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ALBEMARLE CORP - Quarter Report: 2022 June (Form 10-Q)

Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________ 
FORM 10-Q
_________________________________________________ 
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 2022
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 1-12658
_________________________________________________ 

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
_________________________________________________ 
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 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
COMMON STOCK, $.01 Par ValueALBNew York Stock Exchange
Number of shares of common stock, $.01 par value, outstanding as of July 31, 2022: 117,128,763

Table of Contents
ALBEMARLE CORPORATION
INDEX – FORM 10-Q
 
  Page
Number(s)
EXHIBITS
2
Table of Contents
PART I. FINANCIAL INFORMATION
 
Item 1.Financial Statements (Unaudited).
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Net sales$1,479,593 $773,896 $2,607,321 $1,603,187 
Cost of goods sold899,169 525,479 1,577,867 1,091,083 
Gross profit580,424 248,417 1,029,454 512,104 
Selling, general and administrative expenses128,942 121,516 241,510 214,703 
Research and development expenses17,386 13,976 33,469 28,612 
(Gain) loss on sale of business/interest in properties— (429,408)8,400 (429,408)
Operating profit434,096 542,333 746,075 698,197 
Interest and financing expenses(41,409)(7,152)(69,243)(51,034)
Other income, net8,767 14 24,263 11,326 
Income before income taxes and equity in net income of unconsolidated investments401,454 535,195 701,095 658,489 
Income tax expense89,018 106,985 169,548 129,092 
Income before equity in net income of unconsolidated investments312,436 428,210 531,547 529,397 
Equity in net income of unconsolidated investments (net of tax)128,156 17,998 190,592 34,509 
Net income440,592 446,208 722,139 563,906 
Net income attributable to noncontrolling interests(33,819)(21,608)(61,983)(43,629)
Net income attributable to Albemarle Corporation$406,773 $424,600 $660,156 $520,277 
Basic earnings per share$3.47 $3.63 $5.64 $4.54 
Diluted earnings per share$3.46 $3.62 $5.61 $4.51 
Weighted-average common shares outstanding – basic117,116 116,809 117,091 114,700 
Weighted-average common shares outstanding – diluted117,724 117,436 117,689 115,383 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
(Unaudited)

 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Net income $440,592 $446,208 $722,139 $563,906 
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other(117,821)20,564 (123,710)(7,578)
Net investment hedge— — — 5,110 
Cash flow hedge(2,509)823 1,508 (777)
Interest rate swap6,749 650 7,399 1,300 
Total other comprehensive (loss) income, net of tax(113,581)22,037 (114,803)(1,945)
Comprehensive income327,011 468,245 607,336 561,961 
Comprehensive income attributable to noncontrolling interests(33,757)(21,532)(61,868)(43,553)
Comprehensive income attributable to Albemarle Corporation$293,254 $446,713 $545,468 $518,408 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
June 30,December 31,
20222021
Assets
Current assets:
Cash and cash equivalents
$930,596 $439,272 
Trade accounts receivable, less allowance for doubtful accounts (2022 – $2,532; 2021 – $2,559)
962,215 556,922 
Other accounts receivable124,409 66,184 
Inventories1,216,213 812,920 
Other current assets116,671 132,683 
Total current assets3,350,104 2,007,981 
Property, plant and equipment, at cost8,465,403 8,074,746 
Less accumulated depreciation and amortization2,257,379 2,165,130 
Net property, plant and equipment6,208,024 5,909,616 
Investments903,861 897,708 
Other assets230,346 252,239 
Goodwill1,542,767 1,597,627 
Other intangibles, net of amortization285,303 308,947 
Total assets$12,520,405 $10,974,118 
Liabilities And Equity
Current liabilities:
Accounts payable$1,091,583 $647,986 
Accrued expenses330,941 763,293 
Current portion of long-term debt251,304 389,920 
Dividends payable46,097 45,469 
Income taxes payable61,837 27,667 
Total current liabilities1,781,762 1,874,335 
Long-term debt3,205,730 2,004,319 
Postretirement benefits43,079 43,693 
Pension benefits205,890 229,187 
Other noncurrent liabilities591,021 663,698 
Deferred income taxes391,948 353,279 
Commitments and contingencies (Note 10)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 117,122 in 2022 and 117,015 in 2021
1,171 1,170 
Additional paid-in capital2,927,086 2,920,007 
Accumulated other comprehensive loss(507,138)(392,450)
Retained earnings3,664,172 3,096,539 
Total Albemarle Corporation shareholders’ equity6,085,291 5,625,266 
Noncontrolling interests215,684 180,341 
Total equity6,300,975 5,805,607 
Total liabilities and equity$12,520,405 $10,974,118 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(In Thousands, Except Share Data)Additional
Paid-in Capital		Accumulated Other
Comprehensive Loss		Retained EarningsTotal Albemarle
Shareholders’ Equity		Noncontrolling
Interests		Total Equity
Common Stock
SharesAmounts
Balance at March 31, 2022117,112,394 $1,171 $2,915,387 $(393,619)$3,303,661 $5,826,600 $208,452 $6,035,052 
Net income406,773 406,773 33,819 440,592 
Other comprehensive loss(113,519)(113,519)(62)(113,581)
Cash dividends declared, $0.395 per common share
(46,262)(46,262)(26,525)(72,787)
Stock-based compensation11,424 11,424 11,424 
Exercise of stock options7,289 — 436 436 436 
Issuance of common stock, net3,066 — — — — 
Withholding taxes paid on stock-based compensation award distributions(1,001)— (161)(161)(161)
Balance at June 30, 2022117,121,748 $1,171 $2,927,086 $(507,138)$3,664,172 $6,085,291 $215,684 $6,300,975 
Balance at March 31, 2021116,718,175 $1,167 $2,889,923 $(350,114)$3,205,408 $5,746,384 $196,169 $5,942,553 
Net income424,600 424,600 21,608 446,208 
Other comprehensive income (loss)22,113 22,113 (76)22,037 
Cash dividends declared, $0.39 per common share
(45,608)(45,608)(17,479)(63,087)
Stock-based compensation5,104 5,104 5,104 
Fees related to the public issuance of common stock(9)(9)(9)
Exercise of stock options223,685 2 13,150 13,152 13,152 
Issuance of common stock, net3,783 — — — — 
Withholding taxes paid on stock-based compensation award distributions(1,132)— (187)(187)(187)
Balance at June 30, 2021116,944,511 $1,169 $2,907,981 $(328,001)$3,584,400 $6,165,549 $200,222 $6,365,771 
Balance at December 31, 2021117,015,333 $1,170 $2,920,007 $(392,450)$3,096,539 $5,625,266 $180,341 $5,805,607 
Net income660,156 660,156 61,983 722,139 
Other comprehensive loss(114,688)(114,688)(115)(114,803)
Cash dividends declared, $0.79 per common share
(92,523)(92,523)(26,525)(119,048)
Stock-based compensation16,808 16,808 16,808 
Exercise of stock options7,789 — 468 468 468 
Issuance of common stock, net154,696 2 385 387 387 
Withholding taxes paid on stock-based compensation award distributions(56,070)(1)(10,582)(10,583)(10,583)
Balance at June 30, 2022117,121,748 $1,171 $2,927,086 $(507,138)$3,664,172 $6,085,291 $215,684 $6,300,975 
Balance at December 31, 2020106,842,369 $1,069 $1,438,038 $(326,132)$3,155,252 $4,268,227 $200,367 $4,468,594 
Net income520,277 520,277 43,629 563,906 
Other comprehensive loss(1,869)(1,869)(76)(1,945)
Cash dividends declared, $0.78 per common share
(91,129)(91,129)(43,698)(134,827)
Stock-based compensation9,778 9,778 9,778 
Fees related to public issuance of common stock(911)(911)(911)
Exercise of stock options241,649 2 14,333 14,335 14,335 
Issuance of common stock, net9,906,090 99 1,453,789 1,453,888 1,453,888 
Withholding taxes paid on stock-based compensation award distributions(45,597)(1)(7,046)(7,047)(7,047)
Balance at June 30, 2021116,944,511 $1,169 $2,907,981 $(328,001)$3,584,400 $6,165,549 $200,222 $6,365,771 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
20222021
Cash and cash equivalents at beginning of year$439,272 $746,724 
Cash flows from operating activities:
Net income 722,139 563,906 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization137,567 123,683 
Loss (gain) on sale of business/investment in properties8,400 (429,408)
Stock-based compensation and other15,232 8,425 
Equity in net income of unconsolidated investments (net of tax)(190,592)(34,509)
Dividends received from unconsolidated investments and nonmarketable securities156,964 27,420 
Pension and postretirement benefit(8,273)(8,465)
Pension and postretirement contributions(7,685)(20,266)
Unrealized gain on investments in marketable securities3,061 (2,384)
Loss on early extinguishment of debt19,219 28,955 
Deferred income taxes39,476 27,708 
Working capital changes(888,036)7,942 
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL96,314 96,185 
Other, net(43,475)(3,339)
Net cash provided by operating activities60,311 385,853 
Cash flows from investing activities:
Capital expenditures(502,607)(396,915)
Cash proceeds from divestitures, net— 290,467 
Sales of marketable securities, net3,402 4,553 
Investments in equity and other corporate investments(767)(286)
Net cash used in investing activities(499,972)(102,181)
Cash flows from financing activities:
Proceeds from issuance of common stock— 1,453,888 
Repayments of long-term debt and credit agreements(455,000)(1,173,823)
Proceeds from borrowings of long-term debt and credit agreements1,964,216 — 
Other debt repayments, net(390,601)(325,316)
Fees related to early extinguishment of debt(9,767)(24,877)
Dividends paid to shareholders(91,894)(86,637)
Dividends paid to noncontrolling interests(26,525)(43,698)
Proceeds from exercise of stock options855 14,335 
Withholding taxes paid on stock-based compensation award distributions(10,583)(7,047)
Other(4,172)(1,359)
Net cash provided by (used in) financing activities976,529 (194,534)
Net effect of foreign exchange on cash and cash equivalents(45,544)(12,290)
Increase in cash and cash equivalents491,324 76,848 
Cash and cash equivalents at end of period$930,596 $823,572 
See accompanying Notes to the Condensed Consolidated Financial Statements.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

NOTE 1—Basis of Presentation:
In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Albemarle Corporation and our wholly-owned, majority-owned and controlled subsidiaries (collectively, “Albemarle,” “we,” “us,” “our” or “the Company”) contain all adjustments necessary for a fair statement, in all material respects, of our consolidated balance sheets as of June 30, 2022 and December 31, 2021, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three- and six-month periods ended June 30, 2022 and 2021 and our condensed consolidated statements of cash flows for the six-month periods ended June 30, 2022 and 2021. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on February 22, 2022. The December 31, 2021 consolidated balance sheet data herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). The results of operations for the three-and six-month periods ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year.
Interest and financing expenses for the six-month period ended June 30, 2022 includes an expense of $17.5 million for the correction of out of period errors regarding overstated capitalized interest values in prior periods. For the years ended December 31, 2021, 2020 and 2019, Interest expense was understated by $11.4 million, $5.5 million and $0.6 million, respectively. The Company does not believe these adjustments are material to the consolidated financial statements for any of the prior periods presented or to the six-month period ended June 30, 2022, in which they were corrected.

NOTE 2—Acquisitions:
On September 30, 2021, the Company signed a definitive agreement to acquire all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. (“Tianyuan”), for approximately $200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi. The plant has designed annual conversion capacity of up to 25,000 metric tons of LCE and is capable of producing battery-grade lithium carbonate and lithium hydroxide. The plant began commercial production in the first half of 2022. The Company expects the transaction, which is subject to customary closing conditions, to close in the second half of 2022.

NOTE 3—Divestitures:
On June 1, 2021, the Company completed the sale of its fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of 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 will accrue payment-in-kind (“PIK”) dividends at an annual rate of 12% beginning two years after issuance.
As part of the transaction, Grace acquired our manufacturing facilities located in South Haven, Michigan and Tyrone, Pennsylvania. The sale of the FCS business reflects the Company’s commitment to investing in its core, growth-oriented business segments. During the three- and six-month periods ended June 30, 2021 we recorded a gain of $429.4 million ($331.6 million after income taxes) related to the sale of this business. Historical financial statements include results from this business until divested on June 1, 2021.
We determined that the FCS business met the assets held for sale criteria in accordance with ASC 360, Property, Plant and Equipment during the first quarter of 2021. The results of operations of the business classified as held for sale are included in the consolidated statements of income through June 1, 2021. This business did not qualify for discontinued operations treatment because the Company’s management does not consider the sale as representing a strategic shift that had or will have a major effect on the Company’s operations and financial results.


