filings.toolsItem 8. Financial Statements and Supplementary Data.
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Item 8. Financial Statements and Supplementary Data.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with management’s and our directors’ authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
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, 2025. In making this assessment, management used the criteria for effective internal control over financial reporting described in the Internal Control—Integrated Framework 2013 set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment, management concluded that, as of December 31, 2025, 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 concept of reasonable assurance is based on the recognition that there are inherent limitations in all systems of internal control. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
| /S/ J. KENT MASTERS | ||||||||
| J. Kent Masters | ||||||||
| Chairman, President and Chief Executive Officer | ||||||||
| (principal executive officer) | ||||||||
| February 11, 2026 |
| Albemarle Corporation and Subsidiaries | ||||||||
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Albemarle Corporation
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 (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of (loss) income, of comprehensive (loss) income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 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, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these 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 the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. 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 the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
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. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Interim and Annual Goodwill Impairment Assessments – Energy Storage Reporting Unit
As described in Notes 1 and 10 to the consolidated financial statements, the Company’s goodwill balance was $1,499.7 million as of December 31, 2025, and the goodwill associated with the Energy Storage reporting unit was $1,467.0 million. Management tests the Company’s recorded goodwill for impairment in the fourth quarter of each year or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of the Company’s reporting units below their carrying amounts. Management performed the annual goodwill impairment test by comparing the estimated fair value of the reporting unit to the related carrying value. Management estimated the fair value using a discounted cash flow model (income) approach. For the Energy Storage reporting unit, the revenue growth rates and adjusted earnings before interest and financing expenses, income tax expenses, and depreciation and amortization (“EBITDA”) margins were deemed by management to be significant assumptions.
The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment of the Energy Storage reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Energy Storage reporting unit and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates and adjusted EBITDA margins.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Energy Storage reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Energy Storage reporting unit; (ii) evaluating the appropriateness of the income approach used by management; (iii) testing the completeness and accuracy of underlying data used in the income approach; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates and adjusted EBITDA margins. Evaluating management’s assumptions related to revenue growth rates and adjusted EBITDA margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Energy Storage reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.
| /s/ PricewaterhouseCoopers LLP | ||
| Charlotte, North Carolina | ||
| February 11, 2026 |
We have served as the Company’s auditor since 1994.
| Albemarle Corporation and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF (LOSS) INCOME |
| (In Thousands, Except Per Share Amounts) | |||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Net sales | $ | 5,142,733 | $ | 5,377,526 | $ | 9,617,203 | |||||||||||
| Cost of goods sold(a) | 4,474,014 | 5,314,987 | 8,431,294 | ||||||||||||||
| Gross profit | 668,719 | 62,539 | 1,185,909 | ||||||||||||||
| Selling, general and administrative expenses | 550,036 | 618,048 | 910,002 | ||||||||||||||
| Goodwill impairment charges | 181,070 | — | — | ||||||||||||||
| Long-lived asset impairment charges | 245,600 | — | — | ||||||||||||||
| Restructuring charges and asset write-offs | 7,699 | 1,134,316 | 9,491 | ||||||||||||||
| Research and development expenses | 51,398 | 86,720 | 85,725 | ||||||||||||||
| Gain on change in interest in properties/sale of business, net | — | — | (71,190) | ||||||||||||||
| Operating (loss) profit | (367,084) | (1,776,545) | 251,881 | ||||||||||||||
| Interest and financing expenses | (207,651) | (165,619) | (116,072) | ||||||||||||||
| Other income, net | 22,662 | 178,339 | 110,929 | ||||||||||||||
| (Loss) income before income taxes and equity in net income of unconsolidated investments | (552,073) | (1,763,825) | 246,738 | ||||||||||||||
| Income tax expense | 156,881 | 87,085 | 430,277 | ||||||||||||||
| Loss before equity in net income of unconsolidated investments | (708,954) | (1,850,910) | (183,539) | ||||||||||||||
| Equity in net income of unconsolidated investments (net of tax) | 243,744 | 715,433 | 1,854,082 | ||||||||||||||
| Net (loss) income | (465,210) | (1,135,477) | 1,670,543 | ||||||||||||||
| Net income attributable to noncontrolling interests | (45,418) | (43,972) | (97,067) | ||||||||||||||
| Net (loss) income attributable to Albemarle Corporation | (510,628) | (1,179,449) | 1,573,476 | ||||||||||||||
| Mandatory convertible preferred stock dividends | (166,750) | (136,647) | — | ||||||||||||||
| Net (loss) income attributable to Albemarle Corporation common shareholders | $ | (677,378) | $ | (1,316,096) | $ | 1,573,476 | |||||||||||
| Basic (loss) earnings per share attributable to common shareholders | $ | (5.76) | $ | (11.20) | $ | 13.41 | |||||||||||
| Diluted (loss) earnings per share attributable to common shareholders | $ | (5.76) | $ | (11.20) | $ | 13.36 | |||||||||||
| Weighted-average common shares outstanding—basic | 117,664 | 117,516 | 117,317 | ||||||||||||||
| Weighted-average common shares outstanding—diluted | 117,664 | 117,516 | 117,766 |
(a)Included purchases from related unconsolidated affiliates of $534.0 million, $1.7 billion and $2.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
See accompanying notes to the consolidated financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME |
| (In Thousands) | |||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Net (loss) income | $ | (465,210) | $ | (1,135,477) | $ | 1,670,543 | |||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||
| Foreign currency translation and other | 407,873 | (210,534) | 26,403 | ||||||||||||||
| Cash flow hedge | (428) | (2,935) | 5,851 | ||||||||||||||
| Total other comprehensive income (loss), net of tax | 407,445 | (213,469) | 32,254 | ||||||||||||||
| Comprehensive (loss) income | (57,765) | (1,348,946) | 1,702,797 | ||||||||||||||
| Comprehensive income attributable to noncontrolling interests | (45,608) | (44,039) | (97,185) | ||||||||||||||
| Comprehensive (loss) income attributable to Albemarle Corporation | $ | (103,373) | $ | (1,392,985) | $ | 1,605,612 |
See accompanying notes to the consolidated financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
| CONSOLIDATED BALANCE SHEETS |
| (In Thousands) | |||||||||||
| December 31 | 2025 | 2024 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,618,001 | $ | 1,192,230 | |||||||
| Trade accounts receivable, less allowance for credit losses (2025—$4,578; 2024—$5,201) | 593,502 | 742,201 | |||||||||
| Other accounts receivable | 105,110 | 238,384 | |||||||||
| Inventories | 1,179,271 | 1,502,531 | |||||||||
| Other current assets | 140,440 | 166,916 | |||||||||
| Current assets held for sale | 371,815 | — | |||||||||
| Total current assets | 4,008,139 | 3,842,262 | |||||||||
| Property, plant and equipment, at cost | 11,768,840 | 12,523,368 | |||||||||
| Less accumulated depreciation and amortization | 3,156,429 | 3,191,898 | |||||||||
| Net property, plant and equipment | 8,612,411 | 9,331,470 | |||||||||
| Investments | 900,926 | 1,117,739 | |||||||||
| Other assets | 647,185 | 504,711 | |||||||||
| Goodwill | 1,499,657 | 1,582,714 | |||||||||
| Other intangibles, net of amortization | 214,233 | 230,753 | |||||||||
| Noncurrent assets held for sale | 491,660 | — | |||||||||
| Total assets | $ | 16,374,211 | $ | 16,609,649 | |||||||
| Liabilities and Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable to third parties | $ | 779,160 | $ | 793,455 | |||||||
| Accounts payable to related parties | 134,369 | 150,432 | |||||||||
| Accrued expenses | 521,831 | 467,997 | |||||||||
| Current portion of long-term debt | 74,077 | 398,023 | |||||||||
| Dividends payable | 61,387 | 61,282 | |||||||||
| Income taxes payable | 35,467 | 95,275 | |||||||||
| Current liabilities held for sale | 191,753 | — | |||||||||
| Total current liabilities | 1,798,044 | 1,966,464 | |||||||||
| Long-term debt | 3,119,464 | 3,118,142 | |||||||||
| Postretirement benefits | 44,744 | 31,930 | |||||||||
| Pension benefits | 117,361 | 116,192 | |||||||||
| Other noncurrent liabilities | 1,084,892 | 819,204 | |||||||||
| Deferred income taxes | 368,275 | 358,029 | |||||||||
| Noncurrent liabilities held for sale | 59,970 | — | |||||||||
| Commitments and contingencies (Note 15) | |||||||||||
| Equity: | |||||||||||
| Albemarle Corporation shareholders’ equity: | |||||||||||
| Common stock, $.01 par value (authorized 275,000 shares), issued and outstanding — 117,716 in 2025 and 117,560 in 2024 | 1,178 | 1,176 | |||||||||
| Mandatory convertible preferred stock, Series A, no par value, $1,000 stated value, authorized - 15,000, issued and outstanding - 2,300 in 2025 and 2024 | 2,235,105 | 2,235,105 | |||||||||
| Additional paid-in capital | 3,018,213 | 2,985,606 | |||||||||
| Accumulated other comprehensive loss | (334,807) | (742,062) | |||||||||
| Retained earnings | 4,613,676 | 5,481,692 | |||||||||
| Total Albemarle Corporation shareholders’ equity | 9,533,365 | 9,961,517 | |||||||||
| Noncontrolling interests | 248,096 | 238,171 | |||||||||
| Total equity | 9,781,461 | 10,199,688 | |||||||||
| Total liabilities and equity | $ | 16,374,211 | $ | 16,609,649 |
See accompanying notes to the consolidated financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
| (In Thousands, Except Share Data) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Mandatory Convertible Preferred Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Albemarle Shareholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amounts | Shares | Amounts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | 117,168,366 | $ | 1,172 | — | $ | — | $ | 2,940,840 | $ | (560,662) | $ | 5,601,277 | $ | 7,982,627 | $ | 208,220 | $ | 8,190,847 | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | 1,573,476 | 1,573,476 | 97,067 | 1,670,543 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | 32,136 | 32,136 | 118 | 32,254 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends declared, $1.60 per common share | (187,738) | (187,738) | (52,486) | (240,224) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 38,957 | 38,957 | 38,957 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 3,124 | — | 190 | 190 | 190 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | 298,781 | 3 | (3) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | (114,001) | (1) | (27,467) | (27,468) | (27,468) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | 117,356,270 | $ | 1,174 | — | $ | — | $ | 2,952,517 | $ | (528,526) | $ | 6,987,015 | $ | 9,412,180 | $ | 252,919 | $ | 9,665,099 | ||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | (1,179,449) | (1,179,449) | 43,972 | (1,135,477) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | (213,536) | (213,536) | 67 | (213,469) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends declared, $1.61 per common share | (189,227) | (189,227) | (55,363) | (244,590) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandatory convertible preferred stock cumulative dividends | (136,647) | (136,647) | (136,647) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 33,062 | 33,062 | 33,062 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 6,570 | — | 374 | 374 | 374 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | 300,877 | 3 | 11,543 | 11,546 | 11,546 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of mandatory convertible preferred stock, net | 2,300,000 | 2,235,105 | 2,235,105 | 2,235,105 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sale of noncontrolling interest | — | — | (3,424) | (3,424) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | (103,943) | (1) | (11,890) | (11,891) | (11,891) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | 117,559,774 | $ | 1,176 | 2,300,000 | $ | 2,235,105 | $ | 2,985,606 | $ | (742,062) | $ | 5,481,692 | $ | 9,961,517 | $ | 238,171 | $ | 10,199,688 | ||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | (510,628) | (510,628) | 45,418 | (465,210) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | 407,255 | 407,255 | 190 | 407,445 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends declared, $1.62 per common share | (190,638) | (190,638) | (37,463) | (228,101) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandatory convertible preferred stock cumulative dividends | (166,750) | (166,750) | (166,750) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 36,627 | 36,627 | 36,627 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 48,104 | — | 3,240 | 3,240 | 3,240 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | 150,677 | 2 | (2) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in ownership interest of noncontrolling interest | — | 1,780 | 1,780 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | (42,680) | — | (7,258) | (7,258) | (7,258) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | 117,715,875 | $ | 1,178 | 2,300,000 | $ | 2,235,105 | $ | 3,018,213 | $ | (334,807) | $ | 4,613,676 | $ | 9,533,365 | $ | 248,096 | $ | 9,781,461 |
See accompanying notes to the consolidated financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In Thousands) | |||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Cash and cash equivalents at beginning of year | $ | 1,192,230 | $ | 889,900 | $ | 1,499,142 | |||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net (loss) income | (465,210) | (1,135,477) | 1,670,543 | ||||||||||||||
| Adjustments to reconcile net (loss) income to cash flows from operating activities: | |||||||||||||||||
| Depreciation and amortization | 658,678 | 588,638 | 429,944 | ||||||||||||||
| Non-cash goodwill impairment charges | 181,070 | — | — | ||||||||||||||
| Non-cash long-lived asset impairment charges | 245,600 | — | — | ||||||||||||||
| Non-cash restructuring and asset write-offs | — | 1,013,444 | — | ||||||||||||||
| Gain on change in interest in properties/sale of business, net | — | — | (71,190) | ||||||||||||||
| Stock-based compensation and other | 40,271 | 32,141 | 36,545 | ||||||||||||||
| Equity in net income of unconsolidated investments (net of tax) | (243,744) | (715,433) | (1,854,082) | ||||||||||||||
| Dividends received from unconsolidated investments and nonmarketable securities | 93,739 | 358,933 | 2,000,862 | ||||||||||||||
| Pension and postretirement expense (benefit) | 23,377 | (5,274) | (1,658) | ||||||||||||||
| Pension and postretirement contributions | (20,441) | (19,379) | (17,866) | ||||||||||||||
| Realized loss on investments in marketable securities | — | 33,746 | — | ||||||||||||||
| Unrealized (gain) loss on investments in marketable securities | (14,088) | 30,073 | 39,864 | ||||||||||||||
| Loss on early extinguishment of debt | 7,471 | — | — | ||||||||||||||
| Deferred income taxes | 81,169 | (230,406) | 100,877 | ||||||||||||||
| Changes in current assets and liabilities, net of effects of acquisitions and divestitures: | |||||||||||||||||
| Decrease (increase) in accounts receivable | 47,315 | 555,218 | (350,655) | ||||||||||||||
| Decrease (increase) in inventories | 212,351 | 1,055,036 | (353,564) | ||||||||||||||
| Decrease (increase) in other current assets | 4,027 | 244,987 | (171,870) | ||||||||||||||
| Increase (decrease) in accounts payable to third parties | 144,208 | (462,839) | (315,220) | ||||||||||||||
| (Decrease) increase in accounts payable to related parties | (16,063) | (399,398) | 31,809 | ||||||||||||||
| (Decrease) increase in accrued expenses and income taxes payable | (36,753) | (140,099) | 253,518 | ||||||||||||||
| Noncurrent liability changes and other, net | 339,290 | (116,035) | (101,274) | ||||||||||||||
| Net cash provided by operating activities | 1,282,267 | 687,876 | 1,326,583 | ||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Acquisitions, net of cash acquired | — | — | (426,228) | ||||||||||||||
| Capital expenditures | (589,801) | (1,680,529) | (2,154,542) | ||||||||||||||
| Proceeds from sale of property and equipment | 32,812 | 29,102 | — | ||||||||||||||
| Proceeds from sale from investments | 290,908 | — | — | ||||||||||||||
| Proceeds (payments) from settlement of foreign currency forward contracts, net | 114,236 | (15,595) | 221,849 | ||||||||||||||
| Sales (purchases) of marketable securities, net | 6,077 | 82,520 | (204,451) | ||||||||||||||
| Investments in equity investments and nonmarketable securities | (239) | (270) | (1,200) | ||||||||||||||
| Net cash used in investing activities | (146,007) | (1,584,772) | (2,564,572) | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from issuance of mandatory convertible preferred stock, net of issuance costs | — | 2,236,750 | — | ||||||||||||||
| Proceeds from borrowings of long-term debt and credit agreements | 56,728 | 112,439 | 356,047 | ||||||||||||||
| Repayments of long-term debt and credit agreements | (505,736) | (112,439) | (28,862) | ||||||||||||||
| Other (repayments) borrowings, net | (5,657) | (631,834) | 617,014 | ||||||||||||||
| Dividends paid to common shareholders | (190,530) | (188,530) | (187,188) | ||||||||||||||
| Dividends paid to mandatory convertible preferred shareholders | (166,750) | (122,746) | — | ||||||||||||||
| Dividends paid to noncontrolling interests | (18,169) | (37,194) | (105,631) | ||||||||||||||
| Proceeds from exercise of stock options | 3,240 | 374 | 190 | ||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | (7,258) | (11,891) | (27,468) | ||||||||||||||
| Other | (55) | (3,194) | (191) | ||||||||||||||
| Net cash (used in) provided by financing activities | (834,187) | 1,241,735 | 623,911 | ||||||||||||||
| Net effect of foreign exchange on cash and cash equivalents | 123,698 | (42,509) | 4,836 | ||||||||||||||
| Increase (decrease) in cash and cash equivalents | 425,771 | 302,330 | (609,242) | ||||||||||||||
| Cash and cash equivalents at end of year | $ | 1,618,001 | $ | 1,192,230 | $ | 889,900 |
See accompanying notes to the consolidated financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 1—Summary of Significant Accounting Policies:
Basis of Consolidation
The consolidated financial statements include the accounts and operations of Albemarle Corporation and our wholly owned, majority owned and controlled subsidiaries. Unless the context otherwise indicates, the terms “Albemarle,” “we,” “us,” “our” or “the Company” mean Albemarle Corporation and its consolidated subsidiaries. For entities that we control and are the primary beneficiary, but own less than 100%, we record the minority ownership as noncontrolling interest, except as noted below. We apply the equity method of accounting for investments in which we have an ownership interest from 20% to 50% or where we exercise significant influence over the related investee’s operations. In addition, the consolidated financial statements contained herein include our proportionate share of the results of operations of the MARBL Lithium Joint Venture (“MARBL”), which manages the exploration, development, mining, processing and production of lithium and other minerals from the Wodgina hard rock lithium mine project (“Wodgina”). As described in Note 8, “Investments,” the Company closed on the restructuring of the MARBL joint venture with Mineral Resources Limited (“MRL”) on October 18, 2023 to reduce our ownership interest in the MARBL joint venture to 50% from 60%. The consolidated financial statements reflect our ownership percentage of the MARBL joint venture during the periods presented. The joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of assets, liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements. All significant intercompany accounts and transactions are eliminated in consolidation.
Estimates, Assumptions and Reclassifications
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Certain amounts in the accompanying consolidated financial statements and notes thereto have been reclassified to conform to the current presentation.
Revision of Previously Issued Financial Information
As previously reported in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025, during the second quarter of 2025, the Company identified an error in classification within its condensed consolidated statements of cash flows related to the proceeds from settlement and unrealized gains or losses from foreign currency forward contracts, affecting the cash flows from operating activities section, the cash flows from investing activities section and the Net effect of foreign exchange on cash and cash equivalents line of the statements of cash flows. The identified misclassification impacted our previously filed annual financial statements for the fiscal years ended December 31, 2024, 2023 and 2022, and quarterly financial statements for each of the fiscal quarters of fiscal year 2024 and the first fiscal quarter of fiscal year 2025 (collectively, the “Prior Financial Statements”). In addition, the Company made adjustments to correct for other previously identified immaterial errors. The Company assessed the materiality of the error in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108 and determined that the resulting misclassification was not material in any of the Prior Financial Statements, individually or in the aggregate. This revision had no impact on the consolidated balance sheets, consolidated statements of income (loss), consolidated statements of comprehensive (loss) income, or consolidated statements of changes in equity of the Prior Financial Statements or notes thereto.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
A summary of the revisions to the impacted periods presented in this Annual Report on Form 10-K are shown below (in thousands):
| Year Ended December 31, 2024 | |||||||||||||||||
| As Reported | Revision | As Revised | |||||||||||||||
| Decrease (increase) in inventories | $ | 1,060,297 | $ | (5,261) | $ | 1,055,036 | |||||||||||
| Other, net | (107,104) | (8,931) | (116,035) | ||||||||||||||
| Net cash provided by operating activities | 702,068 | (14,192) | 687,876 | ||||||||||||||
| Capital expenditures | $ | (1,685,790) | $ | 5,261 | $ | (1,680,529) | |||||||||||
| Payments for settlement of foreign currency forward contracts, net | — | (15,595) | (15,595) | ||||||||||||||
| Net cash used in investing activities | (1,574,438) | (10,334) | (1,584,772) | ||||||||||||||
| Net effect of foreign exchange on cash and cash equivalents | $ | (67,035) | $ | 24,526 | $ | (42,509) |
| Year Ended December 31, 2023 | |||||||||||||||||
| As Reported | Revision | As Revised | |||||||||||||||
| Decrease (increase) in inventories | $ | (358,825) | $ | 5,261 | $ | (353,564) | |||||||||||
| Other, net | (97,275) | (3,999) | (101,274) | ||||||||||||||
| Net cash provided by operating activities | 1,325,321 | 1,262 | 1,326,583 | ||||||||||||||
| Capital expenditures | $ | (2,149,281) | $ | (5,261) | $ | (2,154,542) | |||||||||||
| Proceeds from settlement of foreign currency forward contracts, net | — | 221,849 | 221,849 | ||||||||||||||
| Net cash used in investing activities | (2,781,160) | 216,588 | (2,564,572) | ||||||||||||||
| Net effect of foreign exchange on cash and cash equivalents | $ | 222,686 | $ | (217,850) | $ | 4,836 |
Revenue Recognition
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods and is recognized when performance obligations are satisfied under the terms of contracts with our customers. A performance obligation is deemed to be satisfied when control of the product is transferred to our customer. The transaction price of a contract, or the amount we expect to receive upon satisfaction of all performance obligations, is determined by reference to the contract’s terms and includes adjustments, if applicable, for any variable consideration, such as customer rebates, noncash consideration or consideration payable to the customer, although these adjustments are generally not material. Where a contract contains more than one distinct performance obligation, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation, although these situations are rare and are generally not built into our contracts. Any unsatisfied performance obligations are not material. Standalone selling prices are based on prices we charge to our customers, which in some cases are based on established market prices. Sales and other similar taxes collected from customers on behalf of third parties are excluded from revenue. Our payment terms are generally between 15 to 90 days, however, they vary by market factors, such as customer size, creditworthiness, geography and competitive environment.
