Albemarle Corporation ALB

Other Income, NetIn thousands 2025 2024 2023 $ Change % Change Other income, net $22,662 $178,339 $110,929 $67,410 61% •2024 $ (155,677) (87)% •$86.4 million decrease attributable to foreign exchange impacts from $18.9 million of net losses recorded in 2025 compared to $67.5 million of net gains recorded in 2024. Foreign exchange gains in 2024 are net of a loss of $26.1 million due to the reclassification from accumulated other comprehensive loss related to the dedesignation of cash flow hedge. •$38.0 million loss resulting from the redemption of preferred equity in a Grace subsidiary in 2025 •$20.2 million decrease attributable to interest income from lower interest rates in 2025 •2025 included losses gains of $70.8 $11.1 million related to the sale and fair market value adjustment of equity securities in public companies compared to $44.7 $70.8 million of net losses for similar fair value adjustments and sales of equity securities in 2023 2024 •$40.9 million gain primarily from the sale of assets at a site not part of our operations in 2024 •$27.9 •$17.7 million increase attributable to foreign exchange gains of pension and OPEB credits (including mark-to-market actuarial losses of $17.2 million) in 2024 2025 as compared to 2023. Foreign exchange gains in 2024 are net of a loss of $26.1 million due to the reclass from accumulated other comprehensive loss related to the dedesigation of cash flow hedge. •$17.0 million increase of income from PIK dividends of preferred equity in a Grace subsidiary in 2024 •$11.3 $11.3 million of pension and OPEB credits (including mark-to-market actuarial gains of $9.8 million) in 2024 as compared to $8.0 million of pension and OPEB credits (including •The mark-to-market actuarial gains 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 $10.2 million) the December 31, 2025 measurement date, which was partially offset by a higher return on pension plan assets in 2023 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 is 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 is 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.

We maintain utilize a combination of commercial insurance and self-insurance programs, including a captive insurance subsidiary, to manage certain property, business interruption, casualty, and liability, and/or other insurance, risks, but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles limitations. While we endeavor to self-insure and purchase coverage limits. that is appropriate based on our assessment of our risk, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages. Assessing the probability of a loss occurring and the timing and amount of any loss related to a regulatory matter or a legal proceeding is inherently difficult, and there are particular uncertainties and complexities involved when assessing the adequacy of loss reserves for potential liabilities that are self-insured by our captive insurance subsidiary. While our insurance arrangements help mitigate market volatility, they expose us to potential variability in earnings and cash flows. We may incur losses beyond the limits, or outside the coverage, of our insurance policies, including liabilities for environmental remediation. In addition, from time to time, various types of insurance for companies in the specialty chemical industry have not been available on commercially acceptable terms or, in some cases, have not been available at all. We are potentially at additional risk if one or more Significant losses, particularly those arising from catastrophic events, may exceed the limits of our insurance carriers fail. Additionally, severe disruptions coverage or captive capacity. In addition, changes in insurance markets, regulatory requirements applicable to captive insurers, or tax laws could increase our costs or reduce the domestic and global financial markets could adversely impact the ratings and survival effectiveness of some insurers. Future downgrades in the ratings of enough insurers could adversely impact both the availability of appropriate insurance coverage and its cost. these programs. In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain. Any such developments could have a material adverse effect on our financial condition and results of operations.

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 the any reporting units 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 the application a review of earnings multiples of observable prices and other relevant information generated by market transactions involving comparable companies to the projected earnings of the reporting unit. 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 Refining Solutions reporting unit, within the Ketjen segment, the revenue growth rates, adjusted EBITDA margins, EBITDA multiples, market participant acquisition premium and the discount rate were deemed to be significant assumptions. For the Energy Storage reporting unit, the revenue growth rates, rates and adjusted EBITDA margins and the discount rate 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, competition or rising costs or the imposition of new tariffs could negatively impact the fair value of the reporting units, since they are forecasting future events. The Company uses a Weighted Average Cost of Capital (“WACC”) approach to determine our discount rate for goodwill recoverability testing. The WACC calculation incorporates industry-weighted average returns on debt and equity from a market perspective. The factors in this calculation are largely external to the Company and, therefore, are beyond its control. The Company performs a sensitivity analysis by using a range of inputs to confirm the reasonableness of these estimates being used in the goodwill impairment analysis. The Company tests its recorded goodwill for impairment in the fourth quarter of each year or upon

In September 2023, the Company finalized agreements to resolve these matters with the DOJ and SEC. 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 has confirmed it will would not pursue action in this matter. In connection with this resolution, which relates to conduct prior to 2018, we the Company entered into a non-prosecution agreement with the DOJ and an administrative resolution with the SEC, pursuant to which we the Company paid a total of $218.5 million in aggregate fines, disgorgement, and prejudgment interest to the DOJ and SEC. 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.