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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 4—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the six months ended June 30, 2022 (in thousands):
LithiumBromineCatalystsTotal
Balance at December 31, 2021
$1,394,182 $20,319 $183,126 $1,597,627 
   Foreign currency translation adjustments(44,093)— (10,767)(54,860)
Balance at June 30, 2022$1,350,089 $20,319 $172,359 $1,542,767 

The following table summarizes the changes in other intangibles and related accumulated amortization for the six months ended June 30, 2022 (in thousands):
Customer Lists and Relationships
Trade Names and Trademarks(a)
Patents and TechnologyOtherTotal
Gross Asset Value
  Balance at December 31, 2021
$428,379 $17,883 $57,313 $36,705 $540,280 
Foreign currency translation adjustments and other(21,646)(567)(2,087)2,149 (22,151)
  Balance at June 30, 2022
$406,733 $17,316 $55,226 $38,854 $518,129 
Accumulated Amortization
  Balance at December 31, 2021
$(163,283)$(7,983)$(39,796)$(20,271)$(231,333)
    Amortization(10,687)— (698)(455)(11,840)
Foreign currency translation adjustments and other8,140 155 1,326 726 10,347 
  Balance at June 30, 2022
$(165,830)$(7,828)$(39,168)$(20,000)$(232,826)
Net Book Value at December 31, 2021
$265,096 $9,900 $17,517 $16,434 $308,947 
Net Book Value at June 30, 2022
$240,903 $9,488 $16,058 $18,854 $285,303 
(a)    Net Book Value includes only indefinite-lived intangible assets.

NOTE 5—Income Taxes:
The effective income tax rate for the three-month and six-month periods ended June 30, 2022 was 22.2% and 24.2%, respectively, compared to 20.0% and 19.6% for the three-month and six-month periods ended June 30, 2021, respectively. The three-month period ended June 30, 2022 included a tax benefit related to global intangible low-taxed income and net discrete tax expenses related to withholding taxes and foreign return to provisions. The Company’s effective income tax rate fluctuates based on, among other factors, the amount and location of income. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-month and six-month periods ended June 30, 2022 and June 30, 2021 was impacted by a variety of factors, primarily global intangible low-taxed income and the location in which income was earned. In addition, the three- and six-month periods ended June 30, 2021 includes a $97.8 million tax expense recorded for the gain on the sale of the FCS business.


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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 6—Earnings Per Share:
Basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2022 and 2021 are calculated as follows (in thousands, except per share amounts):
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation$406,773 $424,600 $660,156 $520,277 
Denominator:
Weighted-average common shares for basic earnings per share117,116 116,809 117,091 114,700 
Basic earnings per share$3.47 $3.63 $5.64 $4.54 
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation$406,773 $424,600 $660,156 $520,277 
Denominator:
Weighted-average common shares for basic earnings per share117,116 116,809 117,091 114,700 
Incremental shares under stock compensation plans608 627 598 683 
Weighted-average common shares for diluted earnings per share117,724 117,436 117,689 115,383 
Diluted earnings per share$3.46 $3.62 $5.61 $4.51 
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. The Company also granted to the underwriters an option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before deducting expenses, underwriting discounts and commissions. The net proceeds were used for debt repayments and general corporate purposes.
On May 3, 2022, the Company declared a cash dividend of $0.395, an increase from the prior year regular quarterly dividend. This dividend was paid on July 1, 2022 to shareholders of record at the close of business as of June 10, 2022. On July 18, 2022, the Company declared a cash dividend of $0.395 per share, which is payable on October 3, 2022 to shareholders of record at the close of business as of September 16, 2022.
NOTE 7—Inventories:
The following table provides a breakdown of inventories at June 30, 2022 and December 31, 2021 (in thousands):
June 30,December 31,
20222021
Finished goods$853,838 $473,836 
Raw materials and work in process(a)
272,051 259,221 
Stores, supplies and other90,324 79,863 
Total$1,216,213 $812,920 

(a)Included $129.8 million and $149.4 million at June 30, 2022 and December 31, 2021, respectively, of work in process in our Lithium segment.

NOTE 8—Investments:
The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), where the ownership 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 this investment is not consolidated as the Company is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $463.0 million and $462.3 million at June 30, 2022 and December 31, 2021, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs for which the Company is not the primary beneficiary was $7.7 million at June 30, 2022 and $8.0 million at December 31, 2021. The Company’s unconsolidated VIEs are reported in Investments on the consolidated balance
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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.
As part of the proceeds from the sale of the FCS business on June 1, 2021, 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 will accrue PIK dividends at an annual rate of 12% beginning two years after issuance. This preferred equity had a fair value of $248.4 million and $246.5 million at June 30, 2022 and December 31, 2021, respectively, which is reported in Investments in the consolidated balance sheets.

NOTE 9—Long-Term Debt:
Long-term debt at June 30, 2022 and December 31, 2021 consisted of the following (in thousands):
June 30,December 31,
20222021
1.125% notes due 2025
$399,153 $426,571 
1.625% notes due 2028
529,200 565,550 
3.45% Senior notes due 2029
171,612 171,612 
4.15% Senior notes due 2024
— 425,000 
4.65% Senior notes due 2027
650,000 — 
5.05% Senior notes due 2032
600,000 — 
5.45% Senior notes due 2044
350,000 350,000 
5.65% Senior notes due 2052
450,000 — 
Credit facilities250,000 — 
Commercial paper notes— 388,500 
Variable-rate foreign bank loans2,953 5,226 
Finance lease obligations73,537 75,431 
Other11,087 — 
Unamortized discount and debt issuance costs(30,508)(13,651)
Total long-term debt3,457,034 2,394,239 
Less amounts due within one year251,304 389,920 
Long-term debt, less current portion$3,205,730 $2,004,319 
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 purposes. The 2024 Notes were originally due to mature on December 15, 2024 and bore interest at a rate of 4.15%. During the three and six months ended June 30, 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 income.
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
In addition, during 2022 the Company drew $250 million under its 2019 Credit Facility for general corporate purposes. The applicable margin on the 2019 Credit Facility was 1.125% at June 30, 2022.
In the first quarter of 2021, the Company made certain debt principal payments using proceeds from the February 2021 underwritten public offering of common stock. As a result, included in Interest and financing expenses for the three-month and six-month periods ended June 30, 2021 is a loss on early extinguishment of debt of $1.2 million and $29.0 million, respectively, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of this debt.
Prior to repayment in the first quarter of 2021, the carrying value of the 1.875% Euro-denominated senior notes was designated as an effective hedge of the net investment in certain foreign subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency were recorded in accumulated other comprehensive loss. Upon repayment of these notes, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated. Prior to the net investment hedge being discontinued, we recorded a gain of $5.1 million (net of income taxes) during the three-month and six-month periods ended June 30, 2021 in accumulated other comprehensive loss.

NOTE 10—Commitments and Contingencies:
Environmental
The following activity was recorded in environmental liabilities for the six months ended June 30, 2022 (in thousands):
Beginning balance at December 31, 2021
$46,617 
Expenditures(1,991)
Accretion of discount521 
Additions and changes in estimates2,811 
Foreign currency translation adjustments and other(1,634)
Ending balance at June 30, 2022
46,324 
Less amounts reported in Accrued expenses9,728 
Amounts reported in Other noncurrent liabilities$36,596 
Environmental remediation liabilities included discounted liabilities of $38.5 million and $39.7 million at June 30, 2022 and December 31, 2021, respectively, discounted at rates with a weighted-average of 3.5%, and with the undiscounted amount totaling $67.6 million and $70.0 million at June 30, 2022 and December 31, 2021, respectively. For certain 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 be an additional $10 million to $24 million before income taxes in excess of amounts already recorded. The variability of this range is primarily driven by possible environmental remediation activity at a formerly owned site where we indemnify the buyer through a set cutoff date in 2024.
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.

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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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.
On February 6, 2017, Huntsman, a subsidiary of Huntsman Corporation, filed a lawsuit in New York state court against Rockwood, Rockwood Specialties, Inc., certain former executives of Rockwood and its subsidiaries—Seifollah Ghasemi, Thomas Riordan, Andrew Ross, and Michael Valente, and Albemarle. The lawsuit arises out of Huntsman’s acquisition of certain Rockwood subsidiaries in connection with a stock purchase agreement (the “SPA”), dated September 17, 2013. Before that transaction closed on October 1, 2014, Albemarle began discussions with Rockwood to purchase all outstanding equity of Rockwood and did so in a transaction that closed on January 12, 2015. Huntsman’s complaint asserted that certain technology that Rockwood had developed for a production facility in Augusta, Georgia, and which was among the assets that Huntsman acquired pursuant to the SPA, did not work, and that Rockwood and the defendant executives had intentionally misled Huntsman about that technology in connection with the Huntsman-Rockwood transaction. The complaint asserted claims for, among other things, fraud, negligent misrepresentation, and breach of the SPA, and sought certain costs for completing construction of the production facility.
On March 10, 2017, Albemarle moved in New York state court to compel arbitration, which was granted on January 8, 2018 (although Huntsman unsuccessfully appealed that decision). Huntsman’s arbitration demand asserted claims substantially similar to those asserted in its state court complaint, and sought various forms of legal remedies, including cost overruns, compensatory damages, expectation damages, punitive damages, and restitution. After a trial, the arbitration panel issued an award on October 28, 2021, awarding approximately $600 million (including interest) to be paid by Albemarle to Huntsman, in addition to the possibility of attorney’s fees, costs and expenses. Following the arbitration panel decision, Albemarle reached a settlement with Huntsman to pay $665 million in two equal installments, with the first payment made in December 2021. The second and final payment of $332.5 million was made in May 2022.
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 our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act, and other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third-party sales representatives in our Refining Solutions business, within our Catalysts segment, to the U.S. Department of Justice (“DOJ”), the SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, the SEC, and the DPP in their review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures. We have commenced discussions with the SEC and DOJ about a potential resolution of these matters.
At this time, we are unable to predict the duration, scope, result, or related costs associated with the investigations. We also are unable to predict what action may be taken by the DOJ, the SEC, or the DPP, or what penalties or remedial actions they may ultimately seek. Any determination that our operations or activities are not, or were not, in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any such fines, penalties, disgorgement, equitable relief, or other losses would have a material adverse effect on our financial condition or liquidity. However, an adverse resolution could have a material adverse effect on our results of operations in a particular period.
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
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
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 $62.6 million and $66.8 million at June 30, 2022 and December 31, 2021, 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
We have contracts with certain of our customers which serve as guarantees on product delivery and performance according to customer specifications that can cover both shipments on an individual basis, as well as blanket coverage of multiple shipments under certain customer supply contracts. The financial coverage provided by these guarantees is typically based on a percentage of net sales value.

NOTE 11—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.


The following table provides details of our lease contracts for the three-month and six-month periods ended June 30, 2022 and 2021 (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Operating lease cost$10,590 $9,735 $21,201 $19,147 
Finance lease cost:
Amortization of right of use assets972 156 1,402 313 
Interest on lease liabilities840 752 1,693 1,507 
Total finance lease cost1,812 908 3,095 1,820 
Short-term lease cost3,271 2,176 5,970 4,780 
Variable lease cost1,914 1,813 2,631 4,178 
Total lease cost$17,587 $14,632 $32,897 $29,925 
Supplemental cash flow information related to our lease contracts for the six-month periods ended June 30, 2022 and 2021 is as follows (in thousands):
Six Months Ended June 30,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$17,539 $14,980 
Operating cash flows from finance leases1,185 876 
Financing cash flows from finance leases661 316 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases1,560 50,856 
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at June 30, 2022 and December 31, 2021 is as follows (in thousands, except as noted):
June 30, 2022December 31, 2021
Operating leases:
Other assets$135,143 $154,741 
Accrued expenses30,669 31,603 
Other noncurrent liabilities106,947 126,997 
Total operating lease liabilities137,616 158,600 
Finance leases:
Net property, plant and equipment72,983 75,302 
Current portion of long-term debt(a)
4,199 3,768 
Long-term debt72,194 74,011 
Total finance lease liabilities76,393 77,779 
Weighted average remaining lease term (in years):
Operating leases13.512.9
Finance leases24.524.5
Weighted average discount rate (%):
Operating leases3.58 %3.44 %
Finance leases4.46 %4.47 %
(a)    Balance includes accrued interest of finance lease recorded in Accrued liabilities.
Maturities of lease liabilities at June 30, 2022 were as follows (in thousands):
Operating LeasesFinance Leases
Remainder of 2022$17,928 $3,038 
202331,878 6,077 
202419,464 6,077 
202511,921 6,077 
20269,783 5,442 
Thereafter122,295 97,215 
Total lease payments213,269 123,926 
Less imputed interest75,653 47,533 
Total$137,616 $76,393 