All of our revenue is derived from contracts with customers, and almost all of our contracts with customers contain one performance obligation for the transfer of goods where such performance obligation is satisfied at a point in time. Control of a product is deemed to be transferred to the customer upon shipment or delivery. Significant portions of our sales are sold free on board shipping point or on an equivalent basis, while delivery terms of other transactions are based upon specific contractual arrangements. Our standard terms of delivery are generally included in our contracts of sale, order confirmation documents and invoices, while the timing between shipment and delivery generally ranges between 1 and 45 days. Costs for shipping and handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment costs. Such costs are immaterial.
The Company currently utilizes the following practical expedients, as permitted by Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers:
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
-
All sales and other pass-through taxes are excluded from contract value;
-
In utilizing the modified retrospective transition method, no adjustment was necessary for contracts that did not cross over the reporting year;
-
We will not consider the possibility of a contract having a significant financing component (which would effectively attribute a portion of the sales price to interest income) unless, if at contract inception, the expected payment terms (from time of delivery or other relevant criterion) are more than one year;
-
If our right to customer payment is directly related to the value of our completed performance, we recognize revenue consistent with the invoicing right; and
-
We expense as incurred all costs of obtaining a contract incremental to any costs/compensation attributable to individual product sales/shipments for contracts where the amortization period for such costs would otherwise be one year or less.
Costs incurred to obtain contracts with customers are not significant and are expensed immediately as the amortization period would be one year or less. When the Company incurs pre-production or other fulfillment costs in connection with an existing or specific anticipated contract and such costs are recoverable through margin or explicitly reimbursable, such costs are capitalized and amortized to Cost of goods sold on a systematic basis that is consistent with the pattern of transfer to the customer of the goods or services to which the asset relates, which is less than one year. We record bad debt expense in specific situations when we determine the customer is unable to meet its financial obligation.
Included in Trade accounts receivable at December 31, 2025 and 2024 is approximately $538.5 million and $705.8 million, respectively, arising from contracts with customers. The remaining balance of Trade accounts receivable at December 31, 2025 and 2024 primarily includes value-added taxes collected from customers on behalf of various taxing authorities.
Cash and Cash Equivalents
Cash and cash equivalents include cash and money market investments with insignificant interest rate risks and no limitations on access.
Inventories
Inventories are stated at lower of cost and net realizable value with cost determined using standard cost, which approximates the first-in, first-out basis. Cost is determined on the weighted-average basis for a small portion of our inventories at foreign plants and our stores, supplies and other inventory. A portion of our domestic produced finished goods and raw materials are determined on the last-in, first-out basis.
The Company eliminates the balance of intra-entity profits on purchases of inventory from its equity method investments that remains unsold at the balance sheet in Inventories, specifically finished goods and equally reduces Equity in net income of unconsolidated investments (net of tax) on the consolidated statements of (loss) income. The intra-entity profit is recognized in Equity in net income of unconsolidated investments (net of tax) in the period that converted inventory is sold to a third-party customer. In the same period, the intra-entity profit is also recognized as higher Cost of goods sold on the consolidated statements of (loss) income.
Property, Plant and Equipment
Property, plant and equipment include costs of assets constructed, purchased or leased under a finance lease, related delivery and installation costs and interest incurred on significant capital projects during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs and maintenance are expensed as incurred. Costs associated with yearly planned major maintenance are generally deferred and amortized over 12 months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in income.
The Company assigns the useful lives of its property, plant and equipment based upon internal engineering estimates, which are reviewed periodically. The estimated useful lives of our property, plant and equipment range from two to sixty years and depreciation is recorded on the straight-line method, with the exception of our mineral rights and reserves, which are depleted on a units-of-production method.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The Company evaluates the recovery of our property, plant and equipment annually and when events or changes in circumstances indicate that its carrying amount may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or capital plans or changes to government regulations that may adversely impact our current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are not recoverable or are less than the carrying amount of a long-lived asset group. We estimate future cash flows based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates. Significant estimates used include, but are not limited to, market pricing (including lithium index pricing), customer demand, operating and production costs, and the timing and capital costs of expansion and sustaining projects. Significant management judgment is involved in estimating these variables and they include inherent uncertainties since they are forecasting future events.
In addition, when assets meet the criteria to be classified as held for sale, the related disposal group is measured at the lower of their carrying amount or their fair value less costs to sell. If the fair value of the disposal group is determined to be lower than the carrying value, the Company would record a non-cash impairment charge in the period the disposal group met the criteria to be classified as held for sale. See Note 2, “Divestitures,” for further details of the long-lived asset impairment charge recorded in the year ended December 31, 2025.
Leases
We determine if an arrangement is a lease at inception. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As an implicit rate for most of our leases is not determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease payments for the initial measurement of lease ROU assets and lease liabilities include fixed and variable payments based on an index or a rate. Variable lease payments that are not index or rate based are recorded as expenses when incurred. Our variable lease payments typically include real estate taxes, insurance costs and common-area maintenance. The operating lease ROU asset also includes any lease payments made, net of lease incentives. The lease term is the non-cancelable period of the lease, including any options to extend, purchase or terminate the lease when it is reasonably certain that we will exercise that option. We amortize the operating lease ROU assets on a straight-line basis over the period of the lease and the finance lease ROU assets on a straight-line basis over the shorter of their estimated useful lives or the lease terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Additionally, we have made accounting policy elections such as exclusion of short-term leases (leases with a term of 12 months or less and which do not include a purchase option that we are reasonably certain to exercise) from the balance sheet presentation, use of portfolio approach in determination of discount rate and accounting for non-lease components in a contract as part of a single lease component for all asset classes, except specific mining operation equipment.
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 the declaration of proven and probable resources are generally expensed as incurred. After proven and probable resources are declared, exploration, evaluation and development costs necessary to bring the property to commercial capacity or increase the capacity or useful life are capitalized. Any costs to maintain the production capacity in a property under production are expensed as incurred.
Capitalized resource costs are depleted using the units-of-production method. Our resource development assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
Investments
Investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, we record our investments in equity-method investees in the consolidated balance sheets as Investments and our share of investees’ earnings or losses together with other-than-temporary impairments in value as Equity in net income of unconsolidated investments in the consolidated statements of (loss) income. We evaluate our equity method investments for impairment whenever events or changes in circumstances
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.
Certain investments in equity securities and mutual fund investments are accounted for as trading equities and are marked-to-market on a periodic basis through the consolidated statements of (loss) income. Investments in joint ventures and nonmarketable securities of immaterial entities are estimated based upon the overall performance of the entity where financial results are not available on a timely basis.
Environmental Compliance and Remediation
Environmental compliance costs include the cost of purchasing and/or constructing assets to prevent, limit and/or control pollution or to monitor the environmental status at various locations. These costs are capitalized and depreciated based on estimated useful lives. Environmental compliance costs also include maintenance and operating costs with respect to pollution prevention and control facilities and other administrative costs. Such operating costs are expensed as incurred. Environmental remediation costs of facilities used in current operations are generally immaterial and are expensed as incurred. We accrue for environmental remediation costs and post-remediation costs that relate to existing conditions caused by past operations at facilities or off-plant disposal sites in the accounting period in which responsibility is established and when the related liability is considered probable and estimable. In developing these cost estimates, we evaluate currently available facts regarding each site, with consideration given to existing technology, presently enacted laws and regulations, prior experience in remediation of contaminated sites, the financial capability of other potentially responsible parties and other factors, subject to uncertainties inherent in the estimation process. If the amount and timing of the cash payments for a site are fixed or reliably determinable, the liability is discounted, if the calculated discount is material. Additionally, these estimates are reviewed periodically, with adjustments to the accruals recorded as necessary.
Research and Development Expenses
Our research and development expenses related to present and future products are expensed as incurred. These expenses consist primarily of personnel-related costs and other overheads, as well as outside service and consulting costs incurred for specific programs. Our U.S. facilities in Texas and Louisiana and our global facilities in the Netherlands, Germany, Belgium and Korea form the capability base for our contract research and custom manufacturing businesses. These business areas provide research and scale-up services primarily to innovative life science companies.
Goodwill and Other Intangible Assets
We account for goodwill and other intangibles acquired in a business combination in conformity with current accounting guidance that requires that goodwill and indefinite-lived intangible assets not be amortized.
We test goodwill for impairment by comparing the estimated fair value of our reporting units to the related carrying value. Our reporting units are either our operating business segments or one level below our operating business segments for which discrete financial information is available and for which operating results are regularly reviewed by the business management. In applying the goodwill impairment test, the Company initially performs a qualitative test (“Step 0”), where it first assesses qualitative factors to determine whether it is more likely than not that the fair value of any reporting unit is less than its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting units and other entity and reporting unit specific events. If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value of the reporting unit is less than the carrying value, the Company performs a quantitative test (“Step 1”). During Step 1, the Company estimates the fair value using either a discounted cash flow model (income) approach or a combination of the discounted cash flow model (income) approach and earnings multiple (market) approach (placing equal weighting on the income and market approaches). The income approach determines fair value based on discounted cash flow model derived from a reporting unit’s long-term forecasted cash flows. The market approach determines fair value based on a review of observable prices and other relevant information generated by market transactions involving comparable assets, liabilities or businesses. Future cash flows for all reporting units include assumptions about revenue growth rates, adjusted EBITDA margins, discount rate as well as other economic or industry-related factors. The Company defines adjusted EBITDA as earnings before interest and financing expenses, income tax expenses, the proportionate share of Windfield income tax expense, depreciation and amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items on a segment basis. For the Energy Storage reporting unit, the revenue growth rates and adjusted EBITDA margins were deemed to be significant assumptions. Significant management judgment is involved in estimating these variables and they include inherent uncertainties, particularly regarding future market conditions and cost fluctuations. Any adverse changes in these assumptions, such as a decline in demand, increased competition or rising costs could negatively impact the fair value of the reporting units, since they are forecasting future events. The Company tests its recorded goodwill for impairment in the fourth quarter of each year or upon
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of its reporting units below their carrying amounts.
During the third quarter of 2025, the Company made significant progress on the potential divestiture of the Refining Solutions reporting unit. The progression of related discussions indicated it was more likely than not that the fair value of the Refining Solutions reporting unit was less than its carrying value as of September 30, 2025. Accordingly, the Company performed an interim goodwill impairment test as of that date. Subsequent to the balance sheet date, the Company entered into definitive agreements on October 23, 2025 and October 25, 2025 to divest its 50% ownership interest in Eurecat S.A., a joint venture within the Refining Solutions reporting unit, and to divest the controlling ownership interest in the remaining Refining Solutions business, respectively (see Note 2, “Divestitures,” for further details). The agreed upon transaction prices in these agreements corroborate the conclusion reached in the interim impairment analysis that the carrying value of the Refining Solutions reporting unit exceeded its fair value as of September 30, 2025. As a result, the Company recorded a $181.1 million non-cash goodwill impairment charge, representing the full value of goodwill associated with the Refining Solutions reporting unit within the Ketjen segment.
The Company performed its annual goodwill impairment test as of October 31, 2025. No evidence of impairment was noted for the reporting units with goodwill balances from the analysis.
The Company assesses its indefinite-lived intangible assets, which include trade names and trademarks, for impairment annually and between annual tests if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The indefinite-lived intangible asset impairment standard allows the Company to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if we determine, based on the qualitative assessment, that it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying amount. If we determine based on the qualitative assessment that it is more likely than not that the asset is impaired, an impairment test is performed by comparing the fair value of the indefinite-lived intangible asset to its carrying amount. During the year ended December 31, 2025, no evidence of impairment was noted from the analysis for the Company’s indefinite-lived intangible assets.
Definite-lived intangible assets, such as purchased technology, patents and customer lists, are amortized over their estimated useful lives generally for periods ranging from five to twenty-five years. Except for customer lists and relationships associated with the majority of our Energy Storage business, which are amortized using the pattern of economic benefit method, definite-lived intangible assets are amortized using the straight-line method. We evaluate the recovery of our definite-lived intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable. If the carrying amount of the asset group is not recoverable, the fair value of the asset group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized. See Note 10, “Goodwill and Other Intangibles.”
Pension Plans and Other Postretirement Benefits
Under authoritative accounting standards, assumptions are made regarding the valuation of benefit obligations and the performance of plan assets. As required, we recognize a balance sheet asset or liability for each of our pension and other postretirement benefit (“OPEB”) plans equal to the plan’s funded status as of the measurement date. The primary assumptions are as follows:
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Discount Rate—The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.
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Expected Return on Plan Assets—We project the future return on plan assets based on prior performance and future expectations for the types of investments held by the plans, as well as the expected long-term allocation of plan assets for these investments. These projected returns reduce the net benefit costs recorded currently.
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Rate of Compensation Increase—For salary-related plans, we project employees’ annual pay increases, which are used to project employees’ pension benefits at retirement.
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Mortality Assumptions—Assumptions about life expectancy of plan participants are used in the measurement of related plan obligations.
Actuarial gains and losses are recognized annually in our consolidated statements of (loss) income in the fourth quarter and whenever a plan is determined to qualify for a remeasurement during a fiscal year. The remaining components of pension and OPEB plan expense, primarily service cost, interest cost and expected return on assets, are recorded on a monthly basis. The market-related value of assets equals the actual market value as of the date of measurement.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
During 2025, we made changes to assumptions related to discount rates and expected rates of return on plan assets. We consider available information that we deem relevant when selecting each of these assumptions.
In selecting the discount rates for the U.S. plans, we consider expected benefit payments on a plan-by-plan basis. As a result, the Company uses different discount rates for each plan depending on the demographics of participants and the expected timing of benefit payments. For 2025, the discount rates were calculated using the results from a bond matching technique developed by Milliman, which matched the future estimated annual benefit payments of each respective plan against a portfolio of bonds of high quality to determine the discount rate. We believe our selected discount rates are determined using preferred methodology under authoritative accounting guidance and accurately reflect market conditions as of the December 31, 2025 measurement date.
In selecting the discount rates for the foreign plans, we look at long-term yields on AA-rated corporate bonds when available. Our actuaries have developed yield curves based on the yields on the constituent bonds in the various indices as well as on other market indicators such as swap rates, particularly at the longer durations. For the Eurozone, we apply the Aon Hewitt yield curve to projected cash flows from the relevant plans to derive the discount rate. For the United Kingdom (“U.K.”), the discount rate is determined by applying the Aon Hewitt yield curve for typical schemes of similar duration to projected cash flows of Albemarle’s U.K. plan. In other countries where there is not a sufficiently deep market of high-quality corporate bonds, we set the discount rate by referencing the yield on government bonds of an appropriate duration.
In estimating the expected return on plan assets, we consider past performance and future expectations for the types of investments held by the plan as well as the expected long-term allocation of plan assets to these investments. In projecting the rate of compensation increase, we consider past experience in light of movements in inflation rates.
For the purpose of measuring our U.S. pension and OPEB obligations at December 31, 2025 and 2024, we used the Pri-2012 Mortality Tables along with the MP-2021 Mortality Improvement Scale, respectively, published by the SOA.
Stock-based Compensation Expense
The fair value of restricted stock awards, restricted stock unit awards and performance unit awards with a service condition are determined based on the number of shares or units granted and the quoted price of our common stock on the date of grant, and the fair value of stock options is determined using the Black-Scholes valuation model. The fair value of performance unit awards with a service condition and a market condition are estimated on the date of grant using a Monte Carlo simulation model. The fair value of these awards is determined after giving effect to estimated forfeitures. Such value is recognized as expense over the service period, which is generally the vesting period of the equity grant. To the extent restricted stock awards, restricted stock unit awards, performance unit awards and stock options are forfeited prior to vesting in excess of the estimated forfeiture rate, the corresponding previously recognized expense is reversed as an offset to operating expenses.
Income Taxes
We use the liability method for determining our income taxes, under which current and deferred tax liabilities and assets are recorded in accordance with enacted tax laws and rates. Under this method, the amounts of deferred tax liabilities and assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. The Company’s deferred tax assets and liabilities are classified as noncurrent on the balance sheet, along with any related valuation allowance. Tax effects are released from Accumulated other comprehensive loss using either the specific identification approach or the portfolio approach based on the nature of the underlying item.
Deferred income taxes are provided for the estimated income tax effect of temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred tax assets are also provided for operating losses, capital losses and certain tax credit carryovers. A valuation allowance, reducing deferred tax assets, is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of such deferred tax assets is dependent upon the generation of sufficient future taxable income of the appropriate character. Although realization is not assured, we do not establish a valuation allowance when we believe it is more likely than not that a net deferred tax asset will be realized. The Company elected to not consider the estimated impact of potential future Corporate Alternative Minimum Tax liabilities for purposes of assessing valuation allowances on its deferred tax balances.
We only recognize a tax benefit after concluding that it is more likely than not that the benefit will be sustained upon audit by the respective taxing authority based solely on the technical merits of the associated tax position. Once the recognition threshold is met, we recognize a tax benefit measured as the largest amount of the tax benefit that, in our judgment, is greater
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| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
than 50% likely to be realized. Under current accounting guidance for uncertain tax positions, interest and penalties related to income tax liabilities are included in Income tax expense on the consolidated statements of (loss) income.
We have designated the undistributed earnings of a portion of our foreign operations as indefinitely reinvested and as a result we do not provide for deferred income taxes on the unremitted earnings of these subsidiaries. Our foreign earnings are computed under U.S. federal tax earnings and profits, or E&P, principles. In general, to the extent our financial reporting book basis over tax basis of a foreign subsidiary exceeds these E&P amounts, deferred taxes have not been provided as they are essentially permanent in duration. The determination of the amount of such unrecognized deferred tax liability is not practicable. We provide for deferred income taxes on our undistributed earnings of foreign operations that are not deemed to be indefinitely invested. We will continue to evaluate our permanent investment assertion taking into consideration all relevant and current tax laws.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss comprises principally foreign currency translation adjustments, gains or losses on foreign currency cash flow hedges designated as effective hedging instruments and deferred income taxes related to the aforementioned items.
Foreign Currency Translation
The assets and liabilities of all foreign subsidiaries were prepared in their respective functional currencies and translated into U.S. Dollars based on the current exchange rate in effect at the balance sheet dates, while income and expenses were translated at average exchange rates for the periods presented. Translation adjustments are reflected as a separate component of equity.
Foreign exchange transaction and revaluation (losses) gains were ($18.9) million, $67.5 million and $39.9 million for the years ended December 31, 2025, 2024 and 2023, respectively, and are included in Other income, net, in our consolidated statements of (loss) income, with the unrealized portion included in Noncurrent liability changes and other, net, in our consolidated statements of cash flows.
Derivative Financial Instruments
We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies and through the use of foreign currency forward contracts from time to time, which generally expire within one year. The principal objective of such contracts is to minimize the financial impact of changes in foreign currency exchange rates. While these contracts are subject to fluctuations in value, such fluctuations are generally expected to be offset by changes in the value of the underlying foreign currency exposures being hedged. Gains or losses under foreign currency forward contracts that have been designated as an effective hedging instrument under ASC 815, Derivatives and Hedging will be recorded in Accumulated other comprehensive loss beginning on the date of designation. All other gains and losses on foreign currency forward contracts not designated as an effective hedging instrument are recognized currently in Other income, net, and generally do not have a significant impact on results of operations.
We may also enter into interest rate swaps, collars or similar instruments from time to time, with the objective of reducing interest rate volatility relating to our borrowing costs.
The counterparties to these contractual agreements are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties. We do not utilize financial instruments for trading or other speculative purposes. In the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia and designated it as an effective hedging instrument under ASC 815, Derivatives and Hedging. As a result of the actions taken at Kemerton Trains 3 and 4 during 2024, the Company dedesignated the remaining hedged foreign currency forward contracts. The Company recorded a loss in Other income, net of $26.1 million during the year ended December 31, 2024 from the reclassification of the hedged balance from Accumulated other comprehensive loss. The balance of the settled hedged foreign currency forward contracts associated with the construction of Kemerton Trains 1 and 2 assets that had been placed into service will be reclassified to earnings over the life of the related assets. All other foreign currency forward contracts outstanding at December 31, 2025 and 2024 have not been designated as hedging instruments under ASC 815, Derivatives and Hedging.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Recently Issued or Adopted Accounting Pronouncements
In August 2023, the FASB issued guidance which will require a joint venture to recognize and initially measure its assets, including goodwill, and liabilities using a new basis of accounting upon formation. Initial measurement of a joint venture’s total net assets will be equal to the fair value of one hundred percent of the joint venture’s equity. In addition, a joint venture will be permitted to apply the measurement period guidance of ASC 805-10 if the initial accounting for the joint venture formation is incomplete by the end of the reporting period in which the formation occurs. This guidance is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. The Company currently does not expect this guidance to have a significant impact on its consolidated financial statements.
In November 2023, the FASB issued guidance to update qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company has adopted this guidance and provided the required disclosures in this Annual Report on Form 10-K. See Note 25, “Segment and Geographic Area Information,” for further details.
In December 2023, the FASB issued guidance to require qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. This Company has adopted this guidance and applied the amendments prospectively for this Annual Report on Form 10-K. See Note 20, “Income Taxes,” for further details.
In November 2024, the FASB issued guidance to require tabular disclosures disaggregating certain types of expenses presented on the income statement within continuing operations, as well as disclosures about selling expenses. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
In December 2025, the FASB issued guidance on the recognition, measurement and presentation of government grants received by business entities and amends certain existing disclosure requirements in ASC 832, Government Assistance. This guidance is effective for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years. As allowed by its provisions, the Company early-adopted this guidance and applied the amendments on a modified prospective basis for this Annual Report on Form 10-K. See Note 7, “Property, Plant and Equipment,” for further details. The adoption of this guidance does not have a significant impact on our consolidated financial statements.
