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Albemarle reports fourth quarter and full year 2013 results

January 28, 2014

BATON ROUGE, La., Jan. 28, 2014 /PRNewswire/ –

(Logo: http://photos.prnewswire.com/prnh/20111129/MM14279LOGO )

Fourth quarter 2013 highlights:

    --  Earnings of $88.4 million, or $1.08 per share, excluding special and
        non-operating items.
    --  Net sales of $692.0 million and EBITDA margin, excluding special and
        non-operating items, of 21 percent.
    --  Announced corporate reorganization into two business units effective
        January 1, 2014 and related fourth quarter 2013 severance charge of
        $21.9 million after income taxes.
    --  Completed accelerated share repurchase program resulting in reduction of
        approximately 1.4 million shares outstanding in fourth quarter.  Full
        year reduction of approximately 9.2 million shares outstanding.


                                                                                                          Three Months
                                                                                                             Ended                    Year Ended

                                                                                                         December 31,                December 31,
                                                                                                         ------------                ------------

    In thousands, except per share amounts                                                            2013             2012           2013             2012
    --------------------------------------                                                            ----             ----           ----             ----

    Net sales                                                                                               $691,956        $687,596        $2,616,416       $2,745,420

    Segment income                                                                                          $136,079        $150,600          $535,191         $661,156

    Net income attributable to Albemarle Corporation                                                        $155,933         $37,726          $413,171         $311,536

    Diluted earnings per share                                                                                 $1.91           $0.42             $4.90            $3.47

       Non-operating pension and OPEB items(a)                                                      (1.09)             0.60          (1.10)             0.46

       Special items(b)                                                                               0.27             0.15           0.26             0.92
                                                                                                      ----             ----           ----             ----

    Diluted earnings per share, excluding special and

      non-operating pension and OPEB items(e)                                                                  $1.08           $1.17             $4.06            $4.85
                                                                                                               =====           =====             =====            =====

    See accompanying notes and reconciliations to the condensed consolidated financial information.

Albemarle Corporation (NYSE: ALB) reported fourth quarter 2013 earnings of $155.9 million, or $1.91 per share, compared to fourth quarter 2012 earnings of $37.7 million, or $0.42 per share. Excluding special and non-operating pension and OPEB items (see notes to the condensed consolidated financial information), fourth quarter 2013 earnings were $88.4 million, or $1.08 per share, compared to $105.2 million, or $1.17 per share, for the fourth quarter of 2012. The Company reported net sales of $692.0 million in the fourth quarter of 2013, up from net sales of $687.6 million in the fourth quarter of 2012, driven by higher volumes in Polymer Solutions and Catalysts, partly offset by lower Fine Chemistry volumes, lower pass through metals pricing, and lower Flame Retardants pricing.

Earnings for the full year 2013 were $413.2 million, or $4.90 per share, compared to $311.5 million, or $3.47 per share, for 2012. Excluding special and non-operating pension and OPEB items, earnings for 2013 were $342.3 million, or $4.06 per share, compared to $436.2 million, or $4.85 per share, for 2012. Net sales for 2013 were $2.6 billion, down from $2.7 billion for 2012, driven by lower metals surcharges, our exit of the phosphorus flame retardants business, and pricing on certain products, partly offset by higher sales volumes.

As previously announced, effective January 1, 2014, the Company’s assets and businesses were aligned under two Global Business Units: Performance Chemicals, including Fire Safety Solutions, Specialty Chemicals and Fine Chemistry Services, and Catalyst Solutions, including Refinery Catalyst Solutions, Performance Catalyst Solutions and Antioxidants.

“Our fourth quarter results reflected a strong finish to an excellent year for refinery catalysts, offset by softer than expected flame retardants and clear completion fluids volumes, reflecting more cautious inventory management by our customers and somewhat muted demand,” stated Luke Kissam, CEO. “In 2013, we undertook a number of strategic initiatives in our catalysts and bromine franchises that we expect to lead to growth in 2014 and beyond. We remain confident in our strategy and the cash generation of our business, which enabled us to return approximately $660 million to our shareholders in 2013.”

Quarterly Segment Results

Catalysts generated net sales of $306.2 million in the fourth quarter of 2013, a 4 percent increase from net sales in the fourth quarter of 2012, primarily on favorable volumes in Refinery Catalysts Solutions, partly offset by lower metals pass through surcharges and unfavorable Performance Catalyst Solutions pricing. Catalysts segment income was $80.1 million in the fourth quarter of 2013, up 2 percent from fourth quarter 2012 results of $78.8 million, due primarily to lower input costs, partly offset by unfavorable pricing and lower equity in net income from unconsolidated investments.