NOTE 12—Segment Information:
Our three reportable segments include: (1) Lithium; (2) Bromine; and (3) Catalysts. 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.
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category included only the FCS business that did not fit into any of our core businesses. On June 1, 2021, we completed the sale of the FCS business. See Note 3, “Divestitures,” for additional information. Amounts in the “All Other” category represent activity in this business until divested on June 1, 2021.
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, 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 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. The Company defines adjusted EBITDA as earnings before interest and financing expenses, income tax expenses, 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 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 (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.
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
(In thousands)(In thousands)
Net sales:
Lithium$891,516 $320,334 $1,441,788 $599,310 
Bromine377,752 279,748 737,331 560,195 
Catalysts210,325 148,344 428,202 368,587 
All Other— 25,470 — 75,095 
Total net sales$1,479,593 $773,896 $2,607,321 $1,603,187 
Adjusted EBITDA:
Lithium$495,208 $109,441 $803,823 $215,877 
Bromine135,683 92,646 264,917 187,286 
Catalysts9,792 21,164 26,702 46,591 
All Other— 8,379 — 29,858 
Corporate(30,474)(37,002)(53,303)(54,930)
Total adjusted EBITDA$610,209 $194,628 $1,042,139 $424,682 

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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net (loss) income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
LithiumBromineCatalystsReportable Segments TotalAll OtherCorporateConsolidated Total
Three months ended June 30, 2022
Net income (loss) attributable to Albemarle Corporation$452,099 $122,461 $(3,383)$571,177 $— $(164,404)$406,773 
Depreciation and amortization42,502 13,222 13,175 68,899 — 2,094 70,993 
Acquisition and integration related costs(a)
— — — — — 5,375 5,375 
Interest and financing expenses(b)
— — — — — 41,409 41,409 
Income tax expense— — — — — 89,018 89,018 
Non-operating pension and OPEB items— — — — — (5,038)(5,038)
Other(c)
607 — — 607 — 1,072 1,679 
Adjusted EBITDA$495,208 $135,683 $9,792 $640,683 $— $(30,474)$610,209 
Three months ended June 30, 2021
Net income (loss) attributable to Albemarle Corporation$74,593 $80,148 $8,446 $163,187 $7,972 $253,441 $424,600 
Depreciation and amortization33,497 12,498 12,718 58,713 407 2,303 61,423 
Restructuring and other(d)
— — — — — 766 766 
Gain on sale of business(e)
— — — — — (429,408)(429,408)
Acquisition and integration related costs(a)
— — — — — 1,915 1,915 
Interest and financing expenses(b)
— — — — — 7,152 7,152 
Income tax expense— — — — — 106,985 106,985 
Non-operating pension and OPEB items— — — — — (5,471)(5,471)
Albemarle Foundation contribution(f)
— — — — — 20,000 20,000 
Other(g)
1,351 — — 1,351 — 5,315 6,666 
Adjusted EBITDA$109,441 $92,646 $21,164 $223,251 $8,379 $(37,002)$194,628 
Six months ended June 30, 2022
Net income (loss) attributable to Albemarle Corporation$713,788 $239,022 $606 $953,416 $— $(293,260)$660,156 
Depreciation and amortization81,028 25,895 26,096 133,019 — 4,548 137,567 
Loss on sale of interest in properties(h)
8,400 — — 8,400 — — 8,400 
Acquisition and integration related costs(a)
— — — — — 7,099 7,099 
Interest and financing expenses(b)
— — — — — 69,243 69,243 
Income tax expense— — — — — 169,548 169,548 
Non-operating pension and OPEB items— — — — — (10,318)(10,318)
Other(c)
607 — — 607 — (163)444 
Adjusted EBITDA$803,823 $264,917 $26,702 $1,095,442 $— $(53,303)$1,042,139 
Six months ended June 30, 2021
Net income (loss) attributable to Albemarle Corporation$144,965 $162,261 $21,362 $328,588 $27,988 $163,701 $520,277 
Depreciation and amortization65,303 25,025 25,229 115,557 1,870 6,256 123,683 
Restructuring and other(d)
— — — — — 1,540 1,540 
Gain on sale of business(e)
— — — — — (429,408)(429,408)
Acquisition and integration related costs(a)
— — — — — 4,076 4,076 
Interest and financing expenses(b)
— — — — — 51,034 51,034 
Income tax expense— — — — — 129,092 129,092 
Non-operating pension and OPEB items— — — — — (10,936)(10,936)
Albemarle Foundation contribution(f)
— — — — — 20,000 20,000 
Other(g)
5,609 — — 5,609 — 9,715 15,324 
Adjusted EBITDA$215,877 $187,286 $46,591 $449,754 $29,858 $(54,930)$424,682 
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(a)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).
(b)Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million for the three and six months ended June 30, 2022, and $1.2 million and $29.0 million for the three and six months ended June 30, 2021, respectively. See Note 9, “Long-term Debt,” for additional information. In addition, Interest and financing expenses for the six months ended June 30, 2022 includes the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest in prior periods. See Note 1, “Basis of Presentation,” for further details.
(c)Included amounts for the three months ended June 30, 2022 recorded in:
•Cost of goods sold - $0.5 million of expense related to the settlement of a legal matter resulting from a prior acquisition.
•SG&A - $1.1 million primarily related to facility closure expenses of offices in Germany.
Included amounts for the six months ended June 30, 2022 recorded in:
•Cost of goods sold - $0.5 million of expense related to the settlement of a legal matter resulting from a prior acquisition.
•SG&A - $4.3 million of gains from the sale of legacy properties not part of our operations, partially offset by $2.8 million of charges for environmental reserves at sites not part of our operations and $1.1 million primarily related to facility closure expenses of offices in Germany.
•Other income, net - $0.6 million gain related to a settlement received from a legal matter in a prior period.
(d)In 2021, the Company recorded facility closure related to offices in Germany, and severance expenses in Germany and Belgium, in SG&A.
(e)See Note 3, “Divestitures,” for additional information.
(f)Included in SG&A is a charitable contribution, using a portion of the proceeds received from the FCS 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 the Company’s employees live and the Company operates. 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 these communities.
(g)Included amounts for the three months ended June 30, 2021 recorded in:
•SG&A - $4.0 million of a loss resulting from the sale of property, plant and equipment, $1.6 million of charges for an environmental reserve at a site not part of our operations and $1.4 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
•Other income, net - $0.3 million of a gain resulting from the adjustment of indemnifications related to previously disposed businesses.
Included amounts for the six months ended June 30, 2021 recorded in:
•SG&A - $6.0 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements, a $4.0 million loss resulting from the sale of property, plant and equipment and $1.6 million of charges for an environmental reserve at a site not part of our operations.
•Other income, net - $3.6 million of expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
(h)Expense recorded 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. The corresponding obligation was recorded in Accrued liabilities to be transferred to Mineral Resources Limited (“MRL”), which maintains a 40% ownership interest in these Kemerton assets.


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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 13—Pension Plans and Other Postretirement Benefits:
The components of pension and postretirement benefits cost (credit) for the three-month and six-month periods ended June 30, 2022 and 2021 were as follows (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Pension Benefits Cost (Credit):
Service cost$970 $1,172 $1,955 $2,351 
Interest cost5,568 5,120 11,173 10,239 
Expected return on assets(10,932)(10,901)(22,144)(21,794)
Amortization of prior service benefit23 29 47 58 
Total net pension benefits credit$(4,371)$(4,580)$(8,969)$(9,146)
Postretirement Benefits Cost:
Service cost$22 $31 $43 $62 
Interest cost326 310 653 619 
Total net postretirement benefits cost$348 $341 $696 $681 
Total net pension and postretirement benefits credit$(4,023)$(4,239)$(8,273)$(8,465)
All components of net benefit cost (credit), other than service cost, are included in Other income, net on the consolidated statements of income.
During the three-month and six-month periods ended June 30, 2022, the Company made contributions of $3.1 million and $6.4 million, respectively, to its qualified and nonqualified pension plans. During the three-month and six-month periods ended June 30, 2021, the Company made contributions of $4.2 million and $18.9 million, respectively, to its qualified and nonqualified pension plans.
The Company paid $0.7 million and $1.3 million in premiums to the U.S. postretirement benefit plan during the three-month and six-month periods ended June 30, 2022 and 2021, respectively. During the three-month and six-month periods ended June 30, 2021, the Company paid $0.8 million and $1.4 million, respectively, in premiums to the U.S. postretirement benefit plan.

NOTE 14—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.
June 30, 2022December 31, 2021
Recorded
Amount		Fair ValueRecorded
Amount		Fair Value
(In thousands)
Long-term debt$3,481,309 $3,319,347 $2,405,021 $2,593,590 
Foreign Currency Forward Contracts—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. There were no outstanding designated foreign currency forward contracts at June 30, 2022. At December 31, 2021, we had outstanding designated foreign currency forward contracts with notional values totaling the equivalent of $36.5 million.
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Notes to the Condensed Consolidated Financial Statements
(Unaudited)
We also enter into foreign currency forward contracts in connection with our risk management strategies that have not been designated as hedging instruments under ASC 815, Derivatives and Hedging, in an attempt to minimize the financial impact of changes in foreign currency exchange rates. These derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The fair values of our non-designated foreign currency forward contracts are estimated based on current settlement values. At June 30, 2022 and December 31, 2021, we had outstanding non-designated foreign currency forward contracts with notional values totaling $452.9 million and $618.1 million, respectively, hedging our exposure to various currencies including the Chilean peso, Euro, Chinese Renminbi, Japanese Yen, Australian Dollar and Singapore Dollar.
The following table summarizes the fair value of our foreign currency forward contracts included in the consolidated balance sheets as of June 30, 2022 and December 31, 2021 (in thousands):
June 30, 2022December 31, 2021
AssetsLiabilitiesAssetsLiabilities
Designated as hedging instruments
Other current assets$— $— $237 $— 
Accrued expenses— — — 57 
Total designated as hedging instruments— — 237 57 
Not designated as hedging instruments
Other current assets49 — 2,901 — 
Accrued expenses— 4,928 — 248 
Total not designated as hedging instruments49 4,928 2,901 248 
Total$49 $4,928 $3,138 $305 

The following table summarizes the net gains (losses) recognized for our foreign currency forward contracts during the three-month and six-month periods ended June 30, 2022 and 2021 (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Designated as hedging instruments
(Loss) income recognized in Other comprehensive loss$(2,508)$823 $1,509 $(777)
Not designated as hedging instruments
(Loss) income recognized in Other income, net(a)
$(23,298)$2,048 $(27,270)$1,857 
(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 six-month periods ended June 30, 2022 and 2021, we recorded net cash settlements of $19.8 million and $0.4 million, respectively, in Other, net, in our condensed 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 15—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:
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Level 1Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2Unadjusted 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 3Unobservable 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. The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):
June 30, 2022Quoted 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)
$248,364 $— $— $248,364 
Investments under executive deferred compensation plan(b)
$26,027 $26,027 $— $— 
Private equity securities measured at net asset value(c)(d)
$4,719 $— $— $— 
Foreign currency forward contracts(e)
$49 $— $49 $— 
Liabilities:
Obligations under executive deferred compensation plan(b)
$26,027 $26,027 $— $— 
Foreign currency forward contracts(e)
$4,928 $— $4,928 $— 
December 31, 2021Quoted 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)
$246,517 $— $— $246,517 
Investments under executive deferred compensation plan(b)
$32,491 $32,491 $— $— 
Private equity securities measured at net asset value(c)(d)
$4,696 $— $— $— 
Foreign currency forward contracts(e)
$3,138 $— $3,138 $— 
Liabilities:
Obligations under executive deferred compensation plan(b)
$32,491 $32,491 $— $— 
Foreign currency forward contracts(e)
$305 $— $305 $— 
(a)Preferred equity of a Grace subsidiary acquired as a portion of the proceeds of the FCS sale on June 1, 2021. See Note 2, “Divestitures,” for further details on the material terms and conditions. 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 Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.
(c)Primarily consists of private equity securities reported in Investments in the consolidated balance sheets. The changes in fair value are reported in Other expense, net, in our consolidated statements of income.
(d)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.
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(e)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 14, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.

