Reportable Segments (Tables)
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12 Months Ended |
Dec. 31, 2017 |
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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 and product groups is shown in the following table:
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Years ended
December 31, |
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2017 |
|
2016 |
|
2015 |
Net sales: |
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|
|
|
Performance Chemicals |
|
$ |
687,645 |
|
|
$ |
437,523 |
|
|
$ |
— |
|
Performance Materials |
|
324,225 |
|
|
206,522 |
|
|
— |
|
Eliminations |
|
(10,021 |
) |
|
(5,094 |
) |
|
— |
|
Performance Materials & Chemicals |
|
1,001,849 |
|
|
638,951 |
|
|
— |
|
|
|
|
|
|
|
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Silica Catalysts |
|
75,333 |
|
|
53,029 |
|
|
— |
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Refining Services |
|
398,342 |
|
|
373,718 |
|
|
388,875 |
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Environmental Catalysts & Services(1)
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|
473,675 |
|
|
426,747 |
|
|
388,875 |
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Inter-segment sales eliminations(2)
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(3,423 |
) |
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(1,521 |
) |
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— |
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Total |
|
$ |
1,472,101 |
|
|
$ |
1,064,177 |
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|
$ |
388,875 |
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Segment Adjusted EBITDA:(3)
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Performance Materials & Chemicals |
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$ |
240,128 |
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$ |
158,679 |
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$ |
— |
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Environmental Catalysts & Services(4)
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|
243,587 |
|
|
196,825 |
|
|
117,704 |
|
Total Segment Adjusted EBITDA(5)
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|
$ |
483,715 |
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|
$ |
355,504 |
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|
$ |
117,704 |
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(1)
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Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 10 to these consolidated consolidated financial statements for further information). The proportionate share of sales is $143,774 and $94,516 for the years ended December 31, 2017 and 2016, respectively.
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(2)
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The Company eliminates intersegment sales when reconciling to the Company’s consolidated statements of operations. |
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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 Environmental Catalysts and Services segment is $58,156 for the year ended December 31, 2017, which includes $46,985 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. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $40,687 for the year ended December 31, 2016, which includes $33,716 of equity in net income plus $36,296 of amortization of investment in affiliate step-up plus $6,920 of joint venture depreciation, amortization and interest.
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(5)
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Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses. |
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| Reconciliation of Net Loss to Segment Adjusted EBITDA |
A reconciliation from net income (loss) to Segment Adjusted EBITDA is as follows:
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Years ended
December 31, |
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2017 |
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2016 |
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2015 |
Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA |
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Net income (loss) attributable to PQ Group Holdings Inc. |
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$ |
57,603 |
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|
$ |
(79,746 |
) |
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$ |
11,427 |
|
Provision for (benefit from) income taxes |
|
(119,197 |
) |
|
10,041 |
|
|
— |
|
Interest expense, net |
|
179,044 |
|
|
140,315 |
|
|
44,348 |
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Depreciation and amortization |
|
177,140 |
|
|
128,288 |
|
|
38,999 |
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Segment EBITDA |
|
294,590 |
|
|
198,898 |
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|
94,774 |
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Unallocated corporate expenses |
|
30,422 |
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|
23,971 |
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— |
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Joint venture depreciation, amortization and interest |
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11,070 |
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|
6,920 |
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— |
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Amortization of investment in affiliate step-up |
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8,600 |
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36,296 |
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— |
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Amortization of inventory step-up |
|
871 |
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|
29,086 |
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— |
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Impairment of fixed assets, intangibles and goodwill |
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— |
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|
6,873 |
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— |
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Debt extinguishment costs |
|
61,886 |
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|
13,782 |
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|
— |
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Losses on disposal of fixed assets |
|
5,793 |
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|
4,216 |
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|
3,911 |
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Foreign currency exchange losses |
|
25,786 |
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(3,558 |
) |
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— |
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Non-cash revaluation of inventory, including LIFO |
|
3,708 |
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|
1,310 |
|
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— |
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Management advisory fees |
|
3,777 |
|
|
3,583 |
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|
590 |
|
Transaction and other related costs |
|
7,425 |
|
|
4,664 |
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|
4,241 |
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Equity-based and other non-cash compensation |
|
8,799 |
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|
7,042 |
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|
2,256 |
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Restructuring, integration and business optimization expenses |
|
13,174 |
|
|
16,258 |
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|
4,147 |
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Defined benefit pension plan cost |
|
2,940 |
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|
1,375 |
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|
2,903 |
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Other(1)
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|
4,874 |
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|
4,788 |
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|
4,882 |
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Segment Adjusted EBITDA
|
|
$ |
483,715 |
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$ |
355,504 |
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$ |
117,704 |
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(1) |
Other includes certain legal and environmental costs and other charges such as capital taxes, asset retirement obligation accretion and other expenses. |
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| Reconciliation of Assets 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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2017 |
|
2016 |
|
2015 |
Capital expenditures: |
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Performance Materials & Chemicals |
|
$ |
87,938 |
|
|
$ |
74,392 |
|
|
$ |
— |
|
Environmental Catalysts & Services(1)
|
|
66,511 |
|
|
74,921 |
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|
41,854 |
|
Eliminations(1)
|
|
(13,366 |
) |
|
(19,001 |
) |
|
— |
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Total |
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$ |
141,083 |
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|
$ |
130,312 |
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$ |
41,854 |
|
Change in non-cash capital expenditures in accounts payable |
|
(601 |
) |
|
(8,891 |
) |
|
(860 |
) |
Capital expenditures per the consolidated statement of cash flows |
|
$ |
140,482 |
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$ |
121,421 |
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$ |
40,994 |
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(1) |
Includes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture. The proportionate share of capital expenditures included in the EC&S segment is $13,366 and $19,001 for the Zeolyst Joint Venture for the years ended December 31, 2017 and 2016, respectively. These capital expenditures are in turn removed in the “Eliminations” line item to reconcile to the Company’s consolidated capital expenditures.
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| Revenue from External Customers by Geographic Areas |
Net sales and long-lived assets by geographic area are presented in the following tables. Net sales are attributed to countries based upon location of products shipped.
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Years ended
December 31, |
|
|
2017 |
|
2016 |
|
2015 |
Net sales(1):
|
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|
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|
United States |
|
$ |
874,764 |
|
|
$ |
705,348 |
|
|
$ |
388,875 |
|
Netherlands |
|
118,567 |
|
|
79,821 |
|
|
— |
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United Kingdom |
|
116,410 |
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|
67,494 |
|
|
— |
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Other foreign countries |
|
362,360 |
|
|
211,514 |
|
|
— |
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Total |
|
$ |
1,472,101 |
|
|
$ |
1,064,177 |
|
|
$ |
388,875 |
|
|
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(1) |
Except for the United States, no sales in an individual country exceeded 10% of the Company’s total net sales. |
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| Long-lived Assets by Geographic Areas |
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Years ended
December 31, |
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|
2017 |
|
2016 |
|
2015 |
Long-lived assets(1):
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United States |
|
$ |
2,919,458 |
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|
$ |
2,870,958 |
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$ |
936,111 |
|
Netherlands |
|
289,459 |
|
|
288,239 |
|
|
— |
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United Kingdom |
|
229,595 |
|
|
228,924 |
|
|
— |
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Other foreign countries |
|
425,675 |
|
|
378,872 |
|
|
— |
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Total |
|
$ |
3,864,187 |
|
|
$ |
3,766,993 |
|
|
$ |
936,111 |
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(1) |
Long-lived assets exclude intercompany notes receivable and deferred tax assets. |
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