Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Mar. 19, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PQ Group Holdings Inc. | |
Entity Central Index Key | 1,708,035 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 135,240,866 | |
Entity Public Float | $ 641,036,201 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Sales | $ 1,472,101 | $ 1,064,177 | $ 388,875 |
Cost of goods sold | 1,095,265 | 810,085 | 278,791 |
Gross profit | 376,836 | 254,092 | 110,084 |
Selling, general and administrative expenses | 145,107 | 107,601 | 34,613 |
Other operating expense, net (Note 8) | 64,225 | 62,301 | 19,696 |
Operating income | 167,504 | 84,190 | 55,775 |
Equity in net income (loss) from affiliated companies | 38,772 | (2,612) | 0 |
Interest expense | 179,044 | 140,315 | 44,348 |
Debt extinguishment costs (Note 15) | 61,886 | 13,782 | 0 |
Other (income) expense, net | 25,980 | (3,402) | 0 |
Income (loss) before income taxes and noncontrolling interest | (60,634) | (69,117) | 11,427 |
(Benefit) provision for income taxes | (119,197) | 10,041 | 0 |
Net income (loss) | 58,563 | (79,158) | 11,427 |
Less: Net income attributable to the noncontrolling interest | 960 | 588 | 0 |
Net income (loss) attributable to PQ Group Holdings Inc. | $ 57,603 | $ (79,746) | $ 11,427 |
Net income (loss) per share: | |||
Basic income (loss) per share (usd per share) | $ 0.52 | $ (1.02) | $ 0.51 |
Diluted income (loss) per share (usd per share) | $ 0.52 | $ (1.02) | $ 0.51 |
Weighted average shares outstanding: | |||
Basic (shares) | 111,299,670 | 78,016,005 | 22,615,787 |
Diluted (shares) | 111,669,037 | 78,016,005 | 22,615,787 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 58,563 | $ (79,158) | $ 11,427 |
Other comprehensive income (loss), net of tax: | |||
Pension and postretirement benefits | (101) | 6,865 | 648 |
Net (loss) gain from hedging activities | (3,590) | 4,557 | 0 |
Foreign currency translation | 60,601 | (66,834) | 0 |
Total other comprehensive income (loss) | 56,910 | (55,412) | 648 |
Comprehensive income (loss) | 115,473 | (134,570) | 12,075 |
Less: Comprehensive loss attributable to noncontrolling interests | (152) | (465) | 0 |
Comprehensive income (loss) attributable to PQ Group Holdings Inc. | $ 115,625 | $ (134,105) | $ 12,075 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 66,195 | $ 70,742 |
Receivables, net | 193,456 | 160,581 |
Inventories (Note 9) | 262,388 | 227,048 |
Prepaid and other current assets | 26,929 | 34,307 |
Total current assets | 548,968 | 492,678 |
Investments in affiliated companies (Note 10) | 469,276 | 459,406 |
Property, plant and equipment, net | 1,230,384 | 1,181,388 |
Goodwill | 1,305,956 | 1,241,429 |
Other intangible assets, net | 786,144 | 816,573 |
Other long-term assets | 74,727 | 68,197 |
Total assets | 4,415,455 | 4,259,671 |
LIABILITIES | ||
Notes payable and current maturities of long-term debt | 45,166 | 14,481 |
Accounts payable | 149,326 | 128,478 |
Accrued liabilities | 93,917 | 99,433 |
Total current liabilities | 288,409 | 242,392 |
Long-term debt | 2,185,320 | 2,547,717 |
Deferred income taxes | 189,336 | 318,463 |
Other long-term liabilities | 120,471 | 123,155 |
Total liabilities | 2,783,536 | 3,231,727 |
Commitments and contingencies (Note 22) | ||
EQUITY | ||
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 135,244,379 and 106,452,330 on December 31, 2017 and December 31, 2016, respectively; outstanding shares 135,244,379 and 106,430,811 on December 31, 2017 and December 31, 2016, respectively | 1,352 | 73 |
Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on December 31, 2017 and December 31, 2016 | 0 | 0 |
Additional paid-in capital | 1,655,114 | 1,167,137 |
Accumulated deficit | (32,777) | (90,380) |
Treasury stock, at cost; shares 21,519 on December 31, 2016 | 0 | (239) |
Accumulated other comprehensive income (loss) | 4,311 | (53,711) |
Total PQ Group Holdings Inc. equity | 1,628,000 | 1,022,880 |
Noncontrolling interest | 3,919 | 5,064 |
Total equity | 1,631,919 | 1,027,944 |
Total liabilities and equity | $ 4,415,455 | $ 4,259,671 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (shares) | 135,244,379 | 106,452,330 |
Common stock, shares outstanding (shares) | 135,244,379 | 106,430,811 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Treasury stock (shares) | 21,519 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit | Treasury stock, at cost | Accumulated other comprehensive income (loss) | Non-controlling interest |
Beginning balance, value at Dec. 31, 2014 | $ 217,824 | $ 0 | $ 239,885 | $ (22,061) | $ 0 | $ 0 | $ 0 |
Beginning balance, shares at Dec. 31, 2014 | 22,390,231 | 0 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 11,427 | 11,427 | |||||
Equity contribution, value | 3,138 | 3,138 | |||||
Equity contribution, shares | 292,846 | ||||||
Other comprehensive income (loss) | 648 | 648 | 0 | ||||
Stock compensation, net of forfeitures, value | 2,256 | 2,256 | |||||
Ending balance, value at Dec. 31, 2015 | 235,293 | $ 0 | 245,279 | (10,634) | $ 0 | 648 | 0 |
Ending balance, shares at Dec. 31, 2015 | 22,683,077 | 0 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (79,158) | (79,746) | 588 | ||||
Business Combination, value | 918,769 | $ 73 | 912,127 | 6,569 | |||
Business Combination, shares | 83,169,873 | ||||||
Stock repurchase, value | (2,540) | $ (2,540) | |||||
Stock repurchase, shares | (207,546) | ||||||
Equity contribution, value | 6,600 | 6,486 | $ 114 | ||||
Equity contribution, shares | 529,375 | 9,255 | |||||
Other comprehensive income (loss) | (55,412) | (54,359) | (1,053) | ||||
Dividend distribution | (1,040) | (1,040) | |||||
Stock compensation, net of forfeitures, value | 5,432 | 3,245 | $ 2,187 | ||||
Stock compensation, net of forfeitures, shares | 70,005 | 176,772 | |||||
Ending balance, value at Dec. 31, 2016 | 1,027,944 | $ 73 | 1,167,137 | (90,380) | $ (239) | (53,711) | 5,064 |
Ending balance, shares at Dec. 31, 2016 | 106,452,330 | (21,519) | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 58,563 | 57,603 | 960 | ||||
Stock split and conversion, value | $ 989 | (1,228) | $ 239 | ||||
Stock split and conversion, shares | (232,571) | (232,534) | |||||
Issuance of common stock - IPO, value | 480,696 | $ 290 | 480,406 | ||||
Issuance of common stock - IPO, shares | 29,000,000 | ||||||
Other comprehensive income (loss) | 56,910 | 58,022 | (1,112) | ||||
Dividend distribution | (993) | (993) | |||||
Issuance of common stock - stock option exercises, shares | 12,063 | ||||||
Stock compensation, net of forfeitures, value | 8,799 | 8,799 | $ 0 | ||||
Stock compensation, net of forfeitures, shares | 12,557 | (211,015) | |||||
Ending balance, value at Dec. 31, 2017 | $ 1,631,919 | $ 1,352 | $ 1,655,114 | $ (32,777) | $ 0 | $ 4,311 | $ 3,919 |
Ending balance, shares at Dec. 31, 2017 | 135,244,379 | 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 58,563,000 | $ (79,158,000) | $ 11,427,000 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 124,551,000 | 89,453,000 | 28,790,000 |
Amortization | 52,589,000 | 38,836,000 | 10,210,000 |
Acquisition accounting valuation adjustments on inventory sold | 871,000 | 29,086,000 | 0 |
Intangible asset impairment charge | 0 | 6,873,000 | 0 |
Amortization of deferred financing costs and original issue discount | 8,733,000 | 6,859,000 | 3,115,000 |
Debt extinguishment costs | 15,007,000 | 8,561,000 | 0 |
Debt modification creditor fees capitalized | (2,756,000) | (2,988,000) | 0 |
Foreign currency exchange (gain) loss | 25,786,000 | (3,558,000) | 0 |
Pension and postretirement healthcare benefit expense | 3,289,000 | 1,957,000 | 2,900,000 |
Pension and postretirement healthcare benefit funding | (7,887,000) | (2,887,000) | (14,937,000) |
Deferred income tax benefit | (140,212,000) | (138,000) | 0 |
Net loss on asset disposals | 5,793,000 | 4,216,000 | 3,911,000 |
Supplemental pension plan mark-to-market gain | (965,000) | (300,000) | 0 |
Stock compensation | 8,799,000 | 5,432,000 | 2,256,000 |
Equity in net (income) loss from affiliated companies | (38,772,000) | 2,612,000 | 0 |
Dividends received from affiliated companies | 44,071,000 | 7,636,000 | 0 |
Working capital changes that provided (used) cash, excluding the effect of business combinations: | |||
Receivables | (11,463,000) | 27,757,000 | (280,000) |
Inventories | (21,200,000) | (2,305,000) | (1,738,000) |
Prepaids and other current assets | (3,434,000) | 548,000 | 20,096,000 |
Accounts payable | 4,343,000 | 11,885,000 | (2,486,000) |
Accrued liabilities | (6,548,000) | (23,866,000) | (13,809,000) |
Other, net | (3,096,000) | (6,791,000) | (4,740,000) |
Net cash provided by operating activities | 116,062,000 | 119,720,000 | 44,715,000 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (140,482,000) | (121,421,000) | (40,994,000) |
Investment in affiliated companies | (9,000,000) | 0 | 0 |
Change in restricted cash, net | 13,432,000 | (14,786,000) | 0 |
Loan receivable under the New Markets Tax Credit Arrangement | (6,221,000) | (15,598,000) | 0 |
Business combinations, net of cash acquired | (41,572,000) | (1,777,740,000) | 3,965,000 |
Other, net | 1,148,000 | (135,000) | (1,696,000) |
Net cash used in investing activities | (182,695,000) | (1,929,680,000) | (38,725,000) |
Cash flows from financing activities: | |||
Draw down of revolver | 357,773,000 | 145,000,000 | 12,000,000 |
Repayments of revolver | (334,180,000) | (167,000,000) | (12,000,000) |
Issuance of long-term debt under the New Market Tax Credit arrangement | 8,820,000 | 22,000,000 | 0 |
Issuance of long-term debt, net of original issue discount and financing fees | 300,000,000 | 1,219,791,000 | 0 |
Issuance of long-term notes, net of original issue discount and financing fees | 0 | 1,124,629,000 | 0 |
Debt issuance costs | (3,700,000) | (5,397,000) | 0 |
Repayments of long-term debt | (739,472,000) | (479,059,000) | (5,000,000) |
IPO proceeds | 507,500,000 | 0 | 0 |
IPO costs | (26,804,000) | 0 | 0 |
Interest hedge premium | 0 | (1,551,000) | 0 |
Equity contribution | 0 | 6,600,000 | 1,538,000 |
Stock repurchase | 0 | (2,540,000) | 0 |
Distributions to noncontrolling interests | (993,000) | (1,040,000) | 0 |
Net cash provided by (used in) financing activities | 68,944,000 | 1,861,433,000 | (3,462,000) |
Effect of exchange rate changes on cash and cash equivalents | (6,858,000) | (5,886,000) | 0 |
Net change in cash and cash equivalents | (4,547,000) | 45,587,000 | 2,528,000 |
Cash and cash equivalents at beginning of period | 70,742,000 | 25,155,000 | 22,627,000 |
Cash and cash equivalents at end of period | $ 66,195,000 | $ 70,742,000 | $ 25,155,000 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | 1. Background and Basis of Presentation: Description of Business PQ Group Holdings Inc. and subsidiaries (the “Company” or “PQ Group Holdings”) conducts operations through two reporting segments: (1) Environmental Catalysts & Services: a leading global innovator and producer of silica catalysts used in the production of high-density polyethylene (“HDPE”), methyl methacrylate (“MMA”), specialty zeolite-based catalysts sold to the emission control industry, the petrochemical industry and other areas of the broader chemicals industry and a merchant sulfuric acid producer operating a network of plants serving a variety of end uses, including the oil refining, nylon, mining, general industrial and chemical industries; and (2) Performance Materials & Chemicals: a fully integrated, global leader in silicate technology, producing sodium silicate, specialty silicas, zeolites, spray dry silicates, magnesium silicate, and other high performance chemical products used in a variety of end-uses such as adsorbents for surface coatings, clarifying agents for beverages, cleaning and personal care products and engineered glass products for use in highway safety, polymer additives, metal finishing and electronics end uses. Seasonal changes and weather conditions typically affect the Company’s performance materials and refining services product groups. In particular, the Company’s performance materials product group generally experiences lower sales and profit in the first and fourth quarters of the year because highway striping projects typically occur during warmer weather months. Additionally, the Company’s refining services product group typically experiences similar seasonal fluctuations as a result of higher demand for gasoline products in the summer months. As a result, working capital requirements tend to be higher in the first and fourth quarters of the year, which can adversely affect the Company’s liquidity and cash flows. Because of this seasonality associated with certain of the Company’s product groups, results for any one quarter are not necessarily indicative of the results that may be achieved for any other quarter or for the full year. Basis of Presentation PQ Merger with Eco Services On August 17, 2015, the Company, PQ Holdings Inc. (“PQ Holdings”), Eco Services Operations LLC (“Eco Services”), certain investment funds affiliated with CCMP Capital Advisors, LLC (now known as CCMP Capital Advisors, LP; “CCMP”), and stockholders of PQ Holdings and Eco Services entered into a reorganization and transaction agreement pursuant to which the companies consummated a series of transactions to reorganize and combine the businesses of PQ Holdings and Eco Services (the “Business Combination”), under a new holding company, PQ Group Holdings Inc. The Business Combination was consummated on May 4, 2016. In accordance with accounting principles generally accepted in the United States (“GAAP”), Eco Services is the accounting predecessor to PQ Group Holdings. Certain investment funds affiliated with CCMP held a controlling interest position in Eco Services prior to the Business Combination. In addition, certain investment funds affiliated with CCMP owned a non-controlling interest in PQ Holdings prior to the Business Combination and the merger with Eco Services constituted a change in control under the PQ Holdings credit agreements and bond indenture that were in place at the time of the Business Combination. Therefore, Eco Services is deemed to be the accounting acquirer. These consolidated financial statements are the continuation of Eco Services’ business prior to the Business Combination. Stock Split and Initial Public Offering Prior to September 22, 2017, the Company had two classes of common stock designated as Class A and Class B common stock. On September 22, 2017, the Company reclassified its Class A common stock into common stock and then effected a 8.8275 -for-1 split of its common stock. On September 28, 2017, the Company converted each outstanding share of Class B common stock into 8.8275 shares of common stock plus an additional number of shares determined by dividing the unreturned paid-in capital amount of such Class B common stock, or $113.74 per share, by $17.50 , the initial public offering price of a share of our common stock in the Company’s initial public offering (“IPO”), rounded to the nearest whole share. Holders of Class B common stock did not receive any cash payments from the Company in connection with the conversion of the Class B common stock. As a result of the reclassification of Class A common stock into common stock, and the conversion of Class B common stock into common stock, all references to “Class A common stock” and “Class B common stock” have been changed to “common stock” for all periods presented. All previously reported per share and common share amounts in the accompanying financial statements and related notes have been restated to reflect the stock split. On October 3, 2017, the Company completed its IPO whereby it issued 29,000,000 shares of its common stock at an initial public offering price of $17.50 per share. The shares began trading on the New York Stock Exchange on September 29, 2017. The aggregate proceeds received by the Company from the offering were $480,696 , net of underwriting discounts, commissions and offering expenses. The net proceeds were used to repay existing indebtedness as further described in Note 15 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies: Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. Investments in affiliated companies are recorded at cost plus the Company’s equity in their undistributed earnings. All intercompany transactions have been eliminated. Noncontrolling interests represent third-party equity ownership in certain of the Company’s consolidated subsidiaries and are presented as a component of equity separate from the equity attributable to the Company’s shareholders. The noncontrolling interests’ share in the Company’s net earnings are included in net income attributable to the noncontrolling interest in the Company’s consolidated statements of operations, and their portion of the Company’s comprehensive income is included in comprehensive loss attributable to noncontrolling interests in the Company’s consolidated statements of comprehensive income (loss). The Company’s noncontrolling interests relate to third-party minority ownership interests held in certain of the Company’s foreign subsidiaries acquired as part of the Business Combination. All assets and liabilities of foreign subsidiaries and affiliated companies are translated to U.S. dollars using exchange rates in effect at the balance sheet date. Adjustments resulting from translation of the balance sheets and intercompany loans, which are considered permanent, are included in stockholders’ equity as part of accumulated other comprehensive income (loss). Adjustments resulting from translation of certain intercompany loans, which are not considered permanent and are denominated in foreign currencies, are included in other (income) expense, net in the consolidated statements of operations. The Company considers intercompany loans to be of a permanent or long-term nature if management expects and intends that the loans will not be repaid. For the years ended December 31, 2017 and 2016 , all intercompany loan arrangements were determined to be non-permanent based on management’s intention as well as actual lending and repayment activity. Therefore, the foreign currency transaction gains or losses associated with the intercompany loans were recorded in the consolidated statements of operations for the years ended December 31, 2017 and 2016 . Income and expense items are translated at average exchange rates during the year. Net foreign exchange included in other (income) expense, net was a loss of $25,786 and gain of $3,558 for the years ended December 31, 2017 and 2016 , respectively. The Company did not incur any foreign exchange expense for the year ended December 31, 2015 . The foreign currency losses realized in 2017 and gains realized in 2016 were primarily driven by the Euro-denominated term loan (see Note 15 to these consolidated financial statements for further information) and the non-permanent intercompany debt denominated in local currency and translated to U.S. dollars . Cash and Cash Equivalents. Cash and cash equivalents include investments with original terms to maturity of 90 days or less from the time of purchase. Restricted Cash. Restricted cash, which is restricted as to withdrawal or usage, is classified separately from cash and cash equivalents on our consolidated balance sheets. The proceeds from the New Markets Tax Credit (“NMTC”) financing arrangements are restricted for use and are classified on the Company’s consolidated balance sheets as other current assets. As of December 31, 2017 and 2016 , there remained $348 and $13,780 , respectively, in restricted cash that is required to be used to fund the capital expenditures associated with the NMTC financing arrangements. See Note 15 to these consolidated financial statements for further information regarding the NMTC financing arrangements. The Company’s total restricted cash balances, including cash related to the NMTC financing arrangements, were $1,048 and $14,335 as of December 31, 2017 and 2016 , respectively, and are included on the Company’s consolidated balance sheets as other current assets. Accounts Receivable and Allowance for Doubtful Accounts. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. A specific reserve for bad debt is recorded for known or suspected doubtful accounts receivable. For all other accounts, the Company recognizes a reserve for bad debt based on the length of time receivables are past due and historical write-off experience. Account balances are charged against the allowance when the Company believes it is probable that the associated receivables will not be recovered. If the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required. The Company does not have any off-balance sheet credit exposure related to its customers. As of December 31, 2017 and 2016 , the Company’s allowance for doubtful accounts was not material. Inventories. Certain domestic inventories are stated at the lower of cost or market and valued using the last-in, first-out (“LIFO”) method. All other inventories are stated at the lower of cost and net realizable value and valued using the weighted average cost or first-in, first-out (“FIFO”) methods. Property, Plant and Equipment. Property, plant and equipment are carried at cost and include expenditures for new facilities, major renewals and betterments. The Company capitalizes the cost of furnace rebuilds as part of property, plant and equipment. Plant and equipment under capital leases are carried at the present value of minimum lease payments as determined at the beginning of the lease term. Maintenance, repairs and minor renewals are charged to expense as incurred. The Company capitalizes certain internal costs associated with the implementation of purchased software. When property, plant and equipment is retired or otherwise disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time. The Company also leases property, plant and equipment, principally under operating leases. Rent expense for operating leases, which may have escalating rentals or rent holidays, is recorded on a straight-line basis over the respective lease terms. Depreciation is provided on the straight-line method based on the estimated useful lives of the assets, which generally range from 15 to 33 years for buildings and improvements and 3 to 10 years for machinery and equipment. Leasehold improvements are depreciated using the straight-line method based on the shorter of the useful life of the improvement or remaining lease term. The Company capitalizes the interest cost associated with the development and construction of significant new plant and equipment and depreciates that amount over the lives of the related assets. Capitalized interest recorded during the years ended December 31, 2017 and 2016 was $5,806 and $5,687 , respectively, and was not material for the year ended December 31, 2015 . Spare Parts. Spare parts are maintained by the Company’s facilities to keep machinery and equipment in working order. Spare parts are capitalized and included in other long-term assets. Spare parts are measured at cost and are not depreciated or expensed until utilized; however, reserves may be provided on aged spare parts. When a spare part is utilized as part of an improvement to property, plant and equipment, the carrying value is depreciated over the applicable life once placed in service. Otherwise, the spare part is expensed and charged as a cost of production when utilized. Investments in Affiliated Companies. Investments in affiliated companies are accounted for using the equity method of accounting if the investment provides the Company with the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investments in equity-method investees are recorded in the consolidated balance sheets as investments in affiliated companies, and the Company’s share of the investees’ earnings or losses, together with other-than temporary impairments in value, is recorded as equity in net income (loss) from affiliated companies in the consolidated statements of operations. Any differences between the Company’s cost of an equity method investment and the underlying equity in the net assets of the investment, such as fair value step-ups resulting from acquisitions, are accounted for according to their nature and impact the amounts recognized as equity in net income (loss) from affiliated companies in the consolidated statements of operations. Goodwill and Intangible Assets. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company is required to test goodwill associated with each of its reporting units for impairment at least annually and whenever events or circumstances indicate that it is more likely than not that goodwill may be impaired. The Company performs its annual goodwill impairment test as of October 1 of each year. Goodwill is tested for impairment at the reporting unit level. In performing tests for goodwill impairment, the Company is permitted to first perform a qualitative assessment about the likelihood of the carrying value of a reporting unit exceeding its fair value. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount based on the qualitative assessment, it is required to perform a two-step goodwill impairment test to identify the potential goodwill impairment and measure the amount of the goodwill impairment loss, if any, to be recognized for that reporting unit. However, if an entity concludes otherwise based on the qualitative assessment, the two-step goodwill impairment test is not required. The option to perform the qualitative assessment can be utilized at the Company’s discretion, and the qualitative assessment need not be applied to all reporting units in a given goodwill impairment test. For an individual reporting unit, if the Company elects not to perform the qualitative assessment, or if the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company must perform the two-step goodwill impairment test for the reporting unit. In applying the two-step process, the first step used to identify potential impairment involves comparing the reporting unit’s estimated fair value to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value exceeds the estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment, if any. The second step of the process involves the calculation of an implied fair value of goodwill for each reporting unit for which step one indicated potential impairment. The implied fair value of goodwill is determined in a manner similar to how goodwill is calculated in a business combination. That is, the estimated fair value of the reporting unit, as calculated in step one, is allocated to the individual assets and liabilities as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded to write down the carrying value. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit and the loss establishes a new basis in the goodwill. Subsequent reversal of an impairment loss is not permitted. For intangible assets other than goodwill, definite-lived intangible assets are amortized over their respective estimated useful lives. Intangible assets with indefinite lives are not amortized, but rather are tested for impairment at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. The Company tests its indefinite-lived intangible assets as of October 1 of each year in conjunction with its annual goodwill impairment test. Impairment Assessment of Long-Lived Assets. The Company performs an impairment review of property, plant and equipment and definite-lived intangible assets when facts and circumstances indicate that the carrying value of an asset or asset group may not be recoverable from its undiscounted future cash flows. When evaluating long-lived assets for impairment, if the carrying amount of an asset or asset group is found not to be recoverable, a potential impairment loss may be recognized. An impairment loss is measured by comparing the carrying amount of the asset or asset group to its fair value. Fair value is determined using quoted market prices when available, or other techniques including discounted cash flows. The Company’s estimates of future cash flows involve assumptions concerning future operating performance, economic conditions and technological changes that may affect the future useful lives of the assets. Derivative Financial Instruments. The Company utilizes certain derivative financial instruments to enhance its ability to manage risk, including exposure to interest rates and natural gas price fluctuations that exist as part of ongoing business operations. Derivative instruments are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. All derivatives designated as hedges are recognized on the consolidated balance sheets at fair value. On the date a derivative contract is entered into, the Company may designate the derivative as a hedge of a forecasted transaction or as a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash-flow hedge are recorded in other comprehensive income (loss) to the extent that the derivative is effective as a hedge and until earnings are affected by the variability in cash flows of the designated hedged item. The ineffective portion is reported in earnings. Changes in the fair value of a derivative that is not designated or does not qualify as a cash-flow hedge are recorded in the consolidated statements of operations. Cash flows from derivative instruments are reported in the same cash-flow category as the cash flows from the items being hedged. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes relating all derivatives that are designated cash-flow hedges to underlying forecasted transactions. The Company also formally assesses whether each hedging relationship is highly effective in achieving offsetting changes in fair values or cash flows of the hedged item during the period both at the inception of the hedge and on an ongoing basis. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly-effective hedge, hedge accounting is discontinued with respect to that derivative prospectively. Fair Value Measurements. The Company measures fair value using the guidelines under GAAP. An asset’s fair value is defined as the price at which the asset could be exchanged in a current transaction between market participants. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. See Note 4 to these consolidated financial statements regarding the application of fair value measurements. The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these items. See Note 15 to these consolidated financial statements regarding the fair value of debt. Revenue Recognition. Revenue, net of related discounts and allowances, is recognized when both title and risk of loss of the product have been transferred to the customer, the seller’s price to the buyer is fixed or determinable, collectability is reasonably assured, and persuasive evidence of an arrangement exists. Customers take title and assume all the risks of ownership based on delivery terms, which are generally included in customer contracts of sale, order confirmation documents and invoices. The Company recognizes rebates given to customers as a reduction of revenue based on an allocation of the cost of honoring rebates earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate. Rebates are recognized at the time revenue is recorded. The Company measures the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement. Shipping and Handling Costs. Amounts billed to a customer in a sale transaction related to shipping and handling, if any, represent revenues earned for the goods provided and are classified as revenue. Costs related to shipping and handling of products shipped to customers are classified as cost of goods sold. Research and Development. Research and development costs of $13,859 and $7,266 for the years ended December 31, 2017 and 2016 , respectively, were expensed as incurred and reported in selling, general and administrative expenses in the consolidated statements of operations. There were no significant research and development costs incurred during the year ended December 31, 2015 . Income Taxes. Prior to the Business Combination, Eco Services was a single member limited liability company and was treated as a partnership for federal and state tax purposes. All income tax liabilities and/or benefits of the Company were passed through to the member. As such, no recognition of federal or state income taxes for the Company have been provided for tax periods prior to the Business Combination. As a result of the Business Combination, Eco Services had a change in tax status and is taxed as a C-Corporation. The Company operates within multiple taxing jurisdictions and are subject to tax filing requirements and audit within these jurisdictions. The Company uses the asset and liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. The Company evaluates its deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that those assets will be realized. In determining the provision for income taxes, the Company provides deferred income taxes on income from foreign subsidiaries as such earnings are taxable upon remittance to the United States, to the extent that these earnings are considered to be available for repatriation. The Company does not provide income taxes on the cumulative unremitted earnings of foreign subsidiaries considered permanently reinvested. The Company establishes contingent liabilities for possible assessments by taxing authorities resulting from uncertain tax positions including, but not limited to, transfer pricing, deductibility of certain expenses and other state, local, and foreign tax matters. The Company recognizes a financial statement benefit for positions taken for tax return purposes when it will be more likely than not (greater than 50%) that the positions will be sustained upon tax examination, based solely on the technical merits of the tax positions, otherwise, no benefit is recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. Tax examinations are often complex as tax authorities may disagree with the treatment of items reported by the Company and may require several years to resolve. These accrued liabilities represent a provision for taxes that are reasonably expected to be incurred on the basis of available information but which are not certain. Pursuant to the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No.118 (“SAB 118”), the Company is allowed a measurement period of up to one year after the enactment date of the Tax Cuts and Jobs Act (“TCJA”) to finalize the recording of the related tax impacts. While we have not yet completed our assessment of the effects of the TCJA, we are able to determine reasonable estimates for the impacts of certain key items, thus we have reported provisional amounts for these items. The Company will continue to calculate the impact of the TCJA and will record any resulting tax adjustments during 2018, prior to the permitted remeasurement date. On a provisional basis, the Company is electing to use tax net operating losses (“NOLs”) to offset any inclusion to U.S. taxable income prescribed by the guidance in new Internal Revenue Code Section 965 (“Section 965”). Given the availability to use NOLs to offset this income inclusion, at this time the Company does not expect to pay any one-time transition tax over the eight-year installment period as prescribed by Section 965. This conclusion is subject to change as we refine the provisional estimate of our total post-1986 E&P, cash position and other related calculations. Asset Retirement Obligations. The Company records a liability when the fair value of any future obligation to retire a long-lived asset as a result of an existing or enacted law, statute, ordinance or contract is reasonably estimable. The Company also records a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. When the liability is initially recorded, the Company capitalizes the cost by increasing the amount of the related long-lived asset. Over time, the Company adjusts the liability to its present value by recognizing accretion expense as an operating expense in the consolidated statements of operations each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company records a gain or loss if the actual costs differ from the accrued amount. The Company has recorded asset retirement obligations (“AROs”) identified as part of the Business Combination in other long-term liabilities in order to recognize legal obligations associated with the retirement of tangible long-lived assets. The Company has assessed whether an ARO is required at each manufacturing facility and has recorded an obligation for those locations for which an obligation exists. The most significant of these are primarily attributable to environmental remediation liabilities associated with current operations that were incurred during the course of normal operations. The Company has AROs that are conditional in nature. The Company identified certain conditional AROs upon which it was able to reasonably estimate their fair value and recorded a liability. These AROs were triggered upon commitments by the Company to comply with local, state, and national laws to remove environmentally hazardous materials. The AROs have been recognized on a discounted basis using a credit adjusted risk free rate. Accretion of the AROs is recorded in other operating expense, net in the Company’s consolidated statements of operations. The following table includes the changes in the Company’s ARO liability during the years ended December 31, 2017 and 2016 : Years ended 2017 2016 Beginning balance $ 3,700 $ — AROs identified as part of the Business Combination — 3,687 Accretion expense 232 177 Foreign exchange impact 162 (164 ) Ending balance $ 4,094 $ 3,700 Environmental Expenditures. Environmental expenditures that pertain to current operations or to future revenues are expensed or capitalized consistent with the Company’s capitalization policy for property, plant and equipment. Expenditures that result from the remediation of an existing condition caused by past operations and that do not contribute to current or future revenues are expensed. Liabilities are recognized for remedial activities when the remediation is probable and the cost can be reasonably estimated. Recoveries of expenditures for environmental remediation are recognized as assets only when recovery is deemed probable. See Note 22 to these consolidated financial statements regarding commitments and contingencies and Note 14 regarding the accrued environmental reserve. Deferred Financing Costs. Financing costs incurred in connection with the issuance of long-term debt are deferred and presented as a direct reduction from the related debt instruments on the Company’s consolidated balance sheets. Deferred financing costs are amortized as interest expense using the effective interest method over the respective terms of the associated debt instruments. Stock-Based Compensation. The Company applies the fair value based method to account for stock options, restricted stock awards and restricted stock units issued in connection with its equity incentive plans. Stock-based compensation expense is recognized on a straight-line basis over the vesting periods of the respective awards. In connection with the adoption of new accounting guidance related to stock-based compensation (see Note 3 to these consolidated financial statements), the Company accounts for forfeitures of equity incentive awards as they occur. See Note 21 to these consolidated financial statements regarding compensation expense associated with the Company’s equity incentive awards. Pensions and Postretirement Benefits. The Company maintains qualified and non-qualified defined benefit pension plans that cover employees in the United States and Canada, as well as certain employees in other international locations. Benefits for a majority of the plans are based on average final pay and years of service. Our funding policy, consistent with statutory requirements, is based on actuarial computations utilizing the projected unit credit method of calculation. Not all defined benefit pension plans are funded. In the United States and Canada, the pension plans’ assets include equity and fixed income securities. In our other international locations, the pension plans’ assets include equity and fixed income securities, as well as insurance policies. Certain assumptions are made regarding the occurrence of future events affecting pension costs, such as mortality, withdrawal, disablement and retirement, changes in compensation and benefits, and discount rates to reflect the time value of money. The major elements in determining pension income and expense are pension liability discount rates and the expected return on plan assets. The Company references rates of return on high-quality, fixed income investments when estimating the discount rate, and the expected period over which payments will be made based upon historical experience. The long-term rate of return used to calculate the expected return on plan assets is the average rate of return estimated to be earned on invested funds for providing pension benefits. In addition to pension benefits, the Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The Company uses explicit assumptions using the best estimates available of the plan’s future experience. Principal actuarial assumptions include: discount rates, present value factors, retirement age, participation rates, mortality rates, cost trend rates, Medicare reimbursement rates and per capita claims cost by age. Current interest rates as of the measurement date are used for discount rates in present value calculations. The Company also has defined contribution plans covering domestic employees of the Company and certain subsidiaries. Contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a loss has been incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed, including the approximate term, how the guarantee arose, and the events or circumstances that would require the guarantor to perform under the guarantee. Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications. As a result of the Business Combination, certain reclassifications have been made to the historical financial statements of Eco Services included in the consolidated financial statements to conform to the current presentation. |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | 3. New Accounting Standards: Recently Adopted Accounting Standards In October 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which eliminates the deferral of the tax effects of intra-entity transfers of an asset other than inventory. Previous GAAP prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset had been sold to an outside party which has resulted in diversity in practice and increased complexity within financial reporting. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early adopted the guidance effective January 1, 2017. The guidance did not have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued guidance that includes targeted improvements to the accounting for employee stock-based compensation. The updates in the guidance include changes in the income tax consequences, balance sheet classification and cash flow statement reporting of stock-based payment transactions. The guidance also includes certain modifications applicable only to nonpublic entities. For public companies, the new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The Company adopted this new guidance as required on January 1, 2017, with no material impact upon adoption to the Company’s consolidated financial statements. On a prospective basis from the adoption date, the Company will record all tax effects related to stock-based compensation through the statement of operations, and all tax-related cash flows resulting from stock-based award payments will be reported as operating activities in the statement of cash flows. The Company made an accounting policy election under the new guidance to account for forfeitures of stock-based compensation awards as they occur. In July 2015, the FASB issued new guidance that changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value. The amendments in this guidance do not apply to inventory that is measured using LIFO or the retail inventory method; rather, the amendments apply to all other inventory, which includes inventory that is measured using FIFO or average cost. Within the scope of this new guidance, an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation, which is consistent with existing GAAP. The Company adopted the new guidance on January 1, 2017 as required. The guidance did not have a material impact on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted as of December 31, 2017 In August 2017, the FASB issued amendments intended to better align hedge accounting with an entities risk management activities. The amendments expand hedge accounting for non-financial and financial risk components and revise the measurement methodologies to better align with an entities risk management activities. Separate presentation of hedge ineffectiveness is eliminated to provide greater transparency of the full impact of hedging by requiring presentation of the results of the hedged item and hedging instrument in a single financial statement line item. In addition, the amendments reduce complexity by simplifying the manner in which assessments of hedge effectiveness may be performed. The new guidance is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted, and the new guidance should be applied prospectively to the presentation and disclosure guidance. The Company early adopted the guidance effective January 1, 2018. The guidance did not have a material impact on the Company’s consolidated financial statements upon adoption. In May 2017, the FASB issued guidance to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the new guidance, an entity should account for the effects of a change in a share-based payment award using modification accounting unless the fair value, vesting conditions and classification as either a liability or equity are all the same with respect to the award immediately prior to modification and the modified award itself. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those years, and the new guidance should be applied prospectively to awards modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018 as required, with no impact on the Company’s consolidated financial statements upon adoption. Although the new guidance is prospective in nature, there would have been no change to the accounting for the modifications of the Company’s equity incentive awards that occurred in connection with the Business Combination or the equity restructuring preceding the IPO (see Note 21 to these consolidated financial statements for further information). In March 2017, the FASB issued guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost (collectively, “pension costs”). Under current GAAP, there are several components of pension costs which are presented net to arrive at pension costs as included in the income statement and disclosed in the notes. As part of this amendment to the existing guidance, the service cost component of pension costs will be bifurcated from the other components and included in the same line items of the income statement as compensation costs are reported. The remaining components will be reported together below operating income on the income statement, either as a separate line item or combined with another line item on the income statement and disclosed. Additionally, with respect to capitalization to inventory, fixed assets, etc., only the service cost component will be eligible for capitalization upon adoption of the guidance. The new guidance is effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those years. The amendments should be applied retrospectively upon adoption with respect to the presentation of the service and other cost components of pension costs in the income statement, and prospectively for the capitalization of the service cost component in assets. The Company adopted the new guidance on January 1, 2018 as required. Prior to the adoption of the guidance, the Company reflected its pension costs within cost of goods sold and selling, general and administrative expenses in the consolidated statements of operations, depending on whether the costs were associated with employees involved in manufacturing, back office support functions, etc. Under the new guidance, the service cost component of the Company’s pension costs will remain in the same line items of the consolidated statements of operations, but the remaining components will be reported as part of nonoperating income in the other (income) expense, net line item of the consolidated statements of operations. Although the guidance requires retrospective application upon adoption, a practical expedient permits the Company to use the amounts disclosed in its pension and other postretirement benefit plan note as its basis of estimation for the prior comparative periods. Based on the Company’s disclosures in Note 19 to these consolidated financial statements, the Company estimates the retrospective impact of the new guidance on its consolidated statements of operations will reduce operating income and increase other nonoperating income by $2,651 for the year ended December 31, 2016. The impact for the year ended December 31, 2015 is not material. The Company is also adjusting any pension costs capitalized as necessary beginning on the adoption date of January 1, 2018 to reflect the service cost component only in accordance with the new guidance. In January 2017, the FASB issued guidance which eliminates the second step from the traditional two-step goodwill impairment test. Under current guidance, an entity performed the first step of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount; if an impairment loss was indicated, the entity computed the implied fair value of goodwill to determine whether an impairment loss existed, and if so, the amount to recognize. Under the new guidance, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value (the Step 1 test), with no further testing required. Any impairment loss recognized is limited to the amount of goodwill allocated to the reporting unit. The new guidance is effective for public companies that are SEC registrants for fiscal years beginning after December 15, 2019, with early adoption permitted for goodwill impairment tests performed on testing dates after January 1, 2017. All entities are required to apply the guidance prospectively to goodwill impairment tests subsequent to adoption of the standard. The impact that the new guidance will have on the Company’s consolidated financial statements depends on whether the Company fails the Step 1 test in any interim or annual goodwill impairment test subsequent to the adoption of the new standard. Upon adoption of the new guidance, the failure of the Step 1 test will result in a goodwill impairment, while the failure of the Step 1 test under current guidance will lead to the Step 2 test, which may or may not result in a goodwill impairment charge depending on the Company’s calculation of the implied fair value of goodwill. The Company has not yet early adopted the new guidance. In January 2017, the FASB issued guidance which clarifies the definition of a business and provides revised criteria and a framework to determine whether an integrated set of assets and activities is a business. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted the new guidance on January 1, 2018 as required, with no impact on the Company’s consolidated financial statements upon adoption. In November 2016, the FASB issued guidance which clarifies the classification and presentation of changes in restricted cash on the statement of cash flows. The updates in the guidance require that the statement of cash flows explain the change during the period in the total of cash, cash equivalents and restricted cash when reconciling the beginning-of-period and end-of-period total amounts. The updates also require a reconciliation between cash, cash equivalents and restricted cash presented on the balance sheet to the total of the same amounts presented on the statement of cash flows. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years, and the new guidance should be applied retrospectively to each period presented. The Company adopted the new guidance on January 1, 2018 as required. As of December 31, 2017 and 2016 , the Company had $1,048 and $14,335 , respectively, of restricted cash included in other current assets on its balance sheet related to its New Market Tax Credit financing arrangements as well as other small restricted cash balances. The activity related to these balances is presented as cash flows from investing activities in the Company’s consolidated statements of cash flow under the existing guidance in place as of December 31, 2017. Under the new guidance effective January 1, 2018, the Company’s restricted cash balances will be added to the existing cash and cash equivalents balances included in the consolidated statements of cash flow rather than reported as part of investing activities. The Company estimates the retrospective impact of the new guidance on its consolidated statements of operations for the years ended December 31, 2017 and 2016 will be as follows: As reported— Retrospective impact— Years ended December 31, Years ended December 31, 2017 2016 2017 2016 Net cash provided by operating activities $ 116,062 $ 119,720 $ 116,062 $ 119,720 Net cash used in investing activities (182,695 ) (1,929,680 ) (195,982 ) (1,915,345 ) Net cash provided by financing activities 68,944 1,861,433 68,944 1,861,433 Effect of exchange rate changes on cash and cash equivalents (6,858 ) (5,886 ) (6,858 ) (5,886 ) Net change in cash and cash equivalents (4,547 ) 45,587 Cash and cash equivalents at beginning of period 70,742 25,155 Cash and cash equivalents at end of period $ 66,195 $ 70,742 Net change in cash, cash equivalents and restricted cash (17,834 ) 59,922 Cash, cash equivalents and restricted cash at beginning of period 85,077 25,155 Cash, cash equivalents and restricted cash at end of period $ 67,243 $ 85,077 In August 2016, the FASB issued guidance which clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs and distributions from certain equity method investees. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and the new guidance should be applied retrospectively to each period presented. The Company adopted the new guidance on January 1, 2018 as required. During the year ended December 31, 2017, the Company paid $47,875 in debt extinguishment costs (breakage and prepayment costs) related to the pay down of its $525,000 floating rate senior unsecured notes due 2022 and its $200,000 8.50% senior notes due 2022 (see Note 15 to these consolidated financial statements for further information). The Company reported these costs as part of cash outflows from operating activities in its consolidated statement of cash flows. Based on the new guidance, these costs will be reported as cash outflows from financing activities in its consolidated statement of cash flows under the retrospective presentation requirement. No such costs were incurred during the year ended December 31, 2016. There are no other significant impacts to the Company’s consolidated financial statements from the adoption of the new guidance. In February 2016, the FASB issued guidance (with subsequent targeted amendments) that modifies the accounting for leases. Under the new guidance, a lessee will recognize assets and liabilities for most leases (including those classified under existing GAAP as operating leases, which based on current standards are not reflected on the balance sheet), but will recognize expenses similar to current lease accounting. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. The new guidance must be adopted using a modified retrospective transition method and provides for certain practical expedients. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements. The Company has operating lease agreements for which it expects to recognize right of use assets and corresponding liabilities on its balance sheet upon adoption of the new guidance. A complete discussion of these leases is included in Note 22 , Commitments and Contingent Liabilities . In May 2014, the FASB issued accounting guidance (with subsequent targeted amendments) that will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that revenue recognized from a transaction or event that arises from a contract with a customer should reflect the consideration to which an entity expects to be entitled in exchange for goods or services provided. To achieve that core principle, the new guidance sets forth a five-step revenue recognition model that will need to be applied consistently to all contracts with customers, except those that are within the scope of other topics in the Accounting Standards Codification (“ASC”). Also required are enhanced disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. The enhanced disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized related to the costs to obtain or fulfill a contract. For public companies, the new requirements are effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company reviewed its key revenue streams and assessed the underlying customer contracts within the framework of the new guidance. The Company evaluated the key aspects of its revenue streams for impact under the new guidance and performed a detailed analysis of its customer agreements to quantify the changes under the guidance. The Company concluded that the guidance did not have a material impact on its existing revenue recognition practices upon adoption on January 1, 2018, but there are new robust disclosure requirements that will have an impact on the Company’s reporting beginning with its first quarter ended March 31, 2018. The Company implemented the guidance under the modified retrospective transition method of adoption. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements: Fair values are based on quoted market prices when available. When market prices are not available, fair values are generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality. In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair values using methods, models and assumptions that management believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment that becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used. The Company’s financial assets and liabilities carried at fair value have been classified based upon a fair value hierarchy. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). The classification of an asset or a liability is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows: • Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. • Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. • Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2017 and 2016 , and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2017 Quoted Prices in Significant Other Observable Inputs (Level 2) Significant (Level 3) Assets: Derivative contracts $ 1,043 $ — $ 1,043 $ — Restoration plan assets 5,576 5,576 — — Total $ 6,619 $ 5,576 $ 1,043 $ — Liabilities: Derivative contracts $ 448 $ — $ 448 $ — Total $ 448 $ — $ 448 $ — December 31, 2016 Quoted Prices in Significant Other Significant Assets: Derivative contracts $ 6,434 $ — $ 6,434 $ — Restoration plan assets 5,594 5,594 — — Total $ 12,028 $ 5,594 $ 6,434 $ — The following table presents information about the Company’s assets and liabilities that were measured at fair value on a non-recurring basis as of December 31, 2016 . The Company performed its annual impairment test on its indefinite life tradenames on October 1, 2017 and determined that no impairment existed. Refer to Note 13 for additional detail. Refer to Note 13 to these consolidated financial statements for a description of the valuation techniques the Company utilized to determine such fair value. As of Quoted Prices in Significant Other Significant Total Assets: Indefinite life trade names (1) $ 153,922 $ — $ — $ 153,922 $ (6,873 ) Total $ 153,922 $ — $ — $ 153,922 $ (6,873 ) (1) Indefinite life trade names with a carrying amount of $160,795 , net of foreign exchange impact, were written down to their implied fair value of $153,922 as part of the Company’s annual impairment assessment on October 1, 2016. This resulted in an impairment charge of $6,873 , which was recorded to other operating expense, net, on the consolidated statements of operations. Restoration plan assets The fair values of the Company’s restoration plan assets are determined through quoted prices in active markets. Restoration plan assets are assets held in a Rabbi trust to fund the obligations of the Company’s defined benefit supplementary retirement plans and include various stock and fixed income mutual funds. See Note 19 to these consolidated financial statements regarding defined benefit supplementary retirement plans. Derivative contracts Derivative assets and liabilities can be exchange-traded or traded over-the-counter (“OTC”). The Company generally values exchange-traded derivatives using models that calibrate to market transactions and eliminate timing differences between the closing price of the exchange-traded derivatives and their underlying instruments. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, forward curves, measures of volatility, and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment. The Company has interest rate caps and natural gas swaps that are fair valued using Level 2 inputs. In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps. To the extent that the Company’s net exposure under a specific master agreement is an asset, the Company utilizes the counterparty’s default swap rate. If the net exposure under a specific master agreement is a liability, the Company utilizes a default swap rate comparable to PQ Group Holdings. The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets. As of December 31, 2017 and 2016 , the credit valuation adjustment resulted in a minimal change in the fair value of the derivatives. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 5. Accumulated Other Comprehensive Income (Loss): The following table presents the components of accumulated other comprehensive income (loss), net of tax, as of December 31, 2017 and 2016 : December 31, 2017 2016 Amortization and unrealized gains on pension and postretirement plans, net of tax of ($4,761) and ($4,799) $ 7,412 $ 7,513 Net changes in fair values of derivatives, net of tax of ($584) and ($2,793) 967 4,557 Foreign currency translation adjustments, net of tax of $790 and $6,627 (4,068 ) (65,781 ) Accumulated other comprehensive income (loss) $ 4,311 $ (53,711 ) The following table presents the tax effects of each component of other comprehensive income (loss) for the years ended December 31, 2017 , 2016 and 2015 : Years ended 2017 2016 2015 Pre-tax amount Tax benefit/ (expense) After-tax amount Pre-tax amount Tax benefit/ (expense) After-tax amount Pre-tax amount Tax benefit/ (expense) After-tax amount Defined benefit and other postretirement plans: Amortization and unrealized losses $ (139 ) $ 38 $ (101 ) $ 11,664 $ (4,799 ) $ 6,865 $ 648 $ — $ 648 Benefit plans, net (139 ) 38 (101 ) 11,664 (4,799 ) 6,865 648 — 648 Net loss from hedging activities (5,799 ) 2,209 (3,590 ) 7,350 (2,793 ) 4,557 — — — Foreign currency translation 66,438 (5,837 ) 60,601 (73,461 ) 6,627 (66,834 ) — — — Other comprehensive income (loss) $ 60,500 $ (3,590 ) $ 56,910 $ (54,447 ) $ (965 ) $ (55,412 ) $ 648 $ — $ 648 The following table presents the change in accumulated other comprehensive income (loss), net of tax, by component for the years ended December 31, 2017 and 2016 : Defined benefit Net gain (loss) from hedging activities Foreign Total December 31, 2015 $ 648 $ — $ — $ 648 Other comprehensive income (loss) before reclassifications 6,844 3,669 (65,781) (55,268) Amounts reclassified from accumulated other comprehensive income (1) 21 888 — 909 Net current period other comprehensive income (loss) 6,865 4,557 (65,781) (54,359) December 31, 2016 $ 7,513 $ 4,557 $ (65,781 ) $ (53,711 ) Other comprehensive income (loss) before reclassifications (208) (3,797) 61,713 57,708 Amounts reclassified from accumulated other comprehensive income (loss) (1) 107 207 — 314 Net current period other comprehensive income (loss) (101) (3,590) 61,713 58,022 December 31, 2017 $ 7,412 $ 967 $ (4,068 ) $ 4,311 (1) See the following table for details about these reclassifications. The following table presents the reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2017 and 2016 . Amounts in parenthesis indicate debits to profit/loss. Details about Accumulated Other Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Years ended 2017 2016 Defined benefit and other postretirement plans: Amortization of prior service cost $ 78 $ — (a) Amortization of net gain (loss) 54 26 (a) 132 26 Total before tax (25 ) (5 ) Tax (expense) benefit $ 107 $ 21 Net of tax Net gain (loss) from hedging activities: Interest rate caps $ 40 $ — Interest expense Natural gas swaps 222 1,433 Cost of goods sold 262 1,433 Total before tax (55 ) (545 ) Tax (expense) benefit $ 207 $ 888 Net of tax Total reclassifications for the period $ 314 $ 909 Net of tax (a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost (see Note 19 to these consolidated financial statements for additional details). |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination | 6. Business Combination: As described in Note 1 to these consolidated financial statements, on May 4, 2016, the Company, PQ Holdings, Eco Services, certain investment funds affiliated with CCMP and certain other stockholders of PQ Holdings and Eco Services completed the Business Combination. Eco Services is the accounting predecessor to PQ Group Holdings. Certain investment funds affiliated with CCMP held a controlling interest position in Eco Services prior to the Business Combination. In addition, certain investment funds affiliated with CCMP owned a noncontrolling interest in PQ Holdings prior to the Business Combination and the merger with Eco constituted a change in control under the various PQ Holdings credit agreements and bond indenture. Therefore, Eco Services is deemed to be the accounting acquirer. These consolidated financial statements are the continuation of Eco Services’ business prior to the Business Combination. The Business Combination was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to PQ Holdings’ net assets acquired based on the fair values of assets acquired and liabilities assumed as of the acquisition date. The excess of the purchase price over the fair values of these net assets is recorded as goodwill. The following table sets forth the calculation and allocation of the purchase price to the net assets acquired with respect to the Business Combination, which was complete as of December 31, 2016. Total consideration, net of cash acquired $ 2,689,941 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 161,110 Inventories 254,770 Prepaid and other current assets 19,295 Investments in affiliated companies 472,994 Property, plant and equipment 683,673 Other intangible assets 754,000 Other long-term assets 48,127 Fair value of assets acquired 2,393,969 Revolver, notes payable & current debt (2,441 ) Accounts payable (93,222 ) Accrued liabilities (98,621 ) Long-term debt (20,470 ) Deferred income taxes (327,296 ) Other long-term liabilities (113,936 ) Noncontrolling interest (6,569 ) Fair value of net assets acquired 1,731,414 Goodwill 958,527 $ 2,689,941 Total consideration for the Business Combination included $1,777,740 of cash, $910,800 of equity in the acquired PQ Holdings entities and $1,400 of assumed stock awards of PQ Holdings. The fair value of the equity consideration was determined based on an estimated enterprise value using a market approach as of the date of the Business Combination, reduced by borrowings to arrive at the fair value of equity. The existing PQ Holdings credit facilities were not legally assumed as part of the Business Combination, and the extinguishment of the debt concurrent with the Business Combination was included as part of the consideration transferred (see Note 15 to these consolidated financial statements for further information). Acquisition costs of $1,583 are included in other operating expense, net in the Company’s consolidated statement of operations for the year ended December 31, 2016. The Company believes that its diverse range of industrial, consumer and governmental applications in which its products are used were the primary reasons that contributed to a total purchase price that resulted in the recognition of goodwill. The goodwill associated with the Business Combination is not deductible for tax purposes. The valuation of the intangible assets acquired and the related weighted-average amortization periods are as follows: Amount Weighted-Average Intangible assets subject to amortization: Trademarks $ 35,400 15.0 Technical know-how 189,300 20.0 Contracts 19,800 5.3 Customer relationships 268,700 10.6 In-process research and development 6,800 Total intangible assets subject to amortization 520,000 Tradenames, not subject to amortization 151,100 Indefinite Trademarks, not subject to amortization 82,900 Indefinite Total $ 754,000 In accordance with the requirements of the purchase method of accounting for acquisitions, inventories were recorded at fair market value (which is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity), which was $58,683 higher than the historical cost. The Company’s cost of goods sold includes a pre-tax charge of $871 and $29,086 for the years ended December 31, 2017 and 2016 , respectively, relating to the portion of the step-up on inventory sold during the period. A separate portion of the fair value step-up related to the domestic inventory accounted for under the LIFO method was included in inventory on the consolidated balance sheet as of December 31, 2016 as part of the new LIFO base layer on the acquired inventory (see Note 9 to these consolidated financial statements for further information). The Company’s consolidated financial statements include PQ Holdings results of operations from May 4, 2016 through December 31, 2016 . Net sales and net loss attributable to PQ Holdings during this period are included in the Company’s consolidated financial statements for the year ended December 31, 2016 and total $690,459 and $17,991 , respectively. Pro Forma Financial Information The unaudited pro forma information has been derived from the Company’s historical consolidated financial statements and has been prepared to give effect to the Business Combination, assuming that the Business Combination occurred on January 1, 2015. These pro forma adjustments primarily relate to depreciation expense on stepped up fixed assets, amortization of acquired intangibles, cost of goods sold expense related to the sale of stepped up inventory, interest expense related to additional debt that would be needed to fund the Business Combination, and the estimated impact of these adjustments on the Company’s tax provision. The unaudited pro forma consolidated results of operations are provided for illustrative purposes and are not indicative of the Company’s actual consolidated results of operations or consolidated financial position. The unaudited pro forma results of operations do not reflect any operating efficiencies or potential cost savings which may result from the acquisitions. Years ended 2016 2015 Pro forma sales $ 1,403,041 $ 1,413,201 Pro forma net loss (76,994 ) (120,982 ) Included in the pro forma net loss are adjustments to allocate charges incurred during the year ended December 31, 2016 to December 31, 2015. These non-recurring charges include a debt prepayment penalty of $26,250 , one-time refinancing charges of $4,747 and transaction fee charges of $1,795 that are each reflected in the pro forma net loss for the year ended December 31, 2015. 7. Acquisition: On June 12, 2017 (the “Closing Date”), the Company acquired the facilities of Sovitec Mondial S.A. (“Sovitec”) located in Belgium, Spain, Argentina and France as part of a stock transaction (the “Acquisition”) for $41,572 in cash, excluding assumed debt. Based in Fleurus, Belgium, Sovitec is a high quality producer of engineered glass products used in transportation safety, metal finishing and polymer additives. The Acquisition was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price was allocated to the identifiable net assets acquired based on the fair values of the identifiable assets acquired and liabilities assumed as of the Closing Date. The excess of the purchase price over the fair values of the identifiable net assets acquired was recorded to goodwill. The following table sets forth the calculation and preliminary allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition: Total consideration, net of cash acquired $ 41,572 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 14,305 Inventories 7,645 Prepaid and other current assets 400 Property, plant and equipment 9,020 Other long-term assets 129 Fair value of assets acquired 31,499 Current debt (6,420 ) Accounts payable (10,748 ) Long-term debt (10,189 ) Other long-term liabilities (154 ) Fair value of net assets acquired 3,988 Goodwill 37,584 $ 41,572 The valuation of the identifiable assets and liabilities included in the table above is preliminary and is subject to change, as the Company is in the process of evaluating the information required to determine the fair values of certain identifiable assets and liabilities acquired, including inventory, property, plant and equipment, and intangible assets. An increased portion of the purchase price allocated to the identifiable net assets acquired will reduce the amount recognized for goodwill and may result in increased cost of goods sold, depreciation and/or amortization expense. Adjustments to the provisional amounts during the measurement period that result in changes to depreciation, amortization or other income effects will be recognized in the reporting period(s) in which the adjustments are determined. The Company believes that the Acquisition will enable it to offer a more comprehensive, cost-effective and high-quality portfolio of products and services to its customers worldwide when, combined with anticipated synergies within its existing business, contributed to a total purchase price that resulted in the recognition of goodwill. All of the goodwill was assigned to the Company’s Performance Materials and Chemicals segment. The goodwill associated with the Acquisition is not deductible for tax purposes. The Company’s consolidated financial statements include Sovitec’s results of operations for the period from the Closing Date through December 31, 2017 . Net sales and net income attributable to Sovitec during this period are included in the Company’s consolidated statement of operations and total $26,257 and $1,370 , respectively, for the year ended December 31, 2017 . Acquisition costs of $2,515 are included in other operating expense, net in the Company’s consolidated statement of operations for the year ended December 31, 2017 . Pro Forma Financial Information The unaudited pro forma financial information for the years ended December 31, 2017 and 2016 has been derived from the Company’s historical consolidated financial statements and prepared to give effect to the Acquisition, assuming that the Acquisition occurred on January 1, 2016. The unaudited pro forma consolidated results of operations are provided for illustrative purposes only and are not indicative of the Company’s actual consolidated results of operations had the Acquisition been made as of January 1, 2016. The unaudited pro forma results of operations do not reflect any operating efficiencies or potential cost savings which may result from the Acquisition. Years ended 2017 2016 Pro forma sales $ 1,489,957 $ 1,105,479 Pro forma net income (loss) 59,968 (77,720 ) Certain non-recurring charges included in the Company’s results of operations for the year ended December 31, 2017 were allocated to the respective prior year periods for pro forma purposes. For the year ended December 31, 2017, non-recurring charges allocated to the prior year period include transaction fee charges of $2,515 which were excluded from the pro forma net income (loss) for the year ended December 31, 2017. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 6. Business Combination: As described in Note 1 to these consolidated financial statements, on May 4, 2016, the Company, PQ Holdings, Eco Services, certain investment funds affiliated with CCMP and certain other stockholders of PQ Holdings and Eco Services completed the Business Combination. Eco Services is the accounting predecessor to PQ Group Holdings. Certain investment funds affiliated with CCMP held a controlling interest position in Eco Services prior to the Business Combination. In addition, certain investment funds affiliated with CCMP owned a noncontrolling interest in PQ Holdings prior to the Business Combination and the merger with Eco constituted a change in control under the various PQ Holdings credit agreements and bond indenture. Therefore, Eco Services is deemed to be the accounting acquirer. These consolidated financial statements are the continuation of Eco Services’ business prior to the Business Combination. The Business Combination was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to PQ Holdings’ net assets acquired based on the fair values of assets acquired and liabilities assumed as of the acquisition date. The excess of the purchase price over the fair values of these net assets is recorded as goodwill. The following table sets forth the calculation and allocation of the purchase price to the net assets acquired with respect to the Business Combination, which was complete as of December 31, 2016. Total consideration, net of cash acquired $ 2,689,941 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 161,110 Inventories 254,770 Prepaid and other current assets 19,295 Investments in affiliated companies 472,994 Property, plant and equipment 683,673 Other intangible assets 754,000 Other long-term assets 48,127 Fair value of assets acquired 2,393,969 Revolver, notes payable & current debt (2,441 ) Accounts payable (93,222 ) Accrued liabilities (98,621 ) Long-term debt (20,470 ) Deferred income taxes (327,296 ) Other long-term liabilities (113,936 ) Noncontrolling interest (6,569 ) Fair value of net assets acquired 1,731,414 Goodwill 958,527 $ 2,689,941 Total consideration for the Business Combination included $1,777,740 of cash, $910,800 of equity in the acquired PQ Holdings entities and $1,400 of assumed stock awards of PQ Holdings. The fair value of the equity consideration was determined based on an estimated enterprise value using a market approach as of the date of the Business Combination, reduced by borrowings to arrive at the fair value of equity. The existing PQ Holdings credit facilities were not legally assumed as part of the Business Combination, and the extinguishment of the debt concurrent with the Business Combination was included as part of the consideration transferred (see Note 15 to these consolidated financial statements for further information). Acquisition costs of $1,583 are included in other operating expense, net in the Company’s consolidated statement of operations for the year ended December 31, 2016. The Company believes that its diverse range of industrial, consumer and governmental applications in which its products are used were the primary reasons that contributed to a total purchase price that resulted in the recognition of goodwill. The goodwill associated with the Business Combination is not deductible for tax purposes. The valuation of the intangible assets acquired and the related weighted-average amortization periods are as follows: Amount Weighted-Average Intangible assets subject to amortization: Trademarks $ 35,400 15.0 Technical know-how 189,300 20.0 Contracts 19,800 5.3 Customer relationships 268,700 10.6 In-process research and development 6,800 Total intangible assets subject to amortization 520,000 Tradenames, not subject to amortization 151,100 Indefinite Trademarks, not subject to amortization 82,900 Indefinite Total $ 754,000 In accordance with the requirements of the purchase method of accounting for acquisitions, inventories were recorded at fair market value (which is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity), which was $58,683 higher than the historical cost. The Company’s cost of goods sold includes a pre-tax charge of $871 and $29,086 for the years ended December 31, 2017 and 2016 , respectively, relating to the portion of the step-up on inventory sold during the period. A separate portion of the fair value step-up related to the domestic inventory accounted for under the LIFO method was included in inventory on the consolidated balance sheet as of December 31, 2016 as part of the new LIFO base layer on the acquired inventory (see Note 9 to these consolidated financial statements for further information). The Company’s consolidated financial statements include PQ Holdings results of operations from May 4, 2016 through December 31, 2016 . Net sales and net loss attributable to PQ Holdings during this period are included in the Company’s consolidated financial statements for the year ended December 31, 2016 and total $690,459 and $17,991 , respectively. Pro Forma Financial Information The unaudited pro forma information has been derived from the Company’s historical consolidated financial statements and has been prepared to give effect to the Business Combination, assuming that the Business Combination occurred on January 1, 2015. These pro forma adjustments primarily relate to depreciation expense on stepped up fixed assets, amortization of acquired intangibles, cost of goods sold expense related to the sale of stepped up inventory, interest expense related to additional debt that would be needed to fund the Business Combination, and the estimated impact of these adjustments on the Company’s tax provision. The unaudited pro forma consolidated results of operations are provided for illustrative purposes and are not indicative of the Company’s actual consolidated results of operations or consolidated financial position. The unaudited pro forma results of operations do not reflect any operating efficiencies or potential cost savings which may result from the acquisitions. Years ended 2016 2015 Pro forma sales $ 1,403,041 $ 1,413,201 Pro forma net loss (76,994 ) (120,982 ) Included in the pro forma net loss are adjustments to allocate charges incurred during the year ended December 31, 2016 to December 31, 2015. These non-recurring charges include a debt prepayment penalty of $26,250 , one-time refinancing charges of $4,747 and transaction fee charges of $1,795 that are each reflected in the pro forma net loss for the year ended December 31, 2015. 7. Acquisition: On June 12, 2017 (the “Closing Date”), the Company acquired the facilities of Sovitec Mondial S.A. (“Sovitec”) located in Belgium, Spain, Argentina and France as part of a stock transaction (the “Acquisition”) for $41,572 in cash, excluding assumed debt. Based in Fleurus, Belgium, Sovitec is a high quality producer of engineered glass products used in transportation safety, metal finishing and polymer additives. The Acquisition was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price was allocated to the identifiable net assets acquired based on the fair values of the identifiable assets acquired and liabilities assumed as of the Closing Date. The excess of the purchase price over the fair values of the identifiable net assets acquired was recorded to goodwill. The following table sets forth the calculation and preliminary allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition: Total consideration, net of cash acquired $ 41,572 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 14,305 Inventories 7,645 Prepaid and other current assets 400 Property, plant and equipment 9,020 Other long-term assets 129 Fair value of assets acquired 31,499 Current debt (6,420 ) Accounts payable (10,748 ) Long-term debt (10,189 ) Other long-term liabilities (154 ) Fair value of net assets acquired 3,988 Goodwill 37,584 $ 41,572 The valuation of the identifiable assets and liabilities included in the table above is preliminary and is subject to change, as the Company is in the process of evaluating the information required to determine the fair values of certain identifiable assets and liabilities acquired, including inventory, property, plant and equipment, and intangible assets. An increased portion of the purchase price allocated to the identifiable net assets acquired will reduce the amount recognized for goodwill and may result in increased cost of goods sold, depreciation and/or amortization expense. Adjustments to the provisional amounts during the measurement period that result in changes to depreciation, amortization or other income effects will be recognized in the reporting period(s) in which the adjustments are determined. The Company believes that the Acquisition will enable it to offer a more comprehensive, cost-effective and high-quality portfolio of products and services to its customers worldwide when, combined with anticipated synergies within its existing business, contributed to a total purchase price that resulted in the recognition of goodwill. All of the goodwill was assigned to the Company’s Performance Materials and Chemicals segment. The goodwill associated with the Acquisition is not deductible for tax purposes. The Company’s consolidated financial statements include Sovitec’s results of operations for the period from the Closing Date through December 31, 2017 . Net sales and net income attributable to Sovitec during this period are included in the Company’s consolidated statement of operations and total $26,257 and $1,370 , respectively, for the year ended December 31, 2017 . Acquisition costs of $2,515 are included in other operating expense, net in the Company’s consolidated statement of operations for the year ended December 31, 2017 . Pro Forma Financial Information The unaudited pro forma financial information for the years ended December 31, 2017 and 2016 has been derived from the Company’s historical consolidated financial statements and prepared to give effect to the Acquisition, assuming that the Acquisition occurred on January 1, 2016. The unaudited pro forma consolidated results of operations are provided for illustrative purposes only and are not indicative of the Company’s actual consolidated results of operations had the Acquisition been made as of January 1, 2016. The unaudited pro forma results of operations do not reflect any operating efficiencies or potential cost savings which may result from the Acquisition. Years ended 2017 2016 Pro forma sales $ 1,489,957 $ 1,105,479 Pro forma net income (loss) 59,968 (77,720 ) Certain non-recurring charges included in the Company’s results of operations for the year ended December 31, 2017 were allocated to the respective prior year periods for pro forma purposes. For the year ended December 31, 2017, non-recurring charges allocated to the prior year period include transaction fee charges of $2,515 which were excluded from the pro forma net income (loss) for the year ended December 31, 2017. |
Other Operating Expense, Net
Other Operating Expense, Net | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense, Net | 8. Other Operating Expense, Net: A summary of other operating expense, net is as follows: Years ended 2017 2016 2015 Amortization expense $ 32,010 $ 25,263 $ 6,605 Transaction and other related costs (1) 7,415 4,952 4,241 Restructuring and other related costs (Note 23) 8,490 12,630 4,147 Net loss on asset disposals 5,793 4,216 3,911 Intangible asset impairment charge (Note 13) — 6,873 — Management advisory fees (Note 26) 3,777 3,584 590 Environmental-related costs (Note 22) 395 1,352 202 Other, net 6,345 3,431 — $ 64,225 $ 62,301 $ 19,696 (1) Transaction and other related costs for the year ended December 31, 2017 primarily include transaction costs associated with the Company’s IPO exclusive of the direct costs recorded in stockholders’ equity net of the proceeds from the offering (see Note 1 to these consolidated financial statements for further information) and the Acquisition (see Note 7 ). Transaction and other related costs for the years ended December 31, 2016 and 2015 primarily include transaction costs directly attributable to the Business Combination (Note 6) and the 2014 Acquisition (see Note 23 ), as well as other business development costs. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 9. Inventories: Inventories are classified and valued as follows: December 31, 2017 2016 Finished products and work in process $ 199,919 $ 175,182 Raw materials 62,469 51,866 $ 262,388 $ 227,048 Valued at lower of cost or market: LIFO basis $ 162,315 $ 135,605 Valued at lower of cost and net realizable value: FIFO or average cost basis 100,073 91,443 $ 262,388 $ 227,048 The domestic inventory acquired as part of the Business Combination is valued based on the LIFO method. Therefore, the fair value allocated to the acquired LIFO inventory was treated as the new base inventory value. If inventories valued under the LIFO basis had been valued using the FIFO method, inventories would have been $26,630 and $30,338 lower than reported as of December 31, 2017 and 2016 , respectively, driven primarily by the purchase accounting fair value step-up of the LIFO inventory base value associated with the Business Combination. As of December 31, 2016 , inventory quantities for one of the Company’s LIFO pools were reduced below their levels at the Business Combination date. As a result of this reduction, LIFO inventory costs charged to cost of goods sold were computed based on the lower base layer costs at the Business Combination date. The impact on cost of goods sold and net loss for the year ended December 31, 2016 was not material. |
Investments in Affiliated Compa