Polymer Solutions reported net sales of $201.0 million in the fourth quarter of 2013, an increase of less than 1 percent compared to net sales in the fourth quarter of 2012, on higher volumes offset by unfavorable pricing impacts. Segment income for Polymer Solutions was $27.4 million in the fourth quarter of 2013, a 24 percent decline from $36.3 million in the fourth quarter of 2012, driven by unfavorable pricing, unfavorable currency impacts primarily from a weaker Japanese Yen, and higher manufacturing costs, partly offset by favorable sales volumes and increased equity in net income from unconsolidated investments.

Fine Chemistry net sales in the fourth quarter of 2013 were $184.8 million, a 4 percent decrease from net sales in the fourth quarter of 2012, due mainly to unfavorable sales volumes. Segment income for Fine Chemistry was $28.5 million for the fourth quarter of 2013, down 20 percent from fourth quarter 2012 results of $35.5 million, due primarily to increased spending and unfavorable sales volumes, partly offset by favorable pricing.

Corporate and Other

Corporate and other income was $124.5 million for the fourth quarter of 2013. The $223.2 million increase from the comparable period in 2012 was due primarily to lower costs from non-operating pension and OPEB items which included a fourth quarter mark-to-market (MTM) actuarial gain of $139.0 million in 2013 and a fourth quarter MTM actuarial loss of $86.0 million in 2012.

Interest and financing expenses were $9.2 million for the fourth quarter of 2013 compared to $7.7 million for the fourth quarter of 2012, due primarily to decreases in interest capitalized on lower average construction work in progress balances in the 2013 period.

Excluding special and non-operating pension and OPEB items, our effective income tax rates were 19.7 percent and 18.3 percent for the fourth quarter of 2013 and 2012, respectively. Our effective tax rate continues to be influenced by the level and geographic mix of income, and benefits from a favorable mix of income in lower tax jurisdictions.

Cash Flow

Our cash flow from operations was approximately $433 million for the full year 2013, down 11 percent from 2012, and we had $477 million in cash and cash equivalents at December 31, 2013. During 2013, proceeds from borrowings net of repayments, cash on hand and cash provided by operations funded capital expenditures for plant, machinery and equipment of approximately $155 million (which includes approximately $37 million in capital expenditures associated with our Jordanian joint venture), dividends to shareholders of $78.1 million, dividends to noncontrolling interests of $10.0 million, pension and postretirement contributions of $13.3 million and $582.3 million for repurchases of our common stock pursuant to the terms of our share repurchase program and our accelerated share repurchase program which was completed in the fourth quarter.

Earnings Call

The Company’s performance for the fourth quarter and the year ended December 31, 2013 will be discussed on a conference call at 9:00 AM Eastern Standard Time on January 29, 2014. The call can be accessed by dialing 888-713-4215 (International Dial-In # 617-213-4867), and entering conference ID 60369062. The Company’s earnings presentation and supporting material can be accessed through Albemarle’s website under Investors at www.albemarle.com.

About Albemarle

Albemarle Corporation, headquartered in Baton Rouge, Louisiana, is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services. Albemarle is committed to sustainability and is advancing its eco-practices and solutions globally, with Corporate Responsibility Magazine naming Albemarle among its prestigious “100 Best Corporate Citizens” list for 2013. The Company employs approximately 4,200 people worldwide and serves customers in approximately 100 countries. Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, Regulation G reconciliations, SEC filings and other information regarding the Company, its businesses and markets served.

Forward-Looking Statements

Some of the information presented in this press release and the conference call and discussions that follow, including, without limitation, statements with respect to product development, changes in productivity, market trends, price, volume and mix changes, expected growth and earnings, input costs, surcharges, tax rates, stock repurchases, dividends, economic trends, outlook and all other information relating to matters that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ materially include, without limitation: changes in economic and business conditions; 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; competition from other manufacturers; changes in the demand for our products; limitations or prohibitions on the manufacture and sale of our products; availability of raw materials; changes in the cost of raw materials and energy and in our ability to pass through such increases; acquisitions and divestitures, and changes in performance of acquired companies; 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 claims or litigation; the occurrence of natural disasters; the inability to maintain current levels of 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; 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 substantial uncertainties in the debt and equity markets; technology or intellectual property infringement, including cyber security breaches, and other innovation risks; decisions we may make in the future; and the other factors detailed from time to time in the reports we file with the SEC, including those described under “Risk Factors” in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.


