Reportable Segments (Tables)
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12 Months Ended |
Dec. 31, 2018 |
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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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2018 |
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2017 |
|
2016 |
Sales: |
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Silica Catalysts |
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$ |
72,099 |
|
|
$ |
75,333 |
|
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$ |
53,029 |
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Refining Services |
|
455,562 |
|
|
398,342 |
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|
373,718 |
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Environmental Catalysts & Services(1)
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|
527,661 |
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473,675 |
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426,747 |
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|
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|
|
|
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Performance Chemicals |
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$ |
717,335 |
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$ |
687,645 |
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$ |
437,523 |
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Performance Materials |
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378,279 |
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|
324,225 |
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|
206,522 |
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Eliminations |
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(11,798 |
) |
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(10,021 |
) |
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(5,094 |
) |
Performance Materials & Chemicals |
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1,083,816 |
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|
1,001,849 |
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638,951 |
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Inter-segment sales eliminations(2)
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(3,323 |
) |
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(3,423 |
) |
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(1,521 |
) |
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Total |
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$ |
1,608,154 |
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$ |
1,472,101 |
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$ |
1,064,177 |
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Segment Adjusted EBITDA:(3)
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Environmental Catalysts & Services(4)
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$ |
257,566 |
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$ |
243,587 |
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$ |
196,825 |
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Performance Materials & Chemicals |
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243,357 |
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|
240,128 |
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|
158,679 |
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Total Segment Adjusted EBITDA(5)
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$ |
500,923 |
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$ |
483,715 |
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$ |
355,504 |
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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 11 to these consolidated consolidated financial statements for further information). The proportionate share of sales is $156,687, $143,774 and $94,516 for the years ended December 31, 2018, 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 $56,663 for the year ended December 31, 2018, which includes $42,854 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.
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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 $46,252 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 $39,903 for the year ended December 31, 2016, which includes $3,313 of equity in net loss plus $36,296 of amortization of investment in affiliate step-up plus $6,920 of joint venture depreciation, amortization and interest.
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(5)
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Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses. |
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| Reconciliation of Net Loss to Segment Adjusted EBITDA |
A reconciliation of net income (loss) attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:
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Years ended
December 31, |
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2018 |
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2017 |
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2016 |
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA |
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Net income (loss) attributable to PQ Group Holdings Inc. |
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$ |
58,300 |
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$ |
57,603 |
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$ |
(79,746 |
) |
Provision for (benefit from) income taxes |
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28,995 |
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(119,197 |
) |
|
10,041 |
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Interest expense, net |
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113,723 |
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|
179,044 |
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|
140,315 |
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Depreciation and amortization |
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185,234 |
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|
177,140 |
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|
128,288 |
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Segment EBITDA |
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386,252 |
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|
294,590 |
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|
198,898 |
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Unallocated corporate expenses |
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36,970 |
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30,422 |
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23,971 |
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Joint venture depreciation, amortization and interest |
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12,592 |
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11,070 |
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6,920 |
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Amortization of investment in affiliate step-up |
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6,634 |
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8,600 |
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36,296 |
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Amortization of inventory step-up |
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1,603 |
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|
871 |
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29,086 |
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Impairment of fixed assets, intangibles and goodwill |
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— |
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— |
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6,873 |
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Debt extinguishment costs |
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7,751 |
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61,886 |
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13,782 |
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Net loss on asset disposals |
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6,574 |
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|
5,793 |
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4,216 |
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Foreign currency exchange loss (gain) |
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13,810 |
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25,786 |
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(3,558 |
) |
LIFO expense |
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8,366 |
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|
3,708 |
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|
1,310 |
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Management advisory fees |
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— |
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|
3,777 |
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|
3,583 |
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Transaction and other related costs |
|
893 |
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7,425 |
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|
4,664 |
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Equity-based compensation |
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19,464 |
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|
8,799 |
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|
7,042 |
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Restructuring, integration and business optimization expenses |
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14,019 |
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13,174 |
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|
16,258 |
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Defined benefit pension plan cost |
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(796 |
) |
|
2,940 |
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|
1,375 |
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Gain on contract termination(1)
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(20,612 |
) |
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— |
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— |
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Other |
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7,403 |
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|
4,874 |
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|
4,788 |
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Segment Adjusted EBITDA |
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$ |
500,923 |
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$ |
483,715 |
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$ |
355,504 |
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(1) |
Includes the non-cash write-off of a long-term supply contract obligation (see Note 25), which was recorded as a reduction in other operating expense, net in the consolidated statement of operations for the year ended December 31, 2018.
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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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|
2018 |
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2017 |
|
2016 |
Capital expenditures: |
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Environmental Catalysts & Services(1)
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$ |
55,007 |
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$ |
53,145 |
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$ |
57,803 |
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Performance Materials & Chemicals |
|
75,476 |
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|
84,783 |
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|
71,293 |
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Corporate(2)
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1,205 |
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|
2,554 |
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(7,675 |
) |
Capital expenditures per the consolidated statements of cash flows |
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$ |
131,688 |
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$ |
140,482 |
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$ |
121,421 |
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(1) |
Excludes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture. |
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(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, |
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2018 |
|
2017 |
|
2016 |
Sales(1):
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United States |
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$ |
963,722 |
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$ |
874,764 |
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$ |
705,348 |
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Netherlands |
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127,803 |
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|
118,567 |
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|
79,821 |
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United Kingdom |
|
119,586 |
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|
116,410 |
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|
67,494 |
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Other foreign countries |
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397,043 |
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|
362,360 |
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|
211,514 |
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Total |
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$ |
1,608,154 |
|
|
$ |
1,472,101 |
|
|
$ |
1,064,177 |
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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, |
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|
2018 |
|
2017 |
Long-lived assets(1):
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United States |
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$ |
865,799 |
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$ |
891,861 |
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Netherlands |
|
52,461 |
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|
52,882 |
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United Kingdom |
|
90,095 |
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|
90,536 |
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Other foreign countries |
|
200,624 |
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|
195,105 |
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Total |
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$ |
1,208,979 |
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$ |
1,230,384 |
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(1) |
Long-lived assets include property, plant and equipment, net. |
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