EX-99.1 2 a1q23earningsreleaseex991.htm EX-99.1 Document
Exhibit 99.1
Contact:
Brook Wootton1.980.299.5700


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Albemarle Reports Net Sales Increase of 129% for First Quarter 2023

CHARLOTTE, N.C. – May 3, 2023 - Albemarle Corporation (NYSE: ALB), a global leader in providing essential elements for mobility, energy, connectivity and health, today announced its results for the first quarter ended March 31, 2023.

First-Quarter 2023 and Recent Highlights
(Unless otherwise stated, all percentage changes represent year-over-year comparisons)

•Net sales of $2.6 billion, an increase of 129%
•Net income of $1.2 billion, or $10.51 per diluted share, an increase of 389%
•Adjusted diluted EPS of $10.32, an increase of 334%
•Adjusted EBITDA of $1.6 billion, an increase of 269%
•Selected U.S. lithium processing facility location in Richburg, South Carolina
•Signed definitive agreements with Mineral Resources Limited (“MinRes”) to restructure the MARBL Lithium Joint Venture in Australia and separately for MinRes to invest in Albemarle’s conversion assets in China
•Reached final investment decision to build Kemerton trains III & IV
•Adjusting 2023 guidance to reflect current lithium market pricing; Net sales are now expected to increase approximately 35% to 55% year-over-year and adjusted EBITDA now expected to range from (5%) to 15% year-over-year

"Compared to last year, first quarter net sales more than doubled, adjusted diluted earnings per share more than quadrupled providing a robust start to the year,” commented Albemarle CEO Kent Masters. “We see strong sales volume growth for the rest of the year but have modified our guidance to reflect softening lithium market pricing. We remain confident in the underlying market strength of our world-class asset base and our long-term growth strategy.”

2023 Corporate Outlook
The company is revising full-year 2023 outlook to reflect current lithium market pricing. Net sales are expected to increase 35% to 55% over prior year, primarily driven by a continued global shift to electric vehicles. The year-over-year change in Adjusted EBITDA is expected to be in the range of (5%) to 15% as higher net sales are partially offset by timing impacts of higher priced inventories. The company expects to maintain positive free cash flow. The company’s capital expenditures are expected to be between $1.7 billion and $1.9 billion for 2023.

FY 2023 Guidance
as of Feb.15, 2023		FY 2023 Guidance
as of May 3, 2023
Net sales$11.3 - $12.9 billion$9.8 - $11.5 billion
Adjusted EBITDA(a)
$4.2 - $5.1 billion$3.3 - $4.0 billion
Adjusted EBITDA Margin(a)
37% - 40%34% - 35%
Adjusted Diluted EPS(a)
$26.00 - $33.00$20.75 - $25.75
Net Cash from Operations$2.1 - $2.4 billion$1.7 - $2.3 billion
Capital Expenditures$1.7 - $1.9 billion$1.7 - $1.9 billion
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(a)    The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. See “Additional Information regarding Non-GAAP Measures” for more information.

First Quarter 2023 Results
In millions, except per share amountsQ1 2023Q1 2022$ Change% Change
Net sales$2,580.3 $1,127.7 $1,452.5 128.8 %
Net income attributable to Albemarle Corporation$1,238.6 $253.4 $985.2 388.8 %
Adjusted EBITDA(a)
$1,595.7 $431.9 $1,163.8 269.4 %
Diluted earnings per share$10.51 $2.15 $8.36 388.8 %
   Non-operating pension and OPEB items(a)
— (0.04)
   Non-recurring and other unusual items(a)
(0.19)0.26 
Adjusted diluted earnings per share(a)(b)
$10.32 $2.38 $7.94 333.6 %

(a)    See Non-GAAP Reconciliations for further details.
(b)    Totals may not add due to rounding.

Net sales for the first quarter of 2023 were $2.6 billion compared to $1.1 billion for the prior-year quarter. The 129% increase was driven by higher lithium prices and volumes. Net income attributable to Albemarle of $1.2 billion increased by $1.0 billion from the prior year’s quarter. Adjusted EBITDA of $1.6 billion increased by $1.2 billion from the prior-year quarter primarily due to higher net sales.

