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Segment and Geographic Area Information | 12 Months Ended
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Dec. 31, 2018
Segment Reporting [Abstract] |
Segment and Geographic Area Information | Segment and Geographic Area Information: In the first quarter of 2018, the PCS product category merged with our former Refining Solutions reportable segment to form a global business focused on catalysts. As a result, our three reportable segments include: (1) Lithium; (2) Bromine Specialties; and (3) Catalysts. On June 17, 2016, the Company signed a definitive agreement to sell its Chemetall Surface Treatment business, a separate reportable segment, to BASF SE. This business was classified as discontinued operations and its results are excluded from segment results for all periods presented. Each segment has a dedicated team of sales, research and development, process engineering, manufacturing and sourcing, and business strategy personnel and has full accountability for improving execution through greater asset and market focus, agility and responsiveness. This business structure aligns with the markets and customers we serve through each of the segments. This structure also facilitates the continued standardization of business processes across the organization, and is consistent with the manner in which information is presently used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions. Summarized financial information concerning our reportable segments is shown in the following tables. Results for 2017 and 2016 have been recast to reflect the change in segments noted above. The “All Other” category includes only the fine chemistry services business that does not fit into any of our core businesses. 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, All Other, and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for certain corporate costs. The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, utilization of inventory markup, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company has reported adjusted EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to Net 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.
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In thousands)
Net sales: |  |  |  |  |
Lithium | $ | 1,228,171 |  |  | $ | 1,018,885 |  |  | $ | 668,852 |
Bromine Specialties | 917,880 |  |  | 855,143 |  |  | 792,425 |
Catalysts | 1,101,554 |  |  | 1,067,572 |  |  | 1,031,501 |
All Other | 127,186 |  |  | 128,914 |  |  | 180,988 |
Corporate | 159 |  |  | 1,462 |  |  | 3,437 |
Total net sales | $ | 3,374,950 |  |  | $ | 3,071,976 |  |  | $ | 2,677,203 |
Adjusted EBITDA: |  |  |  |  |
Lithium | $ | 530,773 |  |  | $ | 446,652 |  |  | $ | 285,714 |
Bromine Specialties | 288,116 |  |  | 258,901 |  |  | 226,926 |
Catalysts | 284,307 |  |  | 283,883 |  |  | 316,609 |
All Other | 14,091 |  |  | 13,878 |  |  | 14,772 |
Corporate | (110,623 | ) |  | (117,834 | ) |  | (85,804 | )
Total adjusted EBITDA | $ | 1,006,664 |  |  | $ | 885,480 |  |  | $ | 758,217 |
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
| Lithium |  | Bromine Specialties |  | Catalysts |  | Reportable Segments Total |  | All Other |  | Corporate |  | Consolidated Total
2018 |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to Albemarle Corporation | $ | 428,212 |  |  | $ | 246,509 |  |  | $ | 445,604 |  |  | $ | 1,120,325 |  |  | $ | 6,018 |  |  | $ | (432,781 | ) |  | $ | 693,562 |
Depreciation and amortization | 95,193 |  |  | 41,607 |  |  | 49,131 |  |  | 185,931 |  |  | 8,073 |  |  | 6,694 |  |  | 200,698 |
Restructuring and other(a) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,838 |  |  | 3,838 |
Gain on sale of business(b) | — |  |  | — |  |  | (210,428 | ) |  | (210,428 | ) |  | — |  |  | — |  |  | (210,428 | )
Acquisition and integration related costs(c) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 19,377 |  |  | 19,377 |
Interest and financing expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 52,405 |  |  | 52,405 |
Income tax expense | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 144,826 |  |  | 144,826 |
Non-operating pension and OPEB items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,285 |  |  | 5,285 |
Legal accrual(d) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 27,027 |  |  | 27,027 |
Environmental accrual(e) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,597 |  |  | 15,597 |
Albemarle Foundation contribution(f) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,000 |  |  | 15,000 |
Indemnification adjustments(g) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,240 |  |  | 25,240 |