    Albemarle Corporation and Subsidiaries

    Consolidated Statements of Income

    (In Thousands Except Per Share Amounts) (Unaudited)

                                                                                      Three Months
                                                                                         Ended                       Year Ended

                                                                                     December 31,                  December 31,
                                                                                     ------------                  ------------

                                                                                   2013             2012             2013             2012
                                                                                   ----             ----             ----             ----

    Net sales                                                                            $691,956         $687,596         $2,616,416       $2,745,420

    Cost of goods sold(a)                                                       438,429            495,619            1,755,011            1,835,425
                                                                                -------            -------            ---------            ---------

    Gross profit                                                                253,527            191,977            861,405            909,995

    Selling, general and administrative expenses(a)(c)                          (27,304)           124,084            162,889            313,227

    Research and development expenses                                            21,287            19,128            82,246            78,919

    Restructuring and other charges, net(b)                                      33,361            16,982            33,361            111,685
                                                                                 ------            ------            ------            -------

    Operating profit                                                            226,183            31,783            582,909            406,164

    Interest and financing expenses                                              (9,224)           (7,666)            (31,559)            (32,800)

    Other (expenses) income, net                                                   (628)           (335)            (6,923)            1,229
                                                                                   ----             ----            ------            -----

    Income before income taxes and equity in net

       income of unconsolidated investments                                     216,331            23,782            544,427            374,593

    Income tax expense (benefit)(b)                                              61,406             (10,849)           136,322            82,533
                                                                                 ------            -------            -------            ------

    Income before equity in net income of

       unconsolidated investments                                               154,925            34,631            408,105            292,060

    Equity in net income of unconsolidated

       investments (net of tax)                                                   6,421            8,834            31,729            38,067
                                                                                  -----            -----            ------            ------

    Net income                                                                  161,346            43,465            439,834            330,127

    Net income attributable to noncontrolling interests                          (5,413)           (5,739)            (26,663)            (18,591)
                                                                                 ------            ------            -------            -------

    Net income attributable to Albemarle Corporation                                     $155,933          $37,726           $413,171         $311,536
                                                                                           ======          =======           ========         ========

    Basic earnings per share                                                                $1.92            $0.42              $4.93            $3.49

    Diluted earnings per share                                                              $1.91            $0.42              $4.90            $3.47

    Weighted-average common shares outstanding -

       basic                                                                     81,226            89,018            83,839            89,189

    Weighted-average common shares outstanding -

       diluted                                                                   81,713            89,660            84,322            89,884

    See accompanying notes to the condensed consolidated financial information.


    Albemarle Corporation and Subsidiaries

    Condensed Consolidated Balance Sheets

    (In Thousands) (Unaudited)

                                   December               December
                                   31,                      31,

                                       2013                  2012
                                       ----                  ----

    ASSETS

    Cash and cash
     equivalents                               $477,239              $477,696

    Other current assets          1,005,676                 929,617
                                  ---------                 -------

    Total current assets          1,482,915                 1,407,313
                                  ---------                 ---------

    Property, plant and
     equipment                    2,972,084                 2,818,604

    Less accumulated
     depreciation and
     amortization                 1,615,015                 1,522,033
                                  ---------                 ---------

    Net property, plant
     and equipment                1,357,069                 1,296,571

    Other assets and
     intangibles                    744,813                 733,407
                                    -------                 -------

    Total assets                             $3,584,797            $3,437,291
                                               ========              ========

    LIABILITIES AND EQUITY

    Current portion of
     long-term debt                             $24,554               $12,700

    Other current
     liabilities                    411,809                 372,309
                                    -------                 -------

    Total current
     liabilities                    436,363                 385,009
                                    -------                 -------

    Long-term debt                1,054,310                 686,588

    Other noncurrent
     liabilities                    222,160                 370,318

    Deferred income taxes           129,188                 63,368

    Albemarle Corporation
     shareholders' equity         1,627,361                 1,833,598

    Noncontrolling
     interests                      115,415                 98,410
                                    -------                 ------

    Total liabilities and
     equity                                  $3,584,797            $3,437,291
                                               ========              ========

    See accompanying notes to the condensed consolidated financial
     information.


