Delivering Today to Create a Better Tomorrow

2011 CEO Review

2011 CEO REVIEW

There’s No Time Like the Present.

In 2010, Albemarle developed a five-year plan to double its business through growth within core and adjacent markets. In 2011—year one of our Vision 2015 strategy—the company took an excellent first step toward meeting the challenge. Record sales and annual earnings. New markets and products. Multiple industry awards, 239 new patents and a constant eye on sustainable, conscientious growth. In the midst of a challenging economy and operating environment, we had both our best financial year ever and our safest year ever. All possible because in a culture built on innovation, collaboration and performance, creating a better tomorrow Globalization starts with delivering today. ($2,869 million net sales)

40% 38% About Albemarle

Albemarle Corporation is a leading global developer, manufacturer and 22% marketer of highly engineered specialty chemicals for a wide range of markets, including petroleum refining, consumer electronics, plastics, crop North America protection, construction, automotive, pharmaceuticals, food safety and Western Europe Rest of custom chemistry services. Our products and services create value for our customers by improving product performance, providing essential product attributes, lowering costs and simplifying processes. Segments ($2,869 million net sales) Headquartered in Baton Rouge, Louisiana, Albemarle employs more than 4,000 people worldwide and serves customers in approximately 100 countries through three business segments: Polymer Solutions, Catalysts and Fine Chemistry. Through its innovation-driven culture and 26% 35% growth-focused strategies, the company is committed to delivering exceptional performance that creates a better tomorrow for all of our stakeholders. 39%

To view the 2011 Annual Report on Form 10-K and 2011 Corporate

Sustainability Report, visit www.albemarle.com. Polymer Solutions Catalysts Fine Chemistry To Our Shareholders: Albemarle’s success is a result of our ability to understand the evolving needs of our customers, develop innovative, responsible solutions to meet those needs and quickly bring those solutions to market. Vision 2015, a five-year plan to double the size of our business, is predicated upon our ability to leverage these core strengths to drive organic growth and expand into adjacent markets. 2011 was a great first step toward Vision 2015.

2011 results were impressive by any measure. Revenue increased by 21% over 2010 to $2.9 billion and earnings increased by 35% to $436 million. These results were achieved in spite of a challenging economic environment in the second half of the year. Our strong operating performance and excellent working capital management led to record cash generation of $487 million. This cash generation allowed us to return substantial capital to our shareholders through a 25% increase in our dividend rate and a repurchase of $178 million in stock. We took advantage of attractive interest rates in 2011 and refinanced our revolving credit facility, increasing our borrowing capacity to $750 million, with the ability to borrow an additional $250 million under the facility. We also ended the year with the strongest balance sheet in our history, giving us the financial flexibility we need to continue to grow our business and provide value to our stakeholders.

As a part of Vision 2015, we plan to expand the application of our base technologies into attractive adjacent markets. For example, we developed a proprietary technology for extracting from the same brine reserves that we use to produce bromine at our Magnolia, Arkansas facilities. In 2011, we proved that the extraction technology worked and made solid progress in the development and design phase of this initiative. Another example is our development of our PureGrowth™ brand of high-purity metal organics for use in the rapidly expanding light emitting diode (LED) and compound semiconductor markets. Our extensive experience and leading global position in organometallics puts us in a particularly strong position to expand into this adjacency. 2011 CEO REVIEW

We continued to expand our global footprint in 2011 to better collaborate with our customers, thereby capturing our fair share of growth in these markets. Our 2011 capital expenditures were about twice the amount we have historically spent; however, this level was necessary to allow us to meet the market demand and continue to grow with our customers. In collaboration with our joint venture partner, SABIC, we broke ground on a world-scale aluminum alkyls unit in Saudi Arabia that will service the ever-growing need for that product in the Middle East. Once that unit is operational, the lead-time for aluminum alkyls in this region will be reduced from approximately six weeks to between two and ten days, depending on the customer’s location in the Middle East. We also broke ground on a polyolefin catalyst center in Yeosu City, , which will provide R&D and technical services to our customers in Korea and other parts of Asia, as well as serve as a local manufacturing site to service those customers. Finally, we began construction to double the capacity for bromine and certain bromine derivatives at our Safi, Jordan joint venture, the world’s lowest cost manufacturing center for these products. We are very pleased with the progress we have made and the milestones we have already met in all three of these projects. We should begin to see meaningful revenue from each of these in 2013.

