Albemarle (ALB) 10-K risk factor changes: FY2017 vs FY2016

Adverse conditions in the economy and volatility and disruption of financial markets can negatively impact our customers, suppliers and other business partners and therefore have a material adverse effect on our [added: business and] results of operations.

Our business and operating results have been and will continue to be sensitive to [added: the many challenges that can affect national, regional and global economies, including] economic downturns (including credit market [removed: tightness] [added: tightness,] which can impact our liquidity as well as that of our customers, suppliers and other business partners), declining consumer and business confidence, fluctuating commodity [removed: prices,] [added: prices and] volatile exchange [removed: rates and other challenges that can affect the economy.][added: rates.]

The long-term profitability of our operations [removed: will be,] [added: will,] in part, [removed: related to] [added: depend on] our ability to continue to economically obtain resources, including energy and raw materials.

For example, our lithium and bromine businesses rely upon our continued ability to produce, or otherwise obtain, lithium and bromine of sufficient quality [added: and] in adequate [removed: amounts.][added: amounts to meet our customers’ demand.]

[removed: In addition,] [added: Furthermore,] other raw material and energy costs account for a significant percentage of our total costs of products sold, even if they can be obtained on commercially reasonable terms.

[removed: Our] raw material and energy costs can be volatile and may increase significantly.

Increases are primarily driven by tightening of market conditions and major increases in the pricing of [removed: basic building blocks] [added: key constituent materials] for our products such as crude oil, chlorine and metals (including molybdenum and rare earths which are used in the refinery catalysts business).

[removed: We face competition from other specialty chemical companies, which places] [added: Competition within our industry may place] downward pressure on the prices and margins of our products and may adversely affect our businesses and results of operations.

Competitors’ pricing decisions could compel us to decrease our prices, which could negatively affect our margins and [removed: profitability adversely.][added: profitability.]

Our ability to maintain or increase our profitability is, and will continue to be, dependent upon our ability to offset decreases in the prices and margins of our products by improving production efficiency and volume and other productivity enhancements, shifting to [added: production of] higher margin chemical products and improving existing products through innovation and research and development.

We believe that our customers are increasingly looking for strong, long-term relationships with a few key suppliers that help them improve product performance, reduce costs, [removed: or] [added: and] support new product development.

[added: In addition,] Albemarle’s brands, product image and trademarks represent the unique product identity of each of our products and are important symbols of the Company’s reputation.

Accordingly, the performance of our business could be adversely affected by any marketing and promotional materials used by our competitors that make [removed: false or unsubstantiated] [added: adverse] claims, [added: whether with or without merit, against our Company or its products,] imply [added: or assert] immoral or improper conduct [added: by us,] or are otherwise disparaging [removed: to] [added: of] our Company or its products.

Many of our customers are in industries, including the electronics, building and construction, oilfield and automotive industries, which are cyclical in nature, or which are subject to secular [added: market] downturns.

Historically, cyclical or secular industry downturns have resulted in diminished [removed: product demand,] [added: demand for our products,] excess manufacturing capacity and lower average selling prices, and we may experience similar problems in the future.

The effectiveness of HPC catalysts diminishes with use, requiring the HPC catalysts to be replaced, on average, once every one to [removed: three] [added: four] years.

In addition, crop pricing and [added: the] timing of when farms alternate from one crop to another crop in a particular year can also alter sales of agrichemicals.

[removed: Our] [added: In addition, our] customers use our specialty chemicals for a broad range of applications.

Our research and development efforts may not succeed [added: in addressing changes in our customers’ needs,] and our competitors may develop more effective or successful products.

Our [added: future] growth [removed: will depend] [added: depends] on our ability to gauge the direction of the commercial and technological progress in all key end markets [added: in which we sell our products] and upon our ability to fund and successfully develop, manufacture and market products in such changing end markets.

[removed: We] [added: There is no assurance that we] will [removed: have] [added: be able] to continue to identify, develop, market [removed: and] [added: and,] in certain cases, secure regulatory approval [removed: for] [added: for,] innovative products [removed: on] [added: in] a timely [removed: basis] [added: manner or at all, as may be required] to replace or enhance existing [removed: products in order to maintain] [added: products, and any such inability could have a material adverse effect on] our profit margins and our competitive position.

[removed: Ongoing] [added: Furthermore, ongoing] investments in research and development for [added: the] future [removed: products] [added: do not yield an immediate beneficial impact on our operating results and therefore] could result in higher costs without a proportional increase in revenues.

[removed: Additionally,] [added: Despite our efforts,] we may not be successful in developing new products and/or technology, either alone or with third parties, or licensing intellectual property rights from third parties on a commercially competitive basis.

Our new products may not be [added: accepted by our customers or may fail to receive regulatory approval.]

Our business and operations could suffer in the event of cybersecurity [removed: breaches.][added: breaches, information technology system failures, or network disruptions.]

[removed: In addition, the] [added: The] devotion of additional resources to the security of our information technology systems in the future could significantly increase the cost of doing business or otherwise adversely impact our financial results.

We conduct a substantial portion of our business outside the [removed: United States.][added: U.S., with approximately 73% of our sales to foreign countries.]

| • | foreign countries [added: in which we do business] may adopt other restrictions on foreign trade or investment, including currency exchange controls; |

| • | trade sanctions [added: by or against these countries] could result in [added: our] losing access to customers and suppliers in those countries; |

| • | [added: our] agreements [added: with counterparties in foreign countries] may be difficult [added: for us] to enforce and [added: related] receivables [added: may be] difficult [added: for us] to collect; |

| • | compliance with [removed: a] [added: the] variety of foreign laws and regulations may be [added: unduly] burdensome; |

| • | unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export [removed: licenses;] [added: licenses may occur;] |

| • | [added: our] foreign operations may experience staffing difficulties and labor disputes; |

| • | foreign governments may nationalize [added: or expropriate] private enterprises; |

| • | [removed: our business and profitability in a particular country could be affected by] political or economic repercussions from terrorist [removed: activities and the response to such] activities, [added: including] the possibility of hyperinflationary conditions and political [removed: instability] [added: instability, may occur] in certain [removed: countries.] [added: countries in which we do business.] |

In addition, certain of our joint ventures operate, and we have ongoing capital [removed: projects in, high-risk] [added: projects, in] regions of the world such as the Middle East and South [removed: America.][added: America, that are of high risk due to significant civil, political and security instability.]

Unanticipated [removed: events] [added: events,] such as geopolitical [removed: changes] [added: changes,] could result in a write-down of our investment in the affected joint venture or a delay or [added: cause] cancellation of those capital projects, which could negatively impact our future growth and profitability.

Furthermore, [removed: our subsidiaries] [added: we] are subject to rules and regulations related to anti-bribery prohibitions of the U.S. and other countries and export controls and economic embargoes, violations of which may carry substantial penalties.

[added: Certain tax proposals] with respect to such earnings could substantially increase our tax expense, which would substantially reduce our income and have a material adverse effect on our results of operations and cash flows from operating activities.

Recent developments, including the European Commission’s investigations on illegal state [removed: aid as well as] [added: aid,] the Organisation for Economic Co-operation and Development (“OECD”) project on Base Erosion and Profit Shifting [added: and the enacted U.S tax reform legislation commonly referred to as the U.S. Tax Cuts and Jobs Act (“TCJA”) during the fourth quarter of 2017] may result in changes to long-standing tax principles, which could adversely affect our effective tax rates or result in higher cash tax liabilities.

Risks Related to Our Business

In addition, we operate and/or sell our products to customers in approximately 100 countries.

We currently have many production facilities, research and development and administrative facilities, as well as sales offices located outside the United States, as detailed in Item 2.

Properties.

| • | termination or substantial modification of international trade agreements may adversely affect our access to raw materials and to markets for our products outside the U.S.; |

In addition, in some cases access to these raw materials by us and our competitors is subject to decisions or actions by governmental authorities, which could adversely impact us.

Our

In addition, raising prices we charge to our customers in order to offset increases in the prices we pay for raw materials could cause us to suffer a loss of sales volumes.

Business.

Our significant manufacturing presence and sales activities in the European Union

Liabilities associated with the investigation and cleanup of hazardous substances, as well as personal injury, property damages or natural resource damages arising from the release of, or exposure to, such hazardous substances, may be imposed in many situations without

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws.

The U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar foreign anti-corruption laws in other jurisdictions around the world generally prohibit companies and their intermediaries from making improper payments or providing anything of value to non-U.S. government officials for the purpose of obtaining or retaining business or securing an unfair advantage.

We operate in some parts of the world that have experienced governmental corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.

Although we have established formal policies or procedures for prohibiting or monitoring this conduct, we cannot assure you that our employees or other agents will not engage in such conduct for which we might be held responsible.

In the event that we believe or have reason to believe that our employees, agents or distributors have or may have violated applicable anti-corruption laws, including the FCPA, we may be required to investigate or have outside counsel investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management.

If we are found to be liable for violations of the FCPA or other applicable anti-corruption laws (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others, including employees of our joint ventures), we could suffer from civil and criminal penalties or other sanctions, which could have a material adverse effect on our business and results of operations.

Following receipt of information regarding potential improper payments being made by third party sales representatives of our Refining Solutions business, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the FCPA, 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 to the U.S. Department of Justice (“DOJ”) and SEC, and intend to cooperate with the DOJ and SEC in their review of these matters.

In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures.

At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ or SEC.

We also are unable to predict what, if any, action may be taken by the DOJ or SEC or what penalties or remedial actions they may seek.

Any determination that our operations or activities are not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses.

We are subject to extensive foreign government regulation that can negatively impact our business.

We are subject to government regulation in non-U.S. jurisdictions in which we conduct our business.

The requirements for compliance with these laws and regulations may be unclear or indeterminate and may involve significant costs, including additional capital expenditures or increased operating expenses, or require changes in business practice, in each case that could result in reduced profitability for our business.

Our having to comply with these foreign laws or regulations can require may provide a competitive advantage to competitors who are not subject to comparable restrictions or prevent us from taking advantage of growth opportunities.

Determination of noncompliance can result in penalties or sanctions that could also adversely impact our operating results and financial condition.

In addition, risks associated with information technology systems failures or network disruptions, including risks associated with upgrading our systems or in successfully integrating information technology and other systems in connection with the integration of businesses we acquire, could disrupt our operations by impeding our processing of transactions, financial reporting and our ability to protect our customer or company information, which could adversely effect our business or results of operations.

Furthermore, the potential impact of climate change and related regulation on our customers is highly uncertain and there can be no assurance that it will not have an adverse effect on our financial condition and results of operations.

Economic conditions and regulatory changes relating to the United Kingdom’s withdrawal from the European Union could adversely impact our business.

Following a referendum in 2016, voters in the United Kingdom (“U.K.”) approved that country’s exit from the European Union (“E.U.”), a process often referred to as “Brexit.” Subsequently, in March 2017, the U.K. invoked Article 50 of the Lisbon Treaty, which provides a two-year time period through March 2019 for the U.K. and the remaining E.U. countries to negotiate a withdrawal agreement.

The future effects of Brexit will depend on any agreements the U.K. makes to retain access to the E.U. or other markets either during a transitional period or more permanently.

Given the lack of comparable precedent and the uncertainty around the terms upon which the U.K. will leave the E.U., it is unclear what financial, trade and legal implications Brexit would have and how such withdrawal would affect our Company.

We derive a significant portion of our revenues from sales outside the U.S., including 17% from E.U. countries.

The consequences of Brexit, together with what may be protracted negotiations around the terms of Brexit, could introduce significant uncertainties into global financial markets, including volatility in foreign currencies, and adversely impact the markets in which we and our customers operate.

Although we are not experiencing any immediate adverse impact on our financial condition as a result of Brexit, adverse consequences such as deterioration in economic conditions, volatility in currency exchange rates or adverse changes in regulation could have a negative impact on our future operations, operating results and financial condition.

All of these potential consequences could be further magnified if additional countries were to exit the E.U.

Risks Related to Our Financial Condition

There also is a risk that raising prices charged to our customers could result in a loss of sales volumes.

