Name: Albemarle Corp. (NYSE:ALB) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Albemarle Corp., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	2,815,131)	199,942)	446,615)	604,357)	739,139)
Depreciation and amortization	300,841)	254,000)	231,984)	213,484)	200,698)
Gain on sale of business/interest in properties, net	8,400)	(295,971)	(7,168)	—)	(210,428)
Gain on sale of property	—)	—)	—)	(14,411)	—)
Stock-based compensation and other	30,474)	20,120)	22,837)	19,680)	15,228)
Equity in net income of unconsolidated investments, net of tax	(772,275)	(95,770)	(127,521)	(129,568)	(89,264)
Dividends received from unconsolidated investments and nonmarketable securities	801,239)	78,391)	88,161)	71,746)	57,415)
Pension and postretirement (benefit) expense	(52,254)	(74,010)	45,658)	31,515)	10,410)
Pension and postretirement contributions	(16,112)	(30,253)	(16,434)	(16,478)	(15,236)
Unrealized gain on investments in marketable securities	3,279)	(3,818)	(4,635)	(2,809)	(527)
Loss on early extinguishment of debt	19,219)	28,955)	—)	4,829)	—)
Deferred income taxes	93,339)	(38,500)	(1,976)	14,394)	49,164)
(Increase) decrease in accounts receivable	(786,121)	(49,295)	100,118)	(18,220)	(97,448)
(Increase) decrease in inventories	(1,609,642)	(127,401)	51,978)	(46,304)	(124,067)
(Increase) decrease in other current assets	(104,655)	17,411)	7,902)	(32,941)	(2,181)
Increase (decrease) in accounts payable	1,287,072)	143,939)	(31,519)	(12,234)	73,730)
Increase (decrease) in accrued expenses and income taxes payable	(201,356)	127,068)	(215,011)	(4,640)	(1,999)
Changes in current assets and liabilities, net of effects of acquisitions and divestitures	(1,414,702)	111,722)	(86,532)	(114,339)	(151,965)
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL	122,682)	135,928)	179,437)	164,496)	—)
Other, net	(31,412)	53,521)	28,488)	(127,522)	(58,469)
Adjustments to reconcile net income to cash flows from operating activities	(907,282)	144,315)	352,299)	115,017)	(192,974)
Net cash provided by operating activities	1,907,849)	344,257)	798,914)	719,374)	546,165)
Acquisitions, net of cash acquired	(162,239)	—)	(22,572)	(820,000)	(11,403)
Capital expenditures	(1,261,646)	(953,667)	(850,477)	(851,796)	(699,991)
Cash proceeds from divestitures, net	—)	289,791)	—)	—)	413,569)
Proceeds from sale of joint venture	—)	—)	11,000)	—)	—)
Proceeds from sale of property and equipment	—)	—)	—)	10,356)	—)
(Investments in) sales of marketable securities, net	1,942)	3,774)	903)	384)	(270)
Investments in equity and other corporate investments	(706)	(6,488)	(2,427)	(2,569)	(5,600)
Net cash used in investing activities	(1,422,649)	(666,590)	(863,573)	(1,663,625)	(303,695)
Proceeds from issuance of common stock	—)	1,453,888)	—)	—)	—)
Proceeds from borrowings of other long-term debt	1,964,216)	—)	452,163)	1,597,807)	—)
Repayments of long-term debt and credit agreements	(705,000)	(1,173,823)	(250,000)	(175,215)	—)
Other borrowings (repayments), net	(391,662)	60,991)	137,635)	(126,364)	(113,567)
Fees related to early extinguishment of debt	(9,767)	(24,877)	—)	(4,419)	—)
Dividends paid to shareholders	(184,429)	(177,853)	(161,818)	(152,204)	(144,596)
Dividends paid to noncontrolling interests	(44,208)	(96,136)	(32,061)	(83,187)	(14,756)
Repurchases of common stock	—)	—)	—)	—)	(500,000)
Proceeds from exercise of stock options	2,783)	18,392)	40,437)	4,814)	3,633)
Withholding taxes paid on stock-based compensation award distributions	(13,338)	(8,140)	(5,143)	(11,031)	(17,240)
Other	(6,708)	(2,230)	(3,952)	(7,514)	—)
Net cash provided by (used in) financing activities	611,887)	50,212)	177,261)	1,042,687)	(786,526)
Net effect of foreign exchange on cash and cash equivalents	(37,217)	(35,331)	21,012)	(40,646)	(37,927)
Increase (decrease) in cash and cash equivalents	1,059,870)	(307,452)	133,614)	57,790)	(581,983)
Cash and cash equivalents at beginning of year	439,272)	746,724)	613,110)	555,320)	1,137,303)
Cash and cash equivalents at end of year	1,499,142)	439,272)	746,724)	613,110)	555,320)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The cash flow profile from 2018 to 2022 is characterized by a significant surge in profitability and operating cash generation in the final year, contrasted by a consistent and expanding commitment to capital expenditures. While net income experienced a steady decline between 2018 and 2021, reaching a low of approximately 199.9 million US$, it rebounded sharply in 2022 to 2.8 billion US$. This surge translated into a substantial increase in net cash provided by operating activities, which rose to 1.9 billion US$ in 2022 from 344.3 million US$ in 2021.

Operating Cash Flow Dynamics: Operating activities show a complex relationship between net income and actual cash realization. In 2022, although net income spiked, the cash conversion was tempered by significant working capital requirements. Specifically, a substantial increase in inventories (1.6 billion US$) and accounts receivable (786.1 million US$) acted as major cash drains. These were partially offset by a significant increase in accounts payable of 1.28 billion US$. Depreciation and amortization grew steadily throughout the period, rising from 200.7 million US$ in 2018 to 300.8 million US$ in 2022, reflecting a growing asset base.
Investing Activities and Capital Expenditure: A consistent downward trend in net cash from investing activities is observed, driven primarily by escalating capital expenditures. Annual spending on capital assets increased nearly every year, growing from 699.9 million US$ in 2018 to 1.26 billion US$ in 2022. This indicates a sustained strategy of capacity expansion or infrastructure investment. Occasional cash inflows from divestitures, such as the 413.6 million US$ in 2018 and 289.8 million US$ in 2021, provided intermittent liquidity to offset these investments.
Financing Activities and Capital Structure: Financing activities exhibit high volatility, reflecting shifts in debt management and equity funding. A notable peak in financing inflows occurred in 2019, driven by 1.6 billion US$ in long-term debt borrowings. In 2021, the company utilized 1.17 billion US$ for the repayment of long-term debt, while 2022 saw a return to heavy borrowing with 1.96 billion US$ in new long-term debt. Dividend payments to shareholders remained relatively stable, gradually increasing from 144.6 million US$ in 2018 to 184.4 million US$ in 2022, indicating a consistent return-to-shareholder policy despite fluctuating annual cash flows.
Liquidity and Cash Position: The overall cash position fluctuated significantly over the five-year period. After a decrease in 2018 and a dip in 2021, the company ended 2022 with a strong liquidity position of 1.49 billion US$ in cash and cash equivalents. This ending balance was achieved through the combination of record operating cash flows and substantial new debt issuance, which together offset the intensified capital expenditure program and working capital absorption.

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