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
Beginning balance at December 31, 2021
$246,517 
Fair value adjustment(4,521)
Accretion of discount6,368 
Ending balance at June 30, 2022
$248,364 

NOTE 16—Accumulated Other Comprehensive (Loss) Income:
The components and activity in Accumulated other comprehensive (loss) income (net of deferred income taxes) consisted of the following during the periods indicated below (in thousands):
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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Foreign Currency Translation and Other
Net Investment Hedge(a)
Cash Flow Hedge(b)
Interest Rate Swap(c)
Total
Three months ended June 30, 2022
Balance at March 31, 2022$(397,510)$— $10,640 $(6,749)$(393,619)
Other comprehensive loss before reclassifications(117,840)— (2,509)— (120,349)
Amounts reclassified from accumulated other comprehensive loss19 — — 6,749 6,768 
Other comprehensive loss, net of tax(117,821)— (2,509)6,749 (113,581)
Other comprehensive income attributable to noncontrolling interests62 — — — 62 
Balance at June 30, 2022$(515,269)$— $8,131 $— $(507,138)
Three months ended June 30, 2021
Balance at March 31, 2021$(345,591)$— $4,849 $(9,372)$(350,114)
Other comprehensive income before reclassifications20,539 — 823 — 21,362 
Amounts reclassified from accumulated other comprehensive loss25 — — 650 675 
Other comprehensive income, net of tax20,564 — 823 650 22,037 
Other comprehensive income attributable to noncontrolling interests76 — — — 76 
Balance at June 30, 2021$(324,951)$— $5,672 $(8,722)$(328,001)
Six months ended June 30, 2022
Balance at December 31, 2021$(391,674)$— $6,623 $(7,399)$(392,450)
Other comprehensive (loss) income before reclassifications(123,749)— 1,508 — (122,241)
Amounts reclassified from accumulated other comprehensive loss39 — — 7,399 7,438 
Other comprehensive (loss) income, net of tax(123,710)— 1,508 7,399 (114,803)
Other comprehensive income attributable to noncontrolling interests115 — — — 115 
Balance at June 30, 2022$(515,269)$— $8,131 $— $(507,138)
Six months ended June 30, 2021
Balance at December 31, 2020$(369,152)$46,593 $6,449 $(10,022)$(326,132)
Other comprehensive (loss) income before reclassifications(7,628)5,110 (777)— (3,295)
Amounts reclassified from accumulated other comprehensive loss50 — — 1,300 1,350 
Other comprehensive (loss) income, net of tax(7,578)5,110 (777)1,300 (1,945)
Amounts reclassified within accumulated other comprehensive loss51,703 (51,703)— — — 
Other comprehensive income attributable to noncontrolling interests76 — — — 76 
Balance at June 30, 2021$(324,951)$— $5,672 $(8,722)$(328,001)
(a)During the first quarter of 2021 the net investment hedge was discontinued following the repayment of the 1.875% Euro-denominated senior notes. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge have been reclassified to Foreign currency translation and other, and will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated.
(b)We entered into a foreign currency forward contract, which was designated and accounted for as a cash flow hedge under ASC 815, Derivatives and Hedging. See Note 14, “Fair Value of Financial Instruments,” for additional information.
(c)The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in Interest and financing expenses. 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 9, “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.

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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The amount of income tax (expense) benefit allocated to each component of Other comprehensive (loss) income for the three-month and six-month periods ended June 30, 2022 and 2021 is provided in the following tables (in thousands):
Foreign Currency Translation and OtherNet Investment HedgeCash Flow HedgeInterest Rate Swap
Three months ended June 30, 2022
Other comprehensive (loss) income, before tax$(118,431)$— $(2,509)$8,905 
Income tax benefit (expense)610 — — (2,156)
Other comprehensive (loss) income, net of tax$(117,821)$— $(2,509)$6,749 
Three months ended June 30, 2021
Other comprehensive income (loss), before tax$20,568 $— $823 $834 
Income tax expense(4)— — (184)
Other comprehensive income (loss), net of tax$20,564 $— $823 $650 
Six months ended June 30, 2022
Other comprehensive (loss) income, before tax$(124,889)$— $1,508 $9,739 
Income tax benefit (expense)1,179 — — (2,340)
Other comprehensive (loss) income, net of tax$(123,710)$— $1,508 $7,399 
Six months ended June 30, 2021
Other comprehensive income (loss), before tax$(7,570)$6,552 $(777)$1,668 
Income tax expense(8)(1,442)— (368)
Other comprehensive income (loss), net of tax$(7,578)$5,110 $(777)$1,300 

NOTE 17—Related Party Transactions:
Our consolidated statements of income include sales to and purchases from unconsolidated affiliates in the ordinary course of business as follows (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Sales to unconsolidated affiliates$7,214 $4,998 $14,869 $10,728 
Purchases from unconsolidated affiliates(a)
$314,886 $55,771 $531,440 $88,921 
(a)Increases in purchases from unconsolidated affiliates primarily relate to increased pricing and volume of spodumene purchased from our Windfield joint venture.

Our consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the ordinary course of business as follows (in thousands):
June 30, 2022December 31, 2021
Receivables from unconsolidated affiliates$3,091 $2,139 
Payables to unconsolidated affiliates(a)
$204,209 $47,499 
(a)Increases in payables to unconsolidated affiliates primarily relate to increased purchases of spodumene purchased from our Windfield joint venture under normal payment terms.


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ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 18—Supplemental Cash Flow Information:
Supplemental information related to the condensed consolidated statements of cash flows is as follows (in thousands):
Six Months Ended
June 30,
20222021
Supplemental non-cash disclosure related to investing and financing activities:
Capital expenditures included in Accounts payable$222,533 $169,532 
Promissory note issued for capital expenditures(a)
$10,876 $— 
Non-cash proceeds from divestitures(b)
$— $244,530 
(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, NC. The promissory note is payable in equal annual installments from the years 2027 to 2048.
(b)Fair value of preferred equity of a Grace subsidiary received as part of the proceeds for the sale of the FCS business. See Note 2, “Divestitures,” for further details.
As part of the purchase price paid for the acquisition of a 60% interest in the MRL Wodgina Project, the Company transferred $96.3 million and $96.2 million of its construction in progress of the designated Kemerton assets during the six months ended June 30, 2022 and 2021, respectively, representing MRL’s 40% interest in the assets. The cash outflow for these assets was recorded in Capital expenditures within Cash flows from investing activities on the condensed consolidated statements of cash flows. The non-cash transfer of these assets is recorded in Non-cash transfer of 40% value of construction in progress of the Kemerton plant to MRL within Cash flows from operating activities on the consolidated statements of cash flows.
Other, net within Cash flows from operating activities on the condensed consolidated statements of cash flows for the six
months ended June 30, 2022 and 2021 included $42.5 million and $28.7 million, respectively, representing the reclassification
of the current portion of the one-time transition tax resulting from the enactment of the U.S. Tax Cuts and Jobs Act, from Other
noncurrent liabilities to Income taxes payable within current liabilities.

NOTE 19—Recently Issued Accounting Pronouncements:
In March 2020, the Financial Accounting Standards Board (“FASB”) issued accounting guidance that provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The guidance applies only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued additional accounting guidance which clarifies that certain optional expedients and exceptions apply to derivatives that are affected by the discounting transition. The guidance under both FASB issuances is effective March 12, 2020 through December 31, 2022. The Company currently does not expect this guidance to have a significant impact on its consolidated financial statements.
In November 2021, the FASB issued accounting guidance that requires disclosures about government assistance in the notes to the financial statements. This guidance will require the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. The Company currently does not expect this guidance to have a significant impact on its annual financial statement disclosures.
In March 2022, the FASB issued accounting guidance that expands the Company’s abilities to hedge the benchmark interest rate risk of portfolios of financial assets or beneficial interests in a fair value hedge. This guidance expands the use of the portfolio layer method to allow multiple hedges of a single closed portfolio of assets using spot starting, forward starting, and amortizing-notional swaps. This also permits both prepayable and non prepayable financial assets to be included in the closed portfolio of assets hedged in a portfolio layer hedge. In addition, this guidance requires that basis adjustments not be allocated to individual assets for active portfolio layer method hedges, but rather be maintained on the closed portfolio of assets as a whole. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2022, including interim periods within those annual periods. The Company currently does not expect this guidance to have a significant impact on its consolidated financial statements.
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Some of the information presented in this Quarterly Report on Form 10-Q, including the documents incorporated by reference, 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 “anticipate,” “believe,” “could,” “estimate,” “expect,” “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;
•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;
•volatility and uncertainties in the debt and equity markets;
•technology or intellectual property infringement, including cyber-security breaches, and other innovation risks;
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•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 from proposed transactions;
•timing of active and proposed projects;
•continuing uncertainties as to the duration and impact of the novel coronavirus (“COVID-19”) pandemic;
•performance of Albemarle’s 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 U.S. Securities and Exchange Commission (“SEC”) including those described under “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q.
These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. 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 condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.
The following is a discussion and analysis of our results of operations for the three-month and six-month periods ended June 30, 2022 and 2021. A discussion of our consolidated financial condition and sources of additional capital is included under a separate heading “Financial Condition and Liquidity.”
Overview
We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that are designed to meet our customers’ needs across a diverse range of end markets. Our corporate purpose is making the world safe and sustainable by powering the potential of people. The end markets we serve include energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals and crop protection. We believe that our commercial and geographic diversity, technical expertise, access to high-quality resources, innovative capability, flexible, low-cost global manufacturing base, experienced management team and strategic focus on our core base technologies will enable us to maintain leading positions in those areas of the specialty chemicals industry in which we operate.
Secular trends favorably impacting demand within the end markets that we serve combined with our diverse product portfolio, broad geographic presence and customer-focused solutions will continue to be key drivers of our future earnings growth. 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 sustainable revenue. For example, our Lithium business contributes to the growth of clean miles driven with electric miles and more efficient use of renewable energy through grid storage; Bromine 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 the Catalysts business creates 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.
Second Quarter 2022
During the second quarter of 2022:
•Our board of directors declared a quarterly dividend of $0.395 per share on May 3, 2022, which was paid on July 1, 2022 to shareholders of record at the close of business as of June 10, 2022.
•In May 2022, we issued $1.7 billion of senior notes pursuant to an underwritten public offering. The proceeds from this issuance were used to redeem the 4.15% Senior Notes due in 2024 (the “2024 Notes”), repay the balance of commercial paper outstanding and for general corporate purposes. The redemption of the 4.15% senior notes resulted in a loss on early extinguishment of debt of $19.2 million recorded in Interest and financing expenses.
•Production of spodumene concentrate from the first and second trains at the Wodgina mine managed by our 60%-owned MARBL joint venture were achieved in May and July of this year, respectively.
•Our net sales for the quarter were $1.48 billion, an increase of 91% compared to net sales of $773.9 million in the second quarter of 2021.
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•Diluted earnings per share was $3.46, compared to $3.62 from the second quarter of 2021. The second quarter of 2021 included a gain of $2.82 per diluted share related to the sale of the FCS business.

