Albemarle Announces Third-Quarter 2005 Results

RICHMOND, Va., Oct. 25 /PRNewswire-FirstCall/ -- Albemarle Corporation reported third-quarter 2005 net income of $26.3 million, or 55 cents per diluted share, up from $0.8 million for third-quarter 2004, which included $19.5 million of special items primarily related to the July 31, 2004 acquisition of the Akzo Nobel N.V. refinery catalysts business. The Company reported net sales of $506.6 million, an increase of $92.7 million compared to 2004, due in large part to the full three months 2005 impact of the refinery catalysts business acquisition and significant pricing improvement across each segment offset, in part, by lower volumes in flame retardants.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050801/ALBEMARLELOGO )

Net income for third-quarter 2005 included $4.9 million, or 10 cents per diluted share, of tax benefit associated with Section 965 of the Internal Revenue Code that was enacted as a part of the American Jobs Creation Act of 2004. Third-quarter 2004 net income, excluding special items, amounted to $20.3 million, or 48 cents per diluted share. Third-quarter 2004 special items are outlined in the reconciliation on page 14. Third-quarter 2005 results include two months consolidation of JBC.

Nine-months 2005 net income, excluding special items, was $80.5 million, or $1.69 per diluted share, compared to nine-months 2004 net income, excluding special items, of $56.1 million, or $1.32 per diluted share. Special items for nine-months 2005, which totaled $2.2 million after income taxes, included a $3.6 million after-tax gain from a retiree benefits plan change and a $0.5 million legal provision, in addition to a $0.9 million write-off of deferred financing costs associated with the refinery catalysts business acquisition. Special items for nine-months 2004, which totaled $20.9 million after income taxes, are outlined in the reconciliation on page 15.

Average common shares used to compute third-quarter and nine-months 2005 diluted earnings per share were 48,014,000 and 47,642,000, up from 42,544,000 and 42,342,000, respectively, for the corresponding periods in 2004, due mainly to the Company's January 2005 public offering of 4,573,000 shares of common stock.

Selected data related to net income, special items and related per share amounts for the third-quarters and nine-months ended September 30, 2005 and 2004 are shown in the Additional Information section below, as well as a reconciliation of net income excluding special items.

Quarterly Segment Results

Polymer Additives segment net sales were $195.4 million, up $9.5 million versus 2004. Polymer Additives segment income for third-quarter 2005 amounted to $23.4 million, up 8.1 percent from third-quarter 2004, excluding special items, driven by overall gains in pricing that were offset, in part, by lower volumes in flame retardants and the effect of higher raw materials and energy costs.

Catalysts segment net sales were $173.5 million, up $67.0 million versus third-quarter 2004, due mainly to the three months net sales of the refinery catalysts business in the current period versus two months in third-quarter 2004 and higher pricing due to increased raw material costs. Catalysts segment income for third-quarter 2005 amounted to $14.8 million, down 2.2 percent from third-quarter 2004, excluding special items, driven by lower production volumes in polyolefins catalysts that were offset, in part, by the extra month of refinery catalysts business results.

Fine Chemicals segment net sales were $137.7 million, up $16.3 million versus last year, driven by improved volumes and product mix in fine chemistry services and improved pricing in performance chemicals. Fine Chemicals segment income for third-quarter 2005 amounted to $12.5 million, up 39.7 percent from third-quarter 2004, excluding special items. Improved pricing in performance chemicals and improved volumes in fine chemistry services and the reclassification impact of consolidating JBC were offset, in part, by the effect of higher raw materials and energy costs and lower pricing in pharmaceutical and agricultural intermediates.

During the quarter, interest and financing expenses increased $5.2 million, excluding special items, versus third-quarter 2004 due mainly to the full quarter 2005 interest expense impact from the refinery catalysts acquisition debt incurred in July 31, 2004, as well as comparatively higher interest rates during the 2005 period. The corporate effective income tax rate for third-quarter 2005 amounted to 13.7 percent, down from third-quarter 2004 due largely to the Section 965 benefit described above.

