our leading process chemistry, high-impact innovation, customer centricity and focus on people and plant
will enable us to maintain a leading position in the industries in which we operate.
Secular trends favorably impacting demand within the end markets that we serve combined with our diverse product
portfolio, cost discipline, broad geographic presence and customer-focused solutions will continue to be key drivers of our
future earnings. We continue to build upon our existing green solutions portfolio and our ongoing mission to provide
innovative, yet commercially viable, clean energy products and services to the marketplace to contribute to our sustainability-
based revenue. For example, our Energy Storage business contributes to the growth of clean miles driven with electric vehicles
and more efficient use of renewable energy through grid storage; Specialties enables the prevention of fires starting in
electronic equipment, greater fuel efficiency from rubber tires and the reduction of emissions from coal fired power plants; and
our Ketjen business enhances the efficiency of natural resources through more usable products from a single barrel of oil,
enables safer, greener production of alkylates used to produce more environmentally-friendly fuels, and reduced emissions
through cleaner transportation fuels. We believe our disciplined cost reduction efforts and ongoing productivity improvements,
among other factors, position us well to take advantage of strengthening economic conditions as they occur, while softening the
negative impact of the current challenging global economic environment.
2024 Highlights
•
We announced a comprehensive review of our cost and operating structure to maintain a competitive position, unlock
near-term cash flow, further generate long-term financial flexibility and drive long-term value creation. This included a
reduction of planned capital expenditures in 2024 to focus on significantly progressed, near completion and in startup
projects, while deferring spending on certain projects.
•
As part of the actions to optimize our cost structure and strengthen our financial flexibility, we have stopped
construction of the Kemerton Trains 3 and 4. In addition, we have put Kemerton Train 2 into care and maintenance.
Kemerton Train 1 will continue to operate and activity around it is currently focused on commercialization efforts.
•
We announced a new operating structure, effective November 1, 2024, that transitions from two core global business
units - Energy Storage and Specialities - to a fully integrated functional model (excluding Ketjen) designed to increase
agility, deliver significant cost savings and maintain long-term competitiveness. We will continue to report results
across its three existing operating segments: Energy Storage, Specialties and Ketjen.
•
We entered into a definitive agreement with the BMW Group to deliver battery-grade lithium to enable the automaker
to pursue high-performance, premium electric vehicles. This multi-year agreement, which takes effect in 2025, is one of
the company’s largest ever globally by volume and value. In addition to supplying the BMW Group with lithium
hydroxide, the two companies will partner on technology for safer and more energy dense lithium-ion batteries.
•
In March 2024, the Company raised net cash proceeds of $2.2 billion from the issuance of depositary shares,
representing interests of the Company’s Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible
Preferred Stock”). The 2,300,000 shares of Mandatory Convertible Preferred Stock issued in respect of the depositary
shares have a $1,000 per share liquidation preference.
•
Effective January 1, 2024, we changed our definition of adjusted EBITDA for financial accounting and reporting
purposes. The updated definition includes our share of the pre-tax earnings of the Windfield joint venture, whereas the
prior definition included our share of Windfield earnings net of tax. This calculation is consistent with the definition of
adjusted EBITDA used in the leverage financial covenant calculation in the February 2024 amendment to our revolving,
unsecured amended and restated credit agreement dated October 28, 2022 (the “2022 Credit Agreement”). This
presentation more closely represents the materiality and financial contribution of the strategic investment in Windfield
to the Company’s earnings, and more closely represents a measure of EBITDA.
•
We proactively amended the 2022 Credit Agreement to modify the financial covenants through June 2026 given the
market pricing of lithium. The amended results of the modification (a) temporarily increase the maximum leverage ratio
permitted by the covenant; (b) add an interest coverage ratio and temporarily decrease the minimum interest coverage
ratio permitted by the covenant; and (c) adjust the calculation of the EBITDA and net debt components that form the
basis of the calculation of the consolidated leverage ratio. The amendments include certain other amendments to the
2022 Credit Agreement, including certain limitations on liens, subsidiary indebtedness, share repurchases and common
dividends.
Albemarle Corporation and Subsidiaries
59
•
We announced an innovative agreement with Martin Marietta Materials, Inc., a leading supplier of building materials,
to make beneficial use of extracted limestone material from Albemarle’s proposed Kings Mountain Mine project. This
agreement is part of the Company’s plan to resume lithium mining operations at the Kings Mountain Mine in an
environmentally and socially responsible manner, including opportunities to repurpose byproduct material and enhance
the economic benefits for the surrounding community.
•
We introduced a project plan and submitted several state and federal permit applications for the potential redevelopment
of the Kings Mountain Mine, one of the few known hard-rock lithium deposits in the United States. The plan includes
the proposed site footprint, primary physical features and details of the mining processes. Pending permitting approval
and a final investment decision, the mine is anticipated to produce approximately 420,000 tons of lithium-bearing
spodumene concentrate yearly, providing a crucial building block for sustainable transportation and to support key
defense applications.
•
We published our 2023 Sustainability Report, All the Elements for a Better World, detailing updates on sustainability
strategy execution and the important progress made toward achieving our sustainability goals.
•
In the third quarter of 2024, we increased our quarterly dividend for the 30th consecutive year, to $0.405 per share.
•
We recorded net sales of $5.4 billion during 2024; grew Energy Storage volumes by 19% year-over-year.
•
Cash flows from operations in 2024 were $702.1 million.
Outlook
The current global business environment presents a diverse set of opportunities and challenges in the markets we serve. In
particular, we believe that the global market for lithium battery and energy storage, particularly for EVs, remains strong,
providing the opportunity to continue to develop high quality and innovative products while managing the high cost of
expanding capacity. The other markets we serve continue to present various opportunities for value and growth as we have
positioned ourselves to manage the impact on our business of changing global conditions, such as slow and uneven global
growth, currency exchange volatility, crude oil price fluctuation, a dynamic pricing environment, an ever-changing landscape in
electronics, the continuous need for cutting edge catalysts and technology by our refinery customers and increasingly stringent
environmental standards. During the course of 2023 and 2024, lithium index pricing dropped significantly. Amidst these
dynamics, and despite recent downward lithium price pressure, we believe our business fundamentals are sound and that we are
strategically well-positioned as we remain focused on increasing sales volumes, optimizing and improving the value of our
portfolio primarily through pricing and product development, managing costs and delivering value to our customers and
shareholders. We believe that our businesses remain well-positioned to capitalize on new business opportunities and long-term
trends driving growth within our end markets and to respond quickly to changes in economic conditions in these markets.
However, in order to optimize our cost structure and strengthen our financial flexibility, we are taking proactive actions,
including certain restructuring activities and reducing planned capital expenditures. As part of these actions, we announced a
new operating structure, effective November 1, 2024, that transitions from two core global business units to a fully integrated
functional model (excluding Ketjen) designed to increase agility, deliver significant cost savings and maintain long-term
competitiveness. We will continue to report results across our three existing operating segments of Energy Storage, Specialities
and Ketjen. If lithium index pricing trends further downward or remains at low levels for an extended time, we may need to
take additional measures to support growth and financial flexibility, including further restructuring actions.
At this time, relating to the current situation in the Middle East, our business operations have continued as normal with
some shipping and raw material delays. We are monitoring the situation and will continue to make efforts to protect the safety
of our employees and the health of our business.
Energy Storage: We expect Energy Storage net sales and profitability to decrease year-over-year in 2025 as lithium
market prices are at lower levels compared to 2024. Because many of our contracts being index-referenced and variable-priced,
our business is generally aligned with changes in market and index pricing. As a result, increases or further decreases in lithium
market pricing could have a material impact on our results. We do expect the lower pricing to be partially offset by higher sales
volume driven primarily by additional capacity from La Negra, Chile, Meishan and Qinzhou, China. The Meishan, China
lithium conversion plant achieved first commercial sales during the second quarter of 2024. We could record inventory
valuation charges in 2025 if lithium prices continue to deteriorate during the projected period of conversion and sale. While we
ramp up our new capacity, we will continue to utilize tolling arrangements to meet growing customer demand. Global EV sales
are expected to continue to increase over the prior year, driving continued demand for lithium batteries.
Albemarle Corporation and Subsidiaries
60
As part of the above-mentioned actions to optimize our cost structure and strengthen our financial flexibility, we have
stopped construction of the Kemerton Trains 3 and 4. In addition, we have put Kemerton Train 2 into care and maintenance.
Kemerton Train 1 will continue to operate and activity around it is currently focused on commercialization efforts.
On a longer-term basis, we believe that demand for lithium will continue to grow as new lithium applications advance
and the use of plug-in hybrid EVs and full battery EVs increases. This demand for lithium is supported by a favorable backdrop
of steadily declining lithium-ion battery costs, increasing battery performance, continuing significant investments in the battery
and EV supply chain by cathode and battery producers and automotive OEMs and favorable global public policy toward e-
mobility/renewable energy usage. Our outlook is also bolstered by long-term supply agreements with key strategic customers,
reflecting our standing as a preferred global lithium partner, highlighted by our scale, access to geographically diverse, low-cost
resources and long-term track record of reliability of supply and operating execution.
Specialties: We expect both net sales and profitability to be higher in 2025 year-over-year as we recover from reduced
customer demand in certain markets, including consumer and industrial electronics. In addition, we expect to maintain strong
demand in other end-markets, such as pharmaceuticals, agriculture and oilfield services.
On a longer-term basis, we continue to believe that improving global standards of living, widespread digitization,
increasing demand for data management capacity and the potential for increasingly stringent fire safety regulations in
developing markets are likely to drive continued demand for fire safety, bromine and lithium specialties products. We are
focused on profitably growing our globally competitive production networks to serve all major bromine and lithium specialties
consuming products and markets. The combination of our solid, long-term business fundamentals, strong cost position, product
innovations and effective management of raw material costs should enable us to manage our business through end-market
challenges and to capitalize on opportunities that are expected with favorable market trends in select end markets.
Ketjen: Total Ketjen results in 2025 are expected to increase year-over-year due to higher revenues. The FCC market is
expected to remain stable. HPC demand is project-driven, based on the refineries taking turnarounds.
On a longer-term basis, we believe increased global demand for transportation fuels, new refinery start-ups, ongoing
adoption of cleaner fuels and the continuous growth in chemical derivatives from petroleum products will be the primary
drivers of growth in our Ketjen business. We believe delivering superior end-use performance continues to be the most
effective way to create sustainable value in the refinery catalysts industry. We also believe our technologies continue to provide
significant performance and financial benefits to refiners challenged to meet tighter regulations around the world.
Corporate: We continue to focus on cash generation, working capital management and process efficiencies. We expect
our global effective tax rate will vary based on the locales in which income is actually earned and remains subject to potential
volatility from changing legislation in the United States, such as the Inflation Reduction Act and Pillar Two which became
effective in early 2024, and other tax jurisdictions. In 2024, we took actions as part of an effort that will focus on preserving our
world-class resource advantages, optimizing our global conversion network, improving our cost competitiveness and efficiency,
reducing capital intensity and enhancing our financial flexibility. As part of these measures, we stopped construction or deferred
spending on certain capital projects, such as the Kemerton conversion plant noted above. In addition, we will incur severance
and other restructuring charges associated with the Company’s transition to a new fully integrated functional operating model.
Actuarial gains and losses related to our defined benefit pension and OPEB plan obligations are reflected in Corporate as
a component of non-operating pension and OPEB plan costs under mark-to-market accounting. Results for the year ended
December 31, 2024 include an actuarial gain of $9.8 million ($7.5 million after income taxes), as compared to a gain of $10.2
million ($8.3 million after income taxes) for the year ended December 31, 2023.
From time to time, we may evaluate the merits of any opportunities that may arise for acquisitions or other business
development activities that will complement our business footprint. Additional information regarding our products, markets and
financial performance is provided at our website, www.albemarle.com. Our website is not a part of this document nor is it
incorporated herein by reference.
Results of Operations
The following data and discussion provides an analysis of certain significant factors affecting our results of operations
during the periods included in the accompanying consolidated statements of (loss) income. Certain percentage changes are
considered not meaningful (“NM”).
Albemarle Corporation and Subsidiaries
61
With the exception of the segment results of operations for the change in definition of adjusted EBITDA, discussion of
our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in
Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Comparison of 2024 to 2023
Net Sales
In thousands
2024
2023
$ Change
% Change
Net sales
$
5,377,526
$
9,617,203
$
(4,239,677)
(44) %
•
$5.6 billion decrease primarily attributable to lower lithium carbonate and hydroxide market pricing in Energy
Storage
•
$1.4 billion increase attributable to higher sales volume, primarily in Energy Storage
•
$36.0 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Gross Profit
In thousands
2024
2023
$ Change
% Change
Gross profit
$
62,539
$ 1,185,909
$
(1,123,370)
(95) %
Gross profit margin
1.2 %
12.3 %
•
Unfavorable pricing impacts primarily in Energy Storage, including the recognition of gross profit on converted
inventory originally purchased from the Windfield joint venture, that was sold to third-party customers. The higher
cost of goods sold of inventory purchased from Windfield is offset in the equity in net income of unconsolidated
investments in the period the converted inventory is sold to third-party customers.
•
Lower average input costs, including the impact of a $604.1 million charge recorded in 2023 (reduced to
$104.0 million as of December 31, 2024) to reduce the value of certain finished goods and spodumene to their net
realizable value following the decline in lithium market pricing at the end of each year
•
Unfavorable currency exchange impacts resulting from the stronger U.S. Dollar against various currencies
•
Higher sales volume in Energy Storage and decreased commission expenses in Chile resulting from lower pricing
Selling, General and Administrative (“SG&A”) Expenses
In thousands
2024
2023
$ Change
% Change
Selling, general and administrative expenses
$
618,048
$
910,002
$
(291,954)
(32) %
Percentage of Net sales
11.5 %
9.5 %
•
2023 included a $218.5 million legal accrual recorded for the agreements in principle to resolve a previously
disclosed legal matter with the DOJ and SEC. See Note 15, “Commitments and Contingencies,” for further details.
•
Reduced expenses as part of announced cost reduction efforts, including outside services and travel and
entertainment costs
Restructuring Charges and Asset Write-Offs
In thousands
2024
2023
$ Change
% Change
Restructuring charges and asset write-offs
$
1,134,316
$
9,491
$
1,124,825
NM
•
Capital project asset write-offs and associated contract cancellation costs recorded in 2024 primarily related to
stopping construction of Kemerton Trains 3 and 4. The Company determined that these assets will not provide future
value or will require significant re-engineering if the related projects are restarted.
•
Severance and other restructuring costs associated with the global headcount reductions from the announced change
in operating structure and the actions taken at Kemerton in 2024
•
2023 included separation and other severance costs to employees in Corporate and the Ketjen business
Research and Development Expenses
In thousands
2024
2023
$ Change
% Change
Research and development expenses
$
86,720
$
85,725
$
995
1 %
Percentage of Net sales
1.6 %
0.9 %
Albemarle Corporation and Subsidiaries
62
Gain on Change in Interest in Properties/Sale of Business, Net
In thousands
2024
2023
$ Change
% Change
Gain on change in interest in properties/sale of
business, net
$
—
$
(71,190)
$
71,190
NM
•
Gain in 2023 resulting from the restructuring of the MARBL joint venture with MRL. See Note 8, “Investments,” for
further details.
Interest and Financing Expenses
In thousands
2024
2023
$ Change
% Change
Interest and financing expenses
$
(165,619)
$
(116,072)
$
(49,547)
43 %
•
Lower capitalized interest in 2024
•
Increased amortization of debt discounts in 2024 primarily from interest-free loan entered into in the second quarter
of 2023
Other Income, Net
In thousands
2024
2023
$ Change
% Change
Other income, net
$
178,339
$
110,929
$
67,410
61 %
•
2024 included losses of $70.8 million related to the sale and fair market value adjustment of equity securities in
public companies compared to $44.7 million of net losses for similar fair value adjustments in 2023
•
$40.9 million gain primarily from the sale of assets at a site not part of our operations in 2024
•
$27.9 million increase attributable to foreign exchange gains in 2024 compared to 2023. Foreign exchange gains in
2024 are net of a loss of $26.1 million due to the reclass from accumulated other comprehensive loss related to the
dedesigation of cash flow hedge.
•
$17.0 million increase of income from PIK dividends of preferred equity in a Grace subsidiary in 2024
•
$11.3 million of pension and OPEB credits (including mark-to-market actuarial gains of $9.8 million) in 2024 as
compared to $8.0 million of pension and OPEB credits (including mark-to-market actuarial gains of $10.2 million) in
2023
•
The mark-to-market actuarial gain in 2024 was primarily attributable to an increase in the weighted-average
discount rate to 5.65% from 5.21% for our U.S. pension plans and to 4.04% from 3.73% for our foreign pension
plans to reflect market conditions as of the December 31, 2024 measurement date. This was partially offset by a
lower return on pension plan assets during the year than was expected, as a result of overall market and
investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan
assets was 5.89% versus an expected return of 6.77%.
•
The mark-to-market actuarial gain in 2023 is primarily attributable to a higher return on pension plan assets
during the year than was expected, as a result of overall market and investment portfolio performance. The
weighted-average actual return on our U.S. and foreign pension plan assets was 11.21% versus an expected
return of 6.66%. This was partially offset by a decrease in the weighted-average discount rate to 5.21% from
5.46% for our U.S. pension plans and to 3.73% from 4.04% for our foreign pension plans to reflect market
conditions as of the December 31, 2023 measurement date.
Income Tax Expense
In thousands
2024
2023
$ Change
% Change
Income Tax Expense
$
87,085
$
430,277
$
(343,192)
(80) %
Effective income tax rate
(4.9) %
174.4 %
•
Change in geographic mix of earnings, with lower 2024 earnings in various jurisdictions
•
2024 included the impact of the valuation allowance for losses in our consolidated Australian entities and certain
entities in China
•
2024 included the impact of the 15% global minimum tax under Pillar Two
•
2023 included tax impact of a non-deductible $218.5 million legal accrual recorded for the agreements to resolve a
previously disclosed legal matter with the DOJ and SEC, a $96.5 million tax reserve related to an uncertain tax
position in Chile, and an establishment of a valuation allowance on 2023 losses in one of our Chinese entities
resulting in an income tax expense impact of $223.0 million
Albemarle Corporation and Subsidiaries
63
Equity in Net Income of Unconsolidated Investments
In thousands
2024
2023
$ Change
% Change
Equity in net income of unconsolidated
investments
$
715,433
$
1,854,082
$
(1,138,649)
(61) %
•
Decreased earnings primarily from lower pricing from the Windfield joint venture in Energy Storage
•
$34.2 million decrease in foreign exchange impacts from our Windfield joint venture
Net Income Attributable to Noncontrolling Interests
In thousands
2024
2023
$ Change
% Change
Net income attributable to noncontrolling
interests
$
(43,972)
$
(97,067)
$
53,095
(55) %
•
Decrease in consolidated income related to our JBC joint venture primarily due to lower pricing
Net (Loss) Income Attributable to Albemarle Corporation
In thousands
2024
2023
$ Change
% Change
Net (loss) income attributable to Albemarle
Corporation
$ (1,179,449)
$ 1,573,476
$
(2,752,925)
NM
Percentage of Net Sales
(21.9) %
16.4 %
Net (loss) income attributable to Albemarle
Corporation common shareholders
$ (1,316,096)
$ 1,573,476
$
(2,889,572)
NM
Basic (loss) earnings per share
$
(11.20)
$
13.41
$
(24.61)
NM
Diluted (loss) earnings per share
$
(11.20)
$
13.36
$
(24.56)
NM
•
Decrease in 2024 results due to reasons noted above
•
Net (loss) income attributable to Albemarle Corporation common shareholders in 2024 includes a $136.6 million
reduction for mandatory convertible preferred stock dividends
Other Comprehensive (Loss) Income, Net of Tax
In thousands
2024
2023
$ Change
% Change
Other comprehensive (loss) income, net of tax
$
(213,469)
$
32,254
$
(245,723)
NM
•
Foreign currency translation and other
$
(210,534)
$
26,403
$
(236,937)
NM
•
2024 included unfavorable movements in the Euro of approximately $182 million, the Brazilian Real of
approximately $15 million, the Japanese Yen of approximately $11 million, the Taiwanese Dollar of
approximately $6 million, the Korean Won of approximately $6 million and a net unfavorable variance in
various other currencies of $7 million, partially offset by unfavorable movements in the Chinese Renminbi of
approximately $15 million
•
2023 included favorable movements in the Euro of approximately $41 million and the Brazilian Real of
approximately $5 million, partially offset by unfavorable movements in the Chinese Renminbi of approximately
$12 million, the Japanese Yen of approximately $8 million and a net unfavorable variance in various other
currencies of approximately $1 million
•
Cash flow hedge
$
(2,935)
$
5,851
$
(8,786)
NM
Segment Information Overview. We have identified three reportable segments according to the nature and economic
characteristics of our products as well as the manner in which the information is used internally by the Company’s chief
operating decision maker to evaluate performance and make resource allocation decisions. Our reportable business segments
consist of: (1) Energy Storage, (2) Specialties and (3) Ketjen.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the
operating segments. Pension and OPEB service cost (which represents the benefits earned by active employees during the
period) and amortization of prior service cost or benefit are allocated to the reportable segments and Corporate, whereas the
remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in
Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for certain corporate costs.
Albemarle Corporation and Subsidiaries
64
Our chief operating decision maker (“CODM”) uses adjusted EBITDA (as defined below) to assess the ongoing
performance of the Company’s business segments and to allocate resources. In addition, the CODM uses adjusted EBITDA for
business and enterprise planning purposes and as a significant component in the calculation of performance-based
compensation for management and other employees. Effective January 1, 2024, the Company changed its definition of adjusted
EBITDA for financial accounting purposes. The updated definition includes Albemarle’s share of the pre-tax earnings of the
Windfield joint venture, whereas the prior definition included Albemarle’s share of Windfield earnings net of tax. This
calculation is consistent with the definition of adjusted EBITDA used in the leverage financial covenant calculation in the
February 9, 2024 amendment to the 2022 Credit Agreement, which is a material agreement for the Company and aligns the
information presented to various stakeholders. This presentation more closely represents the materiality and financial
contribution of the strategic investment in Windfield to the Company’s earnings, and more closely represents a measure of
EBITDA. EBITDA is defined as earnings before interest and financing expenses, income tax expense, and depreciation and
amortization. The Company’s updated definition of adjusted EBITDA is EBITDA before the proportionate share of Windfield
income tax expense, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items on a segment
basis. These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses
on sales of businesses, restructuring charges, facility divestiture charges, certain litigation and arbitration costs and charges,
non-operating pension and OPEB items and other significant non-recurring items. We have reported adjusted EBITDA because
management believes it provides additional useful measurements to review the Company’s operations, provides transparency to
investors and enables period-to-period comparability of financial performance. Total adjusted EBITDA is a financial measure
that is not required by, or presented in accordance with, the generally accepted accounting principles in the United States (“U.S.
GAAP”). Total adjusted EBITDA should not be considered as an alternative to Net (loss) income attributable to Albemarle
Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any
other financial measure reported in accordance with U.S. GAAP. The below segment information also includes a discussion of
our segment net sales and adjusted EBITDA for the year ended December 31, 2023 compared to the year ended December 31,
2022 to conform to the current year presentation.
Year Ended December 31,
Percentage Change
2024
%
2023
%
2022
%
2024 vs.
2023
2023 vs.
2022
(In thousands, except percentages)
Net sales:
Energy Storage
$ 3,015,121
56.1 % $ 7,078,998
73.6 % $ 4,660,945
63.7 %
(57) %
52 %
Specialties
1,325,983
24.6 % 1,482,425
15.4 % 1,759,587
24.0 %
(11) %
(16) %
Ketjen
1,036,422
19.3 % 1,055,780
11.0 %
899,572
12.3 %
(2) %
17 %
Total net sales
$ 5,377,526
100.0 % $ 9,617,203
100.0 % $ 7,320,104
100.0 %
(44) %
31 %
Adjusted EBITDA:
Energy Storage
$
757,540
66.5 % $ 3,181,593
89.7 % $ 3,352,356
88.3 %
(76) %
(5) %
Specialties
228,504
20.0 %
298,506
8.4 %
527,318
13.9 %
(23) %
(43) %
Ketjen
131,066
11.5 %
103,872
2.9 %
28,732
0.7 %
26 %
262 %
Total segment adjusted
EBITDA
1,117,110
98.0 % 3,583,971
101.0 % $ 3,908,406
102.9 %
(69) %
(8) %
Corporate
22,668
2.0 %
(37,983)
(1.0) %
(110,958)
(2.9) %
(160) %
(66) %
Total adjusted EBITDA
$ 1,139,778
100 % $ 3,545,988
100.0 % $ 3,797,448
100.0 %
(68) %
(7) %
See below for a reconciliation of total segment adjusted EBITDA to consolidated Net (loss) income attributable to
Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S.
GAAP, (in thousands):
Albemarle Corporation and Subsidiaries
65
Year ended December 31,
2024
2023
2022
Total segment adjusted EBITDA
$ 1,117,110
$ 3,583,971
$ 3,908,406
Corporate expenses, net
22,668
(37,983)
(110,958)
Depreciation and amortization
(588,638)
(429,944)
(300,841)
Interest and financing expenses(a)
(165,619)
(116,072)
(122,973)
Income tax expense
(87,085)
(430,277)
(390,588)
Proportionate share of Windfield income tax expense(b)
(299,193)
(779,703)
(321,591)
Gain (loss) on change in interest in properties/sale of business, net(c)
—
71,190
(8,400)
Acquisition and integration related costs(d)
(6,223)
(26,767)
(16,259)
Restructuring charges and asset write-offs(e)
(1,180,806)
(9,491)
—
Goodwill impairment(f)
—
(6,765)
—
Non-operating pension and OPEB items
11,335
7,971
57,032
(Loss) gain in fair value of public equity securities(g)
(70,758)
(44,732)
4,319
Legal accrual(h)
—
(218,510)
—
Other(i)
67,760
10,588
(8,331)
Net (loss) income attributable to Albemarle Corporation
$ (1,179,449)
$ 1,573,476
$ 2,689,816
(a)
Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million for the year ended December 31,
2022. See Note 12, “Long-term Debt,” for additional information. In addition, Interest and financing expenses for the year ended
December 31, 2022 includes the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest
in prior periods.
(b)
Albemarle’s 49% ownership interest in the reported income tax expense of the Windfield joint venture.
(c)
Gain recorded during the year ended December 31, 2023 resulting from the restructuring of the MARBL joint venture with MRL. See
Note 8, “Investments,” for further details. $8.4 million of expense recorded during the year ended December 31, 2022 as a result of
revised estimates of the obligation to construct certain lithium hydroxide conversion assets in Kemerton, Western Australia, due to cost
overruns from supply chain, labor and COVID-19 pandemic related issues.
(d)
Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and
administrative expenses (“SG&A”).
(e)
See Note 17, “Restructuring Charges and Asset Write-offs,” for further details.
(f)
Goodwill impairment charge recorded in SG&A during the year ended December 31, 2023 related to our PCS business. See Note 10,
“Goodwill and Other Intangibles,” for further details.
(g)
Other income, net for the year ended December 31, 2024 included losses of $37.0 million and $33.7 million resulting from the net
change in fair value of investments in public equity securities and the sale of investments in public equity securities, respectively. For the
years ended December 31, 2023 and 2022, a (loss) gain of ($44.7) million and $4.3 million, respectively, were recorded in Other income,
net resulting from the change in fair value of investments in public equity securities.
(h)
Loss recorded in SG&A for the agreements to resolve a previously disclosed legal matter with the DOJ and SEC during the year ended
December 31, 2023. See Note 15, “Commitments and Contingencies,” for further details.
(i)
Included amounts for the year ended December 31, 2024 recorded in:
•
Cost of goods sold - $1.4 million of expenses related to non-routine labor and compensation related costs that are outside normal
compensation arrangements.
•
SG&A - $5.3 million of expenses related to certain historical legal and environmental matters.
•
Other income, net - $40.9 million of gains from the sale of assets at a site not part of our operations, $36.3 million of income
from PIK dividends of preferred equity in a Grace subsidiary, a $1.8 million net gain primarily resulting from the adjustment of
indemnification related to previously disposed businesses and a $0.6 million gain from an updated cost estimate of an
environmental reserve at a site not part of our operations, partially offset by $2.9 million of charges for asset retirement
obligations at a site not part of our operations and $2.1 million of a loss related to the fair value adjustment of an investment in a
nonmarketable security.
Included amounts for the year ended December 31, 2023 recorded in:
•
Cost of goods sold - $15.1 million loss recorded to settle an arbitration matter with a regulatory agency in Chile, partially offset
by a $4.1 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations.
•
SG&A - $2.3 million of facility closure expenses related to offices in Germany, $1.9 million of charges primarily for
environmental reserves at sites not part of our operations and $1.8 million of various expenses including for certain legal costs
and shortfall contributions for a multiemployer plan financial improvement plan.
•
Other income, net - $19.3 million gain from PIK dividends of preferred equity in a Grace subsidiary, a $7.3 million gain resulting
from insurance proceeds of a prior legal matter and $5.5 million of gains from the sale of investments and the write-off of certain
Albemarle Corporation and Subsidiaries
66
liabilities no longer required, partially offset by $3.6 million of charges for asset retirement obligations at a site not part of our
operations and $0.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the year ended December 31, 2022 recorded in:
•
Cost of goods sold - $2.7 million of expense related to one-time retention payments for certain employees during the Catalysts
strategic review and business unit realignment, and $0.5 million related to the settlement of a legal matter resulting from a prior
acquisition.
•
SG&A - $4.3 million primarily related to facility closure expenses of offices in Germany, $2.8 million of charges for
environmental reserves at sites not part of our operations, $2.8 million of shortfall contributions for our multiemployer plan
financial improvement plan, $1.9 million of expense related to one-time retention payments for certain employees during the
Catalysts strategic review, partially offset by $4.3 million of gains from the sale of legacy properties not part of our operations.
•
Other income, net - $3.0 million gain from the reversal of a liability related to a previous divestiture, a $2.0 million gain relating
to the adjustment of an environmental reserve at non-operating businesses we previously divested and a $0.6 million gain related
to a settlement received from a legal matter in a prior period, partially offset by a $3.2 million loss resulting from the adjustment
of indemnification related to previously disposed businesses.
Energy Storage
In thousands
2024
2023
$ Change
% Change
Net sales
$
3,015,121
$
7,078,998
$
(4,063,877)
(57) %
•
$5.4 billion decrease attributable to unfavorable pricing impacts, primarily in battery- and tech-grade carbonate and
hydroxide sold under index-referenced and variable-priced contracts, and mix
•
$1.4 billion increase attributable to higher sales volume, primarily driven by the La Negra III/IV expansion in Chile,
as well as sales of chemical-grade spodumene to meet growing customer demand
•
$30.3 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against
currencies
Adjusted EBITDA
$
757,540
$
3,181,593
$
(2,424,053)
(76) %
•
Unfavorable pricing impacts in lithium carbonate and hydroxide
•
Decreased equity in net income from the Windfield joint venture, driven by lower spodumene pricing
•
Lower average input costs, including the impact of a $604.1 million charge recorded in 2023 (reduced to
$104.0 million as of December 31, 2024) to reduce the value of certain finished goods and spodumene to their net
realizable value following the decline in lithium market pricing at the end of each year
•
Higher sales volume
•
Decreased commission expenses in Chile resulting from the lower pricing
•
Savings from designed restructuring and productivity improvements
•
$82.0 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against
various currencies
Specialties
In thousands
2024
2023
$ Change
% Change
Net sales
$
1,325,983
$
1,482,425
$
(156,442)
(11) %
•
$185.5 million decrease attributable to unfavorable pricing impacts
•
$34.5 million increase attributable to higher sales volume related to increased demand across all products
•
$5.5 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against
various currencies
Adjusted EBITDA
$
228,504
$
298,506
$
(70,002)
(23) %
•
Unfavorable pricing impacts
•
Decreased manufacturing costs resulting from higher production volume and productivity initiatives
•
Higher sales volume related to increased demand across all products
•
Decrease in noncontrolling interests to JBC joint venture resulting from lower pricing
•
$6.1 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against
various currencies
Albemarle Corporation and Subsidiaries
67
Ketjen
In thousands
2024
2023
$ Change
% Change
Net sales
$
1,036,422
$
1,055,780
$
(19,358)
(2) %
•
$30.9 million decrease attributable to lower sales volume, primarily in the FCC division
•
$11.7 million increase attributable to favorable product mix, primarily in the CFT division
Adjusted EBITDA
$
131,066
$
103,872
$
27,194
26 %
•
Higher margins, primarily in the CFT division due to favorable product mix
•
Lower input costs from designed productivity improvements
•
$2.3 million decrease attributable to unfavorable currency translation resulting from the weaker U.S. Dollar against
various currencies
•
2023 included a $24 million gain recorded for insurance claim receipts
Corporate
In thousands
2024
2023
$ Change
% Change
Adjusted EBITDA
$
22,668
$
(37,983)
$
60,651
(160) %
•
Reduced expenses as part of announced cost reduction efforts, including outside services and travel and
entertainment costs
•
$14.2 million increase attributable to favorable currency exchange impacts, net of $34.2 million decrease in foreign
exchange impacts from our Windfield joint venture
Summary of Critical Accounting Policies and Estimates
Estimates and Assumptions
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Listed below are the estimates and assumptions that we consider to be critical
in the preparation of our financial statements.
Property, Plant and Equipment. We assign the useful lives of our property, plant and equipment based upon our internal
engineering estimates, which are reviewed periodically. The estimated useful lives of our property, plant and equipment range
from two to sixty years and depreciation is recorded on the straight-line method, with the exception of our mineral rights and
reserves, which are depleted on a units-of-production method. We evaluate the recovery of our property, plant and equipment
annually and when events or changes in circumstances indicate that its carrying amount may not be recoverable. Events that
may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or
capital plans or changes to government regulations that may adversely impact our current or future operations. An impairment
is determined to exist if the total projected future cash flows on an undiscounted basis are not recoverable or are less than the
carrying amount of a long-lived asset group. We estimate future cash flows based on numerous assumptions, which are
consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly
different than the estimates. Significant estimates used include, but are not limited to, market pricing (including lithium index
pricing), customer demand, operating and production costs, and the timing and capital costs of expansion and sustaining
projects. Significant management judgment is involved in estimating these variables and they include inherent uncertainties
since they are forecasting future events.
Acquisition Method of Accounting. We recognize the identifiable assets acquired, the liabilities assumed and any
noncontrolling interest in the acquiree at their estimated fair values on the date of acquisition for acquired businesses.
Determining the fair value of these items requires management’s judgment and the utilization of independent valuation
specialists and involves the use of significant estimates and assumptions with respect to the timing and amounts of future cash
flows and discount rates, among other items. When acquiring mineral reserves, the fair value is estimated using an excess
earnings approach, which requires management to estimate future cash flows, net of capital investments in the specific
operation. Management’s cash flow projections involved the use of significant estimates and assumptions with respect to the
expected production of the mine over the estimated time period, sales prices, shipment volumes, and expected profit margins.
