8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) July 21, 2008

ALBEMARLE CORPORATION

(Exact name of Registrant as specified in charter)

Virginia	1-12658	54-1692118
(State or other jurisdiction of incorporation)	(Commission file number)	(IRS employer identification no.)

330 South Fourth Street, Richmond, Virginia	23219
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code

(804) 788-6000

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240. 14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. 14d-2(b))

¨ Pre-commencement communications pursuant to Rule 1 3e-4(c) under the Exchange Act (17 CFR 240.1 3e-4(c))

Section 2 — Financial Information

Item 2.02. Results of Operations and Financial Condition.

On July 21, 2008, Albemarle Corporation (the “Company”) issued a press release regarding its earnings for the second quarter ended June 30, 2008. A copy of this release is being furnished as Exhibit 99.1 hereto and incorporated herein by reference. In addition, on July 21, 2008, the Company will hold a teleconference for analysts and media to discuss results for the second quarter ended June 30, 2008. The teleconference is webcast on the Company’s website at www.albemarle.com.

The press release attached as Exhibit 99.1 includes net income excluding special items that relate either to severance in conjunction with personnel reductions at the Company’s Richmond headquarters and Singapore sales office or the closure of the Dayton, Ohio fine chemistry facility. 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 to exclude the impact of certain non-recurring items on the Company’s results. The Company has reported net income excluding special items because management believes that this financial measures is more reflective of the Company’s operations, provides transparency to investors and enables period-to-period comparability of financial performance. Net income excluding special items should not be considered as an alternative to net income determined in accordance with GAAP. The Company has included in the press release 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.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release, dated July 21, 2008, issued by the Company.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 21, 2008

ALBEMARLE CORPORATION
By:	/s/ Nicole C. Daniel
	Nicole C. Daniel
	Assistant General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit Number	Exhibit
99.1	Press release, dated July 21, 2008, issued by the Company.

EX-99.1

Exhibit 99.1

[LOGO APPEARS HERE]	Contact:
	Sandra Rodriguez	225.388.7654

Albemarle Reports Second Quarter 2008 Results

Second quarter highlights:

• Net sales of $620.8 million, up 10.1% year over year

• Net income of $61.7 million, or $0.67 per share, up 14.5% over the same period last year

• Record quarterly Polymer Additives net sales of $260.5 million, up 16.3% year over year and 6.5% sequentially

• Over 500 basis point year over year improvement in quarterly Catalyst segment income margin

	Second Quarter Ended June 30,					Six Months Ended June 30,
In thousands, except per share amounts	2008		2007			2008			2007
Net Sales	$	620,750	$	563,812		$	1,288,927		$	1,153,050
Operating Profit	$	77,790	$	74,259		$	161,604		$	155,851
Net Income	$	61,655	$	53,863		$	124,916		$	111,971
Diluted earnings per share	$	0.67	$	0.55		$	1.34		$	1.15
Diluted earnings per share – special item	$	—	$	(0.03	)	$	(0.02	)	$	(0.03	)
Diluted earnings per share excluding special item	$	0.67	$	0.59		$	1.37		$	1.18

BATON ROUGE, La., - July 21 — Albemarle Corporation (NYSE: ALB) reported second quarter 2008 net income of $61.7 million, or 67 cents per share, up from $53.9 million, or 55 cents per share, for the second quarter of 2007. Excluding the $3.2 million after tax charge, or 3 cents per share, related to the closure of our Dayton fine chemistry facility, second quarter 2007 net income was $57.0 million, or 59 cents per share. Operating profit was $77.8 million as strong performance in the Company’s Catalysts and Fine Chemicals business segments was partially offset by declines in the Polymer Additives business segment. The Company reported net sales in the second quarter of 2008 totaling $621 million compared to second quarter 2007 net sales of $564 million.