Commentary

Commenting on third-quarter 2005 results, Mark C. Rohr, President and CEO of Albemarle Corporation said, "We are pleased that the our net sales and net income, excluding special items, are up over 20% compared to third-quarter 2004 results, and up over 40% for first nine-months 2005 compared to first nine-months 2004. Although we faced a number of challenges in third-quarter 2005, including an approximately $3.6 million pre-tax impact due primarily to production losses during Hurricanes Katrina and Rita, I remain confident that we are on track to deliver solid results for the year. We are successfully working through a number of pricing initiatives to help offset the continued rampant escalation in raw material and energy costs, and I believe we will see the positive results from those initiatives in fourth-quarter 2005 and into 2006.

Additionally, we are pleased with the European Union's decision to exempt decabrom from its restriction on hazardous substances, a RoHS directive. This decision should remove questions regarding the safety of this critical flame retardant.

This quarter, we also began consolidating the results of JBC, our bromine- based Jordanian joint venture on the Dead Sea, and two months operations are reflected in this quarter's results on a line-by-line basis."

Earnings Call

The Company's performance for the third quarter ended September 30, 2005 will be discussed on a conference call at 10:00 AM Eastern Daylight Time on October 25, 2005, which can be accessed through Albemarle's website under Investor Information at http://www.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.

Forward-Looking Statement

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; increased government regulation of our operations or our products; and the integration of the Akzo Nobel refinery catalysts business or future acquisitions into our operations. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the period ended December 31, 2004.

Albemarle Corporation and Subsidiaries Condensed Consolidated Statements of Income (In Thousands of Dollars, Except Share and Per-Share Amounts) (Unaudited) Third Quarter Ended September 30, 2005 (a) 2004 (a) Net sales $506,605 $413,904 Cost of goods sold 406,994 (b) 324,396 (b, c) Acquisition-related cost - 13,400 (e) Gross profit 99,611 76,108 Selling, general and administrative expenses 50,423 (d) 43,075 Research and development expenses 10,107 9,101 Special items - 2,801 (f) Operating profit 39,081 21,131 Interest and financing expenses (10,882) (6,250) (g) Equity in net income of unconsolidated investments 4,124 1,826 Other income (expenses), net 534 (15,606) (h) Income before income taxes and minority interests 32,857 1,101 Income (taxes) benefits (4,502) (i) 1,097 Income after income (taxes) benefits and before minority interests 28,355 2,198 Minority interests in income of consolidated subsidiaries (2,063) (1,371) (h) Net income $26,292 $827 Basic earnings per share: Net income $0.56 $0.02 Shares used to compute basic earnings per share 46,607 41,588 Diluted earnings per share: Net income $0.55 $0.02 Shares used to compute diluted earnings per share 48,014 42,544

See accompanying notes to the condensed consolidated financial statements following the balance sheets.

Albemarle Corporation and Subsidiaries Condensed Consolidated Statements of Income (In Thousands of Dollars, Except Share and Per-Share Amounts) (Unaudited) Nine Months Ended September 30, 2005 (a) 2004 (a) Net sales $1,519,324 $1,062,672 Cost of goods sold 1,207,224 (b) 845,952 (b, c) Acquisition-related cost - 13,400 (e) Gross profit 312,100 203,320 Selling, general and administrative expenses 161,118 (d) 106,078 Research and development expenses 31,429 18,768 Special items (4,868)(f) 7,858 (f) Operating profit 124,421 70,616 Interest and financing expenses (31,270)(g) (9,168) (g) Equity in net income of unconsolidated investments 22,583 2,494 Other income (expenses), net 1,100 (h) (12,278) (h) Income before income taxes and minority interests 116,834 51,664 Income taxes (29,590)(i) (12,714) Income after income taxes and before minority interests 87,244 38,950 Minority interests in income of consolidated subsidiaries (4,575)(h) (3,748) (h) Net income $82,669 $35,202 Basic earnings per share: Net income $1.79 $0.85 Shares used to compute basic earnings per share 46,242 41,497 Diluted earnings per share: Net income $1.74 $0.83 Shares used to compute diluted earnings per share 47,642 42,342

See accompanying notes to the condensed consolidated financial statements following the balance sheets.