    Albemarle Corporation and Subsidiaries

    Selected Consolidated Cash Flow Data

    (In Thousands) (Unaudited)

                                             Year Ended

                                            December 31,
                                           ------------

                                          2013                2012

    Cash and cash equivalents at
     beginning of year                          $477,696            $469,416

    Cash and cash equivalents at
     end of year                                $477,239            $477,696

    Sources of cash and cash equivalents:

    Net income                                  $439,834            $330,127

    Proceeds from borrowings of
     long-term debt                    117,000                  -

    Proceeds from other
     borrowings, net                   398,544                  -

    Proceeds from exercise of
     stock options                       5,553               21,148

    Uses of cash and cash equivalents:

    Capital expenditures              (155,346)               (280,873)

    Repurchases of common stock       (582,298)              (63,575)

    Repayments of long-term debt      (135,733)              (14,390)

    Repayments of other
     borrowings, net                         -               (49,421)

    Dividends paid to shareholders     (78,107)              (69,113)

    Dividends paid to
     noncontrolling interests          (10,014)              (7,628)

    Pension and postretirement
     contributions                     (13,294)              (21,610)

    Long-term advances to joint
     ventures                                -               (24,959)

    Non-cash and other items:

    Depreciation and amortization      107,370               99,020

    Write-offs associated with
     restructuring and other                 -               61,809

    Pension and postretirement
     (benefit) expense                (132,707)              77,442

    Equity in net income of
     unconsolidated investments        (31,729)              (38,067)

    See accompanying notes to the condensed consolidated financial
     information.


    Albemarle Corporation and Subsidiaries

    Consolidated Summary of Segment Results

    (In Thousands) (Unaudited)

                                                                                      Three Months
                                                                                         Ended                       Year Ended

                                                                                     December 31,                  December 31,
                                                                                     ------------                  ------------

                                                                                   2013             2012             2013               2012
                                                                                   ----             ----             ----               ----

    Net sales:

    Polymer Solutions                                                                    $200,978         $200,093           $864,388           $892,232

    Catalysts                                                                   306,173            294,081            1,001,606              1,067,948

    Fine Chemistry                                                              184,805            193,422            750,422              785,240

    Total net sales                                                                      $691,956         $687,596         $2,616,416         $2,745,420
                                                                                           ======           ======           ========           ========

    Segment operating profit:

    Polymer Solutions                                                                     $25,578          $35,778           $153,747           $198,426

    Catalysts                                                                    76,213            71,440            222,749              260,544

    Fine Chemistry                                                               33,280            40,287            153,629              182,690

    Total segment operating profit                                              135,071            147,505            530,125              641,660
                                                                                -------            -------            -------              -------

    Equity in net income of unconsolidated investments:

    Polymer Solutions                                                             2,504            1,459            8,875              6,416

    Catalysts                                                                     3,917            7,375            22,854              31,651

    Fine Chemistry                                                                    -               -               -                 -

    Corporate & other                                                                 -               -               -                 -

    Total equity in net income of unconsolidated investments                      6,421            8,834            31,729              38,067
                                                                                  -----            -----            ------              ------

    Net income attributable to noncontrolling interests:

    Polymer Solutions                                                              (635)           (966)            (4,753)              (2,221)

    Catalysts                                                                         -               -               -                 -

    Fine Chemistry                                                               (4,778)           (4,773)            (21,910)              (16,350)

    Corporate & other                                                                 -               -               -               (20)

    Total net income attributable to noncontrolling interests                    (5,413)           (5,739)            (26,663)              (18,591)
                                                                                 ------            ------            -------              -------

    Segment income:

    Polymer Solutions                                                            27,447            36,271            157,869              202,621

    Catalysts                                                                    80,130            78,815            245,603              292,195

    Fine Chemistry                                                               28,502            35,514            131,719              166,340
                                                                                 ------            ------            -------              -------

    Total segment income                                                        136,079            150,600            535,191              661,156

    Corporate & other(a) (d)                                                    124,473             (98,740)           86,145              (123,831)

    Restructuring and other charges, net(b)                                     (33,361)            (16,982)           (33,361)              (111,685)

    Interest and financing expenses                                              (9,224)           (7,666)            (31,559)              (32,800)

    Other (expenses) income, net                                                   (628)           (335)            (6,923)              1,229

    Income tax (expense) benefit(b)                                             (61,406)           10,849            (136,322)              (82,533)

    Net income attributable to Albemarle Corporation                                     $155,933          $37,726           $413,171           $311,536
                                                                                           ======          =======           ========           ========

    See accompanying notes to the condensed consolidated financial information.


