Reportable Segments (Tables)
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12 Months Ended |
Dec. 31, 2019 |
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| Segment Reporting [Abstract] |
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| Reconciliation of Revenue from Reportable Segments to Consolidated |
Summarized financial information for the Company’s reportable segments is shown in the following table:
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Years ended
December 31, |
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2019 |
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2018 |
|
2017 |
Sales: |
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|
|
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Refining Services |
|
$ |
447,081 |
|
|
$ |
455,562 |
|
|
$ |
398,342 |
|
Catalysts(1)
|
|
85,667 |
|
|
72,099 |
|
|
75,333 |
|
Performance Materials |
|
362,965 |
|
|
378,279 |
|
|
324,225 |
|
Performance Chemicals |
|
685,137 |
|
|
717,335 |
|
|
687,645 |
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Eliminations(2)
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|
(13,778 |
) |
|
(15,121 |
) |
|
(13,444 |
) |
Total |
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$ |
1,567,072 |
|
|
$ |
1,608,154 |
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|
$ |
1,472,101 |
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Segment Adjusted EBITDA:(3)
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Refining Services |
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$ |
175,640 |
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$ |
176,499 |
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$ |
154,191 |
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Catalysts(4)
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|
107,808 |
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|
81,067 |
|
|
89,396 |
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Performance Materials |
|
76,712 |
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|
72,471 |
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|
69,661 |
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Performance Chemicals |
|
154,264 |
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|
170,886 |
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|
170,467 |
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Total Segment Adjusted EBITDA(5)
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$ |
514,424 |
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$ |
500,923 |
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$ |
483,715 |
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(1)
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Excludes the Company’s proportionate share of sales from the Zeolyst Joint Venture accounted for using the equity method. The proportionate share of sales is $170,338, $156,687 and $143,774 for the years ended December 31, 2019, 2018 and 2017, respectively.
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(2)
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The Company eliminates intersegment sales when reconciling to the Company’s consolidated statements of income. |
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(3)
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The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Management evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the Company’s operating performance. Adjusted EBITDA as defined by the Company may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. |
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(4)
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The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $68,138 for the year ended December 31, 2019, which includes $45,899 of equity in net income plus $7,534 of amortization of investment in affiliate step-up plus $14,705 of joint venture depreciation, amortization and interest.
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The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $56,663 for the year ended December 31, 2018, which includes $37,437 of equity in net income plus $6,634 of amortization of investment in affiliate step-up plus $12,592 of joint venture depreciation, amortization and interest.
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $58,156 for the year ended December 31, 2017, which includes $38,486 of equity in net income plus $8,600 of amortization of investment in affiliate step-up plus $11,070 of joint venture depreciation, amortization and interest.
(5)
Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses.
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| Reconciliation of Net Income to Segment Adjusted EBITDA |
A reconciliation of net income attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:
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Years ended
December 31, |
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2019 |
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2018 |
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2017 |
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA |
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Net income attributable to PQ Group Holdings Inc. |
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$ |
79,539 |
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$ |
58,300 |
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$ |
57,603 |
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Provision for (benefit from) income taxes |
|
40,699 |
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|
28,995 |
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(119,197 |
) |
Interest expense, net |
|
111,525 |
|
|
113,723 |
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|
179,044 |
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Depreciation and amortization |
|
182,090 |
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|
185,234 |
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|
177,140 |
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Segment EBITDA |
|
413,853 |
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|
386,252 |
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|
294,590 |
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Unallocated corporate expenses |
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40,070 |
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|
36,970 |
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|
30,422 |
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Joint venture depreciation, amortization and interest |
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14,705 |
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12,592 |
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11,070 |
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Amortization of investment in affiliate step-up |
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7,534 |
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6,634 |
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|
8,600 |
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Amortization of inventory step-up |
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— |
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1,603 |
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|
871 |
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Impairment of fixed assets, intangibles and goodwill |
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1,600 |
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— |
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— |
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Debt extinguishment costs |
|
3,400 |
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|
7,751 |
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|
61,886 |
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Net (gain) loss on asset disposals |
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(13,068 |
) |
|
6,574 |
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|
5,793 |
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Foreign currency exchange loss |
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2,787 |
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|
13,810 |
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|
25,786 |
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LIFO expense |
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11,099 |
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|
8,366 |
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|
3,708 |
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Management advisory fees |
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— |
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— |
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|
3,777 |
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Transaction and other related costs |
|
3,642 |
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|
893 |
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|
7,425 |
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Equity-based compensation |
|
18,225 |
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|
19,464 |
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|
8,799 |
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Restructuring, integration and business optimization expenses |
|
4,076 |
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|
14,019 |
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|
13,174 |
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Defined benefit pension plan cost |
|
3,126 |
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(796 |
) |
|
2,940 |
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Gain on contract termination(1)
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— |
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(20,612 |
) |
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— |
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Other |
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3,375 |
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|
7,403 |
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|
4,874 |
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Segment Adjusted EBITDA |
|
$ |
514,424 |
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$ |
500,923 |
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$ |
483,715 |
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(1)
Includes the non-cash write-off of a long-term supply contract obligation (see Note 26), which was recorded as a reduction in other operating expense, net in the consolidated statement of income for the year ended December 31, 2018.
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| Capital Expenditures from Segment to Consolidated |
Capital expenditures for the Company’s reportable segments are shown in the following table:
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Years ended
December 31, |
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|
2019 |
|
2018 |
|
2017 |
Capital expenditures: |
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Refining Services |
|
$ |
42,310 |
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$ |
46,617 |
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$ |
42,876 |
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Catalysts(1)
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|
8,984 |
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|
8,390 |
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|
10,269 |
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Performance Materials |
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16,074 |
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|
18,001 |
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|
20,394 |
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Performance Chemicals |
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54,683 |
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|
57,475 |
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|
64,389 |
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Corporate(2)
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|
5,591 |
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|
1,205 |
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|
2,554 |
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Capital expenditures per the consolidated statements of cash flows |
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$ |
127,642 |
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$ |
131,688 |
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$ |
140,482 |
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(1) |
Excludes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture. |
(2)
Includes corporate capital expenditures, the cash impact from changes in capital expenditures in accounts payable and capitalized interest.
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| Revenue from External Customers by Geographic Areas |
Sales and long-lived assets by geographic area are presented in the following tables. Sales are attributed to countries based upon location of products shipped.
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Years ended
December 31, |
|
|
2019 |
|
2018 |
|
2017 |
Sales(1):
|
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|
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|
United States |
|
$ |
953,511 |
|
|
$ |
963,722 |
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$ |
874,764 |
|
Netherlands |
|
117,211 |
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|
127,803 |
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|
118,567 |
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United Kingdom |
|
118,626 |
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|
119,586 |
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|
116,410 |
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Other foreign countries |
|
377,724 |
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|
397,043 |
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|
362,360 |
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Total |
|
$ |
1,567,072 |
|
|
$ |
1,608,154 |
|
|
$ |
1,472,101 |
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(1)
Except for the United States, no sales in an individual country exceeded 10% of the Company’s total sales.
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| Long-lived Assets by Geographic Areas |
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December 31, |
|
|
2019 |
|
2018 |
Long-lived assets(1):
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United States |
|
$ |
834,229 |
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$ |
865,799 |
|
Netherlands |
|
49,559 |
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|
52,461 |
|
United Kingdom |
|
97,426 |
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|
90,095 |
|
Other foreign countries |
|
205,556 |
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|
200,624 |
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Total |
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$ |
1,186,770 |
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$ |
1,208,979 |
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(1)
Long-lived assets include property, plant and equipment, net.
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