In addition, our products are facing increasing competition from market participants in China.

Within the end-use markets in which we compete, competition is intense.

Substitute products also exist for many of our products.

Therefore, we face substantial risk that certain events, such as new product development by our competitors, changing

customer needs, production advances for competing products, price changes in raw materials and products, our failure to secure patents or the expiration of patents, could result in declining demand for our products as our customers switch to substitute products or undertake manufacturing of such products on their own.

If we are unable to develop, produce or market our products to effectively compete against our competitors, our results of operations may materially suffer.

We may also need to invest and spend more on research and development and marketing costs to strengthen existing customer relationships, as well as attract new customers.

Changes in our customers’ products can reduce the demand for our specialty chemicals.

accepted by our customers or may fail to receive regulatory approval.

If we fail to keep pace with the evolving technological innovations in our end markets on a competitive basis, our business, financial condition and results of operations could be adversely affected.

| • | termination or substantial modification of international trade agreements; |

Certain tax proposals

Violations of environmental, health and safety laws and regulations may subject us to fines, penalties and other liabilities and may require us to change certain business practices or curtail production.

If we violate environmental, health and safety laws or regulations, in addition to being required to correct such violations, we can be held liable in administrative, civil or criminal proceedings for substantial fines and other sanctions could be imposed

that could disrupt or limit our operations.

We have also given contractual indemnities for environmental conditions relating to facilities we no longer own or operate.

international agreement linked to the United Nations Framework Convention on Climate Change (“UNFCC”), which set binding targets for reducing greenhouse gas emissions.

Furthermore, the potential impacts of climate change and related regulation on our customers are highly uncertain and may adversely affect us.

For example, for many years we have marketed methyl bromide, a chemical that is particularly effective as a soil fumigant.

In recent years, the market for methyl bromide has changed significantly, driven by the Montreal Protocol of 1987 and the London Amendment of 1990 and related regulations prompted by findings regarding the chemical’s potential to deplete the ozone layer.

Completion of the phase-out of methyl bromide as a fumigant took effect January 1, 2005, with critical uses allowed in the U.S. on an annual basis until feasible alternatives are available, with methyl bromide scheduled to be completely phased out in 2017.

Business on page 8.

customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand for these products.

Competition

In December 2014, the Protecting and Securing Chemical Facilities from Terrorist Attacks Act of 2014 (“CFATS Act”) was enacted.

We have not established proven or probable reserves through the completion of a feasibility study for the minerals that we produce.

We have not established proven or probable reserves, as defined by the SEC under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study for any of the minerals that we produce.

Since we commenced production without having established proven or probable reserves, there may be greater inherent uncertainty as to whether or not mineralized material can be economically obtained as originally planned and anticipated.

Also, because we do not have any proven or probable reserves, we may not be able to continue to produce such minerals at existing levels or to expand our production capacity in the future which could harm our business, results or operations and financial condition.

[removed: Therefore, there] [added: 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 [added: from the outlook expressed or implied in any forward-looking statement] include, without limitation:

| • | increases in the cost of raw materials and energy, and our ability to pass through such [removed: increases;] [added: increases to our customers;] |

The following is a discussion and analysis of [added: our] results of operations for the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014.][added: 2015.]

A discussion of [added: our] consolidated financial condition and sources of additional capital is included under a separate heading “Financial Condition and Liquidity” on page 49.

We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that [removed: meets customer] [added: are designed to meet our customers’] needs across [removed: an exceptionally] [added: a] diverse range of end markets.

The end markets we serve include [removed: the] [added: energy storage,] petroleum refining, consumer electronics, [removed: energy storage,] construction, automotive, lubricants, pharmaceuticals, crop [removed: protection, food safety] [added: protection] and custom chemistry services.

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 [removed: to] [added: of] our future earnings growth.

We believe our disciplined cost reduction [removed: efforts,] [added: efforts and] ongoing productivity [removed: improvements] [added: improvements, among other factors,] position us well to take advantage of strengthening economic conditions as they [removed: occur] [added: occur,] while softening the negative impact of the current challenging global economic environment.

[added: |] 2016 [removed: Highlights][added: | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| • | In the first quarter, we increased our quarterly dividend for the [removed: 22nd] [added: 23rd] consecutive year, to [removed: $0.305] [added: $0.32] per share. |

[removed: | • | On February 1, 2016, we closed] [added: The year ended December 31, 2016 included gains before income taxes of $11.5 million and $112.3 million related to] the [removed: sale] [added: sales] of the [added: metal sulfides business and the] minerals-based flame retardants and specialty chemicals [removed: business for cash proceeds of approximately $187 million and recorded a gain] [added: business, respectively, both] of [removed: $112.3 million before income taxes] [added: which closed] in [removed: 2016 related to] the [removed: sale. |][added: first quarter of 2016.]

| • | We announced that [added: Albemarle and] Tianqi Lithium Corporation (“Tianqi”) [removed: gave notice of its decision to exercise an] [added: terminated the] option [added: agreement for Tianqi] to acquire a 20% indirect ownership interest in Rockwood Lithium GmbH, a wholly-owned German subsidiary of Albemarle, and its subsidiaries. [removed: In February 2017, we announced that Albemarle and Tianqi terminated the option agreement, and as] [added: As] a [removed: result] [added: result,] we will retain 100% of the ownership interest in Rockwood Lithium GmbH. |

| • | We achieved earnings from continuing operations of [removed: $478.6] [added: $99.5] million during [removed: 2016] [added: 2017] as compared to [removed: $327.6] [added: $478.6] million for [removed: 2015.] [added: 2016.] Cash flows from operations in [removed: 2016] [added: 2017] were [removed: $733.4] [added: $304.0] million. Earnings from continuing operations for [removed: 2016] [added: 2017] includes pension and other postretirement benefit (“OPEB”) actuarial [removed: losses] [added: gains] of [removed: $18.3] [added: $7.3] million after income taxes, compared to pension and OPEB actuarial [removed: gains] [added: losses] of [removed: $21.4] [added: $18.3] million after income taxes in [removed: 2015.] [added: 2016.] |

The [removed: current global business environment presents a diverse set of] [added: other markets we serve continue to present various] opportunities [added: for value] and [removed: challenges in the markets] [added: growth as] we [removed: serve, from] [added: have positioned ourselves to manage changing global conditions, such as] slow and uneven global growth, currency exchange volatility, [removed: significantly low] crude oil [removed: prices,] [added: price fluctuation,] a dynamic pricing environment [removed: in bromine derivatives] and an ever-changing landscape in electronics, [removed: to] the continuous need for cutting edge catalysts and technology by our refinery [removed: customers, diverse energy storage needs including exciting opportunities in electric vehicles,] [added: 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, [removed: significant deleveraging,] optimizing and improving the value of our portfolio [added: primarily] through pricing and product development, managing costs and delivering value to our [removed: customers.][added: customers and shareholders.]

We believe that our businesses remain [removed: positioned] [added: well-positioned] to capitalize on new business opportunities and long-term trends driving growth within our end markets and to respond quickly to [removed: improved] [added: changes in] economic [removed: conditions.][added: conditions in these markets.]

Lithium and Advanced Materials: We expect continued strong [added: year over year] growth [added: for the remainder of 2018] in [removed: 2017,] [added: Lithium,] led by [added: continued strong] demand in battery-grade [removed: applications and continued] [added: applications,] price improvement [removed: in Lithium.][added: and increased conversion capacity.]

[removed: While we expect further negative impacts from the bankruptcy filing in 2017, we] [added: We] expect PCS profitability to stabilize in [removed: 2017] [added: 2018] due to productivity gains and increased volumes due to market demand, offset [removed: slightly] by unfavorable pricing due to excess supply.

On a longer term basis, we believe that demand for lithium will continue to grow as new applications for lithium power continue to be developed and the use of plug-in hybrid electric vehicles and battery electric vehicles [removed: escalates.][added: escalates, against a favorable backdrop of steadily declining electric battery costs, increasing electric battery performance and constructive global public policy toward acceptance of e-mobility/renewables.]

In [removed: addition,] [added: PCS,] we expect growth in [removed: PCS from] [added: the organometallic business due to] growing global demand for plastics driven by rising standards of living and infrastructure [removed: spending, particularly in Asia and the Middle East.][added: spending.]

We expect to see relatively flat growth on net sales and profitability in [removed: 2017.][added: 2018.]

While it is possible oil prices could rebound some in [removed: 2017,] [added: 2018,] the short-term impact will be to [added: increase] raw material [removed: cost.][added: costs.]

Offshore well completions lag oil pricing, [removed: which] [added: so any benefit in completion fluid volumes] would likely extend [removed: beyond 2017.][added: into 2019.]

We are expecting relatively stable fire safety and other derivative net sales and profits in [removed: 2017.][added: 2018.]

On a longer term basis, we believe increased global demand for transportation [removed: fuels from a growing population and increasing mobility] [added: fuels, new refinery start-ups] and [removed: the implementation] [added: ongoing adoption] of [removed: more stringent fuel quality requirements] [added: cleaner fuels] will [removed: drive] [added: be the primary drivers of] growth in our Refining Solutions business.

[removed: Delivering superior end-use performance continues to be the most effective way to create sustainable value in the refinery catalysts industry, and we] [added: We] believe our technologies continue to provide significant performance and financial benefits to refiners challenged to meet tighter regulations around the world, [added: 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.

We expect the next few years to be a [removed: challenging] [added: challenge] for fine chemistry services due to a challenging agriculture industry environment, as well as customer order timing in pharmaceuticals.

[removed: Corporate:] In the first quarter of [removed: 2017,] [added: 2018,] we increased our quarterly dividend rate to [removed: $0.32] [added: $0.335] per share.

[added: Corporate:] We continue to focus on cash generation, working capital management and process efficiencies.

We expect our global effective tax rate for [removed: 2017] [added: 2018] to be [removed: approximately 22.0%;] [added: between 23% and 24%;] however, our rate will vary based on the locales in which income is actually earned and remains subject to potential volatility from changing legislation in the [removed: United States] [added: U.S.] and other tax jurisdictions.

Results for the year ended December 31, [removed: 2016] [added: 2017] include an actuarial [removed: loss] [added: gain] of [removed: $26.7] [added: $11.4] million [removed: ($18.3] [added: ($7.3] million after income taxes), as compared to a [removed: gain] [added: loss] of [removed: $30.1] [added: $26.7] million [removed: ($21.4] [added: ($18.3] million after income taxes) from continuing operations for the year ended December 31, [removed: 2015.][added: 2016.]