NOTE 2—Divestitures:
Assets Held For Sale
On October 25, 2025, the Company signed a definitive agreement to divest the controlling ownership interest of its Refining Solutions business to ChemCat AcquisitionCo, LLC and contribute the remaining ownership interest to ChemCat Holdings, LP, a newly formed limited partnership (“Holdco”). The Refining Solutions business being divested and contributed is defined as the Company’s Ketjen reportable segment, excluding its performance catalysts solutions (“PCS”) business and the Company’s 50% ownership interest in Eurecat S.A. (which the Company divested in a separate transaction as described below). Following the completion of the transactions contemplated in the definitive agreement (collectively, the “Refining Solutions Business Transaction”), the Company will receive an estimated $536 million in cash and will own 49% of the common units of Holdco. The Company expects the Refining Solutions Business Transaction to be completed in the first quarter of 2026, subject to customary closing conditions.
The Company’s ownership interest in Holdco, initially representing a 49% interest, will consist of common units that will be junior to the preferred equity in Holdco held by the other ownership group. The preferred equity will accrue dividends, regardless of whether or not declared, for the first five years after the closing of the Refining Solutions Business Transaction, will be convertible into common equity of Holdco at the option of the holder.
In a separate transaction, on January 23, 2026, the Company completed the previously announced sale its 50% ownership interest in Eurecat S.A., a joint venture included in the Refining Solutions reporting unit, for €105 million (approximately $123 million using foreign exchange rates on the closing date) in cash, to Axens SA.
The PCS business will continue to be operated by the Company following the completion of these transactions. When the Company determines a reintegration plan for the PCS business, this change in circumstances for the PCS business may indicate
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
that the carrying value of PCS’s long-lived assets are not recoverable and may constitute a triggering event to test for impairment in accordance with Accounting Standards Codification (“ASC”) 360. The Company determined that the agreements to divest the Ketjen reportable segment (excluding PCS) did not represent a triggering event to perform an impairment assessment of the PCS assets as of December 31, 2025. However, if a triggering event were to be identified in the future, the Company would perform an impairment assessment, and if an impairment loss is determined to exist, the Company may record a non-cash impairment loss during the period in which the triggering event occurs. As of December 31, 2025, the carrying value of the PCS assets was approximately $186 million.
During the third quarter of 2025, the Company made significant progress on these divestitures. The progression of related discussions indicated it was more likely than not that the fair value of the Refining Solutions reporting unit was less than its carrying value as of September 30, 2025. Accordingly, the Company performed an interim goodwill impairment test as of that date. As noted above, subsequent to that balance sheet date, the Company entered into these divestiture definitive agreements. The agreed upon transaction prices in these agreements corroborate the conclusion reached in the interim impairment analysis that the carrying value of the Refining Solutions reporting unit exceeded its fair value as of September 30, 2025. As a result, the Company recorded a $181.1 million non-cash goodwill impairment charge, representing the full value of goodwill associated with the Refining Solutions reporting unit within the Ketjen segment. This nonrecurring fair value measurement is classified as Level 3 within the fair value hierarchy due to the unobservable inputs used.
In connection with the signed Refining Solutions business divestiture agreement, on October 25, 2025, the Company concluded the Refining Solutions business met the criteria to be classified as held for sale in the Company’s consolidated financial statements. As such, the assets and liabilities of this business were included in the current or noncurrent assets held for sale and liabilities held for sale, respectively, in the consolidated balance sheet at December 31, 2025. The Eurecat S.A. investment is separate from the Refining Solutions business transaction, and is not classified as held for sale. Upon classification as held for sale, the Refining Solutions business is measured at the lower of its carrying amount or its fair value less costs to sell. Following the non-cash goodwill impairment charge and based on the key terms of the divestiture agreement, the Company recorded a pre-tax $245.6 million non-cash long-lived asset impairment charge to reduce the carrying amount of the Refining Solutions business to its fair value less costs to sell as of December 31, 2025. The fair value of the Refining Solutions business was measured using the Black-Scholes option-pricing model using key assumptions such as equity volatility, a risk-free rate and certain terms of the agreement. The considerations used are based on current terms, estimates and assumptions and may change as the transactions progress. This nonrecurring fair value measurement is classified as Level 3 within the fair value hierarchy due to the unobservable inputs used.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The carrying amounts of the major classes of assets and liabilities that were classified as held for sale at December 31, 2025 were as follows (in thousands):
| December 31, 2025 | |||||
| Assets | |||||
| Trade accounts receivable | $ | 179,502 | |||
| Inventories | 188,750 | ||||
| Other current assets | 3,563 | ||||
| Current assets held for sale | 371,815 | ||||
| Property, plant and equipment, at cost | 1,043,529 | ||||
| Less accumulated depreciation and amortization | 645,438 | ||||
| Net property, plant and equipment | 398,091 | ||||
| Investments(a) | 64,125 | ||||
| Other intangibles, net of amortization and other noncurrent assets | 29,444 | ||||
| Noncurrent assets held for sale | 491,660 | ||||
| Total assets held for sale | $ | 863,475 | |||
| Liabilities | |||||
| Accounts payable to third parties | $ | 116,397 | |||
| Accrued expenses and other current liabilities | 75,356 | ||||
| Current liabilities held for sale | 191,753 | ||||
| Deferred income taxes | 44,311 | ||||
| Other noncurrent liabilities | 15,659 | ||||
| Noncurrent liabilities held for sale | 59,970 | ||||
| Total liabilities held for sale | $ | 251,723 |
(a) Does not include the Company’s Eurecat investments of $81.9 million, which are not part of the Refining Solutions business transaction or classified as held for sale.
Neither the Refining Solutions business nor the investment in Eurecat S.A. qualified for discontinued operations treatment because the Company’s management does not consider these sales as representing a strategic shift that had or will have a major effect on the Company’s operations and financial results.
NOTE 3—Supplemental Cash Flow Information:
Supplemental information related to the consolidated statements of cash flows is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid during the year for: | |||||||||||||||||
| Income taxes (net of refunds of $159,392, $67,132 and $31,386 in 2025, 2024 and 2023, respectively) | $ | 152,482 | $ | 262,845 | $ | 319,391 | |||||||||||
| Interest (net of capitalization) | $ | 180,705 | $ | 150,689 | $ | 101,978 | |||||||||||
| Supplemental non-cash disclosures related to investing and financing activities: | |||||||||||||||||
| Capital expenditures included in Accounts payable | $ | 120,366 | $ | 197,951 | $ | 494,029 | |||||||||||
| Common stock issued for annual incentive bonus plan(a) | $ | — | $ | 11,545 | $ | — | |||||||||||
(a) During the first quarter of 2024, the Company issued 95,003 shares of common stock to certain employees in lieu of cash as payment of a portion of their 2023 annual incentive bonus plan.
Noncurrent liability changes and other, net within Cash flows from operating activities on the consolidated statements of cash flows for the year ended December 31, 2025 included the receipt of a $350.0 million customer prepayment. See Note 14, “Other Noncurrent Liabilities,” for further details. Noncurrent liability changes and other, net within Cash flows from operating activities on the consolidated statements of cash flows for the years ended December 31, 2025, 2024 and 2023 included $44.6
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
million, $82.7 million and $64.4 million, respectively, representing the reclassification of the current portion of the one-time transition tax resulting from the enactment of the Tax Cuts and Jobs Act (“TCJA”) in 2017, from Other noncurrent liabilities to Income taxes payable within current liabilities. For additional information, see Note 20, “Income Taxes.” In addition, included in Noncurrent liability changes and other, net for the years ended December 31, 2025, 2024 and 2023 is ($18.9) million, $67.5 million and $39.9 million, respectively, related to (losses) gains on fluctuations in foreign currency exchange rates.
NOTE 4—Other Accounts Receivable:
Other accounts receivable consist of the following at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Value added tax/consumption tax | $ | 75,107 | $ | 213,138 | |||||||
| Other | 30,003 | 25,246 | |||||||||
| Total | $ | 105,110 | $ | 238,384 |
NOTE 5—Inventories:
The following table provides a breakdown of inventories at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Finished goods | $ | 620,738 | $ | 912,662 | |||||||
| Raw materials and work in process(a) | 414,232 | 429,080 | |||||||||
| Stores, supplies and other | 144,301 | 160,789 | |||||||||
| Total(b) | $ | 1,179,271 | $ | 1,502,531 |
(a)Included $297.9 million and $290.6 million at December 31, 2025 and 2024, respectively, of work in process in our Energy Storage segment.
(b)As a result of the decline in lithium market pricing, the Company recorded charges in Cost of goods sold to reduce the value of certain finished goods and spodumene to their net realizable value. The balance of these inventory valuation adjustments totaled $2.7 million and $104.0 million at December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the Company utilized $101.2 million and $500.6 million, respectively, of the inventory valuation adjustments as the inventory was sold, which are included within Decrease (increase) in inventories on the consolidated statements of cash flows.
Approximately 3% of our inventories are valued using the last-in, first-out (“LIFO”) method at both December 31, 2025 and 2024. The portion of our domestic inventories stated on the LIFO basis amounted to $33.4 million and $44.5 million at December 31, 2025 and 2024, respectively, which are below replacement cost by approximately $67.8 million and $67.1 million, respectively.
The Company eliminates the balance of intra-entity profits on purchases of inventory from its equity method investments that remains unsold at the balance sheet in Inventories, specifically finished goods and equally reduces Equity in net income of unconsolidated investments (net of tax) on the consolidated statements of (loss) income. The balance of intra-entity profits on inventory purchased from equity method investments in Inventories totaled $37.2 million and $66.8 million at December 31, 2025 and 2024, respectively. The intra-entity profit is recognized in Equity in net income of unconsolidated investments (net of tax) in the period that converted inventory is sold to a third-party customer. In the same period, the intra-entity profit is also recognized as higher Cost of goods sold on the consolidated statements of (loss) income.
NOTE 6—Other Current Assets:
Other current assets consist of the following at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Income tax receivables | $ | 66,161 | $ | 84,975 | |||||||
| Prepaid taxes | 15,669 | 217 | |||||||||
| Other prepaid expenses | 56,234 | 76,974 | |||||||||
| Other | 2,376 | 4,750 | |||||||||
| Total | $ | 140,440 | $ | 166,916 |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 7—Property, Plant and Equipment:
Property, plant and equipment, at cost, consist of the following at December 31, 2025 and 2024 (in thousands):
| Useful Lives (Years) | December 31, | |||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Land | — | $ | 265,587 | $ | 295,176 | |||||||||||||||
| Land improvements | 10 – 30 | 351,394 | 342,213 | |||||||||||||||||
| Buildings and improvements | 10 – 50 | 936,635 | 933,188 | |||||||||||||||||
| Machinery and equipment(a) | 2 – 45 | 7,812,518 | 8,187,422 | |||||||||||||||||
| Mineral rights and reserves | 7 – 60 | 1,759,775 | 1,755,770 | |||||||||||||||||
| Construction in progress | — | 642,931 | 1,009,599 | |||||||||||||||||
| Total | $ | 11,768,840 | $ | 12,523,368 |
(a)Consists primarily of (1) short-lived production equipment components, office and building equipment and other equipment with estimated lives ranging 2 – 7 years, (2) production process equipment (intermediate components) with estimated lives ranging 8 – 19 years, (3) production process equipment (major unit components) with estimated lives ranging 20 – 29 years, and (4) production process equipment (infrastructure and other) with estimated lives ranging 30 – 45 years.
The cost of property, plant and equipment is depreciated generally by the straight-line method. Depletion of mineral rights is based on the units-of-production method. Depreciation expense, including depletion, amounted to $632.4 million, $561.4 million and $398.5 million during the years ended December 31, 2025, 2024 and 2023, respectively. Interest capitalized on significant capital projects in 2025, 2024 and 2023 was $18.5 million, $49.0 million and $72.7 million, respectively.
In 2022, the Company announced it has been awarded a nearly $150 million grant from the U.S. Department of Energy to expand domestic manufacturing of batteries for EVs and the electric grid and for materials and components currently imported from other countries. The grant funding is intended to support a portion of the anticipated cost to construct a new, commercial-scale U.S.-based lithium concentrator facility at our Kings Mountain, North Carolina location. The grant will be received over the life of the construction period for the new facility (projected through 2028) as reimbursement for capital expenditures. To further support the restart of the Kings Mountain mine, in 2023, we announced a $90 million critical materials award from the U.S. Department of Defense. As funds are received for both of these grants, the Company will reduce the cost of the assets by the amount of the grant, and income will be recognized by the lower depreciation expense over the useful life of the assets. During the years ended December 31, 2025 and 2024, the Company received $12.8 million and $12.4 million of these funds, respectively, which reduced the cost of Property, plant and equipment on the balance sheet.
NOTE 8—Investments:
Investments include our share of unconsolidated joint ventures, nonmarketable securities and marketable equity securities. The following table details the Company’s investment balances at December 31, 2025 and 2024 (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Joint ventures | $ | 819,848 | $ | 726,594 | ||||||||||
| Available for sale debt securities | — | 313,991 | ||||||||||||
| Nonmarketable securities | 16,766 | 16,528 | ||||||||||||
| Marketable equity securities | 64,312 | 60,626 | ||||||||||||
| Total | $ | 900,926 | $ | 1,117,739 |
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| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Unconsolidated Joint Ventures
The Company’s ownership positions in significant unconsolidated investments are shown below:
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||
| * | Windfield Holdings Pty. Ltd. (“Windfield”) - a joint venture with Sichuan Tianqi Lithium Industries, Inc., that mines lithium ore and produces lithium concentrate | 49 | % | 49 | % | 49 | % | ||||||||||||||||
| * | Nippon Aluminum Alkyls - a joint venture with Mitsui Chemicals, Inc. that produces aluminum alkyls(a) | — | % | 50 | % | 50 | % | ||||||||||||||||
| * | Nippon Ketjen Company Limited - a joint venture with Sumitomo Metal Mining Company Limited that produces refinery catalysts(b) | 50 | % | 50 | % | 50 | % | ||||||||||||||||
| * | Eurecat S.A. - a joint venture with Axens Group for refinery catalysts regeneration services(c) | 50 | % | 50 | % | 50 | % | ||||||||||||||||
| * | Fábrica Carioca de Catalisadores S.A. - a joint venture with Petrobras Quimica S.A. - PETROQUISA that produces catalysts and includes catalysts research and product development activities(b) | 50 | % | 50 | % | 50 | % | ||||||||||||||||
(a)The Company divested all of its ownership interest in Nippon Aluminum Alkyls on October 1, 2025. All financial results from this joint venture are included in the Company’s financial statements through the date of sale.
(b)Joint ventures to be included in the Refining Solutions business divestiture expected to close in the first quarter of 2026. See Note 2, “Divestitures,” for further information. The investment balances for these unconsolidated investments are reported within Noncurrent assets held for sale at December 31, 2025.
(c)The Company divested all of its ownership interest in Eurecat S.A. on January 23, 2026. See Note 2, “Divestitures,” for further information.
The following table details the Company’s equity in net income of unconsolidated investments (net of tax) for the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Windfield | $ | 217,222 | $ | 692,965 | $ | 1,833,589 | ||||||||||||||
| Other joint ventures | 26,522 | 22,468 | 20,493 | |||||||||||||||||
| Total | $ | 243,744 | $ | 715,433 | $ | 1,854,082 |
The Company’s investment in the significant unconsolidated joint ventures reported in Investments on the consolidated balance sheet amounted to $803.6 million and $712.2 million as of December 31, 2025 and 2024, respectively. Its investment in the significant unconsolidated joint ventures reported in Noncurrent assets held for sale on the consolidated balance sheets amounted to $59.8 million as of December 31, 2025. Undistributed earnings attributable to the Company’s significant unconsolidated investments represented approximately $606.6 million and $464.6 million of its consolidated retained earnings at December 31, 2025 and 2024, respectively. On October 1, 2025, the Company divested all of its ownership interest in the Nippon Aluminum Alkyls joint venture and recorded a loss of $14.3 million in Other income, net during the year ended December 31, 2025. All of the unconsolidated joint ventures in which the Company has investments are private companies and, accordingly, do not have a quoted market price available.
The following summary lists the assets, liabilities and results of operations for the Company’s significant unconsolidated joint ventures at December 31, 2025 (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Summary of Balance Sheet Information: | ||||||||||||||
| Current assets | $ | 817,766 | $ | 968,453 | ||||||||||
| Noncurrent assets | 2,975,902 | 2,707,216 | ||||||||||||
| Total assets | $ | 3,793,668 | $ | 3,675,669 | ||||||||||
| Current liabilities | $ | 328,528 | $ | 390,522 | ||||||||||
| Noncurrent liabilities | 1,728,775 | 1,727,181 | ||||||||||||
| Total liabilities | $ | 2,057,303 | $ | 2,117,703 |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Summary of Statements of Income Information: | ||||||||||||||||||||
| Net sales | $ | 1,540,659 | $ | 1,810,801 | $ | 7,019,117 | ||||||||||||||
| Gross profit | $ | 763,329 | $ | 1,047,714 | $ | 6,373,472 | ||||||||||||||
| Income before income taxes | $ | 570,046 | $ | 695,932 | $ | 5,988,737 | ||||||||||||||
| Net income | $ | 403,371 | $ | 485,392 | $ | 4,224,961 |
The Company has evaluated each of the unconsolidated investments pursuant to current accounting guidance and none qualify for consolidation. Dividends received from the Company’s significant unconsolidated investments were $85.9 million, $346.8 million and $2.0 billion in 2025, 2024 and 2023, respectively.
The Company holds a 49% equity interest in Windfield, which it acquired in the Rockwood acquisition. With regards to the Company’s ownership in Windfield, the parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”). However, the Company does not consolidate Windfield as it is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is within the Energy Storage segment and the most significant VIE, was $735.3 million and $583.6 million at December 31, 2025 and 2024, respectively. The Company’s unconsolidated VIEs are reported in Investments in the consolidated balance sheets. The Company does not guarantee debt for, or have other financial support obligations to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.
Proportionately Consolidated Joint Ventures
On October 18, 2023, the Company closed on the restructuring of the MARBL joint venture with MRL. This updated structure was intended to significantly simplify the commercial operation agreements previously entered into, allowed the Company to retain full control of downstream conversion assets and provide greater strategic opportunities for each company based on their global operations and the evolving lithium market.
Under the amended agreements, Albemarle acquired the remaining 40% ownership of the Kemerton lithium hydroxide processing facility in Australia that was jointly owned with MRL through the MARBL joint venture, bringing Albemarle’s ownership in the processing facility to 100%. Following this restructuring, Albemarle and MRL each own 50% of Wodgina, and MRL operates the Wodgina mine on behalf of the joint venture. During the fourth quarter of 2023, Albemarle paid MRL approximately $380 million in cash, which included $180 million of consideration for the remaining ownership of Kemerton as well as a payment for the economic effective date of the transaction being retroactive to April 1, 2022.
As a result of this transaction, the Company recorded a gain of $71.2 million on the consolidated statement of (loss) income during the fourth quarter of 2023. The fair value of the 40% ownership of the Kemerton lithium hydroxide processing facility was based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.
This joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore, our proportionate share of assets, liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements.
Public Equity Securities
Included in the Company’s marketable equity securities balance are holdings in equity securities of public companies. The fair value is measured using publicly available share prices of the investments, with any changes reported in Other income, net in our consolidated statements of (loss) income. During the year ended December 31, 2023, the Company purchased approximately $203.4 million of shares in publicly-traded companies. In January 2024, the Company sold equity securities of a public company for proceeds of approximately $81.5 million. As a result of the sale, the Company realized a loss of $33.7 million in Other income, net in the year ended December 31, 2024. In addition, during the years ended December 31, 2025, 2024 and 2023, the Company recorded unrealized mark-to-market gain (losses) of $11.1 million, ($37.0) million and ($41.4) million, respectively, in Other income, net for all public equity securities held at the end of the balance sheet date.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Other
The Company holds a 50% equity interest in Jordan Bromine Company Limited (“JBC”), reported in the Specialties segment. The Company consolidates this venture as it is considered the primary beneficiary due to its operational and financial control.
As part of the proceeds from the sale of the fine chemistry services (“FCS”) business on June 1, 2021, W.R. Grace & Co. (“Grace”) issued Albemarle preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity began accruing payment-in-kind (“PIK”) dividends at an annual rate of 12% on June 1, 2023. In June 2025, the Company redeemed the preferred equity from Grace for an aggregate value of $307.4 million, comprised of $288.0 million in cash received in June 2025 for the redemption and $19.4 million in cash previously received for tax liabilities. As a result, the Company recorded a loss of $38.0 million within Other income, net during the year ended December 31, 2025, representing the difference between the cash received and the recorded fair value of $326.0 million prior to redemption.
We maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of our Executive Deferred Compensation Plan (“EDCP”), subject to the claims of our creditors in the event of our insolvency. Assets of the Trust, in conjunction with our EDCP, are accounted for as trading securities in accordance with authoritative accounting guidance. The assets of the Trust consist primarily of mutual fund investments and are marked-to-market on a monthly basis through the consolidated statements of (loss) income. At December 31, 2025 and 2024, these marketable securities amounted to $30.8 million and $38.2 million, respectively.
NOTE 9—Other Assets:
Other assets consist of the following at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Value added tax/consumption tax | $ | 248,249 | $ | 155,068 | |||||||
| Deferred income taxes(a) | 17,542 | 53,608 | |||||||||
| Assets related to unrecognized tax benefits(a) | 75,846 | 74,809 | |||||||||
| Operating leases(b) | 116,404 | 118,839 | |||||||||
| Capital expenditure incentive receivables(c) | 159,424 | 74,506 | |||||||||
| Other | 29,720 | 27,881 | |||||||||
| Total | $ | 647,185 | $ | 504,711 |
(a)See Note 1, “Summary of Significant Accounting Policies” and Note 20, “Income Taxes.”
(b)See Note 18, “Leases.”
(c)Bonds for incentive agreements with local government agencies that offset value with equal long-term liabilities. See Note 14, “Other Noncurrent Liabilities,” for further details.
