Quarterly report pursuant to Section 13 or 15(d)

Reportable Segments (Tables)

v3.8.0.1
Reportable Segments (Tables)
9 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Reconciliation of Revenue from Reportable Segments to Consolidated
Summarized financial information for the Company’s (1) Performance Materials & Chemicals and (2) Environmental Catalysts & Services reportable segments is shown in the following table:
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2017
 
2016
 
2017
 
2016
Net sales:
 
 
 
 
 
 
 
Performance Materials & Chemicals
$
277,072

 
$
256,219

 
$
765,781

 
$
429,867

Environmental Catalysts & Services(1)   
115,541

 
114,271

 
350,814

 
312,490

Eliminations(2)   
(784
)
 
(511
)
 
(2,568
)
 
(911
)
Total
$
391,829

 
$
369,979

 
$
1,114,027

 
$
741,446

Segment Adjusted EBITDA:(3)
 
 
 
 
 
 
 
Performance Materials & Chemicals
$
65,885

 
$
64,604

 
$
184,741

 
$
111,178

Environmental Catalysts & Services(4)   
61,900

 
56,341

 
182,578

 
135,044

Total Segment Adjusted EBITDA(5)   
$
127,785

 
$
120,945

 
$
367,319

 
$
246,222

 
 
 
 
 
 
 
 
—————
(1) 
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 condensed consolidated financial statements for further information). The proportionate share of sales is $37,622 and $28,184 for the three months ended September 30, 2017 and 2016, respectively. The proportionate share of sales is $100,991 and $48,461 for the nine months ended September 30, 2017 and 2016, respectively.
(2) 
The Company eliminates intersegment sales when reconciling to the Company’s consolidated statements of operations.
(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 environmental catalyst and services segment is $14,398 for the three months ended September 30, 2017, which includes $10,151 of equity in net income plus $1,658 of amortization of investment in affiliate step-up plus $2,563 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the environmental catalyst and services segment is $10,316 for the three months ended September 30, 2016, which includes $4,683 of equity in net loss plus $12,291 of amortization of investment in affiliate step-up plus $2,690 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the environmental catalyst and services segment is $39,690 for the nine months ended September 30, 2017, which includes $24,594 of equity in net income plus $6,941 of amortization of investment in affiliate step-up plus $8,073 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the environmental catalyst and services segment is $19,962 for the nine months ended September 30, 2016, which includes $9,213 of equity in net loss plus $24,606 of amortization of investment in affiliate step-up plus $4,534 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 Loss to Segment Adjusted EBITDA
A reconciliation from net loss to Segment Adjusted EBITDA is as follows:
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2017
 
2016
 
2017
 
2016
Reconciliation of net loss attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA
 
 
 
 
 
 
 
Net loss attributable to PQ Group Holdings Inc.
$
(3,345
)
 
$
(10,017
)
 
$
(7,408
)
 
$
(90,410
)
Provision for (benefit from) income taxes
5,172

 
(3,536
)
 
5,269

 
36,013

Interest expense, net
49,079

 
48,610

 
144,041

 
94,362

Depreciation and amortization
45,929

 
43,611

 
129,135

 
85,602

Segment EBITDA
96,835

 
78,668

 
271,037

 
125,567

Unallocated corporate expenses
7,885

 
7,316

 
23,474

 
13,940

Joint venture depreciation, amortization and interest
2,563

 
2,690

 
8,073

 
4,534

Amortization of investment in affiliate step-up
1,660

 
12,291

 
6,942

 
24,606

Amortization of inventory step-up

 
5,804

 
871

 
23,518

Debt extinguishment costs
453

 

 
453

 
11,858

Losses on disposal of fixed assets
3,494

 
627

 
6,419

 
2,288

Foreign currency exchange losses
5,256

 
3,151

 
21,612

 
6,240

Non-cash revaluation of inventory, including LIFO
750

 
329

 
3,229

 
775

Management advisory fees
1,250

 
1,250

 
3,750

 
2,333

Transaction and other related costs
966

 
1,696

 
5,300

 
6,240

Equity-based and other non-cash compensation
1,041

 
1,137

 
3,869

 
4,916

Restructuring, integration and business optimization expenses
4,957

 
2,839

 
8,009

 
14,567

Defined benefit pension plan cost
791

 
1,244

 
2,200

 
2,642

Other
(116
)
 
1,903

 
2,081

 
2,198

Segment Adjusted EBITDA   
$
127,785

 
$
120,945

 
$
367,319

 
$
246,222