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2016] [added: 2017] vs. [removed: 2015] [added: 2016] | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | |

| NET SALES | $ | [removed: 2,677,203] [added: 3,071,976] | | | $ | [removed: 2,826,429] [added: 2,677,203] | | | $ | [removed: 2,445,548] [added: 2,826,429] | | | [removed: (5] [added: 15] | [removed: )%] [added: %] | | [removed: 16] [added: (5] | [removed: %] [added: )%] |

| Cost of goods sold | [removed: 1,706,627] [added: 1,961,996] | | | | [removed: 1,966,196] [added: 1,706,627] | | | | [removed: 1,674,700] [added: 1,966,196] | | | | [removed: (13] [added: 15] | [removed: )%] [added: %] | | [removed: 17] [added: (13] | [removed: %] [added: )%] |

| GROSS PROFIT | [removed: 970,576] [added: 1,109,980] | | | | [removed: 860,233] [added: 970,576] | | | | [removed: 770,848] [added: 860,233] | | | | [removed: 13] [added: 14] | % | | [removed: 12] [added: 13] | % |

| GROSS PROFIT MARGIN | [removed: 36.3] [added: 36.1] | | % | | [removed: 30.4] [added: 36.3] | | % | | [removed: 31.5] [added: 30.4] | | % | | | | | | |

| Selling, general and administrative expenses | [removed: 380,464] [added: 437,901] | | | | [removed: 300,440] [added: 380,464] | | | | [removed: 355,135] [added: 300,440] | | | | [removed: 27] [added: 15] | % | | [removed: (15] [added: 27] | [removed: )%] [added: %] |

| Research and development expenses | [removed: 80,475] [added: 84,330] | | | | [removed: 89,187] [added: 80,475] | | | | [removed: 88,310] [added: 89,187] | | | | [removed: (10] [added: 5] | [removed: )%] [added: %] | | [removed: 1] [added: (10] | [removed: %] [added: )%] |

| Restructuring and other, net | — | | | | [removed: (6,804] [added: —] | | [removed: )] | | [removed: 25,947] [added: (6,804] | | [added: )] | | [removed: (100] [added: —] | [removed: )%] [added: %] | | [removed: (126] [added: (100] | )% |

2017 Highlights

| • | We announced the approval for the expansion of lithium concentrate production at our Greenbushes, Australia site through our 49% owned Talison joint venture. Commissioning of the expansion is expected to begin in the second quarter of 2019 and would more than double the current lithium carbonate capacity. |

| • | We completed a $250 million accelerated share repurchase (“ASR”) program, receiving and retiring 2,341,083 shares of our common stock pursuant to the terms of the ASR agreement and our share repurchase program. |

| • | We announced that we have developed an innovative technology that could lead to a sustainable increase in total lithium production in Chile to as much as 125,000 metric tons of lithium carbonate equivalent annually, without the need for additional brine pumping at the Salar de Atacama. As a result of this development, we have requested that Chile’s Economic Development Agency (“CORFO”) increase our lithium quota. As of the date of this Annual Report, CORFO is yet to conclude on the Company’s request. |

| • | In November 2017, we announced that during the first quarter of 2018, the PCS product category will merge with the Refining Solutions reportable segment to form a global business focused on catalysts. As a result, our three reportable segments will include: (1) Lithium, (2) Bromine Specialties and (3) Catalysts. |

| • | On December 14, 2017, we signed a definitive agreement to sell the polyolefin catalysts and components portion of our PCS business to W.R. Grace & Co. for proceeds of approximately $416 million in cash. The transaction includes Albemarle’s Product Development Center located in Baton Rouge, Louisiana, and operations at its Yeosu, South Korea site, and is expected to close in the first quarter of 2018. |

| • | We announced a new technology for the FCC catalyst market called Granite™. The Granite™ technology expands the catalyst formulation window and enables refiners to maximize their profitability through better bottoms upgrading, improved coke selectivity, and higher zeolite stability while achieving targeted product yields. |

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 continues to accelerate, providing the opportunity to continue to develop high quality and innovative products while managing the high cost of expanding capacity.

In 2017, our operations were managed and reported under three reportable segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions.

Financial results and discussion about our segments included in this Annual Report on Form 10-K are organized according to these categories except where noted.

In 2017, PCS experienced weaker profitability due to pricing pressure and the impact of hurricane Harvey, partially offset by

productivity and cost savings initiatives.

Our long-term outlook is also bolstered by our successful negotiation of long-term supply agreements with a number of strategic customers, reflecting our standing as a preferred global lithium partner due to our scale, access to geographically diverse, low cost resources and long-term execution track record.

On December 14, 2017, we signed a definitive agreement to sell the polyolefin catalysts and components portion of the PCS business to W.R. Grace & Co. for proceeds of approximately $416 million in cash.

The sale is expected to close in the first quarter of 2018, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities.

In addition, during the first quarter of 2018, the PCS product category will merge with the Refining Solutions reportable segment to form a global business focused on catalysts and be reported in a separate reportable segment.

Bromine Specialties: The Bromine Specialties business had a solid 2017, with strong volume growth in fire safety and other derivatives driving double digit earnings growth year over year.

Refining Solutions: Following a year of significant increases in the number of “Hydro treating unit” catalyst change-outs and marked improvement in catalyst product mix, our CFT business performed as expected.

Our FCC business also performed as expected, despite impacts from hurricane Harvey.

Both businesses faced headwinds from rising raw material costs in 2017 and we expect that trend to continue in 2018.

We believe delivering superior end-use performance continues to be the most effective way to create sustainable value in the refinery catalysts industry.

All Other: The fine chemistry services business will continue to be reported outside the Company’s reportable segments as it does not fit in the Company’s core businesses.

In December 2017, the TCJA was signed into law in the U.S., which among other things, lowers the U.S.

corporate income tax rate from 35% to 21%, implementing a territorial tax system for non-U.S. earnings and imposing a one-time transition tax on the undistributed earnings of certain non-U.S. subsidiaries.

We also anticipate the potential for increased volatility in future effective tax rates from the continuing impact of the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-09, which was adopted in the first quarter of 2017.

During 2017, we received and retired approximately 2.3 million shares of our common stock under our share repurchase program and the ASR agreement, and we may periodically repurchase shares in the future on an opportunistic basis as approved by our share repurchase program.

Comparison of 2017 to 2016

Net sales increased due to $272.2 million of higher volumes, $157.8 million of favorable pricing impacts and $3.4 million of favorable currency exchange impacts, partially offset by the $38.6 million impact of the sale of the minerals-based flame retardants and specialty chemicals business.

Included in Cost of goods sold for the year ended December 31, 2017 are: (1) a $23.1 million charge related to the markup of inventory purchased as part of the acquisition of the lithium hydroxide and lithium carbonate conversion business of Jiangli New Materials; (2) $14.3 million of acquisition and integration related costs resulting from the Jiangli New Materials acquisition; and (3) restructuring costs of $2.9 million related to a plan to reduce costs at several locations.

In addition, gross profit decreased $3.1 million related to the divested minerals-based flame retardants and specialty chemicals business in the first quarter of 2016.

Excluding the impact of these items, gross profit increased by $182.8 million, or 19%, due primarily to higher overall sales volumes and favorable price impacts, partially offset by increased costs in Lithium and a $15.4 million negative impact from hurricane Harvey.

Overall, these factors contributed to a gross profit margin for the years ended December 31, 2017 and 2016 of 36.1% and 36.3%, respectively.

Excluding the impact of the charges noted above, gross profit margin was 37.4% for the year ended December 31, 2017 as compared to 36.7% for the year ended December 31, 2016.

In addition, the year ended December 31, 2017 includes $19.6 million of acquisition and integration related costs, primarily resulting from the acquisition of Jiangli New Materials, $8.4 million of restructuring costs related to several locations, primarily our Lithium sites in Germany and $3.3 million of multiemployer plan financial improvement plan shortfall contributions for our employees.

Excluding the impact of these charges and the mark-to-market actuarial gains and losses, SG&A expenses increased by $61.2 million, or 17%, primarily due to increased compensation costs, Lithium growth spending and professional fees, partially offset by savings from our restructuring.

Included in R&D expenses for the year ended December 31, 2017 are $5.7 million of restructuring costs related to our Lithium sites in Germany.

Acquisition and integration related costs for the year ended December 31, 2017 are reported in Cost of goods sold and SG&A expenses, as noted above.

Interest and financing expenses for the year ended December 31, 2017 increased $50.2 million to $115.4 million from the corresponding 2016 period, due mainly to a loss of $52.8 million on early extinguishment of debt related to the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the repayment of the 3.00% Senior notes in full, €307.0 million of the 1.875% Senior notes and $174.7 million of the 4.50% Senior notes.

During the year ended December 31, 2017, we recorded a $28.7 million reserve recorded against a note receivable in one of our European entities no longer deemed probable of collection, $3.2 million of asset retirement obligation charges related to the revision of an estimate at a site formerly owned by Albemarle, losses of $4.1 million related to the final settlements of previously disposed businesses and the revision of tax indemnification expenses of $3.7 million primarily related to the filing of tax returns and a competent authority agreement for a previously disposed business.

| • | Effective January 1, 2016, our former Performance Chemicals reportable segment was split into two separate reportable segments: (1) Lithium and Advanced Materials and (2) Bromine Specialties. This split did not affect the existing Refining Solutions reportable segment. |

| • | On January 4, 2016, we closed the sale of the metal sulfides business for cash proceeds of approximately $137 million and recorded a gain of $11.5 million before income taxes in 2016 related to the sale. |

| • | We were granted approval by the Environmental Assessment Commission of the Antofagasta Region to increase our currently authorized lithium brine extraction rate at the Company's facility in the Salar de Atacama, Chile. |

| • | We amended our lithium production rights agreement with the Chilean Economic Development Agency (“CORFO”) to provide us with sufficient lithium to support the production of technical and battery grade lithium carbonate and lithium chloride over a 27-year period at our expanding battery grade manufacturing facilities in La Negra, Antofagasta. |

| • | We announced that we are discontinuing production of hexabromocyclododecane (“HBCD”)-based flame retardants to focus on supplying GreenCrest® polymeric fire safety solutions, a sustainable alternative to HBCD. |

| • | We relocated our corporate and principle executive headquarters from Baton Rouge, LA to Charlotte, NC. |

| • | We entered an agreement with Bolland Minera S.A., for the exclusive exploration and acquisition rights to a lithium resource in Antofalla, within the Catamarca Province of Argentina. |

| • | On December 14, 2016, we completed the sale of the Chemetall Surface Treatment business to BASF SE for cash proceeds of approximately $3.1 billion, net of purchase price adjustments, and recorded an after-tax gain of $135.0 million in 2016 related to the sale. |

| • | We repaid the $1.25 billion September 2015 Term Loan Agreement in full, primarily with proceeds from the sales of the Chemetall Surface Treatment business, the metal sulfides business and the minerals-based flame retardants and specialty chemicals business. |

| • | On December 31, 2016, we completed the acquisition of the lithium hydroxide and lithium carbonate conversion business of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. for a purchase price of approximately $145 million. |

Additionally, we achieved our goal regarding synergies from the acquisition of the Rockwood businesses.

On December 14, 2016, we completed the sale of the Chemetall Surface Treatment business to BASF SE for cash proceeds of approximately $3.1 billion, net of purchase price adjustments.

A portion of the proceeds have been used to reduce leverage, while the remaining proceeds are expected to be used to invest in growth of the remaining businesses and to return capital to shareholders.

PCS experienced weaker profitability in 2016 due to weakness in the curatives market and the bankruptcy filing of one of our customers which resulted in a $10 million impact to Income from continuing operations before income taxes and adjusted EBITDA during the year.

Bromine Specialties: The Bromine Specialties business had a solid 2016, with the lack of the methyl bromide product net sales more than offset by volume growth in fire safety and other derivatives, as well as lower variable costs.

Refining Solutions: Following the downturn in 2015 (primarily caused by cash preservation measures from oil companies, triggered by oil price volatility), in 2016 we saw a significant increase in the number of “Hydro treating unit” catalyst change-outs and related catalyst demand.

In addition to catalyst demand increase, we also saw a marked improvement in catalyst product mix year over year.

Despite ongoing uncertainty of oil prices and the ensuing impact on crude slates used by refiners and resulting demand for catalysts, we expect sustained performance in our clean fuels technology business driven by refining change-outs and balanced product mix.

We also expect solid performance from our heavy oil upgrading division despite a number of scheduled maintenance shutdowns and plant turnarounds at refiners, which could dampen heavy oil upgrading demand in 2017.

We also anticipate headwinds from rising raw material costs in 2017 following historically low prices in 2016.

All Other: During the first quarter of 2016, we closed the previously announced sales of the metal sulfides business and the minerals-based flame retardants and specialty chemicals business.

The cash generated from the sale of these businesses was used to reduce borrowings outstanding under the September 2015 Term Loan Agreement.

In April 2016, we concluded that we would suspend efforts to sell the fine chemistry services business.

This business will continue to be reported outside the Company’s reportable segments.

* Percentage calculation is not meaningful.

operating decision maker to evaluate performance and make resource allocation decisions.

Results for 2015 have been recast to reflect the change in segments previously noted.

| 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income (loss) attributable to Albemarle Corporation | $ | 148,821 | | | $ | 186,474 | | | $ | 161,585 | | | $ | 496,880 | | | $ | 32,781 | | | $ | (194,755 | ) | | $ | 334,906 | |

| Depreciation and amortization | 84,069 | | | | 36,179 | | | | 34,039 | | | | 154,287 | | | | 18,183 | | | | 8,703 | | | | 181,173 | | |

| Adjusted EBITDA | $ | 312,867 | | | $ | 222,653 | | | $ | 197,595 | | | $ | 733,115 | | | $ | 53,993 | | | $ | (31,108 | ) | | $ | 756,000 | |

The foreign transaction gains are primarily related to cash denominated in U.S. Dollars held by foreign subsidiaries where the European Union Euro serves as the functional currency

Comparison of 2015 to 2014

Approximately $591.0 million of the increase was attributable to the impact of the Rockwood acquisition.