As we grow our businesses and our global footprint, we are doing so responsibly by staying true to our principles to provide innovative and sustainable solutions without doing harm to people or the environment. Always innovative, Albemarle employees were awarded 239 new patents and two prestigious innovation awards during 2011: The Center for the Polyurethane Industry’s “Polyurethane Innovation Award” and the World Refining Association’s “Biodiesel Corporation of the Year” award. With 31% of the company’s 2011 revenues derived from new products, we continued our trend of upgrading our portfolio by bringing new products to the market. 2011 was also the safest year in Albemarle history, which is a tribute to the 4,000 plus Albemarle employees around the globe who take great pride in doing things the right way, the first time, every time. We do this because it is the right way to run a business, and we were honored when we were named one of Corporate Responsibility Magazine’s 100 Best Corporate Citizens for the second year in a row.

With the foundation laid in 2011, Albemarle is poised for continued growth. Our employees have the passion, the talent and the integrity to make Vision 2015 a reality. They demonstrate this each and every day in Albemarle facilities around the world and in the communities in which we live and operate. I am honored to lead this truly unique and talented team, and I am confident that their dedication, innovation and hard work will continue to fuel Albemarle's future success.

I would be remiss to end this letter without recognizing the profound impact that Mark Rohr had on this organization. His focus on growth in emerging economies resulted in revenue growth from $846 million in 1999 to $2.9 billion in 2011 and profitability growth from $89 million in 1999 to $436 million in 2011. During his tenure, Albemarle shareholders were rewarded with a substantial cumulative return on investment, with our market cap growing from $866 million in 1999 to $5 billion in 2011, and enjoyed continuous dividend increases every year during his tenure. He set a vision and inspired and enabled our employees to achieve that vision. For that, we are grateful, and we wish him only the best.

Sincerely,

Luke Kissam Chief Executive Officer 2011 CEO REVIEW

Key Financial Results*

Increase (in millions, except per share amounts) 2011 2010 (decrease)

Net Sales $ 2,869.0 $ 2,362.8 21%

Net Income, excluding special items** $ 436.3 $ 328.3 35%

Net Cash Provided by Operating Activities $ 487.4 $ 331.3 47%

EBITDA, excluding special items** $ 700.6 $ 544.5 29%

Total Assets $ 3,203.8 $ 3,068.1 4%

Capital Expenditures $ 190.6 $ 75.5 152%

Acquisitions and Other $ 13.2 $ 12.0 10%

Total Long-Term Debt $ 763.7 $ 860.9 (11%)

Total Long-Term Debt as a % of Total Capital 31.3% 36.8% (550) bps

Shares Outstanding at End of Year 88.8 91.6 (3%)

Return on Average Total Equity 27.7% 23.7% 400 bps

Per Common Share

Diluted Earnings Per Share, excluding special items** $ 4.77 $ 3.56 34%

Cash Dividends Declared Per Share $ 0.67 $ 0.56 20%

Total Equity Per Share $ 18.90 $ 16.11 17%

Year-End Closing Price $ 51.51 $ 55.78 (8%)

Net Sales Net Income Diluted EPS (in millions of dollars) excluding special items** excluding special items** (in millions of dollars) (in dollars) $3,000 $450 $5.00

$400 $4.50 $2,500 $4.00 $350

$3.50 $2,000 $300 $3.00 $250 $1,500 $2.50 $200 $2.00 $1,000 $150 $1.50

$100 $1.00 $500

$50 $0.50

0 0 0 ’10’09’08’07’06’05 ’11 ’10’09’08’07’06’05 ’11 ’10’09’08’07’06’05 ’11

* See Item 8—Financial Statements and Supplementary Data, beginning on page 51 of Form 10-K. ** See Reconciliation of Non-GAAP Financial Measures on the company’s website at www.albemarle.com/investors. Global Business Units POLYMER SOLUTIONS

Spending by the global middle class is projected to rise from $21.3 trillion in 2009 to $35 trillion in 2020, as a dramatic increase in the population of consumers with disposable income occurs. Such trends are expected to continue to drive demand for consumer electronics, including TVs, personal computers and smart phones in which flame retardants provide essential fire retardant properties.

(Source: 2010 OECD, The Emerging Middle Class in Developing Countries) 2011 CEO REVIEW

Polymer Solutions

As global building standards require greater energy efficiency and demand for computing devices continues to rise, our diverse products will continue to deliver critical protection and performance.

With over 70 products in a continuously growing portfolio, our Polymer Solutions business delivers signature innovation to a variety of end markets. This business is well positioned to offer its technical knowledge and expertise to meet society’s changing needs. This business is divided into three divisions: Fire Safety Solutions, Stabilizers and Curatives.