Albemarle Corporation Consolidated Summary of Segment Results (a) (In Thousands of Dollars) (Unaudited) Third Quarter Ended Polymer Fine September 30, 2005 Additives Catalysts Chemicals Unallocated Total Net sales $195,356 $173,501 $137,748 $- $506,605 Operating profit (b, d) $21,860 $12,837 $11,836 $(7,452) $39,081 Equity in net income (losses) of unconsolidated investments 1,586 1,929 646 (37) 4,124 Segment income (loss) $23,446 $14,766 $12,482 $(7,489) 43,205 Interest and financing expenses (10,882) Other income, net 534 Income before income taxes and minority interests $32,857 Third Quarter Ended Polymer Fine September 30, 2004 Additives Catalysts Chemicals Unallocated Total Net sales $185,902 $106,518 $121,484 $- $413,904 Operating profit (b, c, e, f) $24,279 $(2,962) $9,830 $(10,016) $21,131 Equity in net income (losses) of unconsolidated investments 993 1,654 (728) (93) 1,826 Segment income (loss) $25,272 $(1,308) $9,102 $(10,109) 22,957 Interest and financing expenses (g) (6,250) Other (expenses), net (h) (15,606) Income before income taxes and minority interests $1,101

See accompanying notes to the condensed consolidated financial statements following the balance sheets.

Albemarle Corporation Consolidated Summary of Segment Results (a) (In Thousands of Dollars) (Unaudited) Nine Months Ended Polymer Fine Unallo- September 30, 2005 Additives Catalysts Chemicals cated Total Net sales $597,893 $493,629 $427,802 $- $1,519,324 Operating profit (b, d, f) $70,460 $52,075 $34,377 $(32,491) $124,421 Equity in net income (losses) of unconsolidated investments 6,159 12,096 4,505 (177) 22,583 Segment income (loss) $76,619 $64,171 $38,882 $(32,668) 147,004 Interest and financing expenses (g) (31,270) Other income, net (h) 1,100 Income before income taxes and minority interests $116,834 Nine Months Ended Polymer Fine Unallo- September 30, 2004 Additives Catalysts Chemicals cated Total Net sales $538,630 $153,795 $370,247 $- $1,062,672 Operating profit (b, c, e, f) $65,688 $2,227 $25,886 $(23,185) $70,616 Equity in net income (losses) of unconsolidated investments 2,538 1,794 (1,611) (227) 2,494 Segment income (loss) $68,226 $4,021 $24,275 $(23,412) 73,110 Interest and financing expenses (g) (9,168) Other (expenses), net (h) (12,278) Income before income taxes and minority interests $51,664

See accompanying notes to the condensed consolidated financial statements following the balance sheets.

Albemarle Corporation and Subsidiaries Selected Cash Flows Data (In Thousands of Dollars) (Unaudited) Nine Months Ended September 30 2005 2004 Cash and cash equivalents at beginning of year $46,390 $35,173 Cash and cash equivalents at end of period $47,859 $60,817 Sources of cash and cash equivalents: Net income 82,669 35,202 Depreciation and amortization 86,197 69,288 Proceeds from issuance of senior notes 324,665 - Proceeds from issuance of common stock 147,862 - Proceeds from borrowings 149,884 1,050,946 Proceeds from liquidation of equity method investment and sale of nonmarketable security 1,058 - Proceeds from exercise of stock options 2,893 6,762 Uses of cash and cash equivalents: Capital expenditures (50,575) (37,602) Investments in joint ventures and other investments (3,088) (6,742) Acquisitions of assets/business, net of cash acquired (j) (7,553) (762,378) Repayments of long-term debt (615,652) (325,806) Payments on hedging of anticipated acquisition purchase price - (12,848) Dividends paid (18,992) (17,982)

See accompanying notes to the condensed consolidated financial statements following the balance sheets.