NOTE 10—Goodwill and Other Intangibles:
The following table summarizes the changes in goodwill by reportable segment for the years ended December 31, 2025 and 2024 (in thousands):
| Energy Storage | Specialties | Ketjen | Total | ||||||||||||||||||||||||||
| Balance at December 31, 2023(a) | $ | 1,424,484 | $ | 32,639 | $ | 172,606 | $ | 1,629,729 | |||||||||||||||||||||
| Foreign currency translation adjustments | (36,893) | (62) | (10,060) | (47,015) | |||||||||||||||||||||||||
| Balance at December 31, 2024(a) | 1,387,591 | 32,577 | 162,546 | 1,582,714 | |||||||||||||||||||||||||
| Impairment loss(b) | — | — | (181,070) | (181,070) | |||||||||||||||||||||||||
| Foreign currency translation adjustments | 79,368 | 121 | 18,524 | 98,013 | |||||||||||||||||||||||||
| Balance at December 31, 2025(c) | $ | 1,466,959 | $ | 32,698 | $ | — | $ | 1,499,657 |
(a) Balance as of December 31, 2024 and 2023 included an accumulated impairment loss of $6.8 million from the PCS reporting unit within the Ketjen segment. As a result, the balance of Ketjen goodwill as of December 31, 2024 and 2023 fully consisted of goodwill related to the Refining Solutions reporting unit. The balances of Energy Storage and Specialties goodwill as of December 31, 2024 and 2023 fully consisted of goodwill related to the Energy Storage and Specialties reporting units, respectively.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
(b) Impairment charge representing the full value of goodwill associated with the Refining Solutions reporting unit within the Ketjen segment. See Note 2, “Divestitures,” for further details.
(c) Balance as of December 31, 2025 included an accumulated impairment loss of $187.8 million from the Refining Solutions and PCS reporting units within the Ketjen segment. The balances of Energy Storage and Specialties goodwill as of December 31, 2025 fully consisted of goodwill related to the Energy Storage and Specialties reporting units, respectively.
Other intangibles consist of the following at December 31, 2025 and 2024 (in thousands):
| Customer Lists and Relationships | Trade Names and Trademarks**(a)** | Patents and Technology | Other | Total | |||||||||||||||||||||||||
| Gross Asset Value | |||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | 417,803 | $ | 13,405 | $ | 46,287 | $ | 34,649 | $ | 512,144 | |||||||||||||||||||
| Retirements | — | (2,309) | (14,506) | (4,449) | (21,264) | ||||||||||||||||||||||||
| Foreign currency translation adjustments and other | (15,791) | (426) | 484 | (1,190) | (16,923) | ||||||||||||||||||||||||
| Balance at December 31, 2024 | 402,012 | 10,670 | 32,265 | 29,010 | 473,957 | ||||||||||||||||||||||||
| Reclass to assets held for sale(b) | (45,289) | (10,357) | (2,900) | (111) | (58,657) | ||||||||||||||||||||||||
| Foreign currency translation adjustments and other | 27,608 | 705 | 3,115 | 1,534 | 32,962 | ||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | 384,331 | $ | 1,018 | $ | 32,480 | $ | 30,433 | $ | 448,262 | |||||||||||||||||||
| Accumulated Amortization | |||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | (204,481) | $ | (3,673) | $ | (26,758) | $ | (15,374) | $ | (250,286) | |||||||||||||||||||
| Amortization | (19,570) | — | (2,549) | (917) | (23,036) | ||||||||||||||||||||||||
| Retirements | — | 2,309 | 14,506 | 4,449 | 21,264 | ||||||||||||||||||||||||
| Foreign currency translation adjustments and other | 7,820 | 40 | 548 | 446 | 8,854 | ||||||||||||||||||||||||
| Balance at December 31, 2024 | (216,231) | (1,324) | (14,253) | (11,396) | (243,204) | ||||||||||||||||||||||||
| Amortization | (18,896) | — | (2,576) | (958) | (22,430) | ||||||||||||||||||||||||
| Reclass to assets held for sale(b) | 43,914 | 1,324 | 2,268 | 111 | 47,617 | ||||||||||||||||||||||||
| Foreign currency translation adjustments and other | (14,858) | — | (701) | (453) | (16,012) | ||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | (206,071) | $ | — | $ | (15,262) | $ | (12,696) | $ | (234,029) | |||||||||||||||||||
| Net Book Value at December 31, 2024 | $ | 185,781 | $ | 9,346 | $ | 18,012 | $ | 17,614 | $ | 230,753 | |||||||||||||||||||
| Net Book Value at December 31, 2025 | $ | 178,260 | $ | 1,018 | $ | 17,218 | $ | 17,737 | $ | 214,233 |
(a)Net Book Value includes only indefinite-lived intangible assets.
(b)Represents intangibles and related amortization of the Refining Solutions Business Transaction. See Note 2, “Divestitures,” for additional information.
Useful lives range from 13 – 25 years for customer lists and relationships; 8 – 20 years for patents and technology; and primarily 5 – 25 years for other.
Amortization of other intangibles amounted to $22.4 million, $23.0 million and $28.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Included in amortization for the years ended December 31, 2025, 2024 and 2023 is $16.0 million, $16.1 million and $16.7 million, respectively, of amortization using the pattern of economic benefit method.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Total estimated amortization expense of other intangibles for the next five fiscal years is as follows (in thousands):
| Estimated Amortization Expense | |||||
| 2026 | $ | 20,958 | |||
| 2027 | $ | 20,589 | |||
| 2028 | $ | 19,859 | |||
| 2029 | $ | 18,319 | |||
| 2030 | $ | 16,595 |
NOTE 11—Accrued Expenses:
Accrued expenses consist of the following at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Employee benefits, payroll and related taxes | $ | 140,208 | $ | 157,153 | |||||||
| Deferred revenue(a) | 93,090 | 2,115 | |||||||||
| Other(b)(c) | 288,533 | 308,729 | |||||||||
| Total | $ | 521,831 | $ | 467,997 |
(a)Deferred revenue expected to be recognized within Net sales over the next 12 months, primarily relating to the receipt of $350 million from a customer for the delivery of specified amounts of spodumene and lithium salts. See Note 14, “Other Noncurrent Liabilities,” for further details.
(b)Other accrued expenses represent balances such as operating lease liabilities, environmental reserves, asset retirement obligations, pension obligations, interest, utilities, other taxes, among other liabilities, expected to be paid within the next 12 months. No individual component exceeds 5% of total current liabilities.
(c)See Note 17, “Restructuring Charges and Asset Write-offs,” for details of the restructuring liability balance recorded in Accrued liabilities.
NOTE 12—Long-Term Debt:
Long-term debt consisted of the following at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| 1.125% notes due 2025 | $ | — | $ | 393,346 | |||||||
| 1.625% notes due 2028 | 588,600 | 521,500 | |||||||||
| 3.45% Senior notes due 2029 | 171,612 | 171,612 | |||||||||
| 4.65% Senior notes due 2027 | 650,000 | 650,000 | |||||||||
| 5.05% Senior notes due 2032 | 600,000 | 600,000 | |||||||||
| 5.45% Senior notes due 2044 | 350,000 | 350,000 | |||||||||
| 5.65% Senior notes due 2052 | 450,000 | 450,000 | |||||||||
| Interest-free loan | 300,000 | 300,000 | |||||||||
| Variable-rate foreign bank loans | 17,892 | 27,477 | |||||||||
| Finance lease obligations | 106,796 | 118,796 | |||||||||
| Other | 20,500 | 22,000 | |||||||||
| Unamortized discount and debt issuance costs | (61,859) | (88,566) | |||||||||
| Total long-term debt | 3,193,541 | 3,516,165 | |||||||||
| Less amounts due within one year | 74,077 | 398,023 | |||||||||
| Long-term debt, less current portion | $ | 3,119,464 | $ | 3,118,142 |
Aggregate annual maturities of long-term debt as of December 31, 2025 are as follows (in millions): 2026—$74.1; 2027—$710.0; 2028—$648.6; 2029—$231.6; 2030—$60.0; thereafter—$1,531.1.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
2022 Notes
On May 13, 2022, the Company issued a series of notes (collectively, the “2022 Notes”) as follows:
-
$650.0 million aggregate principal amount of senior notes, bearing interest at a rate of 4.65% payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior notes is approximately 4.84%. These senior notes mature on June 1, 2027.
-
$600.0 million aggregate principal amount of senior notes, bearing interest at a rate of 5.05% payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior notes is approximately 5.18%. These senior notes mature on June 1, 2032.
-
$450.0 million aggregate principal amount of senior notes, bearing interest at a rate of 5.65% payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2022. The effective interest rate on these senior notes is approximately 5.71%. These senior notes mature on June 1, 2052.
2019 Notes
The Company has the following outstanding series of notes originally issued on November 25, 2019 (collectively, the “2019 Notes”) as follows:
-
€500.0 million aggregate principal amount of notes, bearing interest at a rate of 1.625% payable annually on November 25 of each year, beginning in 2020. The effective interest rate on these notes is approximately 1.74%. These notes mature on November 25, 2028.
-
$171.6 million aggregate principal amount of senior notes, bearing interest at a rate of 3.45% payable semi-annually on May 15 and November 15 of each year, beginning in 2020. The effective interest rate on these senior notes is approximately 3.58%. These senior notes mature on November 15, 2029.
On November 25, 2025, the Company repaid €377.1 million of notes (originally issued on November 25, 2019) with cash on hand as they matured. These notes bore an interest rate of 1.125%.
2014 Senior Notes
We currently have outstanding $350.0 million aggregate principal amount of senior notes issued on November 24, 2014, bearing interest at a rate of 5.45% payable semi-annually on June 1 and December 1 of each year, beginning June 1, 2015. The effective interest rate on these senior notes is approximately 5.50%. These senior notes mature on December 1, 2044.
Credit Agreements
On October 31, 2024 the Company amended its revolving, unsecured amended and restated credit agreement dated October 28, 2022, as previously amended on February 9, 2024 (the “2022 Credit Agreement”), which provides for borrowings of up to $1.5 billion and matures on October 28, 2027. Borrowings under the 2022 Credit Agreement bear interest at variable rates based on a benchmark rate depending on the currency in which the loans are denominated, plus an applicable margin which ranges from 0.910% to 1.375%, depending on the Company’s credit rating from Standard & Poor’s Ratings Services LLC (“S&P”), Moody’s Investors Services, Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”). With respect to loans denominated in U.S. dollars, interest is calculated using the term Secured Overnight Financing Rate (“SOFR”) plus a term SOFR adjustment of 0.10%, plus the applicable margin. The applicable margin on the facility was 1.20% as of December 31, 2025. There were no borrowings outstanding under the 2022 Credit Agreement as of December 31, 2025.
Borrowings under the 2022 Credit Agreement are conditioned upon satisfaction of certain customary conditions precedent, including the absence of defaults. The October 2024 amendment was entered into to modify the financial covenants under the 2022 Credit Agreement. The amended 2022 Credit Agreement subjects the Company to two financial covenants, as well as customary affirmative and negative covenants. The amended first financial covenant requires that the ratio of (a) (i) the Company’s consolidated net funded debt plus a proportionate amount of Windfield’s net funded debt less (ii) the Company’s unrestricted cash and cash equivalents plus a proportionate amount of Windfield’s unrestricted cash and cash equivalents (up to a specified amount) to (b) consolidated Windfield-Adjusted EBITDA (as such terms are defined in the 2022 Credit Agreement) be less than or equal to: (i) 5.00:1.0 as of the end of the fourth quarter of 2025 (ii) 4.75:1.0 as of the end of the first and the second quarters of 2026, respectively and (iii) 3.50:1.0 as of the end of the third quarter of 2026 and each fiscal quarter thereafter through the third quarter of 2027. The maximum permitted leverage ratios described above are subject to adjustment in accordance with the terms of the 2022 Credit Agreement upon the consummation of an acquisition after June 30, 2026 if the consideration includes cash proceeds from issuance of funded debt in excess of $500 million.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The amended second financial covenant requires that the ratio of the Company’s consolidated EBITDA to consolidated interest charges (as such terms are defined in the 2022 Credit Agreement) be no less than (i) 2.50:1.0 as of the end of the fourth quarter of 2025, and (ii) 3.00:1.0 as of the end of each fiscal quarter thereafter. The 2022 Credit Agreement also contains customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants and cross-defaults to other material indebtedness. The occurrence of an event of default under the 2022 Credit Agreement could result in all loans and other obligations becoming immediately due and payable and the commitments under the 2022 Credit Agreement being terminated.
The Company expects to maintain compliance with the amended financial covenants for the next twelve months. However, a significant and extended downturn in lithium market prices or demand could impact the Company’s ability to maintain compliance with its amended financial covenants and it could require the Company to seek additional amendments to the 2022 Credit Agreement and/or issue debt or equity securities to fund its activities and maintain financial flexibility. If the Company were unable to obtain such necessary additional amendments, this could lead to an event of default and its lenders could require the Company to repay its outstanding debt. In that situation, the Company may not be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.
Commercial Paper Notes
On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under which we may issue unsecured commercial paper notes (the “Commercial Paper Notes”) from time-to-time. The maximum aggregate face amount of Commercial Paper Notes outstanding at any time is limited to $1.5 billion, while the aggregate borrowings outstanding under the 2022 Credit Agreement and the Commercial Paper Notes will not exceed the $1.5 billion current maximum amount available under the 2022 Credit Agreement. The Commercial Paper Notes will be sold at a discount from par, or alternatively, will be sold at par and bear interest at rates that will vary based upon market conditions at the time of issuance. The maturities of the Commercial Paper Notes will vary but may not exceed 397 days. During the year ended December 31, 2024, we repaid a net amount of $620.0 million of commercial paper notes using the net proceeds received from the issuance of mandatory convertible preferred stock. See Note 16, “Equity,” for additional information.
Other
In the second quarter of 2023, the Company received a loan of $300.0 million to be repaid in five equal annual installments beginning on December 31, 2026. This interest-free loan was discounted using an imputed interest rate of 5.53% and the Company will amortize that discount through Interest and financing expenses over the term of the loan.
The Company has additional uncommitted credit lines with various U.S. and foreign financial institutions that provide for borrowings of up to approximately $169.6 million at December 31, 2025. Outstanding borrowings under these agreements were $17.9 million and $27.5 million at December 31, 2025 and 2024, respectively. The average interest rate on borrowings under these agreements during 2025 was approximately 1.3% and approximately 0.3% during 2024 and 2023.
During the year ended December 31, 2025, the Company recorded a loss on early extinguishment of debt of $7.5 million in Interest and financing expenses, representing the unamortized discounts from the amendment of other debt.
At December 31, 2025 and 2024, the Company had the ability and intent to refinance our borrowings under other existing credit lines with borrowings under the 2022 Credit Agreement. Therefore, the amounts outstanding under those credit lines, if any, are classified as long-term debt at December 31, 2025 and 2024. At December 31, 2025, the Company had the ability to borrow a total of $1.5 billion under the commercial paper program and the 2022 Credit Agreement.
The Company believes that as of December 31, 2025, it was, and currently is, in compliance with all of its debt covenants.
Accounts Receivable Purchase Agreement
The Company is party to master receivables purchase agreements, under which it may sell available and eligible outstanding customer accounts receivable generated by sales to certain customers of up to approximately $180.6 million at any one time. The agreements are uncommitted and can be terminated by us or the purchaser upon notice in accordance with the terms of the agreements. Transactions under these agreements are accounted for as sales of accounts receivable, and the receivables sold are removed from the consolidated balance sheets as of the effective time of the sales transaction. During the year ended December 31, 2025, the Company sold and removed approximately $257.4 million of accounts receivable under this master receivables purchase agreement. The Company incurred approximately $1.1 million of fees associated with the master
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
receivables purchase agreement during the year ended December 31, 2025. Costs associated with the sales of receivables are reflected in the consolidated statements of (loss) income for the period in which the sales occur.
NOTE 13—Pension Plans and Other Postretirement Benefits:
The Company maintains various noncontributory defined benefit pension plans covering certain employees, primarily in the U.S., the U.K., Germany and Japan. The Company also has a contributory defined benefit plan covering certain Belgian employees. The benefits for these plans are based primarily on compensation and/or years of service. The U.S. and U.K. defined benefit plans for non-represented employees are closed to new participants, with no additional benefits accruing under these plans as participants’ accrued benefits have been frozen. The funding policy for each plan complies with the requirements of relevant governmental laws and regulations. The pension information for all periods presented includes amounts related to salaried and hourly plans.
The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of significant assumptions, for our defined benefit pension plans (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||||||||||||
| U.S. Pension Plans | Foreign Pension Plans | U.S. Pension Plans | Foreign Pension Plans | ||||||||||||||||||||
| Change in benefit obligations: | |||||||||||||||||||||||
| Benefit obligation at January 1 | $ | 485,068 | $ | 177,953 | $ | 512,902 | $ | 195,918 | |||||||||||||||
| Service cost | 402 | 5,167 | 545 | 5,391 | |||||||||||||||||||
| Interest cost | 26,140 | 7,404 | 25,580 | 7,204 | |||||||||||||||||||
| Actuarial loss (gain) | 14,340 | (6,483) | (11,604) | (7,034) | |||||||||||||||||||
| Benefits paid | (41,765) | (12,943) | (42,355) | (9,423) | |||||||||||||||||||
| Employee contributions | — | 65 | — | 70 | |||||||||||||||||||
| Foreign exchange loss (gain) | — | 18,624 | — | (7,920) | |||||||||||||||||||
| Settlements/curtailments | — | (998) | — | (6,197) | |||||||||||||||||||
| Other | — | (52) | — | (56) | |||||||||||||||||||
| Reclass to assets held for sale | (615) | (2,156) | — | — | |||||||||||||||||||
| Benefit obligation at December 31 | $ | 483,570 | $ | 186,581 | $ | 485,068 | $ | 177,953 | |||||||||||||||
| Change in plan assets: | |||||||||||||||||||||||
| Fair value of plan assets at January 1 | $ | 477,394 | $ | 62,318 | $ | 484,131 | $ | 65,514 | |||||||||||||||
| Actual return on plan assets | 34,927 | 3,456 | 33,707 | (1,317) | |||||||||||||||||||
| Employer contributions | 5,237 | 13,240 | 1,911 | 15,498 | |||||||||||||||||||
| Benefits paid | (41,765) | (12,943) | (42,355) | (9,423) | |||||||||||||||||||
| Employee contributions | — | 65 | — | 70 | |||||||||||||||||||
| Foreign exchange gain (loss) | — | 5,948 | — | (1,771) | |||||||||||||||||||
| Settlements/curtailments | — | (998) | — | (6,197) | |||||||||||||||||||
| Other | — | (52) | — | (56) | |||||||||||||||||||
| Reclass to assets held for sale | (563) | (1,210) | — | — | |||||||||||||||||||
| Fair value of plan assets at December 31 | $ | 475,230 | $ | 69,824 | $ | 477,394 | $ | 62,318 | |||||||||||||||
| Funded status at December 31 | $ | (8,340) | $ | (116,757) | $ | (7,674) | $ | (115,635) |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| U.S. Pension Plans | Foreign Pension Plans | U.S. Pension Plans | Foreign Pension Plans | ||||||||||||||||||||
| Amounts recognized in consolidated balance sheets: | |||||||||||||||||||||||
| Current liabilities (accrued expenses) | $ | (910) | $ | (6,826) | $ | (928) | $ | (6,189) | |||||||||||||||
| Noncurrent liabilities (pension benefits) | (7,430) | (109,931) | (6,746) | (109,446) | |||||||||||||||||||
| Net pension liability | $ | (8,340) | $ | (116,757) | $ | (7,674) | $ | (115,635) | |||||||||||||||
| Amounts recognized in accumulated other comprehensive loss: | |||||||||||||||||||||||
| Prior service benefit | $ | — | $ | (371) | $ | — | $ | (441) | |||||||||||||||
| Net amount recognized | $ | — | $ | (371) | $ | — | $ | (441) | |||||||||||||||
| Weighted-average assumptions used to determine benefit obligations at December 31: | |||||||||||||||||||||||
| Discount rate | 5.43 | % | 4.50 | % | 5.65 | % | 4.04 | % | |||||||||||||||
| Rate of compensation increase | — | % | 2.83 | % | — | % | 3.65 | % |
The accumulated benefit obligation for all defined benefit pension plans was $660.8 million and $655.9 million at December 31, 2025 and 2024, respectively.
