Exhibit 99.1
| | | | |
 | | Contact: | | |
| | Nicole Daniel | | 804.788.6096 |
| | Sherry Knapp | | 804.788.6107 |
Albemarle Announces Record Second-Quarter 2006 Results
| • | | Quarterly net income was $43.3 million, or 89 cents per share, up 35 percent over the same period last year. |
| • | | Net sales for the quarter were $568.8 million, up 13 percent over the same period last year. |
RICHMOND, Va., July 24 — Albemarle Corporation (NYSE: ALB) reported record second-quarter 2006 net income of $43.3 million, or 89 cents per share, up from $32.1 million, or 67 cents per share, for second-quarter 2005, due to strong performance in each of the Company’s three business segments and its joint ventures. Excluding special items, second quarter 2005 net income was $29.0 million, or 60 cents per share. The Company reported quarterly net sales in the second quarter of 2006 totaling $569 million, up $66 million, a 13 percent increase from second-quarter 2005.
Net income for the first half of 2006 was $77.7 million, or $1.60 per share, up from $56.4 million, or $1.19 per share, for the first half of 2005 due to strong performance in each of the Company’s three business segments. Excluding special items, first half 2005 net income was $54.2 million or $1.14 per share. Net sales for the first half of 2006 were $1.176 billion, up $163 million, a 16 percent increase from the first half of 2005.
Commenting on second-quarter 2006 results, Mark C. Rohr, President and CEO of Albemarle Corporation stated, “I am pleased to announce record quarterly net income for the Company on strong net sales. Our sales increased 13 percent while our earnings rose 35 percent, reflecting the success we have had achieving value for our products and services in the market. All three business units showed improved earnings and margins compared to the same period last year. Our team is performing well building Albemarle’s innovation and service model, addressing under-performing assets, mitigating costs, and working with customers to introduce new products. We had a strong first half of the year, and while we recognize the expected deceleration in the domestic economy, we expect demand and pricing for our products to remain robust in the second half of the year.”
Quarterly Segment Results
The Polymer Additives segment recorded net sales for second-quarter 2006 of $228.6 million, up $24.1 million, or 12 percent, versus second-quarter 2005. Our mineral flame retardant portfolio saw both volume and net sales improvements. Net sales improved in both brominated flame retardants and our stabilizers and curatives on flat volumes. Polymer Additives segment income for second-quarter 2006 amounted to $39.2 million, up $10.9 million, or 38 percent, versus second-quarter 2005, due mainly to higher pricing, partially offset by increased manufacturing costs and unfavorable foreign exchange. Excluding the special item gain of $2.2 million in second-quarter 2005, Polymer Additives segment income for second-quarter 2006 improved 50 percent.
The Catalysts segment recorded net sales for second-quarter 2006 of $194.0 million, up $46.7 million, or 32 percent, versus second-quarter 2005, due mainly to higher pricing and increased volume in refinery catalysts (both FCC and HPC catalysts), offset in part by slightly lower volumes in polyolefin catalysts. Catalysts segment income for second-quarter 2006 amounted to $29.5 million, up $5.2 million, or 21 percent, from second-quarter 2005, due to higher pricing and increased volume offset by increased raw material cost. In addition, strong performance in the Catalysts joint ventures contributed $9.8 million in second-quarter 2006, a $4.1 million improvement over second-quarter 2005. Excluding the special item gain of $0.6 million in second-quarter 2005, Catalysts segment income for second-quarter 2006 improved 24 percent.
Fine Chemicals segment net sales for second-quarter 2006 were $146.2 million, down $4.8 million, or 3 percent, versus second-quarter 2005. Fine Chemicals segment income for second-quarter 2006 was $13.8 million, down $1.1 million, or 7 percent, from second-quarter 2005, due mainly to increased raw material and manufacturing costs, partially offset by improved pricing. Excluding the special item gain of $2.2 million in second-quarter 2005, Fine Chemicals segment income for second-quarter 2006 improved 9 percent.