Excluding the acquisition of Rockwood, net sales decreased by $210.1 million primarily due to $106.5 million of unfavorable sales volumes, $87.7 million of unfavorable impacts from currency translation and $15.8 million of unfavorable price impacts due to market conditions and portfolio mix.

The unfavorable sales volumes were due to lower Clean Fuels Technologies, Fine Chemistry Services, and Bromine volumes partially offset by increased Heavy Oil Upgrading

and PCS sales volumes.

The unfavorable price impacts were primarily due to lower Refining Solutions, Fine Chemistry Services, and PCS prices partly offset by favorable price impacts for Bromine.

Excluding the $38.2 million increase in gross profit related to pension and OPEB plans, gross profit increased by $51.2 million due to $133.9 million of gross profit attributable to the performance of the acquired Rockwood business, which included a $55.9 million charge for the utilization of the inventory markup recorded as part of purchase accounting for the acquisition, partially offset by an $82.7 million decrease in gross profit due primarily to unfavorable impacts from currency translation, unfavorable price impacts due to market conditions and portfolio mix and lower overall sales volumes.

Overall, these factors contributed to a lower gross profit margin for the year ended December 31, 2015 of 30.4%, down from 31.5% in the corresponding period of 2014.

The primary currencies to which we have foreign currency exchange rate exposure are the Euro, Japanese Yen, Chinese Renminbi, South Korean Won, Australian [removed: Dollar and] [added: Dollar,] Chilean [removed: Peso.][added: Peso and Taiwan Dollar.]

Unless otherwise noted, gains and losses on foreign currency forward contracts are recognized currently in [added: Other (expenses)] income, [added: net,] and generally do not have a significant impact on results of operations.

At December 31, [removed: 2016,] [added: 2017,] our financial instruments subject to foreign currency exchange risk consisted of foreign currency forward contracts with an aggregate notional value of [removed: $251.6] [added: $357.4] million and with a fair value representing a net liability position of [removed: $0.2] [added: $5.0] million.

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 December 31, [removed: 2016,] [added: 2017,] with all other variables held constant.

A 10% appreciation of the U.S. Dollar against foreign currencies that we hedge would result in [removed: a decrease] [added: an increase] of approximately [removed: $7.9] [added: $12.5] 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 [removed: an increase] [added: a decrease] of approximately [removed: $6.0] [added: $14.9] 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 December 31, [removed: 2016,] [added: 2017,] without reflecting the effects of underlying anticipated transactions.

On December 18, 2014, the carrying value of our 1.875% Euro-denominated senior notes was designated as an effective hedge of our net investment in foreign subsidiaries where the Euro serves as the functional currency, and beginning on the date of designation, gains or losses on the revaluation of these senior notes to our reporting currency have been and will be recorded [removed: in accumulated other comprehensive income (loss).]

We had variable interest rate borrowings of [removed: $286.4] [added: $426.6] million and [removed: $1.7 billion] [added: $286.4 million] outstanding at December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] respectively.

These borrowings represented [removed: 11%] [added: 23%] and [removed: 44%] [added: 11%] of total outstanding debt and bore average interest rates of [removed: 1.35%] [added: 1.78%] and [removed: 1.51%] [added: 1.35%] at December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] respectively.

A hypothetical 10% increase (approximately [removed: 13] [added: 18] basis points) in the average interest rate applicable to these borrowings would change our annualized interest expense by approximately [removed: $0.4] [added: $0.8] million as of December 31, [removed: 2016.][added: 2017.]

in Accumulated other comprehensive loss.

[removed: On December 14, 2016, we completed the sale of the] [added: The] Chemetall® Surface Treatment [removed: business] [added: business, acquired as a part of Rockwood, was sold on December 14, 2016] to BASF SE for cash proceeds of approximately $3.1 billion, net of purchase price adjustments.

For additional [removed: information,] [added: information about these transactions,] see “Recent Acquisitions, Joint Ventures and Divestitures” beginning on page [removed: 9,] [added: 8, Note 2, “Acquisitions,”] and [removed: also] Note 3, “Divestitures,” to our consolidated financial statements included in Part II, Item 8 of this report.

On January 12, 2015 (the “Acquisition Closing Date”), we completed the acquisition [removed: (the “Merger”)] of Rockwood [removed: pursuant to an Agreement and Plan of Merger (the “Merger Agreement”)] [added: Holdings, Inc. (“Rockwood”)] for a purchase price of approximately $5.7 billion.

We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that [added: are designed to] meet [removed: customer] [added: our customers’] needs across a diverse range of end markets.

The end markets we serve include [added: energy storage,] petroleum refining, consumer electronics, [removed: energy storage,] construction, automotive, lubricants, pharmaceuticals, crop [removed: protection, food safety] [added: protection] and custom chemistry services.

During [removed: 2016,] [added: 2017,] we managed and reported our operations under three reportable segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions.

Financial results and discussion about our segments included in this Annual Report on Form 10-K are organized according to these categories except where [removed: noted.][added: noted otherwise.]

For financial information regarding our reportable segments, including revenues generated for each of the last three fiscal years from each of the product categories included in our reportable segments, and geographic area information, see Note [removed: 25,] [added: 24,] “Segment and Geographic Area Information,” to our consolidated financial statements included in Part II, Item 8 of this report.

As of December 31, [removed: 2016,] [added: 2017,] our Lithium and Advanced Materials segment consisted of two product categories: Lithium and [removed: Performance Catalyst Solutions.][added: PCS.]

We also develop and manufacture cesium products for the chemical and pharmaceutical industries, and zirconium, barium and titanium products for various pyrotechnical applications, including airbag [removed: igniters.][added: initiators.]

Competition in the global lithium market is [added: largely] based on product quality, product diversity, reliability of supply and customer service.

Our mineral rights with respect to the Salar de Atacama in Chile consist exclusively of our right to access lithium [removed: brine] [added: brine, covering an area of approximately 16,700 hectares,] pursuant to a long-term contract with the Chilean government, originally entered into in January 1975 by one of our predecessors and subsequently amended and restated.

In [removed: February] 2016, we [removed: announced that we] were granted approval by the Environmental Assessment Commission of the Antofagasta Region to increase our currently authorized lithium brine removal rate in the Salar de [removed: Atacama.][added: Atacama, in addition to amending our lithium production rights agreement with the Chilean Economic Development Agency (“CORFO”) to both extend the term of that agreement and increase our authorized lithium quota at our facility in the Salar de Atacama, Chile.]

The amended agreement provides us with sufficient lithium to produce over 80,000 metric tons annually of technical and battery grade lithium salts over the next [removed: 27] [added: 26] years at our expanding battery grade manufacturing facilities in La Negra, [removed: Antofagasta.][added: Chile.]

Our mineral rights in Silver Peak, Nevada consist of our right to access lithium brine pursuant to our permitted and [removed: certificated] [added: certified] senior water rights, a settlement agreement with the U.S. government, originally entered into in June 1991, and our patented and unpatented land claims.

The remaining acres are owned by the U.S. government from whom we lease the land pursuant to [removed: an] unpatented land [removed: claim and lease agreement which is] [added: claims that are] renewed annually.

Based on our [removed: 2016] [added: 2017] production levels, we believe that the amount of lithium brine we can economically obtain from our Silver Peak, Nevada site pursuant to our rights could support the current levels of lithium carbonate production for approximately 20 years.

Talison, through its wholly-owned subsidiaries, owns and operates a lithium mine in Greenbushes, Western Australia and mines lithium ore, which is then milled and processed to separate lithium [added: concentrate from the rest of the ore.]

The ore is processed into battery-grade lithium carbonate and lithium hydroxide at our Jiangxi and Sichuan, China facilities, which were recently acquired [added: by us] from Jiangxi Jiangli New Materials Science and Technology Co. Ltd. [removed: Talison currently sells the lithium concentrate to its shareholders.][added: (“Jiangli New Materials”).]

Talison has a leading position in two categories of lithium concentrates: (i) technical-grade lithium concentrates which have low iron content for use in the manufacture of glass, ceramics and heat-proof cookware; and (ii) a high-yielding chemical-grade lithium concentrate, used to produce lithium chemicals which form the basis for the manufacture of lithium-ion batteries for laptop [removed: computers, mobile phones, electric bicycles and electric vehicles.]

Assuming certain operating conditions are satisfied, the annual lithium [removed: concentrate] [added: carbonate equivalent] production capacity at the Talison facility is estimated to be approximately [removed: 575,000] [added: 80,000] metric tons.

Performance Catalyst [removed: Solutions (“PCS”).][added: Solutions.]

We have [removed: four] [added: three significant] product lines in our PCS division: [added: organometallics,] polymer [removed: catalysts, curatives, organometallics] [added: catalysts] and [removed: electronic materials.][added: curatives.]

Our major competitors in the PCS market include AkzoNobel, [removed: Chemtura Corporation] [added: Lanxess AG] and W.R. Grace & Co. in the polyolefin catalysts and co-catalysts areas.

Our most significant competitors are [removed: Chemtura Corporation] [added: Lanxess AG] and Israel Chemicals Ltd.

[removed: In addition, through our 50% interest in Jordan Bromine Company] Limited (“JBC”), a consolidated joint venture with operations in Safi, Jordan, we source bromine from the Dead Sea, which is believed to have indefinite quantities of brine.

Our two main product lines in this segment are (i) Clean Fuels [removed: Technologies,] [added: Technologies (“CFT”),] which is primarily composed of hydroprocessing catalysts [removed: (“HPC”),] [added: (“HPC”) together with isomerization] and [added: akylation catalysts, and] (ii) [removed: Heavy Oil Upgrading (“HOU”), which is primarily composed of] fluidized catalytic cracking (“FCC”) catalysts and additives.

FCC catalysts assist in the high yield cracking of [removed: less desired] refinery petroleum streams into derivative, higher-value products such as transportation fuels and petrochemical feedstocks like propylene.

In addition, we estimate that there are approximately 3,200 HPC units being operated globally, or a capacity of approximately [removed: 45] [added: 46] million barrels per day, each of which typically requires replacement HPC catalysts once every one to four years.

Our Refining Solutions segment serves the global market including the Americas, Asia, Europe and the Middle East, each of which is highly [removed: competitive.][added: competitive and driven by different factors.]

Our major competitors in the [removed: HPC] [added: CFT] catalysts market include Criterion Catalysts and Technologies, Advanced Refining Technologies and Haldor Topsoe.

Complementing this program are regional Albemarle sales personnel around the world who serve numerous additional customers [removed: around the world.][added: globally.]

We also utilize commissioned sales representatives and specialists in specific market [removed: areas, some of which are affiliated with subsidiaries of large chemical companies.][added: areas.]

Our green chemistry efforts focus on the development of products [removed: that benefit society] in a manner that minimizes waste and the use of raw materials and energy, avoids the use of toxic reagents and solvents and [removed: is produced in] [added: utilizes] safe, environmentally friendly manufacturing processes.

The objective of [removed: the Lithium] [added: our] research and development [removed: effort was] [added: efforts is] to develop innovative chemistries and technologies with applications relevant within targeted key [removed: markets.][added: markets through both process and new]

We incurred research and development expenses of [removed: $80.5] [added: $84.3] million, [removed: $89.2] [added: $80.5] million and [removed: $88.3] [added: $89.2] million during [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] respectively.

As of December 31, [removed: 2016,] [added: 2017,] we owned approximately 2,100 active patents and approximately 800 pending patent applications in key strategic markets worldwide.

We finished [removed: 2016] [added: 2017] with an OSHA occupational injury and illness incident rate of [removed: 0.53] [added: 0.63] for Albemarle employees and nested contractors, compared to [removed: 0.60] [added: 0.53] in [removed: 2015.][added: 2016.]

