BATON ROUGE, La., Jan. 28,
2015 /PRNewswire/ --
Fourth quarter 2014 highlights:
- Full year adjusted earnings of $4.20 per share, up 5% versus 2013; fourth
quarter 2014 adjusted earnings of $0.99 per share.
- Net sales of $2.45 billion for
full year 2014, up 2% versus 2013; adjusted EBITDA grew 1% to
$562 million, a 23% margin.
- 2014 cash flow from operations of $459.2
million, up 6% versus 2013 on lower working capital.
- Completed acquisition of Rockwood on January 12, forming a premier specialty chemical
company with leading positions in attractive end markets.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
In thousands,
except per share amounts
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Net sales
|
$
|
598,566
|
|
|
$
|
639,635
|
|
|
$
|
2,445,548
|
|
|
$
|
2,394,270
|
|
Segment
income
|
$
|
127,212
|
|
|
$
|
138,325
|
|
|
$
|
539,175
|
|
|
$
|
533,663
|
|
Net (loss) income
from continuing operations
|
$
|
(12,990)
|
|
|
$
|
162,232
|
|
|
$
|
230,437
|
|
|
$
|
435,726
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$
|
(18,508)
|
|
|
$
|
155,933
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
Diluted (loss)
earnings per share
|
$
|
(0.24)
|
|
|
$
|
1.91
|
|
|
$
|
1.69
|
|
|
$
|
4.90
|
|
Non-operating pension and OPEB items(a)
|
0.90
|
|
|
(1.09)
|
|
|
1.01
|
|
|
(1.10)
|
|
Special
items(b)(c)(d)(e)(f)
|
0.30
|
|
|
0.27
|
|
|
0.62
|
|
|
0.26
|
|
Discontinued operations(g)
|
0.02
|
|
|
0.01
|
|
|
0.88
|
|
|
(0.05)
|
|
Adjusted diluted
earnings per share(h)
|
$
|
0.99
|
|
|
$
|
1.09
|
|
|
$
|
4.20
|
|
|
$
|
4.01
|
|
Albemarle Corporation (NYSE: ALB) reported a fourth quarter 2014
loss of $(18.5) million, or
$(0.24) per share, compared to fourth
quarter 2013 earnings of $155.9
million, or $1.91 per
share. Fourth quarter 2014 included a mark-to-market (MTM)
actuarial loss of $0.91 per share,
mainly resulting from a lower discount rate and updated mortality
tables included in the actuarial assumptions of the annual
remeasurement of our pension and OPEB plans. We currently do not
expect any required cash contributions to our pension plans until
2021. Fourth quarter 2013 included a MTM actuarial gain of
$1.08 per share, which reflected
actuarial assumptions at the time of the remeasurement.
Fourth quarter 2014 adjusted earnings were $77.4 million, or $0.99 per share, compared to $89.3 million, or $1.09 per share, for the fourth quarter of 2013
(see notes to the condensed consolidated financial
information). The Company reported net sales of $598.6 million in the fourth quarter of 2014,
down from net sales of $639.6 million
in the fourth quarter of 2013, driven mainly by unfavorable
currency exchange and pricing impacts across all our businesses,
and lower volumes in Performance Chemicals.
Earnings for the full year 2014 were $133.3 million, or $1.69 per share, compared to $413.2 million, or $4.90 per share, for the full year 2013.
Adjusted earnings for the full year 2014 were $332.1 million, or $4.20 per share, compared to $338.2 million, or $4.01 per share, for the full year 2013.
Net sales for the full year 2014 were $2.45
billion, up from $2.39 billion
for the full year 2013, driven mainly by favorable Catalyst
Solutions pricing and volumes on strong demand, partly offset by
lower volumes and pricing in Performance Chemicals and the
unfavorable effects of currency exchange.
On January 12, 2015, Albemarle
Corporation completed its acquisition of Rockwood Holdings, Inc., a
Delaware corporation ("Rockwood").
Pursuant to the terms of the previously announced Agreement and
Plan of Merger (the "Merger Agreement"), Rockwood became a
wholly-owned subsidiary of Albemarle.
At the effective time of the merger, each outstanding share of
Rockwood common stock, par value $0.01 per share (other than shares owned,
directly or indirectly, by Albemarle, Rockwood or the Merger Sub,
as defined in the Merger Agreement, and shares with respect to
which appraisal rights were properly exercised and not withdrawn),
was converted into the right to receive (a) $50.65 in cash, without interest, and (b) 0.4803
of a share of common stock, par value $0.01 per share, of Albemarle.
"Our fourth quarter financial results, driven by strong Catalyst
Solutions performance, allowed us to deliver 5% adjusted earnings
per share growth in 2014 – well within the range of our guidance,"
said Albemarle president and CEO Luke
Kissam. "In addition, we closed the Rockwood
acquisition in early January and have already captured
approximately $30 million in
annualized synergies, which is in line with our expectations."
Quarterly Segment Results
Performance Chemicals reported net sales of $302.6 million in the fourth quarter of 2014, a
decrease of 9 percent from net sales in the fourth quarter of 2013
of $333.5 million, primarily on
unfavorable Fine Chemistry Services and Specialty Chemicals
volumes, Fire Safety Solutions pricing, and unfavorable impacts
from currency exchange, partly offset by favorable volumes in Fire
Safety Solutions. Segment income for Performance Chemicals
was $60.2 million in the fourth
quarter of 2014, a decrease of 8 percent from $65.7 million in the fourth quarter of 2013,
driven by unfavorable Fire Safety Solutions pricing and higher
manufacturing costs, partly offset by favorable volumes in Fire
Safety Solutions.