Outlook
The current global business environment presents a diverse set of opportunities and challenges in the markets we serve. In particular, the market for lithium battery and energy storage, particularly that for electric vehicles (“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. Amidst these dynamics, 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.
While global economic conditions have been improving, the COVID-19 pandemic continues to have an impact globally. We have not seen a material impact to our operations to date, however, the ultimate impact on our business will depend on the length and severity of the outbreak throughout the world. All of our information technology systems are running as designed and all sites are operating at normal capacity while we continue to comply with all government and health agency recommendations and requirements, as well as protecting the safety of our employees and communities. We believe we have sufficient inventory to continue to produce at current levels, however, government mandated shutdowns could impact our ability to acquire additional materials and disrupt our customers’ purchases. At this time we cannot predict the expected overall financial impact of the COVID-19 pandemic on our business, but we are planning for various economic scenarios and continue to make efforts to protect the safety of our employees and the health of our business.
Lithium: We expect Lithium results to be higher year-over-year during 2022, mainly due to increased pricing as well as higher sales volume. The increased market pricing reflects tight market conditions, primarily in battery- and tech-grade carbonate and hydroxide, as well as renegotiations of certain of our long-term agreements. Since the beginning of the year, market indices have increased 60% to 130%. Renegotiated contracts include higher prices on existing long-term agreements that are more reflective of current market conditions. In other cases, we have moved from previous long-term agreements towards index-referenced and variable-priced contracts. As a result, our lithium business is more aligned with changes in market and index pricing than it has been in the past. While we expect these prices to remain strong throughout the year, a material decline in these market prices would have a negative impact on our outlook. The increased sales volume is primarily expected from new capacity coming on line from La Negra, Chile, Train 1 in Kemerton, Western Australia, and the expected acquisition of Tianyuan, which includes a lithium hydroxide conversion plant designed to produce up to 25,000 metric tons of LCE per year. While we ramp up our new capacity, we will continue to utilize tolling arrangements to meet growing customer demand. EV sales are expected to continue to increase over the prior year as the lithium battery market remains strong.
We also announced agreements for strategic investments in China with plans to build two battery grade lithium conversion plants, Meishan and Zhangjiagang, each initially targeting 50,000 metric tons per year. At Meishan, construction is currently underway and is expected to be complete by the end of 2024. The Zhangjiagang plant is currently in engineering. In addition, production of spodumene concentrate from the first and second trains at the Wodgina mine managed by our 60%-owned MARBL joint venture were achieved in May and July of this year, respectively. In February 2022, we announced that we signed a non-binding letter agreement with our MARBL joint venture partner, MRL, to explore a potential expansion of the MARBL joint venture, in an effort to expand lithium conversion capacity with increased optionality and reduced risk.
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 electric vehicles and full battery electric vehicles 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 OEM’s, favorable global public policy toward e-mobility/renewable energy usage, and additional stimulus measures taken in Europe in light of the COVID-19 pandemic that we expect to strengthen EV demand. 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.
Bromine: We expect both net sales and profitability to grow 15% to 20% in 2022 due to strength in demand for fire safety solutions, as well as benefiting from diverse end markets. Volumes are expected to up slightly compared to full year
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2021 due to the successful execution of growth projects in 2021 assuming continued availability of raw materials like chlorine. Bromine’s ongoing cost savings initiatives and higher pricing are expected to offset higher freight and raw material costs.
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 products. We are focused on profitably growing our globally competitive bromine and derivatives production network to serve all major bromine 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 will 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.
Catalysts: Total Catalysts results in 2022 are now expected to be down 25% to 65% year-over-year as a result of inflationary pressures in freight and input costs, including the volatility of natural gas pricing in Europe related to the war in Ukraine. This is expected to be partially offset by higher pricing in refining markets. Volume is expected to grow across each of the Catalysts segments. The fluidized catalytic cracking (“FCC”) market has recovered from the COVID-19 pandemic as a result of increased travel and depletion of global gasoline inventories. Hydroprocessing catalysts (“HPC”) demand tends to be lumpier than FCC demand, but is expected to see a prolonged recovery due to refineries pushing out turnarounds. In addition, the Catalysts business is seeking contingent business interruption insurance settlements for lost income from 2019 to 2022 due to multiple incidents at one of its customers. If we prevail with these claims, we could receive these settlements in multiple distributions in 2022 and 2023, totaling up to $53 million. Our strategic review of the Catalysts business to position for value creation is still in progress.
On a longer-term basis, we believe increased global demand for transportation fuels, new refinery start-ups and ongoing adoption of cleaner fuels will be the primary drivers of growth in our Catalysts 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, including those managing new contaminants present in North America tight oil, and those in the Middle East and Asia seeking to use heavier feedstock while pushing for higher propylene yields. Longer-term, we believe that the global crude supply will get heavier and more sour, a trend that bodes well for our catalysts portfolio. With superior technology and production capacities, and expected growth in end market demand, we believe that Catalysts remains well-positioned for the future. In performance catalyst solutions (“PCS”), we expect growth on a longer-term basis in our organometallics business due to growing global demand for plastics driven by rising standards of living and infrastructure spending.
Corporate: In the first quarter of 2022, we increased our quarterly dividend rate to $0.395 per share. We continue to focus on cash generation, working capital management and process efficiencies. In addition, we expect our global effective tax rate for 2022 to continue to vary based on the locations in which income is actually earned and remains subject to potential volatility from changing legislation in the U.S. and other tax jurisdictions. As of June 30, 2022, we have a valuation allowance recorded against certain foreign deferred tax assets and intend to maintain the valuation allowance until there is sufficient evidence to support its reversal. We believe there is a reasonable possibility within the next 12 months sufficient positive evidence may become available to allow us to reach a conclusion the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain foreign deferred tax assets and decrease our income tax expense for the period the release is recorded.
We remain committed to evaluating 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 income.


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Second Quarter 2022 Compared to Second Quarter 2021

Selected Financial Data (Unaudited)

Net Sales
In thousandsQ2 2022Q2 2021$ Change% Change
Net sales$1,479,593 $773,896 $705,697 91 %
•$630.5 million of increased pricing from each of our businesses
•$124.4 million of higher sales volume in each of our businesses
•$25.5 million decrease in net sales following the sale of the fine chemistry services (“FCS”) business on June 1, 2021
•$22.9 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Gross Profit
In thousandsQ2 2022Q2 2021$ Change% Change
Gross profit$580,424 $248,417 $332,007 134 %
Gross profit margin39.2 %32.1 %
▪Favorable pricing impacts and higher sales volume in all businesses
▪Increased utility, primarily natural gas in Europe, and freight costs in each of our businesses
▪Increased commission expenses in Chile resulting from the higher pricing in Lithium
▪Decrease in net sales resulting from the disposal of the FCS business on June 1, 2021
▪Unfavorable currency exchange impacts resulting from the weaker U.S. Dollar against various currencies
Selling, General and Administrative (“SG&A”) Expenses
In thousandsQ2 2022Q2 2021$ Change% Change
Selling, general and administrative expenses$128,942 $121,516 $7,426 6 %
Percentage of Net sales8.7 %15.7 %
▪Higher compensation, including incentive-based, expenses across all businesses and Corporate
▪Partially offset by productivity improvements and a reduction in professional fees and other administrative costs
▪2021 included a $20.0 million charitable contribution, using a portion of the proceeds received from the FCS divestiture, to the Albemarle Foundation, in addition to the normal annual contributions in 2021
▪2021 also included a $4.0 million loss resulting from the sale of property, plant and equipment

Research and Development Expenses
In thousandsQ2 2022Q2 2021$ Change% Change
Research and development expenses$17,386 $13,976 $3,410 24 %
Percentage of Net sales1.2 %1.8 %
(Gain) Loss on Sale of Business/Interest in Properties
In thousandsQ2 2022Q2 2021$ Change% Change
(Gain) loss on sale of business/interest in properties$— $(429,408)$429,408 
▪Gain resulting from the sale of the FCS business on June 1, 2021
Interest and Financing Expenses
In thousandsQ2 2022Q2 2021$ Change% Change
Interest and financing expenses$(41,409)$(7,152)$(34,257)479 %
▪2022 included a $19.2 million loss on early extinguishment of debt, representing the tender premiums, fees, unamortized discounts, unamortized deferred financing costs and accelerated amortization of the interest rate swap balance from the redemption of 4.15% senior notes during the second quarter of 2022
▪Increased debt balance during the second quarter of 2022 compared to 2021 following the issuance of $1.7 billion in new senior notes

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Other Income, Net
In thousandsQ2 2022Q2 2021$ Change% Change
Other income, net$8,767 $14 $8,753 62,521 %
•$3.2 million of income in 2022 from accretion of discount in preferred equity of W. R. Grace & Co. (“Grace”) subsidiary acquired as a portion of the proceeds of the FCS sale
•$2.2 million decrease in foreign exchange losses
Income Tax Expense
In thousandsQ2 2022Q2 2021$ Change% Change
Income tax expense$89,018 $106,985 $(17,967)(17)%
Effective income tax rate22.2 %20.0 %
•2022 included a benefit from global intangible low-taxed income
•$97.8 million one-time tax expense recorded for the gain on the sale of the FCS business in 2021
•Current year tax reserve related to an uncertain tax position in Chile
•Change in geographic mix of earnings
Equity in Net Income of Unconsolidated Investments
In thousandsQ2 2022Q2 2021$ Change% Change
Equity in net income of unconsolidated investments$128,156 $17,998 $110,158 612 %
▪Increased earnings from strong pricing and volume increases results from the Windfield Holdings Pty Ltd (“Talison”) joint venture
▪$3.8 million of favorable foreign exchange impacts from the Talison joint venture
Net Income Attributable to Noncontrolling Interests
In thousandsQ2 2022Q2 2021$ Change% Change
Net income attributable to noncontrolling interests$(33,819)$(21,608)$(12,211)57 %
▪Increase in consolidated income related to our Jordan Bromine Company Limited (“JBC”) joint venture primarily due to favorable pricing
Net Income Attributable to Albemarle Corporation
In thousandsQ2 2022Q2 2021$ Change% Change
Net income attributable to Albemarle Corporation$406,773 $424,600 $(17,827)(4)%
Percentage of Net sales27.5 %54.9 %
Basic earnings per share$3.47 $3.63 $(0.16)(4)%
Diluted earnings per share$3.46 $3.62 $(0.16)(4)%
▪Gain on sale of FCS business of $331.6 million, net of tax in 2021
▪Increased sales volume and favorable pricing in all businesses
▪Increased earnings from Talison joint venture
▪Productivity improvements and a reduction in professional fees and other administrative costs
▪Increased commission expenses in Chile resulting from the higher pricing in Lithium
▪Increased utility, primarily natural gas in Europe, and freight costs in each of our businesses
▪Increased SG&A expenses, primarily related to increased compensation expense
▪Increased interest and financing expenses due to loss on early extinguishment of debt recorded in 2022


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Other Comprehensive (Loss) Income, Net of Tax
In thousandsQ2 2022Q2 2021$ Change% Change
Other comprehensive (loss) income, net of tax$(113,581)$22,037 $(135,618)(615)%
▪Foreign currency translation and other
$(117,821)$20,564 $(138,385)(673)%
▪2022 included unfavorable movements in the Euro of approximately $69 million, the Chinese Renminbi of approximately $31 million, the Japanese Yen of approximately $8 million, the Brazilian Real of approximately $4 million and a net unfavorable variance in various other currencies of $9 million
▪2022 included a $1.9 million loss representing an adjustment to the fair value of our available for sale debt securities
▪2021 included favorable movements in the the Brazilian Real of approximately $11 million, the Chinese Renminbi of approximately $5 million and a net favorable variance in various other currencies of $5 million
▪Cash flow hedge
$(2,509)$823 $(3,332)
▪Interest rate swap
$6,749 $650 $6,099 938 %
▪Accelerated the amortization of the remaining interest rate swap balance in 2022 as a result of the repayment of the 4.15% senior notes due in 2024
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) Lithium, (2) Bromine and (3) Catalysts.

Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the FCS business, the sale of which was completed on June 1, 2021, 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.

Our 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. We define adjusted EBITDA as earnings before interest and financing expenses, 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 planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. We 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, the generally accepted accounting principles in the United States (“U.S. GAAP”). 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.
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Three Months Ended June 30,Percentage Change
2022%2021%2022 vs 2021
(In thousands, except percentages)
Net sales:
   Lithium$891,516 60.3 %$320,334 41.4 %178 %
   Bromine377,752 25.5 %279,748 36.1 %35 %
   Catalysts210,325 14.2 %148,344 19.2 %42 %
   All Other— — %25,470 3.3 %(100)%
      Total net sales$1,479,593 100.0 %$773,896 100.0 %91 %
Adjusted EBITDA:
   Lithium$495,208 81.2 %$109,441 56.2 %352 %
   Bromine135,683 22.2 %92,646 47.6 %46 %
   Catalysts9,792 1.6 %21,164 10.9 %(54)%
   All Other— — %8,379 4.3 %(100)%
   Corporate(30,474)(5.0)%(37,002)(19.0)%18 %
      Total adjusted EBITDA$610,209 100.0 %$194,628 100.0 %214 %
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net (loss) income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
LithiumBromineCatalystsReportable Segments TotalAll OtherCorporateConsolidated Total
Three months ended June 30, 2022
Net income (loss) attributable to Albemarle Corporation$452,099 $122,461 $(3,383)$571,177 $— $(164,404)$406,773 
Depreciation and amortization42,502 13,222 13,175 68,899 — 2,094 70,993 
Acquisition and integration related costs(a)
— — — — — 5,375 5,375 
Interest and financing expenses(b)
— — — — — 41,409 41,409 
Income tax expense— — — — — 89,018 89,018 
Non-operating pension and OPEB items— — — — — (5,038)(5,038)
Other(c)
607 — — 607 — 1,072 1,679 
Adjusted EBITDA$495,208 $135,683 $9,792 $640,683 $— $(30,474)$610,209 
Three months ended June 30, 2021
Net income (loss) attributable to Albemarle Corporation$74,593 $80,148 $8,446 $163,187 $7,972 $253,441 $424,600 
Depreciation and amortization33,497 12,498 12,718 58,713 407 2,303 61,423 
Restructuring and other(d)
— — — — — 766 766 
Acquisition and integration related costs(a)
— — — — — 1,915 1,915 
Gain on sale of business(e)
— — — — — (429,408)(429,408)
Interest and financing expenses(b)
— — — — — 7,152 7,152 
Income tax expense— — — — — 106,985 106,985 
Non-operating pension and OPEB items— — — — — (5,471)(5,471)
Albemarle Foundation contribution(f)
— — — — — 20,000 20,000 
Other(g)
1,351 — — 1,351 — 5,315 6,666 
Adjusted EBITDA$109,441 $92,646 $21,164 $223,251 $8,379 $(37,002)$194,628 
(a)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in SG&A.
(b)Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million for the three months ended June 30, 2022, and $1.2 million for the three months ended June 30, 2021. See Note 9, “Long-term Debt,” for additional information.
(c)Included amounts for the three months ended June 30, 2022 recorded in:
•Cost of goods sold - $0.5 million of expense related to the settlement of a legal matter resulting from a prior acquisition.
•SG&A - $1.1 million primarily related to facility closure expenses of offices in Germany.
(d)In 2021, the Company recorded facility closure related to offices in Germany, and severance expenses in Germany and Belgium, in SG&A.
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(e)Gain resulting from the sale of the FCS business on June 1, 2021.
(f)Included in SG&A is a charitable contribution, using a portion of the proceeds received from the FCS 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 the Company operates. 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 these communities.
(g)Included amounts for the three months ended June 30, 2021 recorded in:
•SG&A - $4.0 million of a loss resulting from the sale of property, plant and equipment, $1.6 million of charges for an environmental reserve at a site not part of our operations and $1.4 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
•Other income, net - $0.3 million of a gain resulting from the adjustment of indemnifications related to previously disposed businesses.