Our significant manufacturing presence and sales activities in the European Union [removed: requires] [added: require] significant compliance costs and may result in increases in the costs of raw materials we purchase and the products we sell.

In June 2016, modifications to the Toxic Substances Control Act (“TSCA”) in the U.S. were signed into law, requiring chemicals to be assessed against a risk-based safety standard and [added: calling] for the elimination of unreasonable risks identified during risk evaluation.

As of December 31, 2017, we served approximately 2,500 customers, none of which individually represents more than 10% of net sales of the Company, in approximately 100 countries.

In November 2017, we announced that during the first quarter of 2018, the Performance Catalyst Solutions ("PCS") product category will merge with the Refining Solutions reportable segment to form a global business focused on catalysts.

As a result, our three reportable segments will include: (1) Lithium, (2) Bromine Specialties and (3) Catalysts.

The agreement provides for commission payments to the Chilean government based on sales price/MT and our support of research and development in Chile in lithium applications and solar energy.

In September 2017, we announced that we have developed an innovative technology that could lead to a sustainable increase in total lithium production in Chile to as much as 125,000 metric tons of lithium carbonate equivalent annually, without the need for additional brine pumping at the Salar de Atacama.

As a result of this development, we have requested that CORFO increase our lithium quota.

As of the date of this Annual Report, CORFO is yet to conclude on the Company’s request.

We also own a 49% interest in Windfield Holdings Pty.

Ltd., which directly owns 100% of the equity of Talison Lithium Pty.

Ltd., a company incorporated in Australia (“Talison”).

Talison currently sells the lithium concentrate to its shareholders.

computers, mobile phones, electric bicycles and electric vehicles.

On December 14, 2017, we signed a definitive agreement to sell the polyolefin catalysts and components portion of the PCS business to W.R. Grace & Co. for proceeds of approximately $416 million in cash.

The transaction includes Albemarle’s Product Development Center located in Baton Rouge, Louisiana, and operations at the Yeosu, South Korea site.

The transaction does not include the organometallics or curatives portion of the PCS business.

The sale is expected to close in the first quarter of 2018, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities.

In addition, through our 50% interest in Jordan Bromine Company

In 2017, the total number of refineries world wide remained at 615.

Over the long-term, we expect to see some smaller refineries shutting down and being replaced by larger scale and more complex refineries, with growth concentrated in the Middle East and Asia.

product development.

On December 14, 2017, we signed a definitive agreement to sell the polyolefin catalysts and components portion of our PCS business to W.R. Grace & Co. for proceeds of approximately $416 million in cash.

The transaction includes Albemarle’s Product Development Center located in Baton Rouge, Louisiana, and operations at our Yeosu, South Korea site.

The sale does not include the organometallics or curatives portion of the PCS business.

The sale of the polyolefin catalysts business and components reflects our commitment to investing in the future growth of our high priority businesses and returning capital to shareholders.

The sale is expected to close in the first quarter of 2018, subject to the satisfaction of customary closing conditions, including approvals from regulatory authorities.

The Chemetall Surface Treatment business was acquired on January 12, 2015 as part of the acquisition of Rockwood Holdings, Inc. (“Rockwood”).

For additional information about the Merger, see “Recent Acquisitions, Joint Ventures and Divestitures” beginning on page 9, and also Note 2, “Acquisitions,” to our consolidated financial statements included in Part II, Item 8 of this report.

As of December 31, 2016, we served approximately 3,000 customers in approximately 100 countries.

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| Albemarle Corporation and Subsidiaries | | |

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Lithium—Customers

Our most significant customers include Panasonic Corporation, Umicore S.A., Binova International Co. Ltd., Samsung SDI Co. Ltd. and Corning Inc., among others.

Our contract with the Chilean government will remain in effect until the date on which we have produced and sold 200,000 metric tons of lithium in any of its forms from the Salar de Atacama.

As of December 31, 2016, the remaining amount of lithium we were permitted to sell under the contract equaled approximately 115,000 metric tons of total lithium.

The size of the area at the Salar de Atacama covered by our claims is approximately 16,700 hectares.

We currently own the land on which we operate our facility at the Salar de Atacama and our processing facility in La Negra.

However, the ownership of the land at the Salar de Atacama will revert to the Chilean government once we have sold all amounts of lithium remaining under our contract with the Chilean government (the ownership of the land and fixed assets in La Negra will remain unchanged).

In December 2016, we also announced that we amended our lithium production rights agreement with the Chilean Economic Development Agency (“CORFO”) to both extend the term of that agreement and increase our authorized lithium quota at our facility in the Salar de Atacama, Chile.

We also own a 49% interest in Windfield Holdings Pty Ltd, which directly owns 100% of the equity of Talison Lithium Pty Ltd, a company incorporated in Australia (“Talison”).

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| Albemarle Corporation and Subsidiaries | | |

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concentrate from the rest of the ore.

In electronic materials, we manufacture and sell high purity metal organic products into electronic applications such as the production of light-emitting diodes (“LEDs”) for displays and general lighting, as well as other products used in the production of solar cells.

PCS—Customers

Our PCS business customers include multinational corporations such as ExxonMobil Corporation, Chevron Corporation, Total Petrochemicals, Saudi Basic Industries Corporation and INEOS Group Holdings S.A. There are thousands of polyolefin and elastomer units worldwide which require a constant supply of co-catalysts and finished catalysts.

Customers

Our bromine business offers more than 40 products to a variety of end markets.

We sell our products mostly to chemical manufacturers and processors, such as polymer resin suppliers, drilling and oil service companies, beef and poultry processors, water treatment and photographic companies, energy producers and other specialty chemical companies.

Sales of bromine and brominated derivatives in Asia are expected to grow long-term due primarily to the underlying growth in consumer demand.

In response to this development, we have established a sales and marketing network in China, Japan, Korea and Singapore with products sourced from the U.S., Europe, China and the Middle East.

In addition, we have a joint venture with Weifang Sinobrom Import and Export Company, Ltd. (“Sinobrom”) in China that allows us the option to source bromine directly from China’s Shandong Province brine fields.

Customers

Our Refining Solutions segment customers include multinational corporations such as ExxonMobil Corporation, Chevron Corporation, TOTAL S.A., Saudi Aramco and its joint ventures, and INEOS Group Holdings S.A.; independent petroleum refining companies such as Valero Energy Corporation, SK Energy Holdings, Reliance Industries and Marathon Petroleum; national petroleum refining companies such as Petróleo Brasileiro S.A., Petróleos Mexicanos, Kuwait National Petroleum Company, Abu Dhabi National Oil Company and Indian Oil Corp.

In 2016, the total number of refineries world wide was reduced from 634 to 615 and we see this trend continuing with smaller refineries shutting down and being replaced by mega refineries, with growth concentrated in the Middle East and Asia.

Research and development efforts are generally focused on both process development (e.g., pilot plant for the recycling of lithium ion batteries) as well as new product development (e.g., for lithium ion battery applications).

PCS research efforts are focused on catalyst performance, improving and extending our line of curing agents and formulations, as well as process improvements.

The focus of research in Bromine Specialties is divided among new and improved flame retardants and new uses for bromine and bromine-based products.

Fire safety solutions research is focused primarily on developing new flame retardants which not only meet the higher performance requirements required by today’s polymer producers, formulators and original equipment manufacturers but which also have superior toxicological and environmental profiles.

Another area of research is the development of bromine-based products for use as biocides in industrial water treatment and food safety applications and as additives used to reduce mercury emissions from coal-fired power plants.

We are involved in litigation incidental to our business and are a party to a number of legal actions and claims, various governmental proceedings and private civil lawsuits, including, but not limited to, those related to environmental and hazardous material exposure matters, product liability, and breach of contract.

Some of the legal proceedings include claims for compensatory as well as punitive damages.

While the final outcome of these matters cannot be predicted with certainty, considering, among other things, the legal defenses available and liabilities that have been recorded along with applicable insurance, it is currently the opinion of management that none of these pending items will have a material adverse effect on our financial condition, results of operations or liquidity.

| | | |

| --- | --- | --- |

| | | |

| Albemarle Corporation and Subsidiaries | | |

| | | |

Following receipt of information regarding potential improper payments being made by third party sales representatives of our Refining Solutions business, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the FCPA, 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 to the U.S. DOJ and SEC, and intend to cooperate with the DOJ and SEC in their review of these matters.

In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures.

At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ or SEC.

We also are unable to predict what, if any, action may be taken by the DOJ or SEC or what penalties or remedial actions they may seek.

Any determination that our operations or activities are not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses.

We do not believe, however, that any fines, penalties, disgorgement, equitable relief or other losses would have a material adverse effect on our financial condition or liquidity.

An unexpected adverse resolution of one or more of these items, however, could have a material adverse effect on our financial condition, results of operations or liquidity in that particular period.

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.

For the fiscal year ended December 31, [removed: 2016][added: 2017]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or a] smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated filer,” [removed: and] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| [removed: Large accelerated filer | x | | Accelerated filer | ¨ | |] Non-accelerated filer | [added: |] ¨ | | Smaller reporting company | [added: |] ¨ |

The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant was approximately [removed: $8.9] [added: $11.7] billion based on the [removed: reported] last [added: reported] sale price of common stock on June 30, [removed: 2016,] [added: 2017,] the last business day of the registrant’s most recently completed second quarter.

Number of shares of common stock outstanding as of February 20, [removed: 2017: 112,566,316][added: 2018: 110,638,449]

Portions of Albemarle Corporation’s definitive Proxy Statement for its [removed: 2017] [added: 2018] Annual Meeting of Shareholders to be filed with the [added: U.S.] Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, are incorporated by reference into [removed: Parts II and] [added: Part] III of this Form 10-K.

Year Ended December 31, [removed: 2016][added: 2017]

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10-K 1 a1231201710-kdocument.htm 10-K

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| Large accelerated filer | | x | | Accelerated filer | | ¨ |

| | | | | 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.

| [PART I](#s5F5AAF297E2F5E3AB878D8B01A49749C) | | |

| [PART II](#sDCF26996705452699BF5AF58E9AC3926) | | |

| [PART IV](#s75E77166F192500E92B2C14C370B294D) | | |

| | [Signatures](#sAEDB8AC49C67576BAFC2881EECC7EAE6) | [124](#sAEDB8AC49C67576BAFC2881EECC7EAE6) |

10-K 1 a1231201610-kdocument.htm 10-K

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| [PART I](#s32AC759AC6D9A8C0776B0FEF0667379F) | | |

| [PART II](#sC81286AD125F43931A1B0FEF07B3F4AB) | | |

| [PART IV](#s3D166697F5F17C938C010FEF14B9D83D) | | |

| | [Signatures](#sCBF903377DE5985E11AA0FEF1512AAC3) | [122](#sCBF903377DE5985E11AA0FEF1512AAC3) |

[removed: Our] [added: We operate globally, with our] principal executive offices [added: located] in Charlotte, NC, our corporate office [added: located] in Baton Rouge, LA and regional shared services offices [added: located] in Budapest, Hungary and Dalian, [removed: China are leased.][added: China.]

During [removed: 2016,] [added: 2017,] the Company’s manufacturing plants operated at approximately [removed: 71% capacity] [added: 73% capacity,] in the aggregate.

