Quarterly report pursuant to Section 13 or 15(d)

Reportable Segments (Tables)

v3.19.1
Reportable Segments (Tables)
3 Months Ended
Mar. 31, 2019
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:
 
 
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