The present value of the projected net cash flows represents the preliminary fair value assigned to mineral reserves. The
discount rate is a significant assumption used in the valuation model. The judgments made in the determination of the estimated
fair value assigned to the assets acquired, the liabilities assumed and any noncontrolling interest in the investee, as well as the
estimated useful life of each asset and the duration of each liability, can materially impact the financial statements in periods
after acquisition, such as through depreciation and amortization expense. For more information on our acquisitions and
Albemarle Corporation and Subsidiaries
68
application of the acquisition method, see Note 2, “Acquisitions,” to our consolidated financial statements included in Part II,
Item 8 of this report.
Income Taxes. We assume the deductibility of certain costs in our income tax filings, and we estimate the future recovery
of deferred tax assets, uncertain tax positions and indefinite investment assertions.
Inventory Valuation. Inventories are stated at lower of cost and net realizable value with cost determined using standard
cost, which approximates the first-in, first-out basis. Cost is determined on the weighted-average basis for a small portion of our
inventories at foreign plants and our stores, supplies and other inventory. A portion of our domestic produced finished goods
and raw materials are determined on the last-in, first-out basis. If management estimates that the market value is below cost or
determines that future demand was lower than current inventory levels, based on historical experience, current and projected
market pricing and demand, current and projected volume trends and other relevant current and projected factors associated
with the current economic conditions, a reduction in inventory cost to estimated net realizable value is recorded in an inventory
reserve with an expense recorded to Cost of goods sold.
Environmental Remediation Liabilities. We estimate and accrue the costs required to remediate a specific site depending
on site-specific facts and circumstances. Cost estimates to remediate each specific site are developed by assessing (i) the scope
of our contribution to the environmental matter, (ii) the scope of the anticipated remediation and monitoring plan and (iii) the
extent of other parties’ share of responsibility.
Asset Retirement Obligations. Certain of our sites are subject to various laws and regulations, including legal and
contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service.
The fair value recorded is estimated based on cost information obtained both internally and externally. These estimates are
inflated based the assumed timing of the obligation payments and discounted using on available risk-free discount rate at the
time. We review our assumptions and estimates of these costs periodically or if we become aware of material changes to these
obligations.
Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial
statements.
Revenue Recognition
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing
services, and is recognized when performance obligations are satisfied under the terms of contracts with our customers. A
performance obligation is deemed to be satisfied when control of the product or service is transferred to our customer. The
transaction price of a contract, or the amount we expect to receive upon satisfaction of all performance obligations, is
determined by reference to the contract’s terms and includes adjustments, if applicable, for any variable consideration, such as
customer rebates, noncash consideration or consideration payable to the customer, although these adjustments are generally not
material. Where a contract contains more than one distinct performance obligation, the transaction price is allocated to each
performance obligation based on the standalone selling price of each performance obligation, although these situations are rare
and are generally not built into our contracts. Any unsatisfied performance obligations are not material. Standalone selling
prices are based on prices we charge to our customers, which in some cases are based on established market prices. Sales and
other similar taxes collected from customers on behalf of third parties are excluded from revenue. Our payment terms are
generally between 30 to 90 days, however, they vary by market factors, such as customer size, creditworthiness, geography and
competitive environment.
All of our revenue is derived from contracts with customers, and almost all of our contracts with customers contain one
performance obligation for the transfer of goods where such performance obligation is satisfied at a point in time. Control of a
product is deemed to be transferred to the customer upon shipment or delivery. Significant portions of our sales are sold free on
board shipping point or on an equivalent basis, while delivery terms of other transactions are based upon specific contractual
arrangements. Our standard terms of delivery are generally included in our contracts of sale, order confirmation documents and
invoices, while the timing between shipment and delivery generally ranges between 1 and 45 days. Costs for shipping and
handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment
costs. Such costs are immaterial.
The Company currently utilizes the following practical expedients, as permitted by Accounting Standards Codification
(“ASC”) 606, Revenue from Contracts with Customers:
•
All sales and other pass-through taxes are excluded from contract value;
Albemarle Corporation and Subsidiaries
69
•
In utilizing the modified retrospective transition method, no adjustment was necessary for contracts that did not cross
over the reporting year;
•
We will not consider the possibility of a contract having a significant financing component (which would effectively
attribute a portion of the sales price to interest income) unless, if at contract inception, the expected payment terms
(from time of delivery or other relevant criterion) are more than one year;
•
If our right to customer payment is directly related to the value of our completed performance, we recognize revenue
consistent with the invoicing right; and
•
We expense as incurred all costs of obtaining a contract incremental to any costs/compensation attributable to
individual product sales/shipments for contracts where the amortization period for such costs would otherwise be one
year or less.
Costs incurred to obtain contracts with customers are not significant and are expensed immediately as the amortization
period would be one year or less. When the Company incurs pre-production or other fulfillment costs in connection with an
existing or specific anticipated contract and such costs are recoverable through margin or explicitly reimbursable, such costs are
capitalized and amortized to Cost of goods sold on a systematic basis that is consistent with the pattern of transfer to the
customer of the goods or services to which the asset relates, which is less than one year. We record bad debt expense in specific
situations when we determine the customer is unable to meet its financial obligation.
Goodwill and Other Intangible Assets
We account for goodwill and other intangibles acquired in a business combination in conformity with current accounting
guidance, which requires goodwill and indefinite-lived intangible assets to not be amortized.
We test goodwill for impairment by comparing the estimated fair value of our reporting units to the related carrying
value. Our reporting units are either our operating business segments or one level below our operating business segments for
which discrete financial information is available and for which operating results are regularly reviewed by the business
management. In applying the goodwill impairment test, the Company initially performs a qualitative test (“Step 0”), where it
first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less
than its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market
considerations, cost factors, overall financial performance of the reporting units and other entity and reporting unit specific
events. If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value of the
reporting unit is less than the carrying value, the Company performs a quantitative test (“Step 1”). During Step 1, the Company
estimates the fair value using either a discounted cash flow model (income) approach or a combination of the discounted cash
flow model (income) approach and earnings multiple (market) approach (placing equal weighting on the income and market
approaches). The income approach determines fair value based on discounted cash flow model derived from a reporting unit’s
long-term forecasted cash flows. The market approach determines fair value based on the application of earnings multiples of
comparable companies to the projected earnings of the reporting unit. Future cash flows for all reporting units include
assumptions about revenue growth rates, adjusted EBITDA margins, discount rate as well as other economic or industry-related
factors. The Company defines adjusted EBITDA as earnings before interest and financing expenses, income tax expenses, the
proportionate share of Windfield income tax expense, depreciation and amortization, as adjusted on a consistent basis for
certain non-operating, non-recurring or unusual items on a segment basis. For the Refining Solutions reporting unit, within the
Ketjen segment, the revenue growth rates, adjusted EBITDA margins, EBITDA multiples, market participant acquisition
premium and the discount rate were deemed to be significant assumptions. For the Energy Storage reporting unit, the revenue
growth rates, adjusted EBITDA margins and the discount rate were deemed to be significant assumptions. Significant
management judgment is involved in estimating these variables and they include inherent uncertainties, particularly regarding
future market conditions and cost fluctuations. Any adverse changes in these assumptions, such as a decline in demand,
increased competition, rising costs or the imposition of new tariffs could negatively impact the fair value of the reporting units,
since they are forecasting future events. The Company uses a Weighted Average Cost of Capital (“WACC”) approach to
determine our discount rate for goodwill recoverability testing. The WACC calculation incorporates industry-weighted average
returns on debt and equity from a market perspective. The factors in this calculation are largely external to the Company and,
therefore, are beyond its control. The Company performs a sensitivity analysis by using a range of inputs to confirm the
reasonableness of these estimates being used in the goodwill impairment analysis. The Company tests its recorded goodwill for
impairment in the fourth quarter of each year or upon the occurrence of events or changes in circumstances that would more
likely than not reduce the fair value of its reporting units below their carrying amounts.
In July 2024, the Company made the decision to stop construction of Kemerton conversion plant Train 3 and put
Kemerton Train 2 into care and maintenance. See Note 17, “Restructuring Charges and Asset Write-offs,” for further details.
The Company determined these actions to be a triggering event for a review for impairment of its Energy Storage reporting unit
Albemarle Corporation and Subsidiaries
70
goodwill. As a result, during the third quarter of 2024, the Company tested the goodwill of the Energy Storage reporting unit by
comparing its estimated fair value, using a discounted cash flow model, to the related carrying value. Based on the analysis, the
Energy Storage reporting unit had sufficient headroom, which is defined as the percentage difference between the fair value of a
reporting unit and its carrying value, that reasonable differences in the significant assumptions used would not impact the
conclusion. Consequently, the Company concluded that the Energy Storage estimated fair value exceeded its carrying value,
thus no impairment was recorded in the third quarter of 2024.
The Company performed its annual goodwill impairment test as of October 31, 2024. No evidence of impairment was
noted for the reporting units with goodwill balances from the analysis. However, if the adjusted EBITDA or discount rate
estimates for the Refining Solutions reporting unit negatively changed by 10% (absent any other changes), the Refining
Solutions fair value would be below its carrying value. Potential events and changes in circumstances that could reasonably be
expected to negatively affect the key assumptions include reductions in demand in oilfield markets, inability to implement
effective pricing actions to offset cost increases, changes in macroeconomic conditions and the introduction or escalation of
tariffs on imported materials. We will continue to monitor these factors closely and assess their impact on our goodwill
impairment evaluations in future periods.
We assess our indefinite-lived intangible assets, which include trade names and trademarks, for impairment annually and
between annual tests if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The
indefinite-lived intangible asset impairment standard allows us to first assess qualitative factors to determine if a quantitative
impairment test is necessary. Further testing is only required if we determine, based on the qualitative assessment, that it is
more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying amount. If we determine based
on the qualitative assessment that it is more likely than not that the asset is impaired, an impairment test is performed by
comparing the fair value of the indefinite-lived intangible asset to its carrying amount. During the year ended December 31,
2024, no evidence of impairment was noted from the analysis for our indefinite-lived intangible assets.
Definite-lived intangible assets, such as purchased technology, patents and customer lists, are amortized over their
estimated useful lives generally for periods ranging from five to twenty-five years. Except for customer lists and relationships
associated with the majority of our Lithium business, which are amortized using the pattern of economic benefit method,
definite-lived intangible assets are amortized using the straight-line method. We evaluate the recovery of our definite-lived
intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be
generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its
carrying amount may not be recoverable. If the carrying amount of the asset group is not recoverable, the fair value of the asset
group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized. See Note 10, “Goodwill
and Other Intangibles,” to our consolidated financial statements included in Part II, Item 8 of this report.
Pension Plans and Other Postretirement Benefits
Under authoritative accounting standards, assumptions are made regarding the valuation of benefit obligations and the
performance of plan assets. As required, we recognize a balance sheet asset or liability for each of our pension and OPEB plans
equal to the plan’s funded status as of the measurement date. The primary assumptions are as follows:
•
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.
Actuarial gains and losses are recognized annually in our consolidated statements of (loss) income in the fourth quarter
and whenever a plan is determined to qualify for a remeasurement during a fiscal year. The remaining components of pension
and OPEB plan expense, primarily service cost, interest cost and expected return on assets, are recorded on a monthly basis.
The market-related value of assets equals the actual market value as of the date of measurement.
During 2024, we made changes to assumptions related to discount rates and expected rates of return on plan assets. We
consider available information that we deem relevant when selecting each of these assumptions.
Albemarle Corporation and Subsidiaries
71
Our U.S. defined benefit plans for non-represented employees are closed to new participants, with no additional benefits
accruing under these plans as participants’ accrued benefits have been frozen. In selecting the discount rates for the U.S. plans,
we consider expected benefit payments on a plan-by-plan basis. As a result, the Company uses different discount rates for each
plan depending on the demographics of participants and the expected timing of benefit payments. For 2024, the discount rates
were calculated using the results from a bond matching technique developed by Milliman, which matched the future estimated
annual benefit payments of each respective plan against a portfolio of bonds of high quality to determine the discount rate. We
believe our selected discount rates are determined using preferred methodology under authoritative accounting guidance and
accurately reflect market conditions as of the December 31, 2024 measurement date.
In selecting the discount rates for the foreign plans, we look at long-term yields on AA-rated corporate bonds when
available. Our actuaries have developed yield curves based on the yields of constituent bonds in the various indices as well as
on other market indicators such as swap rates, particularly at the longer durations. For the Eurozone, we apply the Aon Hewitt
yield curve to projected cash flows from the relevant plans to derive the discount rate. For the U.K., the discount rate is
determined by applying the Aon Hewitt yield curve for typical schemes of similar duration to projected cash flows of
Albemarle’s U.K. plan. In other countries where there is not a sufficiently deep market of high-quality corporate bonds, we set
the discount rate by referencing the yield on government bonds of an appropriate duration.
At December 31, 2024, the weighted-average discount rate for the U.S. and foreign pension plans increased to 5.65% and
4.04%, respectively, from 5.21% and 3.73%, respectively, at December 31, 2023 to reflect market conditions as of the
December 31, 2024 measurement date. The discount rate for the OPEB plans at December 31, 2024 and 2023 was 5.67% and
5.21%, respectively.
In estimating the expected return on plan assets, we consider past performance and future expectations for the types of
investments held by the plan as well as the expected long-term allocations of plan assets to these investments. For the years
2024 and 2023, the weighted-average expected rate of return on U.S. pension plan assets was 6.88%, and the weighted-average
expected rate of return on foreign pension plan assets was 5.95% and 4.86%, respectively. Effective January 1, 2025, the
weighted-average expected rate of return on U.S. and foreign pension plan assets is 6.70% and 6.52%, respectively.
In projecting the rate of compensation increase, we consider past experience in light of changes in inflation rates. At
December 31, 2024 and 2023, the assumed weighted-average rate of compensation increase was 3.65% and 3.67%,
respectively, for our foreign pension plans.
For the purpose of measuring our U.S. pension and OPEB obligations at December 31, 2024 and 2023, we used the
Pri-2012 Mortality Tables along with the MP-2021 Mortality Improvement Scale, respectively, published by the SOA.
At December 31, 2024, the assumed rate of increase in the pre-65 and post-65 per capita cost of covered health care
benefits for U.S. retirees was zero as the employer-paid premium caps (pre-65 and post-65) were met starting January 1, 2013.
A variance in the assumptions discussed above would have an impact on the projected benefit obligations, the accrued
OPEB liabilities, and the annual net periodic pension and OPEB cost. The following table reflects the sensitivities associated
with a hypothetical change in certain assumptions, primarily in the U.S. (in thousands):
(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
$
(53,893) $
2,604
$
62,968
$
(3,252)
Other postretirement benefits
$
(2,756) $
145
$
3,195
$
(179)
Expected return on plan assets:
Pension
*
$
(5,200)
*
$
5,209
* Not applicable.
Of the $539.7 million total pension and postretirement assets at December 31, 2024, $56.9 million, or approximately
11%, are measured using the net asset value as a practical expedient. Gains or losses attributable to these assets are recognized
in the consolidated balance sheets as either an increase or decrease in plan assets. See Note 13, “Pension Plans and Other
Postretirement Benefits,” to our consolidated financial statements included in Part II, Item 8 of this report.
Albemarle Corporation and Subsidiaries
72
Income Taxes
We use the liability method for determining our income taxes, under which current and deferred tax liabilities and assets
are recorded in accordance with enacted tax laws and rates. Under this method, the amounts of deferred tax liabilities and assets
at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered.
Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. In order to record
deferred tax assets and liabilities, we are following guidance under ASU 2015-17, which requires deferred tax assets and
liabilities to be classified as noncurrent on the balance sheet, along with any related valuation allowance. Tax effects are
released from Accumulated other comprehensive loss using either the specific identification approach or the portfolio approach
based on the nature of the underlying item.
Deferred income taxes are provided for the estimated income tax effect of temporary differences between the financial
statement carrying amounts and the tax basis of existing assets and liabilities. Deferred tax assets are also provided for
operating losses, capital losses and certain tax credit carryovers. A valuation allowance, reducing deferred tax assets, is
established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization
of such deferred tax assets is dependent upon the generation of sufficient future taxable income of the appropriate character.
Although realization is not assured, we do not establish a valuation allowance when we believe it is more likely than not that a
net deferred tax asset will be realized. We elected to not consider the estimated impact of potential future Corporate Alternative
Minimum Tax liabilities for purposes of assessing valuation allowances on its deferred tax balances.
We only recognize a tax benefit after concluding that it is more likely than not that the benefit will be sustained upon audit
by the respective taxing authority based solely on the technical merits of the associated tax position. Once the recognition
threshold is met, we recognize a tax benefit measured as the largest amount of the tax benefit that, in our judgment, is greater
than 50% likely to be realized. Interest and penalties related to income tax liabilities are included in Income tax expense on the
consolidated statements of (loss) income.
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Due to the statute of limitations, we are no
longer subject to U.S. federal income tax audits by the Internal Revenue Service (“IRS”) for years prior to 2021. Due to the
statute of limitations, we also are no longer subject to U.S. state income tax audits prior to 2018.
With respect to jurisdictions outside the U.S., several audits are in process. We have audits ongoing for the years 2014
through 2023 related to Belgium, Canada, Chile, China and Germany, some of which are for entities that have since been
divested.
While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could be
greater than our accrued position. Accordingly, additional provisions on federal and foreign tax-related matters could be
recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.
Since the timing of resolutions and/or closure of tax audits are uncertain, it is difficult to predict with certainty the range
of reasonably possible significant increases or decreases in the liability related to uncertain tax positions that may occur within
the next twelve months. As a result of the sale of the Chemetall Surface Treatment business in 2016, we agreed to indemnify
certain income and non-income tax liabilities, including uncertain tax positions, associated with the entities sold. The associated
liability is recorded in Other noncurrent liabilities. See Note 14, “Other Noncurrent Liabilities,” and Note 20, “Income Taxes,”
to our consolidated financial statements included in Part II, Item 8 of this report for further details.
We have designated the undistributed earnings of a portion of our foreign operations as indefinitely reinvested and as a
result we do not provide for deferred income taxes on the unremitted earnings of these subsidiaries. Our foreign earnings are
computed under U.S. federal tax earnings and profits (“E&P”) principles. In general, to the extent our financial reporting book
basis over tax basis of a foreign subsidiary exceeds these E&P amounts, deferred taxes have not been provided, as they are
essentially permanent in duration. The determination of the amount of such unrecognized deferred tax liability is not
practicable. We provide for deferred income taxes on our undistributed earnings of foreign operations that are not deemed to be
indefinitely invested. We will continue to evaluate our permanent investment assertion taking into consideration all relevant and
current tax laws.
Financial Condition and Liquidity
Overview
The principal uses of cash in our business generally have been capital investments and resource development costs,
funding working capital, and service of debt. We also make contributions to our defined benefit pension plans, pay dividends to
Albemarle Corporation and Subsidiaries
73
our shareholders and have the ability to repurchase shares of our common stock. Historically, cash to fund the needs of our
business has been principally provided by cash from operations, debt financing and equity issuances.
We are continually focused on working capital efficiency particularly in the areas of accounts receivable, payables and
inventory. We anticipate that cash on hand, cash provided by operating activities, proceeds from divestitures and borrowings
will be sufficient to pay our operating expenses, satisfy debt service obligations, fund capital expenditures and other investing
activities, fund pension contributions and pay dividends for the foreseeable future.
Cash Flow
Our cash and cash equivalents were $1.2 billion at December 31, 2024 as compared to $889.9 million at December 31,
2023. Cash provided by operating activities was $702.1 million, $1.3 billion and $1.9 billion during the years ended
December 31, 2024, 2023 and 2022, respectively.
The decrease in cash provided by operating activities in 2024 versus 2023 was primarily due to decreased earnings from
the Energy Storage and Specialties segments, driven by lower lithium market prices, and $1.7 billion less dividends received
from unconsolidated investments, partially offset by positive working capital changes year-over-year of $2.3 billion. The inflow
from working capital in 2024 was primarily driven by working capital management and the impact of lower lithium pricing in
inventories and accounts receivables. This was partially offset by lower accounts payable driven by similar lower lithium
pricing. Working capital outflows in 2023 were driven by higher inventory balances from higher cost spodumene and accounts
receivable balances from higher net sales. The decrease in cash provided by operating activities in 2023 versus 2022 was
primarily due to lower earnings from the Energy Storage and Specialties segments, partially offset by lower working capital
outflows and higher dividends received from unconsolidated investments, primarily from the Windfield joint venture. Working
capital outflows in both 2023 and 2022 were driven by higher inventory balances from higher cost spodumene and accounts
receivable balances from higher net sales each year.
During 2024, cash on hand, cash provided by operations and net proceeds from the issuance of mandatory convertible
preferred stock of $2.2 billion funded $1.7 billion of capital expenditures for plant, machinery and equipment, the repayment of
a net balance of $620.0 million of commercial paper, dividends to common shareholders of $188.5 million and dividends to
mandatory convertible preferred shareholders of $122.7 million. During 2023, cash on hand, cash provided by operations and
net proceeds from net borrowings of commercial paper and long-term debt of $944.2 million funded $2.1 billion of capital
expenditures for plant, machinery and equipment, net; approximately $380 million paid to MRL for the restructuring of the
MARBL joint venture; $218.5 million to resolve the legal matter with the DOJ and SEC; investments in marketable securities,
primarily public equity securities, of $204.5 million; and dividends to shareholders of $187.2 million. During 2022, cash on
hand, cash provided by operations and the proceeds of $2.0 billion in long-term debt and credit agreements funded $1.3 billion
of capital expenditures for plant, machinery and equipment, the repayment of long-term debt and credit agreements of
$705.0 million, the net repayment of $391.7 million of commercial paper, the final payment of $332.5 million of a settlement of
an arbitration ruling for a prior legal matter and dividends to shareholders of $184.4 million. In addition, during the years ended
December 31, 2024, 2023 and 2022, our consolidated joint venture, JBC, declared dividends of $149.8 million, $149.7 million
and $274.5 million, respectively, which resulted in dividends paid to noncontrolling interests of $37.2 million, $105.6 million
and $44.2 million ($53.1 million declared in 2022 was paid in the first quarter of 2023), respectively.
In January 2024, the Company sold equity securities of a public company for proceeds of approximately $81.5 million.
As a result of the sale, the Company realized a loss of $33.7 million in the year ended December 31, 2024.
On March 8, 2024, the Company issued 46,000,000 depositary shares, each representing a 1/20th interest in a share of
Mandatory Convertible Preferred Stock. The 2,300,000 shares of Mandatory Convertible Preferred Stock issued had a $1,000
per share liquidation preference. As a result of this transaction, the Company received cash proceeds of approximately $2.2
billion, net of underwriting fees and offering costs. The proceeds were used to repay outstanding commercial paper and for
general corporate purposes. See Note 16, “Equity,” for additional information.
On October 18, 2023, the Company closed on the restructuring of the MARBL joint venture with MRL. This updated
structure is intended to significantly simplify the commercial operation agreements previously entered into, allow us to retain
full control of downstream conversion assets and to provide greater strategic opportunities for each company based on their
global operations and the evolving lithium market.
Under the amended agreements, Albemarle acquired the remaining 40% ownership of the Kemerton lithium hydroxide
processing facility in Australia that was jointly owned with Mineral Resources through the MARBL joint venture. Following
this restructuring, Albemarle and MRL each own 50% of Wodgina, and MRL operates the Wodgina mine on behalf of the joint
venture. During the fourth quarter of 2023, Albemarle paid MRL approximately $380 million in cash, which includes
Albemarle Corporation and Subsidiaries
74
$180 million of consideration for the remaining ownership of Kemerton as well as a payment for the economic effective date of
the transaction being retroactive to April 1, 2022.
On October 25, 2022, the Company completed the acquisition of all of the outstanding equity of Qinzhou, for
approximately $200 million in cash. Qinzhou's operations include a recently constructed lithium processing plant strategically
positioned near the Port of Qinzhou in Guangxi, which began commercial production in the first half of 2022. The plant has
designed annual conversion capacity of up to 25,000 metric tonnes of LCE and is capable of producing battery-grade lithium
carbonate and lithium hydroxide.
On May 13, 2022, the Company issued a series of notes (collectively, the “2022 Notes”) as follows:
•
$650.0 million aggregate principal amount of senior notes, bearing interest at a rate of 4.65% payable semi-annually
on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior
notes is approximately 4.84%. These senior notes mature on June 1, 2027.
•
$600.0 million aggregate principal amount of senior notes, bearing interest at a rate of 5.05% payable semi-annually
on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior
notes is approximately 5.18%. These senior notes mature on June 1, 2032.
•
$450.0 million aggregate principal amount of senior notes, bearing interest at a rate of 5.65% payable semi-annually
on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior
notes is approximately 5.71%. These senior notes mature on June 1, 2052.
The net proceeds from the issuance of the 2022 Notes were used to repay the balance of commercial paper notes, the
remaining balance of $425.0 million of the 4.15% Senior Notes due 2024 (the “2024 Notes”) and for general corporate
purposes. The 2024 Notes were originally due to mature on December 15, 2024 and bore interest at a rate of 4.15%. During the
year ended December 31, 2022, the Company recorded a loss on early extinguishment of debt of $19.2 million in Interest and
financing expenses, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs
from the redemption of the 2024 Notes. In addition, the loss on early extinguishment of debt includes the accelerated
amortization of the interest rate swap associated with the 2024 Notes from Accumulated other comprehensive loss.
Capital expenditures were $1.7 billion, $2.1 billion and $1.3 billion for the years ended December 31, 2024, 2023 and
2022, respectively, and were incurred mainly for plant, machinery and equipment. Capital expenditures in 2024 include
spending for construction of Kemerton Trains 3 and 4 and certain other capital projects, which were stopped as part of our
announced comprehensive review of our cost and operating structure. During the years ended December 31, 2024, 2023 and
2022, capital expenditures for the construction of Kemerton Trains 3 and 4 were $296.2 million, $535.7 million and $44.0
million, respectively.
In addition, in stopping construction of Kemerton Trains 3 and 4, and putting Kemerton Train 2 on care and maintenance,
we incurred $62.3 million of related contract cancellation costs and required charges under take or pay contracts, as well as of
severance and employee benefit charges. The Company’s actions regarding Kemerton are part of a broader effort focused on
preserving its world-class resource advantages, optimizing its global conversion network, improving our cost competitiveness
and efficiency, reducing capital intensity and enhancing the Company’s financial flexibility. As part of this effort, effective
November 1, 2024, the Company transitioned its operating structure to a fully integrated functional model (excluding Ketjen)
from a global business unit model. In connection with all restructuring actions noted, we recorded severance and employee
benefit charges of $70.1 million during the year ended December 31, 2024. We expect to record additional restructuring costs in
the range of $35 million to $45 million associated with these actions in the year ended December 31, 2025.
We expect our capital expenditures to be between $700 million and $800 million in 2025 reflecting the announced new
level of spending to unlock cash flow over the near term and generate long-term financial flexibility. The forecasted lower
capital expenditures in 2025 reflect reduced sustaining growth and capital spend, while continuing safety and critical
maintenance expenditures.
The Company is permitted to repurchase up to a maximum of 15,000,000 shares under a share repurchase program
authorized by our Board of Directors. There were no shares of our common stock repurchased during 2024, 2023 or 2022. At
December 31, 2024, there were 7,396,263 remaining shares available for repurchase under the Company’s authorized share
repurchase program.
Net current assets increased to approximately $1.9 billion at December 31, 2024 from $1.7 billion at December 31, 2023.
The increase is primarily due to the increased cash and cash equivalents balance as a result of the $2.2 billion of net proceeds
from the issuance of Mandatory Convertible Preferred Stock in March 2024, and the resulting paydown of commercial paper. In
addition, accounts receivable, inventory and accounts payable balances all decreased from December 31, 2023 due to the lower
Albemarle Corporation and Subsidiaries
75
lithium market prices and intentional working capital management. Additional changes in the components of net current assets
are primarily due to the timing of the sale of goods and other ordinary transactions leading up to the balance sheet dates. The
additional changes are not the result of any policy changes by the Company, and do not reflect any change in either the quality
of our net current assets or our expectation of success in converting net working capital to cash in the ordinary course of
business.
At December 31, 2024 and 2023, our cash and cash equivalents included $833.7 million and $857.6 million, respectively,
held by our foreign subsidiaries. The majority of these foreign cash balances are associated with earnings that we have asserted
are indefinitely reinvested and which we plan to use to support our continued growth plans outside the U.S. through funding of
capital expenditures, acquisitions, research, operating expenses or other similar cash needs of our foreign operations. From time
to time, we repatriate cash associated with earnings from our foreign subsidiaries to the U.S. for normal operating needs
through intercompany dividends, but only from subsidiaries whose earnings we have not asserted to be indefinitely reinvested
or whose earnings qualify as “previously taxed income” as defined by the Internal Revenue Code. For the years ended
December 31, 2024, 2023 and 2022, we repatriated approximately $32.7 million, $2.9 million and $1.7 million of cash,
respectively, as part of these foreign earnings cash repatriation activities.
While we continue to closely monitor our cash generation, working capital management and capital spending in light of
continuing uncertainties in the global economy, we believe that we will continue to have the financial flexibility and capability
to opportunistically fund future growth initiatives. Additionally, we anticipate that future capital spending, including business
acquisitions and other cash outlays, should be financed primarily with cash flow provided by operations, cash on hand and
additional issuances of debt or equity securities, as needed.
Long-Term Debt
We currently have the following notes outstanding:
Issue Month/Year
Principal (in
millions)
Interest Rate
Interest Payment Dates
Maturity Date
November 2019
€377.1
1.125%
November 25
November 25, 2025
May 2022(a)
$650.0
4.65%
June 1 and December 1
June 1, 2027
November 2019
€500.0
1.625%
November 25
November 25, 2028
November 2019(a)
$171.6
3.45%
May 15 and November 15
November 15, 2029
May 2022(a)
$600.0
5.05%
June 1 and December 1
June 1, 2032
November 2014(a)
$350.0
5.45%
June 1 and December 1
December 1, 2044
May 2022(a)
$450.0
5.65%
June 1 and December 1
June 1, 2052
(a) Denotes senior notes.
Our senior notes are senior unsecured obligations and rank equally with all our other senior unsecured indebtedness from
time to time outstanding. The notes are effectively subordinated to all of our existing or future secured indebtedness and to the
existing and future indebtedness of our subsidiaries. As is customary for such long-term debt instruments, each series of notes
outstanding has terms that allow us to redeem the notes before maturity, in whole at any time or in part from time to time, at a
redemption price equal to the greater of (i) 100% of the principal amount of these notes to be redeemed, or (ii) the sum of the
present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date
of redemption) discounted to the redemption date on a semi-annual basis using the comparable government rate (as defined in
the indentures governing these notes) plus between 25 and 40 basis points, depending on the series of notes, plus, in each case,
accrued interest thereon to the date of redemption. Holders may require us to purchase such notes at 101% upon a change of
control triggering event, as defined in the indentures. These notes are subject to typical events of default, including bankruptcy
and insolvency events, nonpayment and the acceleration of certain subsidiary indebtedness of $40 million or more caused by a
nonpayment default.
Our Euro notes issued in 2019 are unsecured and unsubordinated obligations and rank equally in right of payment to all
our other unsecured senior obligations. The Euro notes are effectively subordinated to all of our existing or future secured
indebtedness and to the existing and future indebtedness of our subsidiaries. As is customary for such long-term debt
instruments, each series of notes outstanding has terms that allow us to redeem the notes before their maturity, in whole at any
time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to
be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal thereof and interest
thereon (exclusive of interest accrued to, but excluding, the date of redemption) discounted to the redemption date on an annual
Albemarle Corporation and Subsidiaries
76
basis using the bond rate (as defined in the indentures governing these notes) plus between 25 and 35 basis points, depending on
the series of notes, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to, but excluding, the
date of redemption. Holders may require us to purchase such notes at 101% upon a change of control triggering event, as
defined in the indentures. These notes are subject to typical events of default, including bankruptcy and insolvency events,
nonpayment and the acceleration of certain subsidiary indebtedness exceeding $100 million caused by a nonpayment default.
Given current economic conditions, specifically around the market pricing of lithium, and the related impact on the
Company’s future earnings, on October 31, 2024, we further amended the 2022 Credit Agreement, which provides for
borrowings of up to $1.5 billion and matures on October 28, 2027. Borrowings under the 2022 Credit Agreement bear interest
at variable rates based on a benchmark rate depending on the currency in which the loans are denominated, plus an applicable
margin which ranges from 0.910% to 1.375%, depending on the Company’s credit rating from Standard & Poor’s Ratings
Services LLC (“S&P”), Moody’s Investors Services, Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”). With respect to loans
denominated in U.S. dollars, interest is calculated using the term Secured Overnight Financing Rate (“SOFR”) plus a term
SOFR adjustment of 0.10%, plus the applicable margin. The applicable margin on the facility was 1.20% as of December 31,
2024. There were 0 borrowings outstanding under the 2022 Credit Agreement as of December 31, 2024.
Borrowings under the 2022 Credit Agreement are conditioned upon satisfaction of certain customary conditions
precedent, including the absence of defaults. The October 2024 amendment was entered into to modify the financial covenants
under the 2022 Credit Agreement to avoid a potential covenant violation over the following 18 months given the current market
pricing of lithium. The amended 2022 Credit Agreement subjects the Company to two financial covenants, as well as customary
affirmative and negative covenants. The amended first financial covenant requires that the ratio of (a) (i) the Company’s
consolidated net funded debt plus a proportionate amount of Windfield’s net funded debt less (ii) the Company’s unrestricted
cash and cash equivalents plus a proportionate amount of Windfield’s unrestricted cash and cash equivalents (up to a specified
amount) to (b) consolidated Windfield-Adjusted EBITDA (as such terms are defined in the 2022 Credit Agreement) be less
than or equal to (i) 4.00:1.0 as of the end of the fourth quarter of 2024, (ii) 4.75:1.0 as of the end of the first quarter of 2025,
(iii) 5.75:1.0 as of the end of the second quarter of 2025, (iv) 5.50:1.0 as of the end of the third quarter of 2025, (v) 5.00:1.0 as
of the end of the fourth quarter of 2025, (vi) 4.75:1.0 as of the end of each of the first and second quarters of 2026, and (vii)
3.50:1.0 as of the end of the third quarter of 2026 and each fiscal quarter thereafter through the third quarter of 2027. The
maximum permitted leverage ratios described above are subject to adjustment in accordance with the terms of the 2022 Credit
Agreement upon the consummation of an acquisition after June 30, 2026 if the consideration includes cash proceeds from the
issuance of funded debt in excess of $500 million.