    Notes to the Condensed
     Consolidated Financial
     Information

    (a)                       Non-operating
                              pension and OPEB
                              items,
                              consisting of
                              MTM actuarial
                              gains/losses as
                              well as interest
                              cost and
                              expected return
                              on assets, are
                              included in
                              Corporate &
                              other as
                              follows:

                              For the three
                               months ended
                               December 31,
                               2013 and 2012,
                               net (benefits)
                               charges
                               amounting to
                               $(140.8) million
                               ($89.5 million
                               after income
                               taxes, or $1.09
                               per share) and
                               $84.2 million
                               ($53.7 million
                               after income
                               taxes, or $0.60
                               per share),
                               respectively.
                               The MTM
                               actuarial (gain)
                               loss was
                               $(139.0) million
                               ($88.3 million
                               after income
                               taxes, or $1.08
                               per share) and
                               $86.0 million
                               ($54.8 million
                               after income
                               taxes, or $0.61
                               per share) for
                               the three months
                               ended December
                               31, 2013 and
                               2012,
                               respectively.

    For the years
                               ended December
                               31, 2013 and
                               2012, net
                               (benefits)
                               charges
                               amounting to
                               $(146.2) million
                               ($92.8 million
                               after income
                               taxes, or $1.10
                               per share) and
                               $65.3 million
                               ($41.7 million
                               after income
                               taxes, or $0.46
                               per share),
                               respectively.
                               The MTM
                               actuarial (gain)
                               loss was
                               $(139.0) million
                               ($88.3 million
                               after income
                               taxes, or $1.05
                               per share) and
                               $75.7 million
                               ($48.2 million
                               after income
                               taxes, or $0.54
                               per share) for
                               the years ended
                               December 31,
                               2013 and 2012.

                              Although non-operating pension and OPEB
                              items are included in cost of goods sold
                              and selling, general and administrative
                              expenses in accordance with GAAP, we
                              believe that these components of pension
                              cost are mainly driven by market
                              performance, and we manage these
                              separately from the operational
                              performance of our businesses. Non-
                              operating pension and OPEB items included
                              in cost of goods sold and selling,
                              general and administrative expenses are
                              as follows (in millions):

                                                              Three
                                                             Months
                                                              Ended                   Year Ended

                                                            December                    December
                                                                    31,                            31,
                                                                ---------                      ---------

                                                       2013               2012         2013              2012
                                                       ----               ----         ----              ----

     Cost of goods sold:

     MTM actuarial (gain) loss                                $(42.7)           $29.2          $(42.7)         $25.9

     Interest cost and expected return on assets, net (0.8)               (0.6)       (3.1)              (3.5)
                                                       ----               ----         ----              ----

     Total                                                    $(43.5)           $28.6          $(45.8)         $22.4
                                                               =====              ===          ======            ===

     Selling, general and administrative expenses:

     MTM actuarial (gain) loss                                $(96.3)           $56.8          $(96.3)         $49.8

     Interest cost and expected return on assets, net (1.0)               (1.2)       (4.1)              (6.9)
                                                       ----               ----         ----              ----

     Total                                                    $(97.3)           $55.6         $(100.4)         $42.9
                                                               =====              ===          ======            ===

    (b)         Restructuring and other special items
                consisted of the following:

                Three months and year ended December 31, 2013
                --

                In connection with the announced realignment
                 of our operating segments effective January
                 1, 2014, in the fourth quarter of 2013 we
                 initiated a workforce reduction plan which
                 will result in a reduction of approximately
                 230 employees worldwide.  In the fourth
                 quarter of 2013 we recorded charges of $33.4
                 million ($21.9 million after income taxes,
                 or $0.27 per share in the fourth quarter and
                 $0.26 per share for the year) for
                 termination benefits related to this
                 workforce reduction plan.

               Three months ended December 31, 2012 --

                A one-time employer contribution to the
                 Company's defined contribution plan of $10.1
                 million ($6.4 million after income taxes, or
                 $0.07 per share) and a net curtailment gain
                 of $4.5 million ($2.9 million after income
                 taxes, or $0.03 per share), both in
                 connection with various amendments to
                 certain of our U.S. pension and defined
                 contribution plans.