Lithium
In thousandsQ2 2022Q2 2021$ Change% Change
Net sales$891,516 $320,334 $571,182 178 %
•$528.0 million of favorable pricing impacts, reflecting tight market conditions, primarily in battery- and tech-grade carbonate and hydroxide, as well as greater volumes sold under index-referenced and variable-priced contracts, and mix
•$59.0 million of higher sales volume, primarily driven by increased tolling
•$15.0 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Adjusted EBITDA$495,208 $109,441 $385,767 352 %
•Favorable pricing impacts and higher sales volume
•Increased equity in net income from the Talison joint venture, driven by increased pricing and sales volume
•Savings from designed productivity improvements
•Increased SG&A expenses from higher compensation and other administrative costs
•Increased utility and freight costs
•Increased spending for investments to support business growth
•Increased commission expenses in Chile resulting from the higher pricing in Lithium
•$14.4 million of unfavorable currency translation resulting from a stronger Chilean Peso
Bromine
In thousandsQ2 2022Q2 2021$ Change% Change
Net sales$377,752 $279,748 $98,004 35 %
•$92.7 million of favorable pricing impacts, primarily in the fire safety solutions division
•$10.4 million of higher sales volume related to increased demand across all products
•$5.1 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Adjusted EBITDA$135,683 $92,646 $43,037 46 %
•Favorable pricing impacts and higher sales volume as demand continues to be strong
•Increased freight costs
•Increased utility costs and raw material prices, primarily due to the higher cost of BPA
•$5.3 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Catalysts
In thousandsQ2 2022Q2 2021$ Change% Change
Net sales$210,325 $148,344 $61,981 42 %
•$55.0 million of higher sales volume, primarily from the timing of clean fuel technologies sales, which has lumpier demand
•$9.8 million of favorable pricing impacts, primarily in clean fuel technologies and PCS
•$2.8 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Adjusted EBITDA$9,792 $21,164 $(11,372)(54)%
•Increased utility costs, primarily natural gas in Europe
•Increased raw material and freight costs
•Higher sales volume and favorable pricing impacts


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All Other
In thousandsQ2 2022Q2 2021$ Change% Change
Net sales$— $25,470 $(25,470)(100)%
•Results from 2021 relate to the FCS business, which was sold on June 1, 2021
Adjusted EBITDA$— $8,379 $(8,379)(100)%
•Results from 2021 relate to the FCS business, which was sold on June 1, 2021
Corporate
In thousandsQ2 2022Q2 2021$ Change% Change
Adjusted EBITDA$(30,474)$(37,002)$6,528 18 %
▪$6.0 million of favorable currency exchange impacts, including a $3.8 million increase in foreign exchange impacts from our Talison joint venture
▪$3.2 million of income in 2022 from accretion of discount in preferred equity of Grace subsidiary acquired as a portion of the proceeds of the FCS sale
▪Increase in incentive compensation costs
First Six Months 2022 Compared to First Six Months 2021

Selected Financial Data (Unaudited)

Net Sales
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net sales$2,607,321 $1,603,187 $1,004,134 63 %
▪$898.9 million of increased pricing from each of our businesses
▪$213.9 million of higher sales volume in each of our businesses
▪$75.1 million decrease in net sales following the sale of the FCS business on June 1, 2021
▪$32.8 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Gross Profit
In thousands
YTD 2022
YTD 2021
$ Change% Change
Gross profit$1,029,454 $512,104 $517,350 101 %
Gross profit margin39.5 %31.9 %
▪Favorable pricing impacts and higher sales volume in all businesses
▪Increased utility, primarily natural gas in Europe, and freight costs in each of our businesses
▪Increased commission expenses in Chile resulting from the higher pricing in Lithium
▪Decrease in net sales resulting from the disposal of the FCS business on June 1, 2021
▪2021 included $22 million of additional production and utility costs in Bromine and Catalysts resulting from the U.S. Gulf Coast winter storm
▪Unfavorable currency exchange impacts resulting from the weaker U.S. Dollar against various currencies
Selling, General and Administrative Expenses
In thousands
YTD 2022
YTD 2021
$ Change% Change
Selling, general and administrative expenses$241,510 $214,703 $26,807 12 %
Percentage of Net sales9.3 %13.4 %
▪Higher compensation, including incentive-based, expenses across all businesses and Corporate
▪Partially offset by productivity improvements and a reduction in professional fees and other administrative costs
▪2022 included $4.3 million of gains from the sale of legacy properties not part of our operations
▪2021 included a $20.0 million charitable contribution, using a portion of the proceeds received from the FCS divestiture, to the Albemarle Foundation, in addition to the normal annual contributions in 2021
▪2021 also included $6.0 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements and a $4.0 million loss resulting from the sale of property, plant and equipment


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Research and Development Expenses
In thousands
YTD 2022
YTD 2021
$ Change% Change
Research and development expenses$33,469 $28,612 $4,857 17 %
Percentage of Net sales1.3 %1.8 %
▪Increased research and development spend in each of the reportable segments
(Gain) Loss on Sale of Business/Interest in Properties
In thousands
YTD 2022
YTD 2021
$ Change% Change
(Gain) loss on sale of business/interest in properties$8,400 $(429,408)$437,808 
▪2022 expense related to cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton, Western Australia
▪2021 gain resulting from sale of FCS business on June 1, 2021
Interest and Financing Expenses
In thousands
YTD 2022
YTD 2021
$ Change% Change
Interest and financing expenses$(69,243)$(51,034)$(18,209)36 %
▪2022 included a $19.2 million loss on early extinguishment of debt, representing the tender premiums, fees, unamortized discounts, unamortized deferred financing costs and accelerated amortization of the interest rate swap balance from the redemption of debt during the second quarter of 2022
▪2022 also included an expense of $17.5 million related to the correction of out of period errors regarding overstated capitalized interest values in prior periods
▪2021 included a $29.0 million loss on early extinguishment of debt, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of debt during the first quarter of 2021
Other Income, Net
In thousands
YTD 2022
YTD 2021
$ Change% Change
Other income, net$24,263 $11,326 $12,937 114 %
•$6.4 million of income in 2022 from accretion of discount in preferred equity of the Grace subsidiary acquired as a portion of the proceeds of the FCS sale
•$1.3 million decrease in foreign exchange losses
•2021 included $3.6 million of expenses primarily related to asset retirement obligation charges to update an estimate at a site formerly owned by Albemarle
Income Tax Expense
In thousands
YTD 2022
YTD 2021
$ Change% Change
Income tax expense$169,548 $129,092 $40,456 31 %
Effective income tax rate
24.2 %19.6 %
•Change in geographic mix of earnings
•Current year tax reserve related to an uncertain tax position in Chile
•$97.8 million one-time tax expense recorded for the gain on the sale of the FCS business in 2021
•2021 included certain discrete tax benefits, partially offset by expense due to an out-of-period adjustment for an overstated deferred tax liability recorded during the three-month period ended December 31, 2017
Equity in Net Income of Unconsolidated Investments
In thousands
YTD 2022
YTD 2021
$ Change% Change
Equity in net income of unconsolidated investments$190,592 $34,509 $156,083 452 %
▪Increased earnings from strong pricing and volume increases results from the Talison joint venture

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Net Income Attributable to Noncontrolling Interests
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net income attributable to noncontrolling interests$(61,983)$(43,629)$(18,354)42 %
▪Increase in consolidated income related to our JBC joint venture primarily due to favorable pricing
Net Income Attributable to Albemarle Corporation
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net income attributable to Albemarle Corporation$660,156 $520,277 $139,879 27 %
Percentage of Net sales25.3 %32.5 %
Basic earnings per share$5.64 $4.54 $1.10 24 %
Diluted earnings per share$5.61 $4.51 $1.10 24 %
▪Gain on sale of FCS business of $331.6 million, net of tax in 2021
▪Increased sales volume and favorable pricing in all businesses
▪Increased earnings from Talison joint venture
▪Productivity improvements and a reduction in professional fees and other administrative costs
▪Increased commission expenses in Chile resulting from the higher pricing in Lithium
▪Increased utility, primarily natural gas in Europe, and freight costs in each of our businesses
▪Increased SG&A expenses, primarily related to increased compensation expense
▪Increased interest and financing expenses due to loss on early extinguishment of debt recorded in 2022
▪Loss of sales from FCS business following the disposition on June 1, 2021

Other Comprehensive Income (loss), Net of Tax
In thousands
YTD 2022
YTD 2021
$ Change% Change
Other comprehensive income (loss), net of tax$(114,803)$(1,945)$(112,858)5,802 %
▪Foreign currency translation and other
$(123,710)$(7,578)$(116,132)1,532 %
▪2022 included unfavorable movements in the Euro of approximately $68 million, the Chinese Renminbi of approximately $32 million, the Japanese Yen of approximately $15 million, the Taiwanese Dollar of approximately $6 million and a net unfavorable variance in various other currencies of $6 million
▪2022 included a $4.5 million loss representing an adjustment to the fair value of our available for sale debt securities
▪2021 included unfavorable movements in the Euro of approximately $11 million and the Japanese Yen of approximately $5 million, partially offset by favorable movements in the Brazilian Real of approximately $5 million and the Chinese Renminbi of approximately $4 million
▪Cash flow hedge
$1,508 $(777)$2,285 
▪Interest rate swap
$7,399 $1,300 $6,099 469 %
▪Accelerated the amortization of the remaining interest rate swap balance in 2022 as a result of the repayment of the 4.15% senior notes due in 2024


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Segment Information Overview. Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the FCS business that does not fit into any of our core businesses.

Six Months Ended June 30,Percentage Change
2022%2021%2022 vs 2021
(In thousands, except percentages)
Net sales:
   Lithium$1,441,788 55.3 %$599,310 37.4 %141 %
   Bromine737,331 28.3 %560,195 34.9 %32 %
   Catalysts428,202 16.4 %368,587 23.0 %16 %
   All Other— — %75,095 4.7 %(100)%
      Total net sales$2,607,321 100.0 %$1,603,187 100.0 %63 %
Adjusted EBITDA:
   Lithium$803,823 77.1 %$215,877 50.8 %272 %
   Bromine264,917 25.4 %187,286 44.1 %41 %
   Catalysts26,702 2.6 %46,591 11.0 %(43)%
   All Other— — %29,858 7.0 %(100)%
   Corporate(53,303)(5.1)%(54,930)(12.9)%3 %
      Total adjusted EBITDA$1,042,139 100.0 %$424,682 100.0 %145 %
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net (loss) income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, (in thousands):
LithiumBromineCatalystsReportable Segments TotalAll OtherCorporateConsolidated Total
Six months ended June 30, 2022
Net income (loss) attributable to Albemarle Corporation$713,788 $239,022 $606 $953,416 $— $(293,260)$660,156 
Depreciation and amortization81,028 25,895 26,096 133,019 — 4,548 137,567 
Loss on sale of interest in properties(a)
8,400 — — 8,400 — — 8,400 
Acquisition and integration related costs(b)
— — — — — 7,099 7,099 
Interest and financing expenses(c)
— — — — — 69,243 69,243 
Income tax expense— — — — — 169,548 169,548 
Non-operating pension and OPEB items— — — — — (10,318)(10,318)
Other(d)
607 — — 607 — (163)444 
Adjusted EBITDA$803,823 $264,917 $26,702 $1,095,442 $— $(53,303)$1,042,139 
Six months ended June 30, 2021
Net income (loss) attributable to Albemarle Corporation$144,965 $162,261 $21,362 $328,588 $27,988 $163,701 $520,277 
Depreciation and amortization65,303 25,025 25,229 115,557 1,870 6,256 123,683 
Restructuring and other(e)
— — — — — 1,540 1,540 
Gain on sale of business(f)
— — — — — (429,408)(429,408)
Acquisition and integration related costs(b)
— — — — — 4,076 4,076 
Interest and financing expenses(c)
— — — — — 51,034 51,034 
Income tax expense— — — — — 129,092 129,092 
Non-operating pension and OPEB items— — — — — (10,936)(10,936)
Albemarle Foundation contribution(g)
— — — — — 20,000 20,000 
Other(h)
5,609 — — 5,609 — 9,715 15,324 
Adjusted EBITDA$215,877 $187,286 $46,591 $449,754 $29,858 $(54,930)$424,682 
(a)Expense recorded 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. The corresponding obligation was recorded in Accrued liabilities to be transferred to MRL, which maintains a 40% ownership interest in these Kemerton assets.
(b)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in SG&A.
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(c)Included in Interest and financing expenses is a loss on early extinguishment of debt of $19.2 million for the six months ended June 30, 2022, and $29.0 million for the six months ended June 30, 2021. See Note 9, “Long-term Debt,” for additional information. In addition, Interest and financing expenses for the six months ended June 30, 2022 includes the correction of an out of period error of $17.5 million related to the overstatement of capitalized interest in prior periods. See Note 1, “Basis of Presentation,” for further details.
(d)Included amounts for the six months ended June 30, 2022 recorded in:
•Cost of goods sold - $0.5 million of expense related to the settlement of a legal matter resulting from a prior acquisition.
•SG&A - $4.3 million of gains from the sale of legacy properties not part of our operations, partially offset by $2.8 million of charges for environmental reserves at sites not part of our operations and $1.1 million primarily related to facility closure expenses of offices in Germany.
•Other income, net - $0.6 million gain related to a settlement received from a legal matter in a prior period.
(e)In 2021, the Company recorded facility closure related to offices in Germany, and severance expenses in Germany and Belgium, in SG&A.
(f)Gain resulting from the sale of the FCS business on June 1, 2021.
(g)Included in SG&A is a charitable contribution, using a portion of the proceeds received from the FCS 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 the Company operates. 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 these communities.
(h)Included amounts for the six months ended June 30, 2021 recorded in:
•SG&A - $6.0 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements, a $4.0 million loss resulting from the sale of property, plant and equipment and $1.6 million of charges for an environmental reserve at a site not part of our operations.
•Other income, net - $3.6 million of expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.