Catalyst Solutions generated net sales of $295.9 million in the fourth quarter of 2014, a
decrease of 3 percent from net sales in the fourth quarter of 2013
of $306.2 million, primarily on
unfavorable mix and pricing in general, unfavorable Clean Fuels
Technology volumes, and unfavorable currency impacts, partly offset
by favorable Heavy Oil Upgrading and Performance Catalyst
Solutions volumes. Catalyst Solutions segment income was
$67.0 million in the fourth quarter
of 2014, a decrease of 8 percent from fourth quarter 2013 results
of $72.6 million, due primarily to
unfavorable mix and pricing and higher variable costs, partly
offset by favorable volume impacts and favorable results from our
unconsolidated joint ventures.
Income Taxes
Our adjusted effective income tax rates, which exclude
discontinued operations, special and non-operating pension and OPEB
items, were 24.0 percent and 19.7 percent for the fourth quarter of
2014 and 2013, respectively, and 22.3 percent and 21.7 percent for
the full year of 2014 and 2013, respectively. Our effective
tax rate continues to be influenced by the level and geographic mix
of income, and benefits from a favorable mix of income in lower tax
jurisdictions.
Cash Flow
Our cash flow from operations was approximately $459.2 million for the year ended December 31, 2014, up 6 percent versus the same
period in 2013 on lower working capital. We had $2.5 billion in cash and cash equivalents at
December 31, 2014, of which approximately $1.9 billion related to net proceeds from the
issuance of senior notes during the fourth quarter 2014 in
anticipation of the Rockwood acquisition. During the year
ending December 31, 2014, cash on hand and cash provided by
operations funded capital expenditures for plant, machinery and
equipment of approximately $110.6
million, dividends to shareholders of $84.1 million, dividends to noncontrolling
interests of $15.5 million and
$150.0 million for repurchases of
approximately 2.2 million shares of our common stock pursuant to
the terms of our accelerated share repurchase programs entered into
in the first and second quarters of 2014. Additionally, in
the third quarter of 2014 we closed the sale of our antioxidant,
ibuprofen and propofol businesses and assets for net proceeds of
$104.7 million. A post-closing
working capital settlement of $7.6
million was received in the first quarter of 2015.
During the fourth quarter of 2014, we issued a series of senior
notes consisting of (i) $250 million
aggregate principal amount of 3.000% senior notes due 2019, (ii)
$425 million aggregate principal
amount of 4.150% senior notes due 2024, (iii) $350 million aggregate principal amount of 5.450%
senior notes due 2044 and (iv) €700 million aggregate principal
amount of 1.875% senior notes due 2021. The net proceeds from
the issuance of the senior notes, together with other borrowings,
have been used primarily to finance the aggregate cash
consideration of Rockwood acquisition, pay related fees and
expenses and will also be used to repay our $325 million senior notes which mature on
February 1, 2015. Also in the
fourth quarter of 2014, we settled a forward starting interest rate
swap which resulted in a payment of $33.4
million.
The Company ended the fourth quarter of 2014 with a Consolidated
Leverage Ratio of approximately 2.5x, as defined by the first
amendment to the Credit Agreement dated as of February 7, 2014. This amendment, dated
August 15, 2014, among other changes,
revised the definition of Consolidated Funded Debt to exclude
Specified Senior Notes to the extent such notes include a "special
mandatory redemption" provision requiring the Company to redeem
them if (i) the Rockwood Acquisition was not consummated on or
prior to May 15, 2015 or (ii) the
Rockwood Acquisition Agreement terminated in accordance with its
terms. Of the $1.9 billion of
senior notes the Company raised during the fourth quarter of 2014,
approximately $1.4 billion are
Specified Senior Notes and excluded from Consolidated Funded Debt
for the quarter ending December 31,
2014 for covenant purposes. This amendment effectively
enabled the Company to pre-fund the financing required to close the
Rockwood acquisition.
Earnings Call
The Company's performance for the fourth quarter and full
year ended December 31, 2014 will be discussed on a
conference call at 10:00 AM Eastern
time on January 29, 2015. The call can be
accessed by dialing 888-713-4209 (International Dial-In #
617-213-4863), and entering conference ID 68967608. The
Company's earnings presentation and supporting material can be
accessed through Albemarle's website under Investors at
www.albemarle.com.
About Albemarle
Albemarle Corporation, headquartered in Baton Rouge, Louisiana, is a premier specialty
chemicals company with leading positions in attractive end markets
around the world. With a broad customer reach and diverse end
markets, Albemarle develops, manufactures and markets
technologically advanced and high value added products, including
lithium and lithium compounds, bromine and derivatives, catalysts
and surface treatment chemistries used in a wide range of
applications including consumer electronics, flame retardants,
metal processing, plastics, contemporary and alternative
transportation vehicles, refining, pharmaceuticals, agriculture,
construction and custom chemistry services. Albemarle is focused on
delivering differentiated, performance-based technologies that
deliver innovative and sustainable solutions to its customers. The
Company employs approximately 6,900 people and serves customers in
approximately 100 countries. Albemarle regularly posts information
to www.albemarle.com, including notification of events, news,
financial performance, investor presentations and webcasts,
Regulation G reconciliations, SEC filings and other information
regarding the Company, its businesses and the markets it
serves.