Beginning in the fourth quarter of 2024, the amended second financial covenant requires that the ratio of the Company’s
consolidated EBITDA to consolidated interest charges (as such terms are defined in the 2022 Credit Agreement) be no less than
(i) 1.00:1.0 for fiscal quarters through June 30, 2025, (ii) 2.00:1.0 for the third quarter of 2025, (iii) 2.50:1.0 for the fourth
quarter of 2025, and (iv) 3.00:1.0 for all fiscal quarters thereafter. The 2022 Credit Agreement also contains customary default
provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of
covenants and cross-defaults to other material indebtedness. The occurrence of an event of default under the 2022 Credit
Agreement could result in all loans and other obligations becoming immediately due and payable and the commitments under
the 2022 Credit Agreement being terminated. Following the $2.2 billion issuance of Mandatory Convertible Preferred Stock in
March 2024 and the amendments to the financial covenants, the Company expects to maintain compliance with the amended
financial covenants in the near future. However, a significant downturn in lithium market prices or demand could impact the
Company’s ability to maintain compliance with its amended financial covenants and it could require the Company to seek
additional amendments to the 2022 Credit Agreement and/or issue debt or equity securities to fund its activities and maintain
financial flexibility. If the Company were unable to obtain such necessary additional amendments, this could lead to an event of
default and its lenders could require the Company to repay its outstanding debt. In that situation, the Company may not be able
to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.
On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under
which we may issue unsecured commercial paper notes (the “Commercial Paper Notes”) from time-to-time. On May 17, 2023,
we entered into definitive documentation to increase the size of our existing commercial paper program. The maximum
aggregate face amount of Commercial Paper Notes outstanding at any time is $1.5 billion. The proceeds from the issuance of
the Commercial Paper Notes are expected to be used for general corporate purposes, including the repayment of other debt of
the Company. The 2022 Credit Agreement is available to repay the Commercial Paper Notes, if necessary. Aggregate
borrowings outstanding under the 2022 Credit Agreement and the Commercial Paper Notes will not exceed the $1.5 billion
current maximum amount available under the 2022 Credit Agreement. The Commercial Paper Notes will be sold at a discount
from par, or alternatively, will be sold at par and bear interest at rates that will vary based upon market conditions at the time of
issuance. The maturities of the Commercial Paper Notes will vary but may not exceed 397 days from the date of issue. The
Albemarle Corporation and Subsidiaries
77
definitive documents relating to the commercial paper program contain customary representations, warranties, default and
indemnification provisions. During the year ended December 31, 2024, we repaid a net amount of $620.0 million of
commercial paper notes using the net proceeds received from the issuance of Mandatory Convertible Preferred Stock.
In the second quarter of 2023, the Company received a loan of $300.0 million to be repaid in five equal annual
installments beginning on December 31, 2026. This interest-free loan was discounted using an imputed interest rate of 5.5%
and the Company will amortize that discount through Interest and financing expenses over the term of the loan.
When constructing new facilities or making major enhancements to existing facilities, we may have the opportunity to
enter into incentive agreements with local government agencies in order to reduce certain state and local tax expenditures.
Under these agreements, we transfer the related assets to various local government entities and receive bonds. We immediately
lease the facilities from the local government entities and have an option to repurchase the facilities for a nominal amount upon
tendering the bonds to the local government entities at various predetermined dates. The bonds and the associated obligations
for the leases of the facilities offset, and the underlying assets are recorded in property, plant and equipment. We currently have
the ability to transfer up to $540 million in assets under these arrangements. At December 31, 2024 and 2023, there were $74.5
million and $14.3 million, respectively, of bonds outstanding under these arrangements.
The non-current portion of our long-term debt amounted to $3.1 billion at December 31, 2024, compared to $3.54 billion
at December 31, 2023. In addition, at December 31, 2024, we had the ability to borrow $1.5 billion under our commercial paper
program and the 2022 Credit Agreement, and $98.8 million under other existing lines of credit, subject to various financial
covenants under the 2022 Credit Agreement. We have the ability and intent to refinance our borrowings under our other
existing credit lines with borrowings under the 2022 Credit Agreement, as applicable. Therefore, the amounts outstanding under
those credit lines, if any, are classified as long-term debt. We believe that as of December 31, 2024 we were, and currently are,
in compliance with all of our debt covenants. For additional information about our long-term debt obligations, see Note 12,
“Long-Term Debt,” to our consolidated financial statements included in Part II, Item 8 of this report.
Off-Balance Sheet Arrangements
In the normal course of business with customers, vendors and others, we have entered into off-balance sheet
arrangements, including bank guarantees and letters of credit, which totaled approximately $115.7 million at December 31,
2024. None of these off-balance sheet arrangements has, or is likely to have, a material effect on our current or future financial
condition, results of operations, liquidity or capital resources.
Liquidity Outlook
We generally use cash on hand and cash provided by operating activities, divestitures and borrowings to pay our
operating expenses, satisfy debt service obligations, fund any capital expenditures, make acquisitions, make pension
contributions and pay dividends. We also could issue additional debt or equity securities to fund these activities in an effort to
maintain our financial flexibility. Our main focus in the short-term, during the continued uncertainty surrounding the global
economy, including lithium market pricing and recent inflationary trends, is to continue to maintain financial flexibility by
continuing our cost savings initiative, while still protecting our employees and customers, committing to shareholder returns
and maintaining an investment grade rating. Over the next three years, in terms of uses of cash, we will continue to invest in
growth of the businesses and return value to shareholders. Additionally, we will continue to evaluate the merits of any
opportunities that may arise for acquisitions of businesses or assets, which may require additional liquidity. Financing the
purchase price of any such acquisitions could involve borrowing under existing or new credit facilities and/or the issuance of
debt or equity securities, in addition to cash on hand.
We expect our capital expenditures to be between $700 million and $800 million in 2025, down from $1.7 billion in
2024. Lower capital expenditures in 2025 reflects the announced new level of spending to unlock cash flow over the near term
and generate long-term financial flexibility and is driven by reduced sustaining growth and capital spend, while continuing
safety and critical maintenance expenditures.
The Company’s actions regarding Kemerton are part of a broader effort focused on preserving its world-class resource
advantages, optimizing its global conversion network, improving the Company’s cost competitiveness and efficiency, reducing
capital intensity and enhancing the Company’s financial flexibility. As part of this effort, effective November 1, 2024, the
Company transitioned its operating structure to a fully integrated functional model (excluding Ketjen) from a global business
unit model. We expect the comprehensive review of our cost and operating structure to drive additional cost and productivity
improvements of $300 million to $400 million per year.
Albemarle Corporation and Subsidiaries
78
In the normal course of business, amounts received from customers in advance of the Company’s satisfaction of its
contractual performance obligations are recorded as deferred revenue, and are recognized within Net sales as the Company
satisfies the related performance obligation. In January 2025, the Company received $350 million from certain customers for
the delivery of specified amounts of spodumene and lithium salts over the next 5 years.
As of December 31, 2024, we are party to master receivables purchase agreements, under which we may sell up to
approximately $92 million of available and eligible outstanding customer accounts receivable generated by sales to certain
customers. The agreements are uncommitted and can be terminated by us or the purchaser with certain notice as defined in the
contracts. Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are
removed from the consolidated balance sheets at the time of the sales transaction. As of December 31, 2024, there were no
accounts receivable sold under these master receivables purchase agreements.
In 2022, we announced we had been awarded a nearly $150 million grant from the U.S. Department of Energy to expand
domestic manufacturing of batteries for EVs and the electrical grid and for materials and components currently imported from
other countries. The grant funding is intended to support a portion of the anticipated cost to construct a new, commercial-scale
U.S.-based lithium concentrator facility at our Kings Mountain, North Carolina, location. We expect the concentrator facility to
create hundreds of construction and full-time jobs and to produce approximately 420,000 tons of spodumene concentrate
annually. To further support the restart of the Kings Mountain mine, in 2023, we announced a $90 million critical materials
award from the U.S. Department of Defense. During the year ended December 31, 2024, the Company received $12.4 million
of these funds.
Overall, with generally strong cash-generative businesses and various capital resources, we believe we have, and will be
able to maintain a solid liquidity position. In order to maintain financial flexibility, we may issue additional debt or equity
securities to fund future debt maturities, capital spending and other cash outlays. Our annual maturities of long-term debt as of
December 31, 2024 are as follows (in millions): 2025—$398.5; 2026—$60.0; 2027—$710.0; 2028—$581.5; 2029—$231.6;
thereafter—$1,623.1. In addition, we expect to make interest payments on those long-term debt obligations as follows (in
millions): 2025—$124.3; 2026—$120.0; 2027—$102.4; 2028—$89.1; 2029—$80.2; thereafter—$927.7. For variable-rate debt
obligations, projected interest payments are calculated using the December 31, 2024 weighted average interest rate of
approximately 0.33%.
As of December 31, 2024, we have committed to approximately $240.2 million of payments to third-party vendors in the
normal course of business to secure raw materials for our production processes, with approximately $128.4 million to be paid in
2025. 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.
See Note 18, “Leases,” to our consolidated financial statements included in Part II, Item 8 of this report for our annual
expected payments under our operating lease obligations at December 31, 2024.
In 2025, we expect to pay $82.7 million of the $127.3 million balance remaining from the transition tax on foreign
earnings as a result of the Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017. The one-time transition tax
imposed by the TCJA is based on our total post-1986 earnings and profits that we previously deferred from U.S. income taxes
and is payable over an eight-year period, with the final payment to be made in 2026.
Contributions to our domestic and foreign qualified and nonqualified pension plans, including our supplemental executive
retirement plan, are expected to approximate $17 million in 2025. We may choose to make additional pension contributions in
excess of this amount. We made contributions of approximately $17.4 million to our domestic and foreign pension plans (both
qualified and nonqualified) during the year ended December 31, 2024.
The liability related to uncertain tax positions, including interest and penalties, recorded in Other noncurrent liabilities
totaled $259.6 million and $220.6 million at December 31, 2024 and 2023, respectively. Related assets for corresponding
offsetting benefits recorded in Other assets totaled $74.8 million and $73.0 million at December 31, 2024 and 2023,
respectively. We cannot estimate the amounts of any cash payments during the next twelve months associated with these
liabilities and are unable to estimate the timing of any such cash payments in the future at this time.
Our cash flows from operations may be negatively affected by adverse consequences to our customers and the markets in
which we compete as a result of moderating global economic conditions, continuing inflationary trends and reduced capital
availability. We have experienced, and may continue to experience, volatility and increases in the price of certain raw materials
and in transportation and energy costs as a result of global market and supply chain disruptions and the broader inflationary
Albemarle Corporation and Subsidiaries
79
environment. As a result, we are planning for various economic scenarios and actively monitoring our balance sheet to maintain
the financial flexibility needed.
Although we maintain business relationships with a diverse group of financial institutions as sources of financing, an
adverse change in their credit standing could lead them to not honor their contractual credit commitments to us, decline funding
under our existing but uncommitted lines of credit with them, not renew their extensions of credit or not provide new financing
to us. While the global corporate bond and bank loan markets remain strong, periods of elevated uncertainty related to the
stability of the banking system, future pandemics or global economic and/or geopolitical concerns may limit efficient access to
such markets for extended periods of time. If such concerns heighten, we may incur increased borrowing costs and reduced
credit capacity as our various credit facilities mature. If the U.S. Federal Reserve or similar national reserve banks in other
countries decide to continue tightening the monetary supply, we may incur increased borrowing costs (as interest rates increase
on our variable rate credit facilities, as our various credit facilities mature or as we refinance any maturing fixed rate debt
obligations), although these cost increases would be partially offset by increased income rates on portions of our cash deposits.
We had cash and cash equivalents totaling $1.2 billion as of December 31, 2024, of which $833.7 million is held by our
foreign subsidiaries. This cash represents an important source of our liquidity and is invested in bank accounts or money market
investments with no limitations on access. The cash held by our foreign subsidiaries is intended for use outside of the U.S. We
anticipate that any needs for liquidity within the U.S. in excess of our cash held in the U.S. can be readily satisfied with
borrowings under our existing U.S. credit facilities or our commercial paper program.
Guarantor Financial Information
Albemarle Wodgina Pty Ltd Issued Notes
Albemarle Wodgina Pty Ltd (the “Issuer”), a wholly-owned subsidiary of Albemarle Corporation, issued $300.0 million
aggregate principal amount of 3.45% Senior Notes due 2029 (the “3.45% Senior Notes”) in November 2019. The 3.45% Senior
Notes are fully and unconditionally guaranteed (the “Guarantee”) on a senior unsecured basis by Albemarle Corporation (the
“Parent Guarantor”). No direct or indirect subsidiaries of the Parent Guarantor guarantee the 3.45% Senior Notes (such
subsidiaries are referred to as the “Non-Guarantors”).
In 2019, we completed the acquisition of a 60% interest in Wodgina in Western Australia and formed an unincorporated
joint venture with MRL, named MARBL Lithium Joint Venture, for the exploration, development, mining, processing and
production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina spodumene mine and for the
operation of the Kemerton assets in Western Australia. We participate in Wodgina through our ownership interest in the Issuer.
On October 18, 2023 we amended the joint venture agreements, resulting in a decrease of our ownership interest in the MARBL
joint venture and Wodgina to 50%.
Prior to January 1, 2024, the Parent Guarantor conducted its U.S. Specialties and Ketjen operations directly, and
conducted its other operations (other than operations conducted through the Issuer) through the Non-Guarantors. Effective
January 1, 2024, the Company split its U.S. Ketjen operations to a separate non-guarantor subsidiary and its results are no
longer included within the summarized Parent Guarantor and Issuer financial information below for the 2024 periods presented.
The 3.45% Senior Notes are the Issuer’s senior unsecured obligations and rank equally in right of payment to the senior
indebtedness of the Issuer, effectively subordinated to all of the secured indebtedness of the Issuer, to the extent of the value of
the assets securing that indebtedness, and structurally subordinated to all indebtedness and other liabilities of its subsidiaries.
The Guarantee is the senior unsecured obligation of the Parent Guarantor and ranks equally in right of payment to the senior
indebtedness of the Parent Guarantor, effectively subordinated to the secured debt of the Parent Guarantor to the extent of the
value of the assets securing the indebtedness and structurally subordinated to all indebtedness and other liabilities of its
subsidiaries.
For cash management purposes, the Parent Guarantor transfers cash among itself, the Issuer and the Non-Guarantors
through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its
subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party
payments for principal and interest on the Issuer and/or the Parent Guarantor’s outstanding debt, common stock dividends and
common stock repurchases. There are no significant restrictions on the ability of the Issuer or the Parent Guarantor to obtain
funds from subsidiaries by dividend or loan.
The following tables present summarized financial information for the Parent Guarantor and the Issuer on a combined
basis after elimination of (i) intercompany transactions and balances among the Issuer and the Parent Guarantor and (ii) equity
Albemarle Corporation and Subsidiaries
80
in earnings from and investments in any subsidiary that is a Non-Guarantor. Each entity in the combined financial information
follows the same accounting policies as described herein.
Summarized Statement of Operations
Year ended
December 31,
$ in thousands
2024
Net sales(a)
$
861,876
Gross profit
(66,144)
Loss before income taxes and equity in net income of unconsolidated investments(b)
(593,433)
Net loss attributable to the Guarantor and the Issuer
(442,751)
(a) Includes net sales to Non-Guarantors of $460.6 million for the year ended December 31, 2024.
(b) Includes intergroup expenses to Non-Guarantors of $46.6 million for the year ended December 31, 2024.
Summarized Balance Sheet
At December 31,
$ in thousands
2024
Current assets(a)
$
921,221
Net property, plant and equipment
2,005,613
Other non-current assets(b)
2,912,866
Current liabilities(c)
$
2,190,646
Long-term debt
2,253,328
Other non-current liabilities(d)
7,157,705
(a) Includes receivables from Non-Guarantors of $411.2 million at December 31, 2024.
(b) Includes non-curent receivables from Non-Guarantors of $2.3 billion at December 31, 2024.
(c) Includes current payables to Non-Guarantors of $1.9 billion at December 31, 2024.
(d) Includes non-current payables to Non-Guarantors of $6.8 billion at December 31, 2024.
The 3.45% Senior Notes are structurally subordinated to the indebtedness and other liabilities of the Non-Guarantors. The
Non-Guarantors are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due
pursuant to the 3.45% Senior Notes or the Indenture under which the 3.45% Senior Notes were issued, or to make any funds
available therefor, whether by dividends, loans, distributions or other payments. Any right that the Parent Guarantor has to
receive any assets of any of the Non-Guarantors upon the liquidation or reorganization of any Non-Guarantor, and the
consequent rights of holders of the 3.45% Senior Notes to realize proceeds from the sale of any of a Non-Guarantor’s assets,
would be effectively subordinated to the claims of such Non-Guarantor’s creditors, including trade creditors and holders of
preferred equity interests, if any, of such Non-Guarantor. Accordingly, in the event of a bankruptcy, liquidation or
reorganization of any of the Non-Guarantors, the Non-Guarantors will pay the holders of their debts, holders of preferred equity
interests, if any, and their trade creditors before they will be able to distribute any of their assets to the Parent Guarantor.
The 3.45% Senior Notes are obligations of the Issuer. The Issuer’s cash flow and ability to make payments on the 3.45%
Senior Notes could be dependent upon the earnings it derives from the production from MARBL for Wodgina. Absent income
received from sales of its share of production from MARBL, the Issuer’s ability to service the 3.45% Senior Notes could be
dependent upon the earnings of the Parent Guarantor’s subsidiaries and other joint ventures and the payment of those earnings
to the Issuer in the form of equity, loans or advances and through repayment of loans or advances from the Issuer.
The Issuer’s obligations in respect of MARBL are guaranteed by the Parent Guarantor. Further, under MARBL pursuant
to a deed of cross security between the Issuer, the joint venture partner and the manager of the project (the “Manager”), each of
the Issuer, and the joint venture partner have granted security to each other and the Manager for the obligations each of the
Issuer and the joint venture partner have to each other and to the Manager. The claims of the joint venture partner, the Manager
and other secured creditors of the Issuer will have priority as to the assets of the Issuer over the claims of holders of the 3.45%
Senior Notes.
Albemarle Corporation and Subsidiaries
81
Albemarle Corporation Issued Notes
In March 2021, Albemarle New Holding GmbH (the “Subsidiary Guarantor”), a wholly-owned subsidiary of Albemarle
Corporation, added a full and unconditional guarantee (the “Upstream Guarantee”) to all securities of Albemarle Corporation
(the “Parent Issuer”) issued and outstanding as of such date and, subject to the terms of the applicable amendment or
supplement, securities issuable by the Parent Issuer pursuant to the Indenture, dated as of January 20, 2005, as amended and
supplemented from time to time (the “Indenture”). No other direct or indirect subsidiaries of the Parent Issuer guarantee these
securities (such subsidiaries are referred to as the “Upstream Non-Guarantors”). See Long-term debt section above for a
description of the securities issued by the Parent Issuer.
The current securities outstanding under the Indenture are the Parent Issuer’s unsecured and unsubordinated obligations
and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Parent Issuer. All
securities currently outstanding under the Indenture are effectively subordinated to the Parent Issuer’s existing and future
secured indebtedness to the extent of the value of the assets securing that indebtedness. With respect to any series of securities
issued under the Indenture that is subject to the Upstream Guarantee (which series of securities does not include the 2022
Notes), the Upstream Guarantee is, and will be, an unsecured and unsubordinated obligation of the Subsidiary Guarantor,
ranking pari passu with all other existing and future unsubordinated and unsecured indebtedness of the Subsidiary Guarantor.
All securities currently outstanding under the Indenture (other than the 2022 Notes) are effectively subordinated to all existing
and future indebtedness and other liabilities of the Parent’s Subsidiaries other than the Subsidiary Guarantor. The 2022 Notes
are effectively subordinated to all existing and future indebtedness and other liabilities of the Parent’s Subsidiaries, including
the Subsidiary Guarantor.
For cash management purposes, the Parent Issuer transfers cash among itself, the Subsidiary Guarantor and the Upstream
Non-Guarantors through intercompany financing arrangements, contributions or declaration of dividends between the
respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make
specified third-party payments for principal and interest on the Parent Issuer and/or the Subsidiary Guarantor’s outstanding
debt, common stock dividends and common stock repurchases. There are no significant restrictions on the ability of the Parent
Issuer or the Subsidiary Guarantor to obtain funds from subsidiaries by dividend or loan.
The following tables present summarized financial information for the Subsidiary Guarantor and the Parent Issuer on a
combined basis after elimination of (i) intercompany transactions and balances among the Parent Issuer and the Subsidiary
Guarantor and (ii) equity in earnings from and investments in any subsidiary that is an Upstream Non-Guarantor.
Summarized Statement of Operations
Year ended
December 31,
$ in thousands
2024
Net sales(a)
$
639,866
Gross profit
(12,059)
Loss before income taxes and equity in net income of unconsolidated investments(b)
(400,246)
Net loss attributable to the Subsidiary Guarantor and the Parent Issuer
(353,248)
(a) Includes net sales to Non-Guarantors of $238.6 million for the year ended December 31, 2024.
(b) Includes intergroup income from Non-Guarantors of $148.3 million for the year ended December 31, 2024.
Summarized Balance Sheet
At December 31,
$ in thousands
2024
Current assets(a)
$
1,104,082
Net property, plant and equipment
800,913
Other non-current assets(b)
2,188,306
Current liabilities(c)
$
2,559,256
Long-term debt
2,551,714
Other non-current liabilities(d)
6,303,456
Albemarle Corporation and Subsidiaries
82
(a) Includes current receivables from Non-Guarantors of $646.3 million at December 31, 2024.
(b) Includes noncurrent receivables from Non-Guarantors of $1.6 billion at December 31, 2024.
(c) Includes current payables to Non-Guarantors of $1.9 billion at December 31, 2024.
(d) Includes non-current payables to Non-Guarantors of $6.0 billion at December 31, 2024.
These securities are structurally subordinated to the indebtedness and other liabilities of the Upstream Non-Guarantors.
The Upstream Non-Guarantors are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay
any amounts due pursuant to these securities or the Indenture under which these securities were issued, or to make any funds
available therefor, whether by dividends, loans, distributions or other payments. Any right that the Subsidiary Guarantor has to
receive any assets of any of the Upstream Non-Guarantors upon the liquidation or reorganization of any Upstream Non-
Guarantors, and the consequent rights of holders of these securities to realize proceeds from the sale of any of an Upstream
Non-Guarantor’s assets, would be effectively subordinated to the claims of such Upstream Non-Guarantor’s creditors, including
trade creditors and holders of preferred equity interests, if any, of such Upstream Non-Guarantor. Accordingly, in the event of a
bankruptcy, liquidation or reorganization of any of the Upstream Non-Guarantors, the Upstream Non-Guarantors will pay the
holders of their debts, holders of preferred equity interests, if any, and their trade creditors before they will be able to distribute
any of their assets to the Subsidiary Guarantor.
Safety and Environmental Matters
We are subject to federal, state, local and foreign requirements regulating the handling, manufacture and use of materials
(some of which may be classified as hazardous or toxic by one or more regulatory agencies), the discharge of materials into the
environment and the protection of the environment. To our knowledge, we are currently complying, and expect to continue to
comply, in all material respects with applicable environmental laws, regulations, statutes and ordinances. Compliance with
existing federal, state, local and foreign environmental protection laws is not currently expected to have a material effect on
capital expenditures, earnings or our competitive position, but the costs associated with increased legal or regulatory
requirements could have an adverse effect on our operating results.
Among other environmental requirements, we are subject to the federal Superfund law, and similar state laws, under
which we may be designated as a PRP, and may be liable for a share of the costs associated with cleaning up various hazardous
waste sites. Management believes that in cases in which we may have liability as a PRP, our liability for our share of cleanup is
de minimis. Further, almost all such sites represent environmental issues that are quite mature and have been investigated,
studied and in many cases settled. In de minimis situations, our policy generally is to negotiate a consent decree and to pay any
apportioned settlement, enabling us to be effectively relieved of any further liability as a PRP, except for remote contingencies.
In other than de minimis PRP matters, our records indicate that unresolved PRP exposures should be immaterial. We accrue and
expense our proportionate share of PRP costs. Because management has been actively involved in evaluating environmental
matters, we are able to conclude that the outstanding environmental liabilities for unresolved PRP sites should not have a
material adverse effect upon our results of operations or financial condition.
Our environmental and safety operating costs charged to expense were $87.5 million, $73.0 million and $46.3 million
during the years ended December 31, 2024, 2023 and 2022, respectively, excluding depreciation of previous capital
expenditures, and are expected to be in the same range in the next few years. Costs for remediation have been accrued and
payments related to sites are charged against accrued liabilities, which at December 31, 2024 totaled approximately $20.0
million, a decrease of $14.1 million from $34.1 million at December 31, 2023. See Note 15, “Commitments and Contingencies”
to our consolidated financial statements included in Part II, Item 8 of this report for a reconciliation of our environmental
liabilities for the years ended December 31, 2024, 2023 and 2022.
We believe that any sum we may be required to pay in connection with environmental remediation and asset retirement
obligation matters in excess of the amounts recorded should occur over a period of time and should not have a material adverse
effect upon our results of operations, financial condition or cash flows on a consolidated annual basis, although any such sum
could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly
reporting period.
Capital expenditures for pollution-abatement and safety projects, including such costs that are included in other projects,
were approximately $54.4 million, $116.7 million and $75.6 million during the years ended December 31, 2024, 2023 and
2022, respectively. In the future, capital expenditures for these types of projects may increase due to more stringent
environmental regulatory requirements and our efforts in reaching sustainability goals. Management’s estimates of the effects
of compliance with governmental pollution-abatement and safety regulations are subject to (a) the possibility of changes in the
applicable statutes and regulations or in judicial or administrative construction of such statutes and regulations and
Albemarle Corporation and Subsidiaries
83
(b) uncertainty as to whether anticipated solutions to pollution problems will be successful, or whether additional expenditures
may prove necessary.
Recently Issued Accounting Pronouncements
See Note 1, “Summary of Significant Accounting Policies” to our consolidated financial statements included in Part II,
Item 8 of this report for a discussion of our Recently Issued Accounting Pronouncements.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
The primary currencies to which we have foreign currency exchange rate exposure are the Chinese Renminbi, Euro and
Australian Dollar. In response to greater fluctuations in foreign currency exchange rates in recent periods, we have increased
the degree of exposure risk management activities to minimize the potential impact on earnings.
We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies
and through the use, from time to time, of foreign currency forward contracts. The principal objective of such contracts is to
minimize the financial impact of changes in foreign currency exchange rates. The counterparties to these contractual
agreements are major financial institutions with which we generally have other financial relationships. We are exposed to credit
loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the
counterparties. We do not utilize financial instruments for trading or other speculative purposes.
The primary method we use to reduce foreign currency exposure is to identify natural hedges, in which the operating
activities denominated in respective currencies across various subsidiaries balance in respect to timing and the underlying
exposures. In the event a natural hedge is not available, we may employ a forward contract to reduce exposure, generally
expiring within one year. While these contracts are subject to fluctuations in value, such fluctuations are intended to offset the
changes in the value of the underlying exposures being hedged. In the fourth quarter of 2019, we entered into a foreign currency
forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton
plant in Australia. This contract has been designated as an effective hedging instrument. As a result of the actions taken at
Kemerton Trains 3 and 4 during 2024, the Company dedesignated the remaining hedged foreign currency forward contracts.
The Company recorded a loss in Other income, net of $26.1 million during the year ended December 31, 2024 from the
reclassification of the hedged balance from Accumulated other comprehensive loss. The balance of the settled hedged foreign
currency forward contracts associated with the construction of Kemerton Trains 1 and 2 assets placed in service will be
reclassified to earnings over the life of the related assets. All other gains and losses on foreign currency forward contracts not
designated as an effective hedging instrument are recognized in Other income, net, and generally do not have a significant
impact on results of operations.
At December 31, 2024, our financial instruments subject to foreign currency exchange risk primarily consisted of foreign
currency forward contracts with an aggregate notional value of $6.9 billion and with a fair value representing a net liability
position of $7.0 million. Fluctuations in the value of these contracts are intended to offset the changes in the value of the
underlying exposures being hedged. We conducted a sensitivity analysis on the fair value of our foreign currency hedge
portfolio assuming an instantaneous 10% change in select foreign currency exchange rates from their levels as of December 31,
2024, with all other variables held constant. A 10% appreciation of the U.S. Dollar against foreign currencies that we hedge
would result in an increase of approximately $102.9 million in the fair value of our foreign currency forward contracts. A 10%
depreciation of the U.S. Dollar against these foreign currencies would result in a decrease of approximately $103.0 million in
the fair value of our foreign currency forward contracts. The sensitivity of the fair value of our foreign currency hedge portfolio
represents changes in fair values estimated based on market conditions as of December 31, 2024, without reflecting the effects
of underlying anticipated transactions. When those anticipated transactions are realized, actual effects of changing foreign
currency exchange rates could have a material impact on our earnings and cash flows in future periods.
We are exposed to changes in interest rates that could impact our results of operations and financial condition. We
manage global interest rate and foreign exchange exposure as part of our regular operational and financing strategies. We had
variable interest rate borrowings of $27.5 million and $650.2 million outstanding at December 31, 2024 and 2023, respectively.
These borrowings represented 1% and 15% of total outstanding debt and bore average interest rates of 0.33% and 5.76% at
December 31, 2024 and 2023, respectively. A hypothetical 100 basis point increase in the average interest rate applicable to
these borrowings would change our annualized interest expense by approximately $0.3 million as of December 31, 2024. We
may enter into interest rate swaps, collars or similar instruments with the objective of reducing interest rate volatility relating to
our borrowing costs.
Albemarle Corporation and Subsidiaries
84
Our raw materials are subject to price volatility caused by weather, supply and demand conditions, political and economic
variables and other unpredictable factors. Historically, we have not used futures, options or swap contracts to manage the
volatility related to the above exposures. However, the refinery catalysts business has used financing arrangements to provide
long-term protection against changes in natural gas and metals prices. We seek to limit our exposure by entering into long-term
contracts when available, and we seek price increase limitations through contracts. These contracts do not have a significant
impact on our results of operations.
Albemarle Corporation and Subsidiaries
85
Item 8. Financial Statements and Supplementary Data.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with accounting principles generally accepted in the United States. Our internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally
accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with
management’s and our directors’ authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of
December 31, 2024. In making this assessment, management used the criteria for effective internal control over financial
reporting described in the Internal Control—Integrated Framework 2013 set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on the assessment, management concluded that, as of
December 31, 2024, our internal control over financial reporting was effective 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 in the United States. The concept of reasonable assurance is based on the recognition that there
are inherent limitations in all systems of internal control. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included
herein.
/S/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer
(principal executive officer)
February 12, 2025
Albemarle Corporation and Subsidiaries
86
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Albemarle Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Albemarle Corporation and its subsidiaries (the “Company”)
as of December 31, 2024 and 2023, and the related consolidated statements of (loss) income, of comprehensive (loss) income,
of changes in equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related
notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control
over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Albemarle Corporation and Subsidiaries
87
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Interim and Annual Goodwill Impairment Assessments – Energy Storage Reporting Unit
As described in Notes 1 and 10 to the consolidated financial statements, the Company’s goodwill balance was $1,582.7 million
as of December 31, 2024, and the goodwill associated with the Energy Storage reporting unit was $1,387.6 million.
Management tests the Company’s recorded goodwill for impairment in the fourth quarter of each year or upon the occurrence
of events or changes in circumstances that would more likely than not reduce the fair value of the Company’s reporting units
below their carrying amounts. During the third quarter of 2024, management identified a triggering event for a review for
impairment of the Company’s Energy Storage reporting unit goodwill. As a result, management tested the goodwill of the
Energy Storage reporting unit by comparing its estimated fair value, using a discounted cash flow model, to the related carrying
value. Management performed the annual goodwill impairment test as of October 31, 2024, by comparing the estimated fair
value of the reporting unit to the related carrying value, and management estimated the fair value using a discounted cash flow
model (income) approach. For the Energy Storage reporting unit, the revenue growth rates, adjusted earnings before interest and
financing expenses, income tax expense, and depreciation and amortization (“EBITDA”) margins, and the discount rate were
deemed by management to be significant assumptions.
The principal considerations for our determination that performing procedures relating to the interim and annual goodwill
impairment assessments of the Energy Storage reporting unit is a critical audit matter are (i) the significant judgment by
management when developing the fair value estimates of the Energy Storage reporting unit; (ii) a high degree of auditor
judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to
revenue growth rates, adjusted EBITDA margins, and the discount rate; and (iii) the audit effort involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessments, including controls over the valuation of the Energy Storage reporting unit.
These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the
Energy Storage reporting unit; (ii) evaluating the appropriateness of the income approach used by management; (iii) testing the
completeness and accuracy of underlying data used in the income approach; and (iv) evaluating the reasonableness of the
significant assumptions used by management related to revenue growth rates, adjusted EBITDA margins, and the discount rate.
Evaluating management’s assumptions related to revenue growth rates and adjusted EBITDA margins involved evaluating
whether the assumptions used by management were reasonable considering (i) the current and past performance of the Energy
Storage reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were
consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to
assist in evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the discount rate assumption.
Annual Goodwill Impairment Assessment – Refining Solutions Reporting Unit
As described in Notes 1 and 10 to the consolidated financial statements, the Company’s goodwill balance was $1,582.7 million
as of December 31, 2024, and the goodwill associated with the Refining Solutions reporting unit was $162.5 million.
Management tests the Company’s recorded goodwill for impairment in the fourth quarter of each year or upon the occurrence
of events or changes in circumstances that would more likely than not reduce the fair value of the Company’s reporting units
below their carrying amounts. Management performed the annual goodwill impairment test as of October 31, 2024, by
comparing the estimated fair value of the reporting unit to the related carrying value. Management estimated the fair value
using a combination of the discounted cash flow model (income) approach and earnings multiple (market) approach (placing
equal weighting on the income and market approaches). For the Refining Solutions reporting unit, within the Ketjen segment,
Albemarle Corporation and Subsidiaries
88
the revenue growth rates, adjusted EBITDA margins, EBITDA multiples, market participant acquisition premium, and the
discount rate were deemed by management to be significant assumptions.
The principal considerations for our determination that performing procedures relating to the annual goodwill impairment
assessment of the Refining Solutions reporting unit is a critical audit matter are (i) the significant judgment by management
when developing the fair value estimate of the Refining Solutions reporting unit; (ii) a high degree of auditor judgment,
subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue
growth rates, adjusted EBITDA margins, EBITDA multiples, market participant acquisition premium, and the discount rate;
and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessment, including controls over the valuation of the Refining Solutions reporting unit.
These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the
Refining Solutions reporting unit; (ii) evaluating the appropriateness of the income and market approaches used by
management; (iii) testing the completeness and accuracy of underlying data used in the income and market approaches; and (iv)
evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, adjusted
EBITDA margins, EBITDA multiples, market participant acquisition premium, and the discount rate. Evaluating management’s
assumptions related to revenue growth rates and adjusted EBITDA margins involved evaluating whether the assumptions used
by management were reasonable considering (i) the current and past performance of the Refining Solutions reporting unit; (ii)
the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence
obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the
appropriateness of the income and market approaches and (ii) the reasonableness of EBITDA multiples, market participant
acquisition premium, and the discount rate assumptions.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 12, 2025
We have served as the Company’s auditor since 1994.
