| Reconciliation of Revenue from Reportable Segments to Consolidated |
Summarized financial information for the Company’s reportable segments is shown in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, |
|
|
2019 |
|
2018 |
Sales: |
|
|
|
|
Refining Services |
|
$ |
105,844 |
|
|
$ |
100,714 |
|
Catalysts(1)
|
|
15,866 |
|
|
16,473 |
|
Performance Materials |
|
61,089 |
|
|
62,742 |
|
Performance Chemicals |
|
180,462 |
|
|
189,963 |
|
Eliminations(2)
|
|
(4,040 |
) |
|
(3,695 |
) |
Total |
|
$ |
359,221 |
|
|
$ |
366,197 |
|
|
|
|
|
|
Segment Adjusted EBITDA:(3)
|
|
|
|
|
Refining Services |
|
$ |
39,731 |
|
|
$ |
35,532 |
|
Catalysts(4)
|
|
18,127 |
|
|
22,889 |
|
Performance Materials |
|
10,515 |
|
|
12,058 |
|
Performance Chemicals |
|
42,673 |
|
|
45,094 |
|
Total Segment Adjusted EBITDA(5)
|
|
$ |
111,046 |
|
|
$ |
115,573 |
|
|
|
|
|
|
|
|
(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 9 to these condensed consolidated financial statements for further information). The proportionate share of sales is $29,478 and $38,349 for the three months ended March 31, 2019 and 2018, respectively.
|
|
|
(2)
|
The Company eliminates intersegment sales when reconciling to the Company’s condensed 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 $8,357 for the three months ended March 31, 2019, which includes $2,036 of equity in net income plus $2,558 of amortization of investment in affiliate step-up and $3,763 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $16,807 for the three months ended March 31, 2018, which includes $11,826 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,323 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:
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, |
|
|
2019 |
|
2018 |
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA |
|
|
|
|
Net income attributable to PQ Group Holdings Inc. |
|
$ |
3,151 |
|
|
$ |
214 |
|
Provision (benefit) for income taxes |
|
2,447 |
|
|
(529 |
) |
Interest expense, net |
|
28,618 |
|
|
29,163 |
|
Depreciation and amortization |
|
45,894 |
|
|
48,488 |
|
Segment EBITDA |
|
80,110 |
|
|
77,336 |
|
Unallocated corporate expenses |
|
10,005 |
|
|
7,688 |
|
Joint venture depreciation, amortization and interest |
|
3,763 |
|
|
3,323 |
|
Amortization of investment in affiliate step-up |
|
2,558 |
|
|
1,658 |
|
Amortization of inventory step-up |
|
— |
|
|
1,603 |
|
Debt extinguishment costs |
|
— |
|
|
5,879 |
|
Net loss on asset disposals |
|
820 |
|
|
1,152 |
|
Foreign currency exchange (gain) loss |
|
(2,689 |
) |
|
5,063 |
|
LIFO expense |
|
10,158 |
|
|
4,926 |
|
Transaction and other related costs |
|
80 |
|
|
428 |
|
Equity-based compensation |
|
3,400 |
|
|
3,831 |
|
Restructuring, integration and business optimization expenses |
|
732 |
|
|
1,079 |
|
Defined benefit pension plan cost |
|
993 |
|
|
550 |
|
Other |
|
1,116 |
|
|
1,057 |
|
Segment Adjusted EBITDA |
|
$ |
111,046 |
|
|
$ |
115,573 |
|
|
|
|
|
|
|