Net income for the first half of 2008 was $124.9 million, or $1.34 per share, up from $112.0 million, or $1.15 per share, for the first half of 2007. Excluding the first quarter 2008 charge related to severance in conjunction with personnel reductions at the Company’s Richmond headquarters and Singapore sales office, net income for the first half of 2008 was $127.0 million, or $1.37 per share. Net income, excluding the Dayton charge, for the first half of 2007 was $115.1 million, or $1.18 per share. Net sales for the first half of 2008 were $1.29 billion compared to $1.15 billion for the first half of 2007, an increase of 12 percent.

Commenting on results, Mark C. Rohr, President and CEO, stated, “While we are facing very tough inflationary pressures of over $45 million this quarter our businesses have been able to respond and manage

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margins and profitability very well. Revenue, volume and profit grew year over year demonstrating the fundamental value of our products to customers seeking to manage this tough business environment. Our business fundamentals remain strong and I believe our company is well positioned to face the challenging economic conditions we face today.”

Quarterly Segment Results

Polymer Additives delivered record net sales for second quarter 2008 of $260.5 million, a 16 percent increase versus the second quarter of 2007. Net sales increased in our flame retardants primarily due to higher volumes and favorable foreign currency exchange rates. Net sales increased in our stabilizers and curatives portfolio due primarily to higher volumes. Polymer Additives segment income for the second quarter of 2008 declined 25 percent from the second quarter of 2007 to $26.5 million due primarily to higher raw material costs, partially offset by improved brominated flame retardant product volumes, pricing and mix.

Catalysts generated net sales for the second quarter of 2008 of $208.4 million, a nominal increase versus second quarter 2007. Catalysts segment income for the second quarter of 2008 increased 33 percent versus the second quarter of 2007 to $43.0 million due primarily to improved pricing in FCC refinery catalysts and increased earnings from our joint ventures.

Fine Chemicals net sales for the second quarter of 2008 were $151.9 million, a 15 percent increase versus the second quarter of 2007 due primarily to higher volumes from our bromine portfolio and improved pricing across fine chemistry services. Segment income margins were 16 percent as compared to 20 percent in the second quarter of 2007. Due to high raw material and energy costs, segment income declined $1.8 million to $24.5 million in the second quarter of 2008 compared to the same period in 2007.

Cash Flow

In the first six months of 2008, our cash and cash flow from operations funded capital expenditures for plant machinery and equipment of $40 million, acquisitions of $20 million and dividends to shareholders of $20 million. We utilized availability under our credit agreement for repurchases of 4.1 million shares of our common stock for an aggregate cost of approximately $151 million. During the quarter, interest and financing expenses were $8.4 million versus second quarter 2007 expenses of $10.4 million.

Taxes

Our second quarter 2008 effective income tax rate was 18.1 percent, and the full year effective tax rate is expected to be approximately 20.0 percent, which is comparable to our full year effective tax rate in 2007. The tax rate continues to be influenced by the level and mix of income and has benefited from a more favorable mix of income due to higher than anticipated earnings in lower tax jurisdictions.

Outlook

We remain optimistic that each of our businesses will experience above trend top-line growth based on fundamental business prospects. Demand for our refinery catalysts should continue to increase due to

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regulations mandating cleaner fuels and the increasing percentage of sour crudes being processed by refiners although we expect season weakness in the third quarter. Our polymer additives business has benefited so far this year from an improved supply demand equation for electronics and we have posted record sales despite prolonged weakness in the automotive and construction markets. Fine Chemicals prospects will be driven by the strength and expansion of our bromine franchise, commercialization of products in our fine chemistry services pipeline and improving utilization of our flexible asset base to deliver solutions to our customers. In addition, we remain focused on expanding our presence in emerging markets as we seek to grow our businesses in the Middle East and Asia. Our Chinese manufacturing base has grown considerably with our Jinhai antioxidants acquisition and the completion of our Nanjing phosphorus flame retardant plant. In 2008, we expect our sales in China to be roughly three times the level in 2005 and are diligently working to expand our geographic footprint. Managing the runaway inflation in raw materials, energy and other costs of doing business is taking significant effort as we work with our customers to preserve the value for our products. For the year we now expect inflation to exceed $220 million year over year with the majority of this occurring in the second half. Margin compression due to the rampant input cost inflation has been the most challenging issue facing our businesses and remains our most important area of focus for the remainder of 2008.

