Albemarle Reports Fourth Quarter and Full Year 2023 Results
Full-Year Net Sales Increase of 31%, Driven by 21% Volume Growth
Full Year 2023 Results
(Unless otherwise stated, all percentage changes represent year-over-year comparisons)
- Net sales of
$9.6 billion , the highest in company history, up 31%, of which 21% was total volume growth; Energy Storage sales volumes were up 35% - Net income of
$1.6 billion , or$13.36 per diluted share, the second highest in company history, which included a lower of cost or net realizable value (LCM) pre-tax charge and a tax valuation allowance expense inChina , both recorded in the fourth quarter - Adjusted EBITDA of
$2.8 billion , or$3.4 billion excluding the$604 million LCM charge, which is in-line with previous outlook as higher volumes offset lower pricing - Adjusted diluted EPS of
$15.22 per share, or$22.25 excluding the LCM charge and the$223 million tax valuation allowance expense, which is in-line with previous outlook
Fourth Quarter 2023 Results and Recent Highlights
- Net sales of
$2.4 billion , primarily driven by 35% volume growth in Energy Storage - Net loss of
$618 million , or ($5.26 ) per diluted share, including the LCM charge and tax valuation allowance expense - Adjusted EBITDA of
($315) million , or$289 million excluding the LCM charge - Adjusted diluted EPS of (
$5.19 ), or$1.85 excluding the LCM charge and tax valuation allowance expense - Announced proactive measures expected to unlock >
$750 million of cash flow including reduced capital expenditures, costs and working capital - Meishan lithium conversion plant achieved mechanical completion in
December 2023 - Recognized by Newsweek as one of America's greatest workplaces for diversity and one of America's most responsible companies; featured in
JUST Capital's 2024 JUST 100 - Completed amendment to the company's credit agreement to ensure on-going financial flexibility; amendment utilizes an updated adjusted EBITDA definition that more accurately reflects the value of Albemarle's strategic ownership in the
Windfield (Talison) joint venture - Introduced full-year 2024 outlook considerations, including Energy Storage ranges based on lithium market price scenarios and utilizing an updated adjusted EBITDA definition similar to that in the company's amended credit agreement
"Albemarle's full-year 2023 result marks the second highest earnings year in company history, made possible by the disciplined focus of our global teams," said Albemarle CEO
Fourth Quarter 2023 Results
In millions, except per share amounts |
Q4 2023 |
|
Q4 2022 |
|
$ Change |
|
% Change |
Net sales |
$ 2,356.2 |
|
$ 2,621.0 |
|
$ (264.8) |
|
(10.1) % |
Net (loss) income attributable to |
$ (617.7) |
|
$ 1,132.4 |
|
$ (1,750.1) |
|
(154.5) % |
Adjusted EBITDA (a) |
$ (315.0) |
|
$ 1,243.8 |
|
$ (1,558.8) |
|
(125.3) % |
Diluted (loss) earnings per share |
$ (5.26) |
|
$ 9.60 |
|
$ (14.86) |
|
(154.8) % |
Non-operating pension and OPEB items (a) |
(0.07) |
|
(0.26) |
|
|
|
|
Non-recurring and other unusual items (a) |
0.14 |
|
(0.72) |
|
|
|
|
Adjusted diluted (loss) earnings per share (a)(b) |
$ (5.19) |
|
$ 8.62 |
|
$ (13.81) |
|
(160.2) % |
|
|
(a) |
See Non-GAAP Reconciliations for further details. |
(b) |
Totals may not add due to rounding. |
Net sales for the fourth quarter of 2023 were $2.4 billion compared to
The effective income tax rate for the fourth quarter of 2023 was (12.9)%, compared to 2.8% in the same period in 2022. The rate in 2023 was impacted by the recording of an income tax expense of
Energy Storage Results
In millions |
Q4 2023 |
|
Q4 2022 |
|
$ Change |
|
% Change |
|
$ 1,675.1 |
|
$ 1,980.8 |
|
$ (305.7) |