Forward-Looking Statements
Some of the information presented in this press release and the
conference call and discussions that follow, including, without
limitation, statements with respect to the transaction with
Rockwood and the anticipated consequences and benefits of the
transaction, product development, changes in productivity, market
trends, price, expected growth and earnings, input costs,
surcharges, tax rates, stock repurchases, dividends, cash flow
generation, costs and cost synergies, portfolio diversification,
economic trends, outlook and all other information relating to
matters that are not historical facts may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. There can be no assurance
that actual results will not differ materially. Factors that could
cause actual results to differ materially include, without
limitation: changes in economic and business conditions; changes in
financial and operating performance of our major customers and
industries and markets served by us; the timing of orders received
from customers; the gain or loss of significant customers;
competition from other manufacturers; changes in the demand for our
products; limitations or prohibitions on the manufacture and sale
of our products; availability of raw materials; changes in the cost
of raw materials and energy; changes in our markets in general;
fluctuations in foreign currencies; changes in laws and government
regulation impacting our operations or our products; the occurrence
of claims or litigation; the occurrence of natural disasters; the
inability to maintain current levels of product or premises
liability insurance or the denial of such coverage; political
unrest affecting the global economy; political instability
affecting our manufacturing operations or joint ventures; changes
in accounting standards; the inability to achieve results from our
global manufacturing cost reduction initiatives as well as our
ongoing continuous improvement and rationalization programs;
changes in the jurisdictional mix of our earnings and changes in
tax laws and rates; changes in monetary policies, inflation or
interest rates; volatility and substantial uncertainties in the
debt and equity markets; technology or intellectual property
infringement; decisions we may make in the future; the ability to
successfully operate and integrate Rockwood's operations and
realize estimated synergies; and the other factors detailed from
time to time in the reports we file with the SEC, including those
described under "Risk Factors" in the joint proxy statement /
prospectus we filed in connection with the transaction with
Rockwood, and in our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q. These forward-looking statements speak
only as of the date of this press release. We assume no obligation
to provide any revisions to any forward-looking statements should
circumstances change, except as otherwise required by securities
and other applicable laws.
Albemarle Corporation
and Subsidiaries
Consolidated
Statements of Income
(In Thousands Except
Per Share Amounts) (Unaudited)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Net
sales
|
$
|
598,566
|
|
|
$
|
639,635
|
|
|
$
|
2,445,548
|
|
|
$
|
2,394,270
|
|
Cost of goods
sold(a)
|
436,126
|
|
|
386,356
|
|
|
1,674,700
|
|
|
1,543,799
|
|
Gross
profit
|
162,440
|
|
|
253,279
|
|
|
770,848
|
|
|
850,471
|
|
Selling, general and
administrative expenses(a)
|
144,008
|
|
|
(28,479)
|
|
|
355,135
|
|
|
158,189
|
|
Research and
development expenses
|
21,394
|
|
|
21,287
|
|
|
88,310
|
|
|
82,246
|
|
Restructuring and
other charges, net(b)
|
5,322
|
|
|
33,361
|
|
|
25,947
|
|
|
33,361
|
|
Acquisition and
integration related costs(c)
|
15,054
|
|
|
—
|
|
|
30,158
|
|
|
—
|
|
Operating (loss)
profit
|
(23,338)
|
|
|
227,110
|
|
|
271,298
|
|
|
576,675
|
|
Interest and
financing expenses(d)
|
(15,103)
|
|
|
(9,224)
|
|
|
(41,358)
|
|
|
(31,559)
|
|
Other expenses,
net(e)
|
(10,307)
|
|
|
(527)
|
|
|
(16,761)
|
|
|
(6,674)
|
|
(Loss) income from
continuing operations before income
taxes and equity in net income of unconsolidated
investments
|
(48,748)
|
|
|
217,359
|
|
|
213,179
|
|
|
538,442
|
|
Income tax (benefit)
expense(f)
|
(28,216)
|
|
|
61,548
|
|
|
18,484
|
|
|
134,445
|
|
(Loss) income from
continuing operations before equity in net income of unconsolidated
investments
|
(20,532)
|
|
|
155,811
|
|
|
194,695
|
|
|
403,997
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
7,542
|
|
|
6,421
|
|
|
35,742
|
|
|
31,729
|
|
Net (loss) income
from continuing operations
|
(12,990)
|
|
|
162,232
|
|
|
230,437
|
|
|
435,726
|
|
(Loss) income from
discontinued operations (net of tax)(g)
|
(1,058)
|
|
|
(886)
|
|
|
(69,531)
|
|
|
4,108
|
|
Net (loss)
income
|
(14,048)
|
|
|
161,346
|
|
|
160,906
|
|
|
439,834
|
|
Net income
attributable to noncontrolling interests
|
(4,460)
|
|
|
(5,413)
|
|
|
(27,590)
|
|
|
(26,663)
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$
|
(18,508)
|
|
|
$
|
155,933
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
Basic (loss) earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.22)
|
|
|
$
|
1.93
|
|
|
$
|
2.57
|
|
|
$
|
4.88
|
|
Discontinued
operations
|
(0.02)
|
|
|
(0.01)
|
|
|
(0.88)
|
|
|
0.05
|
|
|
$
|
(0.24)
|
|
|
$
|
1.92
|
|
|
$
|
1.69
|
|
|
$
|
4.93
|
|
Diluted (loss)
earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.22)
|
|
|
$
|
1.92
|
|
|
$
|
2.57
|
|
|
$
|
4.85
|
|
Discontinued
operations
|
(0.02)
|
|
|
(0.01)
|
|
|
(0.88)
|
|
|
0.05
|
|
|
$
|
(0.24)
|
|
|
$
|
1.91
|
|
|
$
|
1.69
|
|
|
$
|
4.90
|
|
Weighted-average
common shares outstanding – basic
|
78,144
|
|
|
81,226
|
|
|
78,696
|
|
|
83,839
|
|
Weighted-average
common shares outstanding – diluted
|
78,545
|
|
|
81,713
|
|
|
79,102
|
|
|
84,322
|
|
See accompanying notes to the condensed consolidated financial
information.