The effective income tax rate for the first quarter of 2023 was 23.9% compared to 26.9% in the same period of 2022. On an adjusted basis, the effective income tax rates were 23.6% and 18.9% for the first quarter of 2023 and 2022, respectively, with the increase primarily due to changes in the geographic income mix.

Business Segment Results
Beginning January 1, 2023, the company re-segmented its operating segments. The results from 2022 are restated to align with the new structure.

Energy Storage Results
In millionsQ1 2023Q1 2022$ Change% Change
Net Sales$1,943.7 $463.7 $1,480.0 319.2 %
Adjusted EBITDA
$1,406.2 $285.2 $1,120.9 393.0 %

Energy Storage net sales for the first quarter of 2023 were $1.9 billion, an increase of $1.5 billion (+319%) due to higher pricing net of FX (+301%) related to renegotiated contracts and increased market pricing. Volume was also higher (+18%) related to the La Negra III/IV expansion in Chile, production from our processing plant in Qinzhou, China, and higher tolling volumes to meet growing customer demand. Adjusted EBITDA of $1.4 billion increased $1.1 billion as higher pricing and volumes more than offset higher costs.

On February 22, 2023, Albemarle signed a definitive agreement with MinRes to restructure its MARBL Lithium Joint Venture in Australia to enable each partner to deliver long-term value to its customers. Albemarle also obtained new investment by MinRes in Albemarle’s conversion assets in China. MinRes will acquire a 50% interest in Albemarle's 100%-owned Qinzhou and Meishan plants in China.

2023 Energy Storage Outlook
Energy Storage net sales are estimated to range between $6.9 to $8.4 billion. Energy Storage volumes are projected to be up 30% to 40% in 2023 compared to 2022. Full year realized pricing is expected to be up 20% to 30% vs. the prior year, assuming flat lithium market pricing as of mid-April 2023. Adjusted EBITDA anticipated to range between $2.7 and $3.4 billion as higher priced spodumene inventories more than offset higher pricing.

Albemarle continues to expand its global portfolio of conversion capacity and utilization of its world-class resource portfolio:

Chile
–The Salar Yield Improvement Project is on schedule for mechanical completion by the middle of 2023

Australia
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–Kemerton I is operating and producing product subject to customer qualification
–Kemerton II is progressing through commissioning
–Reached final investment decision to build Kemerton trains III & IV

China
–Meishan construction progressing on budget and on schedule with mechanical completion expected in 2024

United States
–Richburg site in South Carolina selected for U.S. lithium processing facility
–Kings Mountain mine studies continue to progress
–Silver Peak new wells and expansion projects continue to progress

Specialties Results
In millionsQ1 2023Q1 2022$ Change% Change
Net Sales$418.8 $446.1 $(27.4)(6.1)%
Adjusted EBITDA
$162.2 $152.6 $9.6 6.3 %

Specialties net sales for the first quarter of 2023 were $418.8 million, a decrease of $27.4 million (-6%) primarily due to lower volumes (-15%), partially offset by increased pricing net of FX (+9%) primarily in our lithium specialties division. Volumes were impacted by weaker demand across the product portfolio. Adjusted EBITDA of $162.2 million increased $9.6 million as higher pricing and lower freight costs were partially offset by lower volumes.

2023 Specialties Outlook
Albemarle is reaffirming its 2023 outlook for Specialties net sales to range between $1.8 billion to $1.9 billion, with adjusted EBITDA estimated from $555 million to $585 million. Adjusted EBITDA margins are expected to be approximately flat year-over-year.

Ketjen Results
In millionsQ1 2023Q1 2022$ Change% Change
Net Sales$217.8 $217.9 $(0.1)— %
Adjusted EBITDA
$14.5 $16.9 $(2.4)(14.0)%

Ketjen net sales of $217.8 million for the first quarter of 2023 were flat compared to the previous year due to higher pricing net of FX (+12%) offset by lower volumes (-12%). Adjusted EBITDA of $14.5 million declined $2.4 million due to higher raw material costs, combined with freeze related downtime and timing of some shipments that were pushed into the second quarter of 2023.