During the quarter, interest and financing expenses were $12.0 million versus second-quarter 2005 of $10.1 million due mainly to higher interest rates and increased levels of debt after the consolidation of our Jordan bromine joint venture. During the quarter we recorded a net charge of approximately 3 cents per share, after tax, related to a foreign exchange adjustment on foreign denominated debt at our consolidated Jordan bromine joint venture. This charge is included in our Other (Expense) Income line item, with a partial offset in Minority Interests in Income of Consolidated Subsidiaries. Our net debt decreased approximately $60 million from March 31, 2006 reflecting strong cash flows. Our second-quarter 2006 effective income tax rate was 25.3 percent.
Selected data related to net income, special items and related per share amounts for the second-quarters and six months ended June 30, 2006 and 2005 are shown in the Additional Information section below, as well as a reconciliation of net income excluding special items and net debt.
Earnings Call
The Company’s performance for the second quarter ended June 30, 2006 will be discussed on a conference call at 11:00 AM Eastern Daylight Time on July 25, 2006, which can be accessed through Albemarle’s website under Investor Information atwww.albemarle.com.
Albemarle Corporation, headquartered in Richmond, Virginia, is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals for consumer electronics; petroleum and petrochemical processing; transportation and industrial products; pharmaceuticals; agricultural products; construction and packaging materials. The Company operates in three business segments, Polymer Additives, Catalysts and Fine Chemicals, and serves customers in approximately 100 countries.
2
Forward-Looking Statements
Some of the information presented in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations as reflected are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ from expectations include, without limitation: the inability to pass through increases in costs and expenses for raw materials and energy; competition from other manufacturers; changes in demand for our products; the gain or loss of significant customers; fluctuations in foreign currencies; and increased government regulation of our operations or our products. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2005 and in our other public filings with the Securities and Exchange Commission. Readers are urged to review and consider carefully the disclosures we make in our filings with the Securities and Exchange Commission.
3
Albemarle Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(In Thousands of Dollars, Except Share and Per-Share Amounts) (Unaudited)
| | | | | | | | | | | | | | | | |
| | | Second Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2006 | | | 2005 (a) | | | 2006 | | | 2005 (a) | |
Net sales | | $ | 568,797 | | | $ | 502,754 | | | $ | 1,176,151 | | | $ | 1,012,719 | |
Cost of goods sold | | | 437,413 | | | | 397,587 | | | | 922,314 | | | | 800,230 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 131,384 | | | | 105,167 | | | | 253,837 | | | | 212,489 | |
Selling, general and administrative expenses | | | 62,202 | | | | 53,669 | | | | 120,055 | | | | 110,695 | |
Research and development expenses | | | 11,198 | | | | 10,342 | | | | 22,643 | | | | 21,322 | |
Benefit plan curtailment gain and other special charges | | | — | | | | (4,868 | )(b) | | | — | | | | (4,868 | )(b) |
| | | | | | | | | | | | | | | | |
Operating profit | | | 57,984 | | | | 46,024 | | | | 111,139 | | | | 85,340 | |
Interest and financing expenses | | | (12,037 | ) | | | (10,135 | ) | | | (22,656 | ) | | | (20,388 | )(c) |
Other (expense) income, net | | | (2,303 | ) | | | 78 | | | | (1,377 | ) | | | 566 | |
| | | | | | | | | | | | | | | | |
Income before income taxes, minority interests and equity in net income of unconsolidated investments | | | 43,644 | | | | 35,967 | | | | 87,106 | | | | 65,518 | |
Income tax (expense) | | | (11,041 | ) | | | (13,948 | ) | | | (22,378 | ) | | | (25,088 | ) |
| | | | | | | | | | | | | | | | |
Income before minority interests and equity in net income of unconsolidated investments | | | 32,603 | | | | 22,019 | | | | 64,728 | | | | 40,430 | |
Minority interests in income of consolidated subsidiaries | | | (394 | ) | | | (1,028 | ) | | | (3,619 | ) | | | (2,512 | ) |
Equity in net income of unconsolidated investments | | | 11,118 | | | | 11,067 | | | | 16,594 | | | | 18,459 | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 43,327 | | | $ | 32,058 | | | $ | 77,703 | | | $ | 56,377 | |
| | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 0.92 | | | $ | 0.69 | | | $ | 1.65 | | | $ | 1.22 | |
| | | | |
Diluted earnings per share | | $ | 0.89 | | | $ | 0.67 | | | $ | 1.60 | | | $ | 1.19 | |
| | | | |
Weighted-average common shares outstanding - Basic | | | 47,345 | | | | 46,581 | | | | 47,211 | | | | 46,059 | |
| | | | |
Weighted-average common shares outstanding - Diluted | | | 48,580 | | | | 47,971 | | | | 48,432 | | | | 47,455 | |
| | | | | | | | | | | | | | | | |
See accompanying notes to the condensed consolidated financial information.