Albemarle Corporation
and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
|
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,489,768
|
|
|
$
|
477,239
|
|
Other current
assets
|
859,082
|
|
|
1,005,676
|
|
Total current
assets
|
3,348,850
|
|
|
1,482,915
|
|
Property, plant and
equipment
|
2,620,670
|
|
|
2,972,084
|
|
Less accumulated
depreciation and amortization
|
1,388,802
|
|
|
1,615,015
|
|
Net property, plant
and equipment
|
1,231,868
|
|
|
1,357,069
|
|
Other assets and
intangibles
|
642,385
|
|
|
744,813
|
|
Total
assets
|
$
|
5,223,103
|
|
|
$
|
3,584,797
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
711,096
|
|
|
$
|
24,554
|
|
Other current
liabilities
|
428,790
|
|
|
411,809
|
|
Total current
liabilities
|
1,139,886
|
|
|
436,363
|
|
Long-term
debt
|
2,223,035
|
|
|
1,054,310
|
|
Other noncurrent
liabilities
|
314,663
|
|
|
222,160
|
|
Deferred income
taxes
|
56,884
|
|
|
129,188
|
|
Albemarle Corporation
shareholders' equity
|
1,359,465
|
|
|
1,627,361
|
|
Noncontrolling
interests
|
129,170
|
|
|
115,415
|
|
Total liabilities and
equity
|
$
|
5,223,103
|
|
|
$
|
3,584,797
|
|
See accompanying notes to the condensed consolidated financial
information.
Albemarle Corporation
and Subsidiaries
Selected Consolidated
Cash Flow Data
(In Thousands)
(Unaudited)
|
|
|
Year
Ended
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
Cash and cash
equivalents at beginning of year
|
$
|
477,239
|
|
|
$
|
477,696
|
|
Cash and cash
equivalents at end of year
|
$
|
2,489,768
|
|
|
$
|
477,239
|
|
Sources of cash
and cash equivalents:
|
|
|
|
|
|
Net income
|
$
|
160,906
|
|
|
$
|
439,834
|
|
Cash proceeds from
divestitures
|
104,718
|
|
|
—
|
|
Proceeds from issuance
of senior notes
|
1,888,197
|
|
|
—
|
|
Proceeds from
borrowings of other long-term debt
|
—
|
|
|
117,000
|
|
Proceeds from other
borrowings, net
|
—
|
|
|
398,544
|
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
40,688
|
|
|
21,632
|
|
Working capital
changes
|
57,160
|
|
|
—
|
|
Uses of cash and
cash equivalents:
|
|
|
|
|
|
Working capital
changes
|
—
|
|
|
(31,003
|
|
Capital
expenditures
|
(110,576)
|
|
|
(155,346)
|
|
Repurchases of common
stock
|
(150,000)
|
|
|
(582,298)
|
|
Repayments of
long-term debt
|
(6,017)
|
|
|
(135,733)
|
|
Payment for settlement
of interest rate swap
|
(33,425)
|
|
|
—
|
|
Dividends paid to
shareholders
|
(84,102)
|
|
|
(78,107)
|
|
Dividends paid to
noncontrolling interests
|
(15,535)
|
|
|
(10,014)
|
|
Pension and
postretirement contributions
|
(13,916)
|
|
|
(13,294)
|
|
Non-cash and other
items:
|
|
|
|
|
|
Depreciation and
amortization
|
103,572
|
|
|
107,370
|
|
Loss on disposal of
businesses
|
85,515
|
|
|
—
|
|
Pension and
postretirement expense (benefit)
|
133,681
|
|
|
(132,707)
|
|
Equity in net income
of unconsolidated investments
|
(35,742)
|
|
|
(31,729)
|
|
See accompanying notes to the condensed consolidated financial
information.