2023 Ketjen Outlook
Albemarle expects Ketjen net sales in 2023 to range between $1.0 billion and $1.1 billion, with adjusted EBITDA in the range of $100 million to $140 million. Adjusted EBITDA guidance is up from prior guidance as the segment is benefiting from a recovery in refining pricing and managing processing costs.

Balance Sheet and Liquidity
As of March 31, 2023, Albemarle had estimated liquidity of approximately $3.3 billion, including $1.6 billion of cash and equivalents, the full $1.5 billion under its revolver and $180.5 million available on other credit lines. Total debt was $3.2 billion, representing our debt covenant net debt to adjusted EBITDA of approximately 0.4 times.

Cash Flow and Capital Deployment
Cash from operations of $721.0 million increased $514.8 million versus the prior year period. This was driven by increased adjusted EBITDA and dividends received from equity investments, partially offset by working capital changes, that were primarily due to the increase in receivables and inventories from higher lithium pricing. Capital expenditures of $415.6 million increased by $183.9 million versus the prior year period as the company invested in lithium and bromine capacity to support growth.

Albemarle’s primary capital allocation priorities are to invest in organic and inorganic opportunities to drive profitable growth, maintain its financial flexibility and investment grade credit rating, and fund its dividends.
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Earnings Call
Date:Thursday, May 4, 2023
Time:9:00 AM Eastern time
Dial-in (U.S.):1.833.470.1428
Dial-in (International):1.404.662.2808
Passcode:741195

The company’s earnings presentation and supporting material are available on Albemarle’s website at https://investors.albemarle.com.

About Albemarle
Albemarle Corporation (NYSE: ALB) leads the world in transforming essential resources into critical ingredients for mobility, energy, connectivity, and health. We partner to pioneer new ways to move, power, connect and protect with people and planet in mind. A reliable and high-quality global supply of lithium and bromine allow us to deliver advanced solutions for our customers. Learn more about how the people of Albemarle are enabling a more resilient world at albemarle.com and on Twitter @AlbemarleCorp.

Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations, Securities and Exchange Commission (“SEC”) filings and other information regarding the company, its businesses and the markets it serves.

Forward-Looking Statements
This press release contains statements concerning our expectations, anticipations and beliefs regarding the future, which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties, often contain words such as “anticipate,” “believe,” “estimate,” “expect,” “guidance,” “intend,” “may,” “outlook,” “should,” “would,” and “will”. Forward-looking statements may include statements regarding expected: financial and operating results, production capacity, volumes, and pricing, demand for Albemarle’s products, capital projects, acquisition and divestiture transactions, market and economic trends, and all other information relating to matters that are not historical facts. Factors that could cause Albemarle’s actual results to differ materially from the outlook expressed or implied in any forward-looking statement include: changes in economic and business conditions; financial and operating performance of customers; timing and magnitude of customer orders; fluctuations in lithium market pricing; production volume shortfalls; increased competition; changes in the product demand; availability and cost of raw materials and energy; technological change and development; fluctuations in foreign currencies; changes in laws and government regulation; regulatory actions, proceedings, claims or litigation; cyber-security breaches, terrorist attacks, industrial accidents or natural disasters; political unrest; changes in inflation or interest rates; volatility in the debt and equity markets; acquisition and divestiture transactions; timing and success of projects; performance of Albemarle’s partners in joint ventures and other projects; changes in credit ratings; and the other factors detailed from time to time in the reports Albemarle files with the SEC, including those described under “Risk Factors” in Albemarle’s most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q, which are filed with the SEC and available on the investor section of Albemarle’s website (investors.albemarle.com) and on the SEC’s website at www.sec.gov. These forward-looking statements speak only as of the date of this press release. Albemarle assumes no obligation to provide any revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

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Albemarle Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)