|
(15.4) % |
Adjusted EBITDA |
$ (338.3) |
|
$ 1,178.9 |
|
$ (1,517.1) |
|
(128.7) % |
Energy Storage net sales of
Specialties Results
In millions |
Q4 2023 |
|
Q4 2022 |
|
$ Change |
|
% Change |
|
$ 339.6 |
|
$ 404.6 |
|
$ (65.0) |
|
(16.1) % |
Adjusted EBITDA |
$ 29.8 |
|
$ 93.8 |
|
$ (63.9) |
|
(68.2) % |
Specialties net sales of
Ketjen Results
In millions |
Q4 2023 |
|
Q4 2022 |
|
$ Change |
|
% Change |
|
$ 341.5 |
|
$ 235.5 |
|
$ 105.9 |
|
45.0 % |
Adjusted EBITDA |
$ 31.3 |
|
$ (2.6) |
|
$ 33.9 |
|
* |
|
|
* |
Percentage change not meaningful. |
Ketjen net sales of
Updated Adjusted EBITDA Definition
Beginning in 2024, the company will change its definition of adjusted EBITDA for financial accounting purposes. The updated definition includes Albemarle's share of the pre-tax earnings of the Talison joint venture, whereas the prior definition included Albemarle's share of Talison earnings net of tax. This presentation more closely represents the materiality and financial contribution of the strategic investment in Talison, smooths the impact of price variations and inventory timing, and more closely represents a measure of EBITDA. This calculation is consistent with the covenant definition in the
2024 Outlook Considerations
Energy Storage Market Price Scenarios
The table below reflects expected outcomes for Albemarle's Energy Storage segment based on recently observed lithium market price scenarios. Ranges are based on a projected increase in Energy Storage volumes of 10% to 20% in 2024 compared to 2023. All three scenarios assume flat market pricing flowing through Energy Storage's current contract book. Scenarios also assume spodumene pricing averages 10% of the lithium carbonate equivalent (LCE) price, while other costs are assumed to be constant.
|
Energy Storage FY 2024E |
||
Observed market price case(a) |
YE 2023 |
Q4 2023 average |
H2 2023 average |
Average lithium market price ($/kg LCE)(a) |
|
|
|
Net sales |
|
|
|
Adjusted EBITDA(b) |
|
|
|
Equity in net income of unconsolidated investments (net of tax)(c)(d) |
|
|
|
|
|
(a) |
Price represents blend of relevant |
(b) |
Presented under updated adjusted EBITDA definition as of 2024. FY23 Energy Storage adjusted EBITDA under updated definition would be |
(c) |
Included in adjusted EBITDA on a pre-tax basis. |
(d) |
Assumes full Talison sales volumes for the second half of the calendar year. |
Specialties and Ketjen Outlook Considerations
Specialties outlook reflects continued softness in consumer electronics and elastomers, partially offset by stronger demand in other end-markets, including oilfield services, agriculture, and pharmaceuticals. Demand visibility is expected to remain low in the first half of 2024. Specialties outlook assumes operations continue as normal in the
Ketjen outlook assumes increased volumes driven by expected high refinery utilization, as well as higher pricing driven primarily by Clean Fuel Technology (CFT) products.
|
Segment FY 2024E |
Specialties net sales |
|
Specialties adjusted EBITDA |
|
Ketjen net sales |
|
Ketjen adjusted EBITDA |
|
Other Corporate Outlook Considerations
Albemarle expects its 2024 capital expenditures to be in the range of
|
Other Corporate FY 2024E |
Capital expenditures |
|
Depreciation and amortization |
|
Adjusted effective tax rate |
27% - 28% |
Corporate costs |
|
Interest and financing expenses |
|
Weighted-average common shares outstanding (diluted) |
117.7 million |
Total Corporate Outlook Considerations
The company's full-year outlook has been constructed assuming the above Specialties, Ketjen and Corporate outlook considerations plus the three Energy Storage market price scenarios.