Albemarle Corporation and Subsidiaries
89
(In Thousands, Except Per Share Amounts)
Year Ended December 31
2024
2023
2022
Net sales
$
5,377,526
$
9,617,203
$
7,320,104
Cost of goods sold(a)
5,314,987
8,431,294
4,245,517
Gross profit
62,539
1,185,909
3,074,587
Selling, general and administrative expenses
618,048
910,002
524,145
Restructuring charges and asset write-offs
1,134,316
9,491
—
Research and development expenses
86,720
85,725
71,981
(Gain) loss on change in interest in properties/sale of business, net
—
(71,190)
8,400
Operating (loss) profit
(1,776,545)
251,881
2,470,061
Interest and financing expenses
(165,619)
(116,072)
(122,973)
Other income, net
178,339
110,929
86,356
(Loss) income before income taxes and equity in net income of
unconsolidated investments
(1,763,825)
246,738
2,433,444
Income tax expense
87,085
430,277
390,588
(Loss) income before equity in net income of unconsolidated
investments
(1,850,910)
(183,539)
2,042,856
Equity in net income of unconsolidated investments (net of tax)
715,433
1,854,082
772,275
Net (loss) income
(1,135,477)
1,670,543
2,815,131
Net income attributable to noncontrolling interests
(43,972)
(97,067)
(125,315)
Net (loss) income attributable to Albemarle Corporation
(1,179,449)
1,573,476
2,689,816
Mandatory convertible preferred stock dividends
(136,647)
—
—
Net (loss) income attributable to Albemarle Corporation common
shareholders
$
(1,316,096)
$
1,573,476
$
2,689,816
Basic (loss) earnings per share attributable to common shareholders
$
(11.20)
$
13.41
$
22.97
Diluted (loss) earnings per share attributable to common
shareholders
$
(11.20)
$
13.36
$
22.84
Weighted-average common shares outstanding—basic
117,516
117,317
117,120
Weighted-average common shares outstanding—diluted
117,516
117,766
117,793
(a)
Included purchases from related unconsolidated affiliates of $1.7 billion, $2.3 billion and $656.7 million for the years ended
December 31, 2024, 2023 and 2022, respectively.
See accompanying notes to the consolidated financial statements.
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF (LOSS) INCOME
90
(In Thousands)
Year Ended December 31
2024
2023
2022
Net (loss) income
$
(1,135,477)
$
1,670,543
$
2,815,131
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other
(210,534)
26,403
(171,295)
Cash flow hedge
(2,935)
5,851
(4,399)
Interest rate swap
—
—
7,399
Total other comprehensive (loss) income, net of tax
(213,469)
32,254
(168,295)
Comprehensive (loss) income
(1,348,946)
1,702,797
2,646,836
Comprehensive income attributable to noncontrolling interests
(44,039)
(97,185)
(125,232)
Comprehensive (loss) income attributable to Albemarle Corporation
$
(1,392,985)
$
1,605,612
$
2,521,604
See accompanying notes to the consolidated financial statements.
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
91
(In Thousands)
December 31
2024
2023
Assets
Current assets:
Cash and cash equivalents
$ 1,192,230
$
889,900
Trade accounts receivable, less allowance for credit losses (2024—$5,201; 2023
—$2,808)
742,201
1,213,160
Other accounts receivable
238,384
509,097
Inventories
1,502,531
2,161,287
Other current assets
166,916
443,475
Total current assets
3,842,262
5,216,919
Property, plant and equipment, at cost
12,523,368
12,233,757
Less accumulated depreciation and amortization
3,191,898
2,738,553
Net property, plant and equipment
9,331,470
9,495,204
Investments
1,117,739
1,369,855
Other assets
504,711
297,087
Goodwill
1,582,714
1,629,729
Other intangibles, net of amortization
230,753
261,858
Total assets
$ 16,609,649
$ 18,270,652
Liabilities and Equity
Current liabilities:
Accounts payable to third parties
$
793,455
$ 1,537,859
Accounts payable to related parties
150,432
550,186
Accrued expenses
467,997
544,835
Current portion of long-term debt
398,023
625,761
Dividends payable
61,282
46,666
Income taxes payable
95,275
255,155
Total current liabilities
1,966,464
3,560,462
Long-term debt
3,118,142
3,541,002
Postretirement benefits
31,930
26,247
Pension benefits
116,192
150,312
Other noncurrent liabilities
819,204
769,100
Deferred income taxes
358,029
558,430
Commitments and contingencies (Note 15)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value (authorized 275,000 shares), issued and outstanding —
117,560 in 2024 and 117,356 in 2023
1,176
1,174
Mandatory convertible preferred stock, Series A, no par value, $1,000 stated value,
authorized - 15,000, issued and outstanding - 2,300 in 2024 and 0 in 2023
2,235,105
—
Additional paid-in capital
2,985,606
2,952,517
Accumulated other comprehensive loss
(742,062)
(528,526)
Retained earnings
5,481,692
6,987,015
Total Albemarle Corporation shareholders’ equity
9,961,517
9,412,180
Noncontrolling interests
238,171
252,919
Total equity
10,199,688
9,665,099
Total liabilities and equity
$ 16,609,649
$ 18,270,652
See accompanying notes to the consolidated financial statements.
Albemarle Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
92
(In Thousands, Except Share Data)
Common Stock
Mandatory
Convertible Preferred
Stock
Additional
Paid-in
Capital
Accumul
ated
Other
Compreh
ensive
Loss
Retained
Earnings
Total
Albemarle
Sharehold
ers’
Equity
Noncontr
olling
Interests
Total
Equity
Shares
Amount
s
Shares
Amounts
Balance at January 1,
2022
117,015,333 $ 1,170
—
$
—
$ 2,920,007
$ (392,450) $ 3,096,539
$ 5,625,266
$ 180,341
$ 5,805,607
Net income
2,689,816
2,689,816
125,315
2,815,131
Other comprehensive
loss
(168,212)
(168,212)
(83)
(168,295)
Common stock
dividends declared,
$1.58 per common
share
(185,078) (185,078) (97,353)
(282,431)
Stock-based
compensation
31,390
31,390
31,390
Exercise of stock
options
32,581
1
2,395
2,396
2,396
Issuance of common
stock, net
186,768
2
385
387
387
Shares withheld for
withholding taxes
associated with
common stock
issuances
(66,316)
(1)
(13,337)
(13,338)
(13,338)
Balance at
December 31, 2022
117,168,366 $ 1,172
—
$
—
$ 2,940,840
$ (560,662) $ 5,601,277
$ 7,982,627
$ 208,220
$ 8,190,847
Net income
1,573,476
1,573,476
97,067
1,670,543
Other comprehensive
income
32,136
32,136
118
32,254
Common stock
dividends declared,
$1.60 per common
share
(187,738) (187,738) (52,486)
(240,224)
Stock-based
compensation
38,957
38,957
38,957
Exercise of stock
options
3,124
—
190
190
190
Issuance of common
stock, net
298,781
3
(3)
—
—
Shares withheld for
withholding taxes
associated with
common stock
issuances
(114,001)
(1)
(27,467)
(27,468)
(27,468)
Balance at
December 31, 2023
117,356,270 $ 1,174
—
$
—
$ 2,952,517
$ (528,526) $ 6,987,015
$ 9,412,180
$ 252,919
$ 9,665,099
Net (loss) income
(1,179,449) (1,179,449)
43,972
(1,135,477)
Other comprehensive
(loss) income
(213,536)
(213,536)
67
(213,469)
Common stock
dividends declared,
$1.61 per common
share
(189,227) (189,227) (55,363)
(244,590)
Mandatory
convertible preferred
stock cumulative
dividends
(136,647) (136,647)
(136,647)
Stock-based
compensation
33,062
33,062
33,062
Exercise of stock
options
6,570
—
374
374
374
Issuance of common
stock, net
300,877
3
11,543
11,546
11,546
Issuance of
mandatory
convertible preferred
stock, net
2,300,000
2,235,105
2,235,105
2,235,105
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
93
Sale of
noncontrolling
interest
—
(3,424)
(3,424)
Shares withheld for
withholding taxes
associated with
common stock
issuances
(103,943)
(1)
(11,890)
(11,891)
(11,891)
Balance at
December 31, 2024
117,559,774 $ 1,176
2,300,000
$ 2,235,105 $ 2,985,606
$ (742,062) $ 5,481,692
$ 9,961,517
$ 238,171
$ 10,199,688
See accompanying notes to the consolidated financial statements.
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
94
(In Thousands)
Year Ended December 31
2024
2023
2022
Cash and cash equivalents at beginning of year
$
889,900
$ 1,499,142
$
439,272
Cash flows from operating activities:
Net (loss) income
(1,135,477)
1,670,543
2,815,131
Adjustments to reconcile net (loss) income to cash flows from operating activities:
Depreciation and amortization
588,638
429,944
300,841
Non-cash restructuring and asset write-offs
1,013,444
—
—
(Gain) loss on change in interest in properties/sale of business, net
—
(71,190)
8,400
Inventory net realizable value adjustment
(500,153)
604,099
—
Stock-based compensation and other
32,141
36,545
30,474
Equity in net income of unconsolidated investments (net of tax)
(715,433)
(1,854,082)
(772,275)
Dividends received from unconsolidated investments and nonmarketable securities
358,933
2,000,862
801,239
Pension and postretirement benefit
(5,274)
(1,658)
(52,254)
Pension and postretirement contributions
(19,379)
(17,866)
(16,112)
Realized loss on investments in marketable securities
33,746
—
—
Unrealized loss on investments in marketable securities
30,073
39,864
3,279
Loss on early extinguishment of debt
—
—
19,219
Deferred income taxes
(230,406)
100,877
93,339
Changes in current assets and liabilities, net of effects of acquisitions and divestitures:
Decrease (increase) in accounts receivable
555,218
(350,655)
(786,121)
Decrease (increase) in inventories
1,560,450
(962,924)
(1,609,642)
Decrease (increase) in other current assets
244,987
(171,870)
(104,655)
(Decrease) increase in accounts payable to third parties
(462,839)
(315,220)
816,194
(Decrease) increase in accounts payable to related parties
(399,398)
31,809
470,878
(Decrease) increase in accrued expenses and income taxes payable
(140,099)
253,518
(201,356)
Other, net
(107,104)
(97,275)
91,270
Net cash provided by operating activities
702,068
1,325,321
1,907,849
Cash flows from investing activities:
Acquisitions, net of cash acquired
—
(426,228)
(162,239)
Capital expenditures
(1,685,790)
(2,149,281)
(1,261,646)
Proceeds from sale of property and equipment
29,102
—
—
Sales (purchases) of marketable securities, net
82,520
(204,451)
1,942
Investments in equity investments and nonmarketable securities
(270)
(1,200)
(706)
Net cash used in investing activities
(1,574,438)
(2,781,160)
(1,422,649)
Cash flows from financing activities:
Proceeds from issuance of mandatory convertible preferred stock, net of issuance costs
2,236,750
—
—
Proceeds from borrowings of long-term debt and credit agreements
112,439
356,047
1,964,216
Repayments of long-term debt and credit agreements
(112,439)
(28,862)
(705,000)
Other (repayments) borrowings, net
(631,834)
617,014
(391,662)
Fees related to early extinguishment of debt
—
—
(9,767)
Dividends paid to common shareholders
(188,530)
(187,188)
(184,429)
Dividends paid to mandatory convertible preferred shareholders
(122,746)
—
—
Dividends paid to noncontrolling interests
(37,194)
(105,631)
(44,208)
Proceeds from exercise of stock options
374
190
2,783
Withholding taxes paid on stock-based compensation award distributions
(11,891)
(27,468)
(13,338)
Other
(3,194)
(191)
(6,708)
Net cash provided by financing activities
1,241,735
623,911
611,887
Net effect of foreign exchange on cash and cash equivalents
(67,035)
222,686
(37,217)
Increase (decrease) in cash and cash equivalents
302,330
(609,242)
1,059,870
Cash and cash equivalents at end of year
$ 1,192,230
$
889,900
$ 1,499,142
See accompanying notes to the consolidated financial statements.
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
95
NOTE 1—Summary of Significant Accounting Policies:
Basis of Consolidation
The consolidated financial statements include the accounts and operations of Albemarle Corporation and our wholly
owned, majority owned and controlled subsidiaries. Unless the context otherwise indicates, the terms “Albemarle,” “we,” “us,”
“our” or “the Company” mean Albemarle Corporation and its consolidated subsidiaries. For entities that we control and are the
primary beneficiary, but own less than 100%, we record the minority ownership as noncontrolling interest, except as noted
below. We apply the equity method of accounting for investments in which we have an ownership interest from 20% to 50% or
where we exercise significant influence over the related investee’s operations. In addition, the consolidated financial statements
contained herein include our proportionate share of the results of operations of the MARBL Lithium Joint Venture
(“MARBL”), which manages the exploration, development, mining, processing and production of lithium and other minerals
from the Wodgina hard rock lithium mine project (“Wodgina”). As described in Note 8, “Investments,” the Company closed on
the restructuring of the MARBL joint venture with Mineral Resources Limited (“MRL”) on October 18, 2023 to reduce our
ownership interest in the MARBL joint venture to 50% from 60%. The consolidated financial statements reflect our ownership
percentage of the MARBL joint venture during the periods presented. The joint venture is unincorporated with each investor
holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of
assets, liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements.
All significant intercompany accounts and transactions are eliminated in consolidation.
Cost of goods sold for the year ended December 31, 2024 includes income of $17.4 million for the correction of out of
period errors pertaining to an overstated accrual for a profit sharing arrangement with the partner of one of the Company’s joint
ventures. For the year ended December 31, 2023, Cost of goods sold was overstated by $17.4 million. The Company believes
this adjustment is not material to the consolidated financial statements for the prior period presented, or for the current periodd,
in which the correction was made.
Estimates, Assumptions and Reclassifications
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the
United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual
results could differ from those estimates.
Revenue Recognition
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods and is
recognized when performance obligations are satisfied under the terms of contracts with our customers. A performance
obligation is deemed to be satisfied when control of the product is transferred to our customer. The transaction price of a
contract, or the amount we expect to receive upon satisfaction of all performance obligations, is determined by reference to the
contract’s terms and includes adjustments, if applicable, for any variable consideration, such as customer rebates, noncash
consideration or consideration payable to the customer, although these adjustments are generally not material. Where a contract
contains more than one distinct performance obligation, the transaction price is allocated to each performance obligation based
on the standalone selling price of each performance obligation, although these situations are rare and are generally not built into
our contracts. Any unsatisfied performance obligations are not material. Standalone selling prices are based on prices we charge
to our customers, which in some cases are based on established market prices. Sales and other similar taxes collected from
customers on behalf of third parties are excluded from revenue. Our payment terms are generally between 30 to 90 days,
however, they vary by market factors, such as customer size, creditworthiness, geography and competitive environment.
All of our revenue is derived from contracts with customers, and almost all of our contracts with customers contain one
performance obligation for the transfer of goods where such performance obligation is satisfied at a point in time. Control of a
product is deemed to be transferred to the customer upon shipment or delivery. Significant portions of our sales are sold free on
board shipping point or on an equivalent basis, while delivery terms of other transactions are based upon specific contractual
arrangements. Our standard terms of delivery are generally included in our contracts of sale, order confirmation documents and
invoices, while the timing between shipment and delivery generally ranges between 1 and 45 days. Costs for shipping and
handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment
costs. Such costs are immaterial.
The Company currently utilizes the following practical expedients, as permitted by Accounting Standards Codification
(“ASC”) 606, Revenue from Contracts with Customers:
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
96
•
All sales and other pass-through taxes are excluded from contract value;
•
In utilizing the modified retrospective transition method, no adjustment was necessary for contracts that did not cross
over the reporting year;
•
We will not consider the possibility of a contract having a significant financing component (which would effectively
attribute a portion of the sales price to interest income) unless, if at contract inception, the expected payment terms
(from time of delivery or other relevant criterion) are more than one year;
•
If our right to customer payment is directly related to the value of our completed performance, we recognize revenue
consistent with the invoicing right; and
•
We expense as incurred all costs of obtaining a contract incremental to any costs/compensation attributable to
individual product sales/shipments for contracts where the amortization period for such costs would otherwise be one
year or less.
Costs incurred to obtain contracts with customers are not significant and are expensed immediately as the amortization
period would be one year or less. When the Company incurs pre-production or other fulfillment costs in connection with an
existing or specific anticipated contract and such costs are recoverable through margin or explicitly reimbursable, such costs are
capitalized and amortized to Cost of goods sold on a systematic basis that is consistent with the pattern of transfer to the
customer of the goods or services to which the asset relates, which is less than one year. We record bad debt expense in specific
situations when we determine the customer is unable to meet its financial obligation.
Included in Trade accounts receivable at December 31, 2024 and 2023 is approximately $705.8 million and $1.2 billion,
respectively, arising from contracts with customers. The remaining balance of Trade accounts receivable at December 31, 2024
and 2023 primarily includes value-added taxes collected from customers on behalf of various taxing authorities.
Cash and Cash Equivalents
Cash and cash equivalents include cash and money market investments with insignificant interest rate risks and no
limitations on access.
Inventories
Inventories are stated at lower of cost and net realizable value with cost determined using standard cost, which
approximates the first-in, first-out basis. Cost is determined on the weighted-average basis for a small portion of our inventories
at foreign plants and our stores, supplies and other inventory. A portion of our domestic produced finished goods and raw
materials are determined on the last-in, first-out basis.
The Company eliminates the balance of intra-entity profits on purchases of inventory from its equity method investments
that remains unsold at the balance sheet in Inventories, specifically finished goods and equally reduces Equity in net income of
unconsolidated investments (net of tax) on the consolidated statements of (loss) income. The intra-entity profit is recognized in
Equity in net income of unconsolidated investments (net of tax) in the period that converted inventory is sold to a third-party
customer. In the same period, the intra-entity profit is also recognized as higher Cost of goods sold on the consolidated
statements of (loss) income.
Property, Plant and Equipment
Property, plant and equipment include costs of assets constructed, purchased or leased under a finance lease, related
delivery and installation costs and interest incurred on significant capital projects during their construction periods.
Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs and maintenance are
expensed as incurred. Costs associated with yearly planned major maintenance are generally deferred and amortized over 12
months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated
depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are
included in income.
We assign the useful lives of our property, plant and equipment based upon our internal engineering estimates, which are
reviewed periodically. The estimated useful lives of our property, plant and equipment range from two to sixty years and
depreciation is recorded on the straight-line method, with the exception of our mineral rights and reserves, which are depleted
on a units-of-production method.
We evaluate the recovery of our property, plant and equipment annually and when events or changes in circumstances
indicate that its carrying amount may not be recoverable. Events that may trigger a test for recoverability include, but are not
limited to, significant adverse changes to projected revenues, costs, or capital plans or changes to government regulations that
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
97
may adversely impact our current or future operations. An impairment is determined to exist if the total projected future cash
flows on an undiscounted basis are not recoverable or are less than the carrying amount of a long-lived asset group. We
estimate future cash flows based on numerous assumptions, which are consistent or reasonable in relation to internal budgets
and projections, and actual future cash flows may be significantly different than the estimates. Significant estimates used
include, but are not limited to, market pricing (including lithium index pricing), customer demand, operating and production
costs, and the timing and capital costs of expansion and sustaining projects. Significant management judgment is involved in
estimating these variables and they include inherent uncertainties since they are forecasting future events.
Leases
We determine if an arrangement is a lease at inception. Right-of-use (“ROU”) assets represent our right to use an
underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments
over the lease term. As an implicit rate for most of our leases is not determinable, we use our incremental borrowing rate based
on the information available at commencement date in determining the present value of lease payments. The lease payments for
the initial measurement of lease ROU assets and lease liabilities include fixed and variable payments based on an index or a
rate. Variable lease payments that are not index or rate based are recorded as expenses when incurred. Our variable lease
payments typically include real estate taxes, insurance costs and common-area maintenance. The operating lease ROU asset
also includes any lease payments made, net of lease incentives. The lease term is the non-cancelable period of the lease,
including any options to extend, purchase or terminate the lease when it is reasonably certain that we will exercise that option.
We amortize the operating lease ROU assets on a straight-line basis over the period of the lease and the finance lease ROU
assets on a straight-line basis over the shorter of their estimated useful lives or the lease terms. Leases with an initial term of 12
months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis
over the lease term.
Additionally, we have made accounting policy elections such as exclusion of short-term leases (leases with a term of 12
months or less and which do not include a purchase option that we are reasonably certain to exercise) from the balance sheet
presentation, use of portfolio approach in determination of discount rate and accounting for non-lease components in a contract
as part of a single lease component for all asset classes, except specific mining operation equipment.
Resource Development Expenses
We incur costs in resource exploration, evaluation and development during the different phases of our resource
development projects. Exploration costs incurred before the declaration of proven and probable resources are generally
expensed as incurred. After proven and probable resources are declared, exploration, evaluation and development costs
necessary to bring the property to commercial capacity or increase the capacity or useful life are capitalized. Any costs to
maintain the production capacity in a property under production are expensed as incurred.
Capitalized resource costs are depleted using the units-of-production method. Our resource development assets are
evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
Investments
Investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise
significant influence, but not control, over the investee. Significant influence is generally deemed to exist if we have an
ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on
the investee’s board of directors and the impact of commercial arrangements, are considered in determining whether the equity
method of accounting is appropriate. Under the equity method of accounting, we record our investments in equity-method
investees in the consolidated balance sheets as Investments and our share of investees’ earnings or losses together with other-
than-temporary impairments in value as Equity in net income of unconsolidated investments in the consolidated statements of
(loss) income. We evaluate our equity method investments for impairment whenever events or changes in circumstances
indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method
investment is determined to be other than temporary, a loss is recorded in earnings in the current period.
Certain investments in equity securities and mutual fund investments are accounted for as trading equities and are
marked-to-market on a periodic basis through the consolidated statements of (loss) income. Investments in joint ventures and
nonmarketable securities of immaterial entities are estimated based upon the overall performance of the entity where financial
results are not available on a timely basis.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
98
Environmental Compliance and Remediation
Environmental compliance costs include the cost of purchasing and/or constructing assets to prevent, limit and/or control
pollution or to monitor the environmental status at various locations. These costs are capitalized and depreciated based on
estimated useful lives. Environmental compliance costs also include maintenance and operating costs with respect to pollution
prevention and control facilities and other administrative costs. Such operating costs are expensed as incurred. Environmental
remediation costs of facilities used in current operations are generally immaterial and are expensed as incurred. We accrue for
environmental remediation costs and post-remediation costs that relate to existing conditions caused by past operations at
facilities or off-plant disposal sites in the accounting period in which responsibility is established and when the related liability
is considered probable and estimable. In developing these cost estimates, we evaluate currently available facts regarding each
site, with consideration given to existing technology, presently enacted laws and regulations, prior experience in remediation of
contaminated sites, the financial capability of other potentially responsible parties and other factors, subject to uncertainties
inherent in the estimation process. If the amount and timing of the cash payments for a site are fixed or reliably determinable,
the liability is discounted, if the calculated discount is material. Additionally, these estimates are reviewed periodically, with
adjustments to the accruals recorded as necessary.
Research and Development Expenses
Our research and development expenses related to present and future products are expensed as incurred. These expenses
consist primarily of personnel-related costs and other overheads, as well as outside service and consulting costs incurred for
specific programs. Our U.S. facilities in Texas and Louisiana and our global facilities in the Netherlands, Germany, Belgium
and Korea form the capability base for our contract research and custom manufacturing businesses. These business areas
provide research and scale-up services primarily to innovative life science companies.
Goodwill and Other Intangible Assets
We account for goodwill and other intangibles acquired in a business combination in conformity with current accounting
guidance that requires that goodwill and indefinite-lived intangible assets not be amortized.
We test goodwill for impairment by comparing the estimated fair value of our reporting units to the related carrying
value. Our reporting units are either our operating business segments or one level below our operating business segments for
which discrete financial information is available and for which operating results are regularly reviewed by the business
management. In applying the goodwill impairment test, the Company initially performs a qualitative test (“Step 0”), where it
first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less
than its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market
considerations, cost factors, overall financial performance of the reporting units and other entity and reporting unit specific
events. If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value of the
reporting unit is less than the carrying value, the Company performs a quantitative test (“Step 1”). During Step 1, the Company
estimates the fair value using either a discounted cash flow model (income) approach or a combination of the discounted cash
flow model (income) approach and earnings multiple (market) approach (placing equal weighting on the income and market
approaches). The income approach determines fair value based on discounted cash flow model derived from a reporting unit’s
long-term forecasted cash flows. The market approach determines fair value based on the application of earnings multiples of
comparable companies to the projected earnings of the reporting unit. Future cash flows for all reporting units include
assumptions about revenue growth rates, adjusted EBITDA margins, discount rate as well as other economic or industry-related
factors. The Company defines adjusted EBITDA as earnings before interest and financing expenses, income tax expenses, the
proportionate share of Windfield income tax expense, depreciation and amortization, as adjusted on a consistent basis for
certain non-operating, non-recurring or unusual items on a segment basis. For the Refining Solutions reporting unit, within the
Ketjen segment, the revenue growth rates, adjusted EBITDA margins, EBITDA multiples, market participant acquisition
premium and the discount rate were deemed to be significant assumptions. For the Energy Storage reporting unit, the revenue
growth rates, adjusted EBITDA margins and the discount rate were deemed to be significant assumptions. Significant
management judgment is involved in estimating these variables and they include inherent uncertainties, particularly regarding
future market conditions and cost fluctuations. Any adverse changes in these assumptions, such as a decline in demand,
increased competition, rising costs or the imposition of new tariffs could negatively impact the fair value of the reporting units,
since they are forecasting future events. The Company uses a Weighted Average Cost of Capital (“WACC”) approach to
determine our discount rate for goodwill recoverability testing. The WACC calculation incorporates industry-weighted average
returns on debt and equity from a market perspective. The factors in this calculation are largely external to the Company and,
therefore, are beyond its control. The Company performs a sensitivity analysis by using a range of inputs to confirm the
reasonableness of these estimates being used in the goodwill impairment analysis. The Company tests its recorded goodwill for
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
99
impairment in the fourth quarter of each year or upon the occurrence of events or changes in circumstances that would more
likely than not reduce the fair value of its reporting units below their carrying amounts.
In July 2024, the Company made the decision to stop construction of Kemerton conversion plant Train 3 and put
Kemerton Train 2 into care and maintenance. See Note 17, “Restructuring Charges and Asset Write-offs,” for further details.
The Company determined these actions to be a triggering event for a review for impairment of its Energy Storage reporting unit
goodwill. As a result, during the third quarter of 2024, the Company tested the goodwill of the Energy Storage reporting unit by
comparing its estimated fair value, using a discounted cash flow model, to the related carrying value. Based on the analysis, the
Energy Storage reporting unit had sufficient headroom, which is defined as the percentage difference between the fair value of a
reporting unit and its carrying value, that reasonable differences in the significant assumptions used would not impact the
conclusion. Consequently, the Company concluded that the Energy Storage estimated fair value exceeded its carrying value,
thus no impairment was recorded in the third quarter of 2024.
The Company performed its annual goodwill impairment test as of October 31, 2024. No evidence of impairment was
noted for the reporting units with goodwill balances from the analysis. In addition, there were no triggering events subsequent
to the annual goodwill impairment test for any of the reporting units. However, if the adjusted EBITDA or discount rate
estimates for the Refining Solutions reporting unit negatively changed by 10% (absent any other changes), the Refining
Solutions fair value would be below its carrying value. Potential events and changes in circumstances that could reasonably be
expected to negatively affect the key assumptions include reductions in demand in oilfield markets, inability to implement
effective pricing actions to offset cost increases, changes in macroeconomic conditions and the introduction or escalation of
tariffs on imported materials. The Company will continue to monitor these factors closely and assess their impact on its
goodwill impairment evaluations in future periods.
The Company assesses its indefinite-lived intangible assets, which include trade names and trademarks, for impairment
annually and between annual tests if events or changes in circumstances indicate that it is more likely than not that the asset is
impaired. The indefinite-lived intangible asset impairment standard allows the Company to first assess qualitative factors to
determine if a quantitative impairment test is necessary. Further testing is only required if we determine, based on the
qualitative assessment, that it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying
amount. If we determine based on the qualitative assessment that it is more likely than not that the asset is impaired, an
impairment test is performed by comparing the fair value of the indefinite-lived intangible asset to its carrying amount. During
the year ended December 31, 2024, no evidence of impairment was noted from the analysis for the Company’s indefinite-lived
intangible assets.
Definite-lived intangible assets, such as purchased technology, patents and customer lists, are amortized over their
estimated useful lives generally for periods ranging from five to twenty-five years. Except for customer lists and relationships
associated with the majority of our Energy Storage business, which are amortized using the pattern of economic benefit method,
definite-lived intangible assets are amortized using the straight-line method. We evaluate the recovery of our definite-lived
intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be
generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its
carrying amount may not be recoverable. If the carrying amount of the asset group is not recoverable, the fair value of the asset
group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized. See Note 10, “Goodwill
and Other Intangibles.”
Pension Plans and Other Postretirement Benefits
Under authoritative accounting standards, assumptions are made regarding the valuation of benefit obligations and the
performance of plan assets. As required, we recognize a balance sheet asset or liability for each of our pension and other
postretirement benefit (“OPEB”) plans equal to the plan’s funded status as of the measurement date. The primary assumptions
are as follows:
•
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
100
Actuarial gains and losses are recognized annually in our consolidated statements of (loss) income in the fourth quarter
and whenever a plan is determined to qualify for a remeasurement during a fiscal year. The remaining components of pension
and OPEB plan expense, primarily service cost, interest cost and expected return on assets, are recorded on a monthly basis.
The market-related value of assets equals the actual market value as of the date of measurement.
During 2024, we made changes to assumptions related to discount rates and expected rates of return on plan assets. We
consider available information that we deem relevant when selecting each of these assumptions.
In selecting the discount rates for the U.S. plans, we consider expected benefit payments on a plan-by-plan basis. As a
result, the Company uses different discount rates for each plan depending on the demographics of participants and the expected
timing of benefit payments. For 2024, the discount rates were calculated using the results from a bond matching technique
developed by Milliman, which matched the future estimated annual benefit payments of each respective plan against a portfolio
of bonds of high quality to determine the discount rate. We believe our selected discount rates are determined using preferred
methodology under authoritative accounting guidance and accurately reflect market conditions as of the December 31, 2024
measurement date.
In selecting the discount rates for the foreign plans, we look at long-term yields on AA-rated corporate bonds when
available. Our actuaries have developed yield curves based on the yields on the constituent bonds in the various indices as well
as on other market indicators such as swap rates, particularly at the longer durations. For the Eurozone, we apply the Aon
Hewitt yield curve to projected cash flows from the relevant plans to derive the discount rate. For the United Kingdom
(“U.K.”), the discount rate is determined by applying the Aon Hewitt yield curve for typical schemes of similar duration to
projected cash flows of Albemarle’s U.K. plan. In other countries where there is not a sufficiently deep market of high-quality
corporate bonds, we set the discount rate by referencing the yield on government bonds of an appropriate duration.
In estimating the expected return on plan assets, we consider past performance and future expectations for the types of
investments held by the plan as well as the expected long-term allocation of plan assets to these investments. In projecting the
rate of compensation increase, we consider past experience in light of movements in inflation rates.
For the purpose of measuring our U.S. pension and OPEB obligations at December 31, 2024 and 2023, we used the
Pri-2012 Mortality Tables along with the MP-2021 Mortality Improvement Scale, respectively, published by the SOA.
Stock-based Compensation Expense
The fair value of restricted stock awards, restricted stock unit awards and performance unit awards with a service
condition are determined based on the number of shares or units granted and the quoted price of our common stock on the date
of grant, and the fair value of stock options is determined using the Black-Scholes valuation model. The fair value of
performance unit awards with a service condition and a market condition are estimated on the date of grant using a Monte Carlo
simulation model. The fair value of these awards is determined after giving effect to estimated forfeitures. Such value is
recognized as expense over the service period, which is generally the vesting period of the equity grant. To the extent restricted
stock awards, restricted stock unit awards, performance unit awards and stock options are forfeited prior to vesting in excess of
the estimated forfeiture rate, the corresponding previously recognized expense is reversed as an offset to operating expenses.
Income Taxes
We use the liability method for determining our income taxes, under which current and deferred tax liabilities and assets
are recorded in accordance with enacted tax laws and rates. Under this method, the amounts of deferred tax liabilities and assets
at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered.
Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. The Company’s deferred
tax assets and liabilities are classified as noncurrent on the balance sheet, along with any related valuation allowance. Tax
effects are released from Accumulated other comprehensive loss using either the specific identification approach or the
portfolio approach based on the nature of the underlying item.
Deferred income taxes are provided for the estimated income tax effect of temporary differences between the financial
statement carrying amounts and the tax basis of existing assets and liabilities. Deferred tax assets are also provided for
operating losses, capital losses and certain tax credit carryovers. A valuation allowance, reducing deferred tax assets, is
established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization
of such deferred tax assets is dependent upon the generation of sufficient future taxable income of the appropriate character.
Although realization is not assured, we do not establish a valuation allowance when we believe it is more likely than not that a
net deferred tax asset will be realized. The Company elected to not consider the estimated impact of potential future Corporate
Alternative Minimum Tax liabilities for purposes of assessing valuation allowances on its deferred tax balances.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
101
We only recognize a tax benefit after concluding that it is more likely than not that the benefit will be sustained upon
audit by the respective taxing authority based solely on the technical merits of the associated tax position. Once the recognition
threshold is met, we recognize a tax benefit measured as the largest amount of the tax benefit that, in our judgment, is greater
than 50% likely to be realized. Under current accounting guidance for uncertain tax positions, interest and penalties related to
income tax liabilities are included in Income tax expense on the consolidated statements of (loss) income.
We have designated the undistributed earnings of a portion of our foreign operations as indefinitely reinvested and as a
result we do not provide for deferred income taxes on the unremitted earnings of these subsidiaries. Our foreign earnings are
computed under U.S. federal tax earnings and profits, or E&P, principles. In general, to the extent our financial reporting book
basis over tax basis of a foreign subsidiary exceeds these E&P amounts, deferred taxes have not been provided as they are
essentially permanent in duration. The determination of the amount of such unrecognized deferred tax liability is not
practicable. We provide for deferred income taxes on our undistributed earnings of foreign operations that are not deemed to be
indefinitely invested. We will continue to evaluate our permanent investment assertion taking into consideration all relevant and
current tax laws.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss comprises principally foreign currency translation adjustments, gains or losses on
foreign currency cash flow hedges designated as effective hedging instruments and deferred income taxes related to the
aforementioned items.
Foreign Currency Translation
The assets and liabilities of all foreign subsidiaries were prepared in their respective functional currencies and translated
into U.S. Dollars based on the current exchange rate in effect at the balance sheet dates, while income and expenses were
translated at average exchange rates for the periods presented. Translation adjustments are reflected as a separate component of
equity.
Foreign exchange transaction and revaluation gains (losses) were $67.5 million, $39.9 million and ($21.8) million for the
years ended December 31, 2024, 2023 and 2022, respectively, and are included in Other income, net, in our consolidated
statements of (loss) income, with the unrealized portion included in Other, net, in our consolidated statements of cash flows.