Three Months Ended
March 31,
20232022
Net sales$2,580,252 $1,127,728 
Cost of goods sold1,303,712 678,698 
Gross profit
1,276,540 449,030 
Selling, general and administrative expenses154,306 112,568 
Research and development expenses20,471 16,083 
Loss on sale of interest in properties— 8,400 
Operating profit
1,101,763 311,979 
Interest and financing expenses(26,777)(27,834)
Other income, net82,492 15,496 
Income before income taxes and equity in net income of unconsolidated investments1,157,478 299,641 
Income tax expense276,963 80,530 
Income before equity in net income of unconsolidated investments880,515 219,111 
Equity in net income of unconsolidated investments (net of tax)396,188 62,436 
Net income1,276,703 281,547 
Net income attributable to noncontrolling interests(38,123)(28,164)
Net income attributable to Albemarle Corporation$1,238,580 $253,383 
Basic earnings per share$10.57 $2.16 
Diluted earnings per share$10.51 $2.15 
Weighted-average common shares outstanding – basic117,232 117,066 
Weighted-average common shares outstanding – diluted117,841 117,653 


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Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
March 31,December 31,
20232022
ASSETS
Current assets:
Cash and cash equivalents$1,586,734 $1,499,142 
Trade accounts receivable1,351,915 1,190,970 
Other accounts receivable312,560 185,819 
Inventories3,180,825 2,076,031 
Other current assets225,541 234,955 
Total current assets
6,657,575 5,186,917 
Property, plant and equipment9,830,257 9,354,330 
Less accumulated depreciation and amortization2,476,768 2,391,333 
Net property, plant and equipment
7,353,489 6,962,997 
Investments1,391,229 1,150,553 
Other assets243,405 250,558 
Goodwill1,634,152 1,617,627 
Other intangibles, net of amortization284,508 287,870 
Total assets
$17,564,358 $15,456,522 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable to third parties$1,758,254 $1,533,624 
Accounts payable to related parties1,012,822 518,377 
Accrued expenses403,336 505,894 
Current portion of long-term debt2,167 2,128 
Dividends payable46,753 46,116 
Income taxes payable282,037 134,876 
Total current liabilities
3,505,369 2,741,015 
Long-term debt3,233,393 3,214,972 
Postretirement benefits33,062 32,751 
Pension benefits160,343 159,571 
Other noncurrent liabilities686,655 636,596 
Deferred income taxes486,466 480,770 
Commitments and contingencies
Equity:
Albemarle Corporation shareholders’ equity:
Common stock1,173 1,172 
Additional paid-in capital2,931,961 2,940,840 
Accumulated other comprehensive loss(513,337)(560,662)
Retained earnings6,792,938 5,601,277 
Total Albemarle Corporation shareholders’ equity9,212,735 7,982,627 
Noncontrolling interests246,335 208,220 
Total equity9,459,070 8,190,847 
Total liabilities and equity$17,564,358 $15,456,522 


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Albemarle Corporation and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)
Three Months Ended
March 31,
20232022
Cash and cash equivalents at beginning of year$1,499,142 $439,272 
Cash flows from operating activities:
Net income1,276,703 281,547 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization87,271 66,574 
Loss on sale of interest in properties— 8,400 
Stock-based compensation and other10,540 4,245 
Equity in net income of unconsolidated investments (net of tax)(396,188)(62,436)
Dividends received from unconsolidated investments and nonmarketable securities547,552 39,168 
Pension and postretirement benefit1,954 (4,250)
Pension and postretirement contributions(2,825)(3,890)
Unrealized (gain) loss on investments in marketable securities(45,732)1,469 
Deferred income taxes14,098 27,747 
Working capital changes(764,071)(219,397)
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL7,665 65,100 
Other, net(15,987)1,899 
Net cash provided by operating activities720,980 206,176 
Cash flows from investing activities:
Capital expenditures(415,608)(231,698)
(Purchases) sales of marketable securities, net(122,267)3,751 
Investments in equity and other corporate investments(1,133)(146)
Net cash used in investing activities(539,008)(228,093)
Cash flows from financing activities:
Proceeds from borrowings of credit agreements— 280,000 
Other debt repayments, net(713)(166,615)
Dividends paid to shareholders(46,282)(45,637)
Dividends paid to noncontrolling interests(53,145)— 
Proceeds from exercise of stock options81 419 
Withholding taxes paid on stock-based compensation award distributions(18,617)(10,422)
Other— (126)
Net cash (used in) provided by financing activities(118,676)57,619 
Net effect of foreign exchange on cash and cash equivalents24,296 (11,649)
Increase in cash and cash equivalents87,592 24,053 
Cash and cash equivalents at end of period$1,586,734 $463,325 



