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Segment Information | 6 Months Ended
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Jun. 30, 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. Adjusted EBITDA for the prior period has been recast to conform to the current year presentation. Segment information for the three-month and six-month periods ended June 30, 2024 and 2023 were as follows (in thousands).
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Net sales: |  |  |  |  |  |  |
Energy Storage | $ | 830,110 |  |  | $ | 1,763,065 |  |  | $ | 1,631,008 |  |  | $ | 3,706,747 |
Specialties | 334,600 |  |  | 371,302 |  |  | 650,665 |  |  | 790,080 |
Ketjen | 265,675 |  |  | 235,823 |  |  | 509,448 |  |  | 453,615 |
Total net sales | $ | 1,430,385 |  |  | $ | 2,370,190 |  |  | $ | 2,791,121 |  |  | $ | 4,950,442 |
Adjusted EBITDA: |  |  |  |  |  |  |
Energy Storage | $ | 282,979 |  |  | $ | 1,165,080 |  |  | $ | 480,975 |  |  | $ | 2,732,772 |
Specialties | 54,175 |  |  | 60,200 |  |  | 99,356 |  |  | 222,358 |
Ketjen | 37,836 |  |  | 42,882 |  |  | 59,815 |  |  | 57,425 |
Total segment adjusted EBITDA | $ | 374,990 |  |  | $ | 1,268,162 |  |  | $ | 640,146 |  |  | $ | 3,012,555 |
Depreciation and amortization: |  |  |  |  |  |  |
Energy Storage | $ | 100,433 |  |  | $ | 56,540 |  |  | $ | 187,707 |  |  | $ | 108,702 |
Specialties | 23,170 |  |  | 21,299 |  |  | 45,607 |  |  | 41,191 |
Ketjen | 12,937 |  |  | 13,084 |  |  | 25,294 |  |  | 26,227 |
Total segment depreciation and amortization | 136,540 |  |  | 90,923 |  |  | 258,608 |  |  | 176,120 |
Corporate | 1,739 |  |  | 2,162 |  |  | 3,422 |  |  | 4,236 |
Total depreciation and amortization | $ | 138,279 |  |  | $ | 93,085 |  |  | $ | 262,030 |  |  | $ | 180,356 |
See below for a reconciliation of total segment adjusted EBITDA to the Company’s 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):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Total segment adjusted EBITDA | $ | 374,990 |  |  | $ | 1,268,162 |  |  | $ | 640,146 |  |  | $ | 3,012,555 |
Corporate expenses, net | 11,370 |  |  | (1,920) |  |  | 37,450 |  |  | 15,391 |
Depreciation and amortization | (138,279) |  |  | (93,085) |  |  | (262,030) |  |  | (180,356) |
Interest and financing expenses | (35,187) |  |  | (25,577) |  |  | (73,156) |  |  | (52,354) |
Income tax benefit (expense) | 30,660 |  |  | (42,987) |  |  | 34,381 |  |  | (319,950) |
Proportionate share of Windfield income tax expense(a) | (119,780) |  |  | (233,976) |  |  | (193,469) |  |  | (399,961) |
Acquisition and integration related costs(b) | (1,581) |  |  | (6,502) |  |  | (3,488) |  |  | (11,610) |
Restructuring and other charges(c) | (2,525) |  |  | (7,439) |  |  | (18,861) |  |  | (7,439) |
Capital project assets write-off(c) | (294,940) |  |  | — |  |  | (314,889) |  |  | — |
Non-operating pension and OPEB items | 337 |  |  | (612) |  |  | 662 |  |  | (1,213) |
(Loss) gain in fair value of public equity securities(d) | (17,780) |  |  | 15,020 |  |  | (60,939) |  |  | 60,846 |
Legal accrual(e) | — |  |  | (218,510) |  |  | — |  |  | (218,510) |
Other(f) | 4,517 |  |  | (2,531) |  |  | 28,443 |  |  | (8,776) |
Net (loss) income attributable to Albemarle Corporation | $ | (188,198) |  |  | $ | 650,043 |  |  | $ | (185,750) |  |  | $ | 1,888,623 |
(a)Albemarle’s 49% ownership interest in the reported income tax expense of the Windfield joint venture. (b)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in SG&A. (c)See Note 8, “Restructuring and Capital Project Assets Write-off,” for further details. (d)Loss of $17.8 million and $27.2 million recorded in Other income, net for the three and six months ended June 30, 2024, respectively, resulting from the net change in fair value of investments in public equity securities and a loss of $33.7 million recorded in Other income, net for the six months ended June 30, 2024 resulting from the sale of investments in public equity securities. Gain of $15.0 million and $60.8 million recorded in Other income, net for the three and six months ended June 30, 2023, respectively, resulting from the net change in fair value of investments in public equity securities. (e)Accrual recorded in SG&A representing for the agreements in principle to resolve a previously disclosed legal matter with the DOJ and SEC. This matter was settled in the third quarter of 2023. (f)Included amounts for the three months ended June 30, 2024 recorded in: •SG&A - $5.1 million of expenses related to certain historical legal and environmental matters. •Other income, net - $8.9 million of income from PIK dividends of preferred equity in a Grace subsidiary and a $0.6 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations. Included amounts for the three months ended June 30, 2023 recorded in: •SG&A - $0.7 million of facility closure expenses related to offices in Germany and $0.6 million primarily related to shortfall contributions for a multiemployer plan financial improvement plan. •Other income, net - $3.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses, partially offset by a $2.7 million gain in the fair value of preferred equity of a Grace subsidiary. Included amounts for the six months ended June 30, 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 - $5.2 million of expenses related to certain historical legal and environmental matters. •Other income, net - $17.6 million of income from PIK dividends of preferred equity in a Grace subsidiary, a $17.3 million gain primarily from the sale of assets at a site not part of our operations, a $2.4 million gain primarily resulting from the adjustment of indemnification related to a previously disposed business 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. Included amounts for the six months ended June 30, 2023 recorded in: •SG&A - $1.9 million of charges primarily for environmental reserves at sites not part of our operations, $1.4 million of facility closure expenses related to offices in Germany and $0.6 million primarily related to shortfall contributions for a multiemployer plan financial improvement plan. •Other income, net - $3.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses and $3.6 million of charges for asset retirement obligations at a site not part of our operations, partially offset by a $2.7 million gain in the fair value of preferred equity of a Grace subsidiary.

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- Definition The entire disclosure for reporting segments including data and tables. 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