Postretirement medical benefits and life insurance is provided for certain groups of U.S. retired employees. Medical and life insurance benefit costs have been funded principally on a pay-as-you-go basis. The availability of medical coverage after retirement varies for different groups of employees. The majority of employees who retired before becoming eligible for Medicare can continue group coverage by paying a portion of the cost of a monthly premium designed to cover the claims incurred by retired employees subject to a cap on payments allowed. Employees who retired after December 31, 2024 pay the full cost of the monthly premium. The availability of group coverage for Medicare-eligible retirees also varies by employee group with coverage designed either to supplement or coordinate with Medicare. Retirees generally pay a portion of the cost of the coverage. Plan assets for retiree life insurance are held under an insurance contract and are reserved for retiree life insurance benefits. In 2005, the postretirement medical benefit available to U.S. employees was changed to provide that employees who are under age 50 as of December 31, 2005 would no longer be eligible for a company-paid retiree medical premium subsidy. Employees who are of age 50 and above as of December 31, 2005 and who retire after January 1, 2006 will have their retiree medical premium subsidy capped. Effective January 1, 2008, our medical insurance for certain groups of U.S. retired employees is now insured through a medical carrier.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of significant assumptions, for our postretirement benefit plans (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Other Postretirement Benefits | Other Postretirement Benefits | ||||||||||
| Change in benefit obligations: | |||||||||||
| Benefit obligation at January 1 | $ | 34,478 | $ | 28,889 | |||||||
| Service cost | 19 | 46 | |||||||||
| Interest cost | 1,883 | 1,441 | |||||||||
| Actuarial loss (gain) | 13,215 | 6,072 | |||||||||
| Benefits paid | (1,964) | (1,970) | |||||||||
| Benefit obligation at December 31 | $ | 47,631 | $ | 34,478 | |||||||
| Change in plan assets: | |||||||||||
| Fair value of plan assets at January 1 | $ | — | $ | — | |||||||
| Employer contributions | 1,964 | 1,970 | |||||||||
| Benefits paid | (1,964) | (1,970) | |||||||||
| Fair value of plan assets at December 31 | $ | — | $ | — | |||||||
| Funded status at December 31 | $ | (47,631) | $ | (34,478) |
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Other Postretirement Benefits | Other Postretirement Benefits | ||||||||||
| Amounts recognized in consolidated balance sheets: | |||||||||||
| Current liabilities (accrued expenses) | $ | (2,887) | $ | (2,548) | |||||||
| Noncurrent liabilities (postretirement benefits) | (44,744) | (31,930) | |||||||||
| Net postretirement liability | $ | (47,631) | $ | (34,478) | |||||||
| Weighted-average assumptions used to determine benefit obligations at December 31: | |||||||||||
| Discount rate | 5.45 | % | 5.67 | % | |||||||
| Rate of compensation increase | 3.50 | % | 3.50 | % |
The components of pension benefits cost (credit) are as follows (in thousands):
| Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| U.S. Pension Plans | Foreign Pension Plans | U.S. Pension Plans | Foreign Pension Plans | U.S. Pension Plans | Foreign Pension Plans | ||||||||||||||||||||||||||||||
| Service cost | $ | 402 | $ | 5,167 | $ | 545 | $ | 5,391 | $ | 499 | $ | 5,686 | |||||||||||||||||||||||
| Interest cost | 26,140 | 7,404 | 25,580 | 7,204 | 26,924 | 7,153 | |||||||||||||||||||||||||||||
| Expected return on assets | (30,711) | (4,252) | (31,862) | (3,867) | (30,875) | (2,872) | |||||||||||||||||||||||||||||
| Actuarial loss (gain) | 10,204 | (6,173) | (13,530) | (2,569) | (11,951) | 8,593 | |||||||||||||||||||||||||||||
| Amortization of prior service benefit | — | 79 | — | 79 | — | 81 | |||||||||||||||||||||||||||||
| Total net pension benefits (credit) cost | $ | 6,035 | $ | 2,225 | $ | (19,267) | $ | 6,238 | $ | (15,403) | $ | 18,641 | |||||||||||||||||||||||
| Weighted-average assumption percentages: | |||||||||||||||||||||||||||||||||||
| Discount rate | 5.65 | % | 4.04 | % | 5.21 | % | 3.73 | % | 5.46 | % | 4.04 | % | |||||||||||||||||||||||
| Expected return on plan assets | 6.70 | % | 6.52 | % | 6.88 | % | 5.95 | % | 6.88 | % | 4.86 | % | |||||||||||||||||||||||
| Rate of compensation increase | — | % | 3.65 | % | — | % | 3.67 | % | — | % | 3.67 | % |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Effective January 1, 2026, the weighted-average expected rate of return on plan assets for the U.S. and foreign defined benefit pension plans is 6.00% and 6.35%, respectively.
The components of postretirement benefits cost (credit) are as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Other Postretirement Benefits | Other Postretirement Benefits | Other Postretirement Benefits | |||||||||||||||
| Service cost | $ | 19 | $ | 46 | $ | 47 | |||||||||||
| Interest cost | 1,883 | 1,441 | 1,873 | ||||||||||||||
| Actuarial loss (gain) | 13,215 | 6,268 | (6,816) | ||||||||||||||
| Total net postretirement benefits credit | $ | 15,117 | $ | 7,755 | $ | (4,896) | |||||||||||
| Weighted-average assumption percentages: | |||||||||||||||||
| Discount rate | 5.67 | % | 5.21 | % | 5.45 | % | |||||||||||
All components of net benefit cost (credit), other than service cost, are included in Other income, net on the consolidated statements of (loss) income.
The mark-to-market actuarial loss in 2025 was primarily attributable to a decrease in the weighted-average discount rate to 5.43% from 5.65% for our U.S. pension plans and postretirement benefit to reflect market conditions as of the December 31, 2025 measurement date, which was partially offset by a higher return on pension plan assets in the U.S. during the year than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. pension plan assets was 7.32% versus an expected return of 6.70%. The mark-to-market actuarial loss in the U.S. was partially offset by a gain for our foreign pension plans, attributable to an increase in the weighted-average discount rate to 4.50% from 4.04% for our foreign pension plans to reflect market conditions as of the December 31, 2025 measurement date. This was partially offset by a lower return on foreign pension plan assets during the year than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 5.55% versus an expected return of 6.52%.
The mark-to-market actuarial gain in 2024 was primarily attributable to an increase in the weighted-average discount rate to 5.65% from 5.21% for our U.S. pension plans and to 4.04% from 3.73% for our foreign pension plans to reflect market conditions as of the December 31, 2024 measurement date. This was partially offset by a lower return on pension plan assets during the year than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 5.89% versus an expected return of 6.77%.
The mark-to-market actuarial gain in 2023 was primarily attributable to a higher return on pension plan assets during the year than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 11.21% versus an expected return of 6.66%. This was partially offset by a decrease in the weighted-average discount rate to 5.21% from 5.46% for our U.S. pension plans and to 3.73% from 4.04% for our foreign pension plans to reflect market conditions as of the December 31, 2023 measurement date.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities | ||||
| Level 2 | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | ||||
| Level 3 | Unobservable inputs for the asset or liability |
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Investments for which market quotations are readily available are valued at the closing price on the last business day of the year. Listed securities for
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
which no sale was reported on such date are valued at the mean between the last reported bid and asked price. Securities traded in the over-the-counter market are valued at the closing price on the last business day of the year or at bid price. The net asset value of shares or units is based on the quoted market value of the underlying assets. The market value of corporate bonds is based on institutional trading lots and is most often reflective of bid price. Government securities are valued at the mean between bid and ask prices. Holdings in private equity securities are typically valued using the net asset valuations provided by the underlying private investment companies.
The following tables set forth the assets of our pension and postretirement plans that were accounted for at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | Quoted Prices in Active Markets for Identical Items (Level 1) | Quoted Prices in Active Markets for Similar Items (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Pension Assets: | |||||||||||||||||||||||
| Domestic Equity(a) | $ | 140 | $ | 140 | $ | — | $ | — | |||||||||||||||
| International Equity(b) | 152,912 | 143,654 | 9,258 | — | |||||||||||||||||||
| Fixed Income(c) | 368,588 | 331,713 | 36,875 | — | |||||||||||||||||||
| Absolute Return Measured at Net Asset Value(d) | 8,076 | — | — | — | |||||||||||||||||||
| Cash | 15,338 | 15,338 | — | — | |||||||||||||||||||
| Total Pension Assets | $ | 545,054 | $ | 490,845 | $ | 46,133 | $ | — | |||||||||||||||
| December 31, 2024 | Quoted Prices in Active Markets for Identical Items (Level 1) | Quoted Prices in Active Markets for Similar Items (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Pension Assets: | |||||||||||||||||||||||
| Domestic Equity(a) | $ | 78,124 | $ | 78,124 | $ | — | $ | — | |||||||||||||||
| International Equity(b) | 78,124 | 69,471 | 8,653 | — | |||||||||||||||||||
| Fixed Income(c) | 318,036 | 286,549 | 31,487 | — | |||||||||||||||||||
| Absolute Return Measured at Net Asset Value(d) | 56,888 | — | — | — | |||||||||||||||||||
| Cash | 8,540 | 8,540 | — | — | |||||||||||||||||||
| Total Pension Assets | $ | 539,712 | $ | 442,684 | $ | 40,140 | $ | — | |||||||||||||||
(a)Consists primarily of U.S. stock funds that track or are actively managed and measured against the S&P 500 index.
(b)Consists primarily of international equity funds that invest in common stocks and other securities whose value is based on an international equity index or an underlying equity security or basket of equity securities.
(c)Consists primarily of debt obligations issued by governments, corporations, municipalities and other borrowers. Also includes insurance policies.
(d)Consists primarily of funds with holdings in private investment companies. See additional information about the Absolute Return investments below. Holdings in private investment companies are measured at fair value using the net asset value per share as a practical expedient and have not been categorized in the fair value hierarchy. Their fair values are included in this table to permit reconciliation to the reconciliation of plan assets table above.
The Company’s pension plan assets in the U.S. and U.K. represent approximately 95% of the total pension plan assets. The investment objective of these pension plan assets is to achieve solid returns while preserving capital to meet current plan cash flow requirements. Assets should participate in rising markets, with defensive action in declining markets expected to an even greater degree. Depending on market conditions, the broad asset class targets may range up or down by approximately 10%. These asset classes include but are not limited to hedge fund of funds, bonds and other fixed income vehicles, high yield fixed income securities, equities and distressed debt. At December 31, 2025 and 2024, equity securities held by our pension and OPEB plans did not include direct ownership of Albemarle common stock.
The weighted-average target allocations as of the measurement date are as follows:
| Target Allocation | |||||
| Equity securities | 30 | % | |||
| Fixed income | 69 | % | |||
| Absolute return | 1 | % | |||
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Our Absolute Return investments consist primarily of our investments in hedge fund of funds. These are holdings in private investment companies with fair values that are based on significant unobservable inputs including assumptions where there is little, if any, market activity for the investment. Investment managers or fund managers associated with these investments provide valuations of the investments on a monthly basis utilizing the net asset valuation approach for determining fair values. These valuations are reviewed by the Company for reasonableness based on applicable sector, benchmark and company performance to validate the appropriateness of the net asset values as a fair value measurement. Where available, audited financial statements are obtained and reviewed for the investments as support for the manager’s investment valuation. In general, the investment objective of these funds is high risk-adjusted returns with an emphasis on preservation of capital. The investment strategies of each of the funds vary; however, the objective of our Absolute Return investments is complementary to the overall investment objective of our U.S. pension plan assets.
We made contributions to our defined benefit pension and OPEB plans of $20.4 million, $19.4 million and $17.9 million during the years ended December 31, 2025, 2024 and 2023, respectively. We expect contributions to our domestic nonqualified and foreign qualified and nonqualified pension plans to approximate $12.5 million in 2026. Also, we expect to pay approximately $2.0 million in premiums to our U.S. postretirement benefit plan in 2026. However, we may choose to make additional voluntary pension contributions in excess of these amounts.
The current forecast of benefit payments, which reflects expected future service, amounts to (in thousands):
| U.S. Pension Plans | Foreign Pension Plans | Other Postretirement Benefits | |||||||||||||||
| 2026 | $ | 44,432 | $ | 14,242 | $ | 2,887 | |||||||||||
| 2027 | $ | 44,105 | $ | 13,136 | $ | 3,004 | |||||||||||
| 2028 | $ | 43,627 | $ | 14,262 | $ | 3,109 | |||||||||||
| 2029 | $ | 42,856 | $ | 16,062 | $ | 3,197 | |||||||||||
| 2030 | $ | 41,763 | $ | 13,580 | $ | 4,252 | |||||||||||
| 2031-2035 | $ | 189,846 | $ | 66,953 | $ | 21,281 |
We have a supplemental executive retirement plan (“SERP”), which provides unfunded supplemental retirement benefits to certain management or highly compensated employees. The SERP provides for incremental pension benefits to offset the limitations imposed on qualified plan benefits by federal income tax regulations. Costs relating to our SERP were $0.7 million, $0.7 million and $0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. The projected benefit obligation for the SERP recognized in the consolidated balance sheets at December 31, 2025 and 2024 was $5.7 million and $5.9 million, respectively. The benefit expenses and obligations of this SERP are included in the tables above. Benefits of $0.9 million are expected to be paid to SERP retirees in 2026. On October 1, 2012, our Board of Directors approved amendments to the SERP, such that effective December 31, 2014, no additional benefits shall accrue under this plan and participants’ accrued benefits shall be frozen as of that date to reflect the same changes as were made under the U.S. qualified defined benefit plan.
At December 31, 2025, the assumed rate of increase in the pre-65 and post-65 per capita cost of covered health care benefits for U.S. retirees was zero as the employer-paid premium caps (pre-65 and post-65) were met starting January 1, 2013.
Defined Contribution Plans
On March 31, 2004, a new defined contribution pension plan benefit was adopted under the qualified defined contribution plan for U.S. non-represented employees hired after March 31, 2004. On October 1, 2012, the Company’s Board of Directors approved certain plan amendments, such that effective January 1, 2013, the defined contribution pension plan benefit is expanded to include non-represented employees hired prior to March 31, 2004, and revised the contribution for all participants to be based on 5% of eligible employee compensation. Effective January 1, 2025, employees in the Ketjen reportable segment were transferred to a separate defined contribution pension plan with the same terms as their previous plan. The employer portion of contributions to these U.S. defined contribution pension plans amounted to $15.8 million, $18.3 million, and $17.8 million in 2025, 2024 and 2023, respectively.
Certain of our employees participate in our defined contribution 401(k) employee savings plan, which is generally available to all U.S. full-time salaried and non-union hourly employees and to employees who are covered by a collective bargaining agreement that provides for such participation. This U.S. defined contribution plan is funded with contributions made by the participants and the Company. Effective January 1, 2025, employees in the Ketjen reportable segment were transferred to a separate defined contribution 401(k) employee savings plan with the same terms as their previous plan. The
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Company’s contributions to these 401(k) plans amounted to $16.8 million, $20.4 million and $18.4 million in 2025, 2024 and 2023, respectively.
NOTE 14—Other Noncurrent Liabilities:
Other noncurrent liabilities consist of the following at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Transition tax on foreign earnings(a) | $ | — | $ | 44,647 | |||||||
| Operating leases(b) | 103,110 | 99,514 | |||||||||
| Liabilities related to uncertain tax positions(c) | 259,199 | 259,586 | |||||||||
| Executive deferred compensation plan obligation | 30,750 | 38,243 | |||||||||
| Environmental liabilities(d) | 16,301 | 15,783 | |||||||||
| Asset retirement obligations(d) | 94,627 | 94,854 | |||||||||
| Tax indemnification liability(e) | 12,089 | 12,567 | |||||||||
| Deferred revenue | 340,527 | 78,027 | |||||||||
| Capital expenditure incentive payables(f) | 159,424 | 74,506 | |||||||||
| Other(g) | 68,865 | 101,477 | |||||||||
| Total | $ | 1,084,892 | $ | 819,204 |
(a)Noncurrent portion of one-time transition tax on foreign earnings. The Company expects to make the final payment in 2026. See Note 20, “Income Taxes,” for additional information.
(b)See Note 18, “Leases.”
(c)See Note 20, “Income Taxes.”
(d)See Note 15, “Commitments and Contingencies.”
(e)Indemnification of certain income and non-income tax liabilities, primarily associated with the Chemetall Surface Treatment entities sold in 2016.
(f)When constructing new facilities or making major enhancements to existing facilities, we may have the opportunity to enter into incentive agreements with local government agencies in order to reduce certain state and local tax expenditures. Under these agreements, we transfer the related assets to various local government entities and receive bonds. We immediately lease the facilities from the local government entities and have an option to repurchase the facilities for a nominal amount upon tendering the bonds to the local government entities at various predetermined dates. The bonds and the associated obligations for the leases of the facilities offset values, and the underlying assets are recorded in property, plant and equipment.
(g)No individual component exceeds 5% of total liabilities.
In the normal course of business, amounts received from customers in advance of the Company’s satisfaction of its contractual performance obligations are recorded as deferred revenue, and are recognized within Net Sales as the Company satisfies the related performance obligation. During the year ended December 31, 2025, the Company received $350 million from a customer for the delivery of specified amounts of spodumene and lithium salts over the next 5 years. $87.5 million of deferred revenue is expected to be recognized within Net sales over the next twelve months and is reported in Accrued expenses on the consolidated balance sheet. There was no deferred revenue recognized in Net sales during the year ended December 31, 2025.
NOTE 15—Commitments and Contingencies:
In the ordinary course of business, we have commitments in connection with various activities. The Company believes that amounts recorded are adequate for known items which might become due in the current year. The most significant commitments are as follows:
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Environmental
The Company had the following activity in our recorded environmental liabilities for the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance, beginning of year | $ | 20,023 | $ | 34,149 | $ | 38,245 | |||||||||||
| Expenditures | (740) | (4,159) | (3,393) | ||||||||||||||
| Accretion of discount | 849 | 1,126 | 1,094 | ||||||||||||||
| Additions, liability releases and changes in estimates, net | 34 | (11,304) | (2,541) | ||||||||||||||
| Foreign currency translation adjustments and other | 382 | 211 | 744 | ||||||||||||||
| Balance, end of year | 20,548 | 20,023 | 34,149 | ||||||||||||||
| Less amounts reported in Accrued expenses | 4,247 | 4,240 | 10,925 | ||||||||||||||
| Amounts reported in Other noncurrent liabilities | $ | 16,301 | $ | 15,783 | $ | 23,224 |
Environmental remediation liabilities included discounted liabilities of $17.0 million and $16.8 million at December 31, 2025 and 2024, respectively, discounted at rates with a weighted-average of 4.0%, with the undiscounted amount totaling $34.2 million and $34.5 million at December 31, 2025 and 2024, respectively.
The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities typically arise during the normal course of our operational and environmental management activities or at the time of acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at each relevant site, changes in risk assessment practices, remediation techniques and regulatory requirements can occur, therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites will be determined when evaluations are completed. Although it is difficult to quantify the potential financial impact of these remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility that future environmental remediation costs associated with our past operations could represent an additional $40 million before income taxes, in excess of amounts already recorded.
The Company believes that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Asset Retirement Obligations
The following is a reconciliation of our beginning and ending asset retirement obligation balances for 2025 and 2024 (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance, beginning of year | $ | 96,389 | $ | 89,159 | |||||||
| Additions and changes in estimates | 3,993 | 6,608 | |||||||||
| Accretion of discount | 3,377 | 3,365 | |||||||||
| Liabilities settled | (7,914) | (2,653) | |||||||||
| Reclass to assets held for sale | (1,001) | — | |||||||||
| Foreign currency translation adjustments and other | 158 | (90) | |||||||||
| Balance, end of year | $ | 95,002 | $ | 96,389 | |||||||
| Less amounts reported in Accrued expenses | 375 | 1,535 | |||||||||
| Amounts reported in Other noncurrent liabilities | $ | 94,627 | $ | 94,854 |
Asset retirement obligations primarily relate to post-closure reclamation of brine wells and sites involved in the surface mining and manufacturing of lithium. We are not aware of any conditional asset retirement obligations that would require recognition in our consolidated financial statements.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Litigation
The Company is involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, the Company may establish financial reserves for such proceedings. The Company also maintains insurance to mitigate certain of such risks. Costs for legal services are generally expensed as incurred.
As first reported in 2018, following receipt of information regarding potential improper payments being made by third-party sales representatives of our Refining Solutions business, within what is now the Ketjen segment, the Company investigated and voluntarily self-reported potential violations of the U.S. Foreign Corrupt Practices Act to the U.S. Department of Justice (“DOJ”) and the SEC, and also reported this conduct to the Dutch Public Prosecutor (“DPP”). The Company cooperated with these agencies in their investigations of this historical conduct and implemented appropriate remedial measures intended to strengthen our compliance program and related internal controls.
In September 2023, the Company finalized agreements to resolve these matters with the DOJ and SEC, recording a charge of $218.5 million in Selling, General and Administrative Expenses in its consolidated statement of (loss) income for the year ended December 31, 2023. The DPP confirmed it would not pursue action in this matter. In connection with this resolution, which relates to conduct prior to 2018, the Company entered into a non-prosecution agreement with the DOJ and an administrative resolution with the SEC, pursuant to which the Company paid a total of $218.5 million in aggregate fines, disgorgement, and prejudgment interest to the DOJ and SEC in October 2023, with this matter considered finalized and no future financial obligations expected. The resolution did not include a compliance monitorship, although the Company agreed to certain ongoing compliance reporting obligations.
In April 2025, the Company concluded its non-prosecution agreement with the DOJ prior to the end of its term in recognition that the terms of the agreement had been satisfied.
Indemnities
The Company is indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although the Company believes that the financial condition of those parties who may have indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party who may have obligations to indemnify the Company will adhere to their obligations and the Company may have to resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. The Company had approximately $12.1 million and $12.6 million at December 31, 2025 and 2024, respectively, recorded in Other noncurrent liabilities primarily related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold in 2016.
Other
The Company has standby letters of credit and guarantees with various financial institutions. The following table summarizes our letters of credit and guarantee agreements (in thousands):
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||||||||||
| Letters of credit and other guarantees | $ | 91,789 | $ | 4,317 | $ | 392 | $ | — | $ | — | $ | 6,094 |
The outstanding letters of credit are primarily related to insurance claim payment guarantees. The majority of the Company’s other guarantees have terms of one year and mainly consist of performance and environmental guarantees, as well as guarantees to customs and port authorities. The guarantees arose during the ordinary course of business.
The Company does not have recorded reserves for the letters of credit and guarantees as of December 31, 2025. The Company is unable to estimate the maximum amount of the potential future liability under guarantees and letters of credit. However, the Company accrues for any potential loss for which it believes a future payment is probable and a range of loss can be reasonably estimated. The Company believes its liability under such obligations is immaterial.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The Company currently, and is from time to time, subject to transactional audits in various taxing jurisdictions and to customs audits globally. The Company does not expect the financial impact of any of these audits to have a material adverse effect on its results of operations, financial condition or cash flows.
NOTE 16—Equity:
Common Stock
Effective May 10, 2024, the Company amended its Amended and Restated Articles of Incorporation (the “Charter”) to increase the number of authorized shares of common stock, $0.01 par value per share, from 150,000,000 to 275,000,000 (the “Charter Amendment”).
Mandatory Convertible Preferred Stock
On March 8, 2024, the Company issued 46,000,000 depositary shares (“Depositary Shares”), each representing a 1/20th interest in a share of Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”). The 2,300,000 shares of Mandatory Convertible Preferred Stock issued have a $1,000 per share liquidation preference. As a result of this transaction, the Company received cash proceeds of approximately $2.2 billion, net of underwriting fees and offering costs.
