Annual report pursuant to Section 13 and 15(d)

Schedule I - Condensed Financial Information of Parent

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Schedule I - Condensed Financial Information of Parent
 12 Months Ended
Dec. 31, 2019
Condensed Financial Information Disclosure [Abstract]  
Condensed Financial Information
SCHEDULE I
PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED STATEMENTS OF INCOME
(in thousands)

 
Years ended
December 31,
 
2019
 
2018
 
2017
Stock compensation expense
$
18,225

 
$
19,464

 
$
8,799

Equity in net income from subsidiaries
(97,764
)
 
(77,764
)
 
(66,402
)
Net income
79,539

 
58,300

 
57,603

Other comprehensive income (loss), net of tax:
 
 
 
 
 
Pension and postretirement benefits
2,430

 
(7,958
)
 
(101
)
Net loss from hedging activities
(2,665
)
 
(330
)
 
(3,590
)
Foreign currency translation
22,117

 
(35,127
)
 
61,713

Total other comprehensive income (loss)
21,882

 
(43,415
)
 
58,022

Comprehensive income
$
101,421

 
$
14,885

 
$
115,625

 
 
 
 
 
 

SCHEDULE I
PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
(in thousands, except share and per share amounts)

 
December 31,
2019
 
December 31,
2018
ASSETS
 
 
 
Investment in subsidiaries
$
1,779,450

 
$
1,659,560

Total assets
$
1,779,450

 
$
1,659,560

LIABILITIES
 
 
 
Total liabilities
$
—

 
$
—

STOCKHOLDERS' EQUITY
 
 
 
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 136,861,382 and 135,758,269 on December 31, 2019 and 2018, respectively; outstanding shares 136,464,961 and 135,592,045 on December 31, 2019 and 2018, respectively
1,369

 
1,358

Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on December 31, 2019 and 2018, respectively
—

 
—

Additional paid-in capital
1,696,899

 
1,674,703

Retained earnings
103,013

 
25,523

Treasury stock, at cost; shares 396,421 and 166,224 on December 31, 2019 and 2018, respectively
(6,483
)
 
(2,920
)
Accumulated other comprehensive loss
(15,348
)
 
(39,104
)
Total PQ Group Holdings Inc. equity
1,779,450

 
1,659,560

Total liabilities and equity
$
1,779,450

 
$
1,659,560

 
 
 
 

SCHEDULE I
PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)

 
Years ended
December 31,
 
2019
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
 
Net income
$
79,539

 
$
58,300

 
$
57,603

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Equity in net income from subsidiaries
(97,764
)
 
(77,764
)
 
(66,402
)
Stock compensation expense
18,225

 
19,464

 
8,799

Net cash (used in) provided by operating activities
—

 
—

 
—

Cash flows from investing activities:
 
 
 
 
 
Investment in subsidiaries
—

 
—

 
(480,696
)
Net cash (used in) provided by investing activities
—

 
—

 
(480,696
)
Cash flows from financing activities:
 
 
 
 
 
IPO proceeds
—

 
—

 
507,500

IPO costs
—

 
—

 
(26,804
)
Net cash (used in) provided by financing activities
—

 
—

 
480,696

Effect of exchange rate changes on cash, cash equivalents and restricted cash
—

 
—

 
—

Net change in cash, cash equivalents and restricted cash
—

 
—

 
—

Cash, cash equivalents and restricted cash at beginning of period
—

 
—

 
—

Cash, cash equivalents and restricted cash at end of period
$
—

 
$
—

 
$
—

 
 
 
 
 
 

SCHEDULE I
PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT)
CONDENSED FINANCIAL INFORMATION
NOTES TO CONDENSED SCHEDULE I

1. Description of PQ Group Holdings Inc. and Subsidiaries
PQ Group Holdings Inc. (“PQ Group Holdings” or the “Parent Company”) is a holding company that conducts substantially all of its business operations through its wholly owned subsidiary, PQ Corporation. As specified in certain of PQ Corporation’s debt agreements entered into concurrently with a series of transactions to reorganize and combine the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016 (the “Business Combination”), as subsequently amended and restated, there are restrictions on the ability of PQ Corporation to make payments to its stockholder, PQ Group Holdings, on behalf of its equity interests (refer to Note 17 to the PQ Group Holdings consolidated financial statements for further information regarding PQ Corporation debt).
2. Basis of Presentation
The accompanying condensed Parent Company financial statements are required in accordance with Rule 4-08(e)(3) of Regulation S-X. These condensed financial statements have been presented on a “parent-only” basis. Under a parent-only presentation, the Parent Company’s investment in its consolidated subsidiary is presented under the equity method of accounting. Under the equity method, the investment in subsidiary is stated at cost plus contributions and equity in undistributed income (loss) of the subsidiary, less distributions received since the date of acquisition. For purposes of presenting net income, this presentation assumes that the Parent Company was in existence for the full year ended December 31, 2016, the year of the Business Combination. These parent-only financial statements should be read in conjunction with PQ Group Holdings’ audited consolidated financial statements.
3. Stock-Based Compensation
Refer to Note 22 of the notes to the PQ Group Holdings consolidated financial statements for a description of stock-based compensation.
4. Common Stock
Refer to Note 23 of the notes to the PQ Group Holdings consolidated financial statements for a description of common stock.