Annual report pursuant to Section 13 and 15(d)

Schedule I

v3.8.0.1
Schedule I
 12 Months Ended
Dec. 31, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Financial Information
SCHEDULE I
PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands)

 
Years ended
December 31,
 
2017
 
2016
Stock compensation expense
$
8,799

 
$
7,029

Equity in income (loss) of subsidiaries
66,402

 
(72,717
)
Net income (loss)
57,603

 
(79,746
)
Other comprehensive income (loss), net of tax:
 
 
 
Pension and postretirement benefits
(101
)
 
6,865

Net (loss) gain from hedging activities
(3,590
)
 
4,557

Foreign currency translation
61,713

 
(65,781
)
Total other comprehensive income (loss)
58,022

 
(54,359
)
Comprehensive income (loss)
$
115,625

 
$
(134,105
)
 
 
 
 
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, 2017
 
December 31, 2016
ASSETS
 
 
 
Total current assets
$
—

 
$
—

Investment in subsidiaries
1,628,000

 
1,022,880

Total assets
$
1,628,000

 
$
1,022,880

LIABILITIES
 
 
 
Total current liabilities
$
—

 
$
—

Total liabilities
—

 
—

STOCKHOLDERS' EQUITY
 
 
 
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 135,244,379 and 106,452,330 on December 31, 2017 and December 31, 2016, respectively; outstanding shares 135,244,379 and 106,430,811 on December 31, 2017 and December 31, 2016, respectively
1,352

 
73

Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on December 31, 2017 and December 31, 2016
—

 
—

Additional paid-in capital
1,655,114

 
1,167,137

Accumulated deficit
(32,327
)
 
(90,380
)
Treasury stock, at cost; shares 21,519 on December 31, 2016
—

 
(239
)
Accumulated other comprehensive income (loss)
4,311

 
(53,711
)
Total PQ Group Holdings Inc. equity
1,628,000

 
1,022,880

Total liabilities and equity
$
1,628,000

 
$
1,022,880

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

 
Years ended
December 31,
 
2017
 
2016
Cash flows from operating activities:
 
 
 
Net income (loss)
$
57,603

 
$
(79,746
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Equity in net (income) loss from subsidiaries
(66,402
)
 
72,717

Stock compensation expense
8,799

 
7,029

Net cash provided by operating activities
—

 
—

Cash flows from investing activities:
 
 
 
Investment in subsidiaries
(480,696
)
 
—

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

Cash flows from financing activities:
 
 
 
IPO proceeds
507,500

 
—

IPO costs
(26,804
)
 
—

Net cash provided by financing activities
480,696

 
—

Effect of exchange rate changes on cash and cash equivalents
—

 
—

Net change in cash and cash equivalents
—

 
—

Cash and cash equivalents at beginning of period
—

 
—

Cash and cash equivalents 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
On August 17, 2015, PQ Holdings Inc. (“PQ Holdings”), Eco Services Operations LLC (“Eco Services”), certain investment funds affiliated with CCMP Capital Advisors, LLC (now known as CCMP Capital Advisors, LP; “CCMP”), and stockholders of PQ Holdings and Eco Services entered into a reorganization and transaction agreement pursuant to which the companies consummated a series of transactions to reorganize and combine the businesses of PQ Holdings and Eco Services (the “Business Combination”), under a new holding company, PQ Group Holdings Inc. (“PQ Group Holdings” or the “Parent Company”). The Business Combination was consummated on May 4, 2016.
In accordance with accounting principles generally accepted in the United States (“GAAP”), Eco Services is the accounting predecessor to PQ Group Holdings. Certain investment funds affiliated with CCMP held a controlling interest position in Eco Services prior to the Business Combination. In addition, certain investment funds affiliated with CCMP owned a non-controlling interest in PQ Holdings prior to the Business Combination and the merger with Eco Services constituted a change in control under the PQ Holdings credit agreements and bond indenture that were in place at the time of the Business Combination. Therefore, Eco Services is deemed to be the accounting acquirer. These Parent Company condensed financial statements are the continuation of Eco Services’ business prior to the Business Combination.
PQ Group Holdings 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 the Business Combination, there are restrictions on the ability of PQ Corporation to make payments to its stockholder, PQ Group Holdings, on behalf of their equity interests (refer to Note 15 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 21 of the notes to the PQ Group Holdings consolidated financial statements for a description of stock-based compensation.
4. Common Stock
Refer to Note 20 of the notes to the PQ Group Holdings consolidated financial statements for a description of common stock.