|
Total Corporate FY 2024E Including Energy Storage Scenarios |
||
Observed market price case(a) |
YE 2023 |
Q4 2023 average |
H2 2023 average |
Average lithium market price ($/kg LCE)(a) |
|
|
|
Net sales |
|
|
|
Adjusted EBITDA (b)(c) |
|
|
|
|
|
(a) |
Price represents blend of relevant |
(b) |
The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. See "Additional Information regarding Non-GAAP Measures" for more information. |
(c) |
Presented under updated adjusted EBITDA definition as of 2024. FY23 adjusted EBITDA under updated definition would be |
Cash Flow and Capital Deployment
Cash from operations of
Capital spend is focused on high return projects to expand Albemarle's global portfolio of conversion capacity and world-class resources, as well as productivity and cost savings initiatives. At the end of 2023, the Meishan lithium conversion facility reached mechanical completion. Primary 2024 capital activities will include commissioning the Meishan lithium conversion facility; completing commissioning activities for trains 1 and 2 at the Kemerton lithium conversion facility and focusing construction on train 3; and prioritizing permitting activities at the
Albemarle's primary capital allocation priorities are to invest in organic opportunities to drive profitable growth, maintain its financial flexibility and investment grade credit rating, and fund its dividend.
Balance Sheet and Liquidity
As of
On
Earnings Call
Date: |
|
Time: |
|
Dial-in ( |
+1 888-330-2007 |
Dial-in (International): |
+1 646-960-0105 |
Passcode: |
5205664 |
The company's earnings presentation and supporting material are available on Albemarle's website at https://investors.albemarle.com.
About Albemarle
Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations,
Forward-Looking Statements
This press release contains statements concerning our expectations, anticipations and beliefs regarding the future, which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties, often contain words such as "anticipate," "believe," "estimate," "expect," "guidance," "intend," "may," "outlook," "scenario," "should," "would," and "will". Forward-looking statements may include statements regarding: our 2024 company and segment outlooks, including expected market pricing of lithium and spodumene and other underlying assumptions and outlook considerations; expected capital expenditure amounts and the corresponding impact on cash flow; market pricing of lithium carbonate equivalent and spodumene; anticipated timing of the commissioning of the
Consolidated Statements of Income (In Thousands Except Per Share Amounts) (Unaudited) |
|||||||
|
|||||||
|
Three Months Ended |
|
Year Ended |
||||
|
|
|
|
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net sales |
|
|
|
|
|
|
|
Cost of goods sold |
3,060,217 |
|
1,619,659 |
|
8,431,294 |
|
4,245,517 |
Gross profit |
(704,052) |
|
1,001,319 |
|
1,185,909 |
|
3,074,587 |
Selling, general and administrative expenses |
194,251 |
|
148,156 |
|
919,493 |
|
524,145 |
Research and development expenses |
22,753 |
|
20,154 |
|
85,725 |
|
71,981 |
(Gain) loss on change in interest in properties/sale of business, net |
(71,190) |
|
— |
|
(71,190) |
|
8,400 |
Operating profit |
(849,866) |
|
833,009 |
|
251,881 |
|
2,470,061 |
Interest and financing expenses |
(34,386) |
|
(24,039) |
|
(116,072) |
|
(122,973) |
Other (expenses) income, net |
(36,699) |
|
54,119 |
|
110,929 |
|
86,356 |
(Loss) income before income taxes and equity in net income of unconsolidated investments |
(920,951) |
|
863,089 |
|
246,738 |
|
2,433,444 |
Income tax expense |
118,878 |
|
24,102 |
|
430,277 |
|
390,588 |