Albemarle Corporation
and Subsidiaries
Consolidated Summary
of Segment Results
(In Thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Chemicals
|
$
|
302,635
|
|
|
$
|
333,462
|
|
|
$
|
1,351,596
|
|
|
$
|
1,392,664
|
|
Catalyst
Solutions
|
295,931
|
|
|
306,173
|
|
|
1,093,952
|
|
|
1,001,606
|
|
Total net
sales
|
$
|
598,566
|
|
|
$
|
639,635
|
|
|
$
|
2,445,548
|
|
|
$
|
2,394,270
|
|
Segment operating
profit:
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Chemicals
|
$
|
61,892
|
|
|
$
|
68,610
|
|
|
$
|
306,616
|
|
|
$
|
334,275
|
|
Catalyst
Solutions
|
62,238
|
|
|
68,707
|
|
|
224,407
|
|
|
194,322
|
|
Total segment
operating profit
|
124,130
|
|
|
137,317
|
|
|
531,023
|
|
|
528,597
|
|
Equity in net
income of unconsolidated
investments:
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Chemicals
|
2,747
|
|
|
2,504
|
|
|
10,068
|
|
|
8,875
|
|
Catalyst
Solutions
|
4,795
|
|
|
3,917
|
|
|
25,674
|
|
|
22,854
|
|
Total equity in net
income of unconsolidated investments
|
7,542
|
|
|
6,421
|
|
|
35,742
|
|
|
31,729
|
|
Net income
attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Chemicals
|
(4,460)
|
|
|
(5,413)
|
|
|
(27,590)
|
|
|
(26,663)
|
|
Total net income
attributable to noncontrolling interests
|
(4,460)
|
|
|
(5,413)
|
|
|
(27,590)
|
|
|
(26,663)
|
|
Segment
income:
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Chemicals
|
60,179
|
|
|
65,701
|
|
|
289,094
|
|
|
316,487
|
|
Catalyst
Solutions
|
67,033
|
|
|
72,624
|
|
|
250,081
|
|
|
217,176
|
|
Total segment
income
|
127,212
|
|
|
138,325
|
|
|
539,175
|
|
|
533,663
|
|
Corporate &
other(a)
|
(127,092)
|
|
|
123,154
|
|
|
(203,620)
|
|
|
81,439
|
|
Restructuring and
other charges, net(b)
|
(5,322)
|
|
|
(33,361)
|
|
|
(25,947)
|
|
|
(33,361)
|
|
Acquisition and
integration related costs(c)
|
(15,054)
|
|
|
—
|
|
|
(30,158)
|
|
|
—
|
|
Interest and
financing expenses(d)
|
(15,103)
|
|
|
(9,224)
|
|
|
(41,358)
|
|
|
(31,559)
|
|
Other expenses,
net(e)
|
(10,307)
|
|
|
(527)
|
|
|
(16,761)
|
|
|
(6,674)
|
|
Income tax benefit
(expense)(f)
|
28,216
|
|
|
(61,548)
|
|
|
(18,484)
|
|
|
(134,445)
|
|
(Loss) income from
discontinued operations (net of tax)(g)
|
(1,058)
|
|
|
(886)
|
|
|
(69,531)
|
|
|
4,108
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$
|
(18,508)
|
|
|
$
|
155,933
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
See accompanying notes to the condensed consolidated financial
information.
Notes to the Condensed Consolidated Financial Information
(a) Non-operating pension and OPEB items, consisting
of MTM actuarial gains/losses as well as interest cost and expected
return on assets, were included in Corporate & other as
follows:
- For the three months ended December 31,
2014 and 2013, net charges (benefits) amounted to
$111.3 million ($71.0 million after income taxes, or $0.90 per share) and $(140.8) million ($89.5
million after income taxes, or $1.09 per share), respectively. The MTM actuarial
loss (gain) was $112.6 million
($71.8 million after income taxes, or
$0.91 per share) and $(139.0) million ($88.3
million after income taxes, or $1.08 per share) for the three months ended
December 31, 2014 and 2013,
respectively, and resulted from the annual remeasurement of the
plans in the fourth quarter. MTM actuarial gains/losses recorded in
the fourth quarter may differ from the year-to-date amounts to the
extent that remeasurements occurred in previous quarters.
- For the year ended December 31,
2014 and 2013, net charges (benefits) amounted to
$125.5 million ($80.0 million after income taxes, or $1.01 per share) and $(146.2) million ($92.8
million after income taxes, or $1.10 per share), respectively. The MTM actuarial
loss (gain) was $130.8 million
($83.3 million after income taxes, or
$1.05 per share) and $(139.0) million ($88.3
million after income taxes, or $1.05 per share) for the years ended December 31, 2014 and 2013, respectively, and
resulted from the annual remeasurement of the plans in the fourth
quarter.
Although non-operating pension and OPEB items are included in
cost of goods sold and selling, general and administrative expenses
in accordance with GAAP, we believe that these components of
pension cost are mainly driven by market performance, and we manage
these separately from the operational performance of our
businesses. Non-operating pension and OPEB items included in cost
of goods sold and selling, general and administrative expenses were
as follows (in millions):
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Cost of goods
sold:
|
|
|
|
|
|
|
|
|
|
|
|
MTM actuarial loss
(gain)
|
$
|
30.7
|
|
|
$
|
(42.7)
|
|
|
$
|
36.4
|
|
|
$
|
(42.7)
|
|
Interest cost and
expected return on assets, net
|
(0.4)
|
|
|
(0.8)
|
|
|
(1.9)
|
|
|
(3.1)
|
|
Total
|
$
|
30.3
|
|
|
$
|
(43.5)
|
|
|
$
|
34.5
|
|
|
$
|
(45.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
MTM actuarial loss
(gain)
|
$
|
81.9
|
|
|
$
|
(96.3)
|
|
|
$
|
94.4
|
|
|
$
|
(96.3)
|
|
Interest cost and
expected return on assets, net
|
(0.9)
|
|
|
(1.0)
|
|
|
(3.4)
|
|
|
(4.1)
|
|
Total
|
$
|
81.0
|
|
|
$
|
(97.3)
|
|
|
$
|
91.0
|
|
|
$
|
(100.4)
|
|
(b) Restructuring and other charges consisted of the
following:
For the three months ended December 31, 2014 -
- Net charges of $6.5 million
($4.3 million after income taxes, or
$0.05 per share) in connection with a
reduction of aluminum alkyls high cost supply capacity.