Dividends on the Mandatory Convertible Preferred Stock are payable on a cumulative basis when, as and if declared by the Albemarle board of directors, or an authorized committee thereof, at an annual rate of 7.25% on the liquidation preference of $1,000 per share, and may be paid in cash or, subject to certain limitations, in shares of common stock or, subject to certain limitations, any combination of cash and shares of common stock. Dividends that are declared on the Mandatory Convertible Preferred Stock will be payable quarterly to the holders of record on February 15, May 15, August 15 and November 15 of each year, immediately preceding the relevant dividend payment date, whether or not such holders convert their Depositary Shares, or such Depositary Shares are automatically converted, after a record date and on or prior to the immediately succeeding dividend payment date. The Company pays a quarterly cash dividend of $18.125 per share of Mandatory Convertible Preferred Stock. Dividends are expected to be paid on March 1, June 1, September 1 and December 1 of each year ending on, and including, March 1, 2027.
The Company may not redeem the shares of the Mandatory Convertible Preferred Stock. However, at its option, the Company may purchase the Mandatory Convertible Preferred Stock from time to time on the open market, by tender offer, exchange offer or otherwise.
Unless converted earlier in accordance with its terms, each share of Mandatory Convertible Preferred Stock will automatically convert on the mandatory conversion date, which is expected to be March 1, 2027, into between 7.618 shares and 9.140 shares of common stock, in each case, subject to customary anti-dilution adjustments described in the certificate of designations related to the Mandatory Convertible Preferred Stock (the “Certificate of Designations”). The number of shares of common stock issuable upon conversion will be determined based on the average volume weighted average price per share of common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately prior to March 1, 2027.
Holders of shares of Mandatory Convertible Preferred Stock have the option to convert all or any portion of their shares of the Mandatory Convertible Preferred Stock at any time. The conversion rate applicable to any early conversion may in certain circumstances be increased to compensate holders of the Mandatory Convertible Preferred Stock for certain unpaid accumulated dividends in the Certificate of Designations.
If a Fundamental Change, as defined in the Certificate of Designations, occurs on or prior to March 1, 2027, then holders of the Mandatory Convertible Preferred Stock will be entitled to convert all or any portion of their Mandatory Convertible Preferred Stock at the fundamental change conversion rate, as defined in the Certificate of Designations, as for a specified period of time and to also receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments.
There were 2,300,000 shares of Mandatory Convertible Preferred Stock issued and outstanding at December 31, 2025.
Accumulated Other Comprehensive Loss
The components and activity in Accumulated other comprehensive loss (net of deferred income taxes) consisted of the following during the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| Foreign Currency Translation and Other | Cash Flow Hedge**(a)** | Total | |||||||||||||||||||||
| Balance at December 31, 2022 | $ | (562,886) | $ | 2,224 | $ | (560,662) | |||||||||||||||||
| Other comprehensive income before reclassifications | 26,337 | 5,986 | 32,323 | ||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 66 | (135) | (69) | ||||||||||||||||||||
| Other comprehensive income, net of tax | 26,403 | 5,851 | 32,254 | ||||||||||||||||||||
| Other comprehensive income attributable to noncontrolling interests | (118) | — | (118) | ||||||||||||||||||||
| Balance at December 31, 2023 | $ | (536,601) | $ | 8,075 | $ | (528,526) | |||||||||||||||||
| Other comprehensive loss before reclassifications | (210,611) | (28,701) | (239,312) | ||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 77 | 25,766 | 25,843 | ||||||||||||||||||||
| Other comprehensive loss, net of tax | (210,534) | (2,935) | (213,469) | ||||||||||||||||||||
| Other comprehensive income attributable to noncontrolling interests | (67) | — | (67) | ||||||||||||||||||||
| Balance at December 31, 2024 | $ | (747,202) | $ | 5,140 | $ | (742,062) | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 407,817 | (194) | 407,623 | ||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 56 | (234) | (178) | ||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 407,873 | (428) | 407,445 | ||||||||||||||||||||
| Other comprehensive income attributable to noncontrolling interests | (190) | — | (190) | ||||||||||||||||||||
| Balance at December 31, 2025 | $ | (339,519) | $ | 4,712 | $ | (334,807) |
(a) We previously entered into a foreign currency forward contract, which was designated and accounted for as a cash flow hedge under ASC 815, Derivatives and Hedging. During the year ended December 31, 2024, the Company dedesignated the remaining foreign currency forward contracts accounted for as cash flow hedges. The related loss was reclassified to Other income, net during the year ended December 31, 2024. The balance of the settled hedged foreign currency forward contracts will be reclassified to earnings over the life of the related assets. See Note 17, “Restructuring Charges and Asset Write-offs,” and Note 22, “Fair Value of Financial Instruments,” for additional information.
The amount of income tax benefit (expense) allocated to each component of Other comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023 is provided in the following tables (in thousands):
| Foreign Currency Translation and Other | Cash Flow Hedge | Total | |||||||||||||||||||||
| 2025 | |||||||||||||||||||||||
| Other comprehensive income (loss), before tax | $ | 401,689 | $ | (428) | $ | 401,261 | |||||||||||||||||
| Income tax benefit | 6,184 | — | 6,184 | ||||||||||||||||||||
| Other comprehensive income (loss), net of tax | $ | 407,873 | $ | (428) | $ | 407,445 | |||||||||||||||||
| 2024 | |||||||||||||||||||||||
| Other comprehensive loss, before tax | $ | (210,522) | $ | (2,935) | $ | (213,457) | |||||||||||||||||
| Income tax expense | (12) | — | (12) | ||||||||||||||||||||
| Other comprehensive loss, net of tax | $ | (210,534) | $ | (2,935) | $ | (213,469) | |||||||||||||||||
| 2023 | |||||||||||||||||||||||
| Other comprehensive income, before tax | $ | 23,964 | $ | 8,358 | $ | 32,322 | |||||||||||||||||
| Income tax benefit (expense) | 2,439 | (2,507) | (68) | ||||||||||||||||||||
| Other comprehensive income, net of tax | $ | 26,403 | $ | 5,851 | $ | 32,254 |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 17—Restructuring Charges and Asset Write-offs:
Second Half 2024 Restructuring
In July 2024, the Company announced a comprehensive review of its cost and operating structure to proactively respond to ongoing industry headwinds, particularly in the lithium value chain, and to maintain a competitive position. As part of this review, the Company made the decision to stop construction of Kemerton Train 3 in Western Australia, and put Kemerton Train 2 into care and maintenance, as the Company determined the current lithium price environment makes it less economical to expand conversion in Australia. Kemerton Train 1 will continue to operate and activity around it is currently focused on commercialization efforts. Additionally, as part of this restructuring plan, the Company placed the Chengdu, China conversion plant into care and maintenance during the first half of 2025. Production from the Chengdu site has been transferred to another processing facility in China.
The Company’s actions regarding Kemerton are part of a broader effort focused on preserving its world-class resource advantages, optimizing its global conversion network, improving the Company’s cost competitiveness and efficiency by lowering operating costs, reducing capital intensity and enhancing the Company’s financial flexibility. As part of this effort, effective November 1, 2024, the Company transitioned its operating structure to a fully integrated functional model (excluding Ketjen) from a global business unit model. As a result, the Company implemented a global workforce reduction that impacted 6-7% of total headcount during the second half of 2024.
Since inception, the Company has recorded charges for this plan consisting of asset write-offs of $726.0 million, severance and employee benefits of $53.4 million, contract cancellation costs of $38.4 million and other (primarily consisting of the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss) of $41.1 million. Charges related to Second Half 2024 Restructuring were primarily recorded in the Energy Storage segment, with the exception of severance and employee benefits, which were recorded globally in Corporate and all segments. The Company does not expect any further material costs associated with the Second Half 2024 Restructuring.
First Half 2024 Restructuring
In January 2024, the Company announced measures to unlock near-term cash flow and generate long-term financial flexibility by re-phasing organic growth investments and optimizing its cost structure. As part of these measures, during the second quarter of 2024, the Company indefinitely suspended construction of Kemerton Train 4, as well as deferred spending and investments with respect to certain other capital projects, primarily within the Energy Storage segment. In addition, the Company recorded severance costs for employees in Corporate and each of the businesses as part of these announced measures. As a result, since inception, the Company has recorded charges for this plan consisting of asset write-offs of $280.6 million, severance and employee benefits of $18.9 million, contract cancellation costs of $24.9 million and other (primarily consisting of the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss) of $5.4 million. No further costs associated with the First Half 2024 Restructuring are expected to be recorded as this restructuring plan was completed in the first half of 2024.
2023 Restructuring
During the year ended December 31, 2023, $9.5 million of separation and other severance costs to employees in Corporate and the Ketjen business were recorded in Restructuring charges and asset write-offs.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Detail of Restructuring Charges and Liabilities
The following table provides details of our restructuring related charges for the years ended December 31, 2025 and 2024 (in thousands):
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||
| Asset Write-offs**(a)** | Severance and Employee Benefits**(b)** | Contract Cancellation Costs**(c)** | Other**(d)** | Total | |||||||||||||||||||||||||
| Second Half 2024 Restructuring(e) | $ | (6,878) | $ | 2,184 | $ | 1,059 | $ | 11,528 | $ | 7,893 | |||||||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||||||||
| Asset Write-offs**(a)** | Severance and Employee Benefits**(b)** | Contract Cancellation Costs**(c)** | Other**(d)** | Total | |||||||||||||||||||||||||
| First Half 2024 Restructuring(e) | $ | 280,596 | $ | 18,856 | $ | 24,887 | $ | 5,374 | $ | 329,713 | |||||||||||||||||||
| Second Half 2024 Restructuring(e) | 732,907 | 51,264 | 37,370 | 29,552 | 851,093 | ||||||||||||||||||||||||
| $ | 1,013,503 | $ | 70,120 | $ | 62,257 | $ | 34,926 | $ | 1,180,806 |
(a) In 2025, the Company received proceeds for certain Kemerton equipment and updated its estimates concerning the progress of construction activities and related contractual obligations, resulting in a net favorable adjustment of asset write-offs. In 2024, asset write-offs included $16.5 million recorded in Cost of goods sold, primarily related to work in process inventory with no future value as a result of the decommissioning of Kemerton Train 2 that was placed into care and maintenance. The remainder of the asset write-offs primarily related to property, plant and equipment of the in-construction Kemerton Trains 3 and 4, and Kemerton Train 2 that was placed into care and maintenance. Asset write-off charges not related to inventories and changes in estimates were recorded in Restructuring charges and asset write-offs.
(b) In 2024, severance and employee benefit charges included $3.8 million recorded in Cost of goods sold. All other severance and employee benefit charges for global employees terminated during the various restructuring programs were recorded in Restructuring charges and asset write-offs.
(c) Includes cancellation fees for contractors and required payments under take or pay contracts. All contract cancellation costs and favorable adjustments were recorded in Restructuring charges and asset write-offs.
(d) Other includes costs to put Kemerton Train 2 and the Chengdu, China conversion plant into care and maintenance and similar restructuring costs, and are recorded in Restructuring charges and asset write-offs. In addition, Other also includes the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss. A loss of $20.7 million was recorded in Other income, net for the year ended December 31, 2024 related to the Second Half 2024 Restructuring and a loss of $5.4 million was recorded in Other income, net for the year ended December 31, 2024 related to the First Half 2024 Restructuring.
(e) Severance and employee benefits related to Corporate and all segments. All other restructuring costs were primarily recorded in the Energy Storage segment.
Restructuring charges related to severance and employee benefits of $9.5 million for the year ended December 31, 2023 were recorded in Restructuring charges and asset write-offs and are reported in Corporate and the Ketjen segment.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The following tables summarize the changes in restructuring liabilities for the year ended December 31, 2025 (in thousands):
| Second Half 2024 Restructuring | Asset Write-offs | Severance and Employee Benefits | Contract Cancellation Costs | Other | Total | ||||||||||||||||||||||||
| Beginning balance at December 31, 2024 | $ | — | $ | 15,867 | $ | 32,479 | $ | 8,811 | $ | 57,157 | |||||||||||||||||||
| 2025 charges | 2,142 | 5,398 | 1,000 | 11,528 | 20,068 | ||||||||||||||||||||||||
| Change in estimate(a) | (9,020) | (3,214) | 59 | — | (12,175) | ||||||||||||||||||||||||
| Cash payments | — | (16,657) | (17,212) | (3,968) | (37,837) | ||||||||||||||||||||||||
| Asset write-off/hedge dedesignation | 6,878 | — | — | (11,528) | (4,650) | ||||||||||||||||||||||||
| Foreign currency translation adjustments and other | — | (279) | (168) | — | (447) | ||||||||||||||||||||||||
| Ending balance at December 31, 2025(b) | $ | — | $ | 1,115 | $ | 16,158 | $ | 4,843 | $ | 22,116 | |||||||||||||||||||
| First Half 2024 Restructuring | Asset Write-offs | Severance and Employee Benefits | Contract Cancellation Costs | Other | Total | ||||||||||||||||||||||||
| Beginning balance at December 31, 2024 | $ | — | $ | — | $ | 2,767 | $ | — | $ | 2,767 | |||||||||||||||||||
| Cash payments | — | — | (1,742) | — | (1,742) | ||||||||||||||||||||||||
| Other | — | — | (1,025) | — | (1,025) | ||||||||||||||||||||||||
| Ending balance at December 31, 2025 | $ | — | $ | — | $ | — | $ | — | $ | — |
(a) In 2025, the Company received proceeds for certain Kemerton equipment and updated its estimates concerning the progress of construction activities and related contractual obligation, as well as updated estimates of severance charges in the U.S., resulting in a favorable adjustment of asset write-offs and severance and employee benefits. Additionally, the Company negotiated revised contract cancellation costs with key suppliers, which resulted in adjustments of the restructuring related charges.
(b) Approximately $15.9 million of the remaining balance is expected to be paid in the next twelve months and are recorded in Accrued expenses as of December 31, 2025. $6.2 million of the liability is recorded in Other noncurrent liabilities as of December 31, 2025, and relates to certain take or pay liabilities that will be paid in line with the terms of the original contract through 2027.
Subsequent Event
In connection with the Company’s ongoing review of its cost and operating structure, in February 2026 the Company determined it will put the Kemerton Train 1 into care and maintenance. As a result, the Company expects to record cash-related charges primarily in 2026 in the range of approximately $150 million to $225 million, of which approximately $75 million to $90 million consists of decommissioning costs and approximately $20 million to $30 million of asset disposal costs, with the remainder related to contract cancellation costs, severance and other associated charges resulting from placing Kemerton Train 1 into care and maintenance (the “Cost Actions”). The Company’s estimated range of the charges for these Cost Actions takes into account initial estimates for these activities and could change as the actions progress. The majority of the Cost Actions associated with these charges are expected to be completed in 2026, with the remainder expected to be completed in 2027.
NOTE 18—Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The following table provides details of our lease contracts for the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Operating lease cost | $ | 36,507 | $ | 37,331 | $ | 48,238 | |||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of right of use assets | 7,824 | 7,270 | 5,302 | ||||||||||||||
| Interest on lease liabilities | 6,418 | 6,435 | 5,070 | ||||||||||||||
| Total finance lease cost | 14,242 | 13,705 | 10,372 | ||||||||||||||
| Short-term lease cost | 24,977 | 25,651 | 20,309 | ||||||||||||||
| Variable lease cost | 48,122 | 34,741 | 25,075 | ||||||||||||||
| Total lease cost | $ | 123,848 | $ | 111,428 | $ | 103,994 |
Supplemental cash flow information related to our lease contracts for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | 35,552 | $ | 35,638 | $ | 49,261 | |||||||||||
| Operating cash flows from finance leases | 6,401 | 9,681 | 4,671 | ||||||||||||||
| Financing cash flows from finance leases | 4,982 | 4,982 | 2,165 | ||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | 44,314 | 25,605 | 48,655 | ||||||||||||||
| Finance leases | — | 12,706 | 46,773 |
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at December 31, 2025 and 2024 is as follows (in thousands, except as noted):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating leases: | |||||||||||
| Other assets | $ | 116,404 | $ | 118,839 | |||||||
| Accrued expenses | 24,561 | 32,626 | |||||||||
| Other noncurrent liabilities | 103,110 | 99,514 | |||||||||
| Total operating lease liabilities | 127,671 | 132,140 | |||||||||
| Finance leases: | |||||||||||
| Net property, plant and equipment | 103,915 | 117,038 | |||||||||
| Current portion of long-term debt | 4,077 | 5,183 | |||||||||
| Long-term debt | 102,719 | 113,613 | |||||||||
| Total finance lease liabilities | 106,796 | 118,796 | |||||||||
| Weighted average remaining lease term (in years): | |||||||||||
| Operating leases | 13.4 | 12.9 | |||||||||
| Finance leases | 20.5 | 20.4 | |||||||||
| Weighted average discount rate (%): | |||||||||||
| Operating leases | 5.01 | % | 4.47 | % | |||||||
| Finance leases | 5.47 | % | 5.55 | % |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):
| Operating Leases | Finance Leases | ||||||||||
| 2026 | $ | 28,150 | $ | 9,852 | |||||||
| 2027 | 23,571 | 9,783 | |||||||||
| 2028 | 19,518 | 9,645 | |||||||||
| 2029 | 17,941 | 9,645 | |||||||||
| 2030 | 12,904 | 8,997 | |||||||||
| Thereafter | 99,324 | 122,808 | |||||||||
| Total lease payments | 201,408 | 170,730 | |||||||||
| Less imputed interest | 73,737 | 63,934 | |||||||||
| Total | $ | 127,671 | $ | 106,796 |
NOTE 19—Stock-based Compensation Expense:
Incentive Plans
We have various share-based compensation plans that authorize the granting of (i) qualified and non-qualified stock options to purchase shares of our common stock, (ii) restricted stock and restricted stock units, (iii) performance unit awards and (iv) stock appreciation rights (“SARs”) to employees and non-employee directors, at our option. Stock options granted to employees generally vest over three years and have a term of ten years. Restricted stock and restricted stock unit awards vest in periods ranging from one to five years from the date of grant. Performance unit awards are earned at a level ranging from 0% to 200% contingent upon the achievement of specific performance criteria over periods ranging from one to three years. Distribution of earned units occurs generally 50% upon completion of the applicable measurement period with the remaining 50% distributed one year thereafter.
In May 2017, the Company adopted the Albemarle Corporation 2017 Incentive Plan (the “Incentive Plan”), which replaced the Albemarle Corporation 2008 Incentive Plan. The maximum number of shares available for issuance to participants under the Incentive Plan is 4,500,000 shares. The adoption of the Incentive Plan did not affect awards already granted under the Albemarle Corporation 2008 Incentive Plan. In February 2023, the Company adopted the Albemarle Corporation 2023 Stock Compensation and Deferral Election Plan for Non-Employee Directors (the “Non-Employee Directors Plan”). The Non-Employee Directors Plan replaced the 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors, which expired by its terms in May 2023. Under the Non-Employee Directors Plan, a maximum aggregate number of 500,000 shares of our common stock is authorized for issuance to the Company’s non-employee directors; any shares remaining available for issuance under the prior plans were canceled. The aggregate fair market value of shares that may be issued to a director during any compensation year (as defined in the Non-Employee Directors Plan, generally July 1 to June 30) shall not exceed $750,000. At December 31, 2025, there were 2,015,321 shares available for grant under the Incentive Plan and 455,344 shares available for grant under the Non-Employee Directors Plan.
Total stock-based compensation expense associated with our incentive plans for the years ended December 31, 2025, 2024 and 2023 amounted to $36.6 million, $33.1 million and $39.0 million, respectively, and is included in Cost of goods sold and Selling, general and administrative expenses in the consolidated statements of (loss) income. Total related recognized tax benefits for the years ended December 31, 2025, 2024 and 2023 amounted to $0.3 million, $2.7 million and $4.6 million, respectively.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The following table summarizes information about the Company’s fixed-price stock options as of and for the year ended December 31, 2025:
| Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 555,656 | $ | 126.38 | 5.9 | $ | 1,255 | |||||||||||||||||
| Granted | 226,844 | 78.97 | |||||||||||||||||||||
| Exercised | (48,104) | 67.38 | |||||||||||||||||||||
| Forfeited | (29,197) | 98.75 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 705,199 | $ | 116.30 | 6.4 | $ | 26,079 | |||||||||||||||||
| Exercisable at December 31, 2025 | 479,837 | $ | 121.06 | 5.3 | $ | 16,189 |
We granted 226,844, 165,350 and 51,316 stock options during the years ended December 31, 2025, 2024 and 2023, respectively. There were no significant modifications made to any share-based grants during these periods.
The fair value of each option granted during the years ended December 31, 2025, 2024 and 2023 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Dividend yield | 1.42 | % | 1.43 | % | 1.26 | % | |||||||||||
| Volatility | 44.74 | % | 42.44 | % | 40.06 | % | |||||||||||
| Average expected life (years) | 6 | 6 | 6 | ||||||||||||||
| Risk-free interest rate | 4.29 | % | 4.33 | % | 3.95 | % | |||||||||||
| Fair value of options granted | $ | 33.80 | $ | 48.70 | $ | 98.66 |
Dividend yield is the average of historical yields and those estimated over the average expected life. The stock volatility is based on historical volatilities of our common stock. The average expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns. The risk-free interest rate is based on the U.S. Treasury strip rate with stripped coupon interest for the period equal to the contractual term of the share option grant in effect at the time of grant.
The intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $1.8 million, $0.3 million and $0.5 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.
Total compensation cost not yet recognized for nonvested stock options outstanding as of December 31, 2025 is approximately $4.3 million and is expected to be recognized over a remaining weighted-average period of 1.8 years. Cash proceeds from stock options exercised and tax benefits related to stock options exercised were $3.2 million and $0.4 million for the year ended December 31, 2025, respectively. The Company issues new shares of common stock upon exercise of stock options and vesting of restricted common stock awards.