(Loss) income before equity in net income of unconsolidated investments |
(1,039,829) |
|
838,987 |
|
(183,539) |
|
2,042,856 |
Equity in net income of unconsolidated investments (net of tax) |
436,537 |
|
322,799 |
|
1,854,082 |
|
772,275 |
Net (loss) income |
(603,292) |
|
1,161,786 |
|
1,670,543 |
|
2,815,131 |
Net income attributable to noncontrolling interests |
(14,388) |
|
(29,341) |
|
(97,067) |
|
(125,315) |
Net (loss) income attributable to |
$ (617,680) |
|
|
|
|
|
|
Basic (loss) earnings per share: |
$ (5.26) |
|
$ 9.67 |
|
$ 13.41 |
|
$ 22.97 |
Diluted (loss) earnings per share: |
$ (5.26) |
|
$ 9.60 |
|
$ 13.36 |
|
$ 22.84 |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – basic |
117,354 |
|
117,160 |
|
117,317 |
|
117,120 |
Weighted-average common shares outstanding – diluted |
117,354 |
|
117,925 |
|
117,766 |
|
117,793 |
Condensed Consolidated Balance Sheets (In Thousands) (Unaudited) |
|||
|
|||
|
|
|
|
|
2023 |
|
2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 889,900 |
|
$ 1,499,142 |
Trade accounts receivable |
1,213,160 |
|
1,190,970 |
Other accounts receivable |
509,097 |
|
185,819 |
Inventories |
2,161,287 |
|
2,076,031 |
Other current assets |
443,475 |
|
234,955 |
Total current assets |
5,216,919 |
|
5,186,917 |
Property, plant and equipment |
12,233,757 |
|
9,354,330 |
Less accumulated depreciation and amortization |
2,738,553 |
|
2,391,333 |
Net property, plant and equipment |
9,495,204 |
|
6,962,997 |
Investments |
1,369,855 |
|
1,150,553 |
Other assets |
297,087 |
|
250,558 |
|
1,629,729 |
|
1,617,627 |
Other intangibles, net of amortization |
261,858 |
|
287,870 |
Total assets |
$ 18,270,652 |
|
$ 15,456,522 |
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable to third parties |
$ 1,537,859 |
|
$ 1,533,624 |
Accounts payable to related parties |
550,186 |
|
518,377 |
Accrued expenses |
544,835 |
|
505,894 |
Current portion of long-term debt |
625,761 |
|
2,128 |
Dividends payable |
46,666 |
|
46,116 |
Income taxes payable |
255,155 |
|
134,876 |
Total current liabilities |
3,560,462 |
|
2,741,015 |
Long-term debt |
3,541,002 |
|
3,214,972 |
Postretirement benefits |
26,247 |
|
32,751 |
Pension benefits |
150,312 |
|
159,571 |
Other noncurrent liabilities |
769,100 |
|
636,596 |
Deferred income taxes |
558,430 |
|
480,770 |
Commitments and contingencies |
|
|
|
Equity: |
|
|
|
|
|
|
|
Common stock |
1,174 |
|
1,172 |
Additional paid-in-capital |
2,952,517 |
|
2,940,840 |
Accumulated other comprehensive loss |
(528,526) |
|
(560,662) |
Retained earnings |
6,987,015 |
|
5,601,277 |
|
9,412,180 |
|
7,982,627 |
Noncontrolling interests |
252,919 |
|
208,220 |
Total equity |
9,665,099 |
|
8,190,847 |
Total liabilities and equity |
$ 18,270,652 |
|
$ 15,456,522 |
Selected Consolidated Cash Flow Data (In Thousands) (Unaudited) |
|||
|
|||
|
Year Ended |
||
|
|
||
|
2023 |
|
2022 |
Cash and cash equivalents at beginning of year |
$ 1,499,142 |
|
$ 439,272 |
Cash flows from operating activities: |
|
|
|
Net income |
1,670,543 |
|
2,815,131 |
Adjustments to reconcile net income to cash flows from operating activities: |
|
|
|
Depreciation and amortization |
429,944 |
|
300,841 |
(Gain) loss on change in interest in properties/sale of business, net |
(71,190) |
|
8,400 |
Inventory net realizable value adjustment |
604,099 |
|
— |
Stock-based compensation and other |
36,545 |
|
30,474 |
Equity in net income of unconsolidated investments (net of tax) |
(1,854,082) |
|
(772,275) |
Dividends received from unconsolidated investments and nonmarketable securities |
2,000,862 |
|
801,239 |
Pension and postretirement benefit |
(1,658) |
|
(52,254) |
Pension and postretirement contributions |
(17,866) |