Set forth below is information regarding our significant production facilities operated by [removed: our affiliates] [added: us] and [removed: us:][added: our affiliates:]

| Location | | Business Segment [added: in 2017] | | Principal Use | | Owned/Leased |

| Amsterdam, the Netherlands | | Refining [removed: Solutions] [added: Solutions(a)] | | Production of refinery catalysts, research and product development activities | | Owned |

| Baton Rouge, Louisiana | | Lithium and Advanced [removed: Materials;] [added: Materials(b);] Bromine Specialties | | Research and product development activities, and production of flame retardants, catalysts and additives | | Owned; on leased land |

| Bitterfeld, Germany | | Refining [removed: Solutions] [added: Solutions(a)] | | Refinery catalyst regeneration, rejuvenation, and sulfiding | | Owned by Eurecat S.A., a joint venture owned 50% by each of [removed: IFP Investissements] [added: Axens Group] and us |

| Cambridge, U.K. | | Lithium and Advanced [removed: Materials] [added: Materials(a)] | | Production of performance catalysts | | Leased |

| Jubail, Saudi Arabia | | Lithium and Advanced [removed: Materials] [added: Materials(a)] | | Manufacturing and marketing of organometallics | | Owned by Saudi Organometallic Chemicals Company LLC, a joint venture owned 50% by each of Saudi Specialty Chemicals Company (a SABIC affiliate) and us |

| Kings Mountain, North Carolina | | Lithium and Advanced Materials | | Production of technical and battery grade lithium [removed: hydroxide] [added: hydroxide, lithium salts and battery grade lithium metal products] | | Owned |

| Langelsheim, Germany | | Lithium and Advanced Materials | | Production of butyllithium, lithium chloride, specialty products, lithium hydrides, [removed: cesium,] [added: cesium and] special metals | | Owned |

| Louvain-la-Neuve, Belgium | | Lithium and Advanced Materials; Bromine Specialties; Refining [removed: Solutions;] [added: Solutions(a);] All Other | | Regional offices and research and customer technical service activities | | Owned |

| La Voulte, France | | Refining [removed: Solutions] [added: Solutions(a)] | | Refinery catalysts regeneration and treatment, research and development activities | | Owned by Eurecat S.A., a joint venture owned 50% by each of [removed: IFP Investissements] [added: Axens Group] and us |

| Location | | Business Segment [added: in 2017] | | Principal Use | | Owned/Leased |

| McAlester, Oklahoma | | Refining [removed: Solutions] [added: Solutions(a)] | | Refinery catalyst regeneration, rejuvenation, pre-reclaim burn off, as well as specialty zeolites and additives marketing activities | | Owned by Eurecat S.A., a joint venture owned 50% by each of [removed: IFP Investissements] [added: Axens Group] and us |

| Mobile, Alabama | | Lithium and Advanced [removed: Materials] [added: Materials(a)] | | Production of tin stabilizers | | Owned by PMC Group, Inc. which operates the plant for Stannica LLC, a joint venture owned 50% by each of PMC Group Inc. and us |

| Niihama, Japan | | Refining [removed: Solutions] [added: Solutions(a)] | | Production of refinery catalysts | | Leased by Nippon Ketjen Company Limited, a joint venture owned 50% by each of Sumitomo Metal Mining Company Limited and us |

| Pasadena, Texas | | Lithium and Advanced [removed: Materials;] [added: Materials(a);] All Other | | Production of aluminum alkyls, alkenyl succinic anhydride, orthoalkylated anilines, and other specialty chemicals | | Owned |

| Pasadena, Texas | | Refining [removed: Solutions] [added: Solutions(a)] | | Production of refinery catalysts, research and development activities | | Owned |

| Pasadena, Texas | | Refining [removed: Solutions] [added: Solutions(a)] | | Refinery catalysts regeneration services | | Owned by Eurecat U.S. Incorporated, a joint venture in which we own a 57.5% interest and a consortium of entities in various proportions owns the remaining interest |

| Santa Cruz, Brazil | | Refining [removed: Solutions] [added: Solutions(a)] | | Production of catalysts, research and product development activities | | Owned by Fábrica Carioca de Catalisadores S.A, a joint venture owned 50% by each of Petrobras Química S.A.—PETROQUISA and us |

| Takaishi City, Osaka, Japan | | Lithium and Advanced [removed: Materials] [added: Materials(a)] | | Production of aluminum alkyls | | Owned by Nippon Aluminum Alkys, a joint venture owned 50% by each of Mitsui Chemicals, Inc. and us |

| Location | | Business Segment [added: in 2017] | | Principal Use | | Owned/Leased |

| Yeosu, South Korea | | Lithium and Advanced [removed: Materials] [added: Materials(b)] | | Research and product development activities/small scale production of catalysts and catalyst components | | Owned |

All of these properties are leased.

| (a) | During the first quarter of 2018, the PCS product category will merge with the Refining Solutions reportable segment to form the Catalysts reportable segment, a global business focused on catalysts. These significant production facilities will be part of the Catalysts reportable segment beginning in 2018. |

| --- | --- |

| (b) | Facility included in the sale of the polyolefin catalysts and components portion of the PCS business, which is expected to close in the first quarter of 2018. |

| | |

| --- | --- |

| | |

We operate on a global basis.

The names, ages and biographies of our executive officers, as of February 20, [removed: 2017,] [added: 2018,] are set forth below.

The term of office of each officer is until the meeting of the Board of Directors following the next annual shareholders’ meeting (May [removed: 12, 2017).][added: 8, 2018).]

| Luther C. Kissam IV | | [removed: 52] [added: 53] | | Chairman, President and Chief Executive Officer |

| Matthew K. Juneau | | [removed: 56] [added: 57] | | Executive Vice President, Corporate Strategy and Investor Relations |

| Karen G. Narwold | | [removed: 57] [added: 58] | | Executive Vice President, Chief Administrative Officer |

| Scott A. Tozier | | [removed: 51] [added: 52] | | Executive Vice President, Chief Financial Officer |

| Donald J. LaBauve, Jr. | | [removed: 50] [added: 51] | | Vice President, Corporate Controller, Chief Accounting Officer |

[removed: Kissam IV] [added: He] was elected as [removed: Chairman of the Board of Directors in November 2016, first elected to our Board of Directors effective November 2011, elected as] Chief Executive Officer effective September 2011 and as our President effective May 2013.

After five years in private practice, she served as Vice President, General Counsel, Human Resources [added: and Secretary of GrafTech International Ltd., a global graphite and carbon manufacturer and former subsidiary of Union]

Since joining the Company as Ethyl Corporation in April 1990, Mr. LaBauve has held various staff and leadership positions of increasing responsibility within the finance function, including an assignment to our European headquarters in Belgium in April [removed: 2000] [added: 2000,] where he held the regional finance leadership role from July 2002 through June 2005.

Kissam IV was elected as Chairman of the Board of Directors in November 2016.

Mr. Kissam was first elected to our Board of Directors effective November 2011.

On January 17, 2018, Mr. Juneau gave notice of his decision to retire from the Company in March 2018 following over 35 years of service.

Carbide.

and Secretary of GrafTech International Ltd., a global graphite and carbon manufacturer and former subsidiary of Union Carbide.

Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “ALB.” The following table sets forth on a per share basis the high and low sales prices for our common stock for the periods [removed: indicated] [added: indicated,] as reported on the NYSE composite transactions reporting [removed: system] [added: system,] and the dividends declared per share on our common stock.

There were [removed: 112,523,790] [added: 110,638,449] shares of common stock held by [removed: 2,661] [added: 2,532] shareholders of record as of [removed: December 31, 2016.][added: February 20, 2018.]

On February 23, [removed: 2017,] [added: 2018,] we declared a dividend of [removed: $0.32] [added: $0.335] per share of common stock, payable April [removed: 3, 2017.][added: 2, 2018.]

The information required by Item 201(d) of Regulation S-K is contained in our definitive Proxy Statement for our [removed: 2017] [added: 2018] Annual Meeting of Shareholders to be filed with the SEC pursuant to Regulation 14A under the Exchange Act, or the Proxy Statement, and is incorporated herein by reference.

The graph below shows the cumulative total shareholder return assuming the investment of $100 in our common stock on December 31, [removed: 2011] [added: 2012] and the reinvestment of all dividends thereafter.

[added: The information contained in the graph below is furnished] and therefore not to be considered “filed” with the SEC, and is not incorporated by reference into any document that incorporates this Annual Report on Form 10-K by reference.

[removed: ][added: ]

| 2017 | | | | | | | | | | | |

| First Quarter | $ | 107.56 | | | $ | 86.98 | | | $ | 0.32 | |

| Second Quarter | $ | 116.64 | | | $ | 103.42 | | | $ | 0.32 | |

| Third Quarter | $ | 137.48 | | | $ | 105.34 | | | $ | 0.32 | |

| Fourth Quarter | $ | 144.99 | | | $ | 126.31 | | | $ | 0.32 | |

We expect to continue to declare and pay dividends to our shareholders in the future, however, dividends are declared solely at the discretion of our Board of Directors and there is no guarantee that the Board of Directors will continue to declare dividends in the future.

| 2015 | | | | | | | | | | | |

| First Quarter | $ | 62.23 | | | $ | 46.78 | | | $ | 0.29 | |

| Second Quarter | $ | 64.99 | | | $ | 52.23 | | | $ | 0.29 | |

| Third Quarter | $ | 55.83 | | | $ | 41.37 | | | $ | 0.29 | |

| Fourth Quarter | $ | 57.99 | | | $ | 44.10 | | | $ | 0.29 | |

The information contained in the graph below is furnished

The information for the five years ended December 31, [removed: 2016,] [added: 2017,] is contained in the “Five-Year Summary” included in Part IV, Item 15, Exhibit 99.1 and incorporated herein by reference.

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 our internal control over financial reporting as of December 31, [removed: 2016.][added: 2017.]

Based on the assessment, management concluded that, as of December 31, [removed: 2016,] [added: 2017,] our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

To the Board of Directors and Shareholders of Albemarle [removed: Corporation:][added: Corporation]

In our opinion, the [removed: accompanying] consolidated financial statements [removed: listed in the index appearing under Item 15(a) (1)] [added: referred to above] present fairly, in all material respects, the financial position of [removed: Albemarle Corporation and its subsidiaries (or] the [removed: “Company”) at] [added: Company as of] December 31, [removed: 2016] [added: 2017] and December 31, [removed: 2015,] [added: 2016,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2016] [added: 2017] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control—Integrated Framework 2013 issued by the [removed: Committee of Sponsoring Organizations of the Treadway Commission (COSO).][added: COSO.]

The Company’s management is responsible for these [added: consolidated] financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express opinions on [removed: these] [added: the Company’s] financial statements and on the Company’s internal control over financial reporting based on our [removed: integrated] audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]

| Year Ended December 31 | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Net sales | $ | [removed: 2,677,203] [added: 3,071,976] | | | $ | [removed: 2,826,429] [added: 2,677,203] | | | $ | [removed: 2,445,548] [added: 2,826,429] | |

| Cost of goods sold | [removed: 1,706,627] [added: 1,961,996] | | | | [removed: 1,966,196] [added: 1,706,627] | | | | [removed: 1,674,700] [added: 1,966,196] | | |

| Gross profit | [removed: 970,576] [added: 1,109,980] | | | | [removed: 860,233] [added: 970,576] | | | | [removed: 770,848] [added: 860,233] | | |

| Selling, general and administrative expenses | [removed: 380,464] [added: 437,901] | | | | [removed: 300,440] [added: 380,464] | | | | [removed: 355,135] [added: 300,440] | | |

| Research and development expenses | [removed: 80,475] [added: 84,330] | | | | [removed: 89,187] [added: 80,475] | | | | [removed: 88,310] [added: 89,187] | | |

| Restructuring and other, net | — | | | | [removed: (6,804] [added: —] | | [removed: )] | | [removed: 25,947] [added: (6,804] | | [added: )] |

| Gain on sales of businesses, net | [removed: (122,298] [added: —] | | [removed: )] | | [removed: —] [added: (122,298] | | [added: )] | | — | | |

| Acquisition and integration related costs | [removed: 57,384] [added: —] | | | | [removed: 132,299] [added: 57,384] | | | | [removed: 30,158] [added: 132,299] | | |

| Operating profit | [removed: 574,551] [added: 587,749] | | | | [removed: 345,111] [added: 574,551] | | | | [removed: 271,298] [added: 345,111] | | |

| Interest and financing expenses | [removed: (65,181] [added: (115,350] | | ) | | [removed: (81,650] [added: (65,181] | | ) | | [removed: (41,358] [added: (81,650] | | ) |

| Other [removed: income (expenses),] [added: (expenses) income,] net | [removed: 5,894] [added: (25,601] | | [added: )] | | [removed: 47,283] [added: 5,894] | | | | [removed: (16,761] [added: 47,283] | | [removed: )] |