Fire Safety Solutions A world leader in flame retardant chemistry, Albemarle offers an entire portfolio of fire safety solutions, including brominated-, mineral- and phosphorus-based flame retardants. Our products help customers meet fire safety standards across a wide range of applications in numerous end markets. Today, plastics molders, wire and cable compounders, building products manufacturers and automotive producers around the world rely on our solutions to add life-saving properties to their materials.

Stabilizers Our broad line of antioxidants add stabilizing properties to lubricants, fuels and plastics. These products help enhance stability and storage life of fuels and lubricants and improve car, 2011 Percent of Sales truck, boat and jet engine performance. Using Albemarle’s ($1,002 million net sales) technology and customized polymer antioxidants, our customers are able to maintain the performance, integrity and processing stability of plastics, elastomers, adhesives and other materials. 78% 22% Curatives Fire Stabilizers Albemarle curatives are critical components in urethane, urea Safety & Curatives and epoxy resin systems employed in a wide range of applications. Spray polyurea coatings are used in demanding environments when waterproofing and corrosion prevention is critical. Common examples are parking structures, sports stadiums, water parks and roofing systems. Cast polyurethane systems produce high performance elastomers used in applications such as wheels, rollers and off road tires. Epoxy formulations based on our curatives are used in high-performance composites such as filament wound pipe and printed wire board.

32% 26% 42% North America W. Europe Rest of World CATALYSTS

China and India are projected to increase their polyethylene consumption by 10.5 million tons over the next five years, equivalent to the total current U.S. consumption. As infrastructure spending and consumer demand drive greater demand for plastics, Albemarle’s Performance Catalyst Solutions business benefits from increased sales of co-catalysts and components to ethylene manufacturers.

(Source: Morgan Stanley) 2011 CEO REVIEW

Catalysts

Growing global demand for fuel and advanced materials —and the requirement that tomorrow’s products be created in an efficient, yet environmentally responsible manner—plays directly to our chemistry expertise and innovative technologies.

Albemarle provides top-performance catalysts, technologies and related services to the refining, petrochemical and electronics industries. Whether it’s extracting more diesel from each barrel of oil, creating a higher quality plastic resin or meeting growing demand for light emitting diodes (LEDs), our global network of industry-leading professionals can tackle the toughest challenges. Together with our partners, we continue to drive innovation and deliver value to our customers through our Performance Catalyst Solutions (PCS) division, as well as through our (FCC) catalysts and Hydroprocessing Catalysts (HPC) groups, which make up our Refinery Catalysts division.

Performance Catalyst Solutions (PCS) Our PCS division is comprised of three business units: polymer catalysts, chemical catalysts and electronic materials. We manufacture organometallic co-catalysts, metallocene components and co-catalysts, and finished polymerization catalysts, such as single-site catalysts (with or without our proprietary ActivCat® technology) and a line of proprietary Ziegler-Natta catalysts under the Advantage™ brand. Polymers produced using Albemarle catalysts include both commodity and specialty plastics serving a wide variety of end markets including packaging, non-packaging, films and injection molding. In electronic materials, we manufacture and sell high-purity metal organic products for electronic applications such as LEDs for displays and general lighting, as well as other products 2011 Percent of Sales used in solar cell production. Our chemical catalysts include a ($1,117 million net sales) variety of products used in the broad , including catalysts used to produce ethylene dichloride and methylamines, among others. 76% 24% Fluid Catalytic Cracking Catalysts (FCC) Refinery Perf. Catalyst FCCs are used to crack heavy, low-value components of crude oil Catalysts Solutions into lighter products like gasoline and diesel. Responding to the needs of our customers, we continue to develop and enhance catalysts and additives that help maximize propylene production and crack the heaviest feedstocks in their FCC units.

Hydroprocessing Catalysts (HPC) HPCs are used extensively within refineries to remove sulfur, metals and other contaminants from feedstock. Albemarle’s HPC catalyst development, application understanding and technical support services help refiners to balance fill costs, performance % % % and economic returns. 40 21 39 North America W. Europe Rest of World FINE CHEMISTRY

Oil production from deep-water fields has nearly doubled in the past five years and now makes up 8% of total global oil output. As an increasing portion of international oil companies’ long-term capital investments fund drilling in waters both deeper and farther offshore, demand for Albemarle’s clear brine fluids is expected to continue to grow.