Earnings Call

The Company's performance for the second quarter ended June 30, 2008 will be discussed on a conference call at 11:00 AM Eastern Daylight time on July 21, 2008, which can be accessed through Albemarle’s website under Investor Information at www.albemarle.com.

Albemarle Corporation, headquartered in Baton Rouge, Louisiana, 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 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, 2007 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.

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Albemarle Corporation and Subsidiaries

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,
	2008			2007			2008			2007
Net sales	$	620,750		$	563,812		$	1,288,927		$	1,153,050
Cost of goods sold		457,769			410,430			958,535			839,879
Gross profit		162,981			153,382			330,392			313,171
Selling, general and administrative expenses		67,598			59,255			131,117			121,741
Research and development expenses		17,593			14,924			34,393			30,635
Severance charges		—			—			3,278	(a)		—
Dayton facility closure charge		—			4,944	(b)		—			4,944	(b)
Operating profit		77,790			74,259			161,604			155,851
Interest and financing expenses		(8,441	)		(10,417	)		(18,657	)		(19,327	)
Other income, net		1,938			1,631			4,784			2,583
Income before income tax expense, minority interests and equity in net income of unconsolidated investments		71,287			65,473			147,731			139,107
Income tax expense		(12,902	)		(15,585	)		(29,528	)		(32,521	)
Income before minority interests and equity in net income of unconsolidated investments		58,385			49,888			118,203			106,586
Minority interests in income of consolidated subsidiaries (net of tax)		(5,396	)		(2,746	)		(8,981	)		(7,697	)
Equity in net income of unconsolidated investments (net of tax)		8,666			6,721			15,694			13,082
Net income	$	61,655		$	53,863		$	124,916		$	111,971
Basic earnings per share	$	0.68		$	0.57		$	1.36		$	1.18
Diluted earnings per share	$	0.67		$	0.55		$	1.34		$	1.15
Weighted-average common shares outstanding - Basic		91,182			95,272			91,766			95,280
Weighted-average common shares outstanding - Diluted		92,367			97,256			93,028			97,380

See accompanying notes to the condensed consolidated financial information.

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Albemarle Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands of Dollars) (Unaudited)

	June 30, 2008		December 31, 2007
ASSETS
Cash and cash equivalents	$	168,482	$	130,551
Other current assets		1,035,662		922,887
Total current assets		1,204,144		1,053,438
Property, plant and equipment		2,394,230		2,314,509
Less accumulated depreciation and amortization		1,330,795		1,275,966
Net property, plant and equipment		1,063,435		1,038,543
Other assets and intangibles		801,585		738,469
Total assets	$	3,069,164	$	2,830,450
LIABILITIES & SHAREHOLDERS’ EQUITY
Current portion of long-term debt	$	21,173	$	16,627
Other current liabilities		408,819		386,290
Total current liabilities		429,992		402,917
Long-term debt		869,844		707,311
Other noncurrent liabilities		326,616		334,828
Deferred income taxes		134,031		107,089
Shareholders’ equity		1,308,681		1,278,305
Total liabilities & shareholders’ equity	$	3,069,164	$	2,830,450

See accompanying notes to the condensed consolidated financial information.