Derivative Financial Instruments
We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies
and through the use of foreign currency forward contracts from time to time, which generally expire within one year. The
principal objective of such contracts is to minimize the financial impact of changes in foreign currency exchange rates. While
these contracts are subject to fluctuations in value, such fluctuations are generally expected to be offset by changes in the value
of the underlying foreign currency exposures being hedged. Gains or losses under foreign currency forward contracts that have
been designated as an effective hedging instrument under ASC 815, Derivatives and Hedging will be recorded in Accumulated
other comprehensive loss beginning on the date of designation. All other gains and losses on foreign currency forward contracts
not designated as an effective hedging instrument are recognized currently in Other income, net, and generally do not have a
significant impact on results of operations.
We may also enter into interest rate swaps, collars or similar instruments from time to time, with the objective of
reducing interest rate volatility relating to our borrowing costs.
The counterparties to these contractual agreements are major financial institutions with which we generally have other
financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do
not anticipate nonperformance by the counterparties. We do not utilize financial instruments for trading or other speculative
purposes. In the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of
non-functional currency purchases during the construction of the Kemerton plant in Australia and designated it as an effective
hedging instrument under ASC 815, Derivatives and Hedging. As a result of the actions taken at Kemerton Trains 3 and 4
during 2024, the Company dedesignated the remaining hedged foreign currency forward contracts. The Company recorded a
loss in Other income, net of $26.1 million during the year ended December 31, 2024 from the reclassification of the hedged
balance from Accumulated other comprehensive loss. The balance of the settled hedged foreign currency forward contracts
associated with the construction of Kemerton Trains 1 and 2 assets placed into service will be reclassified to earnings over the
life of the related assets. All other foreign currency forward contracts outstanding at December 31, 2024 and 2023 have not
been designated as hedging instruments under ASC 815, Derivatives and Hedging.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
102
Recently Issued or Adopted Accounting Pronouncements
In August 2023, the FASB issued guidance which will require a joint venture to recognize and initially measure its assets,
including goodwill, and liabilities using a new basis of accounting upon formation. Initial measurement of a joint venture’s total
net assets will be equal to the fair value of one hundred percent of the joint venture’s equity. In addition, a joint venture will be
permitted to apply the measurement period guidance of ASC 805-10 if the initial accounting for the joint venture formation is
incomplete by the end of the reporting period in which the formation occurs. This guidance is effective prospectively for all
joint venture formations with a formation date on or after January 1, 2025. The Company currently does not expect this
guidance to have a significant impact on its consolidated financial statements.
In November 2023, the FASB issued guidance to update qualitative and quantitative reportable segment disclosure
requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure
requirements, among others. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods
within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied
retrospectively. The Company has adopted this guidance and provided the required disclosures in this Annual Report on Form
10-K. See Note 25, “Segment and Geographic Area Information,” for further details.
In December 2023, the FASB issued guidance to require qualitative and quantitative updates to the rate reconciliation and
income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including
consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of
income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
The amendments should be applied prospectively; however, retrospective application is also permitted. The Company is
currently evaluating the impact this guidance will have on its financial statement disclosures.
In November 2024, the FASB issued guidance to require tabular disclosures disaggregating certain types of expenses
presented on the income statement within continuing operations, as well as disclosures about selling expenses. This guidance is
effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December
15, 2027. Early adoption is permitted, and the amendments should be applied prospectively; however, retrospective application
is also permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
NOTE 2—Acquisitions:
Guangxi Tianyuan New Energy Materials Acquisition
On October 25, 2022, the Company completed the acquisition of all of the outstanding equity of Guangxi Tianyuan New
Energy Materials Co., Ltd. (“Qinzhou”), for approximately $200 million in cash, which included the deferral of approximately
$29 million. The full amount of the deferral, net of working capital adjustments, was paid in installments ending in July 2023.
Qinzhou's operations include a lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi, which
began commercial production in the first half of 2022. The plant has designed annual conversion capacity of up to 25,000
metric tonnes of lithium carbonate equivalent (“LCE”) and is capable of producing battery-grade lithium carbonate and lithium
hydroxide.
The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based
upon their estimated fair values at the acquisition closing date, which were based, in part, upon third-party appraisals for certain
assets. The fair value of the assets and liabilities was primarily related to Property, plant and equipment of $106.6 million,
Other intangibles of $16.3 million, net current liabilities of $5.5 million, and long-term liabilities of $7.1 million. The excess of
the purchase price over the fair value of the net assets acquired was $76.8 million and was recorded as Goodwill within the
Energy Storage reporting unit.
The allocation of the purchase price was finalized in the third quarter of 2023. The fair value of the assets acquired and
liabilities assumed was based on management’s estimates and assumptions, as well as other information compiled by
management, including valuations that utilize customary valuation procedures and techniques. The discount rate is a significant
assumption used in the valuation model. If the actual results differ from the estimates and judgments used in these fair values,
the amounts recorded in the consolidated financial statements could be subject to possible impairment.
Goodwill arising from the acquisition was recorded within the Energy Storage segment and consists largely of anticipated
synergies and economies of scale from the combined companies and overall strategic importance of the acquired businesses to
Albemarle. The goodwill attributable to the acquisition is not amortizable or deductible for tax purposes.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
103
Acquisition, integration and potential divestiture related costs
Acquisition, integration and potential divestiture related costs for the years ended December 31, 2024, 2023 and 2022 of
$6.2 million, $26.8 million and $16.3 million were included in Selling, general and administrative expenses, respectively, on
our consolidated statements of (loss) income. These include costs for the Qinzhou acquisitions noted above, as well as various
other completed or potential acquisitions and divestitures.
NOTE 3—Supplemental Cash Flow Information:
Supplemental information related to the consolidated statements of cash flows is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Cash paid during the year for:
Income taxes (net of refunds of $67,132, $31,386 and $11,564 in 2024,
2023 and 2022, respectively)
$
262,845
$
319,391
$
248,143
Interest (net of capitalization)
$
150,689
$
101,978
$
92,095
Supplemental non-cash disclosures related to investing and financing
activities:
Capital expenditures included in Accounts payable
$
197,951
$
494,029
$
296,294
Promissory note issued for capital expenditures(a)
$
—
$
—
$
10,876
Common stock issued for annual incentive bonus plan(b)
$
11,545
$
—
$
—
(a)
During the first quarter of 2022, the Company issued a promissory note with a present value of $10.9 million for land purchased in
Kings Mountain, North Carolina. The promissory note is payable in equal annual installments from the years 2027 to 2048.
(b)
During the first quarter of 2024, the Company issued 95,003 shares of common stock to certain employees in lieu of cash as payment of
a portion of their 2023 annual incentive bonus plan.
As part of the purchase price paid for the acquisition of a 60% interest in Wodgina in 2019, the Company transferred
$17.3 million and $122.7 million of its construction in progress of the designated Kemerton assets during the years ended
December 31, 2023 and 2022, respectively, representing MRL’s 40% interest in the assets at the time of transfer. Since the
acquisition, the Company has transferred the full $480 million of construction in progress to MRL, as defined in the original
purchase agreement. In addition, during the year ended December 31, 2022, the Company recorded expenses of $8.4 million
related to cost overruns of the designated Kemerton assets. The cash outflow for these assets was recorded in Capital
expenditures within Cash flows from investing activities on the consolidated statements of cash flows. The non-cash transfer of
these assets is recorded in Other, net within Cash flows from operating activities on the consolidated statements of cash flows.
Other, net within Cash flows from operating activities on the consolidated statements of cash flows for the years ended
December 31, 2024, 2023 and 2022 included $82.7 million, $64.4 million and $41.8 million, respectively, representing the
reclassification of the current portion of the one-time transition tax resulting from the enactment of the Tax Cuts and Jobs Act
(“TCJA”) in 2017, from Other noncurrent liabilities to Income taxes payable within current liabilities. For additional
information, see Note 20, “Income Taxes.” In addition, included in Other, net for the years ended December 31, 2024, 2023 and
2022 is $67.5 million, $39.9 million and ($21.8) million, respectively, related to gains (losses) on fluctuations in foreign
currency exchange rates.
NOTE 4—Other Accounts Receivable:
Other accounts receivable consist of the following at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Value added tax/consumption tax
$
213,138
$
474,280
Other
25,246
34,817
Total
$
238,384
$
509,097
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
104
NOTE 5—Inventories:
The following table provides a breakdown of inventories at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Finished goods
$
912,662
$
1,624,893
Raw materials and work in process(a)
429,080
401,050
Stores, supplies and other
160,789
135,344
Total(b)
$
1,502,531
$
2,161,287
(a)
Included $290.6 million and $213.4 million at December 31, 2024 and 2023, respectively, of work in process in our Energy Storage
segment.
(b)
As a result of the decline in lithium market pricing, the Company recorded charges in Cost of goods sold to reduce the value of certain
finished goods and spodumene to their net realizable value. The balance of these inventory reserves totaled $104.0 million and
$604.1 million at December 31, 2024 and 2023, respectively.
Approximately 3% of our inventories are valued using the last-in, first-out (“LIFO”) method at both December 31, 2024
and 2023. The portion of our domestic inventories stated on the LIFO basis amounted to $44.5 million and $60.4 million at
December 31, 2024 and 2023, respectively, which are below replacement cost by approximately $67.1 million and $60.1
million, respectively.
The Company eliminates the balance of intra-entity profits on purchases of inventory from its equity method investments
that remains unsold at the balance sheet in Inventories, specifically finished goods and equally reduces Equity in net income of
unconsolidated investments (net of tax) on the consolidated statements of (loss) income. The balance of intra-entity profits on
inventory purchased from equity method investments in Inventories totaled $66.8 million and $559.6 million at December 31,
2024 and 2023, respectively. The intra-entity profit is recognized in Equity in net income of unconsolidated investments (net of
tax) in the period that converted inventory is sold to a third-party customer. In the same period, the intra-entity profit is also
recognized as higher Cost of goods sold on the consolidated statements of (loss) income.
NOTE 6—Other Current Assets:
Other current assets consist of the following at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Income tax receivables
$
84,975
$
112,953
Prepaid taxes
217
207,894
Other prepaid expenses
76,974
116,033
Other
4,750
6,595
Total
$
166,916
$
443,475
NOTE 7—Property, Plant and Equipment:
Property, plant and equipment, at cost, consist of the following at December 31, 2024 and 2023 (in thousands):
Useful
Lives
(Years)
December 31,
2024
2023
Land
—
$
295,176
$
297,435
Land improvements
10 – 30
342,213
316,544
Buildings and improvements
10 – 50
933,188
699,045
Machinery and equipment(a)
2 – 45
8,187,422
6,173,463
Mineral rights and reserves
7 – 60
1,755,770
1,689,013
Construction in progress
—
1,009,599
3,058,257
Total
$ 12,523,368
$ 12,233,757
(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
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
105
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.
The cost of property, plant and equipment is depreciated generally by the straight-line method. Depletion of mineral
rights is based on the units-of-production method. Depreciation expense, including depletion, amounted to $561.4 million,
$398.5 million and $273.0 million during the years ended December 31, 2024, 2023 and 2022, respectively. Interest capitalized
on significant capital projects in 2024, 2023 and 2022 was $49.0 million, $72.7 million and $31.1 million, respectively.
In 2022, the Company announced it has been awarded a nearly $150 million grant from the U.S. Department of Energy to
expand domestic manufacturing of batteries for EVs and the electric grid and for materials and components currently imported
from other countries. The grant funding is intended to support a portion of the anticipated cost to construct a new, commercial-
scale U.S.-based lithium concentrator facility at our Kings Mountain, North Carolina location. The grant will be received over
the life of the construction period for the new facility (projected through 2028) as reimbursement for capital expenditures. To
further support the restart of the Kings Mountain mine, in 2023, we announced a $90 million critical materials award from the
U.S. Department of Defense. As funds are received for both of these grants, the Company will reduce the cost of the assets by
the amount of the grant, and income will be recognized by the lower depreciation expense over the useful life of the assets.
During the year ended December 31, 2024, the Company received $12.4 million of these funds, which reduced the cost of
Property, plant and equipment on the balance sheet.
NOTE 8—Investments:
Investments include our share of unconsolidated joint ventures, nonmarketable securities and marketable equity
securities. The following table details the Company’s investment balances at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Joint ventures
$
726,594
$
855,131
Available for sale debt securities
313,991
289,307
Nonmarketable securities
16,528
18,389
Marketable equity securities
60,626
207,028
Total
$
1,117,739
$
1,369,855
Unconsolidated Joint Ventures
The Company’s ownership positions in significant unconsolidated investments are shown below:
December 31,
2024
2023
2022
*
Windfield Holdings Pty. Ltd. (“Windfield”) - a joint venture with Sichuan Tianqi Lithium
Industries, Inc., that mines lithium ore and produces lithium concentrate
49 %
49 %
49 %
*
Nippon Aluminum Alkyls - a joint venture with Mitsui Chemicals, Inc. that produces aluminum
alkyls
50 %
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 Axens Group 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 %
The following table details the Company’s equity in net income of unconsolidated investments (net of tax) for the years
ended December 31, 2024, 2023 and 2022 (in thousands):
Year Ended December 31,
2024
2023
2022
Windfield
$
692,965
$
1,833,589
$
750,378
Other joint ventures
22,468
20,493
21,897
Total
$
715,433
$
1,854,082
$
772,275
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
106
Our investment in the significant unconsolidated joint ventures above amounted to $712.2 million and $841.5 million as
of December 31, 2024 and 2023, respectively. Undistributed earnings attributable to our significant unconsolidated investments
represented approximately $464.6 million and $97.3 million of our consolidated retained earnings at December 31, 2024 and
2023, respectively. All of the unconsolidated joint ventures in which we have investments are private companies and,
accordingly, do not have a quoted market price available.
The following summary lists the assets, liabilities and results of operations for the Company’s significant unconsolidated
joint ventures presented herein (in thousands):
December 31,
2024
2023
Summary of Balance Sheet Information:
Current assets
$
968,453
$
1,424,059
Noncurrent assets
2,707,216
2,321,261
Total assets
$
3,675,669
$
3,745,320
Current liabilities
$
390,522
$
773,931
Noncurrent liabilities
1,727,181
1,267,271
Total liabilities
$
2,117,703
$
2,041,202
Year Ended December 31,
2024
2023
2022
Summary of Statements of Income Information:
Net sales
$
1,810,801
$
7,019,117
$
4,290,223
Gross profit
$
1,047,714
$
6,373,472
$
3,765,304
Income before income taxes
$
695,932
$
5,988,737
$
3,301,875
Net income
$
485,392
$
4,224,961
$
2,314,094
We have evaluated each of the unconsolidated investments pursuant to current accounting guidance and none qualify for
consolidation. Dividends received from our significant unconsolidated investments were $346.8 million, $2.0 billion and
$800.9 million in 2024, 2023 and 2022, respectively.
The Company holds a 49% equity interest in Windfield, which we acquired in the Rockwood acquisition. With regards to
the Company’s ownership in Windfield, the parties share risks and benefits disproportionate to their voting interests. As a
result, the Company considers Windfield to be a variable interest entity (“VIE”). However, the Company does not consolidate
Windfield as it is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is within the
Energy Storage segment and the most significant VIE, was $583.6 million and $712.0 million at December 31, 2024 and 2023,
respectively. The Company’s unconsolidated VIEs are reported in Investments in the consolidated balance sheets. The
Company does not guarantee debt for, or have other financial support obligations to, these entities, and its maximum exposure
to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.
Proportionately Consolidated Joint Ventures
On October 18, 2023, the Company closed on the restructuring of the MARBL joint venture with MRL. This updated
structure is intended to significantly simplify the commercial operation agreements previously entered into, allowed us to retain
full control of downstream conversion assets and provide greater strategic opportunities for each company based on their global
operations and the evolving lithium market.
Under the amended agreements, Albemarle acquired the remaining 40% ownership of the Kemerton lithium hydroxide
processing facility in Australia that was jointly owned with MRL through the MARBL joint venture, bringing Albemarle’s
ownership in the processing facility to 100%. Following this restructuring, Albemarle and MRL each own 50% of Wodgina,
and MRL operates the Wodgina mine on behalf of the joint venture. During the fourth quarter of 2023, Albemarle paid MRL
approximately $380 million in cash, which included $180 million of consideration for the remaining ownership of Kemerton as
well as a payment for the economic effective date of the transaction being retroactive to April 1, 2022.
As a result of this transaction, the Company recorded a gain of $71.2 million on the consolidated statement of (loss)
income during the fourth quarter of 2023. The fair value of the 40% ownership of the Kemerton lithium hydroxide processing
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
107
facility was based on management’s estimates and assumptions, as well as other information compiled by management,
including valuations that utilize customary valuation procedures and techniques. If the actual results differ from the estimates
and judgments used in these fair values, the amounts recorded in the consolidated financial statements could be subject to
possible impairment.
This joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately
liable for each liability; therefore, our proportionate share of assets, liabilities, revenue and expenses are included in the
appropriate classifications in the consolidated financial statements.
Public Equity Securities
Included in the Company’s marketable equity securities balance are holdings in equity securities of public companies.
The fair value is measured using publicly available share prices of the investments, with any changes reported in Other income,
net in our consolidated statements of (loss) income. During the year ended December 31, 2023, the Company purchased
approximately $203.4 million of shares in publicly-traded companies. In addition, during the years ended December 31, 2024,
2023 and 2022, the Company recorded unrealized mark-to-market (losses) gains of ($37.0) million, ($41.4) million and $4.3
million, respectively, in Other income, net for all public equity securities held at the end of the balance sheet date.
In January 2024, the Company sold equity securities of a public company for proceeds of approximately $81.5 million.
As a result of the sale, the Company realized a loss of $33.7 million in the year ended December 31, 2024.
Other
The Company holds a 50% equity interest in Jordan Bromine Company Limited (“JBC”), reported in the Specialties
segment. The Company consolidates this venture as it is considered the primary beneficiary due to its operational and financial
control.
As part of the proceeds from the sale of the fine chemistry services (“FCS”) business on June 1, 2021, W.R. Grace & Co.
(“Grace”) issued Albemarle preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The
preferred equity can be redeemed at Grace’s option under certain conditions and began accruing payment-in-kind (“PIK”)
dividends at an annual rate of 12% on June 1, 2023. In addition, the preferred equity can be redeemed by Albemarle when the
accumulated balance reaches 200% of the original value. This preferred equity had a fair value of $314.0 million and
$289.3 million at December 31, 2024 and 2023, respectively, which is reported in Investments in the consolidated balance
sheets.
We maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the
obligations of our Executive Deferred Compensation Plan (“EDCP”), subject to the claims of our creditors in the event of our
insolvency. Assets of the Trust, in conjunction with our EDCP, are accounted for as trading securities in accordance with
authoritative accounting guidance. The assets of the Trust consist primarily of mutual fund investments and are marked-to-
market on a monthly basis through the consolidated statements of (loss) income. At December 31, 2024 and 2023, these
marketable securities amounted to $38.2 million and $33.6 million, respectively.
NOTE 9—Other Assets:
Other assets consist of the following at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Value added tax/consumption tax
$
155,068
$
—
Deferred income taxes(a)
53,608
22,433
Assets related to unrecognized tax benefits(a)
74,809
73,009
Operating leases(b)
118,839
137,405
Capital expenditure incentive receivables(c)
74,506
14,264
Other
27,881
49,976
Total
$
504,711
$
297,087
(a)
See Note 1, “Summary of Significant Accounting Policies” and Note 20, “Income Taxes.”
(b)
See Note 18, “Leases.”
(c)
Bonds for incentive agreements with local government agencies that offset value with equal long-term liabilities. See Note 14, “Other
Noncurrent Liabilities,” for further details.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
108
NOTE 10—Goodwill and Other Intangibles:
The following table summarizes the changes in goodwill by reportable segment for the years ended December 31, 2024
and 2023 (in thousands):
Energy
Storage
Specialties
Ketjen
Total
Balance at December 31, 2022
$ 1,424,275
$
20,319
$
173,033
$ 1,617,627
Change in ownership interest(a)
(6,058)
—
—
(6,058)
Segment realignment(b)
(12,316)
12,316
—
—
Impairment loss(c)
—
—
(6,765)
(6,765)
Foreign currency translation adjustments and other
18,583
4
6,338
24,925
Balance at December 31, 2023(d)
1,424,484
32,639
172,606
1,629,729
Foreign currency translation adjustments
(36,893)
(62)
(10,060)
(47,015)
Balance at December 31, 2024(d)
$ 1,387,591
$
32,577
$
162,546
$ 1,582,714
(a) Represents the reduction of goodwill associated with the proportionately consolidated MARBL joint venture. On October 18, 2023, we
completed the restructuring of the MARBL joint venture, which reduced the Company’s ownership percentage from 60% to 50%. See
Note 8, “Investments,” for further details.
(b) Effective January 1, 2023, the Company realigned its Lithium and Bromine reportable segments into the Energy Storage and Specialties
reportable segments. As a result, the Company transferred goodwill from its legacy Lithium segment to the new Specialties reportable
segment during the year ended December 31, 2023.
(c) During the year ended December 31, 2023, the Company recorded an impairment loss for the remaining balance of its goodwill
associated with its PCS reporting unit within the Ketjen segment. See Note 1, “Summary of Significant Accounting Policies,” for further
details.
(d) Balance as of December 31, 2024 and 2023 includes an accumulated impairment loss of $6.8 million from the PCS reporting unit within
the Ketjen segment. As a result, the balance of Ketjen as of December 31, 2024 and 2023 fully consists of goodwill related to the
Refining Solutions reporting unit.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
109
Other intangibles consist of the following at December 31, 2024 and 2023 (in thousands):
Customer
Lists and
Relationships
Trade Names
and
Trademarks(a)
Patents and
Technology
Other
Total
Gross Asset Value
Balance at December 31, 2022
$
412,670 $
13,161 $
46,399 $
35,186 $
507,416
Foreign currency translation adjustments and
other
5,133
244
(112)
(537)
4,728
Balance at December 31, 2023
417,803
13,405
46,287
34,649
512,144
Retirements
—
(2,309)
(14,506)
(4,449)
(21,264)
Foreign currency translation adjustments and
other
(15,791)
(426)
484
(1,190)
(16,923)
Balance at December 31, 2024
$
402,012 $
10,670 $
32,265 $
29,010 $
473,957
Accumulated Amortization
Balance at December 31, 2022
$
(177,627) $
(3,587) $
(23,790) $
(14,542) $
(219,546)
Amortization
(24,510)
—
(2,563)
(953)
(28,026)
Foreign currency translation adjustments and
other
(2,344)
(86)
(405)
121
(2,714)
Balance at December 31, 2023
(204,481)
(3,673)
(26,758)
(15,374)
(250,286)
Amortization
(19,570)
—
(2,549)
(917)
(23,036)
Retirements
—
2,309
14,506
4,449
21,264
Foreign currency translation adjustments and
other
7,820
40
548
446
8,854
Balance at December 31, 2024
$
(216,231) $
(1,324) $
(14,253) $
(11,396) $
(243,204)
Net Book Value at December 31, 2023
$
213,322 $
9,732 $
19,529 $
19,275 $
261,858
Net Book Value at December 31, 2024
$
185,781 $
9,346 $
18,012 $
17,614 $
230,753
(a)
Net Book Value includes only indefinite-lived intangible assets.
Useful lives range from 13 – 25 years for customer lists and relationships; 8 – 20 years for patents and technology; and
primarily 5 – 25 years for other.
Amortization of other intangibles amounted to $23.0 million, $28.0 million and $24.7 million for the years ended
December 31, 2024, 2023 and 2022, respectively. Included in amortization for the years ended December 31, 2024, 2023 and
2022 is $16.1 million, $16.7 million and $17.2 million, respectively, of amortization using the pattern of economic benefit
method.
Total estimated amortization expense of other intangibles for the next five fiscal years is as follows (in thousands):
Estimated
Amortization
Expense
2025
$
23,554
2026
$
22,095
2027
$
20,499
2028
$
19,621
2029
$
18,091
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
110
NOTE 11—Accrued Expenses:
Accrued expenses consist of the following at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Employee benefits, payroll and related taxes
$
157,153
$
168,361
Other(a)(b)
310,844
376,474
Total
$
467,997
$
544,835
(a)
Other accrued expenses represent balances such as operating lease liabilities, environmental reserves, asset retirement obligations,
pension obligations, interest, utilities, other taxes, among other liabilities, expected to be paid within the next 12 months. No individual
component exceeds 5% of total current liabilities.
(b)
See Note 17, “Restructuring Charges and Asset Write-offs,” for details of the restructuring liability balance recorded in Accrued
liabilities.
NOTE 12—Long-Term Debt:
Long-term debt consisted of the following at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
1.125% notes due 2025
$
393,346
$
416,501
1.625% notes due 2028
521,500
552,200
3.45% Senior notes due 2029
171,612
171,612
4.65% Senior notes due 2027
650,000
650,000
5.05% Senior notes due 2032
600,000
600,000
5.45% Senior notes due 2044
350,000
350,000
5.65% Senior notes due 2052
450,000
450,000
Commercial paper notes
—
620,000
Interest-free loan
300,000
300,000
Variable-rate foreign bank loans
27,477
30,197
Finance lease obligations
118,796
110,245
Other
22,000
22,000
Unamortized discount and debt issuance costs
(88,566)
(105,992)
Total long-term debt
3,516,165
4,166,763
Less amounts due within one year
398,023
625,761
Long-term debt, less current portion
$
3,118,142
$
3,541,002
Aggregate annual maturities of long-term debt as of December 31, 2024 are as follows (in millions): 2025—$398.5; 2026
—$60.0; 2027—$710.0; 2028—$581.5; 2029—$231.6; thereafter—$1,623.1.
2022 Notes
On May 13, 2022, the Company issued a series of notes (collectively, the “2022 Notes”) as follows:
•
$650.0 million aggregate principal amount of senior notes, bearing interest at a rate of 4.65% payable semi-annually
on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior
notes is approximately 4.84%. These senior notes mature on June 1, 2027.
•
$600.0 million aggregate principal amount of senior notes, bearing interest at a rate of 5.05% payable semi-annually
on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior
notes is approximately 5.18%. These senior notes mature on June 1, 2032.
•
$450.0 million aggregate principal amount of senior notes, bearing interest at a rate of 5.65% payable semi-annually
on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior
notes is approximately 5.71%. These senior notes mature on June 1, 2052.
The net proceeds from the issuance of the 2022 Notes were used to repay the balance of the commercial paper notes, the
remaining balance of $425.0 million of the 4.15% Senior Notes due 2024 (the “2024 Notes”) and for general corporate
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
111
purposes. The 2024 Notes were originally due to mature on December 15, 2024 and bore interest at a rate of 4.15%. During the
year ended December 31, 2022, the Company recorded a loss on early extinguishment of debt of $19.2 million in Interest and
financing expenses, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs
from the redemption of the 2024 Notes. In addition, the loss on early extinguishment of debt includes the accelerated
amortization of the interest rate swap associated with the 2024 Notes from Accumulated other comprehensive loss.
2019 Notes
The Company has the following outstanding series of notes originally issued on November 25, 2019 (collectively, the
“2019 Notes”) as follows:
•
€377.1 million aggregate principal amount of notes, bearing interest at a rate of 1.125% payable annually on
November 25 of each year, beginning in 2020. The effective interest rate on these notes is approximately 1.30%.
These notes mature on November 25, 2025.
•
€500.0 million aggregate principal amount of notes, bearing interest at a rate of 1.625% payable annually on
November 25 of each year, beginning in 2020. The effective interest rate on these notes is approximately 1.74%.
These notes mature on November 25, 2028.
•
$171.6 million aggregate principal amount of senior notes, bearing interest at a rate of 3.45% payable semi-annually
on May 15 and November 15 of each year, beginning in 2020. The effective interest rate on these senior notes is
approximately 3.58%. These senior notes mature on November 15, 2029.
2014 Senior Notes
We currently have outstanding $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.
On January 22, 2014, we entered into a pay fixed, receive variable rate forward starting interest rate swap, with a notional
amount of $325.0 million, with J.P. Morgan Chase Bank, N.A., to be effective October 15, 2014. Our risk management
objective and strategy for undertaking this hedge was to eliminate the variability in the interest rate and partial credit spread on
the 20 future semi-annual coupon payments that were to be paid in connection with the 2024 Notes. On October 15, 2014, the
swap was settled, resulting in a payment to the counterparty of $33.4 million. This amount was recorded in Accumulated other
comprehensive loss and was to be amortized to interest expense over the life of the 2024 Notes. As noted above, the 2024 Notes
were repaid in the second quarter of 2022, and as a result, the unamortized balance of this interest rate swap was reclassified to
interest expense during the same period as part of the early extinguishment of debt.
Credit Agreements
Given economic conditions, specifically around the market pricing of lithium, and the related anticipated impact on the
Company’s future earnings, on October 31, 2024 the Company further amended its revolving, unsecured amended and restated
credit agreement dated October 28, 2022, as previously amended on February 9, 2024 (the “2022 Credit Agreement”), which
provides for borrowings of up to $1.5 billion and matures on October 28, 2027. Borrowings under the 2022 Credit Agreement
bear interest at variable rates based on a benchmark rate depending on the currency in which the loans are denominated, plus an
applicable margin which ranges from 0.910% to 1.375%, depending on the Company’s credit rating from Standard & Poor’s
Ratings Services LLC (“S&P”), Moody’s Investors Services, Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”). With respect
to loans denominated in U.S. dollars, interest is calculated using the term Secured Overnight Financing Rate (“SOFR”) plus a
term SOFR adjustment of 0.10%, plus the applicable margin. The applicable margin on the facility was 1.20% as of
December 31, 2024. There were no borrowings outstanding under the 2022 Credit Agreement as of December 31, 2024.
Borrowings under the 2022 Credit Agreement are conditioned upon satisfaction of certain customary conditions
precedent, including the absence of defaults. The October 2024 amendment was entered into to modify the financial covenants
under the 2022 Credit Agreement to avoid a potential covenant violation through June 2026 given the market pricing of lithium.
The amended 2022 Credit Agreement subjects the Company to two financial covenants, as well as customary affirmative and
negative covenants. The amended first financial covenant requires that the ratio of (a) (i) the Company’s consolidated net
funded debt plus a proportionate amount of Windfield’s net funded debt less (ii) the Company’s unrestricted cash and cash
equivalents plus a proportionate amount of Windfield’s unrestricted cash and cash equivalents (up to a specified amount) to (b)
consolidated Windfield-Adjusted EBITDA (as such terms are defined in the 2022 Credit Agreement) be less than or equal to:
(i) 4.00:1.0 as of the end of the fourth quarter of 2024, (ii) 4.75:1.0 as of the end of the first quarter of 2025, (iii) 5.75:1.0 as of
the end of the second quarter of 2025, (iv) 5.50:1.0 as of the end of the third quarter of 2025, (v) 5.00:1.0 as of the end of the
fourth quarter of 2025 (vi) 4.75:1.0 as of the end of the first and the second quarters of 2026, respectively and (vii) 3.50:1.0 as
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
112
of the end of the third quarter of 2026 and each fiscal quarter thereafter through the third quarter of 2027. The maximum
permitted leverage ratios described above are subject to adjustment in accordance with the terms of the 2022 Credit Agreement
upon the consummation of an acquisition after June 30, 2026 if the consideration includes cash proceeds from issuance of
funded debt in excess of $500 million.
The amended second financial covenant requires that, beginning as of the end of the fourth quarter of 2024, the ratio of
the Company’s consolidated EBITDA to consolidated interest charges (as such terms are defined in the 2022 Credit
Agreement) be no less than (i) 1.00:1.0 as of the end of each fiscal quarter through the second quarter of 2025, (ii) 2.00:1.0 as
of the end of the third quarter of 2025, (iii) 2.50:1.0 as of the end of the fourth quarter of 2025, and (iv) 3.00:1.0 as of the end of
each fiscal quarter thereafter. The 2022 Credit Agreement also contains customary default provisions, including defaults for
non-payment, breach of representations and warranties, insolvency, non-performance of covenants and cross-defaults to other
material indebtedness. The occurrence of an event of default under the 2022 Credit Agreement could result in all loans and
other obligations becoming immediately due and payable and the commitments under the 2022 Credit Agreement being
terminated. Following the $2.2 billion issuance of mandatory convertible preferred stock in March 2024 and the amendments to
the financial covenants, the Company expects to maintain compliance with the amended financial covenants for the next twelve
months. In addition to the amended covenants, the Company has introduced additional cost reduction plans to further reduce
operating expenses and capital investments, as discussed in Note 17, “Restructuring Charges and Asset Write-offs.”
No assurances can be given that any additional cost reduction strategies undertaken will be sufficient to meet the
amended financial covenants. Further, a significant and extended downturn in lithium market prices or demand could impact the
Company’s ability to maintain compliance with its amended financial covenants and it could require the Company to seek
additional amendments to the 2022 Credit Agreement and/or issue debt or equity securities to fund its activities and maintain
financial flexibility. If the Company were unable to obtain such necessary additional amendments, this could lead to an event of
default and its lenders could require the Company to repay its outstanding debt. In that situation, the Company may not be able
to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.
Commercial Paper Notes
On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under
which we may issue unsecured commercial paper notes (the “Commercial Paper Notes”) from time-to-time. On May 17, 2023,
we entered into definitive documentation to increase the size of our existing commercial paper program. The maximum
aggregate face amount of Commercial Paper Notes outstanding at any time is $1.5 billion. The proceeds from the issuance of
the Commercial Paper Notes are expected to be used for general corporate purposes, including the repayment of other debt of
the Company. The 2022 Credit Agreement is available to repay the Commercial Paper Notes, if necessary. Aggregate
borrowings outstanding under the 2022 Credit Agreement and the Commercial Paper Notes will not exceed the $1.5 billion
current maximum amount available under the 2022 Credit Agreement. The Commercial Paper Notes will be sold at a discount
from par, or alternatively, will be sold at par and bear interest at rates that will vary based upon market conditions at the time of
issuance. The maturities of the Commercial Paper Notes will vary but may not exceed 397 days. During the year ended
December 31, 2024, we repaid a net amount of $620.0 million of commercial paper notes using the net proceeds received from
the issuance of mandatory convertible preferred stock. See Note 16, “Equity,” for additional information.
Other
In the second quarter of 2023, the Company received a loan of $300.0 million to be repaid in five equal annual
installments beginning on December 31, 2026. This interest-free loan was discounted using an imputed interest rate of 5.53%
and the Company will amortize that discount through Interest and financing expenses over the term of the loan.
We have additional uncommitted credit lines with various U.S. and foreign financial institutions that provide for
borrowings of up to approximately $182.2 million at December 31, 2024. Outstanding borrowings under these agreements were
$27.5 million and $30.2 million at December 31, 2024 and 2023, respectively. The average interest rate on borrowings under
these agreements during 2024, 2023 and 2022 was approximately 0.3%.
At December 31, 2024 and 2023, we had the ability and intent to refinance our borrowings under our other existing credit
lines with borrowings under the 2022 Credit Agreement. Therefore, the amounts outstanding under those credit lines, if any, are
classified as long-term debt at December 31, 2024 and 2023. At December 31, 2024, we had the ability to borrow a total of $1.5
billion under our commercial paper program and the Credit Agreements.