(Source: PFC Energy) 2011 CEO REVIEW

Fine Chemistry

With global developments ranging from rising oil exploration in deeper waters to greater food demand to increased outsourcing of complex chemistry manufacturing and process development, our diverse portfolio is positioned well for growth.

For more than thirty years, our Fine Chemistry business has supplied industry leading specialty products to many of the world’s largest producers of industrial, pharmaceutical, agricultural and custom manufacturing services. This business unit operates through two divisions: Performance Chemicals and Fine Chemistry Services.

Fine Chemistry Services Our fine chemistry services division provides a complete range of custom manufacturing services backed by highly skilled R&D teams to assist with synthesis route selection, process development and analytical support, focused on the agrichemical, pharmaceutical, biochemical and specialty materials markets. Products in our crop protection portfolio are sold to agrichemical manufacturers and distributors that produce and distribute herbicides, insecticides, fungicides and soil fumigants. We also manufacture active pharmaceutical ingredients (APIs) and intermediates for cutting-edge medicines and delivery devices. Albemarle is distinguished competitively as one of a few companies in the world with full-scale facilities and expertise to service customers with 2011 Percent of Sales product development at every stage, from contract research to ($750 million net sales) process development, and pilot plant through commercial-scale manufacturing. Performance Chemicals 61% 39% Albemarle is a leading global producer of bromine and bromine derivatives, with extensive proprietary technology in our product Performance Fine Chemistry portfolio and serving diverse industries and needs. Our products Chemical Services are used in oil and gas well drilling and completion fluids, mercury control, paper manufacturing, water purification, beef and poultry processing, chemical syntheses and various other industrial applications. We also produce a variety of non-bromine based specialty chemicals used in household and industrial cleaners, disinfectants, biocides, paper-sizing formulations, agriculture, refractory, ceramic and polishing applications. Our performance chemicals group is also developing a new technology for recovery of lithium chemicals from brine. In short, many of our product offerings are geared toward providing our communities with 54% 18% 28% cleaner energy, cleaner water, cleaner air and a robust food chain. North America W. Europe Rest of World Innovation is an everyday pursuit.

New customer challenges and evolving consumer needs support our commitment to continuous R&D and innovation, both in the lab and in the field.

At Albemarle, innovation isn’t just critical to our success—it defines our entire culture. In 2011, we registered 239 new patents, and 31% of our global sales came from products introduced into our portfolio within the last five years. Innovation also means looking to our existing core chemistries for new applications and new markets; developing creative industry alliances that benefit from shared knowledge and experience; and applying the spirit of innovation to our business practices, community involvement and environmental stewardship. In today’s knowledge-based economy, our innovation culture is essential to:

• Driving company growth and financial stability; • Creating competitive advantages across diverse markets; • Broadening and deepening our sustainability commitment; and • Attracting and retaining top talent.

Quite simply, innovation is what we do. Here are three examples of the types of product breakthroughs and extensions we expect will continue to deliver a high percentage of innovation-based sales: CATALYSTS | Single-Site Catalysts Single-site catalysts (SSC) have become the innovation driver in the polyolefin and elastomer industries, facilitating approximately 70% of all innovations in those segments. These products create access to new and more controlled polymer designs, leading to stronger and cleaner plastics for films, food packaging and pipes. Albemarle has played a critical role in the growth and success of SSC systems over the last 15 years, and we are the world’s leading supplier of activators and other components for these systems. We have also capitalized on our extensive knowledge of activation mechanisms, catalyst synthesis, and manufacturing and handling of complex molecules to become a leading producer of finished SSC systems for polyolefin producers around the globe. Our customers continue to employ catalysts manufactured with our ActivCat® technology, the latest and most advanced aluminum-based activator technology for SSC. ActivCat drastically improves catalyst yields, which in turn saves precious resources and capital. Albemarle is meeting the growing demand for SSC systems through recent capacity expansions in the and ongoing expansions in Yeosu, Korea. Through facility growth and continuous research in next-generation activator technology, we continue to raise the bar in the SSC industry.

FINE CHEMISTRY | Food Safety Albemarle’s Food Safety Initiative is a program dedicated to delivering cost-effective antimicrobials to food processors worldwide. Our goal is to provide technological solutions to ensure that processors are in compliance with rigorous food safety standards proposed by the United States Department of Agriculture’s Food Safety and Inspection Service. Our state-of-the-art microbiology lab provides a platform for testing new chemistries, as well as working with food processors as they develop multiple intervention programs to ensure the safety of meat and poultry. As the global food supply channel diversifies, Albemarle is committed to increasing public and industry awareness of effective new technologies.