Albemarle Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In Thousands of Dollars) (Unaudited) September 30, December 31, 2005 2004 ASSETS Cash and cash equivalents $47,859 $46,390 Other current assets 806,856 701,020 Total current assets 854,715 747,410 Property, plant and equipment 2,194,471 2,064,585 Less accumulated depreciation and amortization 1,211,712 1,168,601 Net property, plant and equipment 982,759 895,984 Other assets and intangibles 724,451 799,351 $2,561,925 $2,442,745 LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities $431,354 $373,746 Long-term debt 820,613 899,584 Other noncurrent liabilities 227,052 209,289 Deferred income taxes 175,303 248,751 Shareholders' equity 907,603 711,375 $2,561,925 $2,442,745 Notes (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. Minority interests in consolidated subsidiaries is now reflected as a separate line item following income after income taxes and before minority interests. Equity in net income (losses) of unconsolidated investments changes are now included in segment income. See note (h). Effective August 1, 2005, the Company began consolidating its 50- percent ownership position in Jordan Bromine Company Limited ("JBC"), a Jordanian-American joint venture company that manufactures and markets bromine products extracted from the Dead Sea. The Company had previously accounted for this investment on an equity basis but changed to the consolidation method as a result of August 2005 amendments to the related joint venture agreement, upon which Albemarle management concluded that consolidation accounting for this investment was appropriate under generally accepted accounting principals in the United States ("GAAP"). This change in accounting has no impact on the Company's net income for the three- and nine- month periods ended September 30, 2005 and 2004, respectively. The following unaudited pro forma data summarizes the results of operations for the third-quarter and nine-month periods ended September 30, 2005 as if the consolidation of JBC had been completed as of the beginning of each of the periods presented. (Unaudited) Pro Forma Third Quarter Ended Nine Months Ended September 30, 2005 September 30, 2005 Net sales $506,605 $1,519,324 Operating profit $40,926 $136,614 Interest and financing expenses $(11,201) $(33,426) Equity in net income of unconsolidated investments $2,984 $14,949 Other income, net $534 $1,278 Minority interests in income of consolidated subsidiaries $(2,449) $(7,156) Net income $26,292 $82,669 Basic earnings per share $0.56 $1.79 Diluted earnings per share $0.55 $1.74 (b) Cost of goods sold includes foreign exchange transaction gains (losses) of $120 and ($625), and ($907) and ($258) for the third- quarter and nine-month periods ended September 30, 2005 and 2004, respectively. (c) Cost of goods sold for the third-quarter and nine-month periods ended September 30, 2004 included an August 26, 2004, cash settlement pursuant to which the Company and a former insurer settled a dispute related to payments to be made to the Company in connection with certain insurance coverage for the period 1950 through 2000. Pursuant to the agreement, the Company will receive $6,945 ($4,424 after income taxes, or 10 cents per diluted share) with $4,208 paid at the settlement date. Cost of goods sold for the third-quarter and nine- month periods ended September 30, 2004 also includes a third-quarter charge amounting to $3,396 ($2,163 after income taxes, or five cents per diluted share) related to the establishment of a valuation reserve for the potential recoverability of a claim incurred by the Company regarding the discontinuance of product support for and withdrawal from a water treatment venture. (d) Selling general and administrative expenses for the third-quarter and nine-months ended September 30, 2005, reflect an adjustment of $2,759 ($1,760 after income taxes, or four cents per diluted share) to reduce certain of its incentive plan accruals. (e) Acquisition-related cost totaling $13,400 ($8,536 after income taxes, or 20 cents per diluted share) for the third-quarter and nine-month periods ended September 30, 2004, consisted of a step-up increase in acquired inventory to fair value associated with the July 31, 2004 acquisition of the Akzo Nobel N.V. ("Akzo Nobel") refinery catalysts business. (f) Special items *: Third Quarter Nine Months Ended Ended September 30, September 30, 2005 2004 2005 2004 Curtailment gain (1) $- $- $5,603 $- Provisional charge for the potential settlement of future legal claims (2) - - (735) - Purchased in-process research and development charges (3) - (3,000) - (3,000) Reduction in force adjustments (4) - 199 - (4,308) Cleanup of the Pasadena plant zeolite facility (5) - - - (550) Special items $- $(2,801) $4,868 $(7,858) 1. Nine-month period ended September 30, 2005 includes a second-quarter 2005 curtailment gain amounting to $5,603 ($3,569 after income taxes, or seven cents per diluted share) that relates to a reduction in the Company's accumulated postretirement benefit obligation (liability) at the June 29, 2005 remeasurement date associated with a change in coverage in the Company's unfunded postretirement health care benefits plan for active employees' future retiree medical premium payments effective December 31, 2005. 2. Nine-month period ended September 30, 2005 includes a second-quarter 2005 provisional charge of $735 ($468 after income taxes, or one cent per diluted share) for the potential settlement of future legal claims with respect to certain future asbestos premises liability claims. 3. Third-quarter and nine-month periods ended September 30, 2004, included purchased in-process research and development charges amounting to $3,000, or seven cents per diluted share, that were comprised of the write-off of the estimated research and development costs associated with the acquired refinery catalysts business deemed not to have future use. 4. Third-quarter and nine-month periods ended September 30, 2004 included a $199 reversal adjustment of a reserve for work force reduction. Nine months ended September 30, 2004 included a first quarter 2004 charge totaling $4,507 ($2,871 after income taxes, or seven cents per diluted share) for layoffs related to the closing of the Pasadena plant zeolite facility and a related curtailment charge. 5. Nine-month period ended September 30, 2004 included a second-quarter 2004 charge totaling $550 ($350 after income taxes, or one cent per diluted share) related to the cleanup of the Pasadena plant zeolite facility.