We believe that as of December 31, 2024, we were, and currently are, in compliance with all of our debt covenants.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
113
NOTE 13—Pension Plans and Other Postretirement Benefits:
We maintain various noncontributory defined benefit pension plans covering certain employees, primarily in the U.S., the
U.K., Germany and Japan. We also have a contributory defined benefit plan covering certain Belgian employees. The benefits
for these plans are based primarily on compensation and/or years of service. Our U.S. and U.K. defined benefit plans for non-
represented employees are closed to new participants, with no additional benefits accruing under these plans as participants’
accrued benefits have been frozen. The funding policy for each plan complies with the requirements of relevant governmental
laws and regulations. The pension information for all periods presented includes amounts related to salaried and hourly plans.
The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of
significant assumptions, for our defined benefit pension plans (in thousands):
Year Ended December 31, 2024
Year Ended December 31, 2023
U.S. Pension
Plans
Foreign Pension
Plans
U.S. Pension
Plans
Foreign Pension
Plans
Change in benefit obligations:
Benefit obligation at January 1
$
512,902
$
195,918
$
514,971
$
180,561
Service cost
545
5,391
499
5,686
Interest cost
25,580
7,204
26,924
7,153
Actuarial (gain) loss
(11,604)
(7,034)
11,957
10,078
Benefits paid
(42,355)
(9,423)
(41,449)
(9,051)
Employee contributions
—
70
—
60
Foreign exchange (gain) loss
—
(7,920)
—
7,137
Settlements/curtailments
—
(6,197)
—
(5,606)
Other
—
(56)
—
(100)
Benefit obligation at December 31
$
485,068
$
177,953
$
512,902
$
195,918
Change in plan assets:
Fair value of plan assets at January 1
$
484,131
$
65,514
$
469,828
$
58,229
Actual return on plan assets
33,707
(1,317)
54,785
4,395
Employer contributions
1,911
15,498
967
14,496
Benefits paid
(42,355)
(9,423)
(41,449)
(9,051)
Employee contributions
—
70
—
60
Foreign exchange (loss) gain
—
(1,771)
—
3,091
Settlements/curtailments
—
(6,197)
—
(5,606)
Other
—
(56)
—
(100)
Fair value of plan assets at December 31
$
477,394
$
62,318
$
484,131
$
65,514
Funded status at December 31
$
(7,674)
$
(115,635)
$
(28,771)
$
(130,404)
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
114
December 31, 2024
December 31, 2023
U.S. Pension
Plans
Foreign Pension
Plans
U.S. Pension
Plans
Foreign Pension
Plans
Amounts recognized in consolidated balance
sheets:
Current liabilities (accrued expenses)
$
(928)
$
(6,189)
$
(912)
$
(7,951)
Noncurrent liabilities (pension benefits)
(6,746)
(109,446)
(27,859)
(122,453)
Net pension liability
$
(7,674)
$
(115,635)
$
(28,771)
$
(130,404)
Amounts recognized in accumulated other
comprehensive loss:
Prior service benefit
$
—
$
(441)
$
—
$
(531)
Net amount recognized
$
—
$
(441)
$
—
$
(531)
Weighted-average assumptions used to determine
benefit obligations at December 31:
Discount rate
5.65 %
4.04 %
5.21 %
3.73 %
Rate of compensation increase
— %
3.65 %
— %
3.67 %
The accumulated benefit obligation for all defined benefit pension plans was $655.9 million and $700.4 million at
December 31, 2024 and 2023, respectively.
Postretirement medical benefits and life insurance is provided for certain groups of U.S. retired employees. Medical and
life insurance benefit costs have been funded principally on a pay-as-you-go basis. Although the availability of medical
coverage after retirement varies for different groups of employees, the majority of employees who retire before becoming
eligible for Medicare can continue group coverage by paying a portion of the cost of a monthly premium designed to cover the
claims incurred by retired employees subject to a cap on payments allowed. The availability of group coverage for Medicare-
eligible retirees also varies by employee group with coverage designed either to supplement or coordinate with Medicare.
Retirees generally pay a portion of the cost of the coverage. Plan assets for retiree life insurance are held under an insurance
contract and are reserved for retiree life insurance benefits. In 2005, the postretirement medical benefit available to U.S.
employees was changed to provide that employees who are under age 50 as of December 31, 2005 would no longer be eligible
for a company-paid retiree medical premium subsidy. Employees who are of age 50 and above as of December 31, 2005 and
who retire after January 1, 2006 will have their retiree medical premium subsidy capped. Effective January 1, 2008, our medical
insurance for certain groups of U.S. retired employees is now insured through a medical carrier.
The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of
significant assumptions, for our postretirement benefit plans (in thousands):
Year Ended December 31,
2024
2023
Other
Postretirement
Benefits
Other
Postretirement
Benefits
Change in benefit obligations:
Benefit obligation at January 1
$
28,889
$
35,990
Service cost
46
47
Interest cost
1,441
1,873
Actuarial loss (gain)
6,072
(6,618)
Benefits paid
(1,970)
(2,403)
Benefit obligation at December 31
$
34,478
$
28,889
Change in plan assets:
Fair value of plan assets at January 1
$
—
$
—
Employer contributions
1,970
2,403
Benefits paid
(1,970)
(2,403)
Fair value of plan assets at December 31
$
—
$
—
Funded status at December 31
$
(34,478)
$
(28,889)
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
115
December 31,
2024
2023
Other
Postretirement
Benefits
Other
Postretirement
Benefits
Amounts recognized in consolidated balance sheets:
Current liabilities (accrued expenses)
$
(2,548)
$
(2,642)
Noncurrent liabilities (postretirement benefits)
(31,930)
(26,247)
Net postretirement liability
$
(34,478)
$
(28,889)
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate
5.67 %
5.21 %
Rate of compensation increase
3.50 %
— %
The components of pension benefits cost (credit) are as follows (in thousands):
Year Ended
Year Ended
Year Ended
December 31, 2024
December 31, 2023
December 31, 2022
U.S.
Pension
Plans
Foreign
Pension
Plans
U.S.
Pension
Plans
Foreign
Pension
Plans
U.S.
Pension
Plans
Foreign
Pension
Plans
Service cost
$
545
$ 5,391
$
499
$ 5,686
$
904
$ 3,700
Interest cost
25,580
7,204
26,924
7,153
18,827
3,363
Expected return on assets
(31,862)
(3,867)
(30,875)
(2,872)
(40,288)
(3,252)
Actuarial (gain) loss
(13,530)
(2,569)
(11,951)
8,593
(8,008)
(18,818)
Amortization of prior service benefit
—
79
—
81
—
89
Total net pension benefits (credit) cost
$ (19,267)
$ 6,238
$ (15,403)
$ 18,641
$ (28,565)
$ (14,918)
Weighted-average assumption
percentages:
Discount rate
5.21 %
3.73 %
5.46 %
4.04 %
2.86 %
1.44 %
Expected return on plan assets
6.88 %
5.95 %
6.88 %
4.86 %
6.89 %
3.85 %
Rate of compensation increase
— %
3.67 %
— %
3.67 %
— %
3.12 %
Effective January 1, 2025, the weighted-average expected rate of return on plan assets for the U.S. and foreign defined
benefit pension plans is 6.70% and 6.52%, respectively.
The components of postretirement benefits cost (credit) are as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Other
Postretirement
Benefits
Other
Postretirement
Benefits
Other
Postretirement
Benefits
Service cost
$
46
$
47
$
85
Interest cost
1,441
1,873
1,307
Actuarial loss (gain)
6,268
(6,816)
(10,163)
Total net postretirement benefits credit
$
7,755
$
(4,896)
$
(8,771)
Weighted-average assumption percentages:
Discount rate
5.21 %
5.45 %
2.85 %
All components of net benefit cost (credit), other than service cost, are included in Other income, net on the consolidated
statements of (loss) income.
The mark-to-market actuarial gain in 2024 was primarily attributable to an increase in the weighted-average discount rate
to 5.65% from 5.21% for our U.S. pension plans and to 4.04% from 3.73% for our foreign pension plans to reflect market
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
116
conditions as of the December 31, 2024 measurement date. This was partially offset by a lower return on pension plan assets
during the year than was expected, as a result of overall market and investment portfolio performance. The weighted-average
actual return on our U.S. and foreign pension plan assets was 5.89% versus an expected return of 6.77%.
The mark-to-market actuarial gain in 2023 was primarily attributable to a higher return on pension plan assets during the
year than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return
on our U.S. and foreign pension plan assets was 11.21% versus an expected return of 6.66%. This was partially offset by a
decrease in the weighted-average discount rate to 5.21% from 5.46% for our U.S. pension plans and to 3.73% from 4.04% for
our foreign pension plans to reflect market conditions as of the December 31, 2023 measurement date.
The mark-to-market actuarial gain in 2022 was primarily attributable to a significant increase in the weighted-average
discount rate to 5.46% from 2.86% for our U.S. pension plans and to 4.04% from 1.44% for our foreign pension plans to reflect
market conditions as of the December 31, 2022 measurement date. This was partially offset by a lower return on pension plan
assets in 2022 than was expected, as a result of overall market and investment portfolio performance. The weighted-average
actual return on our U.S. and foreign pension plan assets was (17.94)% versus an expected return of 6.48%.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are
classified into the following hierarchy:
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
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified
in their entirety based on the lowest level of input that is significant to the fair value measurement. Investments for which
market quotations are readily available are valued at the closing price on the last business day of the year. Listed securities for
which no sale was reported on such date are valued at the mean between the last reported bid and asked price. Securities traded
in the over-the-counter market are valued at the closing price on the last business day of the year or at bid price. The net asset
value of shares or units is based on the quoted market value of the underlying assets. The market value of corporate bonds is
based on institutional trading lots and is most often reflective of bid price. Government securities are valued at the mean
between bid and ask prices. Holdings in private equity securities are typically valued using the net asset valuations provided by
the underlying private investment companies.
The following tables set forth the assets of our pension and postretirement plans that were accounted for at fair value on a
recurring basis as of December 31, 2024 and 2023 (in thousands):
December 31,
2024
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)
$
78,124
$
78,124
$
—
$
—
International Equity(b)
78,124
69,471
8,653
—
Fixed Income(c)
318,036
286,549
31,487
—
Absolute Return Measured at Net Asset Value(d)
56,888
—
—
—
Cash
8,540
8,540
—
—
Total Pension Assets
$
539,712
$
442,684
$
40,140
$
—
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
117
December 31,
2023
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)
$
58,906
$
58,906
$
—
$
—
International Equity(b)
106,491
99,432
7,059
—
Fixed Income(c)
294,140
257,299
36,841
—
Absolute Return Measured at Net Asset Value(d)
80,542
—
—
—
Cash
9,566
9,566
—
—
Total Pension Assets
$
549,645
$
425,203
$
43,900
$
—
(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 that 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. Their fair values are included in this table to permit reconciliation to
the reconciliation of plan assets table above.
The Company’s pension plan assets in the U.S. and U.K. represent approximately 96% of the total pension plan assets.
The investment objective of these pension plan assets is to achieve solid returns while preserving capital to meet current plan
cash flow requirements. Assets should participate in rising markets, with defensive action in declining markets expected to an
even greater degree. Depending on market conditions, the broad asset class targets may range up or down by approximately
10%. These asset classes include but are not limited to hedge fund of funds, bonds and other fixed income vehicles, high yield
fixed income securities, equities and distressed debt. At December 31, 2024 and 2023, equity securities held by our pension and
OPEB plans did not include direct ownership of Albemarle common stock.
The weighted-average target allocations as of the measurement date are as follows:
Target
Allocation
Equity securities
35 %
Fixed income
59 %
Absolute return
6 %
Our Absolute Return investments consist primarily of our investments in hedge fund of funds. These are holdings in
private investment companies with fair values that are based on significant unobservable inputs including assumptions where
there is little, if any, market activity for the investment. Investment managers or fund managers associated with these
investments provide valuations of the investments on a monthly basis utilizing the net asset valuation approach for determining
fair values. These valuations are reviewed by the Company for reasonableness based on applicable sector, benchmark and
company performance to validate the appropriateness of the net asset values as a fair value measurement. Where available,
audited financial statements are obtained and reviewed for the investments as support for the manager’s investment valuation.
In general, the investment objective of these funds is high risk-adjusted returns with an emphasis on preservation of capital. The
investment strategies of each of the funds vary; however, the objective of our Absolute Return investments is complementary to
the overall investment objective of our U.S. pension plan assets.
We made contributions to our defined benefit pension and OPEB plans of $19.4 million, $17.9 million and $16.1 million
during the years ended December 31, 2024, 2023 and 2022, respectively. We expect contributions to our domestic nonqualified
and foreign qualified and nonqualified pension plans to approximate $16.5 million in 2025. Also, we expect to pay
approximately $2.5 million in premiums to our U.S. postretirement benefit plan in 2025. However, we may choose to make
additional voluntary pension contributions in excess of these amounts.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
118
The current forecast of benefit payments, which reflects expected future service, amounts to (in thousands):
U.S. Pension
Plans
Foreign Pension
Plans
Other
Postretirement
Benefits
2025
$
44,303
$
11,655
$
2,548
2026
$
44,088
$
10,983
$
2,770
2027
$
43,703
$
11,760
$
2,830
2028
$
43,099
$
11,928
$
2,875
2029
$
42,079
$
13,427
$
2,902
2030-2034
$
193,724
$
58,399
$
14,284
We have a supplemental executive retirement plan (“SERP”), which provides unfunded supplemental retirement benefits
to certain management or highly compensated employees. The SERP provides for incremental pension benefits to offset the
limitations imposed on qualified plan benefits by federal income tax regulations. Costs (credits) relating to our SERP were $0.7
million, $0.6 million and ($1.2) million for the years ended December 31, 2024, 2023 and 2022, respectively. The projected
benefit obligation for the SERP recognized in the consolidated balance sheets at December 31, 2024 and 2023 was $5.9 million
and $6.2 million, respectively. The benefit expenses and obligations of this SERP are included in the tables above. Benefits of
$0.9 million are expected to be paid to SERP retirees in 2025. On October 1, 2012, our Board of Directors approved
amendments to the SERP, such that effective December 31, 2014, no additional benefits shall accrue under this plan and
participants’ accrued benefits shall be frozen as of that date to reflect the same changes as were made under the U.S. qualified
defined benefit plan.
At December 31, 2024, the assumed rate of increase in the pre-65 and post-65 per capita cost of covered health care
benefits for U.S. retirees was zero as the employer-paid premium caps (pre-65 and post-65) were met starting January 1, 2013.
Defined Contribution Plans
On March 31, 2004, a new defined contribution pension plan benefit was adopted under the qualified defined contribution
plan for U.S. non-represented employees hired after March 31, 2004. On October 1, 2012, our Board of Directors approved
certain plan amendments, such that effective January 1, 2013, the defined contribution pension plan benefit is expanded to
include non-represented employees hired prior to March 31, 2004, and revised the contribution for all participants to be based
on 5% of eligible employee compensation. The employer portion of contributions to our U.S. defined contribution pension plan
amounted to $18.3 million, $17.8 million, and $12.1 million in 2024, 2023 and 2022, respectively.
Certain of our employees participate in our defined contribution 401(k) employee savings plan, which is generally
available to all U.S. full-time salaried and non-union hourly employees and to employees who are covered by a collective
bargaining agreement that provides for such participation. This U.S. defined contribution plan is funded with contributions
made by the participants and us. Our contributions to the 401(k) plan amounted to $20.4 million, $18.4 million and $12.7
million in 2024, 2023 and 2022, respectively.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
119
NOTE 14—Other Noncurrent Liabilities:
Other noncurrent liabilities consist of the following at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Transition tax on foreign earnings(a)
$
44,647
$
127,339
Operating leases(b)
99,514
113,681
Liabilities related to uncertain tax positions(c)
259,586
220,555
Executive deferred compensation plan obligation
38,243
33,564
Environmental liabilities(d)
15,783
23,224
Asset retirement obligations(d)
94,854
88,703
Tax indemnification liability(e)
12,567
14,481
Deferred revenue
78,027
78,027
Capital expenditure incentive payables(f)
74,506
14,264
Other(g)
101,477
55,262
Total
$
819,204
$
769,100
(a)
Noncurrent portion of one-time transition tax on foreign earnings. See Note 20, “Income Taxes,” for additional information.
(b)
See Note 18, “Leases.”
(c)
See Note 20, “Income Taxes.”
(d)
See Note 15, “Commitments and Contingencies.”
(e)
Indemnification of certain income and non-income tax liabilities, primarily associated with the Chemetall Surface Treatment entities sold
in 2017.
(f)
When constructing new facilities or making major enhancements to existing facilities, we may have the opportunity to enter into
incentive agreements with local government agencies in order to reduce certain state and local tax expenditures. Under these agreements,
we transfer the related assets to various local government entities and receive bonds. We immediately lease the facilities from the local
government entities and have an option to repurchase the facilities for a nominal amount upon tendering the bonds to the local
government entities at various predetermined dates. The bonds and the associated obligations for the leases of the facilities offset values,
and the underlying assets are recorded in property, plant and equipment.
(g)
No individual component exceeds 5% of total liabilities.
NOTE 15—Commitments and Contingencies:
In the ordinary course of business, we have commitments in connection with various activities. We believe that amounts
recorded are adequate for known items which might become due in the current year. The most significant commitments are as
follows:
Environmental
We had the following activity in our recorded environmental liabilities for the years ended December 31, 2024, 2023 and
2022 (in thousands):
Year Ended December 31,
2024
2023
2022
Balance, beginning of year
$
34,149
$
38,245
$
46,617
Expenditures
(4,159)
(3,393)
(10,378)
Accretion of discount
1,126
1,094
1,031
Additions, liability releases and changes in estimates, net
(11,304)
(2,541)
673
Foreign currency translation adjustments and other
211
744
302
Balance, end of year
20,023
34,149
38,245
Less amounts reported in Accrued expenses
4,240
10,925
6,973
Amounts reported in Other noncurrent liabilities
$
15,783
$
23,224
$
31,272
Environmental remediation liabilities included discounted liabilities of $16.8 million and $27.4 million at December 31,
2024 and 2023, respectively, discounted at rates with a weighted-average of 4.0% and 3.7%, respectively, with the
undiscounted amount totaling $34.5 million and $55.4 million at December 31, 2024 and 2023, respectively. For certain
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
120
locations where the Company is operating groundwater monitoring and/or remediation systems, prior owners or insurers have
assumed all or most of the responsibility.
The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities
typically arise during the normal course of our operational and environmental management activities or at the time of
acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at
each relevant site, changes in risk assessment practices, remediation techniques and regulatory requirements can occur,
therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites
will be determined when evaluations are completed. Although it is difficult to quantify the potential financial impact of these
remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility
that future environmental remediation costs associated with our past operations could represent an additional $42 million before
income taxes, in excess of amounts already recorded.
We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of
the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our
results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a
material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Asset Retirement Obligations
The following is a reconciliation of our beginning and ending asset retirement obligation balances for 2024 and 2023 (in
thousands):
Year Ended December 31,
2024
2023
Balance, beginning of year
$
89,159
$
80,101
Additions and changes in estimates
6,608
11,288
Accretion of discount
3,365
2,421
Liabilities settled
(2,653)
(3,044)
Foreign currency translation adjustments and other
(90)
(1,607)
Balance, end of year
$
96,389
$
89,159
Less amounts reported in Accrued expenses
1,535
456
Amounts reported in Other noncurrent liabilities
$
94,854
$
88,703
Asset retirement obligations primarily relate to post-closure reclamation of brine wells and sites involved in the surface
mining and manufacturing of lithium. We are not aware of any conditional asset retirement obligations that would require
recognition in our consolidated financial statements.
Litigation
We are involved from time to time in legal proceedings of types regarded as common in our business, including
administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive
Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability,
breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such
proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed as
incurred.
As first reported in 2018, following receipt of information regarding potential improper payments being made by third-
party sales representatives of our Refining Solutions business, within what is now the Ketjen segment, we investigated and
voluntarily self-reported potential violations of the U.S. Foreign Corrupt Practices Act to the U.S. Department of Justice
(“DOJ”) and the SEC, and also reported this conduct to the Dutch Public Prosecutor (“DPP”). We cooperated with these
agencies in their investigations of this historical conduct and implemented appropriate remedial measures intended to strengthen
our compliance program and related internal controls.
In September 2023, the Company finalized agreements to resolve these matters with the DOJ and SEC. The DPP has
confirmed it will not pursue action in this matter. In connection with this resolution, which relates to conduct prior to 2018, we
entered into a non-prosecution agreement with the DOJ and an administrative resolution with the SEC, pursuant to which we
paid a total of $218.5 million in aggregate fines, disgorgement, and prejudgment interest to the DOJ and SEC. The resolution
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
121
does not include a compliance monitorship, although the Company has agreed to certain ongoing compliance reporting
obligations.
During the year ended December 31, 2023, the Company recorded a charge of $218.5 million in Selling, General and
Administrative Expenses in its consolidated statement of operations and accrued a corresponding liability on its consolidated
balance sheet for these agreements. The agreed upon amounts were paid to the DOJ and SEC in October 2023, with this matter
considered finalized and no future financial obligations expected.
Indemnities
We are indemnified by third parties in connection with certain matters related to acquired and divested businesses.
Although we believe that the financial condition of those parties who may have indemnification obligations to the Company is
generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be
no assurance that any party who may have obligations to indemnify us will adhere to their obligations and we may have to
resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or
businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management,
and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the
Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of
operations or cash flows. The Company had approximately $12.6 million and $14.5 million at December 31, 2024 and 2023,
respectively, recorded in Other noncurrent liabilities primarily related to the indemnification of certain income and non-income
tax liabilities associated with the Chemetall Surface Treatment entities sold in 2017.
Other
The Company has standby letters of credit and guarantees with various financial institutions. The following table
summarizes our letters of credit and guarantee agreements (in thousands):
2025
2026
2027
2028
2029
Thereafter
Letters of credit and other guarantees
$ 101,662
$
5,369
$
2,667
$
656
$
—
$
5,310
The outstanding letters of credit are primarily related to insurance claim payment guarantees. The majority of the
Company’s other guarantees have terms of one year and mainly consist of performance and environmental guarantees, as well
as guarantees to customs and port authorities. The guarantees arose during the ordinary course of business.
We do not have recorded reserves for the letters of credit and guarantees as of December 31, 2024. We are unable to
estimate the maximum amount of the potential future liability under guarantees and letters of credit. However, we accrue for
any potential loss for which we believe a future payment is probable and a range of loss can be reasonably estimated. We
believe our liability under such obligations is immaterial.
We currently, and are from time to time, subject to transactional audits in various taxing jurisdictions and to customs
audits globally. We do not expect the financial impact of any of these audits to have a material adverse effect on the Company’s
results of operations, financial condition or cash flows.
NOTE 16—Equity:
Common Stock
On May 9, 2024, the Company filed to amend the Company’s Amended and Restated Articles of Incorporation (the
“Charter”) to increase the number of authorized shares of common stock, $0.01 par value per share, from 150,000,000 to
275,000,000 (the “Charter Amendment”). The Charter Amendment became effective May 10, 2024.
Mandatory Convertible Preferred Stock
On March 8, 2024, the Company issued 46,000,000 depositary shares (“Depositary Shares”), each representing a 1/20th
interest in a share of Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”). The
2,300,000 shares of Mandatory Convertible Preferred Stock issued has a $1,000 per share liquidation preference. As a result of
this transaction, the Company received cash proceeds of approximately $2.2 billion, net of underwriting fees and offering costs.
The Company intends to use the proceeds for general corporate purposes, which may include, among other uses, funding capital
expenditures, following the repayment of commercial paper with a portion of the proceeds in the first quarter of 2024.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
122
Dividends on the Mandatory Convertible Preferred Stock are payable on a cumulative basis when, as and if declared by
the Albemarle board of directors, or an authorized committee thereof, at an annual rate of 7.25% on the liquidation preference
of $1,000 per share, and may be paid in cash or, subject to certain limitations, in shares of common stock or, subject to certain
limitations, any combination of cash and shares of common stock. Dividends that are declared on the Mandatory Convertible
Preferred Stock will be payable quarterly to the holders of record on February 15, May 15, August 15 and November 15 of each
year, immediately preceding the relevant dividend payment date, whether or not such holders convert their Depositary Shares,
or such Depositary Shares are automatically converted, after a record date and on or prior to the immediately succeeding
dividend payment date. Dividends of $17.12 per share of Mandatory Convertible Preferred Stock were paid in June 2024 and
dividends of $18.125 per share of Mandatory Convertible Preferred Stock were paid in September and December 2024.
Subsequent quarterly cash dividends are expected to be $18.125 per share of Mandatory Convertible Preferred Stock. Dividends
are expected to be paid on March 1, June 1, September 1 and December 1 of each year ending on, and including, March 1,
2027.
The Company may not redeem the shares of the Mandatory Convertible Preferred Stock. However, at its option, the
Company may purchase the Mandatory Convertible Preferred Stock from time to time on the open market, by tender offer,
exchange offer or otherwise.
Unless converted earlier in accordance with its terms, each share of Mandatory Convertible Preferred Stock will
automatically convert on the mandatory conversion date, which is expected to be March 1, 2027, into between 7.618 shares and
9.140 shares of common stock, in each case, subject to customary anti-dilution adjustments described in the certificate of
designations related to the Mandatory Convertible Preferred Stock (the “Certificate of Designations”). The number of shares of
common stock issuable upon conversion will be determined based on the average volume weighted average price per share of
common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day
immediately prior to March 1, 2027.
Holders of shares of Mandatory Convertible Preferred Stock have the option to convert all or any portion of their shares of
the Mandatory Convertible Preferred Stock at any time. The conversion rate applicable to any early conversion may in certain
circumstances be increased to compensate holders of the Mandatory Convertible Preferred Stock for certain unpaid
accumulated dividends in the Certificate of Designations.
If a Fundamental Change, as defined in the Certificate of Designations, occurs on or prior to March 1, 2027, then holders
of the Mandatory Convertible Preferred Stock will be entitled to convert all or any portion of their Mandatory Convertible
Preferred Stock at the fundamental change conversion rate, as defined in the Certificate of Designations, as for a specified
period of time and to also receive an amount to compensate them for certain unpaid accumulated dividends and any remaining
future scheduled dividend payments.
There were 2,300,000 shares of Mandatory Convertible Preferred Stock issued and outstanding at December 31, 2024.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
123
Accumulated Other Comprehensive Loss
The components and activity in Accumulated other comprehensive loss (net of deferred income taxes) consisted of the
following during the years ended December 31, 2024, 2023 and 2022 (in thousands):
Foreign
Currency
Translation
and Other
Cash Flow
Hedge(a)
Interest Rate
Swap(b)
Total
Balance at December 31, 2021
$
(391,674) $
6,623
$
(7,399) $
(392,450)
Other comprehensive loss before reclassifications
(171,367)
(4,399)
—
(175,766)
Amounts reclassified from accumulated other
comprehensive loss
72
—
7,399
7,471
Other comprehensive (loss) income, net of tax
(171,295)
(4,399)
7,399
(168,295)
Other comprehensive loss attributable to noncontrolling
interests
83
—
—
83
Balance at December 31, 2022
$
(562,886) $
2,224
$
—
$
(560,662)
Other comprehensive income before reclassifications
26,337
5,986
—
32,323
Amounts reclassified from accumulated other
comprehensive loss
66
(135)
—
(69)
Other comprehensive income, net of tax
26,403
5,851
—
32,254
Other comprehensive income attributable to noncontrolling
interests
(118)
—
—
(118)
Balance at December 31, 2023
$
(536,601) $
8,075
$
—
$
(528,526)
Other comprehensive loss before reclassifications
(210,611)
(28,701)
—
(239,312)
Amounts reclassified from accumulated other
comprehensive loss
77
25,766
—
25,843
Other comprehensive loss, net of tax
(210,534)
(2,935)
—
(213,469)
Other comprehensive income attributable to noncontrolling
interests
(67)
—
—
(67)
Balance at December 31, 2024
$
(747,202) $
5,140
$
—
$
(742,062)
(a) We previously entered into a foreign currency forward contract, which was designated and accounted for as a cash flow hedge under
ASC 815, Derivatives and Hedging. During the year ended December 31, 2024, the Company dedesignated the remaining foreign
currency forward contracts accounted for as cash flow hedges. The related loss was reclassified to Other income, net during the year
ended December 31, 2024. The balance of the settled hedged foreign currency forward contracts will be reclassified to earnings over the
life of the related assets. See Note 17, “Restructuring Charges and Asset Write-offs,” and Note 22, “Fair Value of Financial
Instruments,” for additional information.
(b) The pre-tax portion of the amount reclassified from accumulated other comprehensive loss is included in interest expense. The balance
of this interest rate swap was being amortized to Interest and financing expenses over the life of the 4.15% senior notes originally due in
2024. As discussed in Note 12, “Long-term Debt,” the Company repaid these notes in the second quarter of 2022, and as a result,
reclassified the remaining balance of this interest rate swap to interest expense during the same period as part of the early extinguishment
of debt.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
124
The amount of income tax (expense) benefit allocated to each component of Other comprehensive (loss) income for the
years ended December 31, 2024, 2023 and 2022 is provided in the following tables (in thousands):
Foreign
Currency
Translation
and Other
Cash Flow
Hedge
Interest Rate
Swap
Total
2024
Other comprehensive loss, before tax
$
(210,522) $
(2,935) $
—
$
(213,457)
Income tax expense
(12)
—
—
(12)
Other comprehensive loss, net of tax
$
(210,534) $
(2,935) $
—
$
(213,469)
2023
Other comprehensive income, before tax
$
23,964
$
8,358
$
—
$
32,322
Income tax benefit (expense)
2,439
(2,507)
—
(68)
Other comprehensive income, net of tax
$
26,403
$
5,851
$
—
$
32,254
2022
Other comprehensive (loss) income, before tax
$
(168,953) $
(4,399) $
9,739
$
(163,613)
Income tax expense
(2,342)
—
(2,340)
(4,682)
Other comprehensive (loss) income, net of tax
$
(171,295) $
(4,399) $
7,399
$
(168,295)
NOTE 17—Restructuring Charges and Asset Write-offs:
Second Half 2024 Restructuring
In July 2024, the Company announced a comprehensive review of its cost and operating structure to proactively respond
to ongoing industry headwinds, particularly in the lithium value chain, and to maintain a competitive position. As part of this
review, the Company made the decision to stop construction of Kemerton conversion plant Train 3 in Western Australia and to
put Kemerton Train 2 into care and maintenance as the Company determined the current lithium price environment makes it
less economical to expand conversion in Australia. Kemerton Train 1 will continue to operate and activity around it is currently
focused on commercialization efforts.
The Company’s actions regarding Kemerton are part of a broader effort focused on preserving its world-class resource
advantages, optimizing its global conversion network, improving the Company’s cost competitiveness and efficiency by
lowering operating costs, reducing capital intensity and enhancing the Company’s financial flexibility. As part of this effort,
effective November 1, 2024, the Company transitioned its operating structure to a fully integrated functional model (excluding
Ketjen) from a global business unit model. As a result, the Company implemented a global workforce reduction that impacted
6-7% of total headcount during the second half of 2024.
As a result of the above actions, the Company recorded charges in Cost of goods sold and Restructuring charges and asset
write-offs for the year ended December 31, 2024 of $16.5 million and $762.6 million, respectively, consisting of the write-off
of the carrying value of the Kemerton Train 3 assets less any salvage value, contract cancellation costs, decommissioning,
demolition and other associated restructuring costs for both Kemerton Trains 2 and 3. The Company also recorded a loss of
$20.7 million in Other income, net for the year ended December 31, 2024 related to the reclassification of the related
dedesignated cash flow hedge from Accumulated other comprehensive loss. In addition, the Company recorded severance and
employee benefit charges related to the above actions of $3.8 million and $47.5 million in Cost of goods sold and Restructuring
charges and asset writeoffs, respectively, for the year ended December 31, 2024.
The Company expects to record additional restructuring costs related to the Second Half 2024 Restructuring in the range
of $35 million to $45 million in the year ended December 31, 2025, when the Company expects the actions to be substantially
completed.
First Half 2024 Restructuring
In January 2024, the Company announced measures to unlock near-term cash flow and generate long-term financial
flexibility by re-phasing organic growth investments and optimizing its cost structure. As part of these measures, during the
second quarter of 2024, the Company indefinitely suspended construction of Kemerton Train 4, as well as deferred spending
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
125
and investments with respect to certain other capital projects. The Company wrote-off the book value of assets related to these
capital projects, which are no longer part of the Company’s modified capital plan, as it determined that these assets will not
provide future value or will require significant re-engineering if the related projects are restarted, as well as recorded losses for
associated contract cancellation costs. In addition, the Company recorded severance costs for employees in Corporate and each
of the businesses as part of these announced measures. These actions resulted in charges of $324.3 million recorded in
Restructuring charges and asset write-offs for the year ended December 31, 2024 and a loss of $5.4 million recorded in Other
income, net for the year ended December 31, 2024 related to the reclassification of the related dedesignated cash flow hedge
from Accumulated other comprehensive loss. No further costs associated with the First Half 2024 Restructuring are expected to
be recorded as this restructuring plan was completed in the first half of 2024.
2023 Restructuring
During the year ended December 31, 2023, $9.5 million of separation and other severance costs to employees in
Corporate and the Ketjen business were recorded in Restructuring charges and asset write-offs.
Detail of Restructuring Charges and Reserves
The following table provides details of our restructuring related charges for the year ended December 31, 2024, which
represent the cumulative amounts incurred to date for these plans (in thousands):
Year Ended December 31, 2024
Asset Write-
offs(a)
Severance and
Employee
Benefits(b)
Contract
Cancellation
Costs(c)
Other(d)
Total
First Half 2024 Restructuring(e)
$
280,596
$
18,856
$
24,887
$
5,374
$
329,713
Second Half 2024 Restructuring(e)
732,907
51,264
37,370
29,552
851,093
$
1,013,503
$
70,120
$
62,257
$
34,926
$
1,180,806
(a) Asset write-offs include $16.5 million recorded in Cost of goods sold, primarily related to work in process inventory with no future value
as a result of the decomissioning of Kemerton Train 2 that was placed into care and maintenance. The remainder of the asset write-offs
primarily relate to property, plant and equipment of the in-construction Kemerton Trains 3 and 4, and Kemerton Train 2 that was placed
into care and maintenance. All asset write-off charges not related to inventories were recorded in Restructuring charges and asset write-
offs.
(b) Severance and employee benefit charges include $3.8 million recorded in Cost of goods sold. All other severance and employee benefit
charges for global employees terminated during the various restructuring programs were recorded in Restructuring charges and asset
write-offs.
(c) Includes cancellation fees for contractors and required payments under take or pay contracts. All contract cancellation costs were
recorded in Restructuring charges and asset write-offs.