Lithium
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net sales$1,441,788 $599,310 $842,478 141 %
•$717.2 million of favorable pricing impacts, reflecting tight market conditions, primarily in battery- and tech-grade carbonate and hydroxide, as well as greater volumes sold under index-referenced and variable-priced contracts, and mix
•$145.2 million of higher sales volume, primarily driven by increased tolling
•$19.1 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Adjusted EBITDA$803,823 $215,877 $587,946 272 %
•Favorable pricing impacts and higher sales volume
•Higher equity in net income from the Talison joint venture, driven by increased pricing and sales volume
•Savings from designed productivity improvements
•Increased SG&A expenses from higher compensation and other administrative costs
•Increased utility and freight costs
•Increased spending for investments to support business growth
•Increased commission expenses in Chile resulting from the higher pricing in Lithium
•$11.2 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Bromine
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net sales$737,331 $560,195 $177,136 32 %
•$167.1 million of favorable pricing impacts, primarily in the fire safety solutions division
•$17.6 million of higher sales volume related to increased demand across all products
•$7.5 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Adjusted EBITDA$264,917 $187,286 $77,631 41 %
•Favorable pricing impacts and higher sales volume as demand continues to be strong
•Increased freight costs
•Increased utility costs and raw material prices, primarily due to the higher cost of BPA
•2021 included higher production and utility costs of approximately $6 million resulting from the U.S. Gulf Coast winter storm
•$8.2 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies

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Catalysts
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net sales$428,202 $368,587 $59,615 16 %
•$51.2 million of higher sales volume, primarily from the timing of clean fuel technologies sales, which has lumpier demand
•$14.6 million of favorable pricing impacts, primarily in clean fuel technologies and PCS
•$6.2 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies
Adjusted EBITDA$26,702 $46,591 $(19,889)(43)%
•Increased utility costs, primarily natural gas in Europe
•Increased raw material and freight costs
•Higher sales volume and favorable pricing impacts
•2021 included higher production and utility costs of approximately $16 million resulting from the U.S. Gulf Coast winter storm
All Other
In thousands
YTD 2022
YTD 2021
$ Change% Change
Net sales$— $75,095 $(75,095)(100)%
▪Primarily decreased volume resulting from the sale of the FCS business in the second quarter of 2021
Adjusted EBITDA$— $29,858 $(29,858)(100)%
▪Primarily decreased volume resulting from the sale of the FCS business in the second quarter of 2021
Corporate
In thousands
YTD 2022
YTD 2021
$ Change% Change
Adjusted EBITDA$(53,303)$(54,930)$1,627 3 %
▪$2.8 million of favorable currency exchange impacts, including a $1.5 million increase in foreign exchange impacts from our Talison joint venture
▪$6.4 million of income in 2022 from accretion of discount in preferred equity of Grace subsidiary acquired as a portion of the proceeds of the FCS sale
▪Increase in incentive compensation costs

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 our shareholders and 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
During the first six months of 2022, cash on hand, cash provided by operations and the proceeds of $1.96 billion in long-term debt and credit agreements funded $502.6 million of capital expenditures for plant, machinery and equipment, the repayment of long-term debt of $455.0 million, the net repayment of $390.6 million of commercial paper and dividends to shareholders of $91.9 million. Our operations provided $60.3 million of cash flows during the first six months of 2022, as compared to $385.9 million for the first six months of 2021. The change compared to prior year was primarily due to increased working capital outflows of $896.0 million and lower earnings from the FCS business sold on June 1, 2021, partially offset by increased earnings from the Lithium and Bromine segments and higher dividends received from unconsolidated investments. The outflow from working capital in 2022 was primarily driven by increased inventory and accounts receivable balances from higher lithium pricing and increased sales, as well as the $332.5 million payment to settle a legacy Rockwood legal matter. This was partially offset by increased accounts payable which includes the higher pricing on lithium spodumene purchases from our Talison joint venture. Overall, our cash and cash equivalents increased by $491.3 million to $930.6 million at June 30, 2022 from $439.3 million at December 31, 2021.
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Capital expenditures for the six-month period ended June 30, 2022 of $502.6 million were primarily associated with plant, machinery and equipment. We expect our capital expenditures to be between $1.3 billion and $1.5 billion in 2022, primarily for Lithium growth and capacity increases, primarily in Australia, Chile and Silver Peak, Nevada, as well as productivity and continuity of operations projects in all segments. Our La Negra, Chile plant is in the commissioning and qualification stage. Train I of our Kemerton, Western Australia plant was completed in December 2021, but due to the ongoing labor shortages and COVID-19 pandemic travel restrictions in Western Australia, Train II construction is now expected to be completed in the second half of 2022. Commercial sales volume from Train II is expected to begin in 2023.
On May 13, 2022, we 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 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 three and six months ended June 30, 2022, we 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 income.
On September 30, 2021, the Company signed a definitive agreement to acquire all of the outstanding equity of Tianyuan for approximately $200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi. The plant has designed annual conversion capacity of up to 25,000 metric tons of LCE and is capable of producing battery-grade lithium carbonate and lithium hydroxide. The plant began commercial production in the first half of 2022. The Company expects the transaction, which is subject to customary closing conditions, to close in the second half of 2022.
Net current assets were $1.57 billion and $133.6 million at June 30, 2022 and December 31, 2021, respectively. The increase is primarily due to increases in cash and cash equivalents from the issuance of the 2022 Notes, as well as increased inventory and accounts receivable balances from higher lithium pricing. 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.
On February 24, 2022, we increased our quarterly dividend rate to $0.395 per share, an increase from the quarterly rate of $0.39 per share paid in 2021. On May 3, 2022, we declared a cash dividend of $0.395, which was paid on July 1, 2022 to shareholders of record at the close of business as of June 10, 2022.
At June 30, 2022 and December 31, 2021, our cash and cash equivalents included $367.2 million and $374.0 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. There were no repatriations of cash from foreign operations during the first six months of 2022 or 2021.
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, share repurchases and other cash outlays, should be financed primarily with cash flow provided by operations and
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cash on hand, with additional cash needed, if any, provided by borrowings. The amount and timing of any additional borrowings will depend on our specific cash requirements.
Long-Term Debt
We currently have the following notes outstanding:
Issue Month/YearPrincipal (in millions)Interest RateInterest Payment DatesMaturity Date
November 2019€371.71.125%November 25November 25, 2025
May 2022(a)
$650.04.65%June 1 and December 1June 1, 2027
November 2019€500.01.625%November 25November 25, 2028
November 2019(a)
$171.63.45%May 15 and November 15November 15, 2029
May 2022(a)
$600.05.05%June 1 and December 1June 1, 2032
November 2014(a)
$350.05.45%June 1 and December 1December 1, 2044
May 2022(a)
$450.05.65%June 1 and December 1June 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 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.
Our revolving, unsecured credit agreement dated as of June 21, 2018, as amended on August 14, 2019, May 11, 2020 and December 10, 2021 (the “2018 Credit Agreement”), currently provides for borrowings of up to $1.0 billion and matures on August 9, 2024. Borrowings under the 2018 Credit Agreement bear interest at variable rates based on an average LIBOR for deposits in the relevant currency plus an applicable margin which ranges from 0.910% to 1.500%, 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”). The applicable margin on the facility was 1.125% as of June 30, 2022. As of June 30, 2022 there were no borrowings outstanding under the 2018 Credit Agreement.
On August 14, 2019, the Company entered into the $1.2 billion 2019 Credit Facility with several banks and other financial institutions, which was amended and restated on December 15, 2020 and again on December 10, 2021. The lenders’ commitment to provide new loans under the amended 2019 Credit Facility permits up to four borrowings by the Company in an aggregate amount equal to $750 million. The 2019 Credit Facility terminates on December 9, 2022, with each such loan maturing 364 days after the funding of such loan. The Company can request that the maturity date of loans be extended for a period of up to four additional years, but any such extension is subject to the approval of the lenders. At the option of the
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Company, the borrowings under the 2019 Credit Facility bear interest at variable rates based on either the base rate or LIBOR for deposits in U.S. dollars, in each case plus an applicable margin which ranges from 0.000% to 0.375% for base rate borrowings or 0.875% to 1.375% for LIBOR borrowings, depending on the Company’s credit rating from S&P, Moody’s and Fitch. The applicable margin on the 2019 Credit Facility was 1.125% as of June 30, 2022. As of June 30, 2022 there was $250 million outstanding under the 2019 Credit Facility.
Borrowings under the under the 2019 Credit Facility and 2018 Credit Agreement (together the “Credit Agreements”) are conditioned upon satisfaction of certain conditions precedent, including the absence of defaults. The Company is subject to one financial covenant, as well as customary affirmative and negative covenants. The financial covenant requires that the Company’s consolidated net funded debt to consolidated EBITDA ratio (as such terms are defined in the Credit Agreements) be less than or equal to 3.50:1 for all remaining fiscal quarters, subject to adjustments in accordance with the terms of the Credit Agreements relating to a consummation of an acquisition where the consideration includes cash proceeds from issuance of funded debt in excess of $500 million. The Credit Agreements also contain 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 Credit Agreements could result in all loans and other obligations becoming immediately due and payable and each such Credit Agreement being terminated. Certain representations, warranties and covenants under the 2018 Credit Agreement were conformed to those under the 2019 Credit Facility following the amendments to those agreements.
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 up to a maximum aggregate principal amount outstanding at any time of $750.0 million. 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 Credit Agreements are available to repay the Commercial Paper Notes, if necessary. Aggregate borrowings outstanding under the Credit Agreements and the Commercial Paper Notes will not exceed the $1.75 billion current maximum amount available under the Credit Agreements. 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 definitive documents relating to the commercial paper program contain customary representations, warranties, default and indemnification provisions. There were no Commercial Paper Notes outstanding at June 30, 2022.
The non-current portion of our long-term debt amounted to $3.21 billion at June 30, 2022, compared to $2.00 billion at December 31, 2021. In addition, at June 30, 2022, we had availability to borrow $1.5 billion under our commercial paper program and the Credit Agreements, and $200.7 million under other existing lines of credit, subject to various financial covenants under our Credit Agreements. We have the ability and intent to refinance our borrowings under our other existing lines of credit with borrowings under the Credit Agreements, as applicable. Therefore, the amounts outstanding under those lines of credit, if any, are classified as long-term debt. We believe that at June 30, 2022, we were, and currently are, in compliance with all of our long-term debt covenants.
Off-Balance Sheet Arrangements
In the ordinary 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 $87.5 million at June 30, 2022. 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.
Other Obligations
Our contractual obligations have not significantly changed based on our ordinary business activities and projected capital expenditures noted above from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2021, with the exception of the debt issued and repaid in the second quarter of 2022, as noted above. Following the debt issuance and repayments, our annual maturities of long-term debt at June 30, 2022 and our expected interest payment on those long-term debt obligations are as follows (in millions):
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Maturities of Long-term DebtExpected Interest Payments
Remainder of 2022$1.3 $73.2 
2023250.0 126.2 
2024— 124.5 
2025399.2 124.1 
2026— 119.8 
Thereafter2,837.1 1,104.8 
Total expected 2022 contributions to our domestic and foreign qualified and nonqualified pension plans, including the Albemarle Corporation Supplemental Executive Retirement Plan, are expected to approximate $12 million. We may choose to make additional pension contributions in excess of this amount. We have made contributions of $6.4 million to our domestic and foreign pension plans (both qualified and nonqualified) during the six-month period ended June 30, 2022.
The liability related to uncertain tax positions, including interest and penalties, recorded in Other noncurrent liabilities totaled $27.9 million at June 30, 2022 and $27.7 million at December 31, 2021. Related assets for corresponding offsetting benefits recorded in Other assets totaled $32.4 million at June 30, 2022 and $32.9 million at December 31, 2021. We cannot estimate the amounts of any cash payments associated with these liabilities for the remainder of 2022 or the next twelve months, and we are unable to estimate the timing of any such cash payments in the future at this time.
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 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 potentially responsible party (“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.
Liquidity Outlook
We anticipate that cash on hand and cash provided by operating activities, divestitures and borrowings will be sufficient to pay our operating expenses, satisfy debt service obligations, fund any capital expenditures and share repurchases, make acquisitions, make pension contributions and pay dividends for the foreseeable future. Our main focus during the continued uncertainty surrounding the COVID-19 pandemic 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.
Our growth investments include the recently announced signing of a definitive agreement to acquire all of the outstanding equity of Tianyuan for approximately $200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant that has designed annual conversion capacity of up to 25,000 metric tons of LCE and is capable of producing battery-grade lithium carbonate and lithium hydroxide. We expect the transaction, which is subject to customary closing conditions, to close in the second half of 2022. In addition, we announced agreements for strategic investments in China with plans to build two battery grade lithium conversion plants, Meishan and Zhangjiagang, each initially targeting 50,000 metric tons per year. At Meishan, construction is currently underway and is expected to be complete by the end of 2024. The Zhangjiagang plant is currently in engineering.
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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 and reduced capital availability. The COVID-19 pandemic has not had a material impact on our liquidity to date; however, we cannot predict the overall impact in terms of cash flow generation as that will depend on the length and severity of the outbreak and its impact. 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 COVID-19 pandemic 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 tighten the monetary supply in response, for example, to improving economic conditions, 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.
On February 6, 2017, Huntsman, a subsidiary of Huntsman Corporation, filed a lawsuit in New York state court against Rockwood, Rockwood Specialties, Inc., certain former executives of Rockwood and its subsidiaries—Seifollah Ghasemi, Thomas Riordan, Andrew Ross, and Michael Valente, and Albemarle. The lawsuit arises out of Huntsman’s acquisition of certain Rockwood subsidiaries in connection with a stock purchase agreement (the “SPA”), dated September 17, 2013. Before that transaction closed on October 1, 2014, Albemarle began discussions with Rockwood to purchase all outstanding equity of Rockwood and did so in a transaction that closed on January 12, 2015. Huntsman’s complaint asserted that certain technology that Rockwood had developed for a production facility in Augusta, Georgia, and which was among the assets that Huntsman acquired pursuant to the SPA, did not work, and that Rockwood and the defendant executives had intentionally misled Huntsman about that technology in connection with the Huntsman-Rockwood transaction. The complaint asserted claims for, among other things, fraud, negligent misrepresentation, and breach of the SPA, and sought certain costs for completing construction of the production facility.
On March 10, 2017, Albemarle moved in New York state court to compel arbitration, which was granted on January 8, 2018 (although Huntsman unsuccessfully appealed that decision). Huntsman’s arbitration demand asserted claims substantially similar to those asserted in its state court complaint, and sought various forms of legal remedies, including cost overruns, compensatory damages, expectation damages, punitive damages, and restitution. After a trial, the arbitration panel issued an award on October 28, 2021, awarding approximately $600 million (including interest) to be paid by Albemarle to Huntsman, in addition to the possibility of attorney’s fees, costs and expenses. Following the arbitration panel decision, Albemarle reached a settlement with Huntsman to pay $665 million in two equal installments, with the first payment made in December 2021. The second and final payment was made in May 2022.
In addition, 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 our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act, and other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third-party sales representatives in our Refining Solutions business, within our Catalysts segment, to the DOJ, the SEC, and the DPP, and are cooperating with the DOJ, the SEC, and the DPP in their review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures. We have commenced discussions with the SEC and DOJ about a potential resolution of these matters..
At this time, we are unable to predict the duration, scope, result, or related costs associated with the investigations. We also are unable to predict what action may be taken by the DOJ, the SEC, or the DPP, or what penalties or remedial actions they may ultimately seek. Any determination that our operations or activities are not, or were not, in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any such fines, penalties, disgorgement, equitable relief, or other losses would have a material adverse effect on our financial condition or liquidity. However, an adverse resolution could have a material adverse effect on our results of operations in a particular period.
Overall, with generally strong cash-generative businesses and no significant long-term debt maturities before 2025, we believe we have, and will be able to maintain, a solid liquidity position.
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We had cash and cash equivalents totaling $930.6 million at June 30, 2022, of which $367.2 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 MRL’s Wodgina hard rock lithium mine project (“Wodgina Project”) 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 the Wodgina Project through our ownership interest in the Issuer.
The Parent Guarantor conducts its U.S. Bromine and Catalysts operations directly, and conducts its other operations (other than operations conducted through the Issuer) through the Non-Guarantors.
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 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 and in our Annual Report on Form 10-K for the year ended December 31, 2021.
Summarized Statement of Operations
$ in thousandsSix Months Ended
June 30, 2022		Year Ended December 31, 2021
Net sales(a)
$1,111,073 $1,412,913 
Gross profit138,450 241,739 
Loss before income taxes and equity in net income of unconsolidated investments(b)(c)
(228,290)(607,995)
Net loss attributable to the Parent Guarantor and the Issuer(290,545)(558,342)
(a)    Includes net sales to Non-Guarantors of $683.3 million and $715.6 million for the six months ended June 30, 2022 and year ended December 31, 2021, respectively.
(b)    Includes intergroup expenses to Non-Guarantors of $62.0 million and $114.3 million for the six months ended June 30, 2022 and year ended December 31, 2021, respectively.
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(c)    The year ended December 31, 2021 includes the Parent Guarantor’s portion of the gain on sale of the FCS business on June 1, 2021 and the loss for the legacy Rockwood legal matter. In addition, includes Issuer’s loss related to cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton.