| Income from continuing operations before income taxes and equity in net income of unconsolidated investments | [removed: 515,264] [added: 446,798] | | | | [removed: 310,744] [added: 515,264] | | | | [removed: 213,179] [added: 310,744] | | |

| Income tax expense | [removed: 96,263] [added: 431,817] | | | | [removed: 11,134] [added: 96,263] | | | | [removed: 18,484] [added: 11,134] | | |

| Income from continuing operations before equity in net income of unconsolidated investments | [removed: 419,001] [added: 14,981] | | | | [removed: 299,610] [added: 419,001] | | | | [removed: 194,695] [added: 299,610] | | |

| Equity in net income of unconsolidated investments (net of tax) | [removed: 59,637] [added: 84,487] | | | | [removed: 27,978] [added: 59,637] | | | | [removed: 35,742] [added: 27,978] | | |

| Net income from continuing operations | [removed: 478,638] [added: 99,468] | | | | [removed: 327,588] [added: 478,638] | | | | [removed: 230,437] [added: 327,588] | | |

| Income [removed: (loss)] from discontinued operations (net of tax) | [removed: 202,131] [added: —] | | | | [removed: 32,476] [added: 202,131] | | | | [removed: (69,531] [added: 32,476] | | [removed: )] |

| Net income | [removed: 680,769] [added: 99,468] | | | | [removed: 360,064] [added: 680,769] | | | | [removed: 160,906] [added: 360,064] | | |

| Net income attributable to noncontrolling interests | [removed: (37,094] [added: (44,618] | | ) | | [removed: (25,158] [added: (37,094] | | ) | | [removed: (27,590] [added: (25,158] | | ) |

| Net income attributable to Albemarle Corporation | $ | [removed: 643,675] [added: 54,850] | | | $ | [removed: 334,906] [added: 643,675] | | | $ | [removed: 133,316] [added: 334,906] | |

| Basic earnings [removed: (loss)] per share: | | | | | | | | | | | |

| Continuing operations | $ | [removed: 3.93] [added: 0.49] | | | $ | [removed: 2.72] [added: 3.93] | | | $ | [removed: 2.57] [added: 2.72] | |

| Discontinued operations | [removed: 1.80] [added: —] | | | | [removed: 0.29] [added: 1.80] | | | | [removed: (0.88] [added: 0.29] | | [removed: )] |

| | $ | [removed: 5.73] [added: 0.49] | | | $ | [removed: 3.01] [added: 5.73] | | | $ | [removed: 1.69] [added: 3.01] | |

| Diluted earnings [removed: (loss)] per share: | | | | | | | | | | | |

| Continuing operations | $ | [removed: 3.90] [added: 0.49] | | | $ | [removed: 2.71] [added: 3.90] | | | $ | [removed: 2.57] [added: 2.71] | |

| Discontinued operations | [removed: 1.78] [added: —] | | | | [removed: 0.29] [added: 1.78] | | | | [removed: (0.88] [added: 0.29] | | [removed: )] |

| | $ | [removed: 5.68] [added: 0.49] | | | $ | [removed: 3.00] [added: 5.68] | | | $ | [removed: 1.69] [added: 3.00] | |

| February 27, 2018 |

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Albemarle Corporation and its subsidiaries (or “the Company”) as of December 31, 2017 and December 31, 2016, and the related consolidated statements of income, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2017, including the related notes (collectively referred to as the “consolidated financial statements”).

We have also audited the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Basis for Opinions

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Definition and Limitations of Internal Control over Financial Reporting

| February 27, 2018 |

We have served as the Company’s auditor since 1994.

| Cash and cash equivalents | $ | 1,137,303 | | | $ | 2,269,756 | |

| Goodwill | 1,610,355 | | | | 1,540,032 | | |

| Total assets | $ | 7,750,772 | | | $ | 8,161,207 | |

| Balance at January 1, 2017 | | 112,523,790 | | | $ | 1,125 | | | $ | 2,084,418 | | | $ | (412,412 | ) | | $ | 2,121,931 | | | $ | 3,795,062 | | | $ | 147,542 | | | $ | 3,942,604 | |

| Net income | | | | | | | | | | | | | | | | | 54,850 | | | | 54,850 | | | | 44,618 | | | | 99,468 | | |

| Other comprehensive income | | | | | | | | | | | | | 186,744 | | | | | | | | 186,744 | | | | 887 | | | | 187,631 | | |

| Cash dividends declared | | | | | | | | | | | | | | | | | (141,618 | | ) | | (141,618 | | ) | | (36,756 | | ) | | (178,374 | | ) |

| Exercise of stock options | | 210,432 | | | 2 | | | | 8,236 | | | | | | | | | | | | 8,238 | | | | | | | | 8,238 | | |

| Shares repurchased | | (2,341,083 | ) | | (23 | | ) | | (249,977 | | ) | | | | | | | | | | (250,000 | | ) | | | | | | (250,000 | | ) |

| Termination of Tianqi Lithium Corporation option agreement | | | | | | | | | 13,144 | | | | | | | | | | | | 13,144 | | | | (13,144 | | ) | | — | | |

| Balance at December 31, 2017 | | 110,546,674 | | | $ | 1,105 | | | $ | 1,863,949 | | | $ | (225,668 | ) | | $ | 2,035,163 | | | $ | 3,674,549 | | | $ | 143,147 | | | $ | 3,817,696 | |

| Gain on acquisition | (6,221 | | ) | | — | | | | — | | |

| Loss on early extinguishment of debt | 52,801 | | | | 1,921 | | | | 5,353 | | |

| Other, net | 449,816 | | | | 59,548 | | | | (62,479 | | ) |

| Net cash provided by operating activities | 303,979 | | | | 735,524 | | | | 360,810 | | |

| Investments in equity and other corporate investments | (3,565 | | ) | | — | | | | — | | |

| Fees related to early extinguishment of debt | (46,959 | | ) | | — | | | | (43,340 | | ) |

| Net cash used in financing activities | (1,086,868 | | ) | | (1,580,024 | | ) | | (478,446 | | ) |

Income tax expense for the year ended December 31, 2017 includes expense of $5.1 million due to an adjustment in the Company’s deferred tax liabilities for basis differences in Chilean fixed assets related to the year ended December 31, 2016.

The Company does not believe this adjustment is material to the consolidated financial statements for the years ended December 31, 2017 or 2016.

In addition, for the year ended December 31, 2017, the Company began reporting its acquisition and integration related costs and restructuring and other costs in Cost of goods sold, Selling, general and administrative expenses and Research and development expenses.

Resource Development Expenses

We incur costs in resource exploration, evaluation and development during the different phases of our resource development projects.

Exploration costs incurred before obtaining legal rights to explore an area are generally expensed as incurred.

After obtaining legal rights, exploration costs are expensed in areas where we have uncertainty about obtaining proven resources.

In areas where we have substantial knowledge about the area and consider it probable to obtain commercially viable proven resources, exploration and evaluation costs can be capitalized.

If technical feasibility studies have been obtained, resource evaluation expenses are capitalized when the study demonstrates proven or probable resources for which future economic returns are expected, while costs for projects that are not considered viable are expensed.

Development costs that are necessary to bring the property to commercial production or increase the capacity or useful life are capitalized.

Costs to maintain the production capacity in a property under production are expensed as incurred.

Our management's assessment of internal control over financial reporting as of December 31, 2016 excludes the Jiangxi Jiangli New Materials Science and Technology Co. Ltd. lithium business (or “Jiangxi Jiangli Lithium”) because it was acquired by the Company in a purchase business combination during 2016.

Jiangxi Jiangli Lithium is a wholly-owned subsidiary whose total assets and total revenues represent 2% and 0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.

| February 27, 2017 |

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded the Jiangxi Jiangli New Materials Science and Technology Co. Ltd. lithium business (or “Jiangxi Jiangli Lithium”) from its assessment of internal control over financial reporting as of December 31, 2016 because it was acquired by the Company in a purchase business combination during 2016.

We have also excluded Jiangxi Jiangli Lithium from our audit of internal control over financial reporting.

Jiangxi Jiangli Lithium is a wholly-owned subsidiary whose total assets and total revenues represent 2% and 0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.

| February 27, 2017 |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| Balance at January 1, 2014 | | 80,052,842 | | | $ | 801 | | | $ | 9,957 | | | $ | 116,245 | | | $ | 1,500,358 | | | $ | 1,627,361 | | | $ | 115,415 | | | $ | 1,742,776 | |

| Net income | | | | | | | | | | | | | | | | | 133,316 | | | | 133,316 | | | | 27,590 | | | | 160,906 | | |

| Other comprehensive loss | | | | | | | | | | | | | (178,658 | | ) | | | | | | (178,658 | | ) | | (80 | | ) | | (178,738 | | ) |

| Cash dividends declared | | | | | | | | | | | | | | | | | (86,364 | | ) | | (86,364 | | ) | | (15,535 | | ) | | (101,899 | | ) |

| Noncontrolling interests’ share of contributed capital in subsidiary | | | | | | | | | | | | | | | | | | | | | — | | | | 1,780 | | | | 1,780 | | |

| Exercise of stock options | | 77,546 | | | 1 | | | | 2,712 | | | | | | | | | | | | 2,713 | | | | | | | | 2,713 | | |

| Shares repurchased | | (2,190,254 | ) | | (22 | | ) | | (13,319 | | ) | | | | | | (136,659 | | ) | | (150,000 | | ) | | | | | | (150,000 | | ) |

| Tax benefit related to stock plans | | | | | | | | | 826 | | | | | | | | | | | | 826 | | | | | | | | 826 | | |

| Balance at December 31, 2014 | | 78,030,524 | | | $ | 780 | | | $ | 10,447 | | | $ | (62,413 | ) | | $ | 1,410,651 | | | $ | 1,359,465 | | | $ | 129,170 | | | $ | 1,488,635 | |

| Cash and cash equivalents at beginning of year | $ | 213,734 | | | $ | 2,489,768 | | | $ | 477,239 | |

| Excess tax benefits realized from stock-based compensation arrangements | (2,121 | | ) | | (121 | | ) | | (826 | | ) |

| Other, net | 61,469 | | | | (57,126 | | ) | | 6,743 | | |

| Net cash provided by operating activities | 733,403 | | | | 360,689 | | | | 492,609 | | |

| Payment for settlement of interest rate swap | — | | | | — | | | | (33,425 | | ) |

| Proceeds from issuance of senior notes | — | | | | — | | | | 1,888,197 | | |

| Excess tax benefits realized from stock-based compensation arrangements | 2,121 | | | | 121 | | | | 826 | | |

| Net cash (used in) provided by financing activities | (1,577,903 | | ) | | (478,325 | | ) | | 1,609,329 | | |

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | | |

Organizational Realignment

Effective January 1, 2016, we realigned our organizational structure to split our former Performance Chemicals reportable segment into two reportable segments: (1) Lithium and Advanced Materials and (2) Bromine Specialties.

Throughout this document, including these consolidated financial statements and related footnotes, current and prior year financial information is presented in accordance with this structure.

Related assets and liabilities are classified as held for sale as of December 31, 2015 in accordance with accounting standards for reporting discontinued operations.

On September 1, 2014, the Company closed the sale of its antioxidant, ibuprofen and propofol businesses and assets to SI Group, Inc. In accordance with the accounting guidance for discontinued operations in effect prior to January 1, 2015, the financial results of this disposed group were presented as discontinued operations in the consolidated statements of income and excluded from segment results for 2014.

Performance and Life Cycle Guarantees

We provide customers certain performance guarantees and life cycle guarantees primarily in Refining Solutions.

These guarantees entitle the customer to claim compensation if the product does not conform to performance standards originally agreed upon.

Performance guarantees relate to minimum technical specifications that products produced with the delivered product must meet, such as yield and product quality.

Life cycle guarantees relate to minimum periods for which performance of the delivered product is guaranteed.

When either performance guarantees or life cycle guarantees are contractually agreed upon, an assessment of the appropriate revenue recognition treatment is evaluated.