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Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)
Three Months Ended
March 31,
20232022
Net sales:
Energy Storage$1,943,682 $463,704 
Specialties418,778 446,147 
Ketjen217,792 217,877 
Total net sales$2,580,252 $1,127,728 
Adjusted EBITDA:
Energy Storage$1,406,181 $285,247 
Specialties162,158 152,602 
Ketjen14,543 16,910 
Total segment adjusted EBITDA1,582,882 454,759 
Corporate12,837 (22,829)
Total adjusted EBITDA$1,595,719 $431,930 

See accompanying non-GAAP reconciliations below.

Additional Information regarding Non-GAAP Measures

It should be noted that adjusted net income attributable to Albemarle Corporation, adjusted diluted earnings per share, non-operating pension and other post-employment benefit (“OPEB”) items per diluted share, non-recurring and other unusual items per diluted share, adjusted effective income tax rates, EBITDA, adjusted EBITDA (on a consolidated basis), 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 non-GAAP measures should not be considered as alternatives to Net income attributable to Albemarle Corporation (“earnings”) or other comparable measures calculated and reported in accordance with GAAP. These measures are presented here to provide additional useful measurements to review the company’s operations, provide transparency to investors and enable period-to-period comparability of financial performance. The company’s chief operating decision maker uses these measures to assess the ongoing performance of the company and its segments, as well as for business and enterprise planning purposes.

A description of other non-GAAP financial measures that Albemarle uses to evaluate its 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 on the following pages of this press release, which is also is available on Albemarle’s website at https://investors.albemarle.com. The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the company's results calculated in accordance with GAAP.

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ALBEMARLE CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income attributable to Albemarle Corporation, EBITDA and adjusted EBITDA (on a consolidated basis), which are non-GAAP financial measures, to Net income attributable to Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reported in accordance with GAAP. Reconciliation of adjusted EBITDA on a segment basis is also provided. Adjusted net income attributable to Albemarle Corporation is defined as net income before the non-recurring, other unusual and non-operating pension and other post-employment benefit (OPEB) items as listed below. The non-recurring and unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, certain litigation and arbitration costs and charges, and other significant non-recurring items. EBITDA is defined as net income attributable to Albemarle Corporation before interest and financing expenses, income tax expense, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus or minus the non-recurring, other unusual and non-operating pension and OPEB items as listed below.

Three Months Ended

March 31,
20232022
In thousands, except percentages and per share amounts
$% of net sales$% of net sales
Net income attributable to Albemarle Corporation$1,238,580 

$253,383 
Add back:
Non-operating pension and OPEB items (net of tax)
374 

(4,139)
Non-recurring and other unusual items (net of tax)
(22,774)

30,903 
Adjusted net income attributable to Albemarle Corporation
$1,216,180 

$280,147 




Adjusted diluted earnings per share
$10.32 

$2.38 




Weighted-average common shares outstanding – diluted
117,841 117,653 




Net income attributable to Albemarle Corporation$1,238,580 48.0 %

$253,383 22.5 %
Add back:



Interest and financing expenses
26,777 1.0 %

27,834 2.5 %
Income tax expense
276,963 10.7 %

80,530 7.1 %
Depreciation and amortization
87,271 3.4 %

66,574 5.9 %
EBITDA
1,629,591 63.2 %

428,321 38.0 %
Non-operating pension and OPEB items
601 — %

(5,280)(0.5)%
Non-recurring and other unusual items(34,473)(1.3)%

8,889 0.8 %
Adjusted EBITDA
$1,595,719 61.8 %

$431,930 38.3 %




Net sales
$2,580,252 

$1,127,728 

Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to Albemarle’s operating segments and are included in the Corporate category. In addition, the company believes that these components of pension cost are mainly driven by market performance, and the company manages these separately from the operational performance of the company’s businesses. In accordance with GAAP, these non-operating pension and OPEB items are included in Other income (expenses), net. Non-operating pension and OPEB items were as follows (in thousands):