The following table summarizes activity in performance unit awards as of and for the year ended December 31, 2025:
| Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
| Nonvested, beginning of period | 277,028 | $ | 183.16 | ||||||||
| Granted | 232,976 | 86.91 | |||||||||
| Vested | (75,950) | 187.60 | |||||||||
| Forfeited | (30,214) | 116.06 | |||||||||
| Nonvested, end of period | 403,840 | 131.76 |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
The weighted average grant date fair value of performance unit awards granted in the years ended December 31, 2025, 2024 and 2023 was $20.2 million, $21.8 million and $22.9 million, respectively. For all periods presented, half of the performance unit awards granted were based on the targeted return on invested capital (“ROIC Award”), while the other half were granted based on targeted market conditions (“TSR Award”). The fair value of each TSR Award was estimated on the date of grant using the Monte Carlo simulation model as these equity awards are tied to a service and market condition. The calculation used the following weighted-average assumptions:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Volatility | 52.48 | % | 49.11 | % | 50.41 | % | |||||||||||
| Risk-free interest rate | 3.97 | % | 4.41 | % | 4.51 | % |
The weighted average fair value of performance unit awards that vested during the years ended December 31, 2025, 2024 and 2023 was $5.9 million, $9.5 million and $17.2 million, respectively, based on the closing prices of our common stock on the dates of vesting. Total compensation cost not yet recognized for nonvested performance unit awards outstanding as of December 31, 2025 is approximately $16.2 million, calculated based on current expectation of specific performance criteria, and is expected to be recognized over a remaining weighted-average period of approximately 1.5 years. Each performance unit represents one share of common stock.
The following table summarizes activity in non-performance based restricted stock and restricted stock unit awards as of and for the year ended December 31, 2025:
| Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
| Nonvested, beginning of period | 206,582 | $ | 152.75 | ||||||||
| Granted | 243,613 | 74.10 | |||||||||
| Vested | (138,285) | 131.77 | |||||||||
| Forfeited | (33,969) | 104.99 | |||||||||
| Nonvested, end of period | 277,941 | 100.27 |
The weighted average grant date fair value of restricted stock and restricted stock unit awards granted in the years ended December 31, 2025, 2024 and 2023 was $18.1 million, $15.4 million and $19.4 million, respectively. The weighted average fair value of restricted stock and restricted stock unit awards that vested in the years ended December 31, 2025, 2024 and 2023 was $14.5 million, $10.0 million and $38.8 million, respectively, based on the closing prices of our common stock on the dates of vesting. Total compensation cost not yet recognized for nonvested, non-performance based restricted stock and restricted stock units as of December 31, 2025 is approximately $12.5 million and is expected to be recognized over a remaining weighted-average period of 1.6 years. The fair value of the non-performance based restricted stock and restricted stock units was estimated on the date of grant adjusted for a dividend factor, if necessary.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 20—Income Taxes:
Income before income taxes and equity in net income of unconsolidated investments, and current and deferred income tax expense (benefit) are composed of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Income before income taxes and equity in net income of unconsolidated investments: | |||||||||||||||||
| Domestic | $ | (624,724) | $ | 201,266 | $ | (461,897) | |||||||||||
| Foreign | 72,651 | (1,965,091) | 708,635 | ||||||||||||||
| Total | $ | (552,073) | $ | (1,763,825) | $ | 246,738 | |||||||||||
| Current income tax expense (benefit): | |||||||||||||||||
| Federal | $ | (11,226) | $ | 212,542 | $ | (54,250) | |||||||||||
| State | 1,683 | (450) | (3,395) | ||||||||||||||
| Foreign | 85,255 | 105,399 | 387,045 | ||||||||||||||
| Total | $ | 75,712 | $ | 317,491 | $ | 329,400 | |||||||||||
| Deferred income tax expense (benefit): | |||||||||||||||||
| Federal | $ | 53,058 | $ | (172,464) | $ | (8,545) | |||||||||||
| State | 21,183 | 1,523 | (4,154) | ||||||||||||||
| Foreign | 6,928 | (59,465) | 113,576 | ||||||||||||||
| Total | $ | 81,169 | $ | (230,406) | $ | 100,877 | |||||||||||
| Total income tax expense | $ | 156,881 | $ | 87,085 | $ | 430,277 |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Following the adoption and prospective application of Accounting Standards Update (“ASU”) 2023-09, the reconciliation of the U.S. federal statutory rate to the effective income tax rate for the year ended December 31, 2025 is as follows (in thousands, except percentages):
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | |||||||||||||||||||||||||||||||||||
| $ | % | ||||||||||||||||||||||||||||||||||
| Federal statutory rate | $ | (115,935) | 21.0 | % | |||||||||||||||||||||||||||||||
| State and local income tax, net of federal tax effect(a) | 22,513 | (4.1) | |||||||||||||||||||||||||||||||||
| Foreign tax effects: | |||||||||||||||||||||||||||||||||||
| China | |||||||||||||||||||||||||||||||||||
| Statutory tax rate difference | 5,318 | (1.0) | |||||||||||||||||||||||||||||||||
| Change in valuation allowance | 8,692 | (1.6) | |||||||||||||||||||||||||||||||||
| Other | (2,885) | 0.5 | |||||||||||||||||||||||||||||||||
| Chile | |||||||||||||||||||||||||||||||||||
| Statutory tax rate difference | 2,200 | (0.4) | |||||||||||||||||||||||||||||||||
| State and local income tax (mining tax) | 7,066 | (1.3) | |||||||||||||||||||||||||||||||||
| Non-deductible payments | 7,265 | (1.3) | |||||||||||||||||||||||||||||||||
| Other | 2,430 | (0.4) | |||||||||||||||||||||||||||||||||
| Jordan | |||||||||||||||||||||||||||||||||||
| Statutory tax rate difference | 3,580 | (0.6) | |||||||||||||||||||||||||||||||||
| Tax rate incentive | (28,639) | 5.2 | |||||||||||||||||||||||||||||||||
| Netherlands | |||||||||||||||||||||||||||||||||||
| Statutory tax rate difference | (7,929) | 1.4 | |||||||||||||||||||||||||||||||||
| Non-deductible goodwill impairment | 46,712 | (8.4) | |||||||||||||||||||||||||||||||||
| Pillar two tax impact | 10,855 | (2.0) | |||||||||||||||||||||||||||||||||
| Return to provision | (7,860) | 1.4 | |||||||||||||||||||||||||||||||||
| Other | (3,487) | 0.6 | |||||||||||||||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||||||||||||||
| Non-deductible payments | 16,858 | (3.1) | |||||||||||||||||||||||||||||||||
| Other | 2,752 | (0.5) | |||||||||||||||||||||||||||||||||
| Other foreign jurisdictions | 15,103 | (2.7) | |||||||||||||||||||||||||||||||||
| Effect of cross-border tax laws: | |||||||||||||||||||||||||||||||||||
| Subpart F income | 5,573 | (1.0) | |||||||||||||||||||||||||||||||||
| Outside basis difference | (79,899) | 14.5 | |||||||||||||||||||||||||||||||||
| Tax credits: | |||||||||||||||||||||||||||||||||||
| Research and development | (1,748) | 0.3 | |||||||||||||||||||||||||||||||||
| Change in valuation allowance | 192,584 | (34.9) | |||||||||||||||||||||||||||||||||
| Non-taxable or non-deductible items: | |||||||||||||||||||||||||||||||||||
| Long-lived asset impairment | 51,576 | (9.3) | |||||||||||||||||||||||||||||||||
| Section 162(m) limitation | 7,876 | (1.4) | |||||||||||||||||||||||||||||||||
| Other, net | (2,413) | 0.5 | |||||||||||||||||||||||||||||||||
| Change in unrecognized tax benefits | (1,277) | 0.2 | |||||||||||||||||||||||||||||||||
| Effective income tax rate | $ | 156,881 | (28.4) | % |
(a)State taxes in Louisiana and Pennsylvania made up the majority (greater than 50%) of the tax effect in this category.
The reconciliation of the U.S. federal statutory rate to the effective income tax rate for the years ended December 31, 2024 and 2023 is as follows:
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal statutory rate | 21.0 | % | 21.0 | % | |||||||
| State taxes, net of federal tax effect | — | (2.8) | |||||||||
| Change in valuation allowance(a) | (26.0) | 98.8 | |||||||||
| Impact of foreign earnings, net(b) | 3.3 | 7.7 | |||||||||
| Global intangible low tax inclusion | — | 4.2 | |||||||||
| Section 162(m) limitation | (0.3) | 4.4 | |||||||||
| Subpart F income | (0.3) | (1.9) | |||||||||
| Stock-based compensation | — | (3.9) | |||||||||
| Depletion | 0.3 | (2.4) | |||||||||
| U.S. federal return to provision | 0.1 | (6.1) | |||||||||
| Change in unrecognized tax benefits(c) | (2.1) | 39.1 | |||||||||
| Legal accrual | — | 18.6 | |||||||||
| Other, net | (0.9) | (2.3) | |||||||||
| Effective income tax rate | (4.9) | % | 174.4 | % |
(a)Our statutory rate is decreased by our share of the income of JBC, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The applicable provisions of the Jordanian law, and applicable regulations thereunder, do not have a termination provision and the exemption is indefinite. As a Free Zones company, JBC is not subject to income taxes on the profits of products exported from Jordan, and currently, substantially all of the profits are from exports. This resulted in a rate benefit of 1.2%, and 20.1% for the years ended December 31, 2024 and 2023, respectively.
(b)Due to the Company being in a three-year cumulative loss position in China as of December 31, 2023, and Australia as of December 31, 2024, the year ended December 31, 2024 includes a valuation allowance of $271.0 million on current year losses in certain Chinese entities and the establishment of a valuation of $254.9 million on current year losses in the Company’s Australian entities. In addition, the year ended December 31, 2024 includes benefits of $70.1 million due to the release of a foreign valuation allowance due to changes in expected profitability.
(c) The year ended December 31, 2024 includes a $37.0 million expense recorded for a current year tax reserve related to an uncertain tax position in Chile.
Following the adoption and prospective application of ASU 2023-09, income taxes paid (net of refunds) are composed of the following (in thousands):
| Year Ended | |||||||||||||||||
| December 31, 2025 | |||||||||||||||||
| Federal income taxes paid (net of refunds) | $ | 23,459 | |||||||||||||||
| State income taxes paid (net of refunds)(a) | (1,645) | ||||||||||||||||
| Foreign | |||||||||||||||||
| Australia | (33,377) | ||||||||||||||||
| Belgium | (10,627) | ||||||||||||||||
| Canada | 7,762 | ||||||||||||||||
| Chile | 113,485 | ||||||||||||||||
| China | 5,784 | ||||||||||||||||
| Germany | 13,825 | ||||||||||||||||
| Japan | 12,427 | ||||||||||||||||
| Netherlands | 3,712 | ||||||||||||||||
| Taiwan | 10,195 | ||||||||||||||||
| Other | 7,482 | ||||||||||||||||
| Total foreign income taxes paid (net of refunds) | 130,668 | ||||||||||||||||
| Total income taxes paid (net of refunds) | $ | 152,482 |
(a)Income taxes paid to state jurisdictions are individually immaterial.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Deferred income tax assets and liabilities recorded on the consolidated balance sheets as of December 31, 2025 and 2024 consist of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accrued employee benefits | $ | 34,045 | $ | 32,993 | |||||||
| Operating loss carryovers | 2,338,465 | 1,841,399 | |||||||||
| Pensions | 17,360 | 17,148 | |||||||||
| Inventory reserves | 12,221 | 27,974 | |||||||||
| Tax credit carryovers | 15,333 | 11,228 | |||||||||
| Outside basis difference | 83,646 | — | |||||||||
| Capitalized research and development | 28,361 | 41,938 | |||||||||
| Lease liability | 51,735 | 53,968 | |||||||||
| Other | 24,818 | 62,406 | |||||||||
| Gross deferred tax assets | 2,605,984 | 2,089,054 | |||||||||
| Valuation allowance | (2,107,936) | (1,736,456) | |||||||||
| Deferred tax assets | 498,048 | 352,598 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation | (609,494) | (456,231) | |||||||||
| Intangibles | (41,757) | (49,676) | |||||||||
| Right of use asset | (47,414) | (48,951) | |||||||||
| Outside basis difference | — | (51,971) | |||||||||
| Other | (150,116) | (50,190) | |||||||||
| Deferred tax liabilities | (848,781) | (657,019) | |||||||||
| Net deferred tax liabilities | $ | (350,733) | $ | (304,421) | |||||||
| Classification in the consolidated balance sheets: | |||||||||||
| Noncurrent deferred tax assets | $ | 17,542 | $ | 53,608 | |||||||
| Noncurrent deferred tax liabilities | (368,275) | (358,029) | |||||||||
| Net deferred tax liabilities | $ | (350,733) | $ | (304,421) |
Changes in the balance of our deferred tax asset valuation allowance are as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at January 1 | $ | (1,736,456) | $ | (1,349,924) | $ | (1,087,505) | |||||||||||
| Additions | (394,829) | (519,169) | (262,469) | ||||||||||||||
| Deductions | 20,092 | 132,637 | 50 | ||||||||||||||
| Reclass to assets held for sale | 3,257 | — | — | ||||||||||||||
| Balance at December 31 | $ | (2,107,936) | $ | (1,736,456) | $ | (1,349,924) |
At December 31, 2025, the Company had approximately $15.3 million of domestic credits available to offset future payments of income taxes, expiring in varying amounts between 2026 and 2046. The Company has established full valuation allowances for those domestic credits since it believes that it is more likely than not that the related deferred tax assets will not be realized.
At December 31, 2025, the Company has, on a pre-tax basis, domestic federal and state net operating losses of $1.3 billion, which have pre-tax valuation allowances of $1.3 billion established. $297.2 million of these domestic net operating losses expire between 2026 and 2042 and $1.0 billion have no expiration date. In addition, the Company has, on a pre-tax basis, $8.6 billion of foreign net operating losses, which have pre-tax valuation allowances for $8.5 billion established. $636.5 million of these foreign net operating losses expire in 2028, $1.3 billion expire in 2029, $20.8 million expire in 2030, $2.9 billion expire in 2035, $229.3 million expire in 2036, $21.8 million expire in 2037, $752.6 million expire in 2042 and $2.6 billion have an indefinite life. The Company has established valuation allowances for these deferred tax assets since it believes that it is
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
more likely than not that the related deferred tax assets will not be realized. For the same reason, the Company established pre-tax valuation allowances of $555.7 million for federal, state and foreign deferred tax assets unrelated to net operating losses. The realization of the deferred tax assets is dependent on the generation of sufficient taxable income in the appropriate tax jurisdictions. Although realization is not assured, the Company believes it is more likely than not that the remaining deferred tax assets will be realized. However, the amount considered realizable could be reduced if estimates of future taxable income change.
The TCJA imposed a mandatory transition tax on accumulated foreign earnings and generally eliminated U.S. taxes on foreign subsidiary distribution with the exception of foreign withholding taxes and other foreign local tax. The Company generally does not provide for taxes related to its undistributed earnings its foreign subsidiaries and joint ventures because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. If in the foreseeable future, the Company can no longer demonstrate that these earnings are indefinitely reinvested, a deferred tax liability will be recognized. A determination of the amount of the unrecognized deferred tax liability related to these undistributed earnings is not practicable due to the complexity and variety of assumptions necessary based on the manner in which the undistributed earnings would be repatriated.
Liabilities related to uncertain tax positions were $259.2 million and $259.6 million at December 31, 2025 and 2024, respectively, inclusive of interest and penalties of $65.4 million and $71.0 million at December 31, 2025 and 2024, respectively, and are reported in Other noncurrent liabilities as provided in Note 14, “Other Noncurrent Liabilities.” These liabilities at December 31, 2025 and 2024 were reduced by $75.8 million and $74.8 million, respectively, for offsetting benefits from the corresponding effects of potential transfer pricing adjustments, state and local income taxes, and rate arbitrage related to foreign structure. These offsetting benefits are recorded in Other assets as provided in Note 9, “Other Assets.” The resulting net liability of $118.0 million, excluding interest and penalties, as of December 31, 2025 would favorably affect earnings if recognized and released, as would the net liability of $113.8 million, excluding interest and penalties, have as of December 31, 2024.
The liabilities related to uncertain tax positions, exclusive of interest, were $193.8 million and $188.8 million at December 31, 2025 and 2024, respectively. The following is a reconciliation of our total gross liability related to uncertain tax positions for 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at January 1 | $ | 188,826 | $ | 178,785 | $ | 72,162 | |||||||||||
| Additions for tax positions related to prior years | — | 31 | 6,216 | ||||||||||||||
| Additions for tax positions related to current year | 5,653 | 10,989 | 101,179 | ||||||||||||||
| Lapses in statutes of limitations/settlements | (547) | (1,038) | (770) | ||||||||||||||
| Foreign currency translation adjustment | (132) | 59 | (2) | ||||||||||||||
| Balance at December 31 | $ | 193,800 | $ | 188,826 | $ | 178,785 |
The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Due to the statute of limitations, the Company is no longer subject to U.S. federal income tax audits by the Internal Revenue Service (“IRS”) for years prior to 2022. Due to the statute of limitations, the Company is also no longer subject to U.S. state income tax audits prior to 2019.
With respect to jurisdictions outside the U.S., several audits are in process. The Company has audits ongoing for the years 2017 through 2024 related to Australia, Belgium, Canada, Chile and Germany, some of which are for entities that have since been divested.
While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than our accrued position. Accordingly, additional provisions on federal and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 21—Earnings Per Share:
Basic and diluted (loss) earnings per share are calculated as follows (in thousands, except per share amounts):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Basic (loss) earnings per share | |||||||||||||||||
| Numerator: | |||||||||||||||||
| Net (loss) income attributable to Albemarle Corporation | $ | (510,628) | $ | (1,179,449) | $ | 1,573,476 | |||||||||||
| Mandatory convertible preferred stock dividends | (166,750) | (136,647) | — | ||||||||||||||
| Net (loss) income attributable to Albemarle Corporation common shareholders | $ | (677,378) | $ | (1,316,096) | $ | 1,573,476 | |||||||||||
| Denominator: | |||||||||||||||||
| Weighted-average common shares for basic (loss) earnings per share | 117,664 | 117,516 | 117,317 | ||||||||||||||
| Basic (loss) earnings per share | $ | (5.76) | $ | (11.20) | $ | 13.41 | |||||||||||
| Diluted (loss) earnings per share | |||||||||||||||||
| Numerator: | |||||||||||||||||
| Net (loss) income attributable to Albemarle Corporation | $ | (510,628) | $ | (1,179,449) | $ | 1,573,476 | |||||||||||
| Mandatory convertible preferred stock dividends | (166,750) | (136,647) | — | ||||||||||||||
| Net (loss) income attributable to Albemarle Corporation common shareholders | $ | (677,378) | $ | (1,316,096) | $ | 1,573,476 | |||||||||||
| Denominator: | |||||||||||||||||
| Weighted-average common shares for basic (loss) earnings per share | 117,664 | 117,516 | 117,317 | ||||||||||||||
| Incremental shares under stock compensation plans | — | — | 449 | ||||||||||||||
| Weighted-average common shares for diluted (loss) earnings per share | 117,664 | 117,516 | 117,766 | ||||||||||||||
| Diluted (loss) earnings per share | $ | (5.76) | $ | (11.20) | $ | 13.36 |
The following table summarizes the number of shares, calculated on a weighted average basis, not included in the computation of diluted (loss) earnings per share because their effect would have been anti-dilutive (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Shares assuming the conversion of the mandatory convertible preferred stock | 20,709 | 16,932 | — | ||||||||||||||
| Shares under the stock compensation plan | 1,413 | 1,064 | 158 |
Included in the calculation of basic (loss) earnings per share are unvested restricted stock awards that contain nonforfeitable rights to dividends. At December 31, 2025, there were 13,625 unvested shares of restricted stock awards outstanding.
We have the authority to issue 15,000,000 shares of preferred stock in one or more classes or series. As of December 31, 2025, 2,300,000 shares of preferred stock have been issued.
In November 2016, our Board of Directors authorized an increase in the number of shares the Company is permitted to repurchase under our share repurchase program, pursuant to which the Company is now permitted to repurchase up to a maximum of 15,000,000 shares, including those previously authorized but not yet repurchased.
There were no shares of the Company’s common stock repurchased during the years ended December 31, 2025, 2024 or 2023. As of December 31, 2025, there were 7,396,263 remaining shares available for repurchase under the Company’s authorized share repurchase program.
NOTE 22—Fair Value of Financial Instruments:
In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions and other risk factors existing at the time of assessment. Fair value information for our financial instruments is as follows:
Long-Term Debt—the fair values of our notes are estimated using Level 1 inputs and account for the difference between the recorded amount and fair value of our long-term debt. The carrying value of our remaining long-term debt reported in the
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
accompanying consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on prevailing variable market rates currently available in the countries in which we have borrowings.
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Recorded Amount | Fair Value | Recorded Amount | Fair Value | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Long-term debt | $ | 3,207,210 | $ | 3,112,590 | $ | 3,532,713 | $ | 3,332,064 |
During the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia. This derivative financial instrument is used to manage risk and is not used for trading or other speculative purposes. This foreign currency forward contract has been designated as a hedging instrument under ASC 815, Derivatives and Hedging. As a result of the actions taken at Kemerton Trains 3 and 4 during 2024, the Company dedesignated the remaining hedged foreign currency forward contracts. The Company recorded a loss in Other income, net of $26.1 million during the year ended December 31, 2024 from the reclassification of the hedged balance from Accumulated other comprehensive loss. The balance of the settled hedged foreign currency forward contracts associated with the construction of Kemerton Trains 1 and 2 assets that had been placed into service will be reclassified to earnings over the life of the related assets.
In connection with our risk management strategies, we also enter into other derivative financial instruments that have not been designated as hedging instruments under ASC 815, Derivatives and Hedging. These derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. At December 31, 2025 and 2024, we had outstanding non-designated derivative financial instruments with notional values totaling $2.4 billion and $6.9 billion, respectively. The non-designated derivative financial instruments are primarily comprised of foreign currency forward contracts that attempt to minimize the financial impact of changes in foreign currency exchange rates. The fair values of our non-designated foreign currency forward contracts are estimated based on current settlement values. At December 31, 2025, these foreign currency forward contracts hedge our exposure to various currencies including the Chinese Renminbi, Euro and Australian Dollar.