* See also footnotes (c), (e), (g) and (h) for additional nonrecurring items.

(g) Interest and financing expenses for the nine months ended September 30, 2005 include a January 2005 write-off of deferred financing expenses totaling $1,386 ($883 after income taxes, or two cents per diluted share), associated with the 364-day bridge loan that was retired using the proceeds from the Company's January 2005 public offerings of common stock and senior notes. Interest and financing expenses for the third-quarter and nine-months periods ended September 30, 2004 included the write-off of deferred financing expenses totaling $528 ($336 net of income taxes, or one cent per diluted share) related to the refinancing of the Company's previous revolving credit agreement. (h) Other (expenses) income, net for the nine months ended September 30, 2005 and the third-quarter and nine-month periods ended September 30, 2004 include the effect of the reclassification of minority interest for the Company's majority-owned subsidiary, Stannica LLC, totaling ($4,030), ($1,371) and ($3,748), respectively. Other (expenses) income, net for the third-quarter and nine-month periods ended September 30, 2004 include foreign exchange hedging charges totaling $15,712 ($10,009 after income taxes, or 24 cents per diluted share) and $12,848 ($8,184 after income taxes, or 19 cents per diluted share), respectively associated with the contracts entered into by the Company to hedge the euro-denominated purchase price for the Company's acquisition of the Akzo Nobel refinery catalysts business. (i) Includes the tax benefits related to the 2005 adoption of FASB Staff Position ("FSP") SFAS 109-1 and its related qualified domestic production activities deduction totaling $129 and $388 for the third- quarter and nine-month periods ended September 30, 2005, respectively, in the period in which the deduction is claimed. Also included are the tax benefits related to the adoption of FSP SFAS 109-2, which created a one-time tax savings during the period on certain accumulated and projected future earnings of certain controlled foreign subsidiaries which have been or will be repatriated for the third-quarter and nine-month periods ended September 30, 2005 of $4,857 or 10 cents per diluted share. (j) On July 31, 2004, the Company completed the acquisition of the Akzo Nobel refinery catalysts business for approximately $763 million, including expenses, at applicable exchange rates. During 2004 and 2005, the Company adjusted the purchase price by approximately $23 million and $8 million, respectively, due primarily to payments to Akzo Nobel as part of the post-closing working capital adjustments. 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 ("GAAP"). It is presented here to exclude the impact of certain non-recurring items on our results that are set forth on pages 14 and 15, as well as the pro forma impact of consolidating JBC on our consolidated segment income that are set forth on pages 16 and 17. 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, the most directly comparable financial measure calculated and reported in accordance with GAAP in the third quarter and nine months ended September 30, 2005 and 2004.