4
Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands of Dollars)
| | | | | | |
| | | June 30, 2006 | | December 31, 2005 |
| | | (Unaudited) | | |
ASSETS | | | | | | |
Cash and cash equivalents | | $ | 98,995 | | $ | 58,570 |
Other current assets | | | 834,106 | | | 815,093 |
| | | | | | |
Total current assets | | | 933,101 | | | 873,663 |
| | | | | | |
Property, plant and equipment | | | 2,269,096 | | | 2,194,878 |
Less accumulated depreciation and amortization | | | 1,282,606 | | | 1,228,061 |
| | | | | | |
Net property, plant and equipment | | | 986,490 | | | 966,817 |
| | |
Other assets and intangibles | | | 722,551 | | | 706,763 |
| | | | | | |
Total assets | | $ | 2,642,142 | | $ | 2,547,243 |
| | | | | | |
LIABILITIES & SHAREHOLDERS’ EQUITY | | | | | | |
Current liabilities | | $ | 419,634 | | $ | 421,917 |
Long-term debt | | | 748,273 | | | 775,889 |
Other noncurrent liabilities | | | 229,838 | | | 225,212 |
Deferred income taxes | | | 214,111 | | | 193,950 |
Shareholders’ equity | | | 1,030,286 | | | 930,275 |
| | | | | | |
Total liabilities & shareholders’ equity | | $ | 2,642,142 | | $ | 2,547,243 |
| | | | | | |
See accompanying notes to the condensed consolidated financial information.
5
Albemarle Corporation and Subsidiaries
Selected Cash Flows Data
(In Thousands of Dollars) (Unaudited)
| | | | | | | | |
| | | Six Months Ended June 30, | |
| | | 2006 | | | 2005 | |
Cash and cash equivalents at beginning of year | | $ | 58,570 | | | $ | 46,390 | |
Cash and cash equivalents at end of period | | $ | 98,995 | | | $ | 98,288 | |
| | |
Sources of cash and cash equivalents: | | | | | | | | |
Net income | | | 77,703 | | | | 56,377 | |
Depreciation and amortization | | | 57,666 | | | | 57,692 | |
Proceeds from issuance of senior notes | | | — | | | | 324,665 | |
Proceeds from issuance of common stock | | | — | | | | 147,862 | |
Proceeds from borrowings | | | 130,709 | | | | 117,372 | |
Proceeds from exercise of stock options | | | 12,856 | | | | 2,704 | |
Proceeds from liquidation of equity method investment and sale of nonmarketable security | | | — | | | | 1,058 | |
| | |
Uses of cash and cash equivalents: | | | | | | | | |
Capital expenditures | | | (49,012 | ) | | | (36,189 | ) |
Purchases of common stock | | | (9,885 | ) | | | — | |
Investments in and advances to joint ventures and other corporate investments | | | (168 | ) | | | (9,088 | ) |
Acquisitions of assets/business | | | — | | | | (7,553 | ) |
Repayments of long-term debt | | | (165,001 | ) | | | (499,419 | ) |
Dividends paid to shareholders | | | (15,248 | ) | | | (11,978 | ) |
Dividends paid to minority interest | | | (3,600 | ) | | | (1,000 | ) |
See accompanying notes to the condensed consolidated financial information.
