| 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
September 30, |
|
Nine months ended
September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Sales: |
|
|
|
|
|
|
|
|
Refining Services |
|
$ |
118,335 |
|
|
$ |
123,369 |
|
|
$ |
341,469 |
|
|
$ |
336,154 |
|
Catalysts(1)
|
|
25,612 |
|
|
16,347 |
|
|
62,335 |
|
|
50,167 |
|
Performance Materials |
|
115,134 |
|
|
115,380 |
|
|
295,095 |
|
|
304,660 |
|
Performance Chemicals |
|
167,949 |
|
|
174,722 |
|
|
526,239 |
|
|
548,446 |
|
Eliminations(2)
|
|
(3,229 |
) |
|
(2,615 |
) |
|
(10,441 |
) |
|
(11,314 |
) |
Total |
|
$ |
423,801 |
|
|
$ |
427,203 |
|
|
$ |
1,214,697 |
|
|
$ |
1,228,113 |
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA:(3)
|
|
|
|
|
|
|
|
|
Refining Services |
|
$ |
51,166 |
|
|
$ |
49,559 |
|
|
$ |
133,721 |
|
|
$ |
126,368 |
|
Catalysts(4)
|
|
31,638 |
|
|
15,751 |
|
|
79,372 |
|
|
62,227 |
|
Performance Materials |
|
25,769 |
|
|
21,255 |
|
|
65,505 |
|
|
61,880 |
|
Performance Chemicals |
|
36,804 |
|
|
41,832 |
|
|
120,642 |
|
|
131,748 |
|
Total Segment Adjusted EBITDA(5)
|
|
$ |
145,377 |
|
|
$ |
128,397 |
|
|
$ |
399,240 |
|
|
$ |
382,223 |
|
|
|
|
|
|
|
|
|
|
|
|
(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 $54,414 and $32,297 for the three months ended September 30, 2019 and 2018, respectively. The proportionate share of sales is $123,016 and $120,159 for the nine months ended September 30, 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 $22,628 for the three months ended September 30, 2019, which includes $17,248 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,722 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $10,513 for the three months ended September 30, 2018, which includes $5,563 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,292 of joint venture depreciation, amortization and interest.
|
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $48,621 for the nine months ended September 30, 2019, which includes $31,548 of equity in net income plus $5,875 of amortization of investment in affiliate step-up and $11,198 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $45,194 for the nine months ended September 30, 2018, which includes $31,005 of equity in net income plus $4,975 of amortization of investment in affiliate step-up and $9,214 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
September 30, |
|
Nine months ended
September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
Net income attributable to PQ Group Holdings Inc. |
|
$ |
26,713 |
|
|
$ |
14,185 |
|
|
$ |
60,438 |
|
|
$ |
30,181 |
|
Provision for income taxes |
|
16,718 |
|
|
8,470 |
|
|
39,472 |
|
|
21,590 |
|
Interest expense, net |
|
27,697 |
|
|
28,238 |
|
|
84,855 |
|
|
84,622 |
|
Depreciation and amortization |
|
44,246 |
|
|
43,827 |
|
|
135,230 |
|
|
139,298 |
|
Segment EBITDA |
|
115,374 |
|
|
94,720 |
|
|
319,995 |
|
|
275,691 |
|
Unallocated corporate expenses |
|
7,693 |
|
|
10,276 |
|
|
28,062 |
|
|
27,322 |
|
Joint venture depreciation, amortization and interest |
|
3,722 |
|
|
3,292 |
|
|
11,198 |
|
|
9,214 |
|
Amortization of investment in affiliate step-up |
|
1,658 |
|
|
1,658 |
|
|
5,875 |
|
|
4,975 |
|
Amortization of inventory step-up |
|
— |
|
|
— |
|
|
— |
|
|
1,603 |
|
Debt extinguishment costs |
|
1,767 |
|
|
864 |
|
|
1,767 |
|
|
6,743 |
|
Net (gain) loss on asset disposals |
|
1,136 |
|
|
5,202 |
|
|
(7,697 |
) |
|
11,106 |
|
Foreign currency exchange loss |
|
4,457 |
|
|
3,527 |
|
|
5,380 |
|
|
15,347 |
|
LIFO expense |
|
534 |
|
|
856 |
|
|
10,814 |
|
|
5,903 |
|
Transaction and other related costs |
|
670 |
|
|
210 |
|
|
1,725 |
|
|
895 |
|
Equity-based compensation |
|
4,806 |
|
|
4,252 |
|
|
13,576 |
|
|
11,879 |
|
Restructuring, integration and business optimization expenses |
|
717 |
|
|
2,178 |
|
|
1,436 |
|
|
5,662 |
|
Defined benefit pension plan cost |
|
834 |
|
|
112 |
|
|
2,379 |
|
|
260 |
|
Other |
|
2,009 |
|
|
1,250 |
|
|
4,730 |
|
|
5,623 |
|
Segment Adjusted EBITDA |
|
$ |
145,377 |
|
|
$ |
128,397 |
|
|
$ |
399,240 |
|
|
$ |
382,223 |
|
|
|
|
|
|
|
|
|
|
|