A description of other non-GAAP financial measures, and reconciliation of these 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 at http://www.albemarle.com/, under "Disclosure of Non- GAAP Financial Measures".

ALBEMARLE CORPORATION AND SUBSIDIARIES (In Thousands, Except Per-Share Amounts) (Unaudited) Third Quarter Ended Third Quarter Ended September 30, 2005 September 30, 2004 Excluding Excluding As Special Special As Special Special Reported Items Items Reported Items Items Net sales $506,605 $- $506,605 $413,904 $- $413,904 Cost of goods sold (406,994) - (406,994) (324,396) (3,549)(c) (327,945) Acquisition- related cost - - - (13,400) 13,400 (e) - Gross profit 99,611 - 99,611 76,108 9,851 85,959 Selling, general and administrative expenses (including SFAS No. 2 R&D) (60,530) - (60,530) (52,176) - (52,176) Special items - - (2,801) 2,801 (f) - Operating profit 39,081 - 39,081 21,131 12,652 33,783 Interest and financing expenses (10,882) - (10,882) (6,250) 528 (g) (5,722) Equity in net income of unconsolidated investments 4,124 - 4,124 1,826 - 1,826 Other income (expenses), net 534 - 534 (15,606) 15,712 (h) 106 Income before income taxes and minority interests 32,857 - 32,857 1,101 28,892 29,993 Income tax (expense) benefits (4,502) - (4,502) 1,097 (9,399)(c, (8,302) e-h) Income after income taxes and before minority interests 28,355 - 28,355 2,198 19,493 21,691 Minority interests in income of consolidated subsidiaries (2,063) - (2,063) (1,371) - (1,371) Net income $26,292 $- $26,292 $827 $19,493 $20,320 Diluted earnings per share $0.55 $- $0.55 $0.02 $0.46 $0.48 ALBEMARLE CORPORATION AND SUBSIDIARIES (In Thousands, Except Per-Share Amounts) (Unaudited) Nine Months Ended Nine Months Ended September 30, 2005 September 30, 2004 Excluding Excluding As Special Special As Special Special Reported Items Items Reported Items Items Net sales $1,519,324 $- $1,519,324 $1,062,672 $- $1,062,672 Cost of goods sold (1,207,224) - (1,207,224) (845,952) (3,549)(c) (849,501) Acquisition- related cost - - - (13,400) 13,400 (e) - Gross profit 312,100 - 312,100 203,320 9,851 213,171 Selling, general and administrative expenses (including SFAS No. 2 R&D) (192,547) - (192,547) (124,846) - (124,846) Special items 4,868 (4,868)(f) - (7,858) 7,858 (f) - Operating profit 124,421 (4,868) 119,553 70,616 17,709 88,325 Interest and financing expenses (31,270) 1,386 (g) (29,884) (9,168) 528 (g) (8,640) Equity in net income of unconsolidated investments 22,583 - 22,583 2,494 - 2,494 Other income (expenses), net 1,100 - 1,100 (12,278) 12,848 (h) 570 Income before income taxes and minority interests 116,834 (3,482) 113,352 51,664 31,085 82,749 Income tax (expense) benefits (29,590) 1,264 (f, (28,326) (12,714) (10,196)(c, (22,910) g) e-h) Income after income taxes and before minority interests 87,244 (2,218) 85,026 38,950 20,889 59,839 Minority interests in income of consolidated subsidiaries (4,575) - (4,575) (3,748) - (3,748) Net income $82,669 $(2,218) $80,451 $35,202 $20,889 $56,091 Diluted earnings per share $1.74 $(0.05) $1.69 $0.83 $0.49 $1.32 Albemarle Corporation Consolidated Summary of Segment Results (a) (In Thousands of Dollars) (Unaudited) Third Quarter Ended September 30, Polymer Fine 2005 Additives Catalysts Chemicals Unallocated Total Net sales $195,356 $173,501 $137,748 $- $506,605 Operating profit (b, d) $21,860 $12,837 $11,836 $(7,452) $39,081 Equity in net income (losses) of unconsolidated investments 1,586 