When testing or modeling of historical results predict that the performance or life cycle criteria will be satisfied, revenue is recognized in accordance with shipping terms at the time of delivery.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2016.][added: 2017.]

Based on the assessment, management concluded that, as of December 31, [removed: 2016,] [added: 2017,] our internal control over financial reporting was effective based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the fiscal quarter ended December 31, [removed: 2016] [added: 2017] that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

As disclosed in this Report under “Business -- Legal Proceedings," following receipt of information regarding potential improper payments being made by third party sales representatives of our Refining Solutions business, we promptly retained outside counsel and forensic accountants to investigate potential violations of our Code of Conduct, the Foreign Corrupt Practices Act and other potentially applicable laws.

Based on this internal investigation, we voluntarily self-reported potential issues relating to the use of third party sales representatives in our Refining Solutions business to the DOJ and the SEC and intend to cooperate with the DOJ and the SEC in their review of these matters.

Our Board of Directors has determined, as a prudent governance measure while the investigation is pending, to condition payment of each Named Executive Officer’s (as defined below) cash incentive bonus for the fiscal year 2017 (the “2017 cash incentive”) on each Named Executive Officer executing a clawback agreement applicable to the 2017 cash incentive.

Accordingly, on February 26, 2018, the Company entered into a clawback agreement with each of Ms. Narwold and Messrs.

Kissam, Tozier, Juneau and LaBauve (each a "Named Executive Officer").

The clawback agreements supplement the Company’s existing clawback policy and provide that each Named Executive Officer's 2017 cash incentive is subject to clawback by the Company in the event that the Executive Compensation Committee of the Board determines that, with respect to the Company’s internal investigation or the government’s review of these matters following such self-report, the Named Executive Officer: (1) engaged in unlawful conduct or misconduct; (2) failed to cooperate in any related investigation; (3) violated the Company’s Code of Conduct or any other Company policy; or (4) failed to exercise appropriate supervision or oversight.

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| Albemarle Corporation and Subsidiaries | | |

| | | |

Disclosure of Certain Activities Under Section 13(r) of the Exchange Act

Section 13(r) of the Exchange Act requires an issuer to disclose whether it or any of its affiliates knowingly engaged in certain activities relating to Iran or with individuals or entities that are subject to certain sanctions under U.S. law.

Disclosure is required even where the activities, transactions or dealings are conducted outside of the United States in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.

All of our activities relating to Iran during the year ended December 31, 2017, as disclosed below, were conducted by one of our non-U.S. subsidiaries in our Refining Solutions segment (the “Specified Subsidiary”) pursuant to, and in compliance with, the terms and conditions of U.S. Treasury’s Office of Foreign Assets Control’s (OFAC) General License H.

In the year ended December 31, 2017, the Specified Subsidiary engaged in sales of the following items to counterparties in Iran’s oil, gas and/or petrochemical sectors:

| • | Sold approximately 794,458 kilograms of hydro-processing catalyst. The gross revenue and estimated net income before income taxes were approximately $5.7 million and $0.8 million, respectively. |

| --- | --- |

| • | Sold one Ketjen Catalyst Addition Unit Catalyst Loader. The gross revenue and estimated net income before income taxes were approximately $181,000 and $7,000, respectively. |

| | |

| --- | --- |

| • | Sold approximately 5,040 kilograms of oxychlorination catalyst. The gross revenue and estimated net income before income taxes were approximately $230,000 and $168,000, respectively. |

We do not intend to continue doing such business in Iran.

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| --- | --- |

| | |

NONE

Code of [removed: Business] Conduct

We have adopted a code of [removed: business] conduct and ethics for directors, officers and employees, known as the Albemarle Code of [removed: Business] Conduct.

The Albemarle Code of [removed: Business] Conduct is available on our website at http://www.albemarle.com.

Shareholders may also request a free copy of the Albemarle Code of [removed: Business] Conduct from: Albemarle Corporation, Attention: Investor Relations, [removed: 451 Florida] [added: 4350 Congress] Street, [removed: Baton Rouge, Louisiana 70801.][added: Suite 700, Charlotte, North Carolina 28209.]

We will disclose any amendments to, or waivers from, a provision of our Code of [removed: Business] Conduct that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions that relates to any element of the Code of [removed: Business] Conduct as defined in Item 406 of Regulation S-K by posting such information on our website.

Our Chief Executive Officer made his annual certification to that effect to the NYSE as of May 24, [removed: 2016.][added: 2017.]

In addition, we have filed, as exhibits to this Annual Report on Form 10-K, the certifications of our principal executive officer and principal financial officer required under Sections 906 and 302 of the [removed: Sarbanes Oxley] [added: Sarbanes-Oxley] Act of 2002 to be filed with the Securities and Exchange Commission regarding the quality of our public disclosure.

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| Albemarle Corporation and Subsidiaries | | |

| | | |

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| Albemarle Corporation and Subsidiaries | | |

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | | |

(a)(1) The following consolidated financial and informational statements of the registrant are included in Part II Item 8 on pages [removed: 56] [added: 57] to [removed: 114:][added: 115:]

Consolidated Balance Sheets as of December 31, [removed: 2016] [added: 2017] and [removed: 2015][added: 2016]

Consolidated Statements of Income, Comprehensive Income (Loss), Changes in Equity and Cash Flows for the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014][added: 2015]

| [removed: 2.1] [added: [2.1](http://www.sec.gov/Archives/edgar/data/915913/000119312514272361/d758511dex21.htm)] | | [removed: Agreement] [added: [Agreement] and Plan of Merger, dated as of July 15, 2014, among Albemarle Corporation, Albemarle Holdings Corporation and Rockwood Holdings, Inc. \[filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on July 18, 2014, and incorporated herein by [removed: reference\].] [added: reference\].](#s992F0D5706E05B8BACCB1535E84395C0)] |

| [removed: 2.2] [added: [2.2](http://www.sec.gov/Archives/edgar/data/915913/000091591316000065/exhibit2106302016.htm)] | | [removed: Share] [added: [Share] Purchase Agreement, dated as of June 17, 2016, between Albemarle Corporation and BASF SE \[filed as Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (No. 1-12658), filed on August 5, 2016, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000091591316000065/exhibit2106302016.htm)] |

| [removed: 3.1] [added: [3.1](http://www.sec.gov/Archives/edgar/data/915913/000119312504170829/dex41.htm)] | | [removed: Amended] [added: [Amended] and Restated Articles of Incorporation (including Amendment thereto) of Albemarle Corporation \[filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-119723) filed on October 13, 2004, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000119312504170829/dex41.htm)] |

| [removed: 3.2] [added: [3.2](http://www.sec.gov/Archives/edgar/data/915913/000094787115000024/ss412125_ex0302.htm)] | | [removed: Amended] [added: [Amended] and Restated Bylaws, effective January 12, 2015, of Albemarle Corporation \[filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 12, 2015, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000094787115000024/ss412125_ex0302.htm)] |

| [removed: 4.1] [added: [4.1](http://www.sec.gov/Archives/edgar/data/915913/000119312505008878/dex41.htm)] | | [removed: Indenture,] [added: [Indenture,] dated as of January 20, 2005, between Albemarle Corporation and The Bank of New York, as trustee \[filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 20, 2005, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000119312505008878/dex41.htm)] |

| [removed: 4.2] [added: [4.2](http://www.sec.gov/Archives/edgar/data/915913/000119312510278095/dex42.htm)] | | [removed: Second] [added: [Second] Supplemental Indenture, dated as of December 10, 2010, between Albemarle Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York \[filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 10, 2010, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000119312510278095/dex42.htm)] |

| [removed: 4.3] [added: [4.3](http://www.sec.gov/Archives/edgar/data/915913/000094787114000728/ss407248_ex0401.htm)] | | [removed: Third] [added: [Third] Supplemental Indenture, dated as of November 24, 2014, among Albemarle Corporation, Albemarle Holdings Corporation (now Rockwood Holdings, Inc.) and Albemarle Holdings II Corporation (now Rockwood Specialties Group, Inc.) and U.S. Bank National Association, as trustee \[filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000094787114000728/ss407248_ex0401.htm)] |

| [removed: 4.4] [added: [4.4](http://www.sec.gov/Archives/edgar/data/915913/000094787115000064/ss414512_ex0401.htm)] | | [removed: Fourth] [added: [Fourth] Supplemental Indenture, dated as of January 29, 2015, among Albemarle Corporation, Rockwood Holdings, Inc. (as successor by merger to Albemarle Holdings Corporation), Rockwood Specialties Group, Inc. (as successor by merger to Albemarle Holdings II Corporation), The Bank of New York Mellon Trust Company, N.A., a national banking association, as successor to The Bank of New York, as resigning trustee, and U.S. Bank National Association, as successor trustee \[filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 29, 2015, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000094787115000064/ss414512_ex0401.htm)] |

| [removed: 4.5] [added: [4.5](http://www.sec.gov/Archives/edgar/data/915913/000119312510278095/dex43.htm)] | | [removed: Form] [added: [Form] of Global Security for the 4.50% Senior Notes due 2020 \[filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 10, 2010, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000119312510278095/dex43.htm)] |

| [removed: 4.6] [added: [4.6](http://www.sec.gov/Archives/edgar/data/915913/000094787114000728/ss407248_ex0403.htm)] | | [removed: Form] [added: [Form] of Global Security for the [removed: 3.000%] [added: 4.150%] Senior Notes due [removed: 2019] [added: 2024] \[filed as Exhibit [removed: 4.2] [added: 4.3] to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000094787114000728/ss407248_ex0403.htm)] |

| [removed: 4.7] [added: [4.7](http://www.sec.gov/Archives/edgar/data/915913/000094787114000728/ss407248_ex0404.htm)] | | [removed: Form] [added: [Form] of Global Security for the [removed: 4.150%] [added: 5.450%] Senior Notes due [removed: 2024] [added: 2044] \[filed as Exhibit [removed: 4.3] [added: 4.4] to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000094787114000728/ss407248_ex0404.htm)] |

| [removed: 4.8] [added: [4.8](http://www.sec.gov/Archives/edgar/data/915913/000091591315000009/exhibit481231201410-k.htm)] | | [removed: Form] [added: [Form] of Global Security for the [removed: 5.450%] [added: 1.875%] Senior Notes due [removed: 2044] [added: 2021] \[filed as Exhibit [removed: 4.4] [added: 4.8] to the Company’s [removed: Current] [added: Annual] Report on Form [removed: 8-K] [added: 10-K for the fiscal year ended December 31, 2014] (No. [removed: 1-12658) filed on November 24, 2014,] [added: 1-12658),] and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000091591315000009/exhibit481231201410-k.htm)] |

| [removed: 4.9] [added: [#10.26](http://www.sec.gov/Archives/edgar/data/915913/000091591316000041/exhibit10211231201510-k.htm)] | | [removed: Form] [added: [Form] of [removed: Global Security for the 1.875% Senior Notes due 2021] [added: Amendment to Severance Compensation Agreement] \[filed as Exhibit [removed: 4.8] [added: 10.21] to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2014] [added: 2015] (No. 1-12658), and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000091591316000041/exhibit10211231201510-k.htm)] |

| [removed: 10.1] [added: [#10.1](http://www.sec.gov/Archives/edgar/data/915913/000119312513130546/d483714ddef14a.htm)] | | [removed: 2013] [added: [2013] Stock Compensation and Deferral Election Plan for Non-Employee Directors of Albemarle Corporation \[filed as Annex A to the Company’s definitive Proxy Statement on Schedule 14A (No. 1-12658) filed on March 28, 2013, and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000119312513130546/d483714ddef14a.htm)] |

| [removed: 10.2] [added: [#10.2](http://www.sec.gov/Archives/edgar/data/915913/000091591316000065/exhibit1010630201610q.htm)] | | [removed: First] [added: [First] Amendment to the Albemarle Corporation Stock Compensation and Deferral Election Plan \[filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (No. 1-12658), and incorporated herein by [removed: reference\].] [added: reference\].](http://www.sec.gov/Archives/edgar/data/915913/000091591316000065/exhibit1010630201610q.htm)] |