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Three Months Ended
March 31,
20232022
Interest cost $9,010 $5,932 
Expected return on assets(8,409)(11,212)
Total$601 $(5,280)

In addition to the non-operating pension and OPEB items disclosed above, the company has identified certain other items and excluded them from Albemarle’s adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):

Three Months Ended
March 31,
20232022
Acquisition and integration related costs(1)
$0.03 $0.01 
Loss on sale of interest in properties(2)
— 0.07 
Mark-to-market gain on public equity securities(3)
(0.29)— 
Other(4)
0.04 (0.01)
Tax related items(5)
0.03 0.19 
Total non-recurring and other unusual items$(0.19)$0.26 

(1)Costs related to the acquisition, integration and divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three months ended March 31, 2023 and 2022 were $5.1 million and $1.7 million ($4.0 million and $1.3 million after income taxes, or $0.03 and $0.01 per share), respectively.

(2)Included in Loss on sale of interest in properties for the three months ended March 31, 2022 is an expense of $8.4 million ($0.07 per share after no income tax impact) related to a post-measurement period Wodgina acquisition purchase price adjustment for a revised estimate of the obligation to construct the lithium hydroxide conversion assets in Kemerton due to cost overruns from supply chain, labor and COVID-19 pandemic related issues.

(3)Gain of $45.8 million ($34.4 million after income taxes, or $0.29 per share) recorded in Other income, net for the three months ended March 31, 2023, resulting from the increase in fair value of investments in public equity securities.

(4)Other adjustments for the three months ended March 31, 2023 included amounts recorded in:
•Selling, general and administrative expenses - 1.9 million of charges primarily for environmental reserves at sites not part of our operations and $0.7 million of facility closure expenses related to offices in Germany.
•Other income, net - $3.6 million of asset retirement obligation charges primarily for a site not part of our operations
After income taxes, these net gains totaled $4.8 million, or $0.04 per share.

Other adjustments for the three months ended March 31, 2022 included amounts recorded in:
•Selling, general and administrative expenses - $4.3 million of gains from the sale of legacy properties not part of our operations, partially offset by $2.8 million of charges for environmental reserves at sites not part of our operations and $0.7 million of facility closure expenses related to offices in Germany.
•Other income, net - $0.6 million gain related to a settlement received from a legal matter in a prior period.
After income taxes, these charges totaled $0.9 million, or $0.01 per share.

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(5)Included in Income tax expense for the three months ended March 31, 2023 are discrete net tax expenses of $2.9 million, or $0.03 per share primarily related to foreign return to provisions offset by excess tax benefits realized from stock-based compensation arrangements.

Included in Income tax expense for the three months ended March 31, 2022 are discrete net tax expenses of $20.4 million, or $0.18 per share related to global intangible low-taxed income associated with a payment made in 2022 for the settlement of a legacy legal matter. In addition, Income tax expense included discrete net tax expenses of $1.6 million, or $0.01 per share. The discrete net expense was primarily related to foreign return to provisions, partially offset by a benefit for excess tax benefits realized from stock-based compensation arrangements..

See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).
Income before income taxes and equity in net income of unconsolidated investmentsIncome tax expenseEffective income tax rate
Three months ended March 31, 2023
As reported$1,157,478 $276,963 23.9 %
Non-recurring, other unusual and non-operating pension and OPEB items(33,872)(11,472)
As adjusted$1,123,606 $265,491 23.6 %
Three months ended March 31, 2022
As reported$299,641 $80,530 26.9 %
Non-recurring, other unusual and non-operating pension and OPEB items3,609 (23,155)
As adjusted$303,250 $57,375 18.9 %

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