1,929 646 (37) 4,124 Segment income (loss) $23,446 $14,766 $12,482 $(7,489) 43,205 Interest and financing expenses (10,882) Other income, net 534 Income before income taxes and minority interests $32,857 Special Items included in operating profit $- $- $- $- $- Operating profit excluding special items $21,860 $12,837 $11,836 $(7,452) $39,081 Segment income (loss) excluding special items $23,446 $14,766 $12,482 $(7,489) $43,205 Operating profit excluding special items and reflecting the consolidation of JBC as of the beginning of the period $22,645 $12,837 $12,896 $(7,452) $40,926 Third Quarter Ended September 30, Polymer Fine 2004 Additives Catalysts Chemicals Unallocated Total Net sales $185,902 $106,518 $121,484 $- $413,904 Operating profit (b, c, e, f) $24,279 $(2,962) $9,830 $(10,016) $21,131 Equity in net income (losses) of unconsolidated investments 993 1,654 (728) (93) 1,826 Segment income (loss) $25,272 $(1,308) $9,102 $(10,109) 22,957 Interest and financing expenses (g) (6,250) Other (expenses), net (h) (15,606) Income before income taxes and minority interests $1,101 Special Items included in operating profit (c, e, f) $(3,583) $16,400 $(165) $- $12,652 Operating profit excluding special items $20,696 $13,438 $9,665 $(10,016) $33,783 Segment income (loss) excluding special items $21,689 $15,092 $8,937 $(10,109) $35,609 Operating profit excluding special items and reflecting the consolidation of JBC as of the beginning of the period $20,372 $13,438 $8,850 $(10,016) $32,644 Albemarle Corporation Consolidated Summary of Segment Results (a) (In Thousands of Dollars) (Unaudited) Nine Months Ended September 30, Polymer Fine 2005 Additives Catalysts Chemicals Unallocated Total Net sales $597,893 $493,629 $427,802 $- $1,519,324 Operating profit (b, d, f) $70,460 $52,075 $34,377 $(32,491) $124,421 Equity in net income (losses) of unconsolidated investments 6,159 12,096 4,505 (177) 22,583 Segment income (loss) $76,619 $64,171 $38,882 $(32,668) 147,004 Interest and financing expenses (g) (31,270) Other income, net (h) 1,100 Income before income taxes and minority interests $116,834 Special Items included in operating profit (f) $(2,181) $(560) $(2,240) $113 $(4,868) Operating profit excluding special items $68,279 $51,515 $32,137 $(32,378) $119,553 Segment income (loss) excluding special items $74,438 $63,611 $36,642 $(32,555) $142,136 Operating profit excluding special items and reflecting the consolidation of JBC as of the beginning of the period $73,291 $51,515 $39,318 $(32,378) $131,746 Nine Months Ended September 30, Polymer Fine 2004 Additives Catalysts Chemicals Unallocated Total Net sales $538,630 $153,795 $370,247 $- $1,062,672 Operating profit (b, c, e, f) $65,688 $2,227 $25,886 $(23,185) $70,616 Equity in net income (losses) of unconsolidated investments 2,538 1,794 (1,611) (227) 2,494 Segment income (loss) $68,226 $4,021 $24,275 $(23,412) 73,110 Interest and financing expenses (g) (9,168) Other (expenses), net (h) (12,278) Income before income taxes and minority interests $51,664 Special Items included in operating profit (c, e, f) $(3,583) $16,400 $4,892 $- $17,709 Operating profit excluding special items $62,105 $18,627 $30,778 $(23,185) $88,325 Segment income (loss) excluding special items $64,643 $20,421 $29,167 $(23,412) $90,819 Operating profit excluding special items and reflecting the consolidation of JBC as of the beginning of the period $59,928 $18,627 $29,561 $(23,185) $84,931