Investments in Affiliated Companies | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Affiliated Companies | 10. Investments in Affiliated Companies: As a result of the Business Combination, the Company acquired investments in affiliated companies accounted for under the equity method. Affiliated companies accounted for on the equity method as of December 31, 2017 are as follows: Company Country Percent PQ Silicates Ltd. Taiwan 50% Zeolyst International USA 50% Zeolyst C.V. Netherlands 50% Quaker Holdings South Africa 49% Following is summarized information of the combined investments 1 : December 31, 2017 2016 Current assets $ 213,815 $ 207,997 Noncurrent assets 235,440 212,144 Current liabilities 37,018 44,741 Noncurrent liabilities 1,417 1,384 Year Ended Period from May 4, 2016 to December 31, 2016 Net sales $ 317,197 $ 206,072 Gross profit 132,812 91,761 Operating income 91,224 67,098 Net income 94,740 67,332 1 Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above. The Company’s investments in affiliated companies balance as of December 31, 2017 and 2016 includes net purchase accounting fair value adjustments of $264,700 and $273,300 , respectively, related to the Business Combination, consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names. Consolidated equity in net income (loss) from affiliates is net of $8,599 and $36,296 of amortization expense related to purchase accounting fair value adjustments for the years ended December 31, 2017 and 2016 , respectively. The following table summarizes the activity related to the Company’s investments in affiliated companies balance on the consolidated balance sheets: Years ended 2017 2016 Balance at beginning of period $ 459,406 $ — Business Combination — 472,994 Acquisition 119 — Investments in affiliated companies 9,000 — Equity in net income of affiliated companies 47,371 33,684 Charges related to purchase accounting fair value adjustments (8,599 ) (36,296 ) Dividends received (44,071 ) (7,636 ) Foreign currency translation adjustments 6,050 (3,340 ) Balance at end of period $ 469,276 $ 459,406 The Company had net receivables due from affiliates of $4,910 and $4,196 as of December 31, 2017 and 2016 , respectively, which are included in prepaid and other current assets. Net receivables due from affiliates are generally non-trade receivables. Sales to affiliates were $2,853 and $1,587 for the years ended December 31, 2017 and 2016 , respectively. The Company purchased goods of $2,475 and $1,147 from affiliates, which is included in cost of goods sold during the years ended December 31, 2017 and 2016 , respectively. On December 18, 2013, PQ Holdings and its joint venture, Zeolyst International, entered into a real estate tax abatement agreement with the Unified Government of Wyandotte County and Kansas City, Kansas that will utilize an Industrial Revenue Bond financing structure to achieve a 75% real estate tax abatement on the value of the improvements that will be constructed during the expansion of PQ Holdings and Zeolyst International’s facilities at the jointly-operated Kansas City, Kansas plant. The financing obligation and the industrial bond receivable have been presented net, as the financing obligation and the industrial bond meet the criteria for right of setoff conditions under GAAP. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 11. Property, Plant and Equipment: A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows: December 31, 2017 2016 Land $ 191,006 $ 186,327 Buildings 200,054 157,944 Machinery and equipment 1,005,025 788,175 Construction in progress 145,414 204,138 1,541,499 1,336,584 Less: accumulated depreciation (311,115 ) (155,196 ) $ 1,230,384 $ 1,181,388 Depreciation expense was $124,551 , $89,453 and $28,790 for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Reportable Segments | 12. Reportable Segments: The Company has organized its business around two operating segments based on the review of discrete financial results for each of the operating segments by the Company’s chief operating decision maker (the Company’s President and Chief Executive Officer), or CODM, for performance assessment and resource allocation purposes. Each of the Company’s operating segments represents a reportable segment under GAAP. The Company’s reportable segments are organized based on the nature and economic characteristics of the Company’s products. The Company’s two reportable segments are Performance Materials and Chemicals (“PM&C”) and Environmental Catalysts and Services (“EC&S”). The PM&C segment is a silicates and specialty materials producer with leading supply positions for the majority of its products sold in North America, Europe, South America, Australia and Asia (excluding China) serving end uses such as personal and industrial cleaning products, fuel efficient tires (or green tires), surface coatings, and food and beverage. The two product groups included in the PM&C segment are performance materials and performance chemicals. The EC&S segment is a leading global innovator and producer of catalysts for the refinery, emission control, and petrochemical industries and is also a leading provider of catalyst recycling services to the North American refining industry. The three product groups included in the EC&S segment are silica catalysts, zeolyst catalysts, and refining services. The EC&S segment includes equity in net income from Zeolyst International and Zeolyst C.V. (collectively, the “Zeolyst Joint Venture”), each of which are 50/50 joint ventures with CRI Zeolites, Inc. (a wholly-owned subsidiary of Royal Dutch Shell). The Zeolyst Joint Venture is accounted for using the equity method in the Company’s consolidated financial statements (see Note 10 to these consolidated financial statements for further information). Company management evaluates the EC&S segment’s performance, including the Zeolyst Joint Venture, on a proportionate consolidation basis. Accordingly, the revenues and expenses used to compute the EC&S segment’s adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) include the Zeolyst Joint Venture’s results of operations on a proportionate basis based on the Company’s 50% ownership level. Since the Company uses the equity method of accounting for the Zeolyst Joint Venture, these items are eliminated when reconciling to the Company’s consolidated results of operations. The Company’s management evaluates the operating results of each reportable segment based upon Adjusted EBITDA. Adjusted EBITDA consists of EBITDA, which is a measure defined as net income before depreciation and amortization, interest expense and income taxes (each of which is included in the Company’s consolidated statements of operations), and adjusted for certain items as discussed below. Summarized financial information for the Company’s reportable segments and product groups is shown in the following table: Years ended 2017 2016 2015 Net sales: Performance Chemicals $ 687,645 $ 437,523 $ — Performance Materials 324,225 206,522 — Eliminations (10,021 ) (5,094 ) — Performance Materials & Chemicals 1,001,849 638,951 — Silica Catalysts 75,333 53,029 — Refining Services 398,342 373,718 388,875 Environmental Catalysts & Services (1) 473,675 426,747 388,875 Inter-segment sales eliminations (2) (3,423 ) (1,521 ) — Total $ 1,472,101 $ 1,064,177 $ 388,875 Segment Adjusted EBITDA: (3) Performance Materials & Chemicals $ 240,128 $ 158,679 $ — Environmental Catalysts & Services (4) 243,587 196,825 117,704 Total Segment Adjusted EBITDA (5) $ 483,715 $ 355,504 $ 117,704 (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 consolidated consolidated financial statements for further information). The proportionate share of sales is $143,774 and $94,516 for the years ended December 31, 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 Catalysts and Services segment is $58,156 for the year ended December 31, 2017 , which includes $46,985 of equity in net income plus $8,600 of amortization of investment in affiliate step-up plus $11,070 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $40,687 for the year ended December 31, 2016 , which includes $33,716 of equity in net income plus $36,296 of amortization of investment in affiliate step-up plus $6,920 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. A reconciliation from net income (loss) to Segment Adjusted EBITDA is as follows: Years ended 2017 2016 2015 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income (loss) attributable to PQ Group Holdings Inc. $ 57,603 $ (79,746 ) $ 11,427 Provision for (benefit from) income taxes (119,197 ) 10,041 — Interest expense, net 179,044 140,315 44,348 Depreciation and amortization 177,140 128,288 38,999 Segment EBITDA 294,590 198,898 94,774 Unallocated corporate expenses 30,422 23,971 — Joint venture depreciation, amortization and interest 11,070 6,920 — Amortization of investment in affiliate step-up 8,600 36,296 — Amortization of inventory step-up 871 29,086 — Impairment of fixed assets, intangibles and goodwill — 6,873 — Debt extinguishment costs 61,886 13,782 — Losses on disposal of fixed assets 5,793 4,216 3,911 Foreign currency exchange losses 25,786 (3,558 ) — Non-cash revaluation of inventory, including LIFO 3,708 1,310 — Management advisory fees 3,777 3,583 590 Transaction and other related costs 7,425 4,664 4,241 Equity-based and other non-cash compensation 8,799 7,042 2,256 Restructuring, integration and business optimization expenses 13,174 16,258 4,147 Defined benefit pension plan cost 2,940 1,375 2,903 Other (1) 4,874 4,788 4,882 Segment Adjusted EBITDA $ 483,715 $ 355,504 $ 117,704 (1) Other includes certain legal and environmental costs and other charges such as capital taxes, asset retirement obligation accretion and other expenses. The Company’s consolidated results include equity in net income from affiliated companies of $38,772 for the year ended December 31, 2017 and equity in net loss from affiliated companies of $2,612 for the year ended December 31, 2016 . This is primarily comprised of equity in net income of $46,985 and $33,716 in the EC&S segment from the Zeolyst Joint Venture for the years ended December 31, 2017 and 2016 , respectively. The remaining equity in net income (loss) for the Company is included in the PM&C segment, which is attributed to smaller investments and was not material. The Company’s equity in net income from affiliates was more than offset by $36,296 of amortization expense related to purchase accounting fair value adjustments associated with the Zeolyst Joint Venture for the year ended December 31, 2016 as a result of the Business Combination valuation. Capital expenditures for the Company’s reportable segments are shown in the following table: Years ended 2017 2016 2015 Capital expenditures: Performance Materials & Chemicals $ 87,938 $ 74,392 $ — Environmental Catalysts & Services (1) 66,511 74,921 41,854 Eliminations (1) (13,366 ) (19,001 ) — Total $ 141,083 $ 130,312 $ 41,854 Change in non-cash capital expenditures in accounts payable (601 ) (8,891 ) (860 ) Capital expenditures per the consolidated statement of cash flows $ 140,482 $ 121,421 $ 40,994 (1) Includes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture. The proportionate share of capital expenditures included in the EC&S segment is $13,366 and $19,001 for the Zeolyst Joint Venture for the years ended December 31, 2017 and 2016 , respectively. These capital expenditures are in turn removed in the “Eliminations” line item to reconcile to the Company’s consolidated capital expenditures. Total assets by segment are not disclosed by the Company because the information is not prepared or used by the CODM to assess performance and to allocate resources. Net sales and long-lived assets by geographic area are presented in the following tables. Net sales are attributed to countries based upon location of products shipped. Years ended 2017 2016 2015 Net sales (1) : United States $ 874,764 $ 705,348 $ 388,875 Netherlands 118,567 79,821 — United Kingdom 116,410 67,494 — Other foreign countries 362,360 211,514 — Total $ 1,472,101 $ 1,064,177 $ 388,875 (1) Except for the United States, no sales in an individual country exceeded 10% of the Company’s total net sales. Years ended 2017 2016 2015 Long-lived assets (1) : United States $ 2,919,458 $ 2,870,958 $ 936,111 Netherlands 289,459 288,239 — United Kingdom 229,595 228,924 — Other foreign countries 425,675 378,872 — Total $ 3,864,187 $ 3,766,993 $ 936,111 (1) Long-lived assets exclude intercompany notes receivable and deferred tax assets. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 13. Goodwill and Other Intangible Assets: The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 is summarized as follows: Performance Environmental Total Balance as of January 1, 2016 $ — $ 311,892 $ 311,892 Goodwill recognized 876,844 81,683 958,527 Foreign exchange impact (24,338 ) (4,652 ) (28,990 ) Balance as of December 31, 2016 $ 852,506 $ 388,923 $ 1,241,429 Goodwill recognized 37,584 — 37,584 Foreign exchange impact 24,533 2,410 26,943 Balance as of December 31, 2017 $ 914,623 $ 391,333 $ 1,305,956 The Company completed its annual goodwill impairment assessments as of October 1, 2017 and 2016 . For the annual assessments, the Company bypassed the option to perform the qualitative assessment and proceeded directly to performing the first step of the two-step goodwill impairment test for each of its reporting units. As a result of the Business Combination, for the October 1, 2017 and 2016 assessments, the Company identified four reporting units, two in each of its operating segments (PM&C and EC&S). The Company determined the fair value of its reporting units using a split between a market approach and an income, or discounted cash flow, approach. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Estimating the fair value of a reporting unit requires various assumptions including the use of projections of future cash flows and discount rates that reflect the risks associated with achieving those cash flows. The key assumptions used in estimating the fair value were the operating margin growth rates, revenue growth rates from implementation of strategic plans, the weighted average cost of capital, the perpetual growth rate, and the estimated earnings market multiples of each reporting unit. The market value was estimated using publicly traded comparable company values by applying their most recent annual EBITDA multiples to the reporting unit’s trailing twelve months EBITDA. The income approach value was estimated using a discounted cash flow approach. The assumptions about future cash flows and growth rates are based on management’s assessment of a number of factors including the reporting unit’s recent performance against budget as well as management’s ability to execute on planned future strategic initiatives. Discount rate assumptions are based on an assessment of the risk inherent in those future cash flows. As of October 1, 2017 and 2016 , the fair values of each of the Company’s reporting units (with the exception of one in 2016 ) substantially exceeded their respective carrying values and therefore, the second step of the two-step goodwill impairment test was not required. For the Company’s performance chemicals reporting unit within its PM&C segment, the result of the annual goodwill impairment test as of October 1, 2016 indicated that the fair value of the reporting unit was in excess of its carrying amount by 10% . Actual sales trends for the reporting unit were lower than originally forecasted due to unfavorable foreign exchange as well as lower volumes in certain product groups, particularly in the base silicate, pulp and paper, and drilling markets. The Company believes the performance chemicals reporting unit remains well positioned over the long term with respect to its entire portfolio of products; however, a deterioration in the macroeconomic environment could adversely affect the fair value or carrying amount of this reporting unit. The amount of goodwill associated with this reporting unit was $577,667 as of the October 1, 2016 testing date. In addition to the annual goodwill impairment assessment, the Company also performed the annual impairment test over its other indefinite-lived intangible assets as of October 1, 2017 and 2016 . As a result of the prior year test, the Company determined that the trade names related to its performance chemicals reporting unit within the PM&C segment and its catalysts reporting unit within the EC&S segment were impaired as of October 1, 2016 . The impaired intangibles related to those identified as part of the Business Combination. The fair value of the respective trade names was determined using the relief-from-royalty method based on the discounted cash flows used in the goodwill impairment test. Slower sales growth rates for both reporting units led to the recognition of the impairment charges. Based on the testing performed, the Company recorded non-cash impairment charges of $5,350 related to trade names within the performance chemicals reporting unit and $1,523 related to trade names within the catalysts reporting unit. The impairment charges are included in the other operating expense, net line item of the Company’s consolidated statement of operations for the year ended December 31, 2016. There was no impairment of the Company’s indefinite-lived intangible assets noted for the year ended December 31, 2017 as a result of the annual impairment test. For the Company’s performance chemicals reporting unit within its PM&C segment, the result of the annual impairment test as of October 1, 2017 indicated that the fair value of the intangible assets over corporate tradenames and product tradenames were slightly in excess of the carrying amounts, 2% and 3% , respectively, due to the impairment taken in the previous year. Gross carrying amounts and accumulated amortization for intangible assets other than goodwill are as follows: December 31, 2017 December 31, 2016 Gross Amount Accumulated Foreign Net Gross Amount Accumulated Impairment Charge Foreign Exchange Impact Net Balance Technical know-how $ 214,290 $ (21,138 ) $ (1,691 ) $ 191,461 $ 214,290 $ (10,029 ) $ — $ (7,855 ) $ 196,406 Customer relationships 368,000 (63,860 ) (1,979 ) 302,161 368,000 (31,199 ) — (11,064 ) 325,737 Contracts 19,800 (9,205 ) — 10,595 19,800 (3,658 ) — — 16,142 Trademarks 35,400 (3,911 ) (198 ) 31,291 35,400 (1,573 ) — (567 ) 33,260 Permits 9,100 (5,612 ) — 3,488 9,100 (3,792 ) — — 5,308 Total definite-lived intangible assets 646,590 (103,726 ) (3,868 ) 538,996 646,590 (50,251 ) — (19,486 ) 576,853 Indefinite-lived trade names 159,027 — (968 ) 158,059 165,900 — (6,873 ) (5,105 ) 153,922 Indefinite-lived trademarks 82,900 — (611 ) 82,289 82,900 — — (3,902 ) 78,998 In-process research and development 6,800 — — 6,800 6,800 — — — 6,800 Total intangible assets $ 895,317 $ (103,726 ) $ (5,447 ) $ 786,144 $ 902,190 $ (50,251 ) $ (6,873 ) $ (28,493 ) $ 816,573 The Company amortizes technical know-how over periods that range from fourteen to twenty years, customer relationships over periods that range from seven to fifteen years, trademarks over a fifteen year period, contracts over periods that range from two to sixteen years, and permits over five years. Amortization of intangibles included in cost of goods sold on the consolidated statements of operations was $20,579 , $13,573 and $3,605 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Amortization of intangibles included in other operating expense, net on the consolidated statements of operations was $32,010 , $25,263 and $6,605 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Estimated future aggregate amortization expense of intangible assets is as follows: Year Amount 2018 $ 51,883 2019 50,914 2020 47,363 2021 46,421 2022 46,354 Thereafter 296,061 Total estimated future aggregate amortization expense $ 538,996 |
Accrued Liabilities (Notes)
Accrued Liabilities (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 14. Accrued Liabilities: The following table summarizes the components of accrued liabilities as follows: December 31, 2017 2016 Compensation and bonus $ 49,988 $ 47,823 Interest 15,936 9,139 Property tax 1,622 2,499 Environmental reserves (see Note 22) 5,790 8,346 Supply contract obligation (see Note 25) 1,638 1,638 Income taxes 1,166 8,035 Commissions and rebates 1,820 2,253 Pension, postretirement and supplemental retirement plans (see Note 19) 2,192 2,030 Other 13,765 17,670 Total $ 93,917 $ 99,433 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 15. Long-term Debt: The summary of long-term debt is as follows: December 31, 2017 December 31, 2016 Term Loan Facility (U.S. dollar denominated) $ 916,153 $ 925,430 Term Loan Facility (Euro denominated) 335,808 297,317 6.75% Senior Secured Notes due 2022 625,000 625,000 5.75% Senior Unsecured Notes due 2025 300,000 — Floating Rate Senior Unsecured Notes due 2022 — 525,000 8.5% Senior Notes due 2022 — 200,000 ABL Facility 25,000 — Other 68,318 45,223 Total debt 2,270,279 2,617,970 Original issue discount (18,390 ) (28,497 ) Deferred financing costs (21,403 ) (27,275 ) Total debt, net of original issue discount and deferred financing costs 2,230,486 2,562,198 Less: current portion (45,166 ) (14,481 ) Total long-term debt $ 2,185,320 $ 2,547,717 Concurrent with the closing of the Business Combination, the Company refinanced the existing credit facilities of PQ Holdings and Eco Services by (i) entering into a $1,200,000 senior secured term loan (consisting of a $900,000 senior secured term loan and a $300,000 Euro equivalent senior secured term loan), (ii) issuing $625,000 in new senior secured notes, (iii) issuing $525,000 in senior unsecured notes, and (iv) entering into a $200,000 asset-based secured revolving credit facility. The existing PQ Holdings credit facilities were not legally assumed as part of the Business Combination, and the extinguishment of the debt was included as part of the consideration transferred for the Business Combination (see Note 6 to these consolidated financial statements for further information). The Company recorded $4,747 of new creditor and third-party financing costs as debt extinguishment costs. In addition, previous unamortized deferred financing costs of $6,252 and original issue discount of $989 associated with the previously outstanding debt were written off as debt extinguishment costs. The Company incurred deferred financing fees associated with the financing of its debt. Such deferred financing costs are amortized over the terms of the related agreements. Amortization of deferred costs of $3,780 and $2,801 for the years ended December 31, 2016 and 2015, respectively, were included in interest expense. In addition, the Company paid original issue discount associated with the financing of its debt. The original issue discount is amortized over the terms of the related agreements. Amortization of original issue discount of $3,079 and $314 for the years ended December 31, 2016 and 2015, respectively, were included in interest expense. Senior Secured USD and Euro Term Loans and Asset-Based Revolving Loan Concurrent with the Business Combination, the Company entered into new senior secured credit facilities (collectively, the “New Senior Secured Credit Facilities”) comprised of a $1,200,000 term loan facility consisting of a $900,000 U.S. dollar-denominated tranche and a $300,000 Euro-denominated (or €265,000 ) tranche (the “Term Loan Facility”), and a $200,000 asset-based revolving credit facility (the “ABL Facility”). The Term Loan Facility was issued at 99.0% of the principal amount. Borrowings under the Term Loan Facility bore interest at a rate equal to the LIBOR rate (or EURIBOR rate, as applicable) or the base rate elected by the Company at the time of the borrowing plus a margin of 4.75% or 3.75% , respectively. Further, the LIBOR rate and base rate elected under the facilities are subject to a floor of 1.00% and 2.00% , respectively. The Term Loan Facility requires minimum scheduled quarterly principal payments equal to 0.25% of the original principal amount of the term loans made on the closing date of the Business Combination. The Term Loan Facility has a maturity date of November 4, 2022, which date may be accelerated prior to the maturity date of the 2022 Notes unless the 2022 Notes have been refinanced or repaid prior to such time. On November 14, 2016 (the “First Amendment Closing Date”), the Company entered into the First Amendment Agreement to the Term Loan Facility (the “First Amendment”) pursuant to which the Company, among other things: (a) refinanced the existing $900,000 U.S. dollar-denominated tranche by issuing a U.S. dollar-denominated replacement term loan in the amount of $927,750 and (b) refinanced the existing €265,000 (or $300,000 ) Euro-denominated tranche by issuing a Euro-denominated replacement term loan in the amount of €283,338 . Included in the U.S. dollar-denominated replacement term loan is an additional $30,000 principal amount of borrowings. Included in the Euro-denominated replacement term loan is an additional €19,000 principal amount of borrowings. The borrowings under the First Amendment bear interest at a rate equal to the LIBOR rate or the base rate elected by the Company at the time of borrowing plus a margin of 4.25% for U.S. dollar-denominated LIBOR Rate loans, 4.00% for Euro-denominated LIBOR Rate loans or 3.25% for base rate loans. These new replacement term loans have substantially the same terms under the original Term Loan Facility subject to the amendments contained in the First Amendment. The Company recorded $474 of new creditor and third-party financing costs as debt extinguishment costs. In addition, previous unamortized deferred financing costs of $564 and original issue discount of $756 associated with the previously outstanding debt were written off as debt extinguishment costs. On August 7, 2017, the Company re-priced the existing $927,750 U.S. dollar-denominated tranche and the existing €283,338 Euro-denominated tranche of its term loans to reduce the applicable interest rates. The terms of the facilities are substantially consistent following the re-pricing, except that borrowings under the term loans bear interest at a rate equal to the LIBOR rate plus a margin of 3.25% with respect to U.S. dollar-denominated LIBOR rate loans and the EURIBOR rate plus a margin of 3.25% with respect to Euro-denominated EURIBOR rate loans. In addition, the LIBOR rate elected under the facilities is subject to a floor of 0% and the EURIBOR rate elected under the facilities is subject to a floor of 0.75% . The Company recorded $199 of new creditor and third-party financing costs as debt extinguishment costs. In addition, previous unamortized deferred financing costs of $105 and original issue discount of $162 associated with the previously outstanding debt were written off as debt extinguishment costs. The Company may at any time or from time to time voluntarily prepay loans under the Term Loan Facility in whole or in part without premium or penalty. The Term Loan Facility further requires prepayments from certain “net cash proceeds” received and 50% of “excess cash flow” with step downs to lower percentages based on the Company’s leverage ratio, if applicable. In accordance with the Term Loan Facility, net cash proceeds generally relate to proceeds received from the issuance or incurrence of certain indebtedness or proceeds received on the disposition of assets, adjusted for certain costs and expenses, and are payable promptly upon receipt, subject in the case of net cash proceeds from asset dispositions or condemnation/casualty events exceeding certain thresholds. Net cash proceeds in respect of asset dispositions are not payable if such proceeds are reinvested in the Company’s business within a certain specified time period. Excess cash flow is to be calculated annually and is defined as the sum of consolidated adjusted EBITDA, consolidated working capital adjustments and consolidated net income, each adjusted for various expenditures and/or proceeds commencing with the fiscal year ending on December 31, 2017. Prepayments with respect to excess cash flow, if any, are to be made on an annual basis due within 5 business days after the annual audited financials are delivered to the lenders thereunder of each year. The remaining principal balance of the term loans are due upon maturity. The loans and guarantees under the Term Loan Facility are secured (i) by a first-priority security interest in, among other things, substantially all of the Company’s and the guarantors’ equity interests, equipment, intellectual property, pledged debt, material real estate assets, general intangibles, books, records and supporting obligations related to the foregoing and any other assets (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral securing the ABL Facility. The liens securing the Term Loan Facility and the guarantees are pari passu with the liens securing the Senior Secured Notes subject to the pari passu intercreditor agreement. The ABL Facility provides for up to $200,000 in revolving credit borrowings consisting of up to $150,000 in U.S. available borrowings, up to $10,000 in Canadian available borrowings and up to $40,000 of European available borrowings. Borrowings under the ABL Facility bear interest at a rate equal to the LIBOR rate or the base rate elected by the Company at the time of the borrowing plus a margin of between 1.50% - 2.00% or 0.50% - 1.00% , respectively, depending on availability under the ABL Facility. In addition, there is an annual commitment fee equal to 0.375% , with a step-down to 0.25% based on the average usage of the revolving credit borrowings available. As of December 31, 2017 , there were $25,000 in revolving credit borrowings under the ABL Facility. Revolving credit borrowings are payable at the option of the Company throughout the term of the ABL Facility with the balance due May 4, 2021. The Company has the ability to request letters of credit under the ABL Facility. The Company had $19,741 of letters of credit outstanding as of December 31, 2017 , which reduce available borrowings under the ABL Facility by such amounts. The loans and guarantees under the ABL Facility are secured (i) by a first-priority security interest in, among other things, substantially all of the Company’s and the guarantors’ receivables, inventory, deposit accounts and other collateral securing the ABL Facility on a first-priority basis and (ii) by a second-priority security interest in the property and assets that secure the Term Loan Facility. In addition, the ABL Facility is secured by the equity interests in, and substantially all of the assets of, certain foreign guarantors in connection with the Canadian dollar-denominated and Euro-denominated availability. The Term Loan Facility and the ABL Facility contain various non-financial restrictive covenants. Each limits the ability of PQ Corporation and its restricted subsidiaries to incur certain indebtedness or liens, merge, consolidate or liquidate, dispose of certain property, make investments or declare or pay dividends, make optional payments, modify certain debt instruments, enter into certain transactions with affiliates, enter into certain sales and leasebacks, and certain other non-financial restrictive covenants. The ABL Facility also contains one financial covenant which applies when minimum availability under the ABL Facility exceeds a certain threshold. During such time, the Company is required to maintain a fixed-charge coverage ratio of at least 1 .0 to 1.0. The Company is in compliance with all debt covenants as of December 31, 2017 and 2016 , respectively. Senior Secured Notes Concurrent with the Business Combination, the Company issued $625,000 of 6.750% Senior Secured Notes due November 2022 (the “Senior Secured Notes”) in transactions exempt from or not subject to registration under the Securities Act pursuant to Rule 144A and Regulation S under the Securities Act of 1933. The Senior Secured Notes are senior secured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior debt, and are senior in right of payment to all of the Company’s existing and future subordinated debt. The Senior Secured Notes are effectively senior to all of the Company’s existing and future unsubordinated indebtedness that is not secured, to the extent of the value of the collateral securing the Senior Secured Notes. The Senior Secured Notes are effectively subordinated to the Company’s ABL Facility, to the extent of the value of the assets securing the ABL Facility on a first priority basis. The Senior Secured Notes are also structurally subordinated to the liabilities of PQ Corporation’s existing and future non-guarantor subsidiaries. The indenture relating to the Senior Secured Notes contains various limitations on the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, pay dividends or repay certain debt, make loans and investments, sell assets, create liens, enter into transactions with affiliates, enter into agreements restricting PQ Corporation’s subsidiaries ability to pay dividends, and merge and consolidate with other companies, among other things. Interest on the Senior Secured Notes is payable on May 15 and November 15 of each year, commencing November 15, 2016. No principal payments are required with respect to the Senior Secured Notes prior to their final maturity. The Senior Secured Notes mature on November 15, 2022. The obligations of the Company under the Senior Secured Notes and the related indenture are guaranteed by PQ Holdings and CPQ Midco I Corporation, PQ Corporation’s direct parent, and each of PQ Corporation’s current and future domestic subsidiaries that is a guarantor under the Term Loan Facility. The obligations of the Company under the Senior Secured Notes and the indenture are secured (i) by a first-priority security interest in substantially all of the Company’s and the guarantors’ property and assets that secure the Term Loan Facility (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral securing the ABL Facility. The liens securing the Senior Secured Notes and the guarantees are pari passu with the liens securing the Term Loan Facility subject to the pari passu intercreditor agreement. If any Event of Default (other than a default relating to certain events of bankruptcy or insolvency of PQ Corporation or certain of its subsidiaries) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 30% in principal amount of the then total outstanding notes by notice to the Company may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately. If an event of default arising from certain events of bankruptcy or insolvency of the Company occurs, the principal of, premium, if any, and interest on all the Senior Secured Notes shall become immediately due and payable without any declaration or other act on the part of the trustee or any holders. The Senior Secured Notes are redeemable, in whole or in part, at the redemption prices (expressed as percentages of principal amount of the Senior Secured Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date, if redeemed on or after any of the dates below until the subsequent date below: Year Percentage May 15, 2019 103.375 % May 15, 2020 101.688 % May 15, 2021 and thereafter 100.000 % Upon the occurrence of a change of control, as defined, each holder will have the right to require the Company to purchase all or any part of such holder’s Senior Secured Notes at a purchase price in cash equal to 101% of the principal amount, plus accrued and unpaid interest. Senior Unsecured Notes - Redeemed as of December 11, 2017 Concurrent with the Business Combination, the Company issued $525,000 aggregate principal amount of floating rate Senior Unsecured Notes due 2022 (the “Senior Unsecured Notes”) in a concurrent private placement exempt from the registration requirements of the Securities Act. The notes were issued at 98.0% of the principal amount. The Senior Unsecured Notes were to mature on May 1, 2022; provided that if the 2022 Notes have been refinanced or otherwise repaid prior to such date, the Senior Unsecured Notes were to mature on May 1, 2023. Interest on the Senior Unsecured Notes was paid and reset quarterly at an annual rate equal to the three-month LIBOR plus 10.75% per year, with a 1.0% LIBOR floor. The note purchase agreement relating to the Senior Unsecured Notes contained various limitations on the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, pay dividends or repay certain debt, make loans and investments, sell assets, create liens, enter into transactions with affiliates, enter into agreements restricting PQ Corporation’s subsidiaries ability to pay dividends, and merge and consolidate with other companies, among other things. Interest was payable on March 15, June 15, September 15, and December 15 of each year, commencing on June 15, 2016. The Senior Unsecured Notes were senior unsecured obligations of the Company and the guarantors. The former obligations of the Company under the Senior Unsecured Notes and the related note purchase agreement were guaranteed by PQ Holdings and CPQ Midco I Corporation, PQ Corporation’s direct parent, and each of PQ Corporation’s subsidiaries that was a guarantor under the New Senior Secured Credit Facilities. In conjunction with the Company’s IPO, on October 3, 2017, the Company redeemed $446,208 in aggregate principal of the $525,000 of PQ Corporation’s Senior Unsecured Notes using the proceeds from the IPO. Following the redemption, $78,792 aggregate principal amount of the Senior Unsecured Notes remained outstanding. The Company paid a redemption premium of $32,284 , which was recorded as debt extinguishment costs. In addition, previous unamortized deferred financing costs of $696 and original issue discount of $7,555 associated with the previously outstanding debt were written off as debt extinguishment costs. On December 11, 2017, the Company redeemed the remaining $78,792 aggregate principal amount of the Senior Unsecured Notes with the proceeds from its issuance of the 5.75% Senior Unsecured Notes due 2025. The Company paid a redemption premium of $7,091 , of which $6,043 was recorded as debt extinguishment costs. In addition, unamortized deferred financing costs of $108 and original issue discount of $1,176 associated with the previously outstanding debt were written off as debt extinguishment costs. Refer to the 5.75% Senior Unsecured Notes due 2025 section of this note for further information. Senior Secured Credit Facilities - Refinanced as of May 4, 2016 On December 1, 2014, Eco Services entered into a credit agreement (the “Senior Credit Agreement”) governing a $555,000 senior secured credit facility, which included a $500,000 term loan facility and a $55,000 revolving credit facility (collectively, the “Senior Secured Credit Facilities”). The full amount of the $500,000 term loan facility was drawn on December 1, 2014 (the “Eco Credit Facility Closing Date”) to finance a portion of 2014 Acquisition with Solvay (as defined in Note 23 ), including working capital and/or purchase price adjustments payable on the Eco Credit Facility Closing Date and the payment of related fees, expenses and other costs of the transactions. The Senior Credit Agreement was due to mature on December 1, 2021. Borrowings under the Senior Credit Agreement bore interest at a rate per annum equal to an applicable interest rate margin, plus, at Eco Services’ option, either (a) a base rate determined by the reference to the highest of (1) the prime commercial lending rate publicly announced by the administrative agent as the “prime rate” as in effect on such day, (2) the federal funds effective rate plus 0.50% , and (3) the LIBOR rate determined by reference to the cost of funds for Eurodollar deposits for an interest period of one month, plus 1.00% or (b) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the specified interest period, as adjusted for certain statutory reserve requirements. As of December 31, 2015, the interest rate on the Senior Credit Agreement was 4.75% . The term loan facility was issued at 99.5% of the principal amount, resulting in an original issue discount on the term loan facility of $2,500 . The accretion of the original issue discount is reported as interest expense, and is accreted under the effective interest method over the term of the loan. Proceeds from the revolving credit facility were to be used to finance the Company’s working capital needs and other general corporate purposes, including investments, restricted payments and any other purpose not prohibited as defined in the Senior Credit Agreement. In 2015, the Company borrowed and repaid $12,000 under the revolving credit facility, resulting in no outstanding credit balance on the revolving credit facility as of December 31, 2015. A portion of the revolving credit facility, not to exceed $25,000 , was also available for the issuance of letters of credit. Concurrent with the Business Combination, on May 4, 2016 the Senior Secured Credit Facilities were refinanced and as such, there is no principal amount outstanding as of December 31, 2017 and 2016, respectively. 2022 Notes - Redeemed as of December 11, 2017 In December 2014, Eco Services issued $200,000 aggregate principal amount of 8.50% senior notes due 2022 (the “2022 Notes”) under an indenture dated October 24, 2014. The 2022 Notes were issued in a private transaction exempt from the registration requirements of the Securities Act. Pursuant to the indenture governing the 2022 Notes, PQ Group Holdings assumed the obligations of Eco Services under the 2022 Notes following the Business Combination. Interest on the 2022 Notes was payable on May 1 and November 1 of each year. The 2022 Notes were to mature on November 1, 2022 and were issued at 100% of the principal amount. In 2014, the Successor Company recorded $3,000 of costs related to potential bridge financing that was charged to interest expense upon the issuance of the 2022 Notes. The 2022 Notes were unsecured senior obligations of the Company, pari passu in right of payment to all existing and future senior indebtedness of the Company, and effectively subordinated to all secured indebtedness of the Company to the extent of the value of the assets securing such senior indebtedness. The 2022 Notes were senior in right of payment to all subordinated indebtedness of the Company. On December 11, 2017, the Company redeemed the $200,000 aggregate principal amount of the 2022 Notes with the proceeds from its issuance of the 5.75% Senior Unsecured Notes due 2025. The Company paid a redemption premium of $8,500 , of which $7,996 was recorded as debt extinguishment costs. In addition, unamortized deferred financing costs of $5,207 associated with the previously outstanding debt were written off as debt extinguishment costs. Refer to the 5.75% Senior Unsecured Notes due 2025 section of this note for further information. 5.75% Senior Unsecured Notes due 2025 On December 11, 2017, the Company issued $300,000 aggregate principal amount of floating rate Senior Unsecured Notes due 2025 (the “ 5.75% Senior Unsecured Notes”) in a private placement exempt from the registration requirements of the Securities Act. The 5.75% Senior Unsecured Notes mature on December 15, 2025. Interest on the 5.75% Senior Unsecured Notes is to be paid semi-annually on February 15 and August 15, commencing August 15, 2018, at an annual rate of 5.75% . The note purchase agreement relating to the 5.75% Senior Unsecured Notes contained various limitations on the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, pay dividends or repay certain debt, make loans and investments, sell assets, create liens, enter into transactions with affiliates, enter into agreements restricting PQ Corporation’s subsidiaries ability to pay dividends, and merge and consolidate with other companies, among other things. No principal payments are required with respect to the Senior Secured Notes prior to their final maturity. The obligations of the Company under the 5.75% Senior Unsecured Notes and the related indenture are guaranteed by PQ Holdings and CPQ Midco I Corporation, PQ Corporation’s direct parent, and each of PQ Corporation’s current and future domestic subsidiaries that is a guarantor under the Term Loan Facility. The obligations of the Company under the 5.75% Senior Unsecured Notes and the indenture are secured (i) by a first-priority security interest in substantially all of the Company’s and the guarantors’ property and assets that secure the Term Loan Facility (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral securing the ABL Facility. The liens securing the 5.75% Senior Unsecured Notes and the guarantees are pari passu with the liens securing the Term Loan Facility subject to the pari passu intercreditor agreement. If any Event of Default (other than a default relating to certain events of bankruptcy or insolvency of PQ Corporation or certain of its subsidiaries) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 30% in principal amount of the then total outstanding notes by notice to the Company may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately. If an event of default arising from certain events of bankruptcy or insolvency of the Company occurs, the principal of, premium, if any, and interest on all the Senior Secured Notes shall become immediately due and payable without any declaration or other act on the part of the trustee or any holders. At any time prior to December 15, 2020, the Company may, at its option and on one more more occasions, redeem (a) up to 40% of the aggregate principal amount of the 5.75% Senior Unsecured Notes with the cash proceeds from certain equity offerings at a redemption price equal to the sum of 105.75% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, and (b) all or part of the 5.75% Senior Unsecured Notes at 100.00% of the aggregate principal amount redeemed plus accrued and unpaid interest thereon and a make-whole premium (the “Applicable Premium”). The Applicable Premium is equal to the greater of: (a) 1% of the principal amount of notes redeemed, or (b) the excess, if any, of: (1) the present value at the redemption date of (i) the redemption price of such notes at December 15, 2020 (as set forth in the table below), plus (ii) all required remaining scheduled interest payments due on such notes through December 15, 2020 (excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the applicable United States Treasury rate as of such redemption date plus 50 basis points; over (2) the outstanding principal amount of such notes on the redemption date. On or after December 15, 2020, the 5.75% Senior Unsecured Notes are redeemable, in whole or in part, at the redemption prices (expressed as percentages of principal amount of the 5.75% Senior Unsecured Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date, if redeemed on or after any of the dates below until the subsequent date below: Year Percentage December 15, 2020 102.875 % December 15, 2021 101.438 % December 15, 2022 and thereafter 100.000 % Upon the occurrence of a change of control, as defined, each holder will have the right to require the Company to purchase all or any part of such holder’s Senior Secured Notes at a purchase price in cash equal to 101% of the principal amount, plus accrued and unpaid interest. New Markets Tax Credit Financing On October 24, 2013, PQ Holdings’ (and now the Company’s) subsidiary Potters Industries, LLC (“Potters”) entered into a NMTC financing arrangement with JPMorgan Chase Bank N.A. and several of its affiliates (“Chase”) and TX CDE V LLC, an affiliate of Texas LIC Development Company LLC d/b/a Texas Community Development Capital (“TX CDE”) to fund the expansion of Potters’ manufacturing facility in Paris, Texas (the “2013 NMTC Agreement”). The NMTC program, which is administered by the United States Treasury Department, requires certain balance sheet commitments. The 2013 NMTC Agreement will provide the Company with certain monetary benefits as an offset to specifically identified capital expenditures. The 2013 NMTC Agreement requires that certain commitments and covenants be maintained over a period of seven years in order to legally recognize the benefit. Chase agreed to contribute $6,634 and an additional $15,632 in funds lent to Chase by Potters Holdings II, L.P. to TX CDE. TX CDE, in turn, lent $21,000 in the form of $5,368 and $15,632 of notes to Potters, which used the proceeds to finance the expansion of Potters’ manufacturing facility in Paris, Texas. The capital expenditures associated with the 2013 NMTC Agreement were completed in 2014. The $21,000 of debt related to the 2013 NMTC was assumed as part of the Business Combination and was outstanding as of December 31, 2017 . On May 17, 2016, Potters entered into a NMTC financing arrangement with U.S. Bank N.A. and several of its affiliates (“USB”) and MRC XX LLC, an affiliate of Midwest Renewable Capital, LLC (“MRC”), to fund the expansion of Potters’ manufacturing facility in Augusta, Georgia (the “May 2016 NMTC Agreement”). The May 2016 NMTC Agreement provides the Company with certain monetary benefits as an offset to specifically identified capital expenditures. The May 2016 NMTC Agreement requires that certain commitments and covenants be maintained over a period of seven years in order to legally recognize the benefit. USB agreed to contribute $3,732 and an additional $7,822 in funds lent to USB by Potters Holdings II, L.P. to MRC. MRC, in turn, lent $11,000 in the form of $7,823 , $1,311 and $1,866 of notes to Potters, which used the proceeds to finance the expansion of Potters’ manufacturing facility in Augusta, Georgia. The $11,000 was outstanding as of December 31, 2017 . The capital expenditures associated with the May 2016 NMTC Agreement were completed in 2017. On December 29, 2016, Potters entered into a second NMTC financing arrangement with USB and MRC whereby USB agreed to contribute $3,815 and an additional $7,775 in funds lent to USB by Potters Holdings II, L.P. to MRC. MRC, in turn, lent $11,000 in the form of $7,775 , $1,402 and $1,823 of notes to Potters, which will use the proceeds as working capital for another expansion of Potters’ manufacturing facility in Paris, Texas (the “December 2016 NMTC Agreement”). The $11,000 was outstanding as of December 31, 2017 . Potters expended the proceeds of the notes as working capital in 2017. On June 22, 2017, Potters, entered into a NMTC financing arrangement with U.S. Bank N.A. (“USB”), one of USB’s affiliates (“USB Investment Fund”) and Business Conduit No. 28, LLC, an affiliate of Community Reinvestment Fund, Inc. (“CRF”). USB contributed $3,054 to USB Investment Fund, and Potters Leveraged Lender LLC, an indirect subsidiary of the Company, lent USB Investment Fund $6,221 . USB Investment Fund then contributed $9,000 to CRF, which in turn lent $8,820 to Potters pursuant to a credit agreement (the “June 2017 NMTC Agreement”). Potters used the $8,820 in proceeds to acquire equipment for the expansion of Potters’ manufacturing facility in Paris, Texas. The June 2017 NMTC Agreement provides the Company with certain monetary benefits as an offset to specifically identified capital expenditures. The June 2017 NMTC Agreement requires that certain commitments and covenants are maintained over a period of seven years in order to legally recognize the benefit. The $8,820 was outstanding as of December 31, 2017 . The capital expenditures associated with the June 2017 NMTC Agreement are expected to be completed in 2018. In connection with the aforementioned NMTC financing arrangements, the Company provided indemnifications related to its actions or inactions which cause either a NMTC disallowance or recapture event. In the event that the Company causes either a recapture or disallowance of the tax credits expected to be generated under this program, then the Company will be required to repay the disallowed or recaptured tax credits plus an amount s |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-term Liabilities | 16. Other Long-term Liabilities: The following table summarizes the components of other long-term liabilities as follows: December 31, 2017 2016 Pension benefits $ 69,914 $ 71,443 Supply contract (see Note 25) 20,612 22,250 Other postretirement benefits 4,503 3,991 Supplemental retirement plans 11,667 12,055 Reserve for uncertain tax positions 4,244 4,149 Asset retirement obligation 4,094 3,700 Other 5,437 5,567 Total $ 120,471 $ 123,155 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 17. Financial Instruments: The Company uses interest rate related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments and uses commodity derivatives to manage its exposure to commodity price fluctuations. The Company does not speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates and commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and, therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high quality counterparties. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates, currency exchange rates, or commodity prices. The market risk associated with interest rate and commodity price contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Use of Derivative Financial Instruments to Manage Commodity Price Risk. The Company is exposed to risks in energy costs due to fluctuations in energy prices, particularly natural gas. The Company has a hedging program in the United States which allows the Company to mitigate exposure to natural gas volatility with natural gas swap agreements. Fair value is determined based on estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices of comparable contracts. The respective current and non-current liabilities are recorded in accrued liabilities and other long-term liabilities and the respective current and non-current assets are recorded in prepaid and other current assets and other long-term assets, as applicable. As the derivatives are highly effective and are designated and qualify as cash-flow hedges, the related unrealized gains or losses are recorded in stockholders’ equity as a component of other comprehensive income (loss), net of tax. Realized gains and losses on natural gas hedges are included in production cost and subsequently charged to cost of goods sold in the consolidated statements of operations in the period in which inventory is sold. The Company’s natural gas swaps have a remaining notional quantity of 4.3 million MMBTU to mitigate commodity price volatility through December 2018. Use of Derivative Financial Instruments to Manage Interest Rate Risk. The Company is exposed to fluctuations in interest rates on its senior secured credit facilities and senior unsecured notes. Changes in interest rates will not affect the market value of such debt but will affect the amount of the Company’s interest payments over the term of the loans. Likewise, an increase in interest rates could have a material impact on the Company’s cash flow. The Company hedges the interest rate fluctuations on debt obligations through interest rate cap agreements. The Company records these agreements at fair value as assets or liabilities. As the derivatives are highly effective and are designated and qualify as cash-flow hedges, the related unrealized gains or losses are deferred in stockholders’ equity as a component of other comprehensive income (loss), net of tax. Fair value is determined based on estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices. In July 2016, the Company entered into interest rate cap agreements, paying a premium of $1,551 to mitigate interest rate volatility from July 2016 through July 2020 by employing varying cap rates, ranging from 1.50% to 3.00% on $1,000,000 of notional variable-rate debt. The fair values of derivative instruments held as of December 31, 2017 and 2016 are shown below: December 31, Balance sheet location 2017 2016 Asset derivatives: Derivatives designated as cash flow hedges: Natural gas swaps Current assets $ — $ 573 Interest rate caps Current assets 44 — Natural gas swaps Other long-term assets — 58 Interest rate caps Other long-term assets 999 5,803 Total asset derivatives $ 1,043 $ 6,434 Liability derivatives: Derivatives designated as cash flow hedges: Natural gas swaps Current liabilities $ 318 $ — Natural gas swaps Other long-term liabilities 130 — Total liability derivatives $ 448 $ — The following table shows the effect of the Company’s derivative instruments designated as hedges on other comprehensive income (loss) (“OCI”) and the statements of operations for the years ended December 31, 2017 and 2016 : December 31, Location in earnings 2017 2016 Derivatives designated as cash flow hedges: AOCI derivative gain at beginning of year $ 4,881 $ — Effective portion of changes in fair value recognized in OCI: Interest rate caps (4,760 ) 4,250 Natural gas swaps (1,300 ) (802 ) Amount of loss reclassified from OCI to earnings: Interest rate caps Interest expense 40 — Natural gas swaps Cost of goods sold 222 1,433 AOCI derivative gain (loss) at end of year $ (917 ) $ 4,881 Amounts of unrealized losses in accumulated other comprehensive income (loss) (“AOCI”) that are expected to be reclassified to the consolidated statement of operations over the next twelve months are $ 574 as of December 31, 2017 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 18. Income Taxes: The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017 and became effective January 1, 2018. The TCJA imposed significant changes to U.S. tax law, such as lowering U.S. corporate income tax rates, implementing a more territorial U.S. income tax system and levying a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The TCJA reduces the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. GAAP requires that deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse in the future. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the TCJA, the Company was required to remeasure existing deferred tax balances using the new U.S. statutory tax rate. As a result of this remeasurement, the Company recorded a provisional net tax benefit from the rate reduction of $64,343 . The TCJA also provided for a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) from controlled foreign corporations (“CFC”) at reduced tax rates of 8% or 15.5%. The Company has historically provided a deferred tax liability for certain foreign earnings. As a result of tax reform, the Company recorded a net provisional income tax benefit of $25,196 , because the transition tax at the reduced rates was less than the amount previously provided at 35%. After provisionally electing to utilize current year tax losses to offset the impact of the transition tax, we expect to pay no U.S. federal cash taxes with respect to the deemed repatriation. Due to having incurred approximately $43,000 of tax expense as of December 31, 2017 resulting from the one-time transition tax based on the cumulative E&P of our CFCs, all previously unremitted earnings for which no U.S. deferred tax liability had been accrued have now been subjected to U.S. federal income tax. Provisionally, the Company expects to offset the full impact of the $43,000 tax expense by utilizing tax net operating losses generated in the 2017 tax year against the deemed repatriation income inclusion. As such, no cash tax expense is expected with respect to the $43,000 . To the extent we repatriate amounts related to these earnings to the United States, we estimate that the Company will not incur significant additional taxes related to such amounts, as they will have already been subject to U.S. federal income tax. However, our estimates are provisional and subject to further analysis. The TCJA also includes a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries and a base erosion anti-abuse tax (“BEAT”) measure that taxes certain payments between a U.S. corporation and its subsidiaries. Both of the GILTI and BEAT provisions are effective January 1, 2018. The Company is in the process of analyzing the impact of these two items. With respect to GILTI, the Company anticipates making a policy election to treat this tax as a period cost and will account for taxes on GILTI as they are incurred. With respect to BEAT, at this time the Company does not expect to be subject to that provision of the TCJA in a way that materially affects future tax provision amounts. The SEC staff has issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. As amounts are refined, SAB 118 allows the registrant to record provisional amounts during a measurement period not to extend beyond one year of the TCJA enactment date. We are in the process of analyzing the impact of the various provisions of the TCJA. The ultimate impact of TCJA to the Company’s financial statements may materially differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, as well as any actions we may take as a result of the TCJA. We expect to complete our analysis within the allowed measurement period in accordance with SAB 118. Income (loss) before income taxes and noncontrolling interest within or outside the United States are shown below: Years ended 2017 2016 2015 Domestic $ (137,147 ) $ (84,094 ) $ 11,427 Foreign 76,513 14,977 — Total $ (60,634 ) $ (69,117 ) $ 11,427 The provision (benefit) for income taxes as shown in the accompanying consolidated statements of operations consists of the following: Years ended 2017 2016 Current: Federal $ — $ — State 806 91 Foreign 20,209 10,088 21,015 10,179 Deferred: Federal (135,970 ) 8,654 State (1,817 ) 292 Foreign (2,425 ) (9,084 ) (140,212 ) (138 ) Provision (benefit) for income taxes $ (119,197 ) $ 10,041 A reconciliation of income tax expense (benefit) at the U.S. federal statutory income tax rate of 35% to actual income tax expense is as follows: Years ended 2017 2016 Tax at statutory rate $ (21,222 ) $ (24,191 ) State income taxes, net of federal income tax benefit (7,754 ) (4,110 ) Repatriation of non-US earnings inclusive of mandatory repatriation toll tax (24,912 ) 4,576 Change in Tax Status-Eco-Passthrough to C-Corp — 33,891 Changes in uncertain tax positions 974 (2,383 ) Change in valuation allowances 6,771 2,577 Rate changes (63,319 ) — Change in state effective rates (340 ) (290 ) Foreign withholding taxes 978 1,505 Foreign tax rate differential (10,131 ) (1,354 ) Non-deductible transaction costs 1,679 667 Other, net (1,921 ) (847 ) Provision (benefit) for income taxes $ (119,197 ) $ 10,041 The total tax (benefit) provision of $(119,197) and $10,041 for the years ended December 31, 2017 and 2016 , respectively, on the Company’s consolidated pre-tax income (loss) for the period differs from the U.S. statutory tax rate of 35% . This difference is principally due to the impacts of U.S. tax reform, foreign income tax in jurisdictions with statutory rates different than the U.S. rate, state taxes, non-deductible transaction costs, foreign withholding taxes, changes in valuation allowance, and changes in uncertain tax positions. Prior to the Business Combination on May 4, 2016, Eco Services was a single member limited liability company and taxed as a partnership for federal and state income tax purposes. As such, all income tax liabilities and/or benefits of Eco Services were passed through to their members. Because Eco Services was taxed as a partnership, it did not record deferred taxes on the basis difference on their financial statements. Following the Business Combination on May 4, 2016, Eco Services had a change in tax status and is now taxed as a C-Corporation subject to federal and state corporate level income taxes at prevailing corporate tax rates. As Eco Services had not previously recorded deferred taxes on the basis difference, the Company recognized net deferred tax liabilities of $33,891 for the year ended December 31, 2016 primarily related to basis differences in depreciable fixed assets and intangible assets based upon prevailing corporate tax rates. Deferred tax assets (liabilities) are comprised of the following: December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 144,267 $ 157,811 Pension 16,255 21,454 Post retirement health 561 1,040 Transaction costs 1,183 2,896 Natural gas contracts 110 — Interest rate swaps 115 — Unrealized translation losses 5,065 6,046 Other 38,290 44,351 Valuation allowance (64,945 ) (38,271 ) $ 140,901 $ 195,327 Deferred tax liabilities: Depreciation $ (86,532 ) $ (114,749 ) Undistributed earnings of non-US subsidiaries (8,334 ) (73,205 ) LIFO reserve — — Inventory (11,324 ) (20,159 ) Intangible assets (184,937 ) (276,671 ) Natural gas contracts — (241 ) Other accruals — (1,621 ) Other (36,810 ) (27,144 ) $ (327,937 ) $ (513,790 ) Net deferred tax liabilities $ (187,036 ) $ (318,463 ) Included in the 2017 and 2016 deferred tax asset and liability amounts for depreciation, intangible assets, inventory, natural gas contracts, unrealized transaction losses, and other above is $45,873 and $75,539 , respectively, of a net deferred tax liability related to the Company’s investment in Potters, which is a partnership for federal income tax purposes. The Company and one of its subsidiaries own in aggregate 100% of Potters and the assets and liabilities of Potters are included in the consolidated financial statements of the Company. The $187,036 in net deferred tax liabilities as of December 31, 2017 consists of $2,300 in non-current deferred tax assets and $189,336 in net non-current deferred tax liabilities. The $318,463 in net deferred tax liabilities as of December 31, 2016 consists of $195,327 in non-current deferred tax assets and $513,790 in net non-current deferred tax liabilities. Prior to the Business Combination, Eco Services was a single member LLC, treated as a partnership for federal and state tax purposes, with no deferred taxes provided. The change in net deferred tax liabilities for the years ended December 31, 2017 and 2016 was primarily related to the decrease in deferred tax liabilities resulting from the revaluing of domestic deferred tax amounts, pursuant to U.S. tax reform lowering the statutory tax rate, as well as the change in book amortization of intangibles with no corresponding tax basis and an increase in valuation allowance with respect to acquired Sovitec entities. The following are changes in the deferred tax valuation allowance during the years ended December 31, 2017 and 2016 : Years ended 2017 2016 Beginning Balance $ 38,271 $ — Additions 34,863 46,347 Reductions (8,189 ) (8,076 ) Ending Balance $ 64,945 $ 38,271 The net change in the total valuation allowance was an increase of $26,674 in 2017 . Prior to the Business Combination, Eco Services was a single member LLC, treated as a partnership for federal and state tax purposes. Any income tax liabilities and/or benefits of Eco Services were passed through to the member. As such, prior to May 4, 2016, the date of the Business Combination, the valuation allowance was $0 . The valuation allowance at December 31, 2017 was primarily related to foreign and state net operating loss carryforwards and tax credits that, in the judgment of management, are not more likely than not to be realized. In assessing the ability to realize deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies that are prudent in making this assessment. In order to fully realize deferred tax assets, the Company will need to generate future taxable income prior to the expiration of the net operating loss and credit carryforwards. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Management considered certain earnings in non-U.S. subsidiaries to be available for repatriation in the future. The tax cost associated with non-U.S. subsidiary earnings and distributions for the year ended December 31, 2017 has been recorded as tax expense for the period. In this regard the Company expects to deduct, rather than credit, foreign tax expense in computing the U.S. tax effects of repatriation from non-U.S. subsidiaries in 2017 . The unremitted earnings of non-U.S. subsidiaries and affiliates that have not been reinvested abroad indefinitely amount to $210,979 and $190,586 as of December 31, 2017 and 2016 , respectively. The deferred U.S. federal and state income tax liability and deferred foreign withholding tax liability on these undistributed earnings is estimated to be $8,334 and $73,205 as of December 31, 2017 and 2016 , respectively. As a result of tax reform, the liability on unremitted earnings as of December 31, 2017 is only related to foreign withholding taxes, as all earnings and profits were deemed repatriated for U.S. income tax purposes as a result of U.S. Tax Reform. As a result of the transition tax computed as part of U.S. tax reform, any earnings and profits permanently reinvested as of December 31, 2017 would have minimal taxes associated with them. As of December 31, 2016 , the cumulative unremitted earnings of foreign subsidiaries outside the United States, considered permanently reinvested, for which no income or withholding taxes have been provided approximated $194,444 . Such earnings are expected to be reinvested indefinitely and, as a result, no deferred tax liability has been recognized with regard to such earnings. Determination of the deferred income tax liability on these unremitted earnings is not practicable, principally because such liability, if any, is dependent on circumstances existing if and when remittance occurs. The following table summarizes the activity related to our gross unrecognized tax benefits: Years ended 2017 2016 Balance at beginning of period $ 16,128 $ — Increases related to prior year tax positions 68 19,419 Decreases related to prior year tax positions (5,508 ) (68 ) Increases related to current year tax positions 743 691 Decreases related to current year tax positions — — Decreases related to settlements with taxing authorities — (3,914 ) Decreases related to lapsing of statute of limitations — — Balance at end of period $ 11,431 $ 16,128 Included in the reduction of prior year positions is the impact of reducing the U.S. corporate tax rate from 35% to 21%, since the uncertain position that is recorded in the U.S. is recorded as a reduction in the net operating loss that is available. The net operating loss deferred tax balance was revalued along with the other domestic deferred tax assets and liabilities as of December 22, 2017. Included in the balance of total unrecognized tax benefits are potential benefits of $11,431 and $16,128 arising from legacy PQ Corporation that if recognized, would affect the effective tax rate on income from continuing operations for the years ended December 31, 2017 and 2016 , respectively. Interest and penalties recognized related to uncertain tax positions amounted to $52 and $2,054 for the years ended December 31, 2017 and 2016 , respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment. The $1,270 and $1,177 in accrued interest and penalties as of December 31, 2017 and 2016 , respectively, is recorded in other long-term liabilities on the consolidated balance sheets. Due to the Business Combination, the Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The following describes the open tax years, by major tax jurisdiction, as of December 31, 2017 : Jurisdiction Period United States-Federal 2007-Present United States-State 2008-Present Canada (1) 2009-Present Germany 2007-Present Netherlands 2012-Present Mexico 2012-Present United Kingdom 2010-Present Brazil 2012-Present (1) Includes federal as well as local jurisdictions Given that certain U.S. companies have net operating loss carryforwards, the statute for examination by taxing authorities in the United States, and certain state jurisdictions, will remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above. The Company has subsidiaries in various states, provinces and countries that are currently under audit for years ranging from 2007 through 2016. To date, no material adjustments have been proposed as a result of these audits. As of December 31, 2017 , the Company does not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. The Company has a net operating loss carry-forward (“NOL”) available of $426,851 to reduce future federal taxes payable. The current federal NOL carry-forward period is 20 years . In light of tax reform, net operating losses incurred after December 31, 2017 will be allowed to carry forward indefinitely. As a result of the Business Combination, $332,376 of the $426,851 may be subject to the limitations of Section 382 of the Internal Revenue Code (“IRC”). Although potentially subject to the limitations of IRC §382, management believes it is more likely than not that the Company will realize the entire $332,376 in pre-transaction NOLs in future years. The remaining $94,475 relates to periods after the Business Combination and would not be subject to IRC §382. For state income tax purposes, the Company incurred net operating losses of $119,742 for 2017 that may be carried forward at periods ranging from 5 to 20 years among the states in which the Company is subject to tax to reduce future state income taxes payable. Cumulative state net operating losses carrying forward into 2018 are $657,738 . A valuation allowance of $16,318 has been applied against the total $31,389 of state net operating loss deferred tax assets, leaving losses of $15,071 that have been recognized for financial accounting purposes for the portion of those losses that the Company believes, on a more likely than not basis, will be realized. Foreign net operating losses of $127,949 , of which $4,880 will begin to expire in 2023, $2,932 will begin to expire in 2027, $2,441 will begin to expire in 2035, $1,604 will begin to expire in 2038 with the remaining $116,093 carrying forward indefinitely, are available to reduce future foreign income taxes payable. A valuation allowance of $29,728 has been applied to $31,294 of deferred tax assets related to foreign net operating loss carry-forwards, leaving a net deferred tax asset relating to foreign net operating losses of $1,566 that has been recognized for financial accounting purposes. Cash payments for income taxes are as follows: Years ended 2017 2016 2015 Domestic $ 1,647 $ 373 $ 8 Foreign 27,552 16,608 — $ 29,199 $ 16,981 $ 8 |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Benefit Plans | 19. Benefit Plans: The Company sponsors defined benefit pension plans covering employees in the United States and certain employees at its foreign subsidiaries. Benefits for a majority of the plans are based on average final pay and years of service. The Company’s funding policy is to fund the minimum required contribution under local statutory requirements. The Company sponsors unfunded plans to provide certain health care benefits to retired employees in the United States and Canada. The plans pay a stated percentage of medical expenses reduced by deductibles and other coverage. The plans are unfunded and obligations are paid out of the Company’s operations. The Company also has defined benefit supplementary retirement plans which provide benefits for certain U.S. employees in excess of qualified plan limitations. The obligations are paid out of the Company’s general assets, including assets held in a Rabbi trust, or restoration plan assets. The Company uses a December 31 measurement date for all of its defined benefit pension, postretirement medical and supplementary retirement plans. The following discussion includes information for the Eco Services benefit plans for all periods presented, and the acquired PQ Holdings benefit plans beginning on the date of the Business Combination. The Eco Services benefit plans include two defined benefit pension plans and one retiree health plan, all based in the U.S. The PQ Holdings benefit plans include a U.S. defined benefit pension plan as well as the defined benefit pension plans for all of the Company’s foreign subsidiaries, two retiree health plans (one each in the U.S and Canada), and the Company’s defined benefit supplementary retirement plans. Of the Company’s three defined benefit pension plans covering employees in the U.S., only the Eco Services Hourly Pension Plan continues to accrue benefits subsequent to December 31, 2016. All future accruals were frozen for the PQ Corporation Retirement Plan as of December 31, 2006 and for the Eco Services Pension Equity Plan as of December 31, 2016. With respect to the Company’s three retiree health plans, the PQ Holdings plans in the U.S. and Canada were closed to new retirees as of December 31, 2006. The Eco Services Postretirement Life and Dental Plan was closed to new retirees effective July 1, 2017. The Company’s defined benefit supplementary retirement plans were frozen to future accruals as of December 31, 2006. Defined Benefit Pension Plans The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s significant defined benefit pension plans as well as the components of net periodic benefit cost, including key assumptions: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 247,418 $ 71,605 $ 106,025 $ — Service cost 1,219 2,130 3,686 2,106 Interest cost 10,115 7,680 3,271 2,224 Participant contributions — — 493 300 Plan curtailments — (1,325 ) — (1,204 ) Plan settlements (2,264 ) (4,772 ) — — Benefits paid (9,591 ) (5,390 ) (2,967 ) (1,305 ) Expenses paid — — (319 ) (66 ) Net transfer in (1) — 192,120 — 99,025 Actuarial (gains) losses 14,205 (14,630 ) (2,169 ) 9,804 Translation adjustment — — 11,690 (4,859 ) Benefit obligation at end of the period $ 261,102 $ 247,418 $ 119,710 $ 106,025 Change in plan assets: Fair value of plan assets at beginning of period $ 198,915 $ 52,678 $ 86,145 $ — Actual return on plan assets 27,554 6,897 217 8,274 Employer contributions 3,760 1,425 3,781 921 Employee contributions — — 493 300 Plan settlements (2,264 ) (4,772 ) — — Benefits paid (9,591 ) (5,390 ) (2,967 ) (1,305 ) Expenses paid — — (319 ) (66 ) Acquisitions (1) — 148,077 — 81,974 Translation adjustment — — 9,168 (3,953 ) Fair value of plan assets at end of the period $ 218,374 $ 198,915 $ 96,518 $ 86,145 Funded status of the plans (underfunded) $ (42,728 ) $ (48,503 ) $ (23,192 ) $ (19,880 ) (1) Relates to the PQ Holdings defined benefit pension plans assumed as part of the Business Combination. Amounts recognized in the consolidated balance sheets consist of: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Noncurrent asset $ — $ — $ 3,503 $ 3,391 Current liability — — (673 ) (331 ) Noncurrent liability (42,728 ) (48,503 ) (26,022 ) (22,940 ) Accumulated other comprehensive income (loss) 10,499 8,190 (2,871 ) (2,085 ) Net amount recognized $ (32,229 ) $ (40,313 ) $ (26,063 ) $ (21,965 ) Amounts recognized in accumulated other comprehensive income (loss) consist of: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Prior service credit $ — $ — $ — $ — Net gain (loss) 13,943 12,920 (3,923 ) (2,686 ) Gross amount recognized 13,943 12,920 (3,923 ) (2,686 ) Deferred income taxes (3,444 ) (4,730 ) 1,052 601 Net amount recognized $ 10,499 $ 8,190 $ (2,871 ) $ (2,085 ) Components of net periodic benefit cost consist of: U.S. Foreign Years ended Years ended 2017 2016 2015 2017 2016 2015 Service cost $ 1,219 $ 2,130 $ 2,778 $ 3,686 $ 2,106 $ — Interest cost 10,115 7,680 2,913 3,271 2,224 — Expected return on plan assets (12,277 ) (9,293 ) (2,885 ) (3,208 ) (2,038 ) — Amortization of net gain — — — (9 ) (10 ) — Curtailment gain recognized — (1,311 ) — — (517 ) — Settlement (gain) loss recognized (48 ) 152 (2 ) — — — Net periodic expense (benefit) $ (991 ) $ (642 ) $ 2,804 $ 3,740 $ 1,765 $ — There are $50 of estimated net actuarial losses and no prior service credits for the Company’s defined benefit pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2018 . The total accumulated benefit obligation as of December 31, 2017 and 2016 for the Company’s U.S. pension plans was $257,882 and $244,003 , respectively. The total accumulated benefit obligation as of December 31, 2017 and 2016 for the Company’s foreign pension plans was $114,095 and $100,473 , respectively. The following table presents selected information about the Company’s pension plans with accumulated benefit obligations in excess of plan assets: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Projected benefit obligation $ 261,102 $ 247,418 $ 67,750 58,837 Accumulated benefit obligation 257,882 244,003 64,526 55,981 Fair value of plan assets 218,374 198,915 42,632 36,771 Significant weighted average assumptions used in determining the pension obligations include the following: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Discount rate 3.74 % 4.24 % 2.91 % 2.99 % Rate of compensation increase (2) 3.00 % 3.00 % 2.57 % 2.97 % (2) With respect to the U.S. plans, the weighted average rate of compensation increase as of December 31, 2017 reflects only the Eco Services Hourly Pension Plan assumption of 3.00% , as both the Eco Services Pension Equity Plan and the PQ Corporation Retirement Plan were frozen to new accruals as of December 31, 2017 (and were included in the average at zero). With respect to the U.S. plans, the weighted average rate of compensation increase as of December 31, 2016 reflects only the Eco Services Hourly Pension Plan assumption of 3.00% , as both the Eco Services Pension Equity Plan and the PQ Corporation Retirement Plan were frozen to new accruals as of December 31, 2016 (and were included in the average at zero). Significant weighted average assumptions used in determining net periodic benefit cost include the following: U.S. Foreign Years ended Years ended 2017 2016 2015 2017 2016 2015 Discount rate 4.24 % 4.02 % 4.09 % 2.99 % 5.16 % — Rate of compensation increase (3) 3.00 % 3.10 % Age-based / 2.97 % 3.95 % — Expected return on assets 6.37 % 6.34 % None 3.58 % 5.62 % — (3) The weighted average rate of compensation increase for the year ended December 31, 2015 for the U.S. plans was 3.00% for the Eco Services Hourly Pension Plan and an age-based assumption for the Eco Services Pension Equity Plan. The discount rate for each of the U.S. plans was determined by utilizing a yield curve model. The model develops a spot rate curve based on the yields available from a broad-based universe of high quality corporate bonds. The discount rate is then set as the weighted average spot rate, using the respective plan’s expected benefit cash flows as the weights. In determining the expected return on U.S. plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes, and expected future performance. In addition, the Company may consult with and consider the opinions of our external advisors in developing appropriate return benchmarks. The investment objective for the U.S. plans is to generate returns sufficient to meet future obligations. The strategy to meet the objective includes generating attractive returns using higher returning assets such as equity securities and balancing risk using less volatile assets such as fixed income securities. The U.S. plans invest in an allocation of assets across the two broadly-defined financial asset categories of equity and fixed income securities. The target allocations for the plan assets across the three U.S. plans are as follows: 45% equity securities and 55% fixed income investments for the PQ Corporation Retirement Plan; 50% equity securities and 50% fixed income investments for the Eco Services Pension Equity Plan; and 48% equity securities and 52% fixed income investments for the Eco Services Hourly Pension Plan. Similar considerations are applied to the investment objectives of the non-U.S. plans as well as the asset classes available in each location and any legal restrictions on plan investments. The Company classifies plan assets based upon a fair value hierarchy (see Note 4 to these consolidated financial statements for further information). The classification of each asset within the hierarchy is based on the lowest level input that is significant to its measurement. The fair value hierarchy consists of three levels as follows: • Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Level 1 assets primarily include investments in publicly traded equity securities and mutual funds. These securities (or the underlying investments of the funds) are actively traded and valued using quoted prices for identical securities from the market exchanges. • Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. Level 2 assets primarily consist of fixed-income securities and comingled funds that are not actively traded or whose underlying investments are valued using observable marketplace inputs. The fair value of plan assets invested in fixed-income securities is generally determined using valuation models that use observable inputs such as interest rates, bond yields, low-volume market quotes and quoted prices for similar assets. Plan assets that are invested in comingled funds are valued using a unit price or net asset value (“NAV”) that is based on the underlying investments of the fund. • Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. Level 3 assets include investments covered by insurance policies and real estate funds valued using significant unobservable inputs. The following tables set forth by level, within the fair value hierarchy, plan assets at fair value: December 31, 2017 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,072 $ 934 $ 138 $ — Equity securities: U.S. investment funds 56,309 43,625 12,684 — International investment funds 70,308 28,827 41,481 — Fixed income securities: Government securities 11,433 — 11,433 — Corporate bonds 82,585 77,685 4,900 — Investment fund bonds 54,263 7,719 46,544 — Other: Insurance policies 38,922 — 34,772 4,150 Total $ 314,892 $ 158,790 $ 151,952 $ 4,150 December 31, 2016 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,979 $ 1,863 $ 116 $ — Equity securities: U.S. investment funds 60,179 41,529 18,650 — International investment funds 58,457 26,119 32,338 — Fixed income securities: Government securities 25,437 — 25,437 — Corporate bonds 4,981 — 4,981 — Investment fund bonds 113,460 $ 77,938 $ 35,522 $ — Other: Insurance policies 20,567 $ — $ 17,281 $ 3,286 Total $ 285,060 $ 147,449 $ 134,325 $ 3,286 The changes in the Level 3 pension plan assets are as follows for the years ended December 31: Insurance Policies 2017 2016 Beginning balance $ 3,286 $ — Business Combination (May 4, 2016) — 3,226 Actual return on plan assets (41 ) 23 Benefits paid (48 ) (27 ) Contributions 466 236 Exchange rate changes 487 (172 ) Ending balance $ 4,150 $ 3,286 The Company expects to contribute $1,760 to the U.S. pension plans and $4,769 to the foreign pension plans in 2018. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year U.S. Foreign 2018 $ 14,626 $ 2,588 2019 15,363 3,331 2020 15,718 2,943 2021 16,371 3,197 2022 15,373 3,630 Years 2023-2027 76,506 22,716 Certain of the Company’s foreign subsidiaries maintain other defined benefit plans that are consistent with statutory practices. These plans are not included in the disclosures above as they are not significant to the Company’s consolidated financial statements. Supplemental Retirement Plans The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s defined benefit supplementary retirement plans, as well as the components of net periodic benefit cost, including key assumptions: December 31, 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 13,225 $ — Interest cost 489 328 Net transfer in (4) — 14,671 Benefits paid (1,179 ) (767 ) Actuarial (gains) losses 246 (1,007 ) Benefit obligation at end of period $ 12,781 $ 13,225 Change in plan assets: Fair value of plan assets at beginning of period $ — $ — Employer contributions 1,179 767 Benefits paid (1,179 ) (767 ) Fair value of plan assets at end of period $ — $ — Funded status of the plans (underfunded) $ (12,781 ) $ (13,225 ) (4) Relates to the PQ Holdings defined benefit supplementary retirement plans assumed as part of the Business Combination. Amounts recognized in the consolidated balance sheets consist of: December 31, 2017 2016 Current liability $ (1,115 ) $ (1,170 ) Noncurrent liability (11,667 ) (12,055 ) Accumulated other comprehensive income 573 623 Net amount recognized $ (12,209 ) $ (12,602 ) Amounts recognized in accumulated other comprehensive income consist of: December 31, 2017 2016 Net gain $ 761 $ 1,007 Gross amount recognized 761 1,007 Deferred income taxes (188 ) (384 ) Net amount recognized $ 573 $ 623 Components of net periodic benefit cost consist of: Years ended 2017 2016 2015 Interest cost $ 489 $ 328 $ — Net periodic expense $ 489 $ 328 $ — There are no estimated net actuarial gains for the Company’s defined benefit supplementary retirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 . The accumulated benefit obligation of the Company’s defined benefit supplemental retirement plans as of December 31, 2017 and 2016 was $12,781 and $13,225 , respectively. The discount rate used in determining the defined benefit supplemental retirement plan obligation was 3.60% and 3.90% as of December 31, 2017 and 2016 , respectively. The discount rate used in determining net periodic benefit cost was 3.90% and 3.40% for the years ended December 31, 2017 and 2016 , respectively. The rate of compensation increase for the years ended December 31, 2017 and 2016 was zero, as all future accruals were frozen for the defined benefit supplementary retirement plans as of December 31, 2006. The Company expects to contribute $1,115 to the defined benefit supplementary retirement plans in 2018. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year Amount 2018 $ 1,115 2019 1,087 2020 1,056 2021 1,024 2022 987 Years 2023-2027 4,371 Other Postretirement Benefit Plans The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s other postretirement benefit plans as well as the components of net periodic benefit cost, including key assumptions: December 31, 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 4,620 $ 1,296 Service cost 21 37 Interest cost 174 151 Employee contributions 251 176 Plan amendments — (443 ) Benefits paid (923 ) (484 ) Medical subsidies received — 90 Premiums paid (3 ) (2 ) Net transfer in (5) — 4,868 Actuarial (gains) losses 418 (1,057 ) Translation adjustment 54 (12 ) Benefit obligation at end of period $ 4,612 $ 4,620 Change in plan assets: Fair value of plan assets at beginning of period — — Employer contributions 675 220 Employee contributions 251 176 Benefits paid (923 ) (484 ) Medical subsidies received — 90 Premiums paid (3 ) (2 ) Fair value of plan assets at end of period $ — $ — Funded status of the plans (underfunded) $ (4,612 ) $ (4,620 ) (5) Relates to the PQ Holdings retiree health plans assumed as part of the Business Combination. Amounts recognized in the consolidated balance sheets consist of: December 31, 2017 2016 Current liability $ (561 ) $ (629 ) Noncurrent liability (4,051 ) (3,991 ) Accumulated other comprehensive income 885 877 Net amount recognized $ (3,727 ) $ (3,743 ) Amounts recognized in accumulated other comprehensive income consist of: December 31, 2017 2016 Prior service credit $ 366 $ — Net gain 719 1,163 Gross amount recognized 1,085 1,163 Deferred income taxes (200 ) (286 ) Net amount recognized $ 885 $ 877 Components of net periodic benefit cost consist of: Years ended 2017 2016 2015 Service cost $ 21 $ 37 $ 39 Interest cost 174 151 57 Amortization of prior service credit (78 ) — — Amortization of net gain (45 ) (17 ) — Net periodic expense $ 72 $ 171 $ 96 The estimated prior service credit for the Company’s retiree health plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 is $78 . The estimated net actuarial gain for the Company’s retiree health plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 is $44 . Significant weighted average assumptions used in determining the net periodic benefit cost, the postretirement benefit obligations and trend rate include the following: December 31, 2017 2016 Benefit obligation: Discount rate 3.53% 3.74% Immediate trend rate 6.20% 6.84% Ultimate trend rate 4.50% 4.50% Year that the rate reaches ultimate trend rate 2037 2035 December 31, 2017 2016 2015 Benefit cost: Discount rate 3.74% 3.92% 4.36% Immediate trend rate 6.84% 7.28% N/A Ultimate trend rate 4.50% 4.50% N/A Year that the rate reaches ultimate trend rate 2035 2035 N/A Note that the Eco Services retiree health plan only includes a life insurance and dental component; thus, the trend rate assumptions for 2015 were not applicable. The trend rate assumptions for 2016 and 2017 reflect the acquired PQ Holdings retiree health plans. A 1% change in the assumed health care cost trend would have increased (decreased) the accumulated postretirement benefit obligation as of December 31, 2017 and the periodic postretirement benefit cost for the year then ended as follows: 1% Increase 1% Decrease Accumulated postretirement benefit obligation $ 172 $ (152 ) Periodic postretirement benefit cost 6 (5 ) The Company expects to contribute $629 to the retiree health plans in 2018. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year Amount 2018 $ 629 2019 607 2020 457 2021 413 2022 273 Years 2023-2027 1,015 There are no expected Medicare subsidy receipts expected in future periods. Certain of the Company’s foreign subsidiaries maintain other postretirement benefit plans that are consistent with statutory practices. These plans are not included in the disclosures above as they are not significant to the Company’s consolidated financial statements. Defined Contribution Plans The Company also has defined contribution plans covering domestic employees of the Company and certain subsidiaries. The Company recorded expenses of $13,103 , $6,864 and $1,511 related to these plans for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 20. Earnings per Share: During the year ended December 31, 2015 to May 4, 2016, the date of the Business Combination, the Company was structured as a single member LLC, with capital contributions from affiliates of CCMP, the Company’s board of managers and management represented by a class of membership units (“Eco Services Class A Units” or “Eco Services membership units”). During this period, Eco Services also granted incentive awards to certain employees, directors and affiliates in the form of Class B Units of Eco Services (the “Eco Services Class B Units”), which provided recipients with the option to purchase Eco Services Class A Units upon the attainment of certain vesting and other restrictions (see Note 21 to these consolidated financial statements for further information regarding the Company’s equity incentive plans). At the date of the Business Combination, the existing Eco Services Class A Units and legacy PQ Holdings equity were converted to common stock of PQ Group Holdings. None of the Eco Class B Units had been exercised prior to the Business Combination, and all Eco Class B Units converted to common stock options of PQ Group Holdings at the date of the Business Combination (see Note 21). The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes restricted stock awards that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares (see Note 21 to these consolidated financial statements for further information regarding outstanding nonvested restricted stock awards). Basic earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period for each class of common stock, if dilutive. Potential shares reflect unvested restricted stock awards and restricted stock units with service conditions as well as options to purchase common stock, which have been included in the diluted earnings per share calculation using the treasury stock method. For both the basic and dilutive weighted average shares calculations, as a result of the Business Combination, the number of Eco Services membership units outstanding from January 1, 2016 through May 4, 2016, the date of the Business Combination, as well as for the year ended December 31, 2015, were computed on the basis of the weighted average units outstanding for Eco Services during the respective periods multiplied by the exchange ratio established for common stock as part of the Business Combination. The reconciliation from basic to diluted weighted average shares outstanding is as follows: Years ended 2017 2016 2015 Weighted average shares outstanding – Basic 111,299,670 78,016,005 22,615,787 Dilutive effect of unvested common shares with service conditions and assumed stock option exercises and conversions 369,367 — — Weighted average shares outstanding – Diluted 111,669,037 78,016,005 22,615,787 Basic and diluted earnings per share are calculated as follows: Years ended 2017 2016 2015 Numerator: Net income (loss) attributable to PQ Group Holdings Inc. $ 57,603 $ (79,746 ) $ 11,427 Denominator: Weighted average shares outstanding – Basic 111,299,670 78,016,005 22,615,787 Weighted average shares outstanding – Diluted 111,669,037 78,016,005 22,615,787 Net income (loss) per share: Basic income (loss) per share $ 0.52 $ (1.02 ) $ 0.51 Diluted income (loss) per share $ 0.52 $ (1.02 ) $ 0.51 The table below presents the details of the Company’s equity-based awards outstanding at the end of each respective year that were excluded from the calculation of diluted earnings per share: December 31, 2017 2016 2015 Restricted stock awards with performance only targets not yet achieved 1,769,447 1,731,522 — Stock options with performance only targets not yet achieved 586,523 417,086 293,150 Anti-dilutive restricted stock awards and restricted stock units — 751,410 — Anti-dilutive stock options 621,747 1,381,352 1,085,152 Restricted stock awards and stock options with performance only vesting conditions are not included in the dilution calculation, as the performance targets have not been achieved as of the end of the respective years. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 21. Stock-Based Compensation: Eco Services Class B Units Prior to the Business Combination, the Company recognized stock-based compensation expense for incentive awards issued under the Eco Services Group Holdings Incentive Unit Agreement dated December 29, 2014 (the “Incentive Unit Agreement”). Under the Incentive Unit Agreement, the Company granted Eco Services Class B Units to certain employees, directors and affiliates of the Company. During the year ended December 31, 2015, 14,419 of Eco Services Class B Units were granted on January 13, 2015 at an exercise price of $1,000 /unit. Immediately prior to the date of the Business Combination on May 4, 2016 and as of December 31, 2015, there were 25,093 of Eco Services Class B Units outstanding. Of this total, 10,674 Eco Services Class B Units granted to employees (the “Management Awards”) had two vesting criteria, in which 50% were subject to a service (time-based) vesting condition and 50% were subject to a performance condition based upon the occurrence of specific liquidity events. The Eco Services Class B Units subject to the service condition vested 25% annually, with the first annual vesting date of December 1, 2015. The remaining 14,419 of Eco Services Class B Units awarded to directors and affiliates (the “Director Awards”) were subject to a service vesting condition only, consistent with that of the Management Awards. The Eco Services Class B Units did not have a contractually defined maximum term. All of the Eco Services Class B Units were valued using a Black-Scholes option pricing model, and the fair value of an Eco Services Class B Unit was $448 /unit. The key assumptions used in valuing the Eco Services Class B Units were as follows: expected term of seven years , expected volatility of 40.27% , risk-free interest rate of 2.02% and expected dividend yield of 0.00% . The expected term represents the period of time over which the Eco Services Class B Units were expected to be outstanding prior to exercise or forfeiture. With the limited experience of the Company with respect to historical exercise and forfeiture rates or patterns, the expected term was estimated in the context of the four -year service award vesting as well as the timeframe for a liquidity event for the performance awards. The expected volatility was based on the actual stock price volatility of a peer group of companies. The risk-free interest rate was based on U.S. Treasury rates in effect at the time of the grants commensurate with the expected term. There was no dividend yield assumption since the Company has not paid dividends nor does it have an expectation of future dividend payouts. The following table summarizes the activity of the Eco Services Class B Units during the year ended December 31, 2015 and through May 3, 2016, the date immediately preceding the Business Combination: Number of Units Weighted Average Exercise Price Outstanding at December 31, 2014 11,367 $ 1,000 Granted 14,419 $ 1,000 Forfeited (693 ) $ 1,000 Outstanding at December 31, 2015 and May 3, 2016 25,093 $ 1,000 Exercisable at December 31, 2015 and May 3, 2016 4,939 $ 1,000 PQ Group Holdings Awards In conjunction with the Business Combination, the Company adopted an equity incentive plan, namely the PQ Group Holdings Inc. Stock Incentive Plan (“2016 Plan”). Under the terms of the 2016 Plan, the Company is authorized to issue a total of 8,017,038 shares for common stock awards to employees, directors and affiliates of the Company. Immediately preceding the IPO as of September 30, 2017, awards with respect to 7,644,518 shares of common stock had been issued under the 2016 Plan. In connection with the IPO, the Company’s board of directors adopted the PQ Group Holdings Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”). Subsequent to the IPO, all equity incentive awards will be granted under the 2017 Plan. The number of shares of common stock reserved for issuance under the 2017 Plan is 7,344,000 shares, which amount is increased by the 372,520 shares remaining available for grant under the 2016 Plan as of the 2017 Plan adoption. Shares that become available for issuance pursuant to the 2016 Plan as a result of forfeiture, cancellation or termination for no consideration will be available for future awards under the 2017 Plan. Shares underlying awards granted under the 2017 Plan that are forfeited, canceled, terminated for no consideration, settled in cash or are withheld for exercise, taxes, etc. will not be deemed as delivered and will also be available for future issuance under the 2017 Plan. At December 31, 2017 , 5,427,526 shares of common stock were available for issuance under the 2017 Plan. Stock Options As part of the Business Combination, the 25,093 of outstanding Eco Services Class B Units at the date of the Business Combination were canceled and replaced with 1,378,302 of options to purchase PQ Group Holdings common stock at an exercise price of $8.04 /share. The Eco Services Class B Units were replaced by common stock options in accordance with a formula to convert such awards, plus a vested cash component. The terms of the new awards were substantially identical to those in effect prior to the Business Combination, except for adjustments to the underlying number of shares (based on the conversion ratio) and the exercise price, which was based on PQ Group Holdings common stock. Additionally, although the Eco Services Class B Units did not have a contractually defined maximum term, the maximum term of the common stock options is ten years . The Company accounted for the cancellation and replacement (including a cash component) as a combination of a modification and a cash settlement. This resulted in no incremental compensation cost recognized at the time of the modification, but led to an acceleration of $1,174 of previously measured but unrecognized compensation cost. In addition to the Eco Services Class B Units that were canceled and replaced at the time of the Business Combination, the Company exchanged the outstanding option awards of PQ Holdings for options of PQ Group Holdings in connection with the merger. The terms of the PQ Group Holdings awards were substantially identical to those of the PQ Holdings awards, including the number of underlying shares and vesting conditions, with the exception of an exercise price of $8.04 /share for the common stock options. There are various vesting conditions associated with the exchanged awards, including satisfaction of certain service and performance based conditions. Between the date of the Business Combination of May 4, 2016 and December 31, 2017, the Company granted common stock options with either service or performance vesting conditions, all with a maximum contractual term of ten years . In connection with the IPO, the Company granted 621,747 of stock options on October 2, 2017, all of which had graded vesting conditions based on service and a maximum contractual term of ten years . The following table summarizes the activity of common stock options for the period from the date of the Business Combination of May 4, 2016 through the year ended December 31, 2017 , which includes both the Eco Services Class B Units that were canceled and replaced, as well as the PQ Holdings options that were exchanged as part of the Business Combination: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Granted/assumed on May 4, 2016 in connection with the Business Combination 1,738,527 $ 7.80 Granted 538,908 $ 8.05 Forfeited (478,997 ) $ 7.49 Outstanding at December 31, 2016 1,798,438 $ 7.96 Granted 1,051,496 $ 13.70 Exercised (32,366 ) $ 8.04 Forfeited (102,398 ) $ 7.98 Outstanding at December 31, 2017 2,715,170 $ 10.18 Vested or expected to vest at December 31, 2017 2,064,450 $ 10.79 8.84 $ 12,004 Exercisable at December 31, 2017 827,210 $ 8.02 8.34 $ 6,975 The aggregate intrinsic value per the above table represents the difference between the closing stock price of the Company’s common stock on the last trading day of the reporting period and the exercise price of in-the-money stock options multiplied by the respective number of stock options as of that date. The total intrinsic value of stock options exercised during the year ended December 31, 2017 and the resulting tax benefit recognized by the Company was not material. The Company did not receive any cash proceeds from the exercise of stock options during the year ended December 31, 2017 , as the Company withheld shares in satisfaction of the exercise price and taxes due. The fair values of PQ Group Holdings common stock options granted during the years ended December 31, 2017 and 2016 were determined on the respective grant dates using a Black-Scholes option pricing model with the following weighted-average assumptions: 2017 2016 Expected term (in years) 5.85 5.00 Expected volatility 34.85 % 45.79 % Risk-free interest rate 2.00 % 1.54 % Expected dividend yield 0.00 % 0.00 % Weighted average grant date fair value of options granted $ 4.71 $ 3.33 With the limited experience of the Company with respect to historical exercise and forfeiture rates or patterns, the expected term for stock option grants in 2016 was estimated in the context of the service award vesting period as well as the timeframe for a liquidity event for the performance awards, along with the ten-year contractual maximum term, while the Company was still privately held. Beginning in 2017, the Company used the simplified method for plain vanilla stock options to estimate the expected term assumption, since the Company lacks sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its common stock has been publicly traded. The application of the simplified method involves calculating the average of the time-to-vesting period and the total contractual life of the options. The Company applied a consistent methodology for the remainder of the assumptions in the Black-Scholes option pricing model for stock option grants in both 2016 and 2017. The expected volatility was compared to a range of the actual stock price volatility of a peer group of companies. The risk-free interest rate was based on U.S. Treasury rates in effect at the time of the grant commensurate with the expected term. There was no dividend yield assumption since the Company has not paid dividends nor does it have an expectation of future dividend payouts. Restricted Stock Awards and Restricted Stock Units In addition to the exchange of the PQ Holdings options at the date of the Business Combination on May 4, 2016, the Company also exchanged unvested PQ Holdings restricted stock awards for 2,444,070 shares of restricted stock awards of PQ Group Holdings. The restricted stock awards were issued at substantially identical terms to the original PQ Holdings awards, with the exception of a new price ascribed to the shares. The restricted stock awards were subject to the same vesting requirements as the original awards, which included awards with vesting conditions based on (1) service only, (2) performance only, or (3) a combination of service and performance conditions, dependent on which event occurs first. The vesting requirements for the majority of these awards were based upon the achievement of a performance condition. As defined in the award agreements, each award subject to the performance condition fully vests upon the occurrence of a defined liquidity event upon which certain investment funds affiliated with CCMP receive proceeds exceeding certain thresholds. Although achievement of the performance condition is subject to continued service with the Company, the terms of awards issued with performance conditions stipulate that the performance vesting condition can be attained for a period of six months following separation from service. The same performance vesting condition for the Company’s restricted stock awards also governs the achievement of the performance vesting condition for the Company’s stock options. With the exception of 21,067 of restricted stock awards granted on October 2, 2017 which immediately vested, all of the Company’s restricted stock awards were granted prior to the IPO. As a result, the Company valued restricted stock awards at grant using multiples of EBITDA and the income approach, based on a discounted free cash flow model. In addition to restricted stock awards, the Company has granted restricted stock units as part of its equity incentive compensation program, all of which were granted on October 2, 2017 in connection with the IPO. The value of the restricted stock unit grants were based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, based on the Company’s policy for valuing such awards, and have graded vesting conditions based on service. The following table summarizes the activity of restricted stock awards and restricted stock units for the period from the date of the Business Combination of May 4, 2016 through the year ended December 31, 2017 , which includes the PQ Holdings restricted stock awards that were exchanged as part of the Business Combination: Restricted Stock Awards Restricted Stock Units Number of Weighted Average Grant Date Fair Value (per share) Number of Weighted Average Grant Date Fair Value (per share) Granted/assumed on May 4, 2016 in connection with the Business Combination 2,444,070 $ 9.27 — $ — Granted 266,955 $ 12.32 — $ — Vested (207,915 ) $ 12.32 — $ — Forfeited (20,178 ) $ 10.52 — $ — Nonvested as of December 31, 2016 2,482,932 $ 9.34 — $ — Granted 51,907 $ 16.11 1,654,690 $ 16.97 Vested (187,837 ) $ 12.84 — $ — Forfeited (250,365 ) $ 12.03 — $ — Nonvested as of December 31, 2017 2,096,637 $ 8.87 1,654,690 $ 16.97 Business Combination and Equity Restructuring The exchange of the PQ Holdings stock options and restricted stock awards for similar awards of PQ Group Holdings in the context of the Business Combination was accounted for as a modification of the awards. As a result, the cost of the replacement awards of PQ Group Holdings represented a combination of both pre- and post-merger services. The amount attributable to services prior to the Business Combination in connection with the modification was $1,400 , and is considered part of the consideration transferred in the Business Combination (see Note 6 to these consolidated financial statements for further information). The remainder of the cost is attributed to post-merger services and is being recognized over the respective remaining vesting periods. The Company’s equity restructuring which occurred prior the IPO (see Note 1 to these consolidated financial statements for further information) also constituted an event subject to modification accounting for stock-based compensation awards. However, the change to the equity incentive awards of the Company was designed to preserve the fair value of the awards before and after the reclassification and stock split (based on the existing antidilution provisions of the 2016 Plan), and included the same terms and were classified in the same manner as the equity awards preceding the modification. As a result, no incremental compensation cost was recognized by the Company. Total Stock-Based Compensation Expense For the years ended December 31, 2017 , 2016 and 2015 , total stock-based compensation expense for the Company (inclusive of both the Eco Services Class B Units prior to the Business Combination and the awards replaced or exchanged at the consummation of the Business Combination) was $8,799 , $7,029 and $2,256 , respectively. The income tax benefit recognized in the statements of operations for the years ended December 31, 2017 and 2016 was $3,345 and $2,662 , respectively (there was no tax benefit for the year ended December 31, 2015 since the Company was not subject to income taxes). As of December 31, 2017 , there was $3,909 of total unrecognized compensation cost related to nonvested stock options subject to service vesting conditions, which is expected to be recognized over a weighted-average period of 2.32 years. As of December 31, 2017 , there was $27,544 of total unrecognized compensation cost related to nonvested restricted stock awards and restricted stock units subject to service vesting conditions, which is expected to be recognized over a weighted-average period of 2.50 years. No expense has been recognized for any stock-based compensation awards subject to the performance condition for the years ended December 31, 2017 , 2016 and 2015 , as the performance-based criteria was not achieved nor considered probable of achievement. Awards issued with performance conditions vest based on the occurrence of a defined liquidity event upon which certain investment funds affiliated with CCMP receive proceeds exceeding certain thresholds. All of the Company’s equity incentive awards with performance-based vesting, whether in the form of stock options or restricted stock awards, are subject to achievement of the same performance condition. If an exit event occurs that exceeds the defined threshold, then all performance-based awards of the Company vest 100% , with no potential for partial vesting or excess achievement. If an exit event or events occur with no further possibility of meeting the defined threshold, then all of the Company’s awards subject to the performance vesting condition will be forfeited. In addition to the defined liquidity event, subsequent to the Company’s IPO, the performance vesting condition can also be achieved if the average closing trading price of the Company’s common stock on the NYSE over any consecutive ten-day trading period equals or exceeds a price that would be equivalent to the achievement of the threshold proceeds to CCMP. Total unrecognized compensation cost related to stock options and restricted stock awards subject to performance vesting conditions only based on the grant date fair value of the respective awards was $16,472 as of December 31, 2017 . |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | 22. Commitments and Contingent Liabilities: Environmental Contingencies There is a risk of environmental impact in chemical manufacturing operations. The Company’s environmental policies and practices are designed to ensure compliance with existing laws and regulations and to minimize the possibility of significant environmental impact. The Company is also subject to various other lawsuits and claims with respect to matters such as governmental regulations, labor and other actions arising out of the normal course of business. No accrual for these matters currently exists, with the exception of those listed below, because management believes that the liabilities resulting from such lawsuits and claims are not probable or reasonably estimable. The Company triggered the requirement of New Jersey’s Industrial Site Recovery Act (“ISRA”) statute with the PQ Holdings stock transfer/corporate merger in December 2004. As required under ISRA, a General Information Notice with respect to the Company’s two New Jersey locations was filed with the New Jersey Department of Environmental Protection (“NJDEP”) in December 2004 and again in July 2007. Based on an initial review of the facilities by the NJDEP in 2005, the Company estimated that $500 would be required for contamination assessment and removal work of one specific contaminant (polychlorinated biphenyls) that exceeded applicable NJDEP standards at these facilities, and had recorded a reserve for such amount as of December 31, 2005. During subsequent years, it was determined that additional assessment, removal and remediation work would be required and the reserve was increased to cover the estimated cost of such work. In addition, during this period, work had been performed and the reserve was reduced for actual costs incurred for the assessment and remediation work. Work at the Carlstadt facility has been completed and is closed from an ISRA standpoint, but as of December 31, 2017 and 2016 , the Company has recorded a reserve of $ 842 and $ 700 , respectively, for costs required for contamination assessment and removal work at the Rahway facility. There may be additional costs related to the remediation of Rahway, but until further investigation takes place, the Company cannot reasonably estimate the amount of additional liability that may exist. As part of a Delaware River Basin Commission (“DRBC”) required Pollutant Minimization Plan (“PMP”), in July 2013, the Company’s Chester facility conducted limited paint sampling for polychlorinated biphenyls (“PCBs”). Also, as part of demolition, repair and maintenance projects scheduled for the Company’s Baltimore facility in 2014, the Company conducted limited paint sampling during the fall of 2013 for waste categorization purposes. Paint samples were analyzed for PCB Aroclor 1254, the specific PCB congener commonly used in the manufacture of paint until the late 1970s. The Company’s analytical results indicated that PCB Aroclor 1254 is present in paint on some structures (e.g., piping, structural steel, tanks) in excess of the fifty (50) parts per million (“ppm”) regulatory threshold. Under the Toxic Substances Control Act (“TSCA”), there is no requirement to test in use paint for PCB content. However, once PCB content is identified at concentrations at or above the regulatory threshold, absent specific approval from the U.S. Environmental Protection Agency (“EPA”), the PCB-containing paint is regulated as an unauthorized use of PCBs, and the paint must be addressed. The Company abated painted surfaces that have tested positive for PCBs at levels exceeding 50 ppm at Baltimore in 2015 and early 2016. Similar abatement of painted structures as necessary at Chester have also been substantially completed. Characterization studies to evaluate whether soils have been impacted at Baltimore have been initiated as required under the TSCA, and have yet to commence at Chester. As of December 31, 2017 and 2016 , the Company has recorded a reserve of $ 701 and $ 1,048 , respectively, for the remediation costs of PCB impacted soils at the Company’s facilities. In 2011, the Company installed a Continuous Emissions Monitor (“CEM”) to measure CO, NOx and Opacity emissions from a furnace at the Company’s Chester facility in Pennsylvania, and the Company conducted Relative Accuracy Test Audits (“RATA”) as part of its efforts to certify the CEM. On May 5, 2014, the Pennsylvania Department of Environmental Protection (“PADEP”) officially notified the Company that it was certifying the CEM based on RATA test results dating back to November 2011 and instructed the Company to start entering data previously recorded by the CEM into the Agency’s on-line database. During the third and fourth quarters of 2014, the Company officially entered data recorded from the CEM up until the second quarter of 2013. In November 2015, PADEP issued an Assessment of Civil Penalty in the amount of $1,739 for alleged violations under the Pennsylvania Air Pollution Control Act during the period from August 11, 2011 through June 30, 2013. The Company appealed, and PADEP reduced the penalty assessment to $1,550 . As of December 31, 2016 , the Company has recorded a reserve of $1,500 associated with the PADEP penalty. After a hearing on the appeal, a Pennsylvania Environmental Hearing Board (“EHB”) judge reduced the penalty assessment to $215 in September 2017. The PADEP filed a motion to reconsider a portion of the EHB judge’s decision and the EHB denied the PADEP’s motion in October 2017. The Company repaid the $215 assessment during the year ended December 31, 2017 . In 2008, the Company sold the property of a manufacturing facility located in the United States to the local port authority. In 2009, the port authority commissioned an environmental investigation of portions of the property. In 2010, the port authority advised the Company of alleged soil and groundwater contamination on the property and alleged the Company liable for certain conditions. The Company received and reviewed the environmental investigation documentation and determined it may have liability with respect to some, but not all, of the alleged contamination. As of December 31, 2017 and 2016 , the Company has recorded a reserve of $ 837 and $ 913 , respectively, for costs related to this potential liability. The Company has recorded a reserve of $ 1,245 and $ 1,776 as of December 31, 2017 and 2016 , respectively, to address remaining subsurface remedial and wetlands/marsh management activities at the Company’s Martinez, CA site. Although currently a sulfuric acid regeneration plant, the site originally was operated by Mountain Copper Company (“Mococo”) as a copper smelter. Also, the site sold iron pyrite to various customers and allowed their customers to deposit waste iron pyrite cinder and slag on the site. The property is adjacent to Peyton Slough, where Mococo had a permitted discharge point from its process. In 1997, the San Francisco Bay Regional Water Quality Control Board (“RWQCB”) required characterization and remediation of Peyton Slough for Copper, Zinc and Acidic Soils. Various remediation activities were undertaken and completed, and the site has received final concurrence from the Army Corps with respect to the completed work. The RWQCB has agreed that Eco Services has achieved the goals for vegetative cover, but the current marsh condition is not sustainable without continued operation of the tide gates. The Company is continuing to work with the RWQCB on a plan to involve the County and work towards development of an alliance for operating, maintaining and funding the tide gates in the future. As of December 31, 2017 and 2016 , the Company has recorded a reserve of $ 1,220 and $ 1,755 , respectively, for subsurface remediation and the Soil Vapor Extraction Project at the Company’s Dominguez, CA site. In the 1980s and 1990s, the EPA and the Los Angeles Regional Water Quality Control Board conducted investigations of the site due to historic chlorinated pesticide and chlorinated solvent use. Soil and groundwater beneath the site were impacted by chlorinated solvents and associated breakdown products, petroleum hydrocarbons, chlorinated pesticides and metals. A Corrective Measures Plan approved in October 2011 requires (1) soil vapor extraction (“SVE”) in affected areas, (2) covering of unpaved areas containing pesticide impacted soil, and (3) annual groundwater monitoring of the perched water-bearing zone. Installation of the SVE unit has been completed and startup has occurred. The California Department of Toxic Substances Control (“DTSC”) has granted conditional approval of the Company’s soil management, and monitoring and maintenance plans. Most recently, the DTSC is requiring the Company to delineate the PCE plume on the eastern boundary of the site. The Company has submitted an action plan to address this matter and is awaiting comments from the DTSC. Leases The Company has entered into various lease agreements for the rental of office and plant facilities, railcars, machinery and equipment, substantially all of which are classified as operating leases. Total rent expense under these agreements was $22,704 , $16,315 and $6,096 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Total rent due under non-cancelable operating lease commitments as of December 31, 2017 is: Year Amount 2018 $ 16,779 2019 11,992 2020 9,695 2021 7,253 2022 5,145 Thereafter 12,432 $ 63,296 Purchase Commitments The Company has entered into short and long-term purchase commitments for various key raw materials and energy requirements. The purchase obligations include agreements to purchase goods that are enforceable and legally binding, and that specify all significant terms. The purchase commitments covered by these agreements are with various suppliers and total approximately $35,038 as of December 31, 2017 . Purchases under these agreements are expected to be as follows: Year Amount 2018 $ 24,113 2019 2,827 2020 1,188 2021 1,186 2022 1,186 Thereafter 4,538 $ 35,038 Other PQ Holdings was previously liable to the seller of a business for potential multi-year UK tax benefits derived from the acquisition. PQ Holdings was contractually obligated to make a payment on an annual basis on its UK taxable results, which fluctuate period-to-period, until there was a change in control, as defined in the purchase agreement. As a result of the Business Combination, a change in control was triggered, and PQ Holdings is no longer liable for additional accruals under the arrangement as of May 4, 2016. At December 31, 2017 and 2016 , the Company has accrued $363 and $1,919 , respectively, for this arrangement, representing the remaining payment owed on the calculation of the liability for the tax years 2016 (through May 4, 2016) and 2015. The Company recorded these expenses as transaction and other related costs in other operating expense, net in the Company’s consolidated statements of operations. |
Restructuring and Other Related
Restructuring and Other Related Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Costs | 23. Restructuring and Other Related Costs: The following table presents the components of restructuring and other related costs for the years ended December 31, 2017 , 2016 and 2015 included in other operating expense, net, in the accompanying consolidated statements of operations: Years ended 2017 2016 2015 Severance and other employee costs related to legacy Eco restructuring plan $ 830 $ 5,093 $ 3,971 Severance and other employee costs related to Performance Materials plant closure 4,711 — — Other related costs 2,949 7,537 176 $ 8,490 $ 12,630 $ 4,147 Legacy Eco Restructuring Plan On July 30, 2014, Eco Services, a newly formed Delaware limited liability company and indirect subsidiary of certain investment funds affiliated with CCMP, entered into an Asset Purchase Agreement with Solvay USA, Inc. (“Solvay”), a Delaware corporation, which provided for the sale, transfer and assignment by Solvay and the acquisition, acceptance and assumption by Eco Services, of substantially all of the assets of Solvay’s Eco Services business unit of Solvay’s regeneration and virgin sulfuric acid production business operations in the United States (the “2014 Acquisition”). Prior to the Asset Purchase Agreement with Solvay, Eco Services operated as a business unit within Solvay, which is an indirect, wholly owned subsidiary of Solvay SA. Subsequent to the 2014 Acquisition, the Company initiated a restructuring plan designed to improve organizational efficiency and streamline the operations of Eco Services as a stand-alone company. The primary impact of the plan to the Company’s consolidated results of operations was the recognition of severance costs related to a reduction-in-force. These costs included benefits payable under ongoing Company severance plan arrangements, whereby payments are attributable to employee services rendered with benefits that accumulate over time. The liabilities and associated charges related to these severance costs are recognized by the Company when payment of the benefits becomes probable and estimable. Charges related to severance costs for the restructuring plan were $830 , $5,093 and $1,293 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Additionally, certain one-time costs related to retention bonuses were also recognized as part of the restructuring plan. The Company recognizes costs under one-time benefit arrangements by measuring the liability as of the employee communication date, which is based on the estimated fair value of the liability at the termination date, and recognizing the liability ratably over the required future service period based on the terms of the arrangement. Charges related to one-time costs for the restructuring plan were $2,678 for the year ended December 31, 2015. Costs related to the restructuring plan affected employees in the Company’s EC&S segment, although these costs are excluded from the segment’s measure of profitability of Adjusted EBITDA (see Note 12 to these consolidated financial statements for further information). Performance Materials Plant Closure In September 2017, the Company approved and announced a plan to consolidate its manufacturing operations in Europe for the performance materials product group and close its facility in Kirchheimbolanden, Germany. The plan is part of the Company’s overall strategy with respect to the Sovitec acquisition (see Note 6 to these consolidated financial statements) and the realization of cost and other synergies related to the business combination. The facility will remain in operation over the short term in a reduced capacity, and the Company plans to cease operations at the location on or about March 31, 2018. The Company plans to relocate the manufacturing equipment to other European facilities, and is exploring strategic alternatives for the building and land. As a result, the Company classified the plant under the “held and used” accounting model as of December 31, 2017 , as it did not meet the criteria to be classified as “held for sale.” As a result of the decision and announcement regarding the plant, the Company performed an impairment assessment related to the fixed assets of the facility. In conducting the recoverability assessment, the Company compared the carrying value of the asset group that includes the plant to the undiscounted future cash flows of the asset group, noting that there was no indication of impairment. The Company does not anticipate the acceleration of depreciation on the fixed assets associated with the plant, as the Company continues to utilize the assets and ultimately expects to relocate the equipment. In addition to the fixed asset recoverability evaluation, the Company recorded a severance charge related to the pending closure and other cost reductions for its performance materials product group in Europe of $4,711 for the year ended December 31, 2017 . The charge was fully recognized as of December 31, 2017 based on the types of benefits provided and the criteria for restructuring and exit cost recognition. Although the Company does not expect to incur additional severance costs related to the closure, the Company will incur additional costs related to the dismantling, transportation and reassembly of the manufacturing equipment after the plant ceases operations, which is currently estimated to be between $500 and $1,000 . Rollforward of Restructuring Liabilities The activity in the accrued liability balance associated with the Company’s restructuring plans, all of which related to severance and other employee costs, was as follows for the years ended December 31, 2017 , 2016 and 2015 : Legacy Eco Restructuring Plan Performance Materials Plant Closure Total Restructuring Charges Balance at December 31, 2014 $ 247 $ — $ 247 Restructuring charges 3,971 — 3,971 Cash payments (2,925 ) — (2,925 ) Balance at December 31, 2015 $ 1,293 $ — $ 1,293 Restructuring charges 5,093 — 5,093 Cash payments (4,743 ) — (4,743 ) Balance at December 31, 2016 $ 1,643 $ — $ 1,643 Restructuring charges 830 4,711 5,541 Cash payments (2,258 ) (1,588 ) (3,846 ) Balance at December 31, 2017 $ 215 $ 3,123 $ 3,338 The remaining accrued liability balance associated with the restructuring plans at December 31, 2017 is expected to be paid in 2018. Other Related Costs The Company incurred severance and other business optimization costs of $2,949 , $7,537 and $176 for the years ended December 31, 2017 , 2016 and 2015 , respectively. These costs were not associated with formal restructuring plans and primarily related to severance charges for certain executives, transition/duplicate staffing, professional fees and other expenses related to the Company’s organizational changes. |
Relationship with Solvay
Relationship with Solvay | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Relationship with Solvay | 24. Relationship with Solvay: Transition Services Agreement Concurrent with the consummation of the 2014 Acquisition, Eco Services entered into a transition services agreement with Solvay (the “Transition Services Agreement”), which provided certain transition services by Solvay to Eco Services and from Eco Services to Solvay. The services from Solvay included the provision of information technology services, certain workspace related services, cost accounting services and consulting services, among others. The Transition Services Agreement was terminated as of December 31, 2015. The Company recorded $4,882 of fees for the transition services provided in selling, general and administrative expenses for the year ended December 31, 2015. Cross-Services Agreement In connection with the 2014 Acquisition, Eco Services entered into a Cross-Services Agreement (the “CSA”) with Aroma Performance, a Solvay business unit (“Aroma”), on July 28, 2014. The CSA pertains to Eco Services’ Baton Rouge, LA site. In connection with the CSA, Eco Services (and now the Company) agreed to continue to provide certain services that it historically provided to Aroma when it operated as a component of Solvay, including its well water and process steam requirements, for an initial term of five years . Further, Eco Services also agreed to provide Aroma with the use of space, operating machinery and handling of chemicals on the site. Under the CSA, the Company sells product to Aroma on an ongoing basis. Sales under the CSA totaled $1,068 , $1,047 and $1,272 for the years ended December 31, 2017 , 2016 and 2015 , respectively. The Company also provides hazardous waste removal services to Aroma under the CSA. Sales related to the hazardous waste removal services were $1,600 , $1,615 and $1,544 for the years ended December 31, 2017 , 2016 and 2015 , respectively. The Company incurs certain shared costs, such as electricity, steam, other utility and plant administration costs, all of which are charged to Aroma primarily based on direct usage. The Company charged Aroma $2,028 , $2,686 and $3,745 for such expenses for the years ended December 31, 2017 , 2016 and 2015 , respectively. Silica Sales Agreement In connection with the 2014 Acquisition, Eco Services entered into an agreement (the “Silica Sales Agreement”) with Solvay’s Silica business unit (“Silica”) pursuant to which Eco Services agreed to provide Silica with sulfuric acid produced at its Hammond, IN plant for a term of five years , renewing automatically for one year terms thereafter. Eco Services historically provided sulfuric acid to Silica when it operated as a component of Solvay, and the Company continues to sell product to Solvay under the Silica Sales Agreement on an ongoing basis. These sales totaled $1,666 , $1,743 and $1,983 for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Long-term Supply Contract
Long-term Supply Contract | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term Supply Contract | 25. Long-term Supply Contract: As part of Solvay’s 2004 sale of its Specialty Phosphates business, Solvay agreed to continue to supply sulfuric acid to a third party in support of the phosphoric acid production for its specialty phosphates business under a preexisting supply agreement. This non-cancelable agreement extends to 2031, and was assumed by the Company in connection with the 2014 Acquisition. The liability associated with this supply agreement was recorded at an estimated fair value of $27,300 in connection with the 2014 Acquisition. The fair value was determined by appraisal, based on the marked up price of the sulfuric acid over the price per the supply agreement, or mark up. The liability was $22,250 and $23,888 at December 31, 2017 and 2016 , respectively, and is being amortized to cost of goods sold over the remaining term of the agreement. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 26. Related Party Transactions: The Company maintains certain policies and procedures for the review, approval and ratification of related party transactions to ensure that all transactions with selected parties are fair, reasonable and in the Company’s best interests. All significant relationships and transactions are separately identified by management if they meet the definition of a related party or a related party transaction. Related party transactions include transactions that occurred during the year, or are currently proposed, in which the Company was or will be a participant, and for which any related person had or will have a direct or indirect material interest. All related party transactions are reviewed, approved and documented by the appropriate level of the Company’s management in accordance with these policies and procedures. On December 29, 2014, PQ Holdings, CCMP and PQ Corporation entered into a consulting agreement relating to the provision of certain financial and strategic advisory services and consulting services. Similarly, the consulting agreement between PQ Holdings, INEOS Capital Partners and PQ Corporation was amended and restated. Under the new consulting agreements, the Company agreed to pay an annual monitoring fee of $5,000 distributed to CCMP and INEOS AG equal to the Pro Rata Percentage, as defined, between CCMP and INEOS AG. These consulting agreements were terminated upon completion of the IPO. The Company recorded $3,777 , $3,584 and $590 of management advisory fees in other operating expense, net in the consolidated statements of operations for the years ended December 31, 2017 , 2016 and 2015 , respectively. Advisory Services and Monitoring Agreement Concurrent with the consummation of the 2014 Acquisition, the Company entered into an advisory services and monitoring agreement with CCMP, pursuant to which CCMP provided certain advisory services to the Company. Pursuant to the advisory services and monitoring agreement, CCMP and certain members of the Company’s management and board of managers were paid a one-time fee on the Closing Date of $8,000 related to the 2014 Acquisition, Senior Secured Credit Facilities and 2022 Notes transactions, and CCMP received (i) an annual advisory fee of $500 and (ii) reimbursement for reasonable out-of-pocket expenses incurred in connection with the provision of services, including the reasonable fees and disbursements of legal counsel and other advisors retained by CCMP and travel and reasonable out-of-pocket expenses of each director appointed by CCMP to the Company’s board of managers or the board of directors of its affiliates, and of any other representative of CCMP in connection with their provision of such services. The advisory services and monitoring agreement also provided for customary exculpation, indemnification and confidentiality provisions. The one-time management fee was recorded by the Company as an increase to selling, general and administrative expenses. Effective January 1, 2015, the Company entered into a service agreement with CCMP (the “Services Agreement”) for the provision of services historically provided by Solvay. The services include product information and operations support, manufacturing support, electronic data processing and systems support, employee relations, and financial services. The Company recorded $1,616 for these services and reimbursable expenses provided under the Service Agreement, which was recorded in selling, general and administrative expenses for the year ended December 31, 2015. Pursuant to the advisory services and monitoring agreement, the Company agreed to pay certain investors a one-time fee of $1,600 for services provided related to the 2014 Acquisition. On January 13, 2015, pursuant to a payment direction and subscription agreement, in lieu of the Company paying this fee, these investors agreed to contribute the $1,600 transaction fee to the capital of Eco Services Group Holdings LLC (“Holdings”). Holdings contributed this fee to Eco Services Intermediate Holdings LLC (“Intermediate Holdings”). Intermediate Holdings in turn contributed this transaction fee to the Company, increasing the Company’s additional paid-in capital by $1,600 . Transactions with Management and Board of Managers For the year ended December 31, 2015, certain members of the Company’s board of managers and management contributed $1,538 in cash, which was invested directly into Holdings. Holdings contributed these proceeds to Intermediate Holdings. Intermediate Holdings in turn contributed the proceeds to the Company, increasing the Company’s additional paid-in capital by $1,538 . Transactions with Board of Directors In connection with the offering by PQ Corporation of $525,000 aggregate principal amount of Senior Unsecured Notes due 2022 in May 2016, a member of the Company’s board of directors purchased $4,000 in principal amount of such notes. Interest accrued on the notes at an annual rate equal to three-month LIBOR plus 10.75% , with a 1.0% LIBOR floor, payable and reset quarterly. The director received interest payments in respect of the notes totaling $362 and $300 during the years ended December 31, 2017 and 2016 , respectively. The notes were partially redeemed in October 2017, in connection with the Company’s initial public offering and December 2017, in connection with the Company’s issuance and sale of the $300,000 Senior Unsecured Notes due 2025 (see Note 15 ). The director received $4,000 of principal amount of such notes as well as $338 related to the prepayment penalties in connection with these two transactions. Joint Venture Agreement The Company entered into a joint venture agreement (the “ZI Partnership Agreement”) in 1988 with CRI Zeolites Inc., a Royal Dutch Shell plc affiliate, to form Zeolyst International, our 50/50 joint venture partnership (the “Partnership”). Under the terms of the ZI Partnership Agreement, the Partnership leases certain land used in its Kansas City production facilities from PQ Corporation. This lease, which has been recorded as an operating lease, provided for rental payments of $295 , $187 and $0 during the years ended December 31, 2017 , 2016 and 2015 , respectively. The terms of this lease are evergreen as long as the ZI Partnership Agreement is in place. The Partnership purchases certain of its raw materials from the Company and is charged for various manufacturing costs incurred at the Company’s Kansas City production facility. The amount of these costs charged to the Partnership were $17,470 , $10,707 and $0 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Certain administrative, marketing, engineering, management-related, and research and development services are provided to the Partnership by the Company. During the years ended December 31, 2017 , 2016 and 2015 , the Partnership was charged $12,248 , $8,169 and $0 , respectively, for these services. In addition, the Partnership was charged certain product demonstration costs of $2,175 , $1,663 and $0 during the years ended December 31, 2017 , 2016 and 2015 , respectively. Other From time to time, the Company makes sales to portfolio companies of funds that are affiliated with CCMP and companies that are affiliated with INEOS Capital Partners, but these sales are not material. |