|
(16,112) |
Unrealized gain on investments in marketable securities |
39,864 |
|
3,279 |
Loss on early extinguishment of debt |
— |
|
19,219 |
Deferred income taxes |
100,877 |
|
93,339 |
Changes in current assets and liabilities, net of effects of acquisitions and divestitures: |
|
|
|
(Increase) in accounts receivable |
(350,655) |
|
(786,121) |
(Increase) in inventories |
(962,924) |
|
(1,609,642) |
(Increase) in other current assets |
(171,870) |
|
(104,655) |
(Decrease) increase in accounts payable to third parties |
(315,220) |
|
816,194 |
Increase in accounts payable to related parties |
31,809 |
|
470,878 |
Increase (decrease) in accrued expenses and income taxes payable |
253,518 |
|
(201,356) |
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL |
17,297 |
|
122,682 |
Other, net |
(114,572) |
|
(31,412) |
Net cash provided by operating activities |
1,325,321 |
|
1,907,849 |
Cash flows from investing activities: |
|
|
|
Acquisitions, net of cash acquired |
(426,228) |
|
(162,239) |
Capital expenditures |
(2,149,281) |
|
(1,261,646) |
Sales of marketable securities, net |
(204,451) |
|
1,942 |
Investments in equity and other corporate investments |
(1,200) |
|
(706) |
Net cash used in investing activities |
(2,781,160) |
|
(1,422,649) |
Cash flows from financing activities: |
|
|
|
Proceeds from borrowings of credit agreements |
356,047 |
|
1,964,216 |
Repayments of long-term debt and credit agreements |
(28,862) |
|
(705,000) |
Other borrowings (repayments), net |
617,014 |
|
(391,662) |
Fees related to early extinguishment of debt |
— |
|
(9,767) |
Dividends paid to shareholders |
(187,188) |
|
(184,429) |
Dividends paid to noncontrolling interests |
(105,631) |
|
(44,208) |
Proceeds from exercise of stock options |
190 |
|
2,783 |
Withholding taxes paid on stock-based compensation award distributions |
(27,468) |
|
(13,338) |
Other |
(191) |
|
(6,708) |
Net cash provided by financing activities |
623,911 |
|
611,887 |
Net effect of foreign exchange on cash and cash equivalents |
222,686 |
|
(37,217) |
(Decrease) increase in cash and cash equivalents |
(609,242) |
|
1,059,870 |
Cash and cash equivalents at end of period |
$ 889,900 |
|
$ 1,499,142 |
Consolidated Summary of Segment Results (In Thousands) (Unaudited) |
|||||||
|
|||||||
|
Three Months Ended |
|
Year Ended |
||||
|
|
|
|
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net sales: |
|
|
|
|
|
|
|
Energy Storage |
|
|
|
|
|
|
|
Specialties |
339,623 |
|
404,637 |
|
1,482,425 |
|
1,759,587 |
Ketjen |
341,454 |
|
235,546 |
|
1,055,780 |
|
899,572 |
Total net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
Energy Storage |
|
|
|
|
|
|
|
Specialties |
29,841 |
|
93,784 |
|
298,506 |
|
527,318 |
Ketjen |
31,288 |
|
(2,605) |
|
103,872 |
|
28,732 |
Total segment adjusted EBITDA |
(277,158) |
|
1,270,032 |
|
2,809,771 |
|
3,588,310 |
Corporate |
(37,829) |
|
(26,280) |
|
(43,486) |
|
(112,453) |
Total adjusted EBITDA |
|
|
|
|
|
|
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net income attributable to
A description of other non-GAAP financial measures that Albemarle uses to evaluate its 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 on the following pages of this press release, which is also is available on Albemarle's website at https://investors.albemarle.com. The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the company's results calculated in accordance with GAAP.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income attributable to
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
In thousands, except percentages and per |
$ |
|
% of |
|
$ |
|
% of |
|
$ |
|
% of |
|
$ |
|
% of |
