Annual report pursuant to Section 13 and 15(d)

Earnings per Share

v3.8.0.1
Earnings per Share
12 Months Ended
Dec. 31, 2017
Earnings Per Share [Abstract]  
Earnings per Share
20. Earnings per Share:
During the year ended December 31, 2015 to May 4, 2016, the date of the Business Combination, the Company was structured as a single member LLC, with capital contributions from affiliates of CCMP, the Company’s board of managers and management represented by a class of membership units (“Eco Services Class A Units” or “Eco Services membership units”). During this period, Eco Services also granted incentive awards to certain employees, directors and affiliates in the form of Class B Units of Eco Services (the “Eco Services Class B Units”), which provided recipients with the option to purchase Eco Services Class A Units upon the attainment of certain vesting and other restrictions (see Note 21 to these consolidated financial statements for further information regarding the Company’s equity incentive plans). At the date of the Business Combination, the existing Eco Services Class A Units and legacy PQ Holdings equity were converted to common stock of PQ Group Holdings. None of the Eco Class B Units had been exercised prior to the Business Combination, and all Eco Class B Units converted to common stock options of PQ Group Holdings at the date of the Business Combination (see Note 21).
The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes restricted stock awards that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares (see Note 21 to these consolidated financial statements for further information regarding outstanding nonvested restricted stock awards). Basic earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period for each class of common stock, if dilutive. Potential shares reflect unvested restricted stock awards and restricted stock units with service conditions as well as options to purchase common stock, which have been included in the diluted earnings per share calculation using the treasury stock method.
For both the basic and dilutive weighted average shares calculations, as a result of the Business Combination, the number of Eco Services membership units outstanding from January 1, 2016 through May 4, 2016, the date of the Business Combination, as well as for the year ended December 31, 2015, were computed on the basis of the weighted average units outstanding for Eco Services during the respective periods multiplied by the exchange ratio established for common stock as part of the Business Combination.
The reconciliation from basic to diluted weighted average shares outstanding is as follows:
 
 
Years ended
December 31,
 
 
2017
 
2016
 
2015
Weighted average shares outstanding – Basic
 
111,299,670

 
78,016,005

 
22,615,787

Dilutive effect of unvested common shares with service conditions and assumed stock option exercises and conversions
 
369,367

 

 

Weighted average shares outstanding – Diluted
 
111,669,037

 
78,016,005

 
22,615,787

 
 
 
 
 
 
 
Basic and diluted earnings per share are calculated as follows:
 
 
Years ended
December 31,
 
 
2017
 
2016
 
2015
Numerator:
 
 
 
 
 
 
Net income (loss) attributable to PQ Group Holdings Inc.
 
$
57,603

 
$
(79,746
)
 
$
11,427

 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
Weighted average shares outstanding – Basic
 
111,299,670

 
78,016,005

 
22,615,787

Weighted average shares outstanding – Diluted
 
111,669,037

 
78,016,005

 
22,615,787

Net income (loss) per share:
 
 
 
 
 
 
Basic income (loss) per share
 
$
0.52

 
$
(1.02
)
 
$
0.51

Diluted income (loss) per share
 
$
0.52

 
$
(1.02
)
 
$
0.51

 
 
 
 
 
 
 

The table below presents the details of the Company’s equity-based awards outstanding at the end of each respective year that were excluded from the calculation of diluted earnings per share:
 
 
December 31,
 
 
2017
 
2016
 
2015
Restricted stock awards with performance only targets not yet achieved
 
1,769,447

 
1,731,522

 

Stock options with performance only targets not yet achieved
 
586,523

 
417,086

 
293,150

Anti-dilutive restricted stock awards and restricted stock units
 

 
751,410

 

Anti-dilutive stock options
 
621,747

 
1,381,352

 
1,085,152


Restricted stock awards and stock options with performance only vesting conditions are not included in the dilution calculation, as the performance targets have not been achieved as of the end of the respective years. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.