Summarized Balance Sheet
$ in thousands
June 30, 2022
December 31, 2021
Current assets(a)
$1,336,194 $961,003 
Net property, plant and equipment3,122,776 2,979,034 
Other noncurrent assets528,795 534,695 
Current liabilities(b)
$1,808,299 $2,329,212 
Long-term debt2,259,166 1,002,009 
Other noncurrent liabilities(c)
7,179,341 7,008,857 
(a)    Includes receivables from Non-Guarantors of $303.5 million and $466.6 million at June 30, 2022 and December 31, 2021, respectively.
(b)    Includes current payables to Non-Guarantors of $900.4 million and $1.11 billion at June 30, 2022 and December 31, 2021, respectively.
(c)    Includes noncurrent payables to Non-Guarantors of $6.65 billion and $6.45 billion at June 30, 2022 and December 31, 2021, respectively.    

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 the Wodgina Project. 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 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, with the exception of the 2022 Notes, are the Parent Issuer’s unsecured and unsubordinated obligations and rank equally in right of payment with all other unsecured and unsubordinated indebtedness. The 2022 Notes are the Parent Issuer’s general senior unsecured obligations, ranking equally in right of payment with all of the Parent Issuer’s existing and future senior unsecured indebtedness and senior to the Parent Issuer’s future
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subordinated indebtedness. The 2022 Notes 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 and to the existing and future indebtedness and other liabilities of the Parent Issuer’s subsidiaries, including the Subsidiary Guarantor. 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.
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. Each entity in the combined financial information follows the same accounting policies as described herein and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Summarized Statement of Operations
$ in thousandsSix Months Ended
June 30, 2022		Year Ended December 31, 2021
Net sales(a)
$1,076,495 $1,412,913 
Gross profit134,901 259,314 
Loss before income taxes and equity in net income of unconsolidated investments(b)
(181,554)(368,737)
Loss attributable to the Subsidiary Guarantor and the Parent Issuer(c)
(258,158)(320,726)
(a)    Includes net sales to Non-Guarantors of $660.4 million and $715.6 million for the six months ended June 30, 2022 and year ended December 31, 2021, respectively.
(b)    Includes intergroup expenses to Non-Guarantors of $44.0 million and $17.8 million for the six months ended June 30, 2022 and year ended December 31, 2021, respectively.
(c)    The year ended December 31, 2021 includes the Parent Issuer’s portion of gain on sale of the FCS business on June 1, 2021 and the loss for the legacy Rockwood legal matter.

Summarized Balance Sheet
$ in thousands
June 30, 2022
December 31, 2021
Current assets(a)
$1,363,599 $1,039,391 
Net property, plant and equipment795,558 754,818 
Other non-current assets(b)
1,609,162 1,634,883 
Current liabilities(c)
$1,714,959 $2,174,360 
Long-term debt2,949,300 1,755,026 
Other noncurrent liabilities(d)
6,336,471 6,404,958 
(a)    Includes receivables from Non-Guarantors of $372.2 million and $576.1 million at June 30, 2022 and December 31, 2021, respectively.
(b)    Includes noncurrent receivables from Non-Guarantors of $1.12 billion and $1.11 billion at June 30, 2022 and December 31, 2021, respectively.
(c)    Includes current payables to Non-Guarantors of $897.2 million and $1.08 billion at June 30, 2022 and December 31, 2021, respectively.
(d)    Includes noncurrent payables to Non-Guarantors of $5.80 billion and $5.82 billion at June 30, 2022 and December 31, 2021, respectively.
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
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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.
Summary of Critical Accounting Policies and Estimates
There have been no significant changes in our critical accounting policies and estimates from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2021.
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, see Item 1 Financial Statements – Note 19, “Recently Issued Accounting Pronouncements” to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.
There have been no significant changes in our interest rate risk, foreign currency exchange rate exposure, marketable securities price risk or raw material price risk from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2021, except as noted below.
During the first quarter of 2021, we repaid the remaining principal balance of our 1.875% Euro-denominated senior notes. Prior to this repayment, the carrying value these notes was designated as an effective hedge of our net investment in certain foreign subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency were recorded in accumulated other comprehensive loss. Upon repayment of these notes, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated.
We had variable interest rate borrowings of $264.0 million outstanding at June 30, 2022, bearing a weighted average interest rate of 2.59% and representing 8% of our total outstanding debt. A hypothetical 100 basis point increase in the interest rate applicable to these borrowings would change our annualized interest expense by approximately $2.6 million as of June 30, 2022. We may enter into interest rate swaps, collars or similar instruments with the objective of reducing interest rate volatility relating to our borrowing costs.
Our financial instruments, which are subject to foreign currency exchange risk, consist of foreign currency forward contracts with an aggregate notional value of $452.9 million and with a fair value representing a net asset position of $4.9 million at June 30, 2022. Fluctuations in the value of these contracts are generally offset by 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 June 30, 2022, with all other variables held constant. A 10% appreciation of the U.S. Dollar against foreign currencies that we hedge would result in a decrease of approximately $36.0 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 an increase of approximately $40.1 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 June 30, 2022, 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.

Item 4.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 Securities Exchange Act of 1934, as amended, or 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
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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.
No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the second quarter ended June 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION

Item 1.Legal Proceedings.
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 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. Additional information with respect to this Item 1 is contained in Note 10 to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 1A.Risk Factors.
While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. The risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 describe some of the risks and uncertainties associated with our business. These risks and uncertainties have the potential to materially affect our results of operations and our financial condition. We do not believe that there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 6.Exhibits.
(a) Exhibits
101 
Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2022, furnished in XBRL (eXtensible Business Reporting Language)).
*Included with this filing.
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income for the six months ended June 30, 2022 and 2021, (ii) the Consolidated Statements of Comprehensive Income for the six months ended June 30, 2022 and 2021, (iii) the Consolidated Balance Sheets at June 30, 2022 and December 31, 2021, (iv) the Consolidated Statements of Changes in Equity for the six months ended June 30, 2022 and 2021, (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 and (vi) the Notes to the Condensed Consolidated Financial Statements.
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SIGNATURES
Pursuant to the requirements 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)
Date:August 3, 2022By:
/S/    SCOTT A. TOZIER        
Scott A. Tozier
Executive Vice President and Chief Financial Officer
(principal financial officer)
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