Net (loss) income attributable to |
$ (617,680) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating pension and OPEB items |
(8,107) |
|
|
|
(30,168) |
|
|
|
(6,966) |
|
|
|
(42,189) |
|
|
Non-recurring and other unusual items |
16,262 |
|
|
|
(85,400) |
|
|
|
226,356 |
|
|
|
(61,377) |
|
|
Adjusted net (loss) income attributable to |
$ (609,525) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of cost or net realizable value (LCM) |
604,099 |
|
|
|
— |
|
|
|
604,099 |
|
|
|
— |
|
|
Tax valuation allowance expense (TVA) |
223,000 |
|
|
|
— |
|
|
|
223,000 |
|
|
|
— |
|
|
Adjusted net income attributable to |
$ 217,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted (loss) earnings per share |
$ (5.19) |
|
|
|
$ 8.62 |
|
|
|
$ 15.22 |
|
|
|
$ 21.96 |
|
|
Adjusted diluted earnings per share, |
$ 1.85 |
|
|
|
$ 8.62 |
|
|
|
$ 22.25 |
|
|
|
$ 21.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares |
117,354 |
|
|
|
117,925 |
|
|
|
117,766 |
|
|
|
117,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to |
$ (617,680) |
|
(26.2) % |
|
|
|
43.2 % |
|
|
|
16.4 % |
|
|
|
36.7 % |
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing expenses |
34,386 |
|
1.5 % |
|
24,039 |
|
0.9 % |
|
116,072 |
|
1.2 % |
|
122,973 |
|
1.7 % |
Income tax expense |
118,878 |
|
5.0 % |
|
24,102 |
|
0.9 % |
|
430,277 |
|
4.5 % |
|
390,588 |
|
5.3 % |
Depreciation and amortization |
144,143 |
|
6.1 % |
|
85,561 |
|
3.3 % |
|
429,944 |
|
4.5 % |
|
300,841 |
|
4.1 % |
EBITDA |
(320,273) |
|
(13.6) % |
|
1,266,147 |
|
48.3 % |
|
2,549,769 |
|
26.5 % |
|
3,504,218 |
|
47.9 % |
Non-operating pension and OPEB items |
(9,804) |
|
(0.4) % |
|
(41,687) |
|
(1.6) % |
|
(7,971) |
|
(0.1) % |
|
(57,032) |
|
(0.8) % |
Non-recurring and other unusual items |
15,090 |
|
0.6 % |
|
19,292 |
|
0.7 % |
|
224,487 |
|
2.3 % |
|
28,671 |
|
0.4 % |
Adjusted EBITDA |
$ (314,987) |
|
(13.4) % |
|
|
|
47.5 % |
|
|
|
28.8 % |
|
|
|
47.5 % |
Lower of cost or net realizable value (LCM) |
604,099 |
|
25.6 % |
|
— |
|
— % |
|
604,099 |
|
6.3 % |
|
— |
|
— % |
Adjusted EBITDA, excluding LCM |
$ 289,112 |
|
12.3 % |
|
|
|
47.5 % |
|
|
|
35.0 % |
|
|
|
47.5 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to Albemarle's operating segments and are included in the Corporate category. In addition, the company believes that these components of pension cost are mainly driven by market performance, and the company manages these separately from the operational performance of the company's businesses. In accordance with GAAP, these non-operating pension and OPEB items are included in Other (expenses) income, net. Non-operating pension and OPEB items were as follows (in thousands):
|
Three Months Ended |
|
Year Ended |
||||
|
|
|
|
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
MTM actuarial gain |
$ (10,174) |
|
$ (36,989) |
|
$ (10,174) |
|
$ (36,989) |
Interest cost |
8,859 |
|
5,814 |
|
35,950 |
|
23,497 |
Expected return on assets |
(8,489) |
|
(10,512) |
|
(33,747) |
|
(43,540) |
Total |
$ (9,804) |
|
$ (41,687) |
|
$ (7,971) |
|
$ (57,032) |
In addition to the non-operating pension and OPEB items disclosed above, the company has identified certain other items and excluded them from Albemarle's adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):
|
Three Months Ended |
|
Year Ended |
||||
|
|
|
|
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Acquisition and integration related costs (1) |
$ 0.03 |
|
$ 0.05 |
|
$ 0.18 |
|
$ 0.11 |
|
0.05 |
|
— |
|
0.05 |
|
— |
(Gain) loss on change in interest in properties, net (3) |
(0.40) |
|
— |
|
(0.40) |
|
0.07 |
Mark-to-market loss (gain) on public equity securities (4) |
0.51 |
|
0.04 |
|
0.29 |