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Albemarle Corporation and Subsidiaries

Selected Cash Flows Data

(In Thousands of Dollars) (Unaudited)

	Six Months Ended June 30,
	2008			2007
Cash and cash equivalents at beginning of year	$	130,551		$	149,499
Cash and cash equivalents at end of period	$	168,482		$	200,406
Sources of cash and cash equivalents:
Net income		124,916			111,971
Proceeds from borrowings		214,612			74,869
Proceeds from exercise of stock options		3,931			15,955
Uses of cash and cash equivalents:
Capital expenditures		(40,237	)		(49,981	)
Acquisitions		(19,965	)(c)		—
Purchases of common stock		(151,137	)		(47,695	)
Repayments of long-term debt		(50,266	)		(15,234	)
Dividends paid to shareholders		(20,476	)		(20,187	)
Dividends paid to minority interests		(7,337	)		(7,548	)
Non-cash items:
Depreciation and amortization		54,042			53,758

See accompanying notes to the condensed consolidated financial information.

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Albemarle Corporation and Subsidiaries

Consolidated Summary of Segment Results

(In Thousands of Dollars) (Unaudited)

	Second Quarter Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net sales:
Polymer Additives	$	260,508		$	223,950		$	505,098		$	438,269
Catalysts		208,386			207,448			484,483			443,275
Fine Chemicals		151,856			132,414			299,346			271,506
Total net sales	$	620,750		$	563,812		$	1,288,927		$	1,153,050
Segment operating profit:
Polymer Additives	$	27,363		$	35,311		$	57,632		$	71,771
Catalysts		35,520			27,435			81,676			62,016
Fine Chemicals		27,673			27,253			51,153			52,500
Subtotal	$	90,556		$	89,999		$	190,461		$	186,287
Minority interests in income of consolidated subsidiaries:
Polymer Additives	$	(2,116	)	$	(1,807	)	$	(4,105	)	$	(4,059	)
Catalysts		—			—			—			—
Fine Chemicals		(3,223	)		(971	)		(5,158	)		(3,706	)
Corporate & other		(57	)		32			282			68
Total minority interests in income of consolidated subsidiaries	$	(5,396	)	$	(2,746	)	$	(8,981	)	$	(7,697	)
Equity in net income of unconsolidated investments:
Polymer Additives	$	1,205		$	1,776		$	2,677		$	3,291
Catalysts		7,488			4,976			13,054			9,800
Fine Chemicals		—			—			—			—
Corporate & other		(27	)		(31	)		(37	)		(9	)
Total equity in net income of unconsolidated investments	$	8,666		$	6,721		$	15,694		$	13,082
Segment income:
Polymer Additives	$	26,452		$	35,280		$	56,204		$	71,003
Catalysts		43,008			32,411			94,730			71,816
Fine Chemicals		24,450			26,282			45,995			48,794
Total segment income		93,910			93,973			196,929			191,613
Corporate & other		(12,850	)		(10,795	)		(25,334	)		(25,433	)
Severance charges (a)		—			—			(3,278	)		—
Dayton facility closure charge (b)		—			(4,944	)		—			(4,944	)
Interest and financing expenses		(8,441	)		(10,417	)		(18,657	)		(19,327	)
Other income, net		1,938			1,631			4,784			2,583
Income tax expense		(12,902	)		(15,585	)		(29,528	)		(32,521	)
Net income	$	61,655		$	53,863		$	124,916		$	111,971

See accompanying notes to the condensed consolidated financial information.

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Notes to the Condensed Consolidated Financial Information

(a) The six-month period ended June 30, 2008 includes charges amounting to $3.3 million ($2.1 million after income taxes, or 2 cents per share) that relate to severance in conjunction with personnel reductions at the Company’s Richmond headquarters and Singapore sales office.

(b) The three and six-month periods ended June 30, 2007 include a charge amounting to $4.9 million ($3.2 million after income taxes, or 3 cents per share) that relates to the closure of our Dayton, Ohio fine chemistry facility.

(c) On June 30, 2008, we acquired the remaining 25 percent of our majority owned Polymer Additives business segment joint ventures in China: Ningbo Jinhai Albemarle Chemical and Industry Company Limited and Shanghai Jinhai Albemarle Fine Chemicals Company Limited.

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.

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 at www.albemarle.com, under “Non-GAAP Reconciliations” under “Investor Relations.”

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