Other(h) | 7,368 |  |  | — |  |  | — |  |  | 7,368 |  |  | — |  |  | 6,869 |  |  | 14,237 |
Adjusted EBITDA | $ | 530,773 |  |  | $ | 288,116 |  |  | $ | 284,307 |  |  | $ | 1,103,196 |  |  | $ | 14,091 |  |  | $ | (110,623 | ) |  | $ | 1,006,664 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to Albemarle Corporation | $ | 342,992 |  |  | $ | 218,839 |  |  | $ | 230,665 |  |  | $ | 792,496 |  |  | $ | 5,521 |  |  | $ | (743,167 | ) |  | $ | 54,850 |
Depreciation and amortization | 87,879 |  |  | 40,062 |  |  | 54,468 |  |  | 182,409 |  |  | 8,357 |  |  | 6,162 |  |  | 196,928 |
Utilization of inventory markup(i) | 23,095 |  |  | — |  |  | — |  |  | 23,095 |  |  | — |  |  | — |  |  | 23,095 |
Restructuring and other(j) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17,056 |  |  | 17,056 |
Gain on acquisition(k) | (6,221 | ) |  | — |  |  | — |  |  | (6,221 | ) |  | — |  |  | — |  |  | (6,221 | )
Acquisition and integration related costs(c) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 33,954 |  |  | 33,954 |
Interest and financing expenses(l) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 115,350 |  |  | 115,350 |
Income tax expense | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 431,817 |  |  | 431,817 |
Non-operating pension and OPEB items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (16,125 | ) |  | (16,125 | )
Note receivable reserve(m) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 28,730 |  |  | 28,730 |
Other(n) | (1,093 | ) |  | — |  |  | (1,250 | ) |  | (2,343 | ) |  | — |  |  | 8,389 |  |  | 6,046 |
Adjusted EBITDA | $ | 446,652 |  |  | $ | 258,901 |  |  | $ | 283,883 |  |  | $ | 989,436 |  |  | $ | 13,878 |  |  | $ | (117,834 | ) |  | $ | 885,480 |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to Albemarle Corporation | $ | 198,852 |  |  | $ | 187,364 |  |  | $ | 265,416 |  |  | $ | 651,632 |  |  | $ | 131,301 |  |  | $ | (139,258 | ) |  | $ | 643,675 |
Depreciation and amortization | 86,862 |  |  | 39,562 |  |  | 51,193 |  |  | 177,617 |  |  | 7,302 |  |  | 6,056 |  |  | 190,975 |
(Gain) loss on sales of businesses, net(b) | — |  |  | — |  |  | — |  |  | — |  |  | (123,831 | ) |  | 1,533 |  |  | (122,298 | )
Acquisition and integration related costs(c) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 57,384 |  |  | 57,384 |
Interest and financing expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 65,181 |  |  | 65,181 |
Income tax expense | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 96,263 |  |  | 96,263 |
Income from discontinued operations (net of tax) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (202,131 | ) |  | (202,131 | )
Non-operating pension and OPEB items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,589 |  |  | 25,589 |
Other(o) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,579 |  |  | 3,579 |
Adjusted EBITDA | $ | 285,714 |  |  | $ | 226,926 |  |  | $ | 316,609 |  |  | $ | 829,249 |  |  | $ | 14,772 |  |  | $ | (85,804 | ) |  | $ | 758,217 |
(a) | Expected severance payments as part of a business reorganization plan, $0.1 million recorded in Cost of goods sold and $3.7 million recorded in Selling, general and administrative expenses. These severance payments have been made during the year ended December 31, 2018.
(b) | See Note 3, “Divestitures,” for additional information.
(c) | See Note 2, “Acquisitions,” for additional information.
(d) | Included in Other expenses, net. See Note 17, “Commitments and Contingencies,” for additional information.
(e) | Increase in environmental reserve to indemnify the buyer of a formerly owned site recorded in Other expenses, net. As defined in the agreement of sale, this indemnification has a set cutoff date in 2024, at which point we will no longer be required to provide financial coverage.
(f) | Including in Selling, general and administrative expenses is a charitable contribution, using a portion of the proceeds received from the Polyolefin Catalysts Divestiture, to the Albemarle Foundation, a non-profit organization that sponsors grants, health and social projects, educational initiatives, disaster relief, matching gift programs, scholarships and other charitable initiatives in locations where our employees live and operate. This contribution is in addition to the normal annual contribution made to the Albemarle Foundation by the Company, and is significant in size and nature in that it is intended to provide more long-term benefits in the communities where we live and operate.
(g) | Included in Other expenses, net is $19.7 million related to the proposed settlement of an ongoing audit of a previously disposed business in Germany, and $5.5 million related to the revision of indemnifications previously recorded from disposed businesses.