|
(0.03) |
Loss on extinguishment of debt (5) |
— |
|
— |
|
— |
|
0.13 |
Legal accrual (6) |
— |
|
— |
|
1.82 |
|
— |
Other (7) |
(0.04) |
|
0.05 |
|
(0.01) |
|
0.05 |
Tax related items (8) |
(0.01) |
|
(0.86) |
|
(0.01) |
|
(0.85) |
Total non-recurring and other unusual items |
$ 0.14 |
|
$ (0.72) |
|
$ 1.92 |
|
$ (0.52) |
|
|
(1) |
Costs related to the acquisition, integration and divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three months and year ended |
|
|
(2) |
|
|
|
(3) |
Included in (Gain) loss on change in interest in properties/sale of business, net for the three months and year ended |
|
|
(4) |
Losses of |
|
|
(5) |
Included in Interest and financing expenses for the year ended |
|
|
(6) |
Loss of |
|
|
(7) |
Other adjustments for the three months ended
|
|
After income taxes, these net gains totaled |
|
|
|
Other adjustments for the year ended
|
|
After income taxes, these charges totaled |
|
|
|
Other adjustments for the three months ended
|
|
After income taxes, these net charges totaled |
|
|
|
Other adjustments for the year ended
|
|
After income taxes, these net charges totaled |
|
|
(8) |
Included in Income tax expense for the three months and year ended |
|
|
|
Included in Income tax expense for the three months and year ended |
See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reporting in accordance with GAAP (in thousands, except percentages).
|
Income (loss) before |
|
Income tax expense |
|
Effective income tax |
Three months ended |
|
|
|
|
|
As reported |
$ (920,951) |
|
$ 118,878 |
|
(12.9) % |
Non-recurring, other unusual and non-operating pension and OPEB items |
5,286 |
|
(2,869) |
|
|
As adjusted |
$ (915,665) |
|
$ 116,009 |
|
(12.7) % |
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
As reported |
$ 863,089 |
|
$ 24,102 |
|
2.8 % |
Non-recurring, other unusual and non-operating pension and OPEB items |
(22,394) |
|
93,174 |
|
|
As adjusted |
$ 840,695 |
|
$ 117,276 |
|
14.0 % |
|
|
|
|
|
|
Year ended |
|
|
|
|
|
As reported |
$ 246,738 |
|
$ 430,277 |
|
174.4 % |
Non-recurring, other unusual and non-operating pension and OPEB items |
216,516 |
|
(2,874) |
|
|
As adjusted |
$ 463,254 |
|
$ 427,403 |
|
92.3 % |
|
|
|
|
|
|
Year ended |
|
|
|
|
|
As reported |
$ 2,433,444 |
|
$ 390,588 |
|
16.1 % |
Non-recurring, other unusual and non-operating pension and OPEB items |
(8,821) |
|
94,424 |
|
|
As adjusted |
$ 2,424,623 |
|
$ 485,012 |
|
20.0 % |
As noted above, beginning in 2024, the company will change its definition of adjusted EBITDA for financial accounting purposes. The updated definition includes Albemarle's share of the pre-tax earnings of the Talison joint venture, whereas the prior definition included Albemarle's share of Talison earnings net of tax. See below for a reconciliation of adjusted EBITDA (on a consolidated basis), the non-GAAP financial measure, to Net income attributable to
|
Year ended |
||
|
As Reported |
|
As Adjusted - |
Net income attributable to |
$ 1,573,476 |
|
$ 1,573,476 |
Depreciation and amortization |
429,944 |
|
429,944 |
Interest and financing expenses |
116,072 |
|
116,072 |
Income tax expense |
430,277 |
|
430,277 |
Proportionate share of |
|
|
785,824 |
Gain on sale of business/interest in properties, net |
(71,190) |
|
(71,190) |
Acquisition and integration related costs |
26,767 |
|
26,767 |
|
6,765 |
|
6,765 |
Non-operating pension and OPEB items |
(7,971) |
|
(7,971) |
Mark-to-market gain on public equity securities |
44,732 |
|
44,732 |
Legal accrual |
218,510 |
|
218,510 |
Other |
(1,097) |
|
(1,097) |
Total adjusted EBITDA |
$ 2,766,285 |
|
$ 3,552,109 |
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