- Net adjustments of ($1.2) million
($0.9 million after taxes, or
$0.01 per share) associated with the
finalization of the workforce reduction plan initiated in the
fourth quarter of 2013.
For the year ended December 31, 2014 -
- Net charges amounting to $23.5
million ($15.5 million after
income taxes, or $0.20 per share) in
connection with a reduction of aluminum alkyls high cost supply
capacity.
- Charges of $3.3 million
($2.1 million after income taxes, or
$0.03 per share) related to the
write-off of certain multi-product facility project costs that we
do not expect to recover in future periods.
- Net adjustments of ($1.2) million
($0.9 million after taxes, or
$0.01 per share) associated with the
finalization of the workforce reduction plan initiated in the
fourth quarter of 2013.
- Other charges of $0.3 million
($0.2 million after income
taxes).
For the three months and year ended December 31, 2013 -
- Charges of $33.4 million
($21.9 million after income taxes, or
$0.27 per share in the fourth quarter
and $0.26 per share for the year) for
termination benefits related to the workforce reduction plan
initiated in the fourth quarter of 2013.
(c) Acquisition and integration related costs
consisted of the following:
For the three months ended December 31, 2014 -
- Transaction and integration fees related to the acquisition of
Rockwood of $14.3 million
($9.0 million after income taxes, or
$0.11 per share).
- Acquisition-related costs on other significant projects of
$0.8 million ($0.5 million after income taxes, or $0.01 per share).
For the year ended December 31, 2014 -
- Transaction and integration fees related to the acquisition of
Rockwood of $23.6 million
($14.9 million after income taxes, or
$0.19 per share).
- Acquisition-related costs on other significant projects of
$6.6 million ($4.2 million after income taxes, or $0.05 per share).
(d) Included in Interest and financing expenses for
the three months and year ended December 31,
2014 was $4.5 million
($2.8 million after income taxes, or
$0.04 per share) for interest and
financing expenses incurred from our new senior notes issued during
the fourth quarter 2014 in connection with the acquisition of
Rockwood, which did not close until January
2015.
(e) Included in Other expenses, net for the three
months and year ended December 31, 2014 was $10.7 million ($6.7
million after income taxes, or $0.09 per share) and $17.7
million ($11.2 million after
income taxes, or $0.14 per share),
respectively, for amortization of bridge facility fees and other
financing fees related to the acquisition of Rockwood as well as
($0.2) million ($0.1 million after income taxes) for interest
income earned on the cash proceeds of the new senior notes issued
in connection with the acquisition of Rockwood.
(f) Included in Income tax (benefit) expense for the
three months and year ended December 31, 2014 was $1.6 million, or $0.02 per share, of income tax expense associated
with the restructure of a Brazilian entity in anticipation of the
acquisition of Rockwood. Also included in Income tax
(benefit) expense for the year ended December 31, 2014 were discrete net tax benefit
items of ($2.1) million, or
($0.03) per share, related
principally to the expiration of statutes of limitations.
(g) On September 1,
2014, the Company closed the sale of its antioxidant,
ibuprofen and propofol businesses and assets to SI Group, Inc and
received net proceeds of $104.7
million and a post-closing working capital
settlement of $7.6 million which
was received in the first quarter of 2015. Financial results of the
disposal group have been presented as discontinued operations in
the consolidated statements of income for all periods
presented. Included in (Loss) income from discontinued
operations are pre-tax charges of $85.5
million ($65.7 million after
income taxes, or $0.83 per share)
recorded for the year ended December 31,
2014 related to the loss on the sale of the disposal group,
representing the difference between the carrying value of the
related assets and their fair value as determined by the sales
price less estimated costs to sell. The loss is primarily
attributable to goodwill, intangibles and long-lived assets, net of
cumulative foreign currency translation gains of $17.8 million.
(h) Totals may not add due to rounding. Items
included in footnotes (b) through (f) above have been aggregated
and are referred to as "special items" in other sections of this
press release.
Additional Information
It should be noted that adjusted net income attributable to
Albemarle Corporation ("adjusted earnings"), adjusted diluted
earnings per share, adjusted effective income tax rates, segment
operating profit, segment income, EBITDA, adjusted EBITDA, adjusted
EBITDA by operating segment, EBITDA margin and adjusted EBITDA
margin are financial measures that are not required by, or
presented in accordance with, accounting principles generally
accepted in the United States, or
GAAP. These measures are presented here to provide additional
useful measurements to review our operations, provide transparency
to investors and enable period-to-period comparability of financial
performance.
A description of other non-GAAP financial measures that we use
to evaluate our operations and financial performance, and
reconciliation of these non-GAAP financial measures to the most
directly comparable financial measures calculated and reported in
accordance with GAAP, can be found in the Investors section of our
website at www.albemarle.com, under "Non-GAAP Reconciliations"
under "Financials." Also, see attached for supplemental
reconciliations of our segment operating profit and segment income
amounts to GAAP Operating (loss) profit and GAAP Net (loss) income
attributable to Albemarle Corporation ("earnings"), respectively;
adjusted earnings, EBITDA and adjusted EBITDA to Net (loss) income
attributable to Albemarle Corporation and adjusted EBITDA by
operating segment to GAAP Operating (loss) profit.
ALBEMARLE CORPORATION AND
SUBSIDIARIES
Non-GAAP Reconciliations
(In Thousands)
(Unaudited)
Our segment information includes measures we refer to as segment
operating profit, segment income, EBITDA, adjusted EBITDA and
adjusted EBITDA by operating segment, which are financial measures
that are not required by, or presented in accordance with, GAAP.