                Net charges of $11.4 million ($6.8 million
                 after income taxes, or $0.08 per share) in
                 connection with various restructuring-
                 related activities across the Company
                 including certain planned reductions in
                 force, changes in product sourcing and other
                 items.

                Discrete net tax expense items of $3.5
                 million, or $0.03 per share, relating to tax
                 planning and other tax matters.

               Year ended December 31, 2012 --

                A one-time employer contribution to the
                 Company's defined contribution plan of $10.1
                 million ($6.4 million after income taxes, or
                 $0.07 per share) and a net curtailment gain
                 of $4.5 million ($2.9 million after income
                 taxes, or $0.03 per share), both in
                 connection with various amendments to
                 certain of our U.S. pension and defined
                 contribution plans.

                Net charges amounting to $100.8 million
                 ($76.1 million after income taxes, or $0.85
                 per share) in connection with our exit of
                 the phosphorus flame retardants business,
                 and other charges amounting to $5.3 million
                 ($4.3 million after income taxes, or $0.04
                 per share) relating to changes in product
                 sourcing and other items.

                Discrete net tax benefit items of $1.0
                 million, or $0.01 per share, related
                 principally to tax planning and the release
                 of various tax reserves.

    (c)         The year ended December 31, 2012 includes a
                gain of $8.1 million ($5.1 million after
                tax, or $0.06 per share) resulting from
                proceeds received in connection with the
                settlement of litigation (net of related
                legal fees).  The year ended December 31,
                2012 also includes an $8 million charitable
                contribution ($5.1 million after tax, or
                $0.06 per share) to the Albemarle
                Foundation.

    (d)         The year ended December 31, 2013 includes
                costs of $3.6 million which are the subject
                of a claim by the Company against a freight
                services vendor for alleged fraud committed
                against several companies.

    (e)        Totals may not add due to rounding.

Additional Information

It should be noted that Net income attributable to Albemarle Corporation (“earnings”), earnings per share and effective income tax rates which exclude special and non-operating pension and OPEB items, as well as presentations of segment operating profit, segment income, EBITDA, EBITDA excluding special and non-operating pension and OPEB items, EBITDA margin and EBITDA margin excluding special and non-operating pension and OPEB items are financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. These measures are presented here to provide additional useful measurements to review our operations, provide transparency to investors and enable period-to-period comparability of financial performance.

A description of other non-GAAP financial measures that we use to evaluate our operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, can be found in the Investors section of our website at www.albemarle.com, under “Non-GAAP Reconciliations” under “Financials.” Also, see attached for a supplemental reconciliation of our segment operating profit and segment income amounts to GAAP Operating profit and GAAP Net income attributable to Albemarle Corporation, respectively, as well as for a supplemental reconciliation of Net income attributable to Albemarle Corporation excluding special and non-operating pension and OPEB items, EBITDA and EBITDA excluding special and non-operating pension and OPEB items to Net income attributable to Albemarle Corporation.


                                                                                     ALBEMARLE CORPORATION AND SUBSIDIARIES

                                                                                            Non-GAAP Reconciliations

                                                                                                 (In Thousands)

                                                                                                   (Unaudited)

    Our segment information includes measures we refer to as "Segment operating profit," "Segment income," "EBITDA" and "EBITDA excluding special and non-operating pension and OPEB items," which
     are financial measures that are not required by, or presented in accordance with, GAAP. The Company has reported Segment operating profit, Segment income, EBITDA and EBITDA excluding special
     and non-operating pension and OPEB items because management believes that these financial measures provide transparency to investors and enable period-to-period comparability of financial
     performance. Segment operating profit, Segment income, EBITDA and EBITDA excluding special and non-operating pension and OPEB items should not be considered as alternatives to operating profit
     or net income attributable to Albemarle Corporation, as determined in accordance with GAAP.

    See below for a reconciliation of Segment operating profit and Segment income, the non-GAAP financial measures, to Operating profit and Net income attributable to Albemarle Corporation,
     respectively, the most directly comparable financial measures calculated and reported in accordance with GAAP.