6
Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands of Dollars) (Unaudited)
| | | | | | | | | | | | | | | | |
| | | Second Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2006 | | | 2005 (a) | | | 2006 | | | 2005 (a) | |
Segment net sales: | | | | | | | | | | | | | | | | |
Polymer Additives | | $ | 228,559 | | | $ | 204,435 | | | $ | 450,430 | | | $ | 402,537 | |
Catalysts | | | 194,045 | | | | 147,304 | | | | 429,401 | | | | 320,128 | |
Fine Chemicals | | | 146,193 | | | | 151,015 | | | | 296,320 | | | | 290,054 | |
| | | | | | | | | | | | | | | | |
Total segment net sales | | $ | 568,797 | | | $ | 502,754 | | | $ | 1,176,151 | | | $ | 1,012,719 | |
| | | | | | | | | | | | | | | | |
Segment income (loss): | | | | | | | | | | | | | | | | |
Polymer Additives | | $ | 39,240 | | | $ | 28,347 | (b) | | $ | 70,460 | | | $ | 50,661 | (b) |
Catalysts | | | 29,518 | | | | 24,346 | (b) | | | 54,847 | | | | 49,405 | (b) |
Fine Chemicals | | | 13,767 | | | | 14,850 | (b) | | | 23,458 | | | | 26,400 | (b) |
Corporate & Other | | | (13,817 | ) | | | (11,480 | )(b) | | | (24,651 | ) | | | (25,179 | )(b) |
| | | | | | | | | | | | | | | | |
Total segment income | | | 68,708 | (d) | | | 56,063 | (d) | | | 124,114 | (d) | | | 101,287 | (d) |
Interest and financing expenses | | | (12,037 | ) | | | (10,135 | ) | | | (22,656 | ) | | | (20,388 | )(c) |
Other (expense) income, net | | | (2,303 | ) | | | 78 | | | | (1,377 | ) | | | 566 | |
Income tax (expense) | | | (11,041 | ) | | | (13,948 | ) | | | (22,378 | ) | | | (25,088 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 43,327 | | | $ | 32,058 | | | $ | 77,703 | | | $ | 56,377 | |
| | | | | | | | | | | | | | | | |
See accompanying notes to the condensed consolidated financial information.
7
Notes to the Condensed Consolidated Financial Information
(In Thousands of Dollars, Except Per-Share Amounts):
| (a) | Certain reclassifications have been made in the condensed consolidated statements of income and consolidated summary of segment results to conform to current presentation. |
| (b) | The second quarter and six-month periods ended June 30, 2005 include the following curtailment gain and special charge: |
| | | | |
Segment income (loss): | | | | |
Polymer Additives | | $ | 2,181 | (1) |
Catalysts | | | 560 | (1) |
Fine Chemicals | | | 2,240 | (1) |
Corporate & Other | | | (113 | )(1-2) |
| | | | |
Total segment income | | | 4,868 | |
| | | | |
| | (1) | The second quarter and six-months ended June 30, 2005 included a curtailment gain amounting to $5,603 ($3,569 after income taxes, or 7 cents per share) that relates to a reduction in our accumulated postretirement benefit obligation (liability) associated with a change in coverage in our unfunded postretirement health care benefits plan for active employees’ future retiree medical premium payments. |
| | (2) | The second quarter and six-months ended June 30, 2005 included a provisional charge of $735 ($468 after income taxes, or 1 cent per share) for the potential settlement of future legal claims with respect to certain future asbestos premises liability claims. |
| (c) | Interest and financing expenses for the six-months ended June 30, 2005 included the write-off of deferred financing expenses totaling $1,386 ($883 after income taxes, or 2 cents per share). |
8