The Company has reported segment operating profit, segment income,
EBITDA, adjusted EBITDA and adjusted EBITDA by operating segment
because management believes that these financial measures provide
transparency to investors and enable period-to-period comparability
of financial performance. Segment operating profit, segment income,
EBITDA, adjusted EBITDA and adjusted EBITDA by operating segment
should not be considered as alternatives to Operating (loss) profit
or Net (loss) income attributable to Albemarle Corporation, as
determined in accordance with GAAP.
See below for a reconciliation of segment operating profit and
segment income, the non-GAAP financial measures, to Operating
(loss) profit and Net (loss) income attributable to Albemarle
Corporation, respectively, the most directly comparable financial
measures calculated and reported in accordance with GAAP.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Total segment
operating profit
|
$
|
124,130
|
|
|
$
|
137,317
|
|
|
$
|
531,023
|
|
|
$
|
528,597
|
|
Corporate &
other
|
(127,092)
|
|
|
123,154
|
|
|
(203,620)
|
|
|
81,439
|
|
Restructuring and
other charges, net
|
(5,322)
|
|
|
(33,361)
|
|
|
(25,947)
|
|
|
(33,361)
|
|
Acquisition and
integration related costs
|
(15,054)
|
|
|
—
|
|
|
(30,158)
|
|
|
—
|
|
GAAP Operating
(loss) profit
|
$
|
(23,338)
|
|
|
$
|
227,110
|
|
|
$
|
271,298
|
|
|
$
|
576,675
|
|
Total segment income
|
$
|
127,212
|
|
|
$
|
138,325
|
|
|
$
|
539,175
|
|
|
$
|
533,663
|
|
Corporate &
other
|
(127,092)
|
|
|
123,154
|
|
|
(203,620)
|
|
|
81,439
|
|
Restructuring and
other charges, net
|
(5,322)
|
|
|
(33,361)
|
|
|
(25,947)
|
|
|
(33,361)
|
|
Acquisition and
integration related costs
|
(15,054)
|
|
|
—
|
|
|
(30,158)
|
|
|
—
|
|
Interest and
financing expenses
|
(15,103)
|
|
|
(9,224)
|
|
|
(41,358)
|
|
|
(31,559)
|
|
Other expenses,
net
|
(10,307)
|
|
|
(527)
|
|
|
(16,761)
|
|
|
(6,674)
|
|
Income tax benefit
(expense)
|
28,216
|
|
|
(61,548)
|
|
|
(18,484)
|
|
|
(134,445)
|
|
(Loss) income from
discontinued operations
|
(1,058)
|
|
|
(886)
|
|
|
(69,531)
|
|
|
4,108
|
|
GAAP Net (loss)
income attributable to Albemarle Corporation
|
$
|
(18,508)
|
|
|
$
|
155,933
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
See below for a reconciliation of adjusted net income
attributable to Albemarle Corporation ("adjusted earnings"), EBITDA
and adjusted EBITDA, the non-GAAP financial measures, to Net (loss)
income attributable to Albemarle Corporation, the most directly
comparable financial measure calculated and reported in accordance
with GAAP. Adjusted net income attributable to Albemarle
Corporation is defined as Net (loss) income attributable to
Albemarle Corporation before discontinued operations and the
special and non-operating pension and OPEB items as listed
below. EBITDA is defined as Net (loss) income attributable to
Albemarle Corporation before interest and financing expenses,
income taxes, depreciation and amortization. Adjusted EBITDA
is defined as EBITDA before discontinued operations and the special
and non-operating pension and OPEB items as listed below.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$
|
(18,508)
|
|
|
$
|
155,933
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
70,978
|
|
|
(89,464)
|
|
|
79,994
|
|
|
(92,829)
|
|
Special items (net of
tax)
|
23,906
|
|
|
21,945
|
|
|
49,307
|
|
|
21,945
|
|
Loss (income) from
discontinued operations (net of tax)
|
1,058
|
|
|
886
|
|
|
69,531
|
|
|
(4,108)
|
|
Adjusted net income
attributable to Albemarle Corporation
|
$
|
77,434
|
|
|
$
|
89,300
|
|
|
$
|
332,148
|
|
|
$
|
338,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$
|
(18,508)
|
|
|
$
|
155,933
|
|
|
$
|
133,316
|
|
|
$
|
413,171
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
15,103
|
|
|
9,224
|
|
|
41,358
|
|
|
31,559
|
|
Income tax (benefit)
expense (from continuing and discontinued operations)
|
(27,158)
|
|
|
61,406
|
|
|
(2,424)
|
|
|
136,322
|
|
Depreciation and
amortization
|
25,228
|
|
|
27,893
|
|
|
103,572
|
|
|
107,370
|
|
EBITDA
|
(5,335)
|
|
|
254,456
|
|
|
275,822
|
|
|
688,422
|
|
Non-operating pension
and OPEB items
|
111,321
|
|
|
(140,818)
|
|
|
125,462
|
|
|
(146,193)
|
|
Special items
(excluding special items associated with interest
expense)
|
30,847
|
|
|
33,361
|
|
|
73,597
|
|
|
33,361
|
|
Loss (income) from
discontinued operations
|
—
|
|
|
1,028
|
|
|
90,439
|
|
|
(5,985)
|
|
Less depreciation and
amortization from discontinued operations
|
—
|
|
|
(2,985)
|
|
|
(3,165)
|
|
|
(12,054)
|
|
Adjusted
EBITDA
|
$
|
136,833
|
|
|
$
|
145,042
|
|
|
$
|
562,155
|
|
|
$
|
557,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
598,566
|
|
|
$
|
639,635
|
|
|
$
|
2,445,548
|
|
|
$
|
2,394,270
|
|
EBITDA
Margin
|
(0.9)%
|
|
|
39.8%
|
|
|
11.3%
|
|
|
28.8%
|
|
Adjusted EBITDA
Margin
|
22.9%
|
|
|
22.7%
|
|
|
23.0%
|
|
|
23.3%
|
|
See below for a reconciliation of adjusted EBITDA by operating
segment, the non-GAAP financial measure, to Operating (loss)
profit, the most directly comparable financial measure calculated
and reporting in accordance with GAAP. Adjusted EBITDA by
operating segment is defined as Operating (loss) profit, excluding
depreciation and amortization, and adjusted for special and
non-operating pension and OPEB items as listed below, plus Equity
in net income (loss) of unconsolidated investments, less Net income
attributable to noncontrolling interests. Adjusted EBITDA for
the Corporate & other segment also includes Other expenses,
net.