(d) Other includes costs to put Kemerton Train 2 into care and maintenance and similar restructuring costs, and are recorded in Restructuring
charges and asset write-offs. In addition, Other also includes the reclassification of the related dedesignated cash flow hedge from
Accumulated other comprehensive loss. $20.7 million recorded in Other income, net for the year ended December 31, 2024 related to the
Second Half 2024 Restructuring and $5.4 million recorded in Other income, net for the year ended December 31, 2024 related to the
First Half 2024 Restructuring.
(e) Severance and employee benefits related to Corporate and all segments. All other restructuring costs were primarily recorded in the
Energy Storage segment.
Restructuring charges related to severance and employee benefits of $9.5 million for the year ended December 31, 2023
were recorded in Restructuring charges and asset write-offs and are reported in Corporate and the Ketjen segment. As of
December 31, 2023, there was a liability of $3.3 million related to these severance costs, which was paid during the year ended
December 31, 2024.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
126
The following tables summarize the changes in restructuring liabilities for the year ended December 31, 2024 (in
thousands):
First Half 2024 Restructuring
Asset Write-
offs
Severance
and Employee
Benefits
Contract
Cancellation
Costs
Other
Total
Beginning balance at December 31, 2023
$
—
$
—
$
—
$
—
$
—
2024 charges
280,596
19,365
34,510
5,374
339,845
Change in estimate(a)
—
(509)
(9,623)
—
(10,132)
Cash payments
—
(18,883)
(22,120)
—
(41,003)
Asset writedowns/hedge dedesignation
(280,596)
—
—
(5,374)
(285,970)
Foreign currency translation adjustments
—
27
—
—
27
Ending balance at December 31, 2024(b)(c)
$
—
$
—
$
2,767
$
—
$
2,767
Second Half 2024 Restructuring
Asset Write-
offs
Severance
and Employee
Benefits
Contract
Cancellation
Costs
Other
Total
Beginning balance at December 31, 2023
$
—
$
—
$
—
$
—
$
—
2024 charges
785,005
51,264
46,870
28,883
912,022
Change in estimate(a)
(52,098)
—
(9,500)
669
(60,929)
Cash payments
—
(35,010)
(4,891)
—
(39,901)
Asset writedowns/hedge dedesignation
(732,907)
—
—
(20,741)
(753,648)
Foreign currency translation adjustments
—
(387)
—
—
(387)
Ending balance at December 31, 2024(b)(c)
$
—
$
15,867
$
32,479
$
8,811
$
57,157
(a) In the fourth quarter of 2024, the Company updated its estimates concerning the progress of construction activities, related contractual
obligations and the estimated salvage value of Kemerton equipment, resulting in a favorable adjustment of asset write-offs. Additionally,
the Company successfully negotiated revised contract cancellation costs with key suppliers to result in a favorable adjustment of the
restructuring related charges.
(b) Approximately $47.5 million recorded in Accrued expenses and $12.4 million recorded in Other noncurrent liabilities on the
consolidated balance sheets as of December 31, 2024.
(c) The majority of the remaining balances are expected to be paid in the next twelve months. Certain take or pay liabilities will be paid in
line with the terms of the original contract through 2027.
NOTE 18—Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms
generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial
term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-
line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years
or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the
leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there
is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual
value guarantees or material restrictive covenants.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
127
The following table provides details of our lease contracts for the years ended December 31, 2024, 2023 and 2022 (in
thousands):
Year Ended December 31,
2024
2023
2022
Operating lease cost
$
37,331
$
48,238
$
43,809
Finance lease cost:
Amortization of right of use assets
7,270
5,302
3,377
Interest on lease liabilities
6,435
5,070
3,504
Total finance lease cost
13,705
10,372
6,881
Short-term lease cost
25,651
20,309
13,985
Variable lease cost
34,741
25,075
8,064
Total lease cost
$
111,428
$
103,994
$
72,739
Supplemental cash flow information related to our lease contracts for the years ended December 31, 2024, 2023 and 2022
is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
35,638
$
49,261
$
36,629
Operating cash flows from finance leases
9,681
4,671
3,389
Financing cash flows from finance leases
4,982
2,165
1,432
Right-of-use assets obtained in exchange for lease obligations:
Operating leases
25,605
48,655
15,913
Finance leases
12,706
46,773
3,976
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at
December 31, 2024 and 2023 is as follows (in thousands, except as noted):
December 31,
2024
2023
Operating leases:
Other assets
$
118,839
$
137,405
Accrued expenses
32,626
30,583
Other noncurrent liabilities
99,514
113,681
Total operating lease liabilities
132,140
144,264
Finance leases:
Net property, plant and equipment
117,038
112,438
Current portion of long-term debt
5,183
9,702
Long-term debt
113,613
104,484
Total finance lease liabilities
118,796
114,186
Weighted average remaining lease term (in years):
Operating leases
12.9
12.2
Finance leases
20.4
20.7
Weighted average discount rate (%):
Operating leases
4.47 %
4.74 %
Finance leases
5.55 %
4.71 %
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
128
Maturities of lease liabilities as of December 31, 2024 were as follows (in thousands):
Operating Leases
Finance Leases
2025
$
32,911
$
11,917
2026
24,135
11,291
2027
18,442
11,222
2028
13,559
11,084
2029
12,078
11,084
Thereafter
92,976
133,917
Total lease payments
194,101
190,515
Less imputed interest
61,961
71,719
Total
$
132,140
$
118,796
NOTE 19—Stock-based Compensation Expense:
Incentive Plans
We have various share-based compensation plans that authorize the granting of (i) qualified and non-qualified stock
options to purchase shares of our common stock, (ii) restricted stock and restricted stock units, (iii) performance unit awards
and (iv) stock appreciation rights (“SARs”) to employees and non-employee directors, at our option. Stock options granted to
employees generally vest over three years and have a term of ten years. Restricted stock and restricted stock unit awards vest in
periods ranging from one to five years from the date of grant. Performance unit awards are earned at a level ranging from 0% to
200% contingent upon the achievement of specific performance criteria over periods ranging from one to three years.
Distribution of earned units occurs generally 50% upon completion of the applicable measurement period with the remaining
50% distributed one year thereafter.
In May 2017, the Company adopted the Albemarle Corporation 2017 Incentive Plan (the “Incentive Plan”), which
replaced the Albemarle Corporation 2008 Incentive Plan. The maximum number of shares available for issuance to participants
under the Incentive Plan is 4,500,000 shares. The adoption of the Incentive Plan did not affect awards already granted under the
Albemarle Corporation 2008 Incentive Plan. In February 2023, the Company adopted the Albemarle Corporation 2023 Stock
Compensation and Deferral Election Plan for Non-Employee Directors (the “Non-Employee Directors Plan”). The Non-
Employee Directors Plan replaced the 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors,
which expired by its terms in May 2023. Under the Non-Employee Directors Plan, a maximum aggregate number of 500,000
shares of our common stock is authorized for issuance to the Company’s non-employee directors; any shares remaining
available for issuance under the prior plans were canceled. The aggregate fair market value of shares that may be issued to a
director during any compensation year (as defined in the Non-Employee Directors Plan, generally July 1 to June 30) shall not
exceed $750,000. At December 31, 2024, there were 2,604,956 shares available for grant under the Incentive Plan and 477,440
shares available for grant under the Non-Employee Directors Plan.
Total stock-based compensation expense associated with our incentive plans for the years ended December 31, 2024,
2023 and 2022 amounted to $33.1 million, $39.0 million and $31.4 million, respectively, and is included in Cost of goods sold
and Selling, general and administrative expenses in the consolidated statements of (loss) income. Total related recognized tax
benefits for the years ended December 31, 2024, 2023 and 2022 amounted to $2.7 million, $4.6 million and $4.0 million,
respectively.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
129
The following table summarizes information about the Company’s fixed-price stock options as of and for the year ended
December 31, 2024:
Shares
Weighted-
Average
Exercise Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2023
427,144
$
129.59
5.8
$
14,891
Granted
165,350
118.18
Exercised
(6,570)
57.02
Forfeited
(30,268)
141.91
Outstanding at December 31, 2024
555,656
$
126.38
5.9
$
1,255
Exercisable at December 31, 2024
316,658
$
101.73
3.9
$
1,255
We granted 165,350, 51,316 and 57,348 stock options during 2024, 2023 and 2022, respectively. There were no
significant modifications made to any share-based grants during these periods.
The fair value of each option granted during the years ended December 31, 2024, 2023 and 2022 was estimated on the
date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Year Ended December 31,
2024
2023
2022
Dividend yield
1.43 %
1.26 %
1.32 %
Volatility
42.44 %
40.06 %
36.21 %
Average expected life (years)
6
6
6
Risk-free interest rate
4.33 %
3.95 %
1.97 %
Fair value of options granted
$
48.70
$
98.66
$
63.00
Dividend yield is the average of historical yields and those estimated over the average expected life. The stock volatility
is based on historical volatilities of our common stock. The average expected life represents the weighted average period of
time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise
patterns. The risk-free interest rate is based on the U.S. Treasury strip rate with stripped coupon interest for the period equal to
the contractual term of the share option grant in effect at the time of grant.
The intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was $0.3 million,
$0.5 million and $6.9 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the
underlying stock exceeds the exercise price of the option.
Total compensation cost not yet recognized for nonvested stock options outstanding as of December 31, 2024 is
approximately $5.7 million and is expected to be recognized over a remaining weighted-average period of 1.6 years. Cash
proceeds from stock options exercised and tax benefits related to stock options exercised were $0.4 million and $0.1 million for
the year ended December 31, 2024, respectively. The Company issues new shares of common stock upon exercise of stock
options and vesting of restricted common stock awards.
The following table summarizes activity in performance unit awards as of and for the year ended December 31, 2024:
Shares
Weighted-
Average
Grant Date
Fair Value
Per Share
Nonvested, beginning of period
223,856
$
207.61
Granted
168,374
129.41
Vested
(74,188)
133.87
Forfeited
(41,014)
181.28
Nonvested, end of period
277,028
183.16
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
130
The weighted average grant date fair value of performance unit awards granted in 2024, 2023 and 2022 was $21.8 million,
$22.9 million and $13.1 million, respectively. For all periods presented, half of the performance unit awards granted were based
on the targeted return on invested capital (“ROIC Award”), while the other half were granted based on targeted market
conditions (“TSR Award”). The fair value of each TSR Award was estimated on the date of grant using the Monte Carlo
simulation model as these equity awards are tied to a service and market condition. The calculation used the following
weighted-average assumptions:
Year Ended December 31,
2024
2023
2022
Volatility
49.11 %
50.41 %
51.51 %
Risk-free interest rate
4.41 %
4.51 %
1.72 %
The weighted average fair value of performance unit awards that vested during 2024, 2023 and 2022 was $9.5 million,
$17.2 million and $11.9 million, respectively, based on the closing prices of our common stock on the dates of vesting. Total
compensation cost not yet recognized for nonvested performance unit awards outstanding as of December 31, 2024 is
approximately $15.8 million, calculated based on current expectation of specific performance criteria, and is expected to be
recognized over a remaining weighted-average period of approximately 1.9 years. Each performance unit represents one share
of common stock.
The following table summarizes activity in non-performance based restricted stock and restricted stock unit awards as of
and for the year ended December 31, 2024:
Shares
Weighted-
Average
Grant Date
Fair Value
Per Share
Nonvested, beginning of period
198,147
$
190.40
Granted
137,436
111.78
Vested
(88,032)
163.53
Forfeited
(40,969)
169.87
Nonvested, end of period
206,582
152.75
The weighted average grant date fair value of restricted stock and restricted stock unit awards granted in 2024, 2023 and
2022 was $15.4 million, $19.4 million and $15.4 million, respectively. The weighted average fair value of restricted stock and
restricted stock unit awards that vested in 2024, 2023 and 2022 was $10.0 million, $38.8 million and $17.8 million,
respectively, based on the closing prices of our common stock on the dates of vesting. Total compensation cost not yet
recognized for nonvested, non-performance based restricted stock and restricted stock units as of December 31, 2024 is
approximately $14.2 million and is expected to be recognized over a remaining weighted-average period of 1.5 years. The fair
value of the non-performance based restricted stock and restricted stock units was estimated on the date of grant adjusted for a
dividend factor, if necessary.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
131
NOTE 20—Income Taxes:
Income before income taxes and equity in net income of unconsolidated investments, and current and deferred income
tax expense (benefit) are composed of the following (in thousands):
Year Ended December 31,
2024
2023
2022
Income before income taxes and equity in net income of
unconsolidated investments:
Domestic
$
201,266
$
(461,897)
$
952,799
Foreign
(1,965,091)
708,635
1,480,645
Total
$
(1,763,825)
$
246,738
$
2,433,444
Current income tax expense (benefit):
Federal
$
212,542
$
(54,250)
$
33,230
State
(450)
(3,395)
4,965
Foreign
105,399
387,045
259,054
Total
$
317,491
$
329,400
$
297,249
Deferred income tax expense (benefit):
Federal
$
(172,464)
$
(8,545)
$
84,054
State
1,523
(4,154)
(3,511)
Foreign
(59,465)
113,576
12,796
Total
$
(230,406)
$
100,877
$
93,339
Total income tax expense
$
87,085
$
430,277
$
390,588
The reconciliation of the U.S. federal statutory rate to the effective income tax rate is as follows:
% of Income Before Income Taxes
2024
2023
2022
Federal statutory rate
21.0 %
21.0 %
21.0 %
State taxes, net of federal tax benefit
—
(2.8)
—
Change in valuation allowance(a)
(26.0)
98.8
(3.9)
Impact of foreign earnings, net(b)
3.3
7.7
(0.1)
Global intangible low tax inclusion
—
4.2
0.3
Foreign-derived intangible income
—
—
(3.0)
Section 162(m) limitation
(0.3)
4.4
0.3
Subpart F income
(0.3)
(1.9)
0.2
Stock-based compensation
—
(3.9)
(0.3)
Depletion
0.3
(2.4)
(0.2)
U.S. federal return to provision
0.1
(6.1)
(0.4)
Revaluation of unrecognized tax benefits/reserve requirements(c)
(2.1)
39.1
2.3
Legal accrual
—
18.6
—
Other items, net
(0.9)
(2.3)
(0.1)
Effective income tax rate
(4.9) %
174.4 %
16.1 %
(a)
Due to the Company being in a three-year cumulative loss position in China as of December 31, 2023, and Australia as of December 31,
2024, the year ended December 31, 2024 includes a valuation allowance of $271.0 million on current year losses in certain Chinese
entities and the establishment of a valuation of $254.9 million on current year losses in the Company’s Australian entities. In addition,
the year ended December 31, 2024 includes benefits of $70.1 million due to the release of a foreign valuation allowance due to changes
in expected profitability.
(b)
Our statutory rate is decreased by 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
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
132
Jordan, and currently, substantially all of the profits are from exports. This resulted in a rate benefit of 1.2%, 20.1%, and 3.2% for the
years ended December 31, 2024, 2023, and 2022, respectively.
(c) The year ended December 31, 2024 includes a $37.0 million expense recorded for a current year tax reserve related to an uncertain tax
position in Chile.
Deferred income tax assets and liabilities recorded on the consolidated balance sheets as of December 31, 2024 and 2023
consist of the following (in thousands):
December 31,
2024
2023
Deferred tax assets:
Accrued employee benefits
$
32,993
$
31,917
Operating loss carryovers
1,841,399
1,316,916
Pensions
17,148
23,527
Inventory reserves
27,974
83,136
Tax credit carryovers
11,228
1,431
Capitalized research and development
41,938
36,929
Lease liability
53,968
35,977
Other
62,406
30,611
Gross deferred tax assets
2,089,054
1,560,444
Valuation allowance
(1,736,456)
(1,349,924)
Deferred tax assets
352,598
210,520
Deferred tax liabilities:
Depreciation
(456,231)
(541,245)
Intangibles
(49,676)
(54,413)
Right of use asset
(48,951)
(30,336)
Outside basis difference
(51,971)
(56,214)
Other
(50,190)
(64,309)
Deferred tax liabilities
(657,019)
(746,517)
Net deferred tax liabilities
$
(304,421)
$
(535,997)
Classification in the consolidated balance sheets:
Noncurrent deferred tax assets
$
53,608
$
22,433
Noncurrent deferred tax liabilities
(358,029)
(558,430)
Net deferred tax liabilities
$
(304,421)
$
(535,997)
Changes in the balance of our deferred tax asset valuation allowance are as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Balance at January 1
$
(1,349,924)
$
(1,087,505)
$
(1,276,305)
Additions
(519,169)
(262,469)
(5,810)
Deductions
132,637
50
194,610
Balance at December 31
$
(1,736,456)
$
(1,349,924)
$
(1,087,505)
At December 31, 2024, we had approximately $11.3 million of domestic credits available to offset future payments of
income taxes, expiring in varying amounts between 2025 and 2029. We have established valuation allowances for $0.1 million
of those domestic credits since we believe that it is more likely than not that the related deferred tax assets will not be realized.
We believe that sufficient taxable income will be generated during the carryover period in order to utilize the other remaining
credit carryovers.
At December 31, 2024, we have on a pre-tax basis, domestic federal and state net operating losses of $1.1 billion, which
have pre-tax valuation allowances of $13.8 million established. $0.5 billion of these domestic net operating losses expire
between 2025 and 2041 and $0.6 billion have no expiration date. In addition, we have on a pre-tax basis $6.7 billion of foreign
net operating losses, which have pre-tax valuation allowances for $6.6 billion established. $636.4 million of these foreign net
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
133
operating losses expire in 2028, $1.3 billion expire in 2029, $2.6 billion expire in 2035, $203.2 million expire in 2036,
$19.3 million expire in 2037 and $1.8 billion have an indefinite life. We have established valuation allowances for these
deferred tax assets since we believe that it is more likely than not that the related deferred tax assets will not be realized. For the
same reason, we established pre-tax valuation allowances of $215.3 million and $15.3 million for other state and foreign
deferred tax assets, respectively, unrelated to net operating losses. The realization of the deferred tax assets is dependent on the
generation of sufficient taxable income in the appropriate tax jurisdictions. Although realization is not assured, we believe it is
more likely than not that the remaining deferred tax assets will be realized. However, the amount considered realizable could be
reduced if estimates of future taxable income change.
As of December 31, 2024, we have not recorded taxes on approximately $12.2 billion of cumulative undistributed
earnings of our non-U.S. subsidiaries and joint ventures. The TCJA imposed a mandatory transition tax on accumulated foreign
earnings and generally eliminated U.S. taxes on foreign subsidiary distribution with the exception of foreign withholding taxes
and other foreign local tax. We generally do not provide for taxes related to our undistributed earnings because such earnings
either would not be taxable when remitted or they are considered to be indefinitely reinvested. If in the foreseeable future, we
can no longer demonstrate that these earnings are indefinitely reinvested, a deferred tax liability will be recognized. A
determination of the amount of the unrecognized deferred tax liability related to these undistributed earnings is not practicable
due to the complexity and variety of assumptions necessary based on the manner in which the undistributed earnings would be
repatriated.
Liabilities related to uncertain tax positions were $259.6 million and $220.6 million at December 31, 2024 and 2023,
respectively, inclusive of interest and penalties of $71.0 million and $42.0 million at December 31, 2024 and 2023,
respectively, and are reported in Other noncurrent liabilities as provided in Note 14, “Other Noncurrent Liabilities.” These
liabilities at December 31, 2024 and 2023 were reduced by $74.8 million and $73.0 million, respectively, for offsetting benefits
from the corresponding effects of potential transfer pricing adjustments, state and local income taxes, and rate arbitrage related
to foreign structure. These offsetting benefits are recorded in Other assets as provided in Note 9, “Other Assets.” The resulting
net liability of $113.8 million, excluding interest and penalties, as of December 31, 2024 would favorably affect earnings if
recognized and released, as would the net liability of $105.6 million, excluding interest and penalties, have as of December 31,
2023.
The liabilities related to uncertain tax positions, exclusive of interest, were $188.8 million and $178.8 million at
December 31, 2024 and 2023, respectively. The following is a reconciliation of our total gross liability related to uncertain tax
positions for 2024, 2023 and 2022 (in thousands):
Year Ended December 31,
2024
2023
2022
Balance at January 1
$
178,785
$
72,162
$
20,717
Additions for tax positions related to prior years
31
6,216
1,673
Reductions for tax positions related to prior years
—
—
—
Additions for tax positions related to current year
10,989
101,179
50,531
Lapses in statutes of limitations/settlements
(1,038)
(770)
(995)
Foreign currency translation adjustment
59
(2)
236
Balance at December 31
$
188,826
$
178,785
$
72,162
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Due to the statute of limitations, we are no
longer subject to U.S. federal income tax audits by the Internal Revenue Service (“IRS”) for years prior to 2021. Due to the
statute of limitations, we also are no longer subject to U.S. state income tax audits prior to 2018.
With respect to jurisdictions outside the U.S., several audits are in process. We have audits ongoing for the years 2014
through 2023 related to Belgium, Canada, Chile, China and Germany, some of which are for entities that have since been
divested.
While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could be
greater than our accrued position. Accordingly, additional provisions on federal and foreign tax-related matters could be
recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
134
Since the timing of resolutions and/or closure of tax audits is uncertain, it is difficult to predict with certainty the range of
reasonably possible significant increases or decreases in the liability related to uncertain tax positions that may occur within the
next twelve months.
NOTE 21—Earnings Per Share:
Basic and diluted (loss) earnings per share are calculated as follows (in thousands, except per share amounts):
Year Ended December 31,
2024
2023
2022
Basic (loss) earnings per share
Numerator:
Net (loss) income attributable to Albemarle Corporation
$ (1,179,449)
$
1,573,476
$
2,689,816
Mandatory convertible preferred stock dividends
(136,647)
—
—
Net (loss) income attributable to Albemarle Corporation common
shareholders
$ (1,316,096)
$
1,573,476
$
2,689,816
Denominator:
Weighted-average common shares for basic (loss) earnings per share
117,516
117,317
117,120
Basic (loss) earnings per share
$
(11.20)
$
13.41
$
22.97
Diluted (loss) earnings per share
Numerator:
Net (loss) income attributable to Albemarle Corporation
$ (1,179,449)
$
1,573,476
$
2,689,816
Mandatory convertible preferred stock dividends
(136,647)
—
—
Net (loss) income attributable to Albemarle Corporation common
shareholders
$ (1,316,096)
$
1,573,476
$
2,689,816
Denominator:
Weighted-average common shares for basic (loss) earnings per share
117,516
117,317
117,120
Incremental shares under stock compensation plans
—
449
673
Weighted-average common shares for diluted (loss) earnings per share
117,516
117,766
117,793
Diluted (loss) earnings per share
$
(11.20)
$
13.36
$
22.84
The following table summarizes the number of shares, calculated on a weighted average basis, not included in the
computation of diluted (loss) earnings per share because their effect would have been anti-dilutive (in thousands):
Year Ended December 31,
2024
2023
2022
Shares assuming the conversion of the mandatory convertible preferred stock
16,932
—
—
Shares under the stock compensation plan
1,064
158
—
Included in the calculation of basic (loss) earnings per share are unvested restricted stock awards that contain
nonforfeitable rights to dividends. At December 31, 2024, there were 14,000 unvested shares of restricted stock awards
outstanding.
We have the authority to issue 15,000,000 shares of preferred stock in one or more classes or series. As of December 31,
2024, 2,300,000 shares of preferred stock have been issued.
In November 2016, our Board of Directors authorized an increase in the number of shares the Company is permitted to
repurchase under our share repurchase program, pursuant to which the Company is now permitted to repurchase up to a
maximum of 15,000,000 shares, including those previously authorized but not yet repurchased.
There were no shares of the Company’s common stock repurchased during the years ended December 31, 2024, 2023 or
2022. As of December 31, 2024, there were 7,396,263 remaining shares available for repurchase under the Company’s
authorized share repurchase program.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
135
NOTE 22—Fair Value of Financial Instruments:
In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions
and other risk factors existing at the time of assessment. Fair value information for our financial instruments is as follows:
Long-Term Debt—the fair values of our notes are estimated using Level 1 inputs and account for the difference between
the recorded amount and fair value of our long-term debt. The carrying value of our remaining long-term debt reported in the
accompanying consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on
prevailing variable market rates currently available in the countries in which we have borrowings.
December 31,
2024
2023
Recorded
Amount
Fair Value
Recorded
Amount
Fair Value
(In thousands)
Long-term debt
$
3,532,713
$
3,332,064
$
4,186,532
$
4,021,693
During the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of
non-functional currency purchases during the construction of the Kemerton plant in Australia. This derivative financial
instrument is used to manage risk and is not used for trading or other speculative purposes. This foreign currency forward
contract has been designated as a hedging instrument under ASC 815, Derivatives and Hedging. As a result of the actions taken
at Kemerton Trains 3 and 4 during 2024, the Company dedesignated the remaining hedged foreign currency forward contracts.
The Company recorded a loss in Other income, net of $26.1 million during the year ended December 31, 2024 from the
reclassification of the hedged balance from Accumulated other comprehensive loss. The balance of the settled hedged foreign
currency forward contracts associated with the construction of Kemerton Trains 1 and 2 assets placed into service will be
reclassified to earnings over the life of the related assets. At December 31, 2023, the notional value of these outstanding
designated foreign currency forward contracts totaled the equivalent of $994.5 million.
In connection with our risk management strategies, we also enter into other derivative financial instruments that have not
been designated as hedging instruments under ASC 815, Derivatives and Hedging. These derivative financial instruments are
used to manage risk and are not used for trading or other speculative purposes. At December 31, 2024 and 2023, we had
outstanding non-designated derivative financial instruments with notional values totaling $6.9 billion and $7.1 billion,
respectively. The non-designated derivative financial instruments are primarily comprised of foreign currency forward contracts
that attempt to minimize the financial impact of changes in foreign currency exchange rates. The fair values of our non-
designated foreign currency forward contracts are estimated based on current settlement values. At December 31, 2024, these
foreign currency forward contracts hedge our exposure to various currencies including the Chinese Renminbi, Euro and
Australian Dollar.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
136
The following table summarizes the fair value of our derivative financial instruments included in the consolidated balance
sheets at December 31, 2024 and 2023 (in thousands):
December 31,
2024
2023
Assets
Liabilities
Assets
Liabilities
Designated as hedging instruments
Other current assets
$
—
$
—
$
3,489
$
—
Other assets
—
—
11,704
—
Accrued expenses
—
—
—
446
Total designated as hedging instruments
—
—
15,193
446
Not designated as hedging instruments
Other current assets
4,347
—
2,636
—
Accrued expenses
—
6,586
—
5,306
Other noncurrent liabilities
—
4,766
—
—
Total not designated as hedging instruments
4,347
11,352
2,636
5,306
Total
$
4,347
$
11,352
$
17,829
$
5,752
The following table summarizes the net (losses) gains recognized for our derivative financial instruments during the years
ended December 31, 2024, 2023 and 2022 (in thousands):
Year Ended December 31,
2024
2023
2022
Designated as hedging instruments:
(Loss) gain recognized in Other comprehensive (loss) income
$
(28,701)
$
5,986
$
(4,399)
(Loss) gain recognized in Other income, net
$
(25,766)
$
135
$
—
Not designated as hedging instruments:
(Loss) gain recognized in Other income, net(a)
$
(14,728)
$
213,378
$
(41,088)
(a)
Fluctuations in the value of our foreign currency forward contracts not designated as hedging instruments are generally expected to be
offset by changes in the value of the underlying exposures being hedged, which are also reported in Other income, net.
In addition, for the years ended December 31, 2024, 2023 and 2022, we recorded net cash (settlements) receipts of ($9.8)
million, $218.0 million and ($44.4) million, respectively, primarily within Changes in current assets and liabilities, in our
consolidated statements of cash flows.
Unrealized gains and losses related to the cash flow hedges will be reclassified to earnings over the life of the related
assets when settled and the related assets are placed into service.
The counterparties to our foreign currency forward contracts are major financial institutions with which we generally
have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties.
However, we do not anticipate nonperformance by the counterparties.
NOTE 23—Fair Value Measurement:
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are
classified into the following hierarchy:
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
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
137
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified
in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set
forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and
2023 (in thousands):
December 31,
2024
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:
Available for sale debt securities(a)
$
313,991
$
—
$
—
$
313,991
Investments under executive deferred compensation plan(b) $
38,243
$
38,243
$
—
$
—
Public equity securities(c)
$
17,910
$
17,910
$
—
$
—
Private equity securities measured at net asset value(d)(e)
$
4,472
$
—
$
—
$
—
Derivative financial instruments(f)
$
4,347
$
—
$
4,347
$
—
Liabilities:
Obligations under executive deferred compensation plan(b)
$
38,243
$
38,243
$
—
$
—
Derivative financial instruments(f)
$
11,352
$
—
$
11,352
$
—
December 31,
2023
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:
Available for sale debt securities(a)
$
289,307
$
—
$
—
$
289,307
Investments under executive deferred compensation plan(b) $
33,564
$
33,564
$
—
$
—
Public equity securities(c)
$
168,928
$
168,928
$
—
$
—
Private equity securities measured at net asset value(d)(e)
$
4,536
$
—
$
—
$
—
Derivative financial instruments(f)
$
17,829
$
—
$
17,829
$
—
Liabilities:
Obligations under executive deferred compensation plan(b)
$
33,564
$
33,564
$
—
$
—
Derivative financial instruments(f)
$
5,752
$
—
$
5,752
$
—
(a)
Preferred equity of a Grace subsidiary acquired as a portion of the proceeds of the FCS sale on June 1, 2021. A third-party estimate of
the fair value was prepared using expected future cash flows over the period up to when the asset is likely to be redeemed, applying a
discount rate that appropriately captures a market participant's view of the risk associated with the investment. These are considered to be
Level 3 inputs.
(b)
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 (loss) income) and cash and cash equivalents. As such, these assets and obligations
are classified within Level 1.
(c)
Holdings in equity securities of public companies reported in Investments in the consolidated balance sheets. The fair value is measured
using publicly available share prices of the investments, and as a result these balances are classified within Level 1. Any changes are
reported in Other income, net, in our consolidated statements of (loss) income. See Note 8, “Investments,” for further details.
(d)
Primarily consists of private equity securities reported in Investments in the consolidated balance sheets. The changes in fair value are
reported in Other income, net in our consolidated statements of (loss) income.
(e)
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.
(f)
The derivative financial instruments are primarily comprised of foreign currency forward contracts. As a result of our global operating
and financing activities, we are exposed to market risks from changes in foreign currency exchange rates which may adversely affect our
operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate
fluctuations through the use of foreign currency forward contracts. The foreign currency forward contracts are valued using broker
quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified
within Level 2. See Note 22, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
138
The following tables set forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value
measurements (in thousands):
Available for Sale Debt Securities
Year Ended December 31,
2024
2023
Beginning balance
$
289,307
$
260,139
Accretion of discount
—
5,306
PIK dividends
36,311
19,307
Change in fair value
—
4,555
Cash received for tax liability
(11,627)
—
Ending balance
$
313,991
$
289,307
NOTE 24—Related Party Transactions:
Our consolidated statements of (loss) income include sales to and purchases from unconsolidated affiliates in the ordinary
course of business as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Sales to unconsolidated affiliates
$
30,090
$
35,676
$
51,906
Purchases from unconsolidated affiliates(a)
$
643,293
$
3,652,784
$
1,920,476
(a)
Purchases from unconsolidated affiliates primarily relate to spodumene purchased from the Company’s Windfield joint venture. The
decrease from prior year primarily related to the lower lithium market prices in recent months.
Our consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the
ordinary course of business as follows (in thousands):
December 31,
2024
2023
Receivables from unconsolidated affiliates
$
11,950
$
15,992
Payables to unconsolidated affiliates(a)
$
150,432
$
550,186
(a)
Payables to unconsolidated affiliates primarily relate to spodumene purchased from the Company’s Windfield joint venture under normal
payment terms.
NOTE 25—Segment and Geographic Area Information:
The Company has three operating and reportable segments, which are: (1) Energy Storage; (2) Specialties; and (3)
Ketjen. The segments are organized based on their similar markets, customers, economic characteristics and production
processes. The organizational structure facilitates the continued standardization of business processes across the organization,
and is consistent with the manner in which information is presently used internally by the Company’s Chairman, President and
Chief Executive Officer, who is the Company’s chief operating decision maker (“CODM”), to evaluate performance and make
resource allocation decisions.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the
operating segments. Pension and other post-employment benefit (“OPEB”) service cost (which represents the benefits earned
by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments
and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and
OPEB items”) are included in Corporate. Segment data includes inter-segment transfers of raw materials at cost and allocations
for certain corporate costs.
The CODM uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business
segments and to allocate resources by considering the variance in the actual results to the forecasts on a monthly basis. The
annual operating budget and ongoing forecasting process use adjusted EBITDA as a key metric in assessing the segments
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
139
process. In addition, the CODM uses adjusted EBITDA for business and enterprise planning purposes and as a significant
component in the calculation of performance-based compensation for management and other employees. Effective January 1,
2024, the Company changed its definition of adjusted EBITDA for financial accounting purposes. The updated definition
includes Albemarle’s share of the pre-tax earnings of the Windfield joint venture, whereas the prior definition included
Albemarle’s share of Windfield earnings net of tax. This calculation is consistent with the definition of adjusted EBITDA used
in the leverage financial covenant calculation in the amended 2022 Credit Agreement, which is a material agreement for the
Company and aligns the information presented to various stakeholders. This presentation more closely represents the
materiality and financial contribution of the strategic investment in Windfield to the Company’s earnings, and more closely
represents a measure of EBITDA. The Company’s updated definition of adjusted EBITDA is earnings before interest and
financing expenses, income tax expenses, the proportionate share of Windfield income tax expense, depreciation and
amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items on a segment basis.
These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses on
sales of businesses, restructuring charges, facility divestiture charges, certain litigation and arbitration costs and charges, non-
operating pension and OPEB items and other significant non-recurring items. Adjusted EBITDA for the prior periods has been
recast to conform to the current year presentation.