POLYMER SOLUTIONS | High-Performance Flame Retardant As technology progresses, the need for advanced materials critical to achieving exceptional performance, including high-performance fire safety solutions, also increases. Anticipating this need, Albemarle has developed a breakthrough flame retardant technology with excellent electrical properties. This new, non-halogenated, phosphorus flame retardant—can be processed at high temperatures and has a unique combination of low smoke generation, high thermal stability and high flame retardant efficiency. It can be applied in many different resin systems, such as those used in printed circuit boards, specialty films and fibers, aerospace, connectors and light emitting diode (LED) applications. This flame retardant’s performance characteristics make it attractive to a broad range of potential customers in both our current markets and in new markets. True to Albemarle’s innovation-driven culture, we intend to bring this technology to the marketplace at a speed that meets our customers’ needs, with commercial availability expected by the end 2012. Directors Officers and Management Team

Jim W. Nokes Luther C. Kissam, IV Matthew K. Juneau Non-executive Chairman of the Board Chief Executive Officer Vice President, Polymer Solutions Retired Executive Vice President ConocoPhillips John M. Steitz Scott A. Martin Houston, President and Chief Operating Officer Vice President, Fine Chemistry

J. Alfred Broaddus, Jr. Karen G. Narwold Ronald C. Zumstein, Ph.D. Vice President, Manufacturing Retired President Senior Vice President, General Counsel Federal Reserve Bank of Richmond and Corporate Secretary Milan R. Shah Richmond, Virginia Scott A. Tozier Vice President, Mergers and Acquisitions William H. Hernandez Senior Vice President, David W. Clary, Ph.D. Retired Senior Vice President and Chief Financial Officer and Chief Risk Officer Vice President, Chief Sustainability Officer Chief Financial Officer PPG Industries, Inc. Susan M. Kelliher Senior Vice President, Human Resources Nicole C. Daniel Pittsburgh, Pennsylvania Vice President, Deputy General Counsel John J. Nicols and Chief Compliance Officer R. William Ide, III Senior Vice President, Partner Strategic Development and Catalysts Richard G. Fishman McKenna, Long & Aldridge LLP Vice President, Treasurer Atlanta, Georgia Anthony S. Parnell and Chief Tax Counsel Vice President, Global Supply Chain Luther C. Kissam, IV William B. Allen, Jr. Vice President, Corporate Controller Chief Executive Officer Ronald R. Gardner and Chief Accounting Officer Albemarle Corporation Vice President Baton Rouge, Louisiana

Joseph M. Mahady Retired President Wyeth Pharmaceuticals, Inc. Radnor, Pennsylvania Shareholder Information

Richard L. Morrill, Ph.D. STOCK TRANSFER AGENT ANNUAL SHAREHOLDER MEETING Chancellor AND REGISTRAR Baton Rouge Hilton University of Richmond For information on shareholder accounts 201 Lafayette Street Richmond, Virginia or to inquire about a dividend reinvestment Baton Rouge, Louisiana 70801 plan, write or call the transfer agent at: May 9, 2012 Barry W. Perry Wells Fargo Bank, N.A. 8:00 a.m. Central Time Retired Chairman and Shareowner Services Doors open at 7:30 a.m. Chief Executive Officer P.O. Box 64854 Engelhard Corporation St. Paul, Minnesota 55164-0854 STOCK LISTING Newton, Pennsylvania Tel: 800-468-9716 www.wellsfargo.com/shareownerservices Ticker Symbol: ALB John Sherman, Jr. Retired Vice Chairman INVESTOR INFORMATION NUMBER OF EMPLOYEES Scott & Stringfellow, Inc. Investors interested in Albemarle’s financial Approximately 4,300 Richmond, Virginia and operating performance may write or call: Albemarle Corporation INDEPENDENT REGISTERED Harriett Tee Taggart Lorin J. Crenshaw PUBLIC ACCOUNTING FIRM Retired Partner Director, Investor Relations PricewaterhouseCoopers LLP Wellington Management LLC and Communications New Orleans, Louisiana Cambridge, Massachusetts 451 Florida Street Baton Rouge, Louisiana 70801 OUTSIDE COUNSEL Anne Marie Whittemore Tel: 225-388-7322 Kelley Drye & Warren LLP Partner Fax: 225-388-8924 Stamford, Connecticut McGuireWoods LLP Email: [email protected] Richmond, Virginia www.albemarle.com/investors

451 Florida Street Baton Rouge, Louisiana 70801 www.albemarle.com