|
Performance
Chemicals
|
|
Catalyst
Solutions
|
|
Corporate
&
Other
|
|
Consolidated
|
Three months ended
December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
|
61,892
|
|
|
$
|
62,238
|
|
|
$
|
(147,468)
|
|
|
$
|
(23,338)
|
|
Depreciation and
amortization
|
11,798
|
|
|
12,227
|
|
|
1,203
|
|
|
25,228
|
|
Other expenses,
net
|
—
|
|
|
—
|
|
|
(10,307)
|
|
|
(10,307)
|
|
Special items
(excluding special items associated with interest
expense)
|
—
|
|
|
—
|
|
|
30,847
|
|
|
30,847
|
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
111,321
|
|
|
111,321
|
|
Equity in net income
of unconsolidated investments
|
2,747
|
|
|
4,795
|
|
|
—
|
|
|
7,542
|
|
Net income
attributable to noncontrolling interests
|
(4,460)
|
|
|
—
|
|
|
—
|
|
|
(4,460)
|
|
Adjusted EBITDA by
operating segment
|
$
|
71,977
|
|
|
$
|
79,260
|
|
|
$
|
(14,404)
|
|
|
$
|
136,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
|
68,610
|
|
|
$
|
68,707
|
|
|
$
|
89,793
|
|
|
$
|
227,110
|
|
Depreciation and
amortization
|
11,347
|
|
|
12,961
|
|
|
600
|
|
|
24,908
|
|
Other expenses,
net
|
—
|
|
|
—
|
|
|
(527)
|
|
|
(527)
|
|
Special items
(excluding special items associated with interest
expense)
|
—
|
|
|
—
|
|
|
33,361
|
|
|
33,361
|
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
(140,818)
|
|
|
(140,818)
|
|
Equity in net income
of unconsolidated investments
|
2,504
|
|
|
3,917
|
|
|
—
|
|
|
6,421
|
|
Net income
attributable to noncontrolling interests
|
(5,413)
|
|
|
—
|
|
|
—
|
|
|
(5,413)
|
|
Adjusted EBITDA by
operating segment
|
$
|
77,048
|
|
|
$
|
85,585
|
|
|
$
|
(17,591)
|
|
|
$
|
145,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
|
306,616
|
|
|
$
|
224,407
|
|
|
$
|
(259,725)
|
|
|
$
|
271,298
|
|
Depreciation and
amortization
|
48,233
|
|
|
49,622
|
|
|
2,552
|
|
|
100,407
|
|
Other expenses,
net
|
—
|
|
|
—
|
|
|
(16,761)
|
|
|
(16,761)
|
|
Special items
(excluding special items associated with interest
expense)
|
—
|
|
|
—
|
|
|
73,597
|
|
|
73,597
|
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
125,462
|
|
|
125,462
|
|
Equity in net income
of unconsolidated investments
|
10,068
|
|
|
25,674
|
|
|
—
|
|
|
35,742
|
|
Net income
attributable to noncontrolling interests
|
(27,590)
|
|
|
—
|
|
|
—
|
|
|
(27,590)
|
|
Adjusted EBITDA by
operating segment
|
$
|
337,327
|
|
|
$
|
299,703
|
|
|
$
|
(74,875)
|
|
|
$
|
562,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
|
334,275
|
|
|
$
|
194,322
|
|
|
$
|
48,078
|
|
|
$
|
576,675
|
|
Depreciation and
amortization
|
43,472
|
|
|
49,656
|
|
|
2,188
|
|
|
95,316
|
|
Other expenses,
net
|
—
|
|
|
—
|
|
|
(6,674)
|
|
|
(6,674)
|
|
Special items
(excluding special items associated with interest
expense)
|
—
|
|
|
—
|
|
|
33,361
|
|
|
33,361
|
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
(146,193)
|
|
|
(146,193)
|
|
Equity in net income
of unconsolidated investments
|
8,875
|
|
|
22,854
|
|
|
—
|
|
|
31,729
|
|
Net income
attributable to noncontrolling interests
|
(26,663)
|
|
|
—
|
|
|
—
|
|
|
(26,663)
|
|
Adjusted EBITDA by
operating segment
|
$
|
359,959
|
|
|
$
|
266,832
|
|
|
$
|
(69,240)
|
|
|
$
|
557,551
|
|
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SOURCE Albemarle Corporation