| (d) | Effective January 1, 2006, we revised the way we evaluate the performance of our segment results to reduce our segment income (loss) for the minority interests in income of consolidated subsidiaries. Segment income (loss) represents operating profit and equity in net income of unconsolidated investments and is reduced by minority interests in income of consolidated subsidiaries. Segment results for the second quarter and six-months ended June 30, 2005 have been reclassified to conform to the new presentation. |
| | | | | | | | | | | | | | | | |
| | | Second Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
Equity in net income of unconsolidated investments: | | | | | | | | | | | | | | | | |
Polymer Additives | | $ | 1,349 | | | $ | 2,793 | | | $ | 2,469 | | | $ | 4,573 | |
Catalysts | | | 9,757 | | | | 5,697 | | | | 14,202 | | | | 10,167 | |
Fine Chemicals | | | — | | | | 2,653 | | | | — | | | | 3,859 | |
Corporate & Other | | | 12 | | | | (76 | ) | | | (77 | ) | | | (140 | ) |
| | | | | | | | | | | | | | | | |
Total equity in net income of unconsolidated investments | | $ | 11,118 | | | $ | 11,067 | | | $ | 16,594 | | | $ | 18,459 | |
| | | | | | | | | | | | | | | | |
Minority interests in income of consolidated subsidiaries: | | | | | | | | | | | | | | | | |
Polymer Additives | | $ | (1,358 | ) | | $ | (1,028 | ) | | $ | (3,373 | ) | | $ | (2,512 | ) |
Catalysts | | | — | | | | — | | | | — | | | | — | |
Fine Chemicals | | | (939 | ) | | | — | | | | (2,149 | ) | | | — | |
Corporate & Other | | | 1,903 | | | | — | | | | 1,903 | | | | — | |
| | | | | | | | | | | | | | | | |
Total minority interests in income of consolidated subsidiaries | | $ | (394 | ) | | $ | (1,028 | ) | | $ | (3,619 | ) | | $ | (2,512 | ) |
| | | | | | | | | | | | | | | | |
9
Additional Information
It should be noted that net income excluding special items is a financial measure that is not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. It is presented here to exclude the impact of certain non-recurring items on our results. We believe this measure is more reflective of our operations, provides transparency to investors and enables period-to-period comparability of financial performance. Set forth below is a reconciliation of net income excluding special items, a non-GAAP financial measure, to net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, for the second quarter and six months ended June 30, 2006 and 2005.
Net debt is a supplemental financial measure that is not required by, or presented in accordance with GAAP. We believe net debt is helpful in analyzing leverage and as a performance measure. We define net debt as total debt plus the portion of outstanding joint venture indebtedness guaranteed by us (or less the portion of outstanding joint venture indebtedness consolidated but not guaranteed by us), less cash and cash equivalents. Set forth below is a reconciliation of net debt, a non-GAAP financial measure, to total debt, the most directly comparable financial measure calculated and reported in accordance with GAAP, for the first and second quarters ended March 31, 2006 and June 30, 2006, respectively.
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 Investor Information section of our website atwww.albemarle.com, under “Non-GAAP Reconciliations” under “Investor Relations.”