See below for a reconciliation of segment Net sales to adjusted EBITDA by segment showing significant segment
expenses regularly reviewed by the CODM for the years ended December 31, 2024, 2023 and 2022 (in thousands):
Energy
Storage
Specialties
Ketjen
Total
Segments
Year Ended December 31, 2024
Net sales(a)
$ 3,015,121
$ 1,325,983
$ 1,036,422
$ 5,377,526
Cost of goods sold(b)
(2,992,566)
(935,017)
(810,319)
(4,737,902)
Selling, general and administrative expenses(b)
(249,805)
(93,533)
(90,653)
(433,991)
Other segment items(c)
(25,101)
(25,676)
(26,852)
(77,629)
Equity in net income of unconsolidated investments(d)
1,009,891
—
22,468
1,032,359
Net income attributable to noncontrolling interests
—
(43,253)
—
(43,253)
Adjusted EBITDA by segment
$
757,540
$
228,504
$
131,066
$ 1,117,110
Year Ended December 31, 2023
Net sales(a)
$ 7,078,998
$ 1,482,425
$ 1,055,780
$ 9,617,203
Cost of goods sold(b)
(6,205,403)
(961,177)
(847,018)
(8,013,598)
Selling, general and administrative expenses(b)
(266,190)
(100,173)
(94,387)
(460,750)
Other segment items(c)
(22,632)
(25,719)
(30,972)
(79,323)
Equity in net income of unconsolidated investments(d)
2,596,820
—
20,469
2,617,289
Net income attributable to noncontrolling interests
—
(96,850)
—
(96,850)
Adjusted EBITDA by segment
$ 3,181,593
$
298,506
$
103,872
$ 3,583,971
Year Ended December 31, 2022
Net sales(a)
$ 4,660,945
$ 1,759,587
$
899,572
$ 7,320,104
Cost of goods sold(b)
(2,170,867)
(1,013,247)
(775,717)
(3,959,831)
Selling, general and administrative expenses(b)
(186,311)
(77,382)
(84,896)
(348,589)
Other segment items(c)
(18,389)
(16,677)
(32,131)
(67,197)
Equity in net income of unconsolidated investments(d)
1,066,978
—
21,904
1,088,882
Net income attributable to noncontrolling interests
—
(124,963)
—
(124,963)
Adjusted EBITDA by segment
$ 3,352,356
$
527,318
$
28,732
$ 3,908,406
(a)
Intersegment sales are not considered material.
(b)
The significant expense categories and amounts align with the segment information that is regularly provided to the CODM. Excludes
depreciation and amortization, and non-operating, non-recurring or unusual items as described in the reconciliation of total segment
adjusted EBITDA to consolidated Net (loss) income attributable to Albemarle Corporation below.
(c)
Other segment items are comprised of Research and development expenses excluding depreciation and amortization.
(d)
Excludes Albemarle’s 49% ownership interest in the income tax expense of the Windfield joint venture.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
140
The Company reconciles the total segment adjusted EBITDA to the consolidated net (loss) income attributable to
Albemarle Corporation given the impact of equity in net income from unconsolidated investments, the majority of which relates
to the Windfield joint venture. This reconciliation reflects the strategic and operational significance of the Company’s joint
ventures and aligns with our allocation of equity in net income from unconsolidated investments at the segment level,
representing each segment's contribution to the Company's overall financial performance. See below for a reconciliation of total
segment adjusted EBITDA to consolidated Net (loss) income attributable to Albemarle Corporation (in thousands):
Year Ended December 31,
2024
2023
2022
Total segment adjusted EBITDA
$ 1,117,110
$ 3,583,971
$ 3,908,406
Corporate expenses, net
22,668
(37,983)
(110,958)
Depreciation and amortization
(588,638)
(429,944)
(300,841)
Interest and financing expenses(a)
(165,619)
(116,072)
(122,973)
Income tax expense
(87,085)
(430,277)
(390,588)
Proportionate share of Windfield income tax expense(b)
(299,193)
(779,703)
(321,591)
Gain (loss) on change in interest in properties/sale of business, net(c)
—
71,190
(8,400)
Acquisition and integration related costs(d)
(6,223)
(26,767)
(16,259)
Restructuring charges and asset write-offs(e)
(1,180,806)
(9,491)
—
Goodwill impairment(f)
—
(6,765)
—
Non-operating pension and OPEB items
11,335
7,971
57,032
(Loss) gain in fair value of public equity securities(g)
(70,758)
(44,732)
4,319
Legal accrual(h)
—
(218,510)
—
Other(i)
67,760
10,588
(8,331)
Net (loss) income attributable to Albemarle Corporation
$ (1,179,449)
$ 1,573,476
$ 2,689,816
(a)
Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million for the year ended December 31,
2022. See Note 12, “Long-term Debt,” for additional information. In addition, Interest and financing expenses for the year ended
December 31, 2022 includes the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest
in prior periods.
(b)
Albemarle’s 49% ownership interest in the reported income tax expense of the Windfield joint venture.
(c)
Gain recorded during the year ended December 31, 2023 resulting from the restructuring of the MARBL joint venture with MRL. See
Note 8, “Investments,” for further details. $8.4 million of expense recorded during the year ended December 31, 2022 as a result of
revised estimates of the obligation to construct certain lithium hydroxide conversion assets in Kemerton, Western Australia, due to cost
overruns from supply chain, labor and COVID-19 pandemic related issues.
(d)
Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and
administrative expenses (“SG&A”).
(e)
See Note 17, “Restructuring Charges and Asset Write-offs,” for further details.
(f)
Goodwill impairment charge recorded in SG&A during the year ended December 31, 2023 related to our PCS business. See Note 10,
“Goodwill and Other Intangibles,” for further details.
(g)
Other income, net for the year ended December 31, 2024 included losses of $37.0 million and $33.7 million resulting from the net
change in fair value of investments in public equity securities and the sale of investments in public equity securities, respectively. For the
years ended December 31, 2023 and 2022, a (loss) gain of ($44.7) million and $4.3 million, respectively, were recorded in Other income,
net resulting from the change in fair value of investments in public equity securities.
(h)
Loss recorded in SG&A for the agreements to resolve a previously disclosed legal matter with the DOJ and SEC during the year ended
December 31, 2023. See Note 15, “Commitments and Contingencies,” for further details.
(i)
Included amounts for the year ended December 31, 2024 recorded in:
•
Cost of goods sold - $1.4 million of expenses related to non-routine labor and compensation related costs that are outside normal
compensation arrangements.
•
SG&A - $5.3 million of expenses related to certain historical legal and environmental matters.
•
Other income, net - $40.9 million of gains from the sale of assets at a site not part of our operations, $36.3 million of income
from PIK dividends of preferred equity in a Grace subsidiary, a $1.8 million net gain primarily resulting from the adjustment of
indemnification related to previously disposed businesses and a $0.6 million gain from an updated cost estimate of an
environmental reserve at a site not part of our operations, partially offset by $2.9 million of charges for asset retirement
obligations at a site not part of our operations and $2.1 million of a loss related to the fair value adjustment of a nonmarketable
security investment.
Included amounts for the year ended December 31, 2023 recorded in:
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
141
•
Cost of goods sold - $15.1 million loss recorded to settle an arbitration matter with a regulatory agency in Chile, partially offset
by a $4.1 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations.
•
SG&A - $2.3 million of facility closure expenses related to offices in Germany, $1.9 million of charges primarily for
environmental reserves at sites not part of our operations and $1.8 million of various expenses including for certain legal costs
and shortfall contributions for a multiemployer plan financial improvement plan.
•
Other income, net - $19.3 million gain from PIK dividends of preferred equity in a Grace subsidiary, a $7.3 million gain resulting
from insurance proceeds of a prior legal matter and $5.5 million of gains from the sale of investments and the write-off of certain
liabilities no longer required, partially offset by $3.6 million of charges for asset retirement obligations at a site not part of our
operations and $0.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the year ended December 31, 2022 recorded in:
•
Cost of goods sold - $2.7 million of expense related to one-time retention payments for certain employees during the Catalysts
strategic review and business unit realignment, and $0.5 million related to the settlement of a legal matter resulting from a prior
acquisition.
•
SG&A - $4.3 million primarily related to facility closure expenses of offices in Germany, $2.8 million of charges for
environmental reserves at sites not part of our operations, $2.8 million of shortfall contributions for our multiemployer plan
financial improvement plan, $1.9 million of expense related to one-time retention payments for certain employees during the
Catalysts strategic review, partially offset by $4.3 million of gains from the sale of legacy properties not part of our operations.
•
Other income, net - $3.0 million gain from the reversal of a liability related to a previous divestiture, a $2.0 million gain relating
to the adjustment of an environmental reserve at non-operating businesses we previously divested and a $0.6 million gain related
to a settlement received from a legal matter in a prior period, partially offset by a $3.2 million loss resulting from the adjustment
of indemnification related to previously disposed businesses.
Identifiable assets by segment as of December 31, 2024, 2023 and 2022 were as follows (in thousands):
December 31,
2024
2023
2022
Assets:
Energy Storage(a)
$ 11,285,847
$ 13,246,412
$ 10,471,949
Specialties
1,843,564
1,696,307
1,396,583
Ketjen
1,426,189
1,355,743
1,214,482
Total segment assets
14,555,600
16,298,462
13,083,014
Corporate
2,054,049
1,972,190
2,373,508
Total assets
$ 16,609,649
$ 18,270,652
$ 15,456,522
Additional segment information for the years ended December 31, 2024, 2023 and 2022 was as follows (in thousands):
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
142
Year Ended December 31,
2024
2023
2022
Depreciation and amortization:
Energy Storage
$
434,916
$
258,436
$
175,738
Specialties
95,043
86,673
67,705
Ketjen
51,488
76,023
51,417
Total segment depreciation and amortization
581,447
421,132
294,860
Corporate
7,191
8,812
5,981
Total depreciation and amortization
$
588,638
$
429,944
$
300,841
Equity in net income of unconsolidated investments (net of tax):
Energy Storage
$
705,378
$
1,822,620
$
746,882
Ketjen
22,468
20,469
21,904
Total segment equity in net income of unconsolidated investments
(net of tax)
727,846
1,843,089
768,786
Corporate(a)
(12,413)
10,993
3,489
Total equity in net income of unconsolidated investments (net of
tax)
$
715,433
$
1,854,082
$
772,275
Capital expenditures:
Energy Storage
$
1,231,009
$
1,752,440
$
980,410
Specialties
257,673
214,039
183,658
Ketjen
163,921
132,510
66,319
Total segment capital expenditures
1,652,603
2,098,989
1,230,387
Corporate
33,187
50,292
31,259
Total capital expenditures
$
1,685,790
$
2,149,281
$
1,261,646
(a)
Corporate equity in net income of unconsolidated investments (net of tax) relates to foreign exchange gains or losses from the Windfield
joint venture.
The following table summarizes the Company’s net sales by geographic area for the years ended December 31, 2024,
2023 and 2022 (in thousands):
Year Ended December 31,
2024
2023
2022
Net Sales(a):
United States
$
901,870
$
930,838
$
888,612
South Korea
912,376
3,125,372
1,628,728
China
1,961,143
2,851,809
2,380,459
Japan
589,268
1,396,360
1,079,322
Other(b)
1,012,869
1,312,824
1,342,983
Total
$
5,377,526
$
9,617,203
$
7,320,104
(a)
Net sales are attributed to countries based upon shipments to final destination.
(b)
Net sales to any other country are individually material.
During the year ended December 31, 2024, no customer represented greater than 10% of the Company’s consolidated net
sales. During of the year ended December 31, 2023, one customer in the Energy Storage business represented approximately
12% of the Company’s consolidated net sales, and during the year ended December 31, 2022, a separate customer represented
approximately 11% of the Company’s consolidated net sales.
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
143
The following table summarizes the Company’s long-lived assets by geographic area for the years ended December 31,
2024, 2023 and 2022 was as follows (in thousands):
As of December 31,
2024
2023
2022
(In thousands)
Long-Lived Assets(a):
United States
$
2,134,371
$
1,912,243
$
1,371,347
Australia
3,943,847
4,610,963
3,253,069
Chile
2,253,647
2,258,619
2,057,270
China
966,785
819,119
438,090
Jordan
309,148
292,870
267,612
Netherlands
177,587
186,963
167,264
Germany
90,367
91,979
77,845
France
59,815
56,876
52,894
Brazil
29,733
33,730
31,855
Other foreign countries
92,655
87,489
77,747
Total
$ 10,057,955
$ 10,350,851
$
7,794,993
(a) Long-lived assets are comprised of the Company’s Property, plant and equipment and joint ventures included in Investments.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
NONE
Item 9A.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period
covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as
of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and
communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure.
Management’s report on internal control over financial reporting and the independent registered public accounting firm’s
report are included in Item 8 under the captions entitled “Management’s Report on Internal Control over Financial Reporting”
and “Report of Independent Registered Public Accounting Firm” and are incorporated herein by reference.
Changes in Internal Control over Financial Reporting
No changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f))
occurred during the fiscal quarter ended December 31, 2024 that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B.
Other Information.
NONE
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.
NONE
PART III
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
144
Item 10.
Directors, Executive Officers and Corporate Governance.
The information regarding Directors under the heading “Proposal 1 - Election of Directors,” and under the subheadings
“Process for Selecting Directors” and “Director Candidate Recommendations and Nominations by Shareholders” under the
heading “Corporate Governance”; the information under the subheading “Delinquent Section 16(a) Reports” under the heading
“Share Ownership”; and the information regarding the Audit Committee under the subheading “Committees of the Board of
Directors” under the heading “Corporate Governance” in the Company’s 2025 Proxy Statement are incorporated herein by
reference. See “Executive Officers of the Registrant” appearing after Item 4 in Part I of this Annual Report for information
regarding executive officers of the Company.
Code of Conduct
We have adopted a code of conduct and ethics for directors, officers and employees, known as the Albemarle Code of
Conduct. The Albemarle Code of Conduct is available on our website, www.albemarle.com. Shareholders may also request a
free copy of the Albemarle Code of Conduct from: Albemarle Corporation, Attention: Investor Relations, 4250 Congress Street,
Suite 900, Charlotte, North Carolina 28209. We will disclose any amendments to, or waivers from, a provision of our Code of
Conduct that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions that relates to any element of the Code of Conduct as defined in Item 406 of Regulation S-
K by posting such information on our website.
New York Stock Exchange Certifications
Because our common stock is listed on the New York Stock Exchange (“NYSE”), our Chief Executive Officer is required
to make, and he has made, an annual certification to the NYSE stating that he was not aware of any violation by us of the
corporate governance listing standards of the NYSE. Our Chief Executive Officer made his annual certification to that effect to
the NYSE as of May 20, 2024. In addition, we have filed, as exhibits to this Annual Report on Form 10-K, the certifications of
our principal executive officer and principal financial officer required under Sections 906 and 302 of the Sarbanes-Oxley Act of
2002 to be filed with the Securities and Exchange Commission regarding the quality of our public disclosure.
Additional information will be contained in the Proxy Statement and is incorporated herein by reference.
Item 11.
Executive Compensation.
The information under the heading “Director Compensation” and the information under the headings “Compensation
Discussion and Analysis”; “Compensation Committee Report”; “Compensation Tables and Other Information”; and “Pay Ratio
Disclosure” under the principal heading “Compensation”; and the information under the subheading “Compensation
Committee Interlocks and Insider Participation” under the heading “Corporate Governance” in the Company’s 2025 Proxy
Statement is incorporated herein by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information under the subheading “Equity Plan Compensation Information” under the heading “Compensation
Tables and Other Information” and the information under “Share Ownership” in the Company’s 2025 Proxy Statement is
incorporated herein by reference.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
The information under the subheading “Director Independence” under the principal heading “Corporate Governance” and
under the heading “Certain Relationships and Related Transactions” in the Company’s 2025 Proxy Statement is incorporated
herein by reference.
Item 14.
Principal Accountant Fees and Services.
The information under the subheadings “Fees Billed by PwC” and “Audit & Finance Committee Pre-Approval Policy”
under the heading “Proposal 3 - Ratification of Appointment of Independent Registered Public Accounting Firm” in the
Company’s 2025 Proxy Statement is incorporated herein by reference.
Albemarle Corporation and Subsidiaries
145
PART IV
Item 15.
Exhibits and Financial Statement Schedules.
(a)(1) The following consolidated financial and informational statements of the registrant are included in Part II Item 8 on pages
80 to 131:
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Balance Sheets as of December 31, 2024 and 2023
Consolidated Statements of (Loss) Income, Comprehensive (Loss) Income, Changes in Equity and Cash Flows for the years
ended December 31, 2024, 2023 and 2022
Notes to the Consolidated Financial Statements
(a)(2) No financial statement schedules are provided in accordance with Item 15(a)(2) as the information is either not
applicable, not required or has been furnished in the Consolidated Financial Statements or Notes thereto.
(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:
3.1*
Amended and Restated Articles of Incorporation of Albemarle Corporation [restated electronically for SEC
filing purposes only].
3.2
Amended and Restated Bylaws, effective October 23, 2023, of Albemarle Corporation [filed as Exhibit 3.1 to
the Company’s Current Report on Form 8-K (No. 1-12658) filed on October 26, 2023, 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
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].
4.3
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].
4.4
Fifth Supplemental Indenture, dated as of November 25, 2019, among Albemarle Corporation, Albemarle
Wodgina Pty Ltd 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 25, 2019, and incorporated herein by
reference].
4.5
Sixth Supplemental Indenture, dated March 30, 2021, among Albemarle Corporation, Albemarle New Holding
GmbH, 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 March 31, 2021, and incorporated herein by reference].
4.6
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].
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
146
4.7
Form of 3.450% Note due 2029 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No.
1-12658) filed on November 25, 2019, and incorporated herein by reference].
4.8
Form of 1.125% Note due 2025 [filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K (No.
1-12658) filed on November 25, 2019, and incorporated herein by reference].
4.9
Form of 1.625% Note due 2028 [filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K (No.
1-12658) filed on November 25, 2019, and incorporated herein by reference].
4.10
Form of 4.650% Senior Notes due 2027 [filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K
(No. 1-12658) filed on May 13, 2022, and incorporated herein by reference].
4.11
Form of 5.050% Senior Notes due 2032 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K
(No. 1-12658) filed on May 13, 2022, and incorporated herein by reference].
4.12
Form of 5.650% Senior Notes due 2052 [filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K
(No. 1-12658) filed on May 13, 2022, and incorporated herein by reference].
4.13*
Description of Securities.
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].
10.2#
First Amendment to the 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors of
Albemarle Corporation [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658)
filed on August 5, 2016, and incorporated herein by reference].
10.3#
Second Amendment to the 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors
of Albemarle Corporation [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No.
1-12658) filed on August 5, 2020, and incorporated herein by reference].
10.4#
Third Amendment to the 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors of
Albemarle Corporation [filed as Exhibit 10.56 to the Company's Annual Report on Form 10-K (No. 1-12658)
filed on February 19, 2021 and incorporated herein by reference].
10.5#
Fourth Amendment to the 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors
of Albemarle Corporation [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No.
1-12658) filed on August 4, 2021, and incorporated herein by reference].
10.6#
Albemarle Corporation 2023 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 21, 2023, and incorporated herein by reference].
10.7#
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].
10.8#
Form of Notice of Option Grant under the Albemarle Corporation 2008 Incentive Plan [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].
10.9#
Albemarle Corporation 2017 Incentive Plan, adopted May 12, 2017 [filed as Appendix A to the Company’s
Definitive Proxy Statement filed on March 30, 2017, and incorporated herein by reference].
Albemarle Corporation and Subsidiaries
147
10.10#
Form of Notice of Option Grant under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.2 to
the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on May 9, 2018, and incorporated herein
by reference].
10.11#
Form of Restricted Stock Unit Award Agreement under the Albemarle Corporation 2017 Incentive Plan [filed
as Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28, 2022, and
incorporated herein by reference].
10.12#
Form of Adjusted ROIC Performance Unit Award Agreement under the Albemarle Corporation 2017
Incentive Plan [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on
February 28, 2022, and incorporated herein by reference].
10.13#
Form of TSR Performance Unit Award Agreement under the Albemarle Corporation 2017 Incentive Plan
[filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28,
2022, and incorporated herein by reference].
10.14#
Form of Stock Option Grant Agreement under the Albemarle Corporation 2017 Incentive Plan [filed as
Exhibit 10.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28, 2022, and
incorporated herein by reference].
10.15#
Form of Special Restricted Stock Unit Award Agreement under the Albemarle Corporation 2017 Incentive
Plan [filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 28,
2022, and incorporated herein by reference].
10.16#
Form Notice of Special Retention Restricted Stock Unit Award under the Albemarle Corporation 2017
Incentive Plan [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on
November 2, 2022, and incorporated herein by reference].
10.17#
Form of Stock Option Award Agreement under the Albemarle Corporation 2017 Incentive Plan [filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 24, 2023, and
incorporated herein by reference].
10.18#
Form of rTSR Performance Unit Award Agreement under the Albemarle Corporation 2017 Incentive Plan
[filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 24,
2023, and incorporated herein by reference].
10.19#
Form of ROIC Performance Unit Award Agreement under the Albemarle Corporation 2017 Incentive Plan
[filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 24,
2023, and incorporated herein by reference].
10.20#
Form of Restricted Stock Unit Award Agreement under the Albemarle Corporation 2017 Incentive Plan [filed
as Exhibit 10.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 24, 2023, and
incorporated herein by reference].
10.21#
Form of Special Restricted Stock Unit Award Agreement under the Albemarle Corporation 2017 Incentive
Plan [filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 24,
2023, 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].
Albemarle Corporation and Subsidiaries
148
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#
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].
10.27#
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].
10.28#
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].
10.29#
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].
10.30*#
Form of Executive Change in Control Agreement.
10.31#
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].
10.32#
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].
10.33#
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].
10.34#
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].
10.35#
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].
10.36#
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].
10.37#
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].
10.38#
Fifth Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of March 31,
2017 [filed as Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2017 (No. 1-12658), and incorporated herein by reference].
10.39#
Sixth Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of July 5,
2017 [filed as Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2017 (No. 1-12658), and incorporated herein by reference].
Albemarle Corporation and Subsidiaries
149
10.40#
Seventh Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of
November 9, 2017 [filed as Exhibit 10.40 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2017 (No. 1-12658), and incorporated herein by reference].
10.41#
Amended and Restated Executive Employment Agreement, dated March 15, 2023, between the Company and
J. Kent Masters [filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed
on May 3, 2023, and incorporated herein by reference].
10.42#
Amended and Restated Severance Compensation Agreement, dated March 15, 2023, between the Company
and J. Kent Masters [filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658)
filed on May 3, 2023, and incorporated herein by reference].
10.43
Sale, Purchase and Contribution Agreement, dated February 25, 2021 among Albemarle Corporation, W. R.
Grace & Co.-Conn and Fine Chemical Manufacturing Services LLC [filed as Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q (No. 1-12658) filed on May 5, 2021, and incorporated herein by reference].
10.44
Second Amendment and Restatement Agreement, dated as of December 10, 2021, among Albemarle
Corporation, the Lenders Party hereto, and JPMorgan Chase Bank, N.A., as Administrative Agent [filed as
Exhibit 10.62 to the Company’s Annual Report on Form 10-K (No. 1-12658) filed on February 18, 2022 and
incorporated herein by reference].
10.45
Amended and Restated Credit Agreement, dated as of October 28, 2022, among Albemarle Corporation,
certain other subsidiaries of the Company, the Lenders Party thereto, and Bank of America, N.A., as
Administrative Agent for the Lenders [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q
(No. 1-12658) filed on November 2, 2022, and incorporated herein by reference].
10.46
First Amendment to Credit Agreement, dated as of February 9, 2024, among Albemarle Corporation, certain
other subsidiaries of the Company, the Lenders Party thereto, and Bank of America, N.A., as Administrative
Agent for the Lenders [filed as Exhibit 10.52 to the Company’s Annual Report on Form 10-K (No. 1-12658)
filed on February 15, 2024 and incorporated herein by reference].
10.47
Form of Employee Non-Solicitation, Non-Compete and Confidentiality Agreement [filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 9, 2022 and incorporated herein by
reference].
10.48#
Albemarle Corporation Amended and Restated Compensation Recoupment and Forfeiture Policy, effective as
of December 1, 2023 [filed as Exhibit 10.54 to the Company’s Annual Report on Form 10-K (No. 1-12658)
filed on February 15, 2024 and incorporated herein by reference].
19*
Albemarle Corporation Insider Trading Policy, effective as of October 4, 2024.
21.1*
Subsidiaries of the Company.
23.1*
Consent of PricewaterhouseCoopers LLP.
23.2
Consent of SRK Consulting (U.S), Inc. regarding lithium reserves and resources [filed as Exhibit 23.1 to the
Company’s Current Report on Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by
reference].
23.3
Consent of Fastmarkets Group Limited regarding market studies for lithium reserves and resources [filed as
Exhibit 23.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 12, 2025 and
incorporated herein by reference].
23.4
Consent of RPM Global USA, Inc. regarding lithium reserves and resources [filed as Exhibit 23.3 to the
Company’s Current Report on Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by
reference].
Albemarle Corporation and Subsidiaries
150
23.5
Consent of RPS Energy Canada Ltd regarding bromine reserves and resources [filed as Exhibit 23.4 to the
Company’s Current Report on Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by
reference].
23.6
Consent of RESPEC Company, LLC regarding bromine reserves and resources [filed as Exhibit 23.5 to the
Company’s Current Report on Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by
reference].
31.1*
Certification of Principal 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 Principal 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 Principal 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 Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
96.1
SEC Technical Report Summary, Greenbushes Mine, Western Australia, prepared by RPM Global USA Inc.,
dated February 10, 2025 [filed as Exhibit 96.1 to the Company’s Current Report on Form 8-K (No. 1-12658)
filed on February 12, 2025 and incorporated herein by reference].
96.2
SEC Technical Report Summary, Wodgina Operation, Western Australia, prepared by RPM Global USA Inc.,
dated February 10, 2025 [filed as Exhibit 96.2 to the Company’s Current Report on Form 8-K (No. 1-12658)
filed on February 12, 2025 and incorporated herein by reference].
96.3
SEC Technical Report Summary, Prefeasibility Study, Salar de Atacama Region II, Chile, prepared by SRK
Consulting (U.S), Inc., dated February 8, 2025 [filed as Exhibit 96.3 to the Company’s Current Report on
Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by reference].
96.4
SEC Technical Report Summary Prefeasibility Study, Silver Peak Lithium Operation, Nevada, USA, prepared
by SRK Consulting (U.S), Inc., dated February 8, 2025 [filed as Exhibit 96.4 to the Company’s Current Report
on Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by reference].
96.5
SEC Technical Report Summary for Jordan Bromine Operation, prepared by RPS Energy Canada Ltd and
RESPEC Consulting Inc., dated February 12, 2025 [filed as Exhibit 96.5 to the Company’s Current Report on
Form 8-K (No. 1-12658) filed on February 12, 2025 and incorporated herein by reference].
96.6
SEC Technical Report Summary for Magnolia Field Bromine Reserves, prepared by RPS Energy Canada Ltd,
dated February 12, 2025 [filed as Exhibit 96.6 to the Company’s Current Report on Form 8-K (No. 1-12658)
filed on February 12, 2025 and incorporated herein by reference].
97
Albemarle Corporation Incentive-Based Compensation Recovery Policy, effective as of December 1, 2023
[filed as Exhibit 97 to the Company’s Annual Report on Form 10-K (No. 1-12658) filed on February 15, 2024
and incorporated herein by reference].
101*
Interactive Data Files (Annual Report on Form 10-K, for the fiscal year ended December 31, 2024, 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 (Loss) Income for the fiscal years ended December 31, 2024, 2023 and 2022, (ii) the
Consolidated Statements of Comprehensive (Loss) Income for the fiscal years ended December 31, 2024, 2023
and 2022, (iii) the Consolidated Balance Sheets at December 31, 2024 and 2023, (iv) the Consolidated
Statements of Changes in Equity for the fiscal years ended December 31, 2024, 2023 and 2022, (v) the
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2024, 2023 and 2022 and (vi)
the Notes to Consolidated Financial Statements.
Albemarle Corporation and Subsidiaries
151
104*
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
#
Management contract or compensatory plan or arrangement.
*
Included with this filing.
(c) In accordance with Regulation S-X Rule 3-09, the financial statements of Windfield Holdings Pty. Ltd. (“Windfield”) for
the year ended December 31, 2024, Windfield’s fiscal year end, will be filed by amendment to this Annual Report on Form 10-
K on or before June 30, 2025.
Item 16.
Form 10-K Summary.
NONE
Albemarle Corporation and Subsidiaries
152
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
ALBEMARLE CORPORATION
(Registrant)
By:
/S/ J. KENT MASTERS
(J. Kent Masters)
Chairman, President and Chief Executive Officer
Dated: February 12, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities indicated as of February 12, 2025.
Signature
Title
/S/ J. KENT MASTERS
Chairman, President and Chief Executive Officer (principal executive
(J. Kent Masters)
officer)
/S/ NEAL R. SHEOREY
Executive Vice President, Chief Financial Officer (principal financial
(Neal R. Sheorey)
officer)
/S/ DONALD J. LABAUVE
Vice President, Corporate Controller and Chief Accounting Officer
(principal accounting officer)
(Donald. J. LaBauve)
/S/ M. LAUREN BRLAS
Director
(M. Lauren Brlas)
/S/ RALF H. CRAMER
Director
(Ralf H. Cramer)
/S/ GLENDA J. MINOR
Director
(Glenda J. Minor)
/S/ JAMES J. O’BRIEN
Director
(James J. O’Brien)
/S/ DIARMUID B. O’CONNELL
Director
(Diarmuid B. O’Connell)
/S/ DEAN L. SEAVERS
Director
(Dean L. Seavers)
/S/ GERALD A. STEINER
Director
(Gerald A. Steiner)
/S/ HOLLY A. VAN DEURSEN
Director
(Holly A. Van Deursen)
/S/ ALEJANDRO D. WOLFF
Director
(Alejandro D. Wolff)
Albemarle Corporation and Subsidiaries
153
Exhibit 21.1
SUBSIDIARIES OF ALBEMARLE CORPORATION
ACI Cyprus, L.L.C.
Delaware
Albemarle Amendments, LLC
Delaware
Albemarle Argentina S.R.L.
Argentina
Albemarle Chemical Canada Ltd.
Canada
Albemarle Chemicals (Shanghai) Co., Ltd.
China
Albemarle Chemicals Ltd
Cyprus
Albemarle Chemicals SAS
France
Albemarle Chemicals South Africa (Proprietary) Limited
South Africa
Albemarle Chemicals Trading Ltd
United Arab Emirates
Albemarle Delaware Holdings 1 LLC
Delaware
Albemarle Delaware Holdings 2 LLC
Delaware
Albemarle Dutch Holdings B.V.
Netherlands
Albemarle Europe SRL
Belgium
Albemarle Finance Company B.V.
Netherlands
Albemarle Foundation
Virginia
Albemarle Germany GmbH
Germany
Albemarle Hilfe GmbH Unterstützungskasse
Germany
Albemarle Holdings Company Limited
Turks & Caicos
Albemarle Holdings Limited
Hong Kong
Albemarle Hungary Ltd.
Hungary
Albemarle India New Materials Private Limited
India
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 Limitada
Chile
Albemarle Lithium Holding Corporation
Delaware
Albemarle Lithium Holding GmbH
Germany
Albemarle Lithium (Jiangsu) Co., Ltd.
China
Albemarle Lithium Pty Ltd
Australia
Albemarle Lithium Spain S.L.
Spain
Albemarle Lithium UK Limited
United Kingdom
Albemarle Management (Shanghai) Co., Ltd.
China
Albemarle Middle East FZE
United Arab Emirates
Albemarle Netherlands B.V.
Netherlands
Albemarle New Holding GmbH
Germany
Albemarle Overseas Employment Corporation
Virginia
Albemarle Saudi Trading Company
Saudi Arabia
Albemarle Sichuan New Materials Co., Ltd.
China
Albemarle Specialties Trading Company
Saudi Arabia
Albemarle Specialty Products Singapore Pte. Ltd.
Singapore
Albemarle Taiwan Limited
Taiwan
Albemarle U.S., Inc.
Delaware
NAME
PLACE OF FORMATION
Albemarle Wodgina Pty Ltd
Australia
CMC Lithium Pty Ltd
Australia
Excalibur Realty Company
Delaware
Foote Chile Holding Company
Delaware
Foote Minera e Inversiones Limitada
Chile
Genesis Voyager Pty Ltd
Australia
Guangxi Albemarle Lithium Co., Ltd.
China
Jiangxi Albemarle Lithium Co., Ltd.
China
Jordan Bromine Company Ltd.
Jordan
Ketjen Belgium SRL
Belgium
Ketjen Brazil Holdings Limitada
Brazil
Ketjen Brazil Limitada
Brazil
Ketjen Canada Limited
Canada
Ketjen Catalysts (Shanghai) Company Limited
China
Ketjen Corporation
Delaware
Ketjen Hungary Limited Liability Company
Hungary
Ketjen India Private Limited
India
Ketjen Italy S.r.l.
Italy
Ketjen Japan GK
Japan
Ketjen Korea Limited
Republic of Korea
Ketjen Limited Liability Company
Delaware
Ketjen Malaysia Sdn Bhd.
Malaysia
Ketjen Middle East Trading Company - L.L.C.
United Arab Emirates
Ketjen Netherlands B.V.
Netherlands
Ketjen Netherlands Holdings B.V.
Netherlands
Ketjen Netherlands Holdings 2 B.V.
Netherlands
Ketjen Singapore Private Limited
Singapore
Ketjen Spain, S.L.
Spain
Ketjen Taiwan Company Limited
Taiwan
Ketjen (Thailand) Co., Ltd.
Thailand
Ketjen UK Limited
United Kingdom
Ketjen Vietnam Limited Liability Company
Vietnam
Knight Lux 1 S.à r.l.
Luxembourg
Knight Lux 2 S.à r.l.
Luxembourg
LiBrA Insurance Company, Inc.
North Carolina
Metalon Environmental Management & Solutions GmbH
Germany
Outfield Limited
Canada
PT Ketjen Catalysts Indonesia
Indonesia
Rockwood Holdings, Inc.
Delaware
Rockwood Lithium Japan K.K.
Japan
Rockwood Lithium Korea LLC
Republic of Korea
Rockwood Lithium (Shanghai) Co., Ltd.
China
Rockwood Lithium Taiwan Co., Ltd.
Taiwan
Rockwood Specialties GmbH
Germany
Rockwood Specialties Group, LLC
Delaware
Rockwood Specialties LLC
Delaware
NAME
PLACE OF FORMATION
Rockwood Specialties Limited
United Kingdom
RSG Immobilien GmbH
Germany
RT Lithium Limited
United Kingdom
Sales de Magnesio Limitada
Chile
Shandong Sinobrom Albemarle Bromine Chemicals Company Limited
China
Sichuan Guorun New Material Co., Ltd.
China
Titus Minerals Pty Ltd
Australia
Voyager Holding Company Pty Ltd
Australia
Western Lithium Pty Ltd
Australia
NAME
PLACE OF FORMATION
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-269815) and on
Form S-8 (No. 333-150694, 333-166828, 333-188599, 333-223167 and 333-271578) of Albemarle Corporation of our report
dated February 12, 2025 relating to the financial statements and the effectiveness of internal control over financial reporting,
which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 12, 2025
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, J. Kent Masters, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Albemarle Corporation for the period ended December 31, 2024;
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 12, 2025
/s/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Neal R. Sheorey, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Albemarle Corporation for the period ended December 31, 2024;
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 12, 2025
/s/ NEAL R. SHEOREY
Neal R. Sheorey
Executive Vice President and Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Albemarle Corporation (the “Company”) for the period ended
December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Kent Masters,
principal executive officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-
Oxley Act of 2002, that:
(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/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer
February 12, 2025
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Albemarle Corporation (the “Company”) for the period ended
December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Neal R.
Sheorey, principal financial officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the
Sarbanes-Oxley Act of 2002, that:
(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/ NEAL R. SHEOREY
Neal R. Sheorey
Executive Vice President and Chief Financial Officer
February 12, 2025
BR012653-0325-10K