Quarterly report pursuant to Section 13 or 15(d)

Reportable Segments (Tables)

v3.20.2
Reportable Segments (Tables)
 6 Months Ended
Jun. 30, 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:
Three months ended
June 30,		 Six months ended
June 30,
2020 2019 2020 2019
Sales:
Refining Services $ 90,432    $ 117,290    $ 191,123    $ 223,134   
Catalysts(1)
25,208    20,857    50,072    36,723   
Performance Materials 104,203    118,872    169,772    179,961   
Performance Chemicals 142,641    177,828    316,920    358,290   
Eliminations(2)
(2,959)   (3,172)   (6,764)   (7,212)  
Total $ 359,525    $ 431,675    $ 721,123    $ 790,896   
 Segment Adjusted EBITDA:(3)
Refining Services
 $ 34,996    $ 42,824    $ 72,179    $ 82,555   
Catalysts(4)
25,312    29,607    47,979    47,734   
Performance Materials
 27,306    29,221    40,813    39,736   
Performance Chemicals
 34,011    41,165    74,485    83,838   
 Total Segment Adjusted EBITDA(5)
$ 121,625    $ 142,817    $ 235,456    $ 253,863   

(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 11 to these condensed consolidated financial statements for further information). The proportionate share of sales is $40,852 and $39,124 for the three months ended June 30, 2020 and 2019, respectively. The proportionate share of sales is $73,143 and $68,602 for the six months ended June 30, 2020 and 2019, 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 $16,855 for the three months ended June 30, 2020, which includes $11,489 of equity in net income plus $1,659 of amortization of investment in affiliate step-up and $3,707 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $17,636 for the three months ended June 30, 2019, which includes $12,264 of equity in net income plus $1,659 of amortization of investment in affiliate step-up and $3,713 of joint venture depreciation, amortization and interest.
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $30,580 for the six months ended June 30, 2020, which includes $19,806 of equity in net income plus $3,317 of amortization of investment in affiliate step-up and $7,457 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $25,993 for the six months ended June 30, 2019, which includes $14,300 of equity in net income plus $4,217 of amortization of investment in affiliate step-up and $7,476 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
June 30,		 Six months ended
June 30,
2020 2019 2020 2019
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA
Net income attributable to PQ Group Holdings Inc. $ 15,926    $ 30,574    $ 16,150    $ 33,725   
Provision for income taxes 16,262    20,307    17,689    22,754   
Interest expense, net 22,275    28,540    46,730    57,158   
Depreciation and amortization 44,822    45,090    90,493    90,984   
Segment EBITDA 99,285    124,511    171,062    204,621   
Joint venture depreciation, amortization and interest 3,708    3,713    7,457    7,476   
Amortization of investment in affiliate step-up 1,659    1,659    3,317    4,217   
Debt extinguishment costs —    —    2,513    —   
Net (gain) loss on asset disposals (1,020)   (9,653)   8,401    (8,833)  
Foreign currency exchange (gain) loss (854)   3,612    2,483    923   
LIFO expense (1,469)   122    (1,798)   10,280   
Transaction and other related costs 739    975    2,801    1,055   
Equity-based compensation 6,366    5,370    12,286    8,770   
Restructuring, integration and business optimization expenses 3,591    (13)   5,620    719   
Defined benefit pension plan (benefit) cost (252)   552    (500)   1,545   
Other 1,284    1,605    2,538    2,721   
Adjusted EBITDA 113,037    132,453    216,180    233,494   
Unallocated corporate expenses 8,588    10,364    19,276    20,369   
Segment Adjusted EBITDA $ 121,625    $ 142,817    $ 235,456    $ 253,863