10
ALBEMARLE CORPORATION AND SUBSIDIARIES
(In Thousands, Except Per-Share Amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Second Quarter Ended June 30, 2006 | | | Second Quarter Ended June 30, 2005 | |
| | | As
Reported | | | Special
Items | | Excluding
Special
Items | | | As
Reported | | | Special
Items | | | Excluding
Special
Items | |
Net sales | | $ | 568,797 | | | $ | — | | $ | 568,797 | | | $ | 502,754 | | | $ | — | | | $ | 502,754 | |
Cost of goods sold | | | (437,413 | ) | | | — | | | (437,413 | ) | | | (397,587 | ) | | | — | | | | (397,587 | ) |
Selling, general and administrative expenses (including SFAS No. 2 R&D) | | | (73,400 | ) | | | — | | | (73,400 | ) | | | (64,011 | ) | | | — | | | | (64,011 | ) |
Benefit plan curtailment gain and other special charges | | | — | | | | — | | | — | | | | 4,868 | | | | (4,868 | ) (a) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
Operating profit | | | 57,984 | | | | — | | | 57,984 | | | | 46,024 | | | | (4,868 | ) | | | 41,156 | |
Interest and financing expenses | | | (12,037 | ) | | | — | | | (12,037 | ) | | | (10,135 | ) | | | — | | | | (10,135 | ) |
Other (expense) income, net | | | (2,303 | ) | | | — | | | (2,303 | ) | | | 78 | | | | — | | | | 78 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Income before income taxes, minority interests and equity in net income of unconsolidated investments | | | 43,644 | | | | — | | | 43,644 | | | | 35,967 | | | | (4,868 | ) | | | 31,099 | |
Income tax (expense) | | | (11,041 | ) | | | — | | | (11,041 | ) | | | (13,948 | ) | | | 1,767 | (a) | | | (12,181 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Income before minority interests and equity in net income of unconsolidated investments | | | 32,603 | | | | — | | | 32,603 | | | | 22,019 | | | | (3,101 | ) | | | 18,918 | |
Minority interests in income of consolidated subsidiaries | | | (394 | ) | | | — | | | (394 | ) | | | (1,028 | ) | | | — | | | | (1,028 | ) |
Equity in net income of unconsolidated investments | | | 11,118 | | | | — | | | 11,118 | | | | 11,067 | | | | — | | | | 11,067 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 43,327 | | | $ | — | | $ | 43,327 | | | $ | 32,058 | | | $ | (3,101 | ) | | $ | 28,957 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Diluted earnings per share | | $ | 0.89 | | | $ | — | | $ | 0.89 | | | $ | 0.67 | | | $ | (0.07 | ) | | $ | 0.60 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Segment income: | | | | | | | | | | | | | | | | | | | | | | | |
Polymer Additives | | $ | 39,240 | | | $ | — | | $ | 39,240 | | | $ | 28,347 | | | $ | (2,181 | ) | | $ | 26,166 | |
Catalysts | | | 29,518 | | | | — | | | 29,518 | | | | 24,346 | | | | (560 | ) | | | 23,786 | |
Fine Chemicals | | | 13,767 | | | | — | | | 13,767 | | | | 14,850 | | | | (2,240 | ) | | | 12,610 | |
Corporate & Other | | | (13,817 | ) | | | — | | | (13,817 | ) | | | (11,480 | ) | | | 113 | | | | (11,367 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 68,708 | | | $ | — | | $ | 68,708 | | | $ | 56,063 | | | $ | (4,868 | ) | | $ | 51,195 | |
| | | | | | | | | | | | | | | | | | | | | | | |
11
ALBEMARLE CORPORATION AND SUBSIDIARIES
(In Thousands, Except Per-Share Amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, 2006 | | | Six Months Ended June 30, 2005 | |
| | | As Reported | | | Special
Items | | Excluding
Special
Items | | | As Reported | | | Special
Items | | | Excluding
Special
Items | |
Net sales | | $ | 1,176,151 | | | $ | — | | $ | 1,176,151 | | | $ | 1,012,719 | | | $ | — | | | $ | 1,012,719 | |
Cost of goods sold | | | (922,314 | ) | | | — | | | (922,314 | ) | | | (800,230 | ) | | | — | | | | (800,230 | ) |
Selling, general and administrative expenses (including SFAS No. 2 R&D) | | | (142,698 | ) | | | — | | | (142,698 | ) | | | (132,017 | ) | | | — | | | | (132,017 | ) |