(h) | Included amounts for the year ended December 31, 2018 recorded in:
• | Cost of goods sold - $4.9 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian joint venture and $8.8 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.
• | Selling, general and administrative expenses - $2.3 million of shortfall contributions for our multiemployer plan financial improvement plan and a $1.2 million contribution, using a portion of the proceeds received from the Polyolefin Catalysts Divestiture, to schools in the state of Louisiana for qualified tuition purposes. This contribution is significant in size and is intended to provide long-term benefits for families in the Louisiana community. This was partially offset by a $1.5 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.
• | Other expenses, net - $1.5 million gain related to the reversal of previously recorded liabilities of disposed businesses.
(i) | In connection with the acquisition of Jiangli New Materials, the Company valued inventory purchased from Jiangli New Materials at fair value, which resulted in a markup of the underlying net book value of the inventory totaling approximately $23.1 million. The utilization of this inventory markup was included in Costs of goods sold during the year ended December 31, 2017, the estimated remaining selling period.
(j) | During 2017, we initiated action to reduce costs in each of our reportable segments at several locations, primarily at our Lithium sites in Germany. Based on the restructuring plans, we have recorded expenses of $2.9 million in Cost of goods sold, $8.4 million in Selling, general and administrative expenses, and $5.7 million in Research and development expenses, primarily related to expected severance payments. The unpaid balance is recorded in Accrued expenses at December 31, 2018, with the expectation that the remaining balance will be paid by the end of 2019.
(k) | Gain recorded in Other expenses, net related to the acquisition of the remaining 50% interest in Salmag. See Note 2, “Acquisitions,” for additional information.
(l) | Included in Interest and financing expenses is a loss on early extinguishment of debt of $52.8 million. See Note 14, “Long-Term Debt,” for additional information.
(m) | Reserve recorded in Other expenses, net against a note receivable on one of our European entities no longer deemed probable of collection.
(n) | Included amounts for the year ended December 31, 2017 recorded in:
• | Cost of goods sold - $1.3 million reversal of deferred income related to an abandoned project at an unconsolidated investment.
• | Selling, general and administrative expenses - $3.3 million of shortfall contributions for our multiemployer plan financial improvement plan, partially offset by $1.0 million related to a reversal of an accrual recorded as part of purchase accounting from a previous acquisition.
• | Other expenses, net - $3.2 million of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle, losses of $8.7 million related to adjustments of settlements and indemnifications of previously disposed businesses, the revision of tax indemnification expenses of $3.7 million primarily related to the filing of tax returns and a competent authority agreement for a previously disposed business and $1.0 million related to the settlement of a legal claim. This is partially offset by gains of $10.6 million and $1.1 million related to the reversal of liabilities recorded as part of purchase accounting from a previous acquisition and the previous disposal of a property, respectively.
(o) | Included amounts for the year ended December 31, 2016 recorded in:
• | Selling, general and administrative expenses - $0.9 million related to the net loss on the sales of properties.
• | Research and development expenses - $1.4 million related to the write-off of fixed assets in China.
• | Other expenses, net -$2.4 million related to environmental charges related to a site formerly owned by Albemarle, partially offset by a gain related to a previously disposed of site in China of $1.1 million.
| December 31,
| 2018 |  | 2017 |  | 2016
|  |  | (In thousands) |  |
Identifiable assets: |  |  |  |  |
Lithium(a) | $ | 4,605,070 |  |  | $ | 3,979,615 |  |  | $ | 3,499,302 |
Bromine Specialties | 753,157 |  |  | 745,007 |  |  | 724,218 |
Catalysts | 1,134,975 |  |  | 1,332,599 |  |  | 1,224,504 |
All Other | 128,185 |  |  | 126,486 |  |  | 130,595 |
Corporate(a)(b) | 960,287 |  |  | 1,567,065 |  |  | 2,582,588 |
Total identifiable assets | $ | 7,581,674 |  |  | $ | 7,750,772 |  |  | $ | 8,161,207 |
Goodwill: |  |  |  |  |
Lithium | $ | 1,354,779 |  |  | $ | 1,389,089 |  |  | $ | 1,326,980 |
Bromine Specialties | 20,319 |  |  | 20,319 |  |  | 20,319 |
Catalysts | 185,485 |  |  | 194,361 |  |  | 186,147 |
All Other | 6,586 |  |  | 6,586 |  |  | 6,586 |
Total goodwill | $ | 1,567,169 |  |  | $ | 1,610,355 |  |  | $ | 1,540,032 |
(a) | The identifiable assets at December 31, 2017, have been revised to correct an error in the previously reported amounts, which understated the Lithium segment and overstated the Corporate category by $238.5 million. There is no impact to the financial statements or total identifiable assets at December 31, 2017.
(b) | Decrease in Corporate identifiable assets at December 31, 2018 primarily due to the net use of cash and cash equivalents for items such as capital expenditures, share repurchases and commercial paper repayments. As of December 31, 2016, Corporate included the net proceeds received from the sale of the Chemetall Surface Treatment business completed on December 14, 2016, less the repayment of the term loans and commercial paper using those proceeds. See Note 3, “Divestitures,” and Note 14, “Long-Term Debt” for additional details about these transactions.
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
|  |  | (In thousands) |  |
Depreciation and amortization: |  |  |  |  |
Lithium | $ | 95,193 |  |  | $ | 87,879 |  |  | $ | 86,862 |
Bromine Specialties | 41,607 |  |  | 40,062 |  |  | 39,562 |
Catalysts | 49,131 |  |  | 54,468 |  |  | 51,193 |
Discontinued Operations | — |  |  | — |  |  | 35,194 |
All Other | 8,073 |  |  | 8,357 |  |  | 7,302 |
Corporate | 6,694 |  |  | 6,162 |  |  | 6,056 |
Total depreciation and amortization | $ | 200,698 |  |  | $ | 196,928 |  |  | $ | 226,169 |
Capital expenditures: |  |  |  |  |
Lithium | $ | 500,849 |  |  | $ | 192,318 |  |  | $ | 72,038 |
Bromine Specialties | 79,357 |  |  | 46,427 |  |  | 46,414 |
Catalysts | 52,019 |  |  | 46,808 |  |  | 47,475 |
Discontinued Operations | — |  |  | — |  |  | 19,281 |
All Other | 5,232 |  |  | 3,657 |  |  | 9,251 |
Corporate | 62,534 |  |  | 28,493 |  |  | 2,195 |
Total capital expenditures | $ | 699,991 |  |  | $ | 317,703 |  |  | $ | 196,654 |
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
|  |  | (In thousands) |  |
Net Sales(a): |  |  |  |  |
United States | $ | 887,416 |  |  | $ | 840,589 |  |  | $ | 797,267 |
Foreign(b) | 2,487,534 |  |  | 2,231,387 |  |  | 1,879,936 |
Total | $ | 3,374,950 |  |  | $ | 3,071,976 |  |  | $ | 2,677,203 |
(a) | Net sales are attributed to countries based upon shipments to final destination.
(b) | In 2018, net sales to Korea, China and Japan represented 13%, 12%, and 10%, respectively, of total net sales. In 2017 and 2016, net sales to China represented 15% and 13%, respectively, of total net sales. No net sales in any other foreign country exceed 10% of total net sales.
| As of December 31,
| 2018 |  | 2017 |  | 2016
|  |  | (In thousands) |  |
Long-Lived Assets(a): |  |  |  |  |
United States | $ | 929,291 |  |  | $ | 833,002 |  |  | $ | 850,689 |
Chile | 1,406,478 |  |  | 1,069,859 |  |  | 922,878 |
Australia | 407,141 |  |  | 364,624 |  |  | 288,553 |
Jordan | 254,800 |  |  | 242,626 |  |  | 227,222 |
Netherlands | 166,853 |  |  | 171,980 |  |  | 145,917 |
Germany | 101,168 |  |  | 115,305 |  |  | 117,027 |
China | 91,160 |  |  | 50,532 |  |  | 31,564 |
France | 43,698 |  |  | 40,852 |  |  | 39,470 |
Brazil | 40,464 |  |  | 47,255 |  |  | 46,380 |
Korea(b) | 111 |  |  | 495 |  |  | 65,963 |
Other foreign countries | 65,826 |  |  | 60,131 |  |  | 57,936 |
Total | $ | 3,506,990 |  |  | $ | 2,996,661 |  |  | $ | 2,793,599 |
(a) | Long-lived assets are comprised of the Company’s Property, plant and equipment and Investments.
(b) | The reduction as of December 31, 2017, relates to the assets of the Polyolefin Catalysts Divestiture that are included in Assets held for sale in the consolidated balance sheet.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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