                                                                                                                                               Three Months
                                                                                                                                                   Ended                           Year Ended

                                                                                                                                               December 31,                        December 31,
                                                                                                                                               ------------                        ------------

                                                                                                                                             2013                2012                2013             2012
                                                                                                                                             ----                ----                ----             ----

    Total segment operating profit                                                                                                                 $135,071            $147,505             $530,125         $641,660

    Corporate & other *                                                                                                                   124,473                (98,740)              86,145             (123,811)

    Restructuring and other charges, net                                                                                                  (33,361)               (16,982)              (33,361)             (111,685)
                                                                                                                                          -------               -------

    GAAP Operating profit                                                                                                                          $226,183             $31,783             $582,909         $406,164
                                                                                                                                                     ======             =======             ========         ========

    Total segment income                                                                                                                           $136,079            $150,600             $535,191         $661,156

    Corporate & other                                                                                                                     124,473                (98,740)              86,145             (123,831)

    Restructuring and other charges, net                                                                                                  (33,361)               (16,982)              (33,361)             (111,685)

    Interest and financing expenses                                                                                                        (9,224)              (7,666)               (31,559)            (32,800)

    Other (expenses) income, net                                                                                                             (628)              (335)               (6,923)            1,229

    Income tax (expense) benefit                                                                                                          (61,406)              10,849                (136,322)           (82,533)
                                                                                                                                          -------               ------               --------            -------

    GAAP Net income attributable to Albemarle Corporation                                                                                          $155,933             $37,726             $413,171         $311,536
                                                                                                                                                     ======             =======             ========         ========

    * Excludes corporate noncontrolling interest adjustments of $(20) for the year ended December 31, 2012.


    See below for a reconciliation of Net income attributable to Albemarle Corporation excluding special and non-operating pension and OPEB items, EBITDA and EBITDA excluding special and non-operating pension and OPEB
     items, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. EBITDA is defined as Net
     income attributable to Albemarle Corporation before interest and financing expenses, income taxes, depreciation and amortization. EBITDA excluding special and non-operating pension and OPEB items is defined as EBITDA
     before the special and non-operating pension and OPEB items as listed below.

                                                                                                                                                 Three Months Ended                           Year Ended

                                                                                                                                                    December 31,                             December 31,
                                                                                                                                                    ------------                             ------------

                                                                                                                                                           2013                   2012                     2013                     2012
                                                                                                                                                           ----                   ----                     ----                     ----

    Net income attributable to Albemarle Corporation                                                                                                   $155,933                $37,726                 $413,171                 $311,536
                                                                                                                                                       ========                =======                 ========                 ========

    Add back:

      Non-operating pension and OPEB items (net of tax)                                                                                      (89,464)                  53,657                  (92,829)                    41,706

      Special items (net of tax)                                                                                                              21,945                   13,837                  21,945                    82,937

    Net income attributable to Albemarle Corporation excluding special

      and non-operating pension and OPEB items                                                                                                          $88,414               $105,220                 $342,287                 $436,179
                                                                                                                                                        =======                 ======                 ========                 ========

    Net income attributable to Albemarle Corporation                                                                                                   $155,933                $37,726                 $413,171                 $311,536
                                                                                                                                                       ========                =======                 ========                 ========

    Add back:

      Interest and financing expenses                                                                                                          9,224                   7,666                  31,559                    32,800

      Income tax expense (benefit)                                                                                                            61,406                    (10,849)                 136,322                    82,533

      Depreciation and amortization                                                                                                           27,893                   24,592                  107,370                    99,020
                                                                                                                                              ------                   ------                  -------                    ------

    EBITDA                                                                                                                                   254,456                   59,135                  688,422                    525,889

      Non-operating pension and OPEB items                                                                                                  (140,818)                  84,189                  (146,193)                    65,279

      Special items                                                                                                                           33,361                   16,982                  33,361                    111,685

    EBITDA excluding special and non-operating pension and

     OPEB items                                                                                                                                        $146,999               $160,306                 $575,590                 $702,853
                                                                                                                                                       ========                 ======                 ========                 ========

    Net sales                                                                                                                                          $691,956               $687,596               $2,616,416               $2,745,420
                                                                                                                                                       ========                 ======                 ========                 ========

    EBITDA Margin                                                                                                                               36.8%                    8.6%                  26.3%                    19.2%
                                                                                                                                                ====                     ===                   ====                     ====

    EBITDA Margin excluding special and non-operating pension and

      OPEB items                                                                                                                                21.2%                   23.3%                  22.0%                    25.6%
                                                                                                                                                ====                    ====                   ====                     ====

SOURCE Albemarle Corporation


Source: PR Newswire



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