The following table summarizes the fair value of our derivative financial instruments included in the consolidated balance sheets at December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
| Not designated as hedging instruments | |||||||||||||||||||||||
| Other current assets | $ | 2,163 | $ | — | $ | 4,347 | $ | — | |||||||||||||||
| Accrued expenses | — | 4,781 | — | 6,586 | |||||||||||||||||||
| Other noncurrent liabilities | — | — | — | 4,766 | |||||||||||||||||||
| Total not designated as hedging instruments | $ | 2,163 | $ | 4,781 | $ | 4,347 | $ | 11,352 | |||||||||||||||
The following table summarizes the net (losses) gains recognized for our derivative financial instruments during the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Designated as hedging instruments: | |||||||||||||||||
| (Loss) gain recognized in Other comprehensive income (loss) | $ | (194) | $ | (28,701) | $ | 5,986 | |||||||||||
| Gain (loss) recognized in Other income, net | $ | 234 | $ | (25,766) | $ | 135 | |||||||||||
| Not designated as hedging instruments: | |||||||||||||||||
| Gain (loss) recognized in Other income, net(a) | $ | 118,802 | $ | (14,728) | $ | 213,378 |
(a)Fluctuations in the value of our foreign currency forward contracts not designated as hedging instruments are generally expected to be offset by changes in the value of the underlying exposures being hedged, which are also reported in Other income, net.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
In addition, for the years ended December 31, 2025, 2024 and 2023, we recorded net cash receipts (settlements) of $114.2 million, ($9.8) million and $218.0 million, respectively, in Proceeds (payments) from settlement of foreign currency forward contracts, net, in our consolidated statements of cash flows.
Unrealized gains and losses related to the cash flow hedges are reclassified to earnings over the life of the related assets that had been placed into service.
The counterparties to our foreign currency forward contracts are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties.
NOTE 23—Fair Value Measurement:
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities | ||||
| Level 2 | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | ||||
| Level 3 | Unobservable inputs for the asset or liability |
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | Quoted Prices in Active Markets for Identical Items (Level 1) | Quoted Prices in Active Markets for Similar Items (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Investments under executive deferred compensation plan(a) | $ | 30,750 | $ | 30,750 | $ | — | $ | — | |||||||||||||||
| Public equity securities(b) | $ | 29,047 | $ | 29,047 | $ | — | $ | — | |||||||||||||||
| Private equity securities measured at net asset value(c)(d) | $ | 4,515 | $ | — | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments(e) | $ | 2,163 | $ | — | $ | 2,163 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Obligations under executive deferred compensation plan(a) | $ | 30,750 | $ | 30,750 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments(e) | $ | 4,781 | $ | — | $ | 4,781 | $ | — |
| December 31, 2024 | Quoted Prices in Active Markets for Identical Items (Level 1) | Quoted Prices in Active Markets for Similar Items (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available for sale debt securities(f) | $ | 313,991 | $ | — | $ | — | $ | 313,991 | |||||||||||||||
| Investments under executive deferred compensation plan(a) | $ | 38,243 | $ | 38,243 | $ | — | $ | — | |||||||||||||||
| Public equity securities(b) | $ | 17,910 | $ | 17,910 | $ | — | $ | — | |||||||||||||||
| Private equity securities measured at net asset value(c)(d) | $ | 4,472 | $ | — | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments(e) | $ | 4,347 | $ | — | $ | 4,347 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Obligations under executive deferred compensation plan(a) | $ | 38,243 | $ | 38,243 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments(e) | $ | 11,352 | $ | — | $ | 11,352 | $ | — |
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
(a)We maintain an EDCP that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of (loss) income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.
(b)Holdings in equity securities of public companies reported in Investments in the consolidated balance sheets. The fair value is measured using publicly available share prices of the investments, and as a result these balances are classified within Level 1. Any changes are reported in Other income, net, in our consolidated statements of (loss) income. See Note 8, “Investments,” for further details.
(c)Primarily consists of private equity securities reported in Investments in the consolidated balance sheets. The changes in fair value are reported in Other income, net in our consolidated statements of (loss) income.
(d)Holdings in certain private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy.
(e)The derivative financial instruments are primarily comprised of foreign currency forward contracts. As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2. See Note 22, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.
(f)Preferred equity of a Grace subsidiary acquired as a portion of the proceeds of the FCS sale on June 1, 2021. A third-party estimate of the fair value was prepared using expected future cash flows over the period up to when the asset was likely to be redeemed, applying a discount rate that appropriately captures a market participant’s view of the risk associated with the investment. These were considered to be Level 3 inputs. In June 2025, the Company redeemed the preferred equity and we derecognized the investment from the consolidated balance sheet. See Note 8, “Investments,” for further details.
The following tables set forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements (in thousands):
| Available for Sale Debt Securities | |||||||||||
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | 313,991 | $ | 289,307 | |||||||
| PIK dividends | 19,830 | 36,311 | |||||||||
| Cash received for tax liability | (7,820) | (11,627) | |||||||||
| Cash proceeds from redemption of preferred equity | (288,000) | — | |||||||||
| Realized loss from redemption of preferred equity | (38,001) | — | |||||||||
| Ending balance | $ | — | $ | 313,991 |
NOTE 24—Related Party Transactions:
Our consolidated statements of (loss) income include sales to and purchases from unconsolidated affiliates in the ordinary course of business as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Sales to unconsolidated affiliates | $ | 16,344 | $ | 30,090 | $ | 35,676 | |||||||||||
| Purchases from unconsolidated affiliates(a) | $ | 585,402 | $ | 643,293 | $ | 3,652,784 |
(a)Purchases from unconsolidated affiliates primarily relate to spodumene purchased from the Company’s Windfield joint venture. The decrease from 2024 and 2023 primarily related to lower lithium market prices.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
Our consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the ordinary course of business as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Receivables from unconsolidated affiliates | $ | 2,643 | $ | 11,950 | |||||||
| Payables to unconsolidated affiliates(a) | $ | 134,369 | $ | 150,432 |
(a)Payables to unconsolidated affiliates primarily relate to spodumene purchased from the Company’s Windfield joint venture under normal payment terms.
NOTE 25—Segment and Geographic Area Information:
The Company has three operating and reportable segments, which are: (1) Energy Storage; (2) Specialties; and (3) Ketjen. The segments are organized based on their similar markets, customers, economic characteristics and production processes. The organizational structure facilitates the continued standardization of business processes across the organization, and is consistent with the manner in which information is presently used internally by the Company’s Chairman, President and Chief Executive Officer, who is the Company’s chief operating decision maker (“CODM”), to evaluate performance and make resource allocation decisions.
In 2025, the Company signed definitive agreements to divest the controlling ownership interest of its Refining Solutions business and its remaining ownership interest in the Eurecat S.A. joint venture, both within the Ketjen segment. The Eurecat S.A. transaction was completed on January 23, 2026 and the Company expects the Refining Solutions business transaction to be completed in the first quarter of 2026, subject to customary closing conditions. Upon completion of that transaction, the Company will retain its PCS business and a 49% ownership interest in the Refining Solutions business. Until the Refining Solutions transaction is completed, the Company will continue to report the results of these businesses within the Ketjen reportable segment.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and other post-employment benefit (“OPEB”) service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes inter-segment transfers of raw materials at cost and allocations for certain corporate costs.
The CODM uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources by considering the variance in the actual results to the forecasts on a monthly basis. The annual operating budget and ongoing forecasting process use adjusted EBITDA as a key metric in assessing performance of the segment. In addition, the CODM uses adjusted EBITDA for business and enterprise planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company’s definition of adjusted EBITDA is earnings before interest and financing expenses, income tax expenses, the proportionate share of Windfield income tax expense, depreciation and amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items on a segment basis. These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, gains or losses on the fair value of public equity securities, restructuring charges and asset write-offs, facility divestiture charges, certain litigation and arbitration costs and charges, goodwill and long-lived asset impairment charges, non-operating pension and OPEB items and other significant non-recurring items. This calculation is consistent with the definition of adjusted EBITDA used in the leverage financial covenant calculation in the Company’s credit agreement, which is a material agreement for the Company and aligns the information presented to various stakeholders.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
See below for a reconciliation of segment Net sales to adjusted EBITDA by segment showing significant segment expenses regularly reviewed by the CODM for the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Energy Storage | Specialties | Ketjen | Total Segments | ||||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| Net sales(a) | $ | 2,710,035 | $ | 1,366,435 | $ | 1,066,263 | $ | 5,142,733 | |||||||||||||||
| Cost of goods sold(b) | (2,084,515) | (948,295) | (819,323) | (3,852,133) | |||||||||||||||||||
| Selling, general and administrative expenses(b) | (185,773) | (87,981) | (95,809) | (369,563) | |||||||||||||||||||
| Other segment items(c) | (7,785) | (9,002) | (26,962) | (43,749) | |||||||||||||||||||
| Equity in net income of unconsolidated investments(d) | 265,253 | — | 26,229 | 291,482 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | — | (45,418) | — | (45,418) | |||||||||||||||||||
| Adjusted EBITDA by segment | $ | 697,215 | $ | 275,739 | $ | 150,398 | $ | 1,123,352 | |||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||
| Net sales(a) | $ | 3,015,121 | $ | 1,325,983 | $ | 1,036,422 | $ | 5,377,526 | |||||||||||||||
| Cost of goods sold(b) | (2,992,566) | (935,017) | (810,319) | (4,737,902) | |||||||||||||||||||
| Selling, general and administrative expenses(b) | (249,805) | (93,533) | (90,653) | (433,991) | |||||||||||||||||||
| Other segment items(c) | (25,101) | (25,676) | (26,852) | (77,629) | |||||||||||||||||||
| Equity in net income of unconsolidated investments(d) | 1,009,891 | — | 22,468 | 1,032,359 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | — | (43,253) | — | (43,253) | |||||||||||||||||||
| Adjusted EBITDA by segment | $ | 757,540 | $ | 228,504 | $ | 131,066 | $ | 1,117,110 | |||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||
| Net sales(a) | $ | 7,078,998 | $ | 1,482,425 | $ | 1,055,780 | $ | 9,617,203 | |||||||||||||||
| Cost of goods sold(b) | (6,205,403) | (961,177) | (847,018) | (8,013,598) | |||||||||||||||||||
| Selling, general and administrative expenses(b) | (266,190) | (100,173) | (94,387) | (460,750) | |||||||||||||||||||
| Other segment items(c) | (22,632) | (25,719) | (30,972) | (79,323) | |||||||||||||||||||
| Equity in net income of unconsolidated investments(d) | 2,596,820 | — | 20,469 | 2,617,289 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | — | (96,850) | — | (96,850) | |||||||||||||||||||
| Adjusted EBITDA by segment | $ | 3,181,593 | $ | 298,506 | $ | 103,872 | $ | 3,583,971 |
(a)Intersegment sales are not considered material.
(b)The significant expense categories and amounts align with the segment information that is regularly provided to the CODM. Excludes depreciation and amortization, and non-operating, non-recurring or unusual items as described in the reconciliation of total segment adjusted EBITDA to consolidated Net (loss) income attributable to Albemarle Corporation below.
(c)Other segment items are comprised of Research and development expenses excluding depreciation and amortization.
(d)Excludes Albemarle’s 49% ownership interest in the income tax expense of the Windfield joint venture.
The Company reconciles the total segment adjusted EBITDA to the consolidated Net (loss) income attributable to Albemarle Corporation given the impact of equity in net income from unconsolidated investments, the majority of which relates to the Windfield joint venture. This reconciliation reflects the strategic and operational significance of the Company’s joint ventures and aligns with our allocation of equity in net income from unconsolidated investments at the segment level, representing each segment's contribution to the Company's overall financial performance. See below for a reconciliation of total segment adjusted EBITDA to consolidated Net (loss) income attributable to Albemarle Corporation (in thousands):
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Total segment adjusted EBITDA | $ | 1,123,352 | $ | 1,117,110 | $ | 3,583,971 | |||||||||||
| Corporate expenses, net | (25,359) | 22,668 | (37,983) | ||||||||||||||
| Depreciation and amortization | (658,678) | (588,638) | (429,944) | ||||||||||||||
| Interest and financing expenses(a) | (207,651) | (165,619) | (116,072) | ||||||||||||||
| Income tax expense | (156,881) | (87,085) | (430,277) | ||||||||||||||
| Proportionate share of Windfield income tax expense(b) | (94,549) | (299,193) | (779,703) | ||||||||||||||
| Gain on change in interest in properties/sale of business, net(c) | — | — | 71,190 | ||||||||||||||
| Acquisition and integration related costs(d) | (8,303) | (6,223) | (26,767) | ||||||||||||||
| Restructuring charges and asset write-offs(e) | (7,893) | (1,180,806) | (9,491) | ||||||||||||||
| Goodwill impairment(f) | (181,070) | — | (6,765) | ||||||||||||||
| Long-lived asset impairment(g) | (245,600) | — | — | ||||||||||||||
| Non-operating pension and OPEB items | (17,710) | 11,335 | 7,971 | ||||||||||||||
| Gain (loss) in fair value of public equity securities(h) | 11,137 | (70,758) | (44,732) | ||||||||||||||
| Legal accrual(i) | — | — | (218,510) | ||||||||||||||
| Other(j) | (41,423) | 67,760 | 10,588 | ||||||||||||||
| Net (loss) income attributable to Albemarle Corporation | $ | (510,628) | $ | (1,179,449) | $ | 1,573,476 |
(a)Includes a loss on early extinguishment of debt of $7.5 million for the year ended December 31, 2025. See Note 12, “Long-term Debt,” for additional information.
(b)Albemarle’s 49% ownership interest in the reported income tax expense of the Windfield joint venture.
(c)Gain recorded during the year ended December 31, 2023 resulting from the restructuring of the MARBL joint venture with MRL. See Note 8, “Investments,” for further details.
(d)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).
(e)See Note 17, “Restructuring Charges and Asset Write-offs,” for further details.
(f)See Note 2, “Divestitures,” and Note 10, “Goodwill and Other Intangibles,” for further details.
(g)See Note 2, “Divestitures,” for further details.
(h)Represents the net change in fair value of investments in public equity securities for the years ended December 31, 2025 and 2023, recorded in Other income, net. The year ended December 31, 2024 included losses of $37.0 million and $33.7 million, recorded in Other income, net, resulting from the net change in fair value of investments in public equity securities and the sale of investments in public equity securities, respectively.
(i)Loss recorded in SG&A for the agreements to resolve a previously disclosed legal matter with the DOJ and SEC during the year ended December 31, 2023. See Note 15, “Commitments and Contingencies,” for further details.
(j)Included amounts for the year ended December 31, 2025 recorded in:
-
Cost of goods sold - $4.8 million related to the write-off of assets damaged in a severe weather incident in Jordan.
-
SG&A - $9.2 million related to the write-off of assets damaged in a severe weather incident in Jordan, $3.1 million of severance expenses not related to a restructuring plan, $2.2 million related to the write-off of certain fixed assets, $2.0 million of expenses related to certain historical legal matters and $1.4 million of expenses related to the redemption of preferred equity in a Grace subsidiary, partially offset by $13.3 million of gains from the sale of assets not part of our production operations.
-
Other income, net - $38.0 million loss resulting from the redemption of preferred equity in a Grace subsidiary, $14.3 million loss related to the sale of our ownership interest in the Nippon Aluminum Alkyls joint venture and $1.9 million of charges for asset retirement obligations at a site not part of our operations, partially offset by $19.8 million of income from PIK dividends of the preferred equity in a Grace subsidiary prior to redemption and a $2.4 million gain primarily resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the year ended December 31, 2024 recorded in:
-
Cost of goods sold - $1.4 million of expenses related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
-
SG&A - $5.3 million of expenses related to certain historical legal and environmental matters.
-
Other income, net - $40.9 million of gains from the sale of assets at a site not part of our operations, $36.3 million of income from PIK dividends of preferred equity in a Grace subsidiary, a $1.8 million net gain primarily resulting from the adjustment of indemnification related to previously disposed businesses and a $0.6 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations, partially offset by $2.9 million of charges for asset retirement obligations at a site not part of our operations and $2.1 million of a loss related to the fair value adjustment of a nonmarketable security investment.
Included amounts for the year ended December 31, 2023 recorded in:
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
-
Cost of goods sold - $15.1 million loss recorded to settle an arbitration matter with a regulatory agency in Chile, partially offset by a $4.1 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations.
-
SG&A - $2.3 million of facility closure expenses related to offices in Germany, $1.9 million of charges primarily for environmental reserves at sites not part of our operations and $1.8 million of various expenses including for certain legal costs and shortfall contributions for a multiemployer plan financial improvement plan.
-
Other income, net - $19.3 million gain from PIK dividends of preferred equity in a Grace subsidiary, a $7.3 million gain resulting from insurance proceeds of a prior legal matter and $5.5 million of gains from the sale of investments and the write-off of certain liabilities no longer required, partially offset by $3.6 million of charges for asset retirement obligations at a site not part of our operations and $0.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses.
Identifiable assets by segment as of December 31, 2025, 2024 and 2023 were as follows (in thousands):
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Assets: | |||||||||||||||||
| Energy Storage | $ | 11,086,694 | $ | 11,285,847 | $ | 13,246,412 | |||||||||||
| Specialties | 2,067,191 | 1,843,564 | 1,696,307 | ||||||||||||||
| Ketjen(a) | 1,146,671 | 1,426,189 | 1,355,743 | ||||||||||||||
| Total segment assets | 14,300,556 | 14,555,600 | 16,298,462 | ||||||||||||||
| Corporate | 2,073,655 | 2,054,049 | 1,972,190 | ||||||||||||||
| Total assets | $ | 16,374,211 | $ | 16,609,649 | $ | 18,270,652 | |||||||||||
(a)Ketjen assets include the Refining Solutions business assets reported as held for sale on the consolidated balance sheet, the investment in Eurecat joint venture divested on January 23, 2026 and the PCS business assets.
Additional segment information for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Depreciation and amortization: | |||||||||||||||||
| Energy Storage | $ | 497,903 | $ | 434,916 | $ | 258,436 | |||||||||||
| Specialties | 105,390 | 95,043 | 86,673 | ||||||||||||||
| Ketjen | 46,504 | 51,488 | 76,023 | ||||||||||||||
| Total segment depreciation and amortization | 649,797 | 581,447 | 421,132 | ||||||||||||||
| Corporate | 8,881 | 7,191 | 8,812 | ||||||||||||||
| Total depreciation and amortization | $ | 658,678 | $ | 588,638 | $ | 429,944 | |||||||||||
| Equity in net income of unconsolidated investments (net of tax): | |||||||||||||||||
| Energy Storage | $ | 184,669 | $ | 705,378 | $ | 1,822,620 | |||||||||||
| Ketjen | 26,229 | 22,468 | 20,469 | ||||||||||||||
| Total segment equity in net income of unconsolidated investments (net of tax) | 210,898 | 727,846 | 1,843,089 | ||||||||||||||
| Corporate(a) | 32,846 | (12,413) | 10,993 | ||||||||||||||
| Total equity in net income of unconsolidated investments (net of tax) | $ | 243,744 | $ | 715,433 | $ | 1,854,082 | |||||||||||
| Capital expenditures: | |||||||||||||||||
| Energy Storage(b) | $ | 284,100 | $ | 1,225,748 | $ | 1,757,701 | |||||||||||
| Specialties | 171,243 | 257,673 | 214,039 | ||||||||||||||
| Ketjen | 120,161 | 163,921 | 132,510 | ||||||||||||||
| Total segment capital expenditures | 575,504 | 1,647,342 | 2,104,250 | ||||||||||||||
| Corporate | 14,297 | 33,187 | 50,292 | ||||||||||||||
| Total capital expenditures | $ | 589,801 | $ | 1,680,529 | $ | 2,154,542 |
(a)Corporate equity in net income of unconsolidated investments (net of tax) relates to foreign exchange gains or losses from the Windfield joint venture.
| Albemarle Corporation and Subsidiaries | ||||||||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
(b)Energy Storage capital expenditures for the years ended December 31, 2024 and 2023 include adjustments to correct previously identified immaterial errors. See Note 1, “Summary of Significant Accounting Policies,” for further details.
The following table summarizes the Company’s net sales by geographic area for the years ended December 31, 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net Sales**(a)****:** | |||||||||||||||||
| United States | $ | 890,498 | $ | 901,870 | $ | 930,838 | |||||||||||
| South Korea | 789,547 | 912,376 | 3,125,372 | ||||||||||||||
| China | 2,026,293 | 1,961,143 | 2,851,809 | ||||||||||||||
| Japan | 359,631 | 589,268 | 1,396,360 | ||||||||||||||
| Other(b) | 1,076,764 | 1,012,869 | 1,312,824 | ||||||||||||||
| Total | $ | 5,142,733 | $ | 5,377,526 | $ | 9,617,203 |
(a)Net sales are attributed to countries based upon shipments to final destination.
(b)Net sales to any other country are individually immaterial.
During the years ended December 31, 2025 and 2024, no customer represented greater than 10% of the Company’s consolidated net sales. During the year ended December 31, 2023, one customer in the Energy Storage business represented approximately 12% of the Company’s consolidated net sales.
The following table summarizes the Company’s long-lived assets by geographic area for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):
| As of December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Long-Lived Assets**(a)****:** | |||||||||||||||||
| United States | $ | 1,810,967 | $ | 2,134,371 | $ | 1,912,243 | |||||||||||
| Australia | 3,895,577 | 3,943,847 | 4,610,963 | ||||||||||||||
| Chile | 2,167,720 | 2,253,647 | 2,258,619 | ||||||||||||||
| China | 990,536 | 966,785 | 819,119 | ||||||||||||||
| Jordan | 327,439 | 309,148 | 292,870 | ||||||||||||||
| Netherlands | — | 177,587 | 186,963 | ||||||||||||||
| Germany | 111,946 | 90,367 | 91,979 | ||||||||||||||
| France | 68,285 | 59,815 | 56,876 | ||||||||||||||
| Brazil | — | 29,733 | 33,730 | ||||||||||||||
| Other foreign countries | 59,673 | 92,655 | 87,489 | ||||||||||||||
| Total | $ | 9,432,143 | $ | 10,057,955 | $ | 10,350,851 |
(a) Long-lived assets are comprised of the Company’s Property, plant and equipment and joint ventures included in Investments. The balances of long-lived assets as of December 31, 2025 exclude assets held for sale.
Previous: Item 7A. Quantitative and Qualitative Disclosures About Market Risk. · Next: Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.