Benefit plan curtailment gain and other special charges | | | — | | | | — | | | — | | | | 4,868 | | | | (4,868 | ) (a) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
Operating profit | | | 111,139 | | | | — | | | 111,139 | | | | 85,340 | | | | (4,868 | ) | | | 80,472 | |
Interest and financing expenses | | | (22,656 | ) | | | — | | | (22,656 | ) | | | (20,388 | ) | | | 1,386 | (b) | | | (19,002 | ) |
Other (expense) income, net | | | (1,377 | ) | | | — | | | (1,377 | ) | | | 566 | | | | — | | | | 566 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Income before income taxes, minority interests and equity in net income of unconsolidated investments | | | 87,106 | | | | — | | | 87,106 | | | | 65,518 | | | | (3,482 | ) | | | 62,036 | |
Income tax (expense) | | | (22,378 | ) | | | — | | | (22,378 | ) | | | (25,088 | ) | | | 1,264 | (a-b) | | | (23,824 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Income before minority interests and equity in net income of unconsolidated investments | | | 64,728 | | | | — | | | 64,728 | | | | 40,430 | | | | (2,218 | ) | | | 38,212 | |
Minority interests in income of consolidated subsidiaries | | | (3,619 | ) | | | — | | | (3,619 | ) | | | (2,512 | ) | | | — | | | | (2,512 | ) |
Equity in net income of unconsolidated investments | | | 16,594 | | | | — | | | 16,594 | | | | 18,459 | | | | — | | | | 18,459 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 77,703 | | | $ | — | | $ | 77,703 | | | $ | 56,377 | | | $ | (2,218 | ) | | $ | 54,159 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Diluted earnings per share | | $ | 1.60 | | | $ | — | | $ | 1.60 | | | $ | 1.19 | | | $ | (0.05 | ) | | $ | 1.14 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Segment income: | | | | | | | | | | | | | | | | | | | | | | | |
Polymer Additives | | $ | 70,460 | | | $ | — | | $ | 70,460 | | | $ | 50,661 | | | $ | (2,181 | ) | | $ | 48,480 | |
Catalysts | | | 54,847 | | | | — | | | 54,847 | | | | 49,405 | | | | (560 | ) | | | 48,845 | |
Fine Chemicals | | | 23,458 | | | | — | | | 23,458 | | | | 26,400 | | | | (2,240 | ) | | | 24,160 | |
Corporate & Other | | | (24,651 | ) | | | — | | | (24,651 | ) | | | (25,179 | ) | | | 113 | | | | (25,066 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 124,114 | | | $ | — | | $ | 124,114 | | | $ | 101,287 | | | $ | (4,868 | ) | | $ | 96,419 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Special items for the second quarter and six-months ended June 30, 2005 included a curtailment gain amounting to $5,603 ($3,569 after income taxes, or 7 cents per share) that relates to a reduction in our accumulated postretirement benefit obligation (liability) associated with a change in coverage in our unfunded postretirement health care benefits plan for active employees’ future retiree medical premium payments. The second quarter and six-months ended June 30, 2005 also included a provisional charge of $735 ($468 after income taxes, or 1 cent per share) for the potential settlement of future legal claims with respect to certain future asbestos premises liability claims. |
| (b) | Interest and financing expenses for the six-months ended June 30, 2005 included the write-off of deferred financing expenses totaling $1,386 ($883 after income taxes, or 2 cents per share). |
12
ALBEMARLE CORPORATION AND SUBSIDIARIES
Net Debt Reconciliation
(In Thousands of Dollars)
(Unaudited)
| | | | | | | | |
| | | Second Quarter Ended June 30, 2006 | | | First Quarter Ended March 31, 2006 | |
Total debt | | $ | 799,835 | | | $ | 828,176 | |
JV debt consolidated by the Company but guaranteed by others | | | (37,773 | ) | | | (37,659 | ) |
Less: Cash and cash equivalents | | | (98,995 | ) | | | (67,100 | ) |
| | | | | | | | |
Net Debt | | $ | 663,067 | | | $ | 723,417 | |
| | | | | | | | |
13