Quarterly Financial Summary (Un
Quarterly Financial Summary (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Summary (Unaudited) | 27. Quarterly Financial Summary (Unaudited): The following tables summarize the Company’s quarterly financial results during the years ended December 31, 2017 and 2016 : 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Sales $ 332,931 $ 389,267 $ 391,829 $ 358,074 Gross profit 82,712 107,414 102,559 84,151 Operating income 37,915 55,149 46,558 27,882 Net income (loss) (2,315 ) (1,670 ) (3,016 ) 65,564 Net income (loss) attributable to PQ Group Holdings Inc. (2,454 ) (1,609 ) (3,345 ) 65,011 Net income (loss) per common share: Basic income (loss) per share $ (0.02 ) $ (0.02 ) $ (0.03 ) $ 0.49 Diluted income (loss) per share $ (0.02 ) $ (0.02 ) $ (0.03 ) $ 0.49 Weighted average shares outstanding: Basic 103,947,888 104,015,815 104,096,837 133,138,140 Diluted 103,947,888 104,015,815 104,096,837 133,895,646 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Sales $ 93,913 $ 277,554 $ 369,979 $ 322,731 Gross profit 26,101 62,298 95,299 70,394 Operating income 8,048 16,749 44,254 15,139 Net income (loss) (3,131 ) (76,948 ) (9,606 ) 10,527 Net income (loss) attributable to PQ Group Holdings Inc. (3,131 ) (77,262 ) (10,017 ) 10,664 Net income (loss) per common share: Basic loss per share $ (0.14 ) $ (0.99 ) $ (0.10 ) $ 0.10 Diluted loss per share $ (0.14 ) $ (0.99 ) $ (0.10 ) $ 0.10 Weighted average shares outstanding: Basic 22,694,161 77,842,216 103,783,719 103,947,888 Diluted 22,694,161 77,842,216 103,783,719 103,947,888 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 28. Supplemental Cash Flow Information: The following table presents supplemental cash flow information for the Company: Years ended December 31, 2017 2016 2015 Cash paid during the year for: Income taxes $ 29,199 . $ 16,981 $ 8 Interest 170,131 132,579 44,074 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the period end 18,762 18,161 624 Non-cash financing activities: Equity consideration for the Business Combination (Note 6) — 910,800 — Debt assumed in the Business Combination (Note 6) — 22,911 — Debt assumed in the Acquisition (Note 7) 16,609 — — Non-cash equity contribution (Note 26) — — 1,600 The Company also issued 12,063 shares of common stock in satisfaction of the exercise of 32,366 common stock options originally issued under the Company’s equity incentive plan during the year ended December 31, 2017 . The Company did not receive any cash proceeds from the transaction, as the Company withheld 20,303 of the shares covered by the options in satisfaction of the exercise price and taxes due. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 29. Subsequent Events: On February 8, 2018 (the “Closing Date”), PQ Corporation (the “Borrower”), an indirect, wholly owned subsidiary of the Company, refinanced its existing senior secured term loan facility with a new $1,267,000 senior secured term loan facility (the “New Term Loan Facility”) by entering into a third amendment agreement (the “Amendment”), which amended and restated the Term Loan Credit Agreement dated as of May 4, 2016, among the Borrower, CPQ Midco I Corporation, the guarantors identified therein, Citibank, N.A., as an additional term lender, Credit Suisse AG, Cayman Island Branch, as administrative agent and collateral agent, and the lenders and the other parties party thereto from time to time (as amended prior to the Amendment, the “Existing Credit Agreement” and as amended and restated by the Amendment, the “New Credit Agreement”). The New Term Facility bears interest at a floating rate of LIBOR (with a zero percent minimum LIBOR floor) plus 2.50 percent per annum and matures in February 2025, effectively lowering the interest rate margin and extending the maturity of its senior secured term loan facility. The New Term Loan Facility requires scheduled quarterly amortization payments, each equal to 0.25% of the original principal amount of the loans under the New Term Loan Facility. Voluntary prepayments of the New Term Loan Facility in connection with a Repricing Transaction, as defined in the New Credit Agreement, on or prior to six months after the Closing Date will be subject to a call premium of 1.0% . Otherwise, outstanding loans under the New Term Loan Facility may be voluntarily prepaid at any time without premium or penalty. In addition, the New Credit Agreement contains customary mandatory prepayments, affirmative and negative covenants and events of default, all of which are substantially the same as under the Existing Credit Agreement. On the Closing Date, the Borrower also entered into multiple cross currency swap arrangements to hedge foreign currency risk. With an aggregate notional amount of approximately $342,561 , the swaps are designed to enable the Borrower to effectively convert a portion of its fixed-rate U.S. dollar denominated debt obligations into approximately €280,000 equivalent. The swaps are expected to mature in February 2023. The Company has evaluated subsequent events since the balance sheet date and determined that, other than the items noted above, there are no additional items to disclose. |
Schedule I
Schedule I | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Financial Information | SCHEDULE I PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION CONDENSED STATEMENTS OF OPERATIONS (in thousands) Years ended 2017 2016 Stock compensation expense $ 8,799 $ 7,029 Equity in income (loss) of subsidiaries 66,402 (72,717 ) Net income (loss) 57,603 (79,746 ) Other comprehensive income (loss), net of tax: Pension and postretirement benefits (101 ) 6,865 Net (loss) gain from hedging activities (3,590 ) 4,557 Foreign currency translation 61,713 (65,781 ) Total other comprehensive income (loss) 58,022 (54,359 ) Comprehensive income (loss) $ 115,625 $ (134,105 ) SCHEDULE I PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION CONDENSED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2017 December 31, 2016 ASSETS Total current assets $ — $ — Investment in subsidiaries 1,628,000 1,022,880 Total assets $ 1,628,000 $ 1,022,880 LIABILITIES Total current liabilities $ — $ — Total liabilities — — STOCKHOLDERS' EQUITY Common stock ($0.01 par); authorized shares 450,000,000; issued shares 135,244,379 and 106,452,330 on December 31, 2017 and December 31, 2016, respectively; outstanding shares 135,244,379 and 106,430,811 on December 31, 2017 and December 31, 2016, respectively 1,352 73 Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on December 31, 2017 and December 31, 2016 — — Additional paid-in capital 1,655,114 1,167,137 Accumulated deficit (32,327 ) (90,380 ) Treasury stock, at cost; shares 21,519 on December 31, 2016 — (239 ) Accumulated other comprehensive income (loss) 4,311 (53,711 ) Total PQ Group Holdings Inc. equity 1,628,000 1,022,880 Total liabilities and equity $ 1,628,000 $ 1,022,880 SCHEDULE I PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION CONDENSED STATEMENTS OF CASH FLOWS (in thousands) Years ended 2017 2016 Cash flows from operating activities: Net income (loss) $ 57,603 $ (79,746 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in net (income) loss from subsidiaries (66,402 ) 72,717 Stock compensation expense 8,799 7,029 Net cash provided by operating activities — — Cash flows from investing activities: Investment in subsidiaries (480,696 ) — Net cash used in investing activities (480,696 ) — Cash flows from financing activities: IPO proceeds 507,500 — IPO costs (26,804 ) — Net cash provided by financing activities 480,696 — Effect of exchange rate changes on cash and cash equivalents — — Net change in cash and cash equivalents — — Cash and cash equivalents at beginning of period — — Cash and cash equivalents at end of period $ — $ — SCHEDULE I PQ GROUP HOLDINGS INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION NOTES TO CONDENSED SCHEDULE I 1. Description of PQ Group Holdings Inc. and Subsidiaries On August 17, 2015, PQ Holdings Inc. (“PQ Holdings”), Eco Services Operations LLC (“Eco Services”), certain investment funds affiliated with CCMP Capital Advisors, LLC (now known as CCMP Capital Advisors, LP; “CCMP”), and stockholders of PQ Holdings and Eco Services entered into a reorganization and transaction agreement pursuant to which the companies consummated a series of transactions to reorganize and combine the businesses of PQ Holdings and Eco Services (the “Business Combination”), under a new holding company, PQ Group Holdings Inc. (“PQ Group Holdings” or the “Parent Company”). The Business Combination was consummated on May 4, 2016. In accordance with accounting principles generally accepted in the United States (“GAAP”), Eco Services is the accounting predecessor to PQ Group Holdings. Certain investment funds affiliated with CCMP held a controlling interest position in Eco Services prior to the Business Combination. In addition, certain investment funds affiliated with CCMP owned a non-controlling interest in PQ Holdings prior to the Business Combination and the merger with Eco Services constituted a change in control under the PQ Holdings credit agreements and bond indenture that were in place at the time of the Business Combination. Therefore, Eco Services is deemed to be the accounting acquirer. These Parent Company condensed financial statements are the continuation of Eco Services’ business prior to the Business Combination. PQ Group Holdings is a holding company that conducts substantially all of its business operations through its wholly owned subsidiary, PQ Corporation. As specified in certain of PQ Corporation’s debt agreements entered into concurrently with the Business Combination, there are restrictions on the ability of PQ Corporation to make payments to its stockholder, PQ Group Holdings, on behalf of their equity interests (refer to Note 15 to the PQ Group Holdings consolidated financial statements for further information regarding PQ Corporation debt). 2. Basis of Presentation The accompanying condensed Parent Company financial statements are required in accordance with Rule 4-08(e)(3) of Regulation S-X. These condensed financial statements have been presented on a “parent-only” basis. Under a parent-only presentation, the Parent Company’s investment in its consolidated subsidiary is presented under the equity method of accounting. Under the equity method, the investment in subsidiary is stated at cost plus contributions and equity in undistributed income (loss) of the subsidiary, less distributions received since the date of acquisition. For purposes of presenting net income, this presentation assumes that the Parent Company was in existence for the full year ended December 31, 2016, the year of the Business Combination. These parent-only financial statements should be read in conjunction with PQ Group Holdings’ audited consolidated financial statements. 3. Stock-Based Compensation Refer to Note 21 of the notes to the PQ Group Holdings consolidated financial statements for a description of stock-based compensation. 4. Common Stock Refer to Note 20 of the notes to the PQ Group Holdings consolidated financial statements for a description of common stock. |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation PQ Merger with Eco Services On August 17, 2015, the Company, PQ Holdings Inc. (“PQ Holdings”), Eco Services Operations LLC (“Eco Services”), certain investment funds affiliated with CCMP Capital Advisors, LLC (now known as CCMP Capital Advisors, LP; “CCMP”), and stockholders of PQ Holdings and Eco Services entered into a reorganization and transaction agreement pursuant to which the companies consummated a series of transactions to reorganize and combine the businesses of PQ Holdings and Eco Services (the “Business Combination”), under a new holding company, PQ Group Holdings Inc. The Business Combination was consummated on May 4, 2016. In accordance with accounting principles generally accepted in the United States (“GAAP”), Eco Services is the accounting predecessor to PQ Group Holdings. Certain investment funds affiliated with CCMP held a controlling interest position in Eco Services prior to the Business Combination. In addition, certain investment funds affiliated with CCMP owned a non-controlling interest in PQ Holdings prior to the Business Combination and the merger with Eco Services constituted a change in control under the PQ Holdings credit agreements and bond indenture that were in place at the time of the Business Combination. Therefore, Eco Services is deemed to be the accounting acquirer. These consolidated financial statements are the continuation of Eco Services’ business prior to the Business Combination. |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. Investments in affiliated companies are recorded at cost plus the Company’s equity in their undistributed earnings. All intercompany transactions have been eliminated. Noncontrolling interests represent third-party equity ownership in certain of the Company’s consolidated subsidiaries and are presented as a component of equity separate from the equity attributable to the Company’s shareholders. The noncontrolling interests’ share in the Company’s net earnings are included in net income attributable to the noncontrolling interest in the Company’s consolidated statements of operations, and their portion of the Company’s comprehensive income is included in comprehensive loss attributable to noncontrolling interests in the Company’s consolidated statements of comprehensive income (loss). The Company’s noncontrolling interests relate to third-party minority ownership interests held in certain of the Company’s foreign subsidiaries acquired as part of the Business Combination. All assets and liabilities of foreign subsidiaries and affiliated companies are translated to U.S. dollars using exchange rates in effect at the balance sheet date. Adjustments resulting from translation of the balance sheets and intercompany loans, which are considered permanent, are included in stockholders’ equity as part of accumulated other comprehensive income (loss). Adjustments resulting from translation of certain intercompany loans, which are not considered permanent and are denominated in foreign currencies, are included in other (income) expense, net in the consolidated statements of operations. The Company considers intercompany loans to be of a permanent or long-term nature if management expects and intends that the loans will not be repaid. |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents include investments with original terms to maturity of 90 days or less from the time of purchase. |
Restricted Cash | Restricted Cash. Restricted cash, which is restricted as to withdrawal or usage, is classified separately from cash and cash equivalents on our consolidated balance sheets. The proceeds from the New Markets Tax Credit (“NMTC”) financing arrangements are restricted for use and are classified on the Company’s consolidated balance sheets as other current assets. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. A specific reserve for bad debt is recorded for known or suspected doubtful accounts receivable. For all other accounts, the Company recognizes a reserve for bad debt based on the length of time receivables are past due and historical write-off experience. Account balances are charged against the allowance when the Company believes it is probable that the associated receivables will not be recovered. If the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required. |
Inventories | Inventories. Certain domestic inventories are stated at the lower of cost or market and valued using the last-in, first-out (“LIFO”) method. All other inventories are stated at the lower of cost and net realizable value and valued using the weighted average cost or first-in, first-out (“FIFO”) methods. |
Property, Plant and Equipment | Property, Plant and Equipment. Property, plant and equipment are carried at cost and include expenditures for new facilities, major renewals and betterments. The Company capitalizes the cost of furnace rebuilds as part of property, plant and equipment. Plant and equipment under capital leases are carried at the present value of minimum lease payments as determined at the beginning of the lease term. Maintenance, repairs and minor renewals are charged to expense as incurred. The Company capitalizes certain internal costs associated with the implementation of purchased software. When property, plant and equipment is retired or otherwise disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time. The Company also leases property, plant and equipment, principally under operating leases. Rent expense for operating leases, which may have escalating rentals or rent holidays, is recorded on a straight-line basis over the respective lease terms. Depreciation is provided on the straight-line method based on the estimated useful lives of the assets, which generally range from 15 to 33 years for buildings and improvements and 3 to 10 years for machinery and equipment. Leasehold improvements are depreciated using the straight-line method based on the shorter of the useful life of the improvement or remaining lease term. The Company capitalizes the interest cost associated with the development and construction of significant new plant and equipment and depreciates that amount over the lives of the related assets. |
Spare Parts | Spare Parts. Spare parts are maintained by the Company’s facilities to keep machinery and equipment in working order. Spare parts are capitalized and included in other long-term assets. Spare parts are measured at cost and are not depreciated or expensed until utilized; however, reserves may be provided on aged spare parts. When a spare part is utilized as part of an improvement to property, plant and equipment, the carrying value is depreciated over the applicable life once placed in service. Otherwise, the spare part is expensed and charged as a cost of production when utilized. |
Investments in Affiliated Companies | Investments in Affiliated Companies. Investments in affiliated companies are accounted for using the equity method of accounting if the investment provides the Company with the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investments in equity-method investees are recorded in the consolidated balance sheets as investments in affiliated companies, and the Company’s share of the investees’ earnings or losses, together with other-than temporary impairments in value, is recorded as equity in net income (loss) from affiliated companies in the consolidated statements of operations. Any differences between the Company’s cost of an equity method investment and the underlying equity in the net assets of the investment, such as fair value step-ups resulting from acquisitions, are accounted for according to their nature and impact the amounts recognized as equity in net income (loss) from affiliated companies in the consolidated statements of operations. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company is required to test goodwill associated with each of its reporting units for impairment at least annually and whenever events or circumstances indicate that it is more likely than not that goodwill may be impaired. The Company performs its annual goodwill impairment test as of October 1 of each year. Goodwill is tested for impairment at the reporting unit level. In performing tests for goodwill impairment, the Company is permitted to first perform a qualitative assessment about the likelihood of the carrying value of a reporting unit exceeding its fair value. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount based on the qualitative assessment, it is required to perform a two-step goodwill impairment test to identify the potential goodwill impairment and measure the amount of the goodwill impairment loss, if any, to be recognized for that reporting unit. However, if an entity concludes otherwise based on the qualitative assessment, the two-step goodwill impairment test is not required. The option to perform the qualitative assessment can be utilized at the Company’s discretion, and the qualitative assessment need not be applied to all reporting units in a given goodwill impairment test. For an individual reporting unit, if the Company elects not to perform the qualitative assessment, or if the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company must perform the two-step goodwill impairment test for the reporting unit. In applying the two-step process, the first step used to identify potential impairment involves comparing the reporting unit’s estimated fair value to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value exceeds the estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment, if any. The second step of the process involves the calculation of an implied fair value of goodwill for each reporting unit for which step one indicated potential impairment. The implied fair value of goodwill is determined in a manner similar to how goodwill is calculated in a business combination. That is, the estimated fair value of the reporting unit, as calculated in step one, is allocated to the individual assets and liabilities as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded to write down the carrying value. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit and the loss establishes a new basis in the goodwill. Subsequent reversal of an impairment loss is not permitted. For intangible assets other than goodwill, definite-lived intangible assets are amortized over their respective estimated useful lives. Intangible assets with indefinite lives are not amortized, but rather are tested for impairment at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. The Company tests its indefinite-lived intangible assets as of October 1 of each year in conjunction with its annual goodwill impairment test. |
Impairment Assessment of Long-Lived Assets | Impairment Assessment of Long-Lived Assets. The Company performs an impairment review of property, plant and equipment and definite-lived intangible assets when facts and circumstances indicate that the carrying value of an asset or asset group may not be recoverable from its undiscounted future cash flows. When evaluating long-lived assets for impairment, if the carrying amount of an asset or asset group is found not to be recoverable, a potential impairment loss may be recognized. An impairment loss is measured by comparing the carrying amount of the asset or asset group to its fair value. Fair value is determined using quoted market prices when available, or other techniques including discounted cash flows. The Company’s estimates of future cash flows involve assumptions concerning future operating performance, economic conditions and technological changes that may affect the future useful lives of the assets. |
Derivative Financial Instruments | Derivative Financial Instruments. The Company utilizes certain derivative financial instruments to enhance its ability to manage risk, including exposure to interest rates and natural gas price fluctuations that exist as part of ongoing business operations. Derivative instruments are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. All derivatives designated as hedges are recognized on the consolidated balance sheets at fair value. On the date a derivative contract is entered into, the Company may designate the derivative as a hedge of a forecasted transaction or as a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash-flow hedge are recorded in other comprehensive income (loss) to the extent that the derivative is effective as a hedge and until earnings are affected by the variability in cash flows of the designated hedged item. The ineffective portion is reported in earnings. Changes in the fair value of a derivative that is not designated or does not qualify as a cash-flow hedge are recorded in the consolidated statements of operations. Cash flows from derivative instruments are reported in the same cash-flow category as the cash flows from the items being hedged. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes relating all derivatives that are designated cash-flow hedges to underlying forecasted transactions. The Company also formally assesses whether each hedging relationship is highly effective in achieving offsetting changes in fair values or cash flows of the hedged item during the period both at the inception of the hedge and on an ongoing basis. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly-effective hedge, hedge accounting is discontinued with respect to that derivative prospectively. |
Fair Value Measurement | The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these items. Fair Value Measurements. The Company measures fair value using the guidelines under GAAP. An asset’s fair value is defined as the price at which the asset could be exchanged in a current transaction between market participants. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. Restoration plan assets The fair values of the Company’s restoration plan assets are determined through quoted prices in active markets. Restoration plan assets are assets held in a Rabbi trust to fund the obligations of the Company’s defined benefit supplementary retirement plans and include various stock and fixed income mutual funds. See Note 19 to these consolidated financial statements regarding defined benefit supplementary retirement plans. Derivative contracts Derivative assets and liabilities can be exchange-traded or traded over-the-counter (“OTC”). The Company generally values exchange-traded derivatives using models that calibrate to market transactions and eliminate timing differences between the closing price of the exchange-traded derivatives and their underlying instruments. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, forward curves, measures of volatility, and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment. The Company has interest rate caps and natural gas swaps that are fair valued using Level 2 inputs. In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps. To the extent that the Company’s net exposure under a specific master agreement is an asset, the Company utilizes the counterparty’s default swap rate. If the net exposure under a specific master agreement is a liability, the Company utilizes a default swap rate comparable to PQ Group Holdings. The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets. |
Revenue Recognition | Revenue Recognition. Revenue, net of related discounts and allowances, is recognized when both title and risk of loss of the product have been transferred to the customer, the seller’s price to the buyer is fixed or determinable, collectability is reasonably assured, and persuasive evidence of an arrangement exists. Customers take title and assume all the risks of ownership based on delivery terms, which are generally included in customer contracts of sale, order confirmation documents and invoices. The Company recognizes rebates given to customers as a reduction of revenue based on an allocation of the cost of honoring rebates earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate. Rebates are recognized at the time revenue is recorded. The Company measures the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement. |
Shipping and Handling Costs | Shipping and Handling Costs. Amounts billed to a customer in a sale transaction related to shipping and handling, if any, represent revenues earned for the goods provided and are classified as revenue. Costs related to shipping and handling of products shipped to customers are classified as cost of goods sold. |
Research and Development | Research and Development. Research and development costs of $13,859 and $7,266 for the years ended December 31, 2017 and 2016 , respectively, were expensed as incurred and reported in selling, general and administrative expenses in the consolidated statements of operations. |
Income Taxes | Income Taxes. Prior to the Business Combination, Eco Services was a single member limited liability company and was treated as a partnership for federal and state tax purposes. All income tax liabilities and/or benefits of the Company were passed through to the member. As such, no recognition of federal or state income taxes for the Company have been provided for tax periods prior to the Business Combination. As a result of the Business Combination, Eco Services had a change in tax status and is taxed as a C-Corporation. The Company operates within multiple taxing jurisdictions and are subject to tax filing requirements and audit within these jurisdictions. The Company uses the asset and liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. The Company evaluates its deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that those assets will be realized. In determining the provision for income taxes, the Company provides deferred income taxes on income from foreign subsidiaries as such earnings are taxable upon remittance to the United States, to the extent that these earnings are considered to be available for repatriation. The Company does not provide income taxes on the cumulative unremitted earnings of foreign subsidiaries considered permanently reinvested. The Company establishes contingent liabilities for possible assessments by taxing authorities resulting from uncertain tax positions including, but not limited to, transfer pricing, deductibility of certain expenses and other state, local, and foreign tax matters. The Company recognizes a financial statement benefit for positions taken for tax return purposes when it will be more likely than not (greater than 50%) that the positions will be sustained upon tax examination, based solely on the technical merits of the tax positions, otherwise, no benefit is recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. Tax examinations are often complex as tax authorities may disagree with the treatment of items reported by the Company and may require several years to resolve. These accrued liabilities represent a provision for taxes that are reasonably expected to be incurred on the basis of available information but which are not certain. |
Asset Retirement Obligations | Asset Retirement Obligations. The Company records a liability when the fair value of any future obligation to retire a long-lived asset as a result of an existing or enacted law, statute, ordinance or contract is reasonably estimable. The Company also records a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. When the liability is initially recorded, the Company capitalizes the cost by increasing the amount of the related long-lived asset. Over time, the Company adjusts the liability to its present value by recognizing accretion expense as an operating expense in the consolidated statements of operations each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company records a gain or loss if the actual costs differ from the accrued amount. |
Environmental Expenditures | Environmental Expenditures. Environmental expenditures that pertain to current operations or to future revenues are expensed or capitalized consistent with the Company’s capitalization policy for property, plant and equipment. Expenditures that result from the remediation of an existing condition caused by past operations and that do not contribute to current or future revenues are expensed. Liabilities are recognized for remedial activities when the remediation is probable and the cost can be reasonably estimated. Recoveries of expenditures for environmental remediation are recognized as assets only when recovery is deemed probable. |
Deferred Finance Costs | Deferred Financing Costs. Financing costs incurred in connection with the issuance of long-term debt are deferred and presented as a direct reduction from the related debt instruments on the Company’s consolidated balance sheets. Deferred financing costs are amortized as interest expense using the effective interest method over the respective terms of the associated debt instruments. |
Stock-Based Compensation | Stock-Based Compensation. The Company applies the fair value based method to account for stock options, restricted stock awards and restricted stock units issued in connection with its equity incentive plans. Stock-based compensation expense is recognized on a straight-line basis over the vesting periods of the respective awards. In connection with the adoption of new accounting guidance related to stock-based compensation (see Note 3 to these consolidated financial statements), the Company accounts for forfeitures of equity incentive awards as they occur. |
Pensions and Postretirement Benefits | Pensions and Postretirement Benefits. The Company maintains qualified and non-qualified defined benefit pension plans that cover employees in the United States and Canada, as well as certain employees in other international locations. Benefits for a majority of the plans are based on average final pay and years of service. Our funding policy, consistent with statutory requirements, is based on actuarial computations utilizing the projected unit credit method of calculation. Not all defined benefit pension plans are funded. In the United States and Canada, the pension plans’ assets include equity and fixed income securities. In our other international locations, the pension plans’ assets include equity and fixed income securities, as well as insurance policies. Certain assumptions are made regarding the occurrence of future events affecting pension costs, such as mortality, withdrawal, disablement and retirement, changes in compensation and benefits, and discount rates to reflect the time value of money. The major elements in determining pension income and expense are pension liability discount rates and the expected return on plan assets. The Company references rates of return on high-quality, fixed income investments when estimating the discount rate, and the expected period over which payments will be made based upon historical experience. The long-term rate of return used to calculate the expected return on plan assets is the average rate of return estimated to be earned on invested funds for providing pension benefits. In addition to pension benefits, the Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The Company uses explicit assumptions using the best estimates available of the plan’s future experience. Principal actuarial assumptions include: discount rates, present value factors, retirement age, participation rates, mortality rates, cost trend rates, Medicare reimbursement rates and per capita claims cost by age. Current interest rates as of the measurement date are used for discount rates in present value calculations. The Company also has defined contribution plans covering domestic employees of the Company and certain subsidiaries. |
Contingencies | Contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a loss has been incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed, including the approximate term, how the guarantee arose, and the events or circumstances that would require the guarantor to perform under the guarantee. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications | Reclassifications. As a result of the Business Combination, certain reclassifications have been made to the historical financial statements of Eco Services included in the consolidated financial statements to conform to the current presentation. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards In October 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which eliminates the deferral of the tax effects of intra-entity transfers of an asset other than inventory. Previous GAAP prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset had been sold to an outside party which has resulted in diversity in practice and increased complexity within financial reporting. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early adopted the guidance effective January 1, 2017. The guidance did not have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued guidance that includes targeted improvements to the accounting for employee stock-based compensation. The updates in the guidance include changes in the income tax consequences, balance sheet classification and cash flow statement reporting of stock-based payment transactions. The guidance also includes certain modifications applicable only to nonpublic entities. For public companies, the new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The Company adopted this new guidance as required on January 1, 2017, with no material impact upon adoption to the Company’s consolidated financial statements. On a prospective basis from the adoption date, the Company will record all tax effects related to stock-based compensation through the statement of operations, and all tax-related cash flows resulting from stock-based award payments will be reported as operating activities in the statement of cash flows. The Company made an accounting policy election under the new guidance to account for forfeitures of stock-based compensation awards as they occur. In July 2015, the FASB issued new guidance that changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value. The amendments in this guidance do not apply to inventory that is measured using LIFO or the retail inventory method; rather, the amendments apply to all other inventory, which includes inventory that is measured using FIFO or average cost. Within the scope of this new guidance, an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation, which is consistent with existing GAAP. The Company adopted the new guidance on January 1, 2017 as required. The guidance did not have a material impact on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted as of December 31, 2017 In August 2017, the FASB issued amendments intended to better align hedge accounting with an entities risk management activities. The amendments expand hedge accounting for non-financial and financial risk components and revise the measurement methodologies to better align with an entities risk management activities. Separate presentation of hedge ineffectiveness is eliminated to provide greater transparency of the full impact of hedging by requiring presentation of the results of the hedged item and hedging instrument in a single financial statement line item. In addition, the amendments reduce complexity by simplifying the manner in which assessments of hedge effectiveness may be performed. The new guidance is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted, and the new guidance should be applied prospectively to the presentation and disclosure guidance. The Company early adopted the guidance effective January 1, 2018. The guidance did not have a material impact on the Company’s consolidated financial statements upon adoption. In May 2017, the FASB issued guidance to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the new guidance, an entity should account for the effects of a change in a share-based payment award using modification accounting unless the fair value, vesting conditions and classification as either a liability or equity are all the same with respect to the award immediately prior to modification and the modified award itself. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those years, and the new guidance should be applied prospectively to awards modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018 as required, with no impact on the Company’s consolidated financial statements upon adoption. Although the new guidance is prospective in nature, there would have been no change to the accounting for the modifications of the Company’s equity incentive awards that occurred in connection with the Business Combination or the equity restructuring preceding the IPO (see Note 21 to these consolidated financial statements for further information). In March 2017, the FASB issued guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost (collectively, “pension costs”). Under current GAAP, there are several components of pension costs which are presented net to arrive at pension costs as included in the income statement and disclosed in the notes. As part of this amendment to the existing guidance, the service cost component of pension costs will be bifurcated from the other components and included in the same line items of the income statement as compensation costs are reported. The remaining components will be reported together below operating income on the income statement, either as a separate line item or combined with another line item on the income statement and disclosed. Additionally, with respect to capitalization to inventory, fixed assets, etc., only the service cost component will be eligible for capitalization upon adoption of the guidance. The new guidance is effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those years. The amendments should be applied retrospectively upon adoption with respect to the presentation of the service and other cost components of pension costs in the income statement, and prospectively for the capitalization of the service cost component in assets. The Company adopted the new guidance on January 1, 2018 as required. Prior to the adoption of the guidance, the Company reflected its pension costs within cost of goods sold and selling, general and administrative expenses in the consolidated statements of operations, depending on whether the costs were associated with employees involved in manufacturing, back office support functions, etc. Under the new guidance, the service cost component of the Company’s pension costs will remain in the same line items of the consolidated statements of operations, but the remaining components will be reported as part of nonoperating income in the other (income) expense, net line item of the consolidated statements of operations. Although the guidance requires retrospective application upon adoption, a practical expedient permits the Company to use the amounts disclosed in its pension and other postretirement benefit plan note as its basis of estimation for the prior comparative periods. Based on the Company’s disclosures in Note 19 to these consolidated financial statements, the Company estimates the retrospective impact of the new guidance on its consolidated statements of operations will reduce operating income and increase other nonoperating income by $2,651 for the year ended December 31, 2016. The impact for the year ended December 31, 2015 is not material. The Company is also adjusting any pension costs capitalized as necessary beginning on the adoption date of January 1, 2018 to reflect the service cost component only in accordance with the new guidance. In January 2017, the FASB issued guidance which eliminates the second step from the traditional two-step goodwill impairment test. Under current guidance, an entity performed the first step of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount; if an impairment loss was indicated, the entity computed the implied fair value of goodwill to determine whether an impairment loss existed, and if so, the amount to recognize. Under the new guidance, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value (the Step 1 test), with no further testing required. Any impairment loss recognized is limited to the amount of goodwill allocated to the reporting unit. The new guidance is effective for public companies that are SEC registrants for fiscal years beginning after December 15, 2019, with early adoption permitted for goodwill impairment tests performed on testing dates after January 1, 2017. All entities are required to apply the guidance prospectively to goodwill impairment tests subsequent to adoption of the standard. The impact that the new guidance will have on the Company’s consolidated financial statements depends on whether the Company fails the Step 1 test in any interim or annual goodwill impairment test subsequent to the adoption of the new standard. Upon adoption of the new guidance, the failure of the Step 1 test will result in a goodwill impairment, while the failure of the Step 1 test under current guidance will lead to the Step 2 test, which may or may not result in a goodwill impairment charge depending on the Company’s calculation of the implied fair value of goodwill. The Company has not yet early adopted the new guidance. In January 2017, the FASB issued guidance which clarifies the definition of a business and provides revised criteria and a framework to determine whether an integrated set of assets and activities is a business. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted the new guidance on January 1, 2018 as required, with no impact on the Company’s consolidated financial statements upon adoption. In November 2016, the FASB issued guidance which clarifies the classification and presentation of changes in restricted cash on the statement of cash flows. The updates in the guidance require that the statement of cash flows explain the change during the period in the total of cash, cash equivalents and restricted cash when reconciling the beginning-of-period and end-of-period total amounts. The updates also require a reconciliation between cash, cash equivalents and restricted cash presented on the balance sheet to the total of the same amounts presented on the statement of cash flows. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years, and the new guidance should be applied retrospectively to each period presented. The Company adopted the new guidance on January 1, 2018 as required. As of December 31, 2017 and 2016 , the Company had $1,048 and $14,335 , respectively, of restricted cash included in other current assets on its balance sheet related to its New Market Tax Credit financing arrangements as well as other small restricted cash balances. The activity related to these balances is presented as cash flows from investing activities in the Company’s consolidated statements of cash flow under the existing guidance in place as of December 31, 2017. Under the new guidance effective January 1, 2018, the Company’s restricted cash balances will be added to the existing cash and cash equivalents balances included in the consolidated statements of cash flow rather than reported as part of investing activities. The Company estimates the retrospective impact of the new guidance on its consolidated statements of operations for the years ended December 31, 2017 and 2016 will be as follows: As reported— Retrospective impact— Years ended December 31, Years ended December 31, 2017 2016 2017 2016 Net cash provided by operating activities $ 116,062 $ 119,720 $ 116,062 $ 119,720 Net cash used in investing activities (182,695 ) (1,929,680 ) (195,982 ) (1,915,345 ) Net cash provided by financing activities 68,944 1,861,433 68,944 1,861,433 Effect of exchange rate changes on cash and cash equivalents (6,858 ) (5,886 ) (6,858 ) (5,886 ) Net change in cash and cash equivalents (4,547 ) 45,587 Cash and cash equivalents at beginning of period 70,742 25,155 Cash and cash equivalents at end of period $ 66,195 $ 70,742 Net change in cash, cash equivalents and restricted cash (17,834 ) 59,922 Cash, cash equivalents and restricted cash at beginning of period 85,077 25,155 Cash, cash equivalents and restricted cash at end of period $ 67,243 $ 85,077 In August 2016, the FASB issued guidance which clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs and distributions from certain equity method investees. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and the new guidance should be applied retrospectively to each period presented. The Company adopted the new guidance on January 1, 2018 as required. During the year ended December 31, 2017, the Company paid $47,875 in debt extinguishment costs (breakage and prepayment costs) related to the pay down of its $525,000 floating rate senior unsecured notes due 2022 and its $200,000 8.50% senior notes due 2022 (see Note 15 to these consolidated financial statements for further information). The Company reported these costs as part of cash outflows from operating activities in its consolidated statement of cash flows. Based on the new guidance, these costs will be reported as cash outflows from financing activities in its consolidated statement of cash flows under the retrospective presentation requirement. No such costs were incurred during the year ended December 31, 2016. There are no other significant impacts to the Company’s consolidated financial statements from the adoption of the new guidance. In February 2016, the FASB issued guidance (with subsequent targeted amendments) that modifies the accounting for leases. Under the new guidance, a lessee will recognize assets and liabilities for most leases (including those classified under existing GAAP as operating leases, which based on current standards are not reflected on the balance sheet), but will recognize expenses similar to current lease accounting. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. The new guidance must be adopted using a modified retrospective transition method and provides for certain practical expedients. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements. The Company has operating lease agreements for which it expects to recognize right of use assets and corresponding liabilities on its balance sheet upon adoption of the new guidance. A complete discussion of these leases is included in Note 22 , Commitments and Contingent Liabilities . In May 2014, the FASB issued accounting guidance (with subsequent targeted amendments) that will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that revenue recognized from a transaction or event that arises from a contract with a customer should reflect the consideration to which an entity expects to be entitled in exchange for goods or services provided. To achieve that core principle, the new guidance sets forth a five-step revenue recognition model that will need to be applied consistently to all contracts with customers, except those that are within the scope of other topics in the Accounting Standards Codification (“ASC”). Also required are enhanced disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. The enhanced disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized related to the costs to obtain or fulfill a contract. For public companies, the new requirements are effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company reviewed its key revenue streams and assessed the underlying customer contracts within the framework of the new guidance. The Company evaluated the key aspects of its revenue streams for impact under the new guidance and performed a detailed analysis of its customer agreements to quantify the changes under the guidance. The Company concluded that the guidance did not have a material impact on its existing revenue recognition practices upon adoption on January 1, 2018, but there are new robust disclosure requirements that will have an impact on the Company’s reporting beginning with its first quarter ended March 31, 2018. The Company implemented the guidance under the modified retrospective transition method of adoption. |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Change in Asset Retirement Obligation | The following table includes the changes in the Company’s ARO liability during the years ended December 31, 2017 and 2016 : Years ended 2017 2016 Beginning balance $ 3,700 $ — AROs identified as part of the Business Combination — 3,687 Accretion expense 232 177 Foreign exchange impact 162 (164 ) Ending balance $ 4,094 $ 3,700 |
New Accounting Standards (Table
New Accounting Standards (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Prior Period Adjustments | The Company estimates the retrospective impact of the new guidance on its consolidated statements of operations for the years ended December 31, 2017 and 2016 will be as follows: As reported— Retrospective impact— Years ended December 31, Years ended December 31, 2017 2016 2017 2016 Net cash provided by operating activities $ 116,062 $ 119,720 $ 116,062 $ 119,720 Net cash used in investing activities (182,695 ) (1,929,680 ) (195,982 ) (1,915,345 ) Net cash provided by financing activities 68,944 1,861,433 68,944 1,861,433 Effect of exchange rate changes on cash and cash equivalents (6,858 ) (5,886 ) (6,858 ) (5,886 ) Net change in cash and cash equivalents (4,547 ) 45,587 Cash and cash equivalents at beginning of period 70,742 25,155 Cash and cash equivalents at end of period $ 66,195 $ 70,742 Net change in cash, cash equivalents and restricted cash (17,834 ) 59,922 Cash, cash equivalents and restricted cash at beginning of period 85,077 25,155 Cash, cash equivalents and restricted cash at end of period $ 67,243 $ 85,077 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring | The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2017 and 2016 , and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2017 Quoted Prices in Significant Other Observable Inputs (Level 2) Significant (Level 3) Assets: Derivative contracts $ 1,043 $ — $ 1,043 $ — Restoration plan assets 5,576 5,576 — — Total $ 6,619 $ 5,576 $ 1,043 $ — Liabilities: Derivative contracts $ 448 $ — $ 448 $ — Total $ 448 $ — $ 448 $ — December 31, 2016 Quoted Prices in Significant Other Significant Assets: Derivative contracts $ 6,434 $ — $ 6,434 $ — Restoration plan assets 5,594 5,594 — — Total $ 12,028 $ 5,594 $ 6,434 $ — |
Fair Value Measurements, Nonrecurring | The following table presents information about the Company’s assets and liabilities that were measured at fair value on a non-recurring basis as of December 31, 2016 . The Company performed its annual impairment test on its indefinite life tradenames on October 1, 2017 and determined that no impairment existed. Refer to Note 13 for additional detail. Refer to Note 13 to these consolidated financial statements for a description of the valuation techniques the Company utilized to determine such fair value. As of Quoted Prices in Significant Other Significant Total Assets: Indefinite life trade names (1) $ 153,922 $ — $ — $ 153,922 $ (6,873 ) Total $ 153,922 $ — $ — $ 153,922 $ (6,873 ) (1) Indefinite life trade names with a carrying amount of $160,795 , net of foreign exchange impact, were written down to their implied fair value of $153,922 as part of the Company’s annual impairment assessment on October 1, 2016. This resulted in an impairment charge of $6,873 , which was recorded to other operating expense, net, on the consolidated statements of operations. |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the components of accumulated other comprehensive income (loss), net of tax, as of December 31, 2017 and 2016 : December 31, 2017 2016 Amortization and unrealized gains on pension and postretirement plans, net of tax of ($4,761) and ($4,799) $ 7,412 $ 7,513 Net changes in fair values of derivatives, net of tax of ($584) and ($2,793) 967 4,557 Foreign currency translation adjustments, net of tax of $790 and $6,627 (4,068 ) (65,781 ) Accumulated other comprehensive income (loss) $ 4,311 $ (53,711 ) The following table presents the tax effects of each component of other comprehensive income (loss) for the years ended December 31, 2017 , 2016 and 2015 : Years ended 2017 2016 2015 Pre-tax amount Tax benefit/ (expense) After-tax amount Pre-tax amount Tax benefit/ (expense) After-tax amount Pre-tax amount Tax benefit/ (expense) After-tax amount Defined benefit and other postretirement plans: Amortization and unrealized losses $ (139 ) $ 38 $ (101 ) $ 11,664 $ (4,799 ) $ 6,865 $ 648 $ — $ 648 Benefit plans, net (139 ) 38 (101 ) 11,664 (4,799 ) 6,865 648 — 648 Net loss from hedging activities (5,799 ) 2,209 (3,590 ) 7,350 (2,793 ) 4,557 — — — Foreign currency translation 66,438 (5,837 ) 60,601 (73,461 ) 6,627 (66,834 ) — — — Other comprehensive income (loss) $ 60,500 $ (3,590 ) $ 56,910 $ (54,447 ) $ (965 ) $ (55,412 ) $ 648 $ — $ 648 The following table presents the change in accumulated other comprehensive income (loss), net of tax, by component for the years ended December 31, 2017 and 2016 : Defined benefit Net gain (loss) from hedging activities Foreign Total December 31, 2015 $ 648 $ — $ — $ 648 Other comprehensive income (loss) before reclassifications 6,844 3,669 (65,781) (55,268) Amounts reclassified from accumulated other comprehensive income (1) 21 888 — 909 Net current period other comprehensive income (loss) 6,865 4,557 (65,781) (54,359) December 31, 2016 $ 7,513 $ 4,557 $ (65,781 ) $ (53,711 ) Other comprehensive income (loss) before reclassifications (208) (3,797) 61,713 57,708 Amounts reclassified from accumulated other comprehensive income (loss) (1) 107 207 — 314 Net current period other comprehensive income (loss) (101) (3,590) 61,713 58,022 December 31, 2017 $ 7,412 $ 967 $ (4,068 ) $ 4,311 (1) See the following table for details about these reclassifications. |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2017 and 2016 . Amounts in parenthesis indicate debits to profit/loss. Details about Accumulated Other Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Years ended 2017 2016 Defined benefit and other postretirement plans: Amortization of prior service cost $ 78 $ — (a) Amortization of net gain (loss) 54 26 (a) 132 26 Total before tax (25 ) (5 ) Tax (expense) benefit $ 107 $ 21 Net of tax Net gain (loss) from hedging activities: Interest rate caps $ 40 $ — Interest expense Natural gas swaps 222 1,433 Cost of goods sold 262 1,433 Total before tax (55 ) (545 ) Tax (expense) benefit $ 207 $ 888 Net of tax Total reclassifications for the period $ 314 $ 909 Net of tax (a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost (see Note 19 to these consolidated financial statements for additional details). |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Preliminary Purchase Price Allocation | The following table sets forth the calculation and allocation of the purchase price to the net assets acquired with respect to the Business Combination, which was complete as of December 31, 2016. Total consideration, net of cash acquired $ 2,689,941 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 161,110 Inventories 254,770 Prepaid and other current assets 19,295 Investments in affiliated companies 472,994 Property, plant and equipment 683,673 Other intangible assets 754,000 Other long-term assets 48,127 Fair value of assets acquired 2,393,969 Revolver, notes payable & current debt (2,441 ) Accounts payable (93,222 ) Accrued liabilities (98,621 ) Long-term debt (20,470 ) Deferred income taxes (327,296 ) Other long-term liabilities (113,936 ) Noncontrolling interest (6,569 ) Fair value of net assets acquired 1,731,414 Goodwill 958,527 $ 2,689,941 The following table sets forth the calculation and preliminary allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition: Total consideration, net of cash acquired $ 41,572 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 14,305 Inventories 7,645 Prepaid and other current assets 400 Property, plant and equipment 9,020 Other long-term assets 129 Fair value of assets acquired 31,499 Current debt (6,420 ) Accounts payable (10,748 ) Long-term debt (10,189 ) Other long-term liabilities (154 ) Fair value of net assets acquired 3,988 Goodwill 37,584 $ 41,572 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The valuation of the intangible assets acquired and the related weighted-average amortization periods are as follows: Amount Weighted-Average Intangible assets subject to amortization: Trademarks $ 35,400 15.0 Technical know-how 189,300 20.0 Contracts 19,800 5.3 Customer relationships 268,700 10.6 In-process research and development 6,800 Total intangible assets subject to amortization 520,000 Tradenames, not subject to amortization 151,100 Indefinite Trademarks, not subject to amortization 82,900 Indefinite Total $ 754,000 |
Business Acquisition, Pro Forma Information | Years ended 2016 2015 Pro forma sales $ 1,403,041 $ 1,413,201 Pro forma net loss (76,994 ) (120,982 ) Years ended 2017 2016 Pro forma sales $ 1,489,957 $ 1,105,479 Pro forma net income (loss) 59,968 (77,720 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Preliminary Purchase Price Allocation | The following table sets forth the calculation and allocation of the purchase price to the net assets acquired with respect to the Business Combination, which was complete as of December 31, 2016. Total consideration, net of cash acquired $ 2,689,941 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 161,110 Inventories 254,770 Prepaid and other current assets 19,295 Investments in affiliated companies 472,994 Property, plant and equipment 683,673 Other intangible assets 754,000 Other long-term assets 48,127 Fair value of assets acquired 2,393,969 Revolver, notes payable & current debt (2,441 ) Accounts payable (93,222 ) Accrued liabilities (98,621 ) Long-term debt (20,470 ) Deferred income taxes (327,296 ) Other long-term liabilities (113,936 ) Noncontrolling interest (6,569 ) Fair value of net assets acquired 1,731,414 Goodwill 958,527 $ 2,689,941 The following table sets forth the calculation and preliminary allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition: Total consideration, net of cash acquired $ 41,572 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 14,305 Inventories 7,645 Prepaid and other current assets 400 Property, plant and equipment 9,020 Other long-term assets 129 Fair value of assets acquired 31,499 Current debt (6,420 ) Accounts payable (10,748 ) Long-term debt (10,189 ) Other long-term liabilities (154 ) Fair value of net assets acquired 3,988 Goodwill 37,584 $ 41,572 |
Business Acquisition, Pro Forma Information | Years ended 2016 2015 Pro forma sales $ 1,403,041 $ 1,413,201 Pro forma net loss (76,994 ) (120,982 ) Years ended 2017 2016 Pro forma sales $ 1,489,957 $ 1,105,479 Pro forma net income (loss) 59,968 (77,720 ) |
Other Operating Expense, Net (T
Other Operating Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | A summary of other operating expense, net is as follows: Years ended 2017 2016 2015 Amortization expense $ 32,010 $ 25,263 $ 6,605 Transaction and other related costs (1) 7,415 4,952 4,241 Restructuring and other related costs (Note 23) 8,490 12,630 4,147 Net loss on asset disposals 5,793 4,216 3,911 Intangible asset impairment charge (Note 13) — 6,873 — Management advisory fees (Note 26) 3,777 3,584 590 Environmental-related costs (Note 22) 395 1,352 202 Other, net 6,345 3,431 — $ 64,225 $ 62,301 $ 19,696 (1) Transaction and other related costs for the year ended December 31, 2017 primarily include transaction costs associated with the Company’s IPO exclusive of the direct costs recorded in stockholders’ equity net of the proceeds from the offering (see Note 1 to these consolidated financial statements for further information) and the Acquisition (see Note 7 ). Transaction and other related costs for the years ended December 31, 2016 and 2015 primarily include transaction costs directly attributable to the Business Combination (Note 6) and the 2014 Acquisition (see Note 23 ), as well as other business development costs. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories are classified and valued as follows: December 31, 2017 2016 Finished products and work in process $ 199,919 $ 175,182 Raw materials 62,469 51,866 $ 262,388 $ 227,048 Valued at lower of cost or market: LIFO basis $ 162,315 $ 135,605 Valued at lower of cost and net realizable value: FIFO or average cost basis 100,073 91,443 $ 262,388 $ 227,048 |
Investments in Affiliated Com47
Investments in Affiliated Companies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Affiliated companies accounted for on the equity method as of December 31, 2017 are as follows: Company Country Percent PQ Silicates Ltd. Taiwan 50% Zeolyst International USA 50% Zeolyst C.V. Netherlands 50% Quaker Holdings South Africa 49% Following is summarized information of the combined investments 1 : December 31, 2017 2016 Current assets $ 213,815 $ 207,997 Noncurrent assets 235,440 212,144 Current liabilities 37,018 44,741 Noncurrent liabilities 1,417 1,384 Year Ended Period from May 4, 2016 to December 31, 2016 Net sales $ 317,197 $ 206,072 Gross profit 132,812 91,761 Operating income 91,224 67,098 Net income 94,740 67,332 1 Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above. The following table summarizes the activity related to the Company’s investments in affiliated companies balance on the consolidated balance sheets: Years ended 2017 2016 Balance at beginning of period $ 459,406 $ — Business Combination — 472,994 Acquisition 119 — Investments in affiliated companies 9,000 — Equity in net income of affiliated companies 47,371 33,684 Charges related to purchase accounting fair value adjustments (8,599 ) (36,296 ) Dividends received (44,071 ) (7,636 ) Foreign currency translation adjustments 6,050 (3,340 ) Balance at end of period $ 469,276 $ 459,406 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows: December 31, 2017 2016 Land $ 191,006 $ 186,327 Buildings 200,054 157,944 Machinery and equipment 1,005,025 788,175 Construction in progress 145,414 204,138 1,541,499 1,336,584 Less: accumulated depreciation (311,115 ) (155,196 ) $ 1,230,384 $ 1,181,388 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Reportable Segments to Consolidated | Summarized financial information for the Company’s reportable segments and product groups is shown in the following table: Years ended 2017 2016 2015 Net sales: Performance Chemicals $ 687,645 $ 437,523 $ — Performance Materials 324,225 206,522 — Eliminations (10,021 ) (5,094 ) — Performance Materials & Chemicals 1,001,849 638,951 — Silica Catalysts 75,333 53,029 — Refining Services 398,342 373,718 388,875 Environmental Catalysts & Services (1) 473,675 426,747 388,875 Inter-segment sales eliminations (2) (3,423 ) (1,521 ) — Total $ 1,472,101 $ 1,064,177 $ 388,875 Segment Adjusted EBITDA: (3) Performance Materials & Chemicals $ 240,128 $ 158,679 $ — Environmental Catalysts & Services (4) 243,587 196,825 117,704 Total Segment Adjusted EBITDA (5) $ 483,715 $ 355,504 $ 117,704 (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 consolidated consolidated financial statements for further information). The proportionate share of sales is $143,774 and $94,516 for the years ended December 31, 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 Catalysts and Services segment is $58,156 for the year ended December 31, 2017 , which includes $46,985 of equity in net income plus $8,600 of amortization of investment in affiliate step-up plus $11,070 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $40,687 for the year ended December 31, 2016 , which includes $33,716 of equity in net income plus $36,296 of amortization of investment in affiliate step-up plus $6,920 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 income (loss) to Segment Adjusted EBITDA is as follows: Years ended 2017 2016 2015 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income (loss) attributable to PQ Group Holdings Inc. $ 57,603 $ (79,746 ) $ 11,427 Provision for (benefit from) income taxes (119,197 ) 10,041 — Interest expense, net 179,044 140,315 44,348 Depreciation and amortization 177,140 128,288 38,999 Segment EBITDA 294,590 198,898 94,774 Unallocated corporate expenses 30,422 23,971 — Joint venture depreciation, amortization and interest 11,070 6,920 — Amortization of investment in affiliate step-up 8,600 36,296 — Amortization of inventory step-up 871 29,086 — Impairment of fixed assets, intangibles and goodwill — 6,873 — Debt extinguishment costs 61,886 13,782 — Losses on disposal of fixed assets 5,793 4,216 3,911 Foreign currency exchange losses 25,786 (3,558 ) — Non-cash revaluation of inventory, including LIFO 3,708 1,310 — Management advisory fees 3,777 3,583 590 Transaction and other related costs 7,425 4,664 4,241 Equity-based and other non-cash compensation 8,799 7,042 2,256 Restructuring, integration and business optimization expenses 13,174 16,258 4,147 Defined benefit pension plan cost 2,940 1,375 2,903 Other (1) 4,874 4,788 4,882 Segment Adjusted EBITDA $ 483,715 $ 355,504 $ 117,704 (1) Other includes certain legal and environmental costs and other charges such as capital taxes, asset retirement obligation accretion and other expenses. |
Reconciliation of Assets from Segment to Consolidated | Capital expenditures for the Company’s reportable segments are shown in the following table: Years ended 2017 2016 2015 Capital expenditures: Performance Materials & Chemicals $ 87,938 $ 74,392 $ — Environmental Catalysts & Services (1) 66,511 74,921 41,854 Eliminations (1) (13,366 ) (19,001 ) — Total $ 141,083 $ 130,312 $ 41,854 Change in non-cash capital expenditures in accounts payable (601 ) (8,891 ) (860 ) Capital expenditures per the consolidated statement of cash flows $ 140,482 $ 121,421 $ 40,994 (1) Includes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture. The proportionate share of capital expenditures included in the EC&S segment is $13,366 and $19,001 for the Zeolyst Joint Venture for the years ended December 31, 2017 and 2016 , respectively. These capital expenditures are in turn removed in the “Eliminations” line item to reconcile to the Company’s consolidated capital expenditures. |
Revenue from External Customers by Geographic Areas | Net sales and long-lived assets by geographic area are presented in the following tables. Net sales are attributed to countries based upon location of products shipped. Years ended 2017 2016 2015 Net sales (1) : United States $ 874,764 $ 705,348 $ 388,875 Netherlands 118,567 79,821 — United Kingdom 116,410 67,494 — Other foreign countries 362,360 211,514 — Total $ 1,472,101 $ 1,064,177 $ 388,875 (1) Except for the United States, no sales in an individual country exceeded 10% of the Company’s total net sales. |
Long-lived Assets by Geographic Areas | Years ended 2017 2016 2015 Long-lived assets (1) : United States $ 2,919,458 $ 2,870,958 $ 936,111 Netherlands 289,459 288,239 — United Kingdom 229,595 228,924 — Other foreign countries 425,675 378,872 — Total $ 3,864,187 $ 3,766,993 $ 936,111 (1) Long-lived assets exclude intercompany notes receivable and deferred tax assets. |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 is summarized as follows: Performance Environmental Total Balance as of January 1, 2016 $ — $ 311,892 $ 311,892 Goodwill recognized 876,844 81,683 958,527 Foreign exchange impact (24,338 ) (4,652 ) (28,990 ) Balance as of December 31, 2016 $ 852,506 $ 388,923 $ 1,241,429 Goodwill recognized 37,584 — 37,584 Foreign exchange impact 24,533 2,410 26,943 Balance as of December 31, 2017 $ 914,623 $ 391,333 $ 1,305,956 |
Schedule of Finite-Lived Intangible Assets | Gross carrying amounts and accumulated amortization for intangible assets other than goodwill are as follows: December 31, 2017 December 31, 2016 Gross Amount Accumulated Foreign Net Gross Amount Accumulated Impairment Charge Foreign Exchange Impact Net Balance Technical know-how $ 214,290 $ (21,138 ) $ (1,691 ) $ 191,461 $ 214,290 $ (10,029 ) $ — $ (7,855 ) $ 196,406 Customer relationships 368,000 (63,860 ) (1,979 ) 302,161 368,000 (31,199 ) — (11,064 ) 325,737 Contracts 19,800 (9,205 ) — 10,595 19,800 (3,658 ) — — 16,142 Trademarks 35,400 (3,911 ) (198 ) 31,291 35,400 (1,573 ) — (567 ) 33,260 Permits 9,100 (5,612 ) — 3,488 9,100 (3,792 ) — — 5,308 Total definite-lived intangible assets 646,590 (103,726 ) (3,868 ) 538,996 646,590 (50,251 ) — (19,486 ) 576,853 Indefinite-lived trade names 159,027 — (968 ) 158,059 165,900 — (6,873 ) (5,105 ) 153,922 Indefinite-lived trademarks 82,900 — (611 ) 82,289 82,900 — — (3,902 ) 78,998 In-process research and development 6,800 — — 6,800 6,800 — — — 6,800 Total intangible assets $ 895,317 $ (103,726 ) $ (5,447 ) $ 786,144 $ 902,190 $ (50,251 ) $ (6,873 ) $ (28,493 ) $ 816,573 |
Schedule of Indefinite-Lived Intangible Assets | Gross carrying amounts and accumulated amortization for intangible assets other than goodwill are as follows: December 31, 2017 December 31, 2016 Gross Amount Accumulated Foreign Net Gross Amount Accumulated Impairment Charge Foreign Exchange Impact Net Balance Technical know-how $ 214,290 $ (21,138 ) $ (1,691 ) $ 191,461 $ 214,290 $ (10,029 ) $ — $ (7,855 ) $ 196,406 Customer relationships 368,000 (63,860 ) (1,979 ) 302,161 368,000 (31,199 ) — (11,064 ) 325,737 Contracts 19,800 (9,205 ) — 10,595 19,800 (3,658 ) — — 16,142 Trademarks 35,400 (3,911 ) (198 ) 31,291 35,400 (1,573 ) — (567 ) 33,260 Permits 9,100 (5,612 ) — 3,488 9,100 (3,792 ) — — 5,308 Total definite-lived intangible assets 646,590 (103,726 ) (3,868 ) 538,996 646,590 (50,251 ) — (19,486 ) 576,853 Indefinite-lived trade names 159,027 — (968 ) 158,059 165,900 — (6,873 ) (5,105 ) 153,922 Indefinite-lived trademarks 82,900 — (611 ) 82,289 82,900 — — (3,902 ) 78,998 In-process research and development 6,800 — — 6,800 6,800 — — — 6,800 Total intangible assets $ 895,317 $ (103,726 ) $ (5,447 ) $ 786,144 $ 902,190 $ (50,251 ) $ (6,873 ) $ (28,493 ) $ 816,573 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future aggregate amortization expense of intangible assets is as follows: Year Amount 2018 $ 51,883 2019 50,914 2020 47,363 2021 46,421 2022 46,354 Thereafter 296,061 Total estimated future aggregate amortization expense $ 538,996 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The following table summarizes the components of accrued liabilities as follows: December 31, 2017 2016 Compensation and bonus $ 49,988 $ 47,823 Interest 15,936 9,139 Property tax 1,622 2,499 Environmental reserves (see Note 22) 5,790 8,346 Supply contract obligation (see Note 25) 1,638 1,638 Income taxes 1,166 8,035 Commissions and rebates 1,820 2,253 Pension, postretirement and supplemental retirement plans (see Note 19) 2,192 2,030 Other 13,765 17,670 Total $ 93,917 $ 99,433 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The summary of long-term debt is as follows: December 31, 2017 December 31, 2016 Term Loan Facility (U.S. dollar denominated) $ 916,153 $ 925,430 Term Loan Facility (Euro denominated) 335,808 297,317 6.75% Senior Secured Notes due 2022 625,000 625,000 5.75% Senior Unsecured Notes due 2025 300,000 — Floating Rate Senior Unsecured Notes due 2022 — 525,000 8.5% Senior Notes due 2022 — 200,000 ABL Facility 25,000 — Other 68,318 45,223 Total debt 2,270,279 2,617,970 Original issue discount (18,390 ) (28,497 ) Deferred financing costs (21,403 ) (27,275 ) Total debt, net of original issue discount and deferred financing costs 2,230,486 2,562,198 Less: current portion (45,166 ) (14,481 ) Total long-term debt $ 2,185,320 $ 2,547,717 |
Debt Instrument Redemption | The Senior Secured Notes are redeemable, in whole or in part, at the redemption prices (expressed as percentages of principal amount of the Senior Secured Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date, if redeemed on or after any of the dates below until the subsequent date below: Year Percentage May 15, 2019 103.375 % May 15, 2020 101.688 % May 15, 2021 and thereafter 100.000 % On or after December 15, 2020, the 5.75% Senior Unsecured Notes are redeemable, in whole or in part, at the redemption prices (expressed as percentages of principal amount of the 5.75% Senior Unsecured Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date, if redeemed on or after any of the dates below until the subsequent date below: Year Percentage December 15, 2020 102.875 % December 15, 2021 101.438 % December 15, 2022 and thereafter 100.000 % |
Fiscal Year Maturity Schedule | The aggregate long-term debt maturities are: Year Amount 2018 45,166 2019 14,479 2020 14,479 2021 14,488 2022 1,829,846 Thereafter 351,821 2,270,279 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-term Liabilities | The following table summarizes the components of other long-term liabilities as follows: December 31, 2017 2016 Pension benefits $ 69,914 $ 71,443 Supply contract (see Note 25) 20,612 22,250 Other postretirement benefits 4,503 3,991 Supplemental retirement plans 11,667 12,055 Reserve for uncertain tax positions 4,244 4,149 Asset retirement obligation 4,094 3,700 Other 5,437 5,567 Total $ 120,471 $ 123,155 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivatives Held | The fair values of derivative instruments held as of December 31, 2017 and 2016 are shown below: December 31, Balance sheet location 2017 2016 Asset derivatives: Derivatives designated as cash flow hedges: Natural gas swaps Current assets $ — $ 573 Interest rate caps Current assets 44 — Natural gas swaps Other long-term assets — 58 Interest rate caps Other long-term assets 999 5,803 Total asset derivatives $ 1,043 $ 6,434 Liability derivatives: Derivatives designated as cash flow hedges: Natural gas swaps Current liabilities $ 318 $ — Natural gas swaps Other long-term liabilities 130 — Total liability derivatives $ 448 $ — |
Effect of Derivative Instruments Designated as Hedges on Other Comprehensive Income | The following table shows the effect of the Company’s derivative instruments designated as hedges on other comprehensive income (loss) (“OCI”) and the statements of operations for the years ended December 31, 2017 and 2016 : December 31, Location in earnings 2017 2016 Derivatives designated as cash flow hedges: AOCI derivative gain at beginning of year $ 4,881 $ — Effective portion of changes in fair value recognized in OCI: Interest rate caps (4,760 ) 4,250 Natural gas swaps (1,300 ) (802 ) Amount of loss reclassified from OCI to earnings: Interest rate caps Interest expense 40 — Natural gas swaps Cost of goods sold 222 1,433 AOCI derivative gain (loss) at end of year $ (917 ) $ 4,881 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) before income taxes and noncontrolling interest within or outside the United States are shown below: Years ended 2017 2016 2015 Domestic $ (137,147 ) $ (84,094 ) $ 11,427 Foreign 76,513 14,977 — Total $ (60,634 ) $ (69,117 ) $ 11,427 |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes as shown in the accompanying consolidated statements of operations consists of the following: Years ended 2017 2016 Current: Federal $ — $ — State 806 91 Foreign 20,209 10,088 21,015 10,179 Deferred: Federal (135,970 ) 8,654 State (1,817 ) 292 Foreign (2,425 ) (9,084 ) (140,212 ) (138 ) Provision (benefit) for income taxes $ (119,197 ) $ 10,041 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of income tax expense (benefit) at the U.S. federal statutory income tax rate of 35% to actual income tax expense is as follows: Years ended 2017 2016 Tax at statutory rate $ (21,222 ) $ (24,191 ) State income taxes, net of federal income tax benefit (7,754 ) (4,110 ) Repatriation of non-US earnings inclusive of mandatory repatriation toll tax (24,912 ) 4,576 Change in Tax Status-Eco-Passthrough to C-Corp — 33,891 Changes in uncertain tax positions 974 (2,383 ) Change in valuation allowances 6,771 2,577 Rate changes (63,319 ) — Change in state effective rates (340 ) (290 ) Foreign withholding taxes 978 1,505 Foreign tax rate differential (10,131 ) (1,354 ) Non-deductible transaction costs 1,679 667 Other, net (1,921 ) (847 ) Provision (benefit) for income taxes $ (119,197 ) $ 10,041 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) are comprised of the following: December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 144,267 $ 157,811 Pension 16,255 21,454 Post retirement health 561 1,040 Transaction costs 1,183 2,896 Natural gas contracts 110 — Interest rate swaps 115 — Unrealized translation losses 5,065 6,046 Other 38,290 44,351 Valuation allowance (64,945 ) (38,271 ) $ 140,901 $ 195,327 Deferred tax liabilities: Depreciation $ (86,532 ) $ (114,749 ) Undistributed earnings of non-US subsidiaries (8,334 ) (73,205 ) LIFO reserve — — Inventory (11,324 ) (20,159 ) Intangible assets (184,937 ) (276,671 ) Natural gas contracts — (241 ) Other accruals — (1,621 ) Other (36,810 ) (27,144 ) $ (327,937 ) $ (513,790 ) Net deferred tax liabilities $ (187,036 ) $ (318,463 ) |
Summary of Valuation Allowance | The following are changes in the deferred tax valuation allowance during the years ended December 31, 2017 and 2016 : Years ended 2017 2016 Beginning Balance $ 38,271 $ — Additions 34,863 46,347 Reductions (8,189 ) (8,076 ) Ending Balance $ 64,945 $ 38,271 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to our gross unrecognized tax benefits: Years ended 2017 2016 Balance at beginning of period $ 16,128 $ — Increases related to prior year tax positions 68 19,419 Decreases related to prior year tax positions (5,508 ) (68 ) Increases related to current year tax positions 743 691 Decreases related to current year tax positions — — Decreases related to settlements with taxing authorities — (3,914 ) Decreases related to lapsing of statute of limitations — — Balance at end of period $ 11,431 $ 16,128 |
Open Tax Years | The following describes the open tax years, by major tax jurisdiction, as of December 31, 2017 : Jurisdiction Period United States-Federal 2007-Present United States-State 2008-Present Canada (1) 2009-Present Germany 2007-Present Netherlands 2012-Present Mexico 2012-Present United Kingdom 2010-Present Brazil 2012-Present (1) Includes federal as well as local jurisdictions |
Schedule of Tax Payments | Cash payments for income taxes are as follows: Years ended 2017 2016 2015 Domestic $ 1,647 $ 373 $ 8 Foreign 27,552 16,608 — $ 29,199 $ 16,981 $ 8 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Benefit Plan Disclosure | |
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | A 1% change in the assumed health care cost trend would have increased (decreased) the accumulated postretirement benefit obligation as of December 31, 2017 and the periodic postretirement benefit cost for the year then ended as follows: 1% Increase 1% Decrease Accumulated postretirement benefit obligation $ 172 $ (152 ) Periodic postretirement benefit cost 6 (5 ) |
Defined Benefit Pension Plans | |
Defined Benefit Plan Disclosure | |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s significant defined benefit pension plans as well as the components of net periodic benefit cost, including key assumptions: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 247,418 $ 71,605 $ 106,025 $ — Service cost 1,219 2,130 3,686 2,106 Interest cost 10,115 7,680 3,271 2,224 Participant contributions — — 493 300 Plan curtailments — (1,325 ) — (1,204 ) Plan settlements (2,264 ) (4,772 ) — — Benefits paid (9,591 ) (5,390 ) (2,967 ) (1,305 ) Expenses paid — — (319 ) (66 ) Net transfer in (1) — 192,120 — 99,025 Actuarial (gains) losses 14,205 (14,630 ) (2,169 ) 9,804 Translation adjustment — — 11,690 (4,859 ) Benefit obligation at end of the period $ 261,102 $ 247,418 $ 119,710 $ 106,025 Change in plan assets: Fair value of plan assets at beginning of period $ 198,915 $ 52,678 $ 86,145 $ — Actual return on plan assets 27,554 6,897 217 8,274 Employer contributions 3,760 1,425 3,781 921 Employee contributions — — 493 300 Plan settlements (2,264 ) (4,772 ) — — Benefits paid (9,591 ) (5,390 ) (2,967 ) (1,305 ) Expenses paid — — (319 ) (66 ) Acquisitions (1) — 148,077 — 81,974 Translation adjustment — — 9,168 (3,953 ) Fair value of plan assets at end of the period $ 218,374 $ 198,915 $ 96,518 $ 86,145 Funded status of the plans (underfunded) $ (42,728 ) $ (48,503 ) $ (23,192 ) $ (19,880 ) (1) Relates to the PQ Holdings defined benefit pension plans assumed as part of the Business Combination. |
Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the consolidated balance sheets consist of: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Noncurrent asset $ — $ — $ 3,503 $ 3,391 Current liability — — (673 ) (331 ) Noncurrent liability (42,728 ) (48,503 ) (26,022 ) (22,940 ) Accumulated other comprehensive income (loss) 10,499 8,190 (2,871 ) (2,085 ) Net amount recognized $ (32,229 ) $ (40,313 ) $ (26,063 ) $ (21,965 ) |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in accumulated other comprehensive income (loss) consist of: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Prior service credit $ — $ — $ — $ — Net gain (loss) 13,943 12,920 (3,923 ) (2,686 ) Gross amount recognized 13,943 12,920 (3,923 ) (2,686 ) Deferred income taxes (3,444 ) (4,730 ) 1,052 601 Net amount recognized $ 10,499 $ 8,190 $ (2,871 ) $ (2,085 ) |
Components of Net Periodic Expense | Components of net periodic benefit cost consist of: U.S. Foreign Years ended Years ended 2017 2016 2015 2017 2016 2015 Service cost $ 1,219 $ 2,130 $ 2,778 $ 3,686 $ 2,106 $ — Interest cost 10,115 7,680 2,913 3,271 2,224 — Expected return on plan assets (12,277 ) (9,293 ) (2,885 ) (3,208 ) (2,038 ) — Amortization of net gain — — — (9 ) (10 ) — Curtailment gain recognized — (1,311 ) — — (517 ) — Settlement (gain) loss recognized (48 ) 152 (2 ) — — — Net periodic expense (benefit) $ (991 ) $ (642 ) $ 2,804 $ 3,740 $ 1,765 $ — |
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | The following table presents selected information about the Company’s pension plans with accumulated benefit obligations in excess of plan assets: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Projected benefit obligation $ 261,102 $ 247,418 $ 67,750 58,837 Accumulated benefit obligation 257,882 244,003 64,526 55,981 Fair value of plan assets 218,374 198,915 42,632 36,771 |
Schedule of Assumptions Used | Significant weighted average assumptions used in determining net periodic benefit cost include the following: U.S. Foreign Years ended Years ended 2017 2016 2015 2017 2016 2015 Discount rate 4.24 % 4.02 % 4.09 % 2.99 % 5.16 % — Rate of compensation increase (3) 3.00 % 3.10 % Age-based / 2.97 % 3.95 % — Expected return on assets 6.37 % 6.34 % None 3.58 % 5.62 % — (3) The weighted average rate of compensation increase for the year ended December 31, 2015 for the U.S. plans was 3.00% for the Eco Services Hourly Pension Plan and an age-based assumption for the Eco Services Pension Equity Plan. Significant weighted average assumptions used in determining the pension obligations include the following: U.S. Foreign December 31, December 31, 2017 2016 2017 2016 Discount rate 3.74 % 4.24 % 2.91 % 2.99 % Rate of compensation increase (2) 3.00 % 3.00 % 2.57 % 2.97 % (2) With respect to the U.S. plans, the weighted average rate of compensation increase as of December 31, 2017 reflects only the Eco Services Hourly Pension Plan assumption of 3.00% , as both the Eco Services Pension Equity Plan and the PQ Corporation Retirement Plan were frozen to new accruals as of December 31, 2017 (and were included in the average at zero). With respect to the U.S. plans, the weighted average rate of compensation increase as of December 31, 2016 reflects only the Eco Services Hourly Pension Plan assumption of 3.00% , as both the Eco Services Pension Equity Plan and the PQ Corporation Retirement Plan were frozen to new accruals as of December 31, 2016 (and were included in the average at zero). |
Schedule of Allocation of Plan Assets | The following tables set forth by level, within the fair value hierarchy, plan assets at fair value: December 31, 2017 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,072 $ 934 $ 138 $ — Equity securities: U.S. investment funds 56,309 43,625 12,684 — International investment funds 70,308 28,827 41,481 — Fixed income securities: Government securities 11,433 — 11,433 — Corporate bonds 82,585 77,685 4,900 — Investment fund bonds 54,263 7,719 46,544 — Other: Insurance policies 38,922 — 34,772 4,150 Total $ 314,892 $ 158,790 $ 151,952 $ 4,150 December 31, 2016 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,979 $ 1,863 $ 116 $ — Equity securities: U.S. investment funds 60,179 41,529 18,650 — International investment funds 58,457 26,119 32,338 — Fixed income securities: Government securities 25,437 — 25,437 — Corporate bonds 4,981 — 4,981 — Investment fund bonds 113,460 $ 77,938 $ 35,522 $ — Other: Insurance policies 20,567 $ — $ 17,281 $ 3,286 Total $ 285,060 $ 147,449 $ 134,325 $ 3,286 |
Defined Benefit Plan Level 3 Assets | The changes in the Level 3 pension plan assets are as follows for the years ended December 31: Insurance Policies 2017 2016 Beginning balance $ 3,286 $ — Business Combination (May 4, 2016) — 3,226 Actual return on plan assets (41 ) 23 Benefits paid (48 ) (27 ) Contributions 466 236 Exchange rate changes 487 (172 ) Ending balance $ 4,150 $ 3,286 |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year U.S. Foreign 2018 $ 14,626 $ 2,588 2019 15,363 3,331 2020 15,718 2,943 2021 16,371 3,197 2022 15,373 3,630 Years 2023-2027 76,506 22,716 |
Supplemental Retirement Plans | |
Defined Benefit Plan Disclosure | |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s defined benefit supplementary retirement plans, as well as the components of net periodic benefit cost, including key assumptions: December 31, 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 13,225 $ — Interest cost 489 328 Net transfer in (4) — 14,671 Benefits paid (1,179 ) (767 ) Actuarial (gains) losses 246 (1,007 ) Benefit obligation at end of period $ 12,781 $ 13,225 Change in plan assets: Fair value of plan assets at beginning of period $ — $ — Employer contributions 1,179 767 Benefits paid (1,179 ) (767 ) Fair value of plan assets at end of period $ — $ — Funded status of the plans (underfunded) $ (12,781 ) $ (13,225 ) (4) Relates to the PQ Holdings defined benefit supplementary retirement plans assumed as part of the Business Combination. |
Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the consolidated balance sheets consist of: December 31, 2017 2016 Current liability $ (1,115 ) $ (1,170 ) Noncurrent liability (11,667 ) (12,055 ) Accumulated other comprehensive income 573 623 Net amount recognized $ (12,209 ) $ (12,602 ) |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in accumulated other comprehensive income consist of: December 31, 2017 2016 Net gain $ 761 $ 1,007 Gross amount recognized 761 1,007 Deferred income taxes (188 ) (384 ) Net amount recognized $ 573 $ 623 |
Components of Net Periodic Expense | Components of net periodic benefit cost consist of: Years ended 2017 2016 2015 Interest cost $ 489 $ 328 $ — Net periodic expense $ 489 $ 328 $ — |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year Amount 2018 $ 1,115 2019 1,087 2020 1,056 2021 1,024 2022 987 Years 2023-2027 4,371 |
Other Postretirement Benefits Plans | |
Defined Benefit Plan Disclosure | |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s other postretirement benefit plans as well as the components of net periodic benefit cost, including key assumptions: December 31, 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 4,620 $ 1,296 Service cost 21 37 Interest cost 174 151 Employee contributions 251 176 Plan amendments — (443 ) Benefits paid (923 ) (484 ) Medical subsidies received — 90 Premiums paid (3 ) (2 ) Net transfer in (5) — 4,868 Actuarial (gains) losses 418 (1,057 ) Translation adjustment 54 (12 ) Benefit obligation at end of period $ 4,612 $ 4,620 Change in plan assets: Fair value of plan assets at beginning of period — — Employer contributions 675 220 Employee contributions 251 176 Benefits paid (923 ) (484 ) Medical subsidies received — 90 Premiums paid (3 ) (2 ) Fair value of plan assets at end of period $ — $ — Funded status of the plans (underfunded) $ (4,612 ) $ (4,620 ) (5) Relates to the PQ Holdings retiree health plans assumed as part of the Business Combination. |
Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the consolidated balance sheets consist of: December 31, 2017 2016 Current liability $ (561 ) $ (629 ) Noncurrent liability (4,051 ) (3,991 ) Accumulated other comprehensive income 885 877 Net amount recognized $ (3,727 ) $ (3,743 ) |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in accumulated other comprehensive income consist of: December 31, 2017 2016 Prior service credit $ 366 $ — Net gain 719 1,163 Gross amount recognized 1,085 1,163 Deferred income taxes (200 ) (286 ) Net amount recognized $ 885 $ 877 |
Components of Net Periodic Expense | Components of net periodic benefit cost consist of: Years ended 2017 2016 2015 Service cost $ 21 $ 37 $ 39 Interest cost 174 151 57 Amortization of prior service credit (78 ) — — Amortization of net gain (45 ) (17 ) — Net periodic expense $ 72 $ 171 $ 96 |
Schedule of Assumptions Used | Significant weighted average assumptions used in determining the net periodic benefit cost, the postretirement benefit obligations and trend rate include the following: December 31, 2017 2016 Benefit obligation: Discount rate 3.53% 3.74% Immediate trend rate 6.20% 6.84% Ultimate trend rate 4.50% 4.50% Year that the rate reaches ultimate trend rate 2037 2035 December 31, 2017 2016 2015 Benefit cost: Discount rate 3.74% 3.92% 4.36% Immediate trend rate 6.84% 7.28% N/A Ultimate trend rate 4.50% 4.50% N/A Year that the rate reaches ultimate trend rate 2035 2035 N/A |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Year Amount 2018 $ 629 2019 607 2020 457 2021 413 2022 273 Years 2023-2027 1,015 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of from Basic to Diluted Weighted Average Number of Shares Outstanding | The reconciliation from basic to diluted weighted average shares outstanding is as follows: Years ended 2017 2016 2015 Weighted average shares outstanding – Basic 111,299,670 78,016,005 22,615,787 Dilutive effect of unvested common shares with service conditions and assumed stock option exercises and conversions 369,367 — — Weighted average shares outstanding – Diluted 111,669,037 78,016,005 22,615,787 |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share are calculated as follows: Years ended 2017 2016 2015 Numerator: Net income (loss) attributable to PQ Group Holdings Inc. $ 57,603 $ (79,746 ) $ 11,427 Denominator: Weighted average shares outstanding – Basic 111,299,670 78,016,005 22,615,787 Weighted average shares outstanding – Diluted 111,669,037 78,016,005 22,615,787 Net income (loss) per share: Basic income (loss) per share $ 0.52 $ (1.02 ) $ 0.51 Diluted income (loss) per share $ 0.52 $ (1.02 ) $ 0.51 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The table below presents the details of the Company’s equity-based awards outstanding at the end of each respective year that were excluded from the calculation of diluted earnings per share: December 31, 2017 2016 2015 Restricted stock awards with performance only targets not yet achieved 1,769,447 1,731,522 — Stock options with performance only targets not yet achieved 586,523 417,086 293,150 Anti-dilutive restricted stock awards and restricted stock units — 751,410 — Anti-dilutive stock options 621,747 1,381,352 1,085,152 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Nonvested Restricted Stock Shares Activity | The following table summarizes the activity of restricted stock awards and restricted stock units for the period from the date of the Business Combination of May 4, 2016 through the year ended December 31, 2017 , which includes the PQ Holdings restricted stock awards that were exchanged as part of the Business Combination: Restricted Stock Awards Restricted Stock Units Number of Weighted Average Grant Date Fair Value (per share) Number of Weighted Average Grant Date Fair Value (per share) Granted/assumed on May 4, 2016 in connection with the Business Combination 2,444,070 $ 9.27 — $ — Granted 266,955 $ 12.32 — $ — Vested (207,915 ) $ 12.32 — $ — Forfeited (20,178 ) $ 10.52 — $ — Nonvested as of December 31, 2016 2,482,932 $ 9.34 — $ — Granted 51,907 $ 16.11 1,654,690 $ 16.97 Vested (187,837 ) $ 12.84 — $ — Forfeited (250,365 ) $ 12.03 — $ — Nonvested as of December 31, 2017 2,096,637 $ 8.87 1,654,690 $ 16.97 |
Incentive Unit Agreement | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Share-based Compensation Options Activity | The following table summarizes the activity of the Eco Services Class B Units during the year ended December 31, 2015 and through May 3, 2016, the date immediately preceding the Business Combination: Number of Units Weighted Average Exercise Price Outstanding at December 31, 2014 11,367 $ 1,000 Granted 14,419 $ 1,000 Forfeited (693 ) $ 1,000 Outstanding at December 31, 2015 and May 3, 2016 25,093 $ 1,000 Exercisable at December 31, 2015 and May 3, 2016 4,939 $ 1,000 |
2017 Omnibus Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Share-based Compensation Options Activity | The following table summarizes the activity of common stock options for the period from the date of the Business Combination of May 4, 2016 through the year ended December 31, 2017 , which includes both the Eco Services Class B Units that were canceled and replaced, as well as the PQ Holdings options that were exchanged as part of the Business Combination: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Granted/assumed on May 4, 2016 in connection with the Business Combination 1,738,527 $ 7.80 Granted 538,908 $ 8.05 Forfeited (478,997 ) $ 7.49 Outstanding at December 31, 2016 1,798,438 $ 7.96 Granted 1,051,496 $ 13.70 Exercised (32,366 ) $ 8.04 Forfeited (102,398 ) $ 7.98 Outstanding at December 31, 2017 2,715,170 $ 10.18 Vested or expected to vest at December 31, 2017 2,064,450 $ 10.79 8.84 $ 12,004 Exercisable at December 31, 2017 827,210 $ 8.02 8.34 $ 6,975 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair values of PQ Group Holdings common stock options granted during the years ended December 31, 2017 and 2016 were determined on the respective grant dates using a Black-Scholes option pricing model with the following weighted-average assumptions: 2017 2016 Expected term (in years) 5.85 5.00 Expected volatility 34.85 % 45.79 % Risk-free interest rate 2.00 % 1.54 % Expected dividend yield 0.00 % 0.00 % Weighted average grant date fair value of options granted $ 4.71 $ 3.33 |
Commitments and Contingent Li59
Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Total rent due under non-cancelable operating lease commitments as of December 31, 2017 is: Year Amount 2018 $ 16,779 2019 11,992 2020 9,695 2021 7,253 2022 5,145 Thereafter 12,432 $ 63,296 |
Expected Purchases Under Purchase Agreements | The purchase commitments covered by these agreements are with various suppliers and total approximately $35,038 as of December 31, 2017 . Purchases under these agreements are expected to be as follows: Year Amount 2018 $ 24,113 2019 2,827 2020 1,188 2021 1,186 2022 1,186 Thereafter 4,538 $ 35,038 |
Restructuring and Other Relat60
Restructuring and Other Related Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Components of Restructuring and Other Related Costs | The following table presents the components of restructuring and other related costs for the years ended December 31, 2017 , 2016 and 2015 included in other operating expense, net, in the accompanying consolidated statements of operations: Years ended 2017 2016 2015 Severance and other employee costs related to legacy Eco restructuring plan $ 830 $ 5,093 $ 3,971 Severance and other employee costs related to Performance Materials plant closure 4,711 — — Other related costs 2,949 7,537 176 $ 8,490 $ 12,630 $ 4,147 |
Activity in Restructuring Plan | The activity in the accrued liability balance associated with the Company’s restructuring plans, all of which related to severance and other employee costs, was as follows for the years ended December 31, 2017 , 2016 and 2015 : Legacy Eco Restructuring Plan Performance Materials Plant Closure Total Restructuring Charges Balance at December 31, 2014 $ 247 $ — $ 247 Restructuring charges 3,971 — 3,971 Cash payments (2,925 ) — (2,925 ) Balance at December 31, 2015 $ 1,293 $ — $ 1,293 Restructuring charges 5,093 — 5,093 Cash payments (4,743 ) — (4,743 ) Balance at December 31, 2016 $ 1,643 $ — $ 1,643 Restructuring charges 830 4,711 5,541 Cash payments (2,258 ) (1,588 ) (3,846 ) Balance at December 31, 2017 $ 215 $ 3,123 $ 3,338 |
Quarterly Financial Summary (61
Quarterly Financial Summary (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following tables summarize the Company’s quarterly financial results during the years ended December 31, 2017 and 2016 : 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Sales $ 332,931 $ 389,267 $ 391,829 $ 358,074 Gross profit 82,712 107,414 102,559 84,151 Operating income 37,915 55,149 46,558 27,882 Net income (loss) (2,315 ) (1,670 ) (3,016 ) 65,564 Net income (loss) attributable to PQ Group Holdings Inc. (2,454 ) (1,609 ) (3,345 ) 65,011 Net income (loss) per common share: Basic income (loss) per share $ (0.02 ) $ (0.02 ) $ (0.03 ) $ 0.49 Diluted income (loss) per share $ (0.02 ) $ (0.02 ) $ (0.03 ) $ 0.49 Weighted average shares outstanding: Basic 103,947,888 104,015,815 104,096,837 133,138,140 Diluted 103,947,888 104,015,815 104,096,837 133,895,646 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Sales $ 93,913 $ 277,554 $ 369,979 $ 322,731 Gross profit 26,101 62,298 95,299 70,394 Operating income 8,048 16,749 44,254 15,139 Net income (loss) (3,131 ) (76,948 ) (9,606 ) 10,527 Net income (loss) attributable to PQ Group Holdings Inc. (3,131 ) (77,262 ) (10,017 ) 10,664 Net income (loss) per common share: Basic loss per share $ (0.14 ) $ (0.99 ) $ (0.10 ) $ 0.10 Diluted loss per share $ (0.14 ) $ (0.99 ) $ (0.10 ) $ 0.10 Weighted average shares outstanding: Basic 22,694,161 77,842,216 103,783,719 103,947,888 Diluted 22,694,161 77,842,216 103,783,719 103,947,888 |
Supplemental Cash Flow Inform62
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table presents supplemental cash flow information for the Company: Years ended December 31, 2017 2016 2015 Cash paid during the year for: Income taxes $ 29,199 . $ 16,981 $ 8 Interest 170,131 132,579 44,074 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the period end 18,762 18,161 624 Non-cash financing activities: Equity consideration for the Business Combination (Note 6) — 910,800 — Debt assumed in the Business Combination (Note 6) — 22,911 — Debt assumed in the Acquisition (Note 7) 16,609 — — Non-cash equity contribution (Note 26) — — 1,600 |
Background and Basis of Prese63
Background and Basis of Presentation (Details) $ / shares in Units, $ in Thousands | Oct. 03, 2017USD ($)$ / sharesshares | Sep. 28, 2017 | Dec. 31, 2017segment | Sep. 29, 2017$ / shares |
Subsidiary or Equity Method Investee | ||||
Reportable segments | segment | 2 | |||
Stock split, conversion ratio | 8.8275 | |||
Unreturned paid-in capital per share (usd per share) | $ 113.74 | |||
IPO | ||||
Subsidiary or Equity Method Investee | ||||
Price of shares issued (usd per share) | $ 17.50 | |||
Shares issued (shares) | shares | 29,000,000 | |||
Consideration received | $ | $ 480,696 |
Summary of Significant Accoun64
Summary of Significant Accounting Policies - Narratives (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies Table | |||
Foreign exchange expense | $ (25,786,000) | $ 3,558,000 | $ 0 |
Restricted cash | 1,048,000 | 14,335,000 | |
Interest costs capitalized | 5,806,000 | 5,687,000 | 0 |
Research and development cost | $ 13,859,000 | 7,266,000 | $ 0 |
Building and building improvements | Minimum | |||
Summary of Significant Accounting Policies Table | |||
Fixed asset useful life | 15 years | ||
Building and building improvements | Maximum | |||
Summary of Significant Accounting Policies Table | |||
Fixed asset useful life | 33 years | ||
Machinery and equipment | Minimum | |||
Summary of Significant Accounting Policies Table | |||
Fixed asset useful life | 3 years | ||
Machinery and equipment | Maximum | |||
Summary of Significant Accounting Policies Table | |||
Fixed asset useful life | 10 years | ||
New Markets Tax Credit Financing | |||
Summary of Significant Accounting Policies Table | |||
Restricted cash | $ 348,000 | $ 13,780,000 |
Summary of Significant Accoun65
Summary of Significant Accounting Policies - Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation | ||
Beginning balance | $ 3,700 | $ 0 |
AROs identified as part of the Business Combination | 0 | 3,687 |
Accretion expense | 232 | 177 |
Foreign exchange impact | 162 | (164) |
Ending balance | $ 4,094 | $ 3,700 |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) | Jan. 01, 2018 | Dec. 11, 2017 | Oct. 03, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 04, 2016 | Dec. 31, 2014 |
New Accounting Pronouncements or Change in Accounting Principle | ||||||||||||||||
Operating income | $ 27,882,000 | $ 46,558,000 | $ 55,149,000 | $ 37,915,000 | $ 15,139,000 | $ 44,254,000 | $ 16,749,000 | $ 8,048,000 | $ 167,504,000 | $ 84,190,000 | $ 55,775,000 | |||||
Non operating income | (25,980,000) | 3,402,000 | $ 0 | |||||||||||||
Restricted cash | $ 1,048,000 | $ 14,335,000 | 1,048,000 | 14,335,000 | ||||||||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||||||||||
Debt extinguishment costs | $ 6,043,000 | $ 32,284,000 | $ 47,875,000 | $ 0 | ||||||||||||
Debt instrument face amount | 525,000,000 | $ 525,000,000 | ||||||||||||||
Debt extinguishment amount | 78,792,000 | $ 446,208,000 | ||||||||||||||
Senior Notes | 8.5% Senior Notes due 2022 | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||||||||||
Debt extinguishment costs | $ 7,996,000 | |||||||||||||||
Debt instrument face amount | $ 200,000,000 | |||||||||||||||
Debt instrument stated interest rate | 8.50% | 8.50% | 8.50% | |||||||||||||
Pro Forma | ASU 2017-07 | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||||||||||||
Operating income | $ (2,651,000) | |||||||||||||||
Non operating income | $ 2,651,000 |
New Accounting Standards - Adju
New Accounting Standards - Adjustment Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle | |||
Net cash provided by operating activities | $ 116,062 | $ 119,720 | $ 44,715 |
Net cash used in investing activities | (182,695) | (1,929,680) | (38,725) |
Net cash provided by financing activities | 68,944 | 1,861,433 | (3,462) |
Effect of exchange rate changes on cash and cash equivalents | (6,858) | (5,886) | 0 |
Net change in cash and cash equivalents | (4,547) | 45,587 | 2,528 |
Cash and cash equivalents at beginning of period | 70,742 | 25,155 | 22,627 |
Cash and cash equivalents at end of period | 66,195 | 70,742 | 25,155 |
Accounting Standards Update 2016-18 [Member] | Pro Forma | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Net cash provided by operating activities | 116,062 | 119,720 | |
Net cash used in investing activities | (195,982) | (1,915,345) | |
Net cash provided by financing activities | 68,944 | 1,861,433 | |
Effect of exchange rate changes on cash and cash equivalents | (6,858) | (5,886) | |
Net change in cash, cash equivalents and restricted cash | (17,834) | 59,922 | |
Cash, cash equivalents and restricted cash at beginning of period | 85,077 | 25,155 | |
Cash, cash equivalents and restricted cash at end of period | $ 67,243 | $ 85,077 | $ 25,155 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Derivative contracts | $ 1,043 | $ 6,434 |
Restoration plan assets | 5,576 | 5,594 |
Total | 6,619 | 12,028 |
Liabilities: | ||
Derivative contracts | 448 | |
Total | 448 | |
Recurring | Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Derivative contracts | 0 | 0 |
Restoration plan assets | 5,576 | 5,594 |
Total | 5,576 | 5,594 |
Liabilities: | ||
Derivative contracts | 0 | |
Total | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Derivative contracts | 1,043 | 6,434 |
Restoration plan assets | 0 | 0 |
Total | 1,043 | 6,434 |
Liabilities: | ||
Derivative contracts | 448 | |
Total | 448 | |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Derivative contracts | 0 | 0 |
Restoration plan assets | 0 | 0 |
Total | 0 | $ 0 |
Liabilities: | ||
Derivative contracts | 0 | |
Total | $ 0 |
Fair Value Measurements - Ass69
Fair Value Measurements - Assets Measured at Fair Value on a Non-recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Total | $ 6,619 | $ 12,028 | |
Trade names | 160,795 | ||
Intangible asset impairment charge | $ 0 | 6,873 | $ 0 |
Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Indefinite life tradenames | 153,922 | ||
Estimate of Fair Value Measurement | Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Indefinite life tradenames | 153,922 | ||
Total | 153,922 | ||
Estimate of Fair Value Measurement | Nonrecurring | Quoted Prices in Active Markets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Indefinite life tradenames | 0 | ||
Total | 0 | ||
Estimate of Fair Value Measurement | Nonrecurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Indefinite life tradenames | 0 | ||
Total | 0 | ||
Estimate of Fair Value Measurement | Nonrecurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Indefinite life tradenames | 153,922 | ||
Total | 153,922 | ||
Change Measurement During Period | Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Indefinite life tradenames | (6,873) | ||
Total | $ (6,873) |
Accumulated Other Comprehensi70
Accumulated Other Comprehensive Income (Loss) - Components, Net of Tax (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Stockholders equity | $ 1,631,919 | $ 1,027,944 | $ 235,293 | $ 217,824 |
Accumulated other comprehensive income (loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Stockholders equity | 4,311 | (53,711) | 648 | $ 0 |
Defined benefit and other postretirement plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Stockholders equity | 7,412 | 7,513 | 648 | |
Tax | ||||
Tax related to AOCI | (4,761) | (4,799) | ||
Net gain (loss) from hedging activities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Stockholders equity | 967 | 4,557 | 0 | |
Tax | ||||
Tax related to AOCI | (584) | (2,793) | ||
Foreign currency translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Stockholders equity | (4,068) | (65,781) | $ 0 | |
Tax | ||||
Tax related to AOCI | $ 790 | $ 6,627 |
Accumulated Other Comprehensi71
Accumulated Other Comprehensive Income (Loss) - Pre-tax and After-tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
After-tax amount | |||
Pre-tax amount | $ 60,500 | $ (54,447) | $ 648 |
Tax benefit / (expense) | (3,590) | (965) | 0 |
Total other comprehensive income (loss) | 56,910 | (55,412) | 648 |
Defined benefit and other postretirement plans | |||
After-tax amount | |||
Pre-tax amount | (139) | 11,664 | 648 |
Tax benefit / (expense) | 38 | (4,799) | 0 |
Total other comprehensive income (loss) | (101) | 6,865 | 648 |
Net loss (gain) from hedging activities | |||
After-tax amount | |||
Pre-tax amount | (5,799) | 7,350 | 0 |
Tax benefit / (expense) | 2,209 | (2,793) | 0 |
Total other comprehensive income (loss) | (3,590) | 4,557 | 0 |
Foreign currency translation | |||
After-tax amount | |||
Pre-tax amount | 66,438 | (73,461) | 0 |
Tax benefit / (expense) | (5,837) | 6,627 | 0 |
Total other comprehensive income (loss) | $ 60,601 | $ (66,834) | $ 0 |
Accumulated Other Comprehensi72
Accumulated Other Comprehensive Income (Loss) - Change by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Beginning balance, value | $ 1,027,944 | $ 235,293 | $ 217,824 |
Amounts reclassified from accumulated other comprehensive income | 314 | 909 | |
Total other comprehensive income (loss) | 56,910 | (55,412) | 648 |
Ending balance, value | 1,631,919 | 1,027,944 | 235,293 |
Total | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Beginning balance, value | (53,711) | 648 | 0 |
Other comprehensive income (loss) before reclassifications | 57,708 | (55,268) | |
Amounts reclassified from accumulated other comprehensive income | 314 | 909 | |
Total other comprehensive income (loss) | 58,022 | (54,359) | 648 |
Ending balance, value | 4,311 | (53,711) | 648 |
Defined benefit and other postretirement plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Beginning balance, value | 7,513 | 648 | |
Other comprehensive income (loss) before reclassifications | (208) | 6,844 | |
Amounts reclassified from accumulated other comprehensive income | 107 | 21 | |
Total other comprehensive income (loss) | (101) | 6,865 | |
Ending balance, value | 7,412 | 7,513 | 648 |
Net gain (loss) from hedging activities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Beginning balance, value | 4,557 | 0 | |
Other comprehensive income (loss) before reclassifications | (3,797) | 3,669 | |
Amounts reclassified from accumulated other comprehensive income | 207 | 888 | |
Total other comprehensive income (loss) | (3,590) | 4,557 | |
Ending balance, value | 967 | 4,557 | 0 |
Foreign currency translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Beginning balance, value | (65,781) | 0 | |
Other comprehensive income (loss) before reclassifications | 61,713 | (65,781) | |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | |
Total other comprehensive income (loss) | 61,713 | (65,781) | |
Ending balance, value | $ (4,068) | $ (65,781) | $ 0 |
Accumulated Other Comprehensi73
Accumulated Other Comprehensive Income (Loss) - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Reclassification, net | $ 314 | $ 909 | |||||||||
Interest expense | 179,044 | 140,315 | $ 44,348 | ||||||||
Cost of goods sold | 1,095,265 | 810,085 | 278,791 | ||||||||
Income (loss) before income taxes and noncontrolling interest | 60,634 | 69,117 | (11,427) | ||||||||
Tax (expense) benefit | (119,197) | 10,041 | 0 | ||||||||
Net loss | $ (65,564) | $ 3,016 | $ 1,670 | $ 2,315 | $ (10,527) | $ 9,606 | $ 76,948 | $ 3,131 | (58,563) | 79,158 | $ (11,427) |
Defined benefit and other postretirement plans | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Reclassification, before tax | 132 | 26 | |||||||||
Reclassification, tax | (25) | (5) | |||||||||
Reclassification, net | 107 | 21 | |||||||||
Amortization of prior service cost | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Reclassification, before tax | 78 | 0 | |||||||||
Amortization of net gain (loss) | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Reclassification, before tax | 54 | 26 | |||||||||
Net gain (loss) from hedging activities | Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Income (loss) before income taxes and noncontrolling interest | 262 | 1,433 | |||||||||
Tax (expense) benefit | (55) | (545) | |||||||||
Net loss | 207 | 888 | |||||||||
Net gain (loss) from hedging activities | Reclassification out of Accumulated Other Comprehensive Income | Interest rate caps | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest expense | 40 | 0 | |||||||||
Net gain (loss) from hedging activities | Reclassification out of Accumulated Other Comprehensive Income | Natural gas swaps | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Cost of goods sold | $ 222 | $ 1,433 |
Business Combination - Narrativ
Business Combination - Narratives (Details) - USD ($) $ in Thousands | May 04, 2016 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition | ||||||||||||
Acquisition costs | $ 7,415 | $ 4,952 | $ 4,241 | |||||||||
Net income (loss) | $ 65,564 | $ (3,016) | $ (1,670) | $ (2,315) | $ 10,527 | $ (9,606) | $ (76,948) | $ (3,131) | 58,563 | (79,158) | 11,427 | |
Debt Repayment Penalty | ||||||||||||
Business Acquisition | ||||||||||||
Net income (loss) | (26,250) | |||||||||||
Refinancing Charges | ||||||||||||
Business Acquisition | ||||||||||||
Net income (loss) | (4,747) | |||||||||||
Transaction Fees | ||||||||||||
Business Acquisition | ||||||||||||
Net income (loss) | (1,795) | |||||||||||
PQ Holdings, Eco Services | ||||||||||||
Business Acquisition | ||||||||||||
Payments to acquire business | $ 1,777,740 | |||||||||||
Equity consideration for the business combination | 910,800 | 0 | 910,800 | $ 0 | ||||||||
Stock awards transferred as consideration | 1,400 | |||||||||||
Acquisition costs | 1,583 | |||||||||||
Increase to inventory at acquisition | $ 58,683 | |||||||||||
Cost of goods sold, additional portion related to step-up inventory price | $ 871 | 29,086 | ||||||||||
Net sales attributable to acquiree | 690,459 | |||||||||||
Net income (loss) from acquiree | $ 17,991 |
Business Combination - Business
Business Combination - Business Acquired (Details) - USD ($) $ in Thousands | May 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition | ||||
Total consideration, net of cash acquired | $ 41,572 | $ 1,777,740 | $ (3,965) | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Goodwill | $ 1,305,956 | $ 1,241,429 | $ 311,892 | |
PQ Holdings, Eco Services | ||||
Business Acquisition | ||||
Total consideration, net of cash acquired | $ 2,689,941 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Receivables | 161,110 | |||
Inventories | 254,770 | |||
Prepaid and other current assets | 19,295 | |||
Investments in affiliated companies | 472,994 | |||
Property, plant and equipment | 683,673 | |||
Other intangible assets | 754,000 | |||
Other long-term assets | 48,127 | |||
Fair value of assets acquired | 2,393,969 | |||
Revolver, notes payable & current debt | (2,441) | |||
Accounts payable | (93,222) | |||
Accrued liabilities | (98,621) | |||
Long-term debt | (20,470) | |||
Deferred income taxes | (327,296) | |||
Other long-term liabilities | (113,936) | |||
Noncontrolling interest | (6,569) | |||
Fair value of net assets acquired | 1,731,414 | |||
Goodwill | 958,527 | |||
Net assets including goodwill acquired | $ 2,689,941 |
Business Combination - Intangib
Business Combination - Intangible Assets Acquired (Details) - PQ Holdings, Eco Services $ in Thousands | May 04, 2016USD ($) |
Business Acquisition | |
Intangible assets subject to amortization: | $ 520,000 |
Total | 754,000 |
Trade names | |
Business Acquisition | |
Intangible assets not subject to amortization | 151,100 |
Trademarks | |
Business Acquisition | |
Intangible assets not subject to amortization | 82,900 |
Trademarks | |
Business Acquisition | |
Intangible assets subject to amortization: | $ 35,400 |
Finite lived intangible assets useful life | 15 years |
Technical know-how | |
Business Acquisition | |
Intangible assets subject to amortization: | $ 189,300 |
Finite lived intangible assets useful life | 20 years |
Contracts | |
Business Acquisition | |
Intangible assets subject to amortization: | $ 19,800 |
Finite lived intangible assets useful life | 5 years 3 months 18 days |
Customer relationships | |
Business Acquisition | |
Intangible assets subject to amortization: | $ 268,700 |
Finite lived intangible assets useful life | 10 years 7 months 6 days |
In-process research and development | |
Business Acquisition | |
Intangible assets subject to amortization: | $ 6,800 |
Business Combination - Proforma
Business Combination - Proforma Disclosure (Details) - PQ Holdings, Eco Services - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition | ||
Pro forma sales | $ 1,403,041 | $ 1,413,201 |
Pro forma net loss | $ (76,994) | $ (120,982) |
Acquisitions - Allocation of Pu
Acquisitions - Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Jun. 12, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition | ||||
Total consideration, net of cash acquired | $ 41,572 | $ 1,777,740 | $ (3,965) | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Goodwill | $ 1,305,956 | $ 1,241,429 | $ 311,892 | |
Sovitec Mondial S.A. | ||||
Business Acquisition | ||||
Total consideration, net of cash acquired | $ 41,572 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Receivables | 14,305 | |||
Inventories | 7,645 | |||
Prepaid and other current assets | 400 | |||
Property, plant and equipment | 9,020 | |||
Other long-term assets | 129 | |||
Fair value of assets acquired | 31,499 | |||
Current debt | (6,420) | |||
Accounts payable | (10,748) | |||
Long-term debt | (10,189) | |||
Other long-term liabilities | (154) | |||
Fair value of net assets acquired | 3,988 | |||
Goodwill | 37,584 | |||
Net assets including goodwill acquired | $ 41,572 |
Acquisitions - Narratives (Deta
Acquisitions - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition | |||||||||||
Net income (loss) | $ 65,564 | $ (3,016) | $ (1,670) | $ (2,315) | $ 10,527 | $ (9,606) | $ (76,948) | $ (3,131) | $ 58,563 | $ (79,158) | $ 11,427 |
Acquisition costs | $ 7,415 | $ 4,952 | $ 4,241 | ||||||||
Sovitec Mondial S.A. | |||||||||||
Business Acquisition | |||||||||||
Net sales attributable to acquiree | 26,257 | ||||||||||
Net income from acquiree | 1,370 | ||||||||||
Acquisition costs | 2,515 | ||||||||||
Sovitec Mondial S.A. | Acquisition-related costs | |||||||||||
Business Acquisition | |||||||||||
Net income (loss) | $ 2,515 |
Acquisitions - Pro Forma Disclo
Acquisitions - Pro Forma Disclosure (Details) - Sovitec Mondial S.A. - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition | ||
Pro forma sales | $ 1,489,957 | $ 1,105,479 |
Pro forma net income (loss) | $ 59,968 | $ (77,720) |
Other Operating Expense, Net (D
Other Operating Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Amortization expense | $ 32,010 | $ 25,263 | $ 6,605 |
Transaction and other related costs | 7,415 | 4,952 | 4,241 |
Restructuring and other related costs (Note 23) | 8,490 | 12,630 | 4,147 |
Net loss on asset disposals | 5,793 | 4,216 | 3,911 |
Intangible asset impairment charge | 0 | 6,873 | 0 |
Management advisory fees (Note 26) | 3,777 | 3,584 | 590 |
Environmental-related costs (Note 22) | 395 | 1,352 | 202 |
Other, net | 6,345 | 3,431 | 0 |
Other operating expense, net | $ 64,225 | $ 62,301 | $ 19,696 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory, Net | ||
Finished products and work in process | $ 199,919 | $ 175,182 |
Raw materials | 62,469 | 51,866 |
Inventory, Net | 262,388 | 227,048 |
Valued at lower of cost or market: | ||
LIFO basis | 162,315 | 135,605 |
Valued at Lower of Cost and Net Realizable Value [Abstract] | ||
FIFO or average cost basis | 100,073 | 91,443 |
Inventory, Net | $ 262,388 | $ 227,048 |
Inventories - Narratives (Detai
Inventories - Narratives (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Business Combinations | ||
Inventory | ||
Difference in LIFO and FIFO inventory valuation | $ 26,630 | $ 30,338 |
Investments in Affiliated Com84
Investments in Affiliated Companies - Ownership Percentage (Details) | Dec. 31, 2017 |
PQ Silicates Ltd. | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 50.00% |
Zeolyst International | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 50.00% |
Zeolyst C.V. | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 50.00% |
Quaker Holdings | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 49.00% |
Investments in Affiliated Com85
Investments in Affiliated Companies - Summarized Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Current assets | $ 213,815 | $ 207,997 |
Noncurrent assets | 235,440 | 212,144 |
Current liabilities | 37,018 | 44,741 |
Noncurrent liabilities | $ 1,417 | $ 1,384 |
Investments in Affiliated Com86
Investments in Affiliated Companies - Summarized Income Statement (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Equity Method Investment, Summarized Financial Information | ||
Net sales | $ 206,072 | $ 317,197 |
Gross profit | 91,761 | 132,812 |
Operating income | 67,098 | 91,224 |
Net income | $ 67,332 | $ 94,740 |
Investments in Affiliated Com87
Investments in Affiliated Companies - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition | ||
Charges related to purchase accounting fair value adjustments | $ 8,599 | $ 36,296 |
Equity Method Investee | ||
Business Acquisition | ||
Due from related parties | 4,910 | 4,196 |
Related party sales | 2,853 | 1,587 |
Purchases from related party | 2,475 | 1,147 |
Business Combination | ||
Business Acquisition | ||
Purchase accounting fair value adjustments | $ 264,700 | $ 273,300 |
Investments in Affiliated Com88
Investments in Affiliated Companies - Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investments | |||
Balance at beginning of period | $ 459,406 | $ 0 | |
Investments in affiliated companies | 9,000 | 0 | $ 0 |
Equity in net income of affiliated companies | 47,371 | 33,684 | |
Charges related to purchase accounting fair value adjustments | (8,599) | (36,296) | |
Dividends received | (44,071) | (7,636) | |
Foreign currency translation adjustments | 6,050 | (3,340) | |
Balance at end of period | 469,276 | 459,406 | $ 0 |
PQ Holdings, Eco Services | |||
Equity Method Investments | |||
Equity method investments assumed in business combination | 0 | 472,994 | |
Sovitec Mondial S.A. | |||
Equity Method Investments | |||
Equity method investments assumed in business combination | $ 119 | $ 0 |
Property, Plant and Equipment89
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,541,499 | $ 1,336,584 |
Less: accumulated depreciation | (311,115) | (155,196) |
Property, plant and equipment, net | 1,230,384 | 1,181,388 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 191,006 | 186,327 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 200,054 | 157,944 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,005,025 | 788,175 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 145,414 | $ 204,138 |
Property, Plant and Equipment -
Property, Plant and Equipment - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 124,551 | $ 89,453 | $ 28,790 |
Reportable Segments - Narrative
Reportable Segments - Narratives (Details) | 12 Months Ended |
Dec. 31, 2017segmentproduct_group | |
Segment Reporting Information | |
Number of operating segments | 2 |
Reportable segments | 2 |
Environmental Catalysts & Services | |
Segment Reporting Information | |
Number of product groups | product_group | 3 |
Reportable Segments - Summary F
Reportable Segments - Summary Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ 358,074 | $ 391,829 | $ 389,267 | $ 332,931 | $ 322,731 | $ 369,979 | $ 277,554 | $ 93,913 | $ 1,472,101 | $ 1,064,177 | $ 388,875 |
Segment Adjustment EBITDA | 294,590 | 198,898 | 94,774 | ||||||||
Equity in net income (loss) from affiliated companies | 38,772 | (2,612) | 0 | ||||||||
Environmental Catalysts & Services | Zeolyst Joint Venture | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Segment Adjustment EBITDA | 58,156 | 40,687 | |||||||||
Equity in net income (loss) from affiliated companies | 46,985 | 33,716 | |||||||||
Investment in affiliate and inventory step-up amortization | 8,600 | 36,296 | |||||||||
Joint venture depreciation, amortization, and interest | 11,070 | 6,920 | |||||||||
Operating segments | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Segment Adjustment EBITDA | 483,715 | 355,504 | 117,704 | ||||||||
Operating segments | Performance Materials & Chemicals | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 1,001,849 | 638,951 | 0 | ||||||||
Segment Adjustment EBITDA | 240,128 | 158,679 | 0 | ||||||||
Operating segments | Environmental Catalysts & Services | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 473,675 | 426,747 | 388,875 | ||||||||
Segment Adjustment EBITDA | 243,587 | 196,825 | 117,704 | ||||||||
Operating segments | Environmental Catalysts & Services | Zeolyst Joint Venture | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 143,774 | 94,516 | |||||||||
Operating segments | Reportable Subsegment | Performance Materials & Chemicals | Performance Chemicals | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 687,645 | 437,523 | 0 | ||||||||
Operating segments | Reportable Subsegment | Performance Materials & Chemicals | Performance Materials | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 324,225 | 206,522 | 0 | ||||||||
Operating segments | Reportable Subsegment | Environmental Catalysts & Services | Silica Catalysts | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 75,333 | 53,029 | 0 | ||||||||
Operating segments | Reportable Subsegment | Environmental Catalysts & Services | Refining Services | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 398,342 | 373,718 | 388,875 | ||||||||
Operating segments | Eliminations | Performance Materials & Chemicals | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | (10,021) | (5,094) | 0 | ||||||||
Inter-segment sales eliminations | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ (3,423) | $ (1,521) | $ 0 |
Reportable Segments - Reconcili
Reportable Segments - Reconciliation of Net Loss to Adjusted EBITDA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information | |||||||||||
Net income (loss) attributable to PQ Group Holdings Inc. | $ 65,011,000 | $ (3,345,000) | $ (1,609,000) | $ (2,454,000) | $ 10,664,000 | $ (10,017,000) | $ (77,262,000) | $ (3,131,000) | $ 57,603,000 | $ (79,746,000) | $ 11,427,000 |
(Benefit) provision for income taxes | (119,197,000) | 10,041,000 | 0 | ||||||||
Interest expense, net | 179,044,000 | 140,315,000 | 44,348,000 | ||||||||
Depreciation and amortization | 177,140,000 | 128,288,000 | 38,999,000 | ||||||||
Segment EBITDA | 294,590,000 | 198,898,000 | 94,774,000 | ||||||||
Debt extinguishment costs (Note 15) | 61,886,000 | 13,782,000 | 0 | ||||||||
Losses on disposal of fixed assets | 5,793,000 | 4,216,000 | 3,911,000 | ||||||||
Foreign currency exchange (gain) loss | 25,786,000 | (3,558,000) | 0 | ||||||||
Management advisory fees | 3,777,000 | 3,584,000 | 590,000 | ||||||||
Acquisition costs | 7,415,000 | 4,952,000 | 4,241,000 | ||||||||
Restructuring, integration and business optimization expenses | 5,541,000 | 5,093,000 | 3,971,000 | ||||||||
Corporate, non-segment | |||||||||||
Segment Reporting Information | |||||||||||
Unallocated corporate expenses | 30,422,000 | 23,971,000 | 0 | ||||||||
Segment reconciling items | |||||||||||
Segment Reporting Information | |||||||||||
Joint venture depreciation, amortization, and interest | 11,070,000 | 6,920,000 | 0 | ||||||||
Investment in affiliate and inventory step-up amortization | 8,600,000 | 36,296,000 | 0 | ||||||||
Amortization of inventory step-up | 871,000 | 29,086,000 | 0 | ||||||||
Impairment of fixed assets, intangibles and goodwill | 0 | 6,873,000 | 0 | ||||||||
Debt extinguishment costs (Note 15) | 61,886,000 | 13,782,000 | 0 | ||||||||
Losses on disposal of fixed assets | 5,793,000 | 4,216,000 | 3,911,000 | ||||||||
Foreign currency exchange (gain) loss | 25,786,000 | (3,558,000) | 0 | ||||||||
Non-cash revaluation of inventory, including LIFO | 3,708,000 | 1,310,000 | 0 | ||||||||
Management advisory fees | 3,777,000 | 3,583,000 | 590,000 | ||||||||
Acquisition costs | 7,425,000 | 4,664,000 | 4,241,000 | ||||||||
Equity-based and other non-cash compensation | 8,799,000 | 7,042,000 | 2,256,000 | ||||||||
Restructuring, integration and business optimization expenses | 13,174,000 | 16,258,000 | 4,147,000 | ||||||||
Defined benefit pension plan cost | 2,940,000 | 1,375,000 | 2,903,000 | ||||||||
Other expense, net | 4,874,000 | 4,788,000 | 4,882,000 | ||||||||
Operating segments | |||||||||||
Segment Reporting Information | |||||||||||
Segment EBITDA | $ 483,715,000 | $ 355,504,000 | $ 117,704,000 |
Reportable Segments - Capital E
Reportable Segments - Capital Expenditures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets | |||
Capital expenditures gross | $ 141,083 | $ 130,312 | $ 41,854 |
Capital expenditure | 140,482 | 121,421 | 40,994 |
Change in non-cash capital expenditures in accounts payable | (601) | (8,891) | (860) |
Operating segments | Performance Materials & Chemicals | |||
Revenues from External Customers and Long-Lived Assets | |||
Capital expenditures gross | 87,938 | 74,392 | 0 |
Operating segments | Environmental Catalysts & Services | |||
Revenues from External Customers and Long-Lived Assets | |||
Capital expenditures gross | 66,511 | 74,921 | 41,854 |
Operating segments | Environmental Catalysts & Services | Zeolyst Joint Venture | |||
Revenues from External Customers and Long-Lived Assets | |||
Capital expenditure | 13,366 | 19,001 | |
Eliminations | |||
Revenues from External Customers and Long-Lived Assets | |||
Capital expenditures gross | $ (13,366) | $ (19,001) | $ 0 |
Reportable Segments - Sales by
Reportable Segments - Sales by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets | |||||||||||
Sales | $ 358,074 | $ 391,829 | $ 389,267 | $ 332,931 | $ 322,731 | $ 369,979 | $ 277,554 | $ 93,913 | $ 1,472,101 | $ 1,064,177 | $ 388,875 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Sales | 874,764 | 705,348 | 388,875 | ||||||||
Netherlands | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Sales | 118,567 | 79,821 | 0 | ||||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Sales | 116,410 | 67,494 | 0 | ||||||||
Other foreign countries | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Sales | $ 362,360 | $ 211,514 | $ 0 |
Reportable Segments - Assets by
Reportable Segments - Assets by Geography (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets | |||
Long-lived assets | $ 3,864,187 | $ 3,766,993 | $ 936,111 |
United States | |||
Revenues from External Customers and Long-Lived Assets | |||
Long-lived assets | 2,919,458 | 2,870,958 | 936,111 |
Netherlands | |||
Revenues from External Customers and Long-Lived Assets | |||
Long-lived assets | 289,459 | 288,239 | 0 |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets | |||
Long-lived assets | 229,595 | 228,924 | 0 |
Other foreign countries | |||
Revenues from External Customers and Long-Lived Assets | |||
Long-lived assets | $ 425,675 | $ 378,872 | $ 0 |
Goodwill and Other Intangible97
Goodwill and Other Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill | ||
Beginning balance | $ 1,241,429 | $ 311,892 |
Goodwill recognized | 37,584 | 958,527 |
Foreign exchange impact | 26,943 | (28,990) |
Ending balance | 1,305,956 | 1,241,429 |
Performance Materials & Chemicals | ||
Goodwill | ||
Beginning balance | 852,506 | 0 |
Goodwill recognized | 37,584 | 876,844 |
Foreign exchange impact | 24,533 | (24,338) |
Ending balance | 914,623 | 852,506 |
Environmental Catalysts & Services | ||
Goodwill | ||
Beginning balance | 388,923 | 311,892 |
Goodwill recognized | 0 | 81,683 |
Foreign exchange impact | 2,410 | (4,652) |
Ending balance | $ 391,333 | $ 388,923 |
Goodwill and Other Intangible98
Goodwill and Other Intangible Assets - Narratives (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)segmentreporting_unit | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 01, 2016USD ($) | |
Goodwill | ||||
Number of reporting units | reporting_unit | 4 | |||
Number of operating segments | segment | 2 | |||
Goodwill | $ 1,305,956 | $ 1,241,429 | $ 311,892 | |
Intangible asset impairment charge | 0 | 6,873 | 0 | |
Cost of goods sold | ||||
Goodwill | ||||
Amortization expense | 20,579 | 13,573 | 3,605 | |
Other operating expenses | ||||
Goodwill | ||||
Amortization expense | $ 32,010 | 25,263 | 6,605 | |
Corporate Tradenames | ||||
Goodwill | ||||
Percentage in excess of carrying value | 2.00% | |||
Product Tradenames | ||||
Goodwill | ||||
Percentage in excess of carrying value | 3.00% | |||
Performance Chemicals | ||||
Goodwill | ||||
Goodwill | $ 577,667 | |||
Performance Chemicals | Trade names | ||||
Goodwill | ||||
Intangible asset impairment charge | 5,350 | |||
Silica Catalysts | Trade names | ||||
Goodwill | ||||
Intangible asset impairment charge | 1,523 | |||
Performance Materials & Chemicals | ||||
Goodwill | ||||
Goodwill | $ 914,623 | $ 852,506 | $ 0 | |
Percentage in excess of carrying value | 10.00% |
Goodwill and Other Intangible99
Goodwill and Other Intangible Assets - Finite Lived Intangible Assets Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Definite-lived Intangible assets, net | ||
Accumulated Amortization | $ (103,726) | $ (50,251) |
Net Balance | 538,996 | |
Indefinite-lived intangible assets | ||
Gross Carrying Amount | 895,317 | 902,190 |
Impairment Charge | (6,873) | |
Foreign Exchange Impact | (5,447) | (28,493) |
Net Balance | 786,144 | 816,573 |
Indefinite-lived trade names | ||
Indefinite-lived intangible assets | ||
Gross Carrying Amount | 159,027 | 165,900 |
Impairment Charge | (6,873) | |
Foreign Exchange Impact | (968) | (5,105) |
Net Balance | 158,059 | 153,922 |
Trademarks | ||
Indefinite-lived intangible assets | ||
Gross Carrying Amount | 82,900 | 82,900 |
Impairment Charge | 0 | |
Foreign Exchange Impact | (611) | (3,902) |
Net Balance | 82,289 | 78,998 |
In-process research and development | ||
Indefinite-lived intangible assets | ||
Gross Carrying Amount | 6,800 | 6,800 |
Impairment Charge | 0 | |
Foreign Exchange Impact | 0 | 0 |
Net Balