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Segment Information | 3 Months Ended
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Mar. 31, 2024
Segment Reporting [Abstract] |
Segment Information | Segment Information: The Company’s three reportable segments include: (1) Energy Storage; (2) Specialties; and (3) Ketjen. 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. 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 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. 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 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. 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 in a balanced manner and 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. In addition, management 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. The Company has 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, U.S. GAAP. Total 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. Adjusted EBITDA for the prior period has been recast to conform to the current year presentation. Segment information for the three-month periods ended March 31, 2024 and 2023 were as follows (in thousands).
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
Net sales: |  |  |  |  |  |  |
Energy Storage |  |  |  |  | $ | 800,898 |  |  | $ | 1,943,682 |
Specialties |  |  |  |  | 316,065 |  |  | 418,778 |
Ketjen |  |  |  |  | 243,773 |  |  | 217,792 |
Total net sales |  |  |  |  | $ | 1,360,736 |  |  | $ | 2,580,252 |
Adjusted EBITDA: |  |  |  |  |  |  |
Energy Storage |  |  |  |  | $ | 197,996 |  |  | $ | 1,567,692 |
Specialties |  |  |  |  | 45,181 |  |  | 162,158 |
Ketjen |  |  |  |  | 21,979 |  |  | 14,543 |
Total segment adjusted EBITDA |  |  |  |  | $ | 265,156 |  |  | $ | 1,744,393 |
Depreciation and amortization: |  |  |  |  |  |  |
Energy Storage |  |  |  |  | $ | 87,274 |  |  | $ | 52,162 |
Specialties |  |  |  |  | 22,437 |  |  | 19,892 |
Ketjen |  |  |  |  | 12,357 |  |  | 13,143 |
Total segment depreciation and amortization |  |  |  |  | 122,068 |  |  | 85,197 |
Corporate |  |  |  |  | 1,683 |  |  | 2,074 |
Total depreciation and amortization |  |  |  |  | $ | 123,751 |  |  | $ | 87,271 |
See below for a reconciliation of total segment adjusted EBITDA to the companies consolidated Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
Total segment adjusted EBITDA |  |  |  |  | $ | 265,156 |  |  | $ | 1,744,393 |
Corporate expenses, net |  |  |  |  | 26,080 |  |  | 17,311 |
Depreciation and amortization |  |  |  |  | (123,751) |  |  | (87,271) |
Interest and financing expenses |  |  |  |  | (37,969) |  |  | (26,777) |
Income tax benefit (expense) |  |  |  |  | 3,721 |  |  | (276,963) |
Proportionate share of Windfield income tax expense(a) |  |  |  |  | (73,689) |  |  | (165,985) |
Acquisition and integration related costs(b) |  |  |  |  | (1,907) |  |  | (5,108) |
Restructuring and other charges(c) |  |  |  |  | (36,285) |  |  | — |
Non-operating pension and OPEB items |  |  |  |  | 325 |  |  | (601) |
(Loss) gain in fair value of public equity securities(d) |  |  |  |  | (43,159) |  |  | 45,826 |
Other(e) |  |  |  |  | 23,926 |  |  | (6,245) |
Net income attributable to Albemarle Corporation |  |  |  |  | $ | 2,448 |  |  | $ | 1,238,580 |
(a)Albemarle’s 49% ownership interest in the income tax expense of the Windfield joint venture. (b)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”). (c)In January 2024, the Company announced it was taking 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 a result, the Company recorded severance costs for employees in Corporate and each of the businesses, and losses related to the cancellation of certain capital expenditure projects. During the three months ended March 31, 2024, $33.5 million of these expenses were recorded in SG&A and $2.8 million were recorded in Other income, net. The severance has primarily been paid, with the remainder expected to be paid in 2024. (d)Loss of $33.7 million recorded in Other income, net for the three months ended March 31, 2024 resulting from the sale of investments in public equity securities and a (loss) gain of ($9.4) million and $45.8 million recorded in Other income, net for the three months ended March 31, 2024 and 2023, respectively, resulting from the net change in fair value of investments in public equity securities. (e)Included amounts for the three months ended March 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 - $0.1 million of expenses related to certain legal costs. •Other income, net - $17.3 million gain primarily from the sale of assets at a site not part of our operations, an $8.7 million gain from PIK dividends of preferred equity in a Grace subsidiary and a $2.4 million gain primarily resulting from the adjustment of indemnification related to a previously disposed business, partially offset by $2.9 million of charges for asset retirement obligations at a site not part of our operations. Included amounts for the three months ended March 31, 2023 recorded in: •SG&A - $1.9 million of charges primarily for environmental reserves at sites not part of our operations and $0.7 million of facility closure expenses related to offices in Germany. •Other income, net - $3.6 million of charges for asset retirement obligations at a site not part of our operations.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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