Annual report pursuant to Section 13 and 15(d)

Reportable Segments (Tables)

v3.20.4
Reportable Segments (Tables)
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Reconciliation of Revenue from Reportable Segments to Consolidated
Summarized financial information for the Company’s reportable segments is shown in the following table:
Years ended
December 31,
2020 2019 2018
Sales:
Refining Services $ 401,913  $ 447,081  $ 455,562 
Catalysts(1)
94,007  85,667  72,099 
Performance Chemicals 614,704  670,563  704,502 
Eliminations(2)
(3,261) (3,397) (3,237)
Total $ 1,107,363  $ 1,199,914  $ 1,228,926 
Segment Adjusted EBITDA:(3)
Refining Services $ 157,198  $ 175,640  $ 176,499 
Catalysts(4)
74,504  107,808  81,067 
Performance Chemicals 142,372  151,547  168,196 
Total Segment Adjusted EBITDA(5)
$ 374,074  $ 434,995  $ 425,762 

(1)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 $128,623, $170,338 and $156,687 for the years ended December 31, 2020, 2019 and 2018, respectively.
(2)The Company eliminates intersegment sales when reconciling to the Company’s consolidated statements of income.
(3)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.
(4)     The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $42,515 for the year ended December 31, 2020, which includes $21,157 of equity in net income plus $6,634 of amortization of investment in affiliate step-up plus $14,724 of joint venture depreciation, amortization and interest.
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.
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.
(5)     Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses.
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:
Years ended
December 31,
2020 2019 2018
Reconciliation of net (loss) income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA
Net (loss) income from continuing operations $ (176,265) $ 65,136  $ 49,271 
(Benefit) provision for income taxes (48,122) 39,677  33,641 
Interest expense, net 66,979  87,072  90,758 
Depreciation and amortization 151,840  151,797  153,931 
Segment EBITDA (5,568) 343,682  327,601 
Joint venture depreciation, amortization and interest 14,724  14,705  12,592 
Amortization of investment in affiliate step-up 6,634  7,534  6,634 
Goodwill impairment charge 260,000  —  — 
Debt extinguishment costs 25,028  3,400  7,751 
Net (gain) loss on asset disposals (134) (13,207) 4,190 
Foreign currency exchange (gain) loss (4,172) 2,410  12,543 
LIFO (benefit) expense (5,229) 9,700  3,039 
Transaction and other related costs 8,618  415  490 
Equity-based compensation 21,527  16,212  18,419 
Restructuring, integration and business optimization expenses 15,596  3,554  8,707 
Defined benefit pension plan cost 12  2,960  411 
Gain on contract termination(1)
—  —  (20,612)
Other 959  2,597  6,155 
Adjusted EBITDA 337,995  393,962  387,920 
Unallocated corporate expenses 36,079  41,033  37,842 
Segment Adjusted EBITDA $ 374,074  $ 434,995  $ 425,762 

(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 income for the year ended December 31, 2018.
Capital Expenditures from Segment to Consolidated
Capital expenditures for the Company’s reportable segments are shown in the following table:
  Years ended
December 31,
  2020 2019 2018
Capital expenditures:    
Refining Services $ 31,799  $ 42,310  $ 46,617 
Catalysts(1)
11,177  8,984  8,390 
Performance Chemicals 40,864  53,910  56,759 
Corporate(2)
13,295  5,898  29 
Capital expenditures per the consolidated statements of cash flows $ 97,135  $ 111,102  $ 111,795 

(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.
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.
Years ended
December 31,
2020 2019 2018
Sales(1):
   
United States $ 655,015  $ 735,752  $ 740,190 
Netherlands 108,338  117,211  127,803 
United Kingdom 107,539  99,048  101,277 
Other foreign countries 236,471  247,903  259,656 
Total $ 1,107,363  $ 1,199,914  $ 1,228,926 

(1)    Except for the United States, no sales in an individual country exceeded 10% of the Company’s total sales.
Long-lived Assets by Geographic Areas
December 31,
2020 2019
Long-lived assets(1):
   
United States $ 749,635  $ 784,699 
Netherlands 53,006  49,559 
United Kingdom 100,392  92,229 
Other foreign countries 128,441  133,086 
Total $ 1,031,474  $ 1,059,573 

(1)    Long-lived assets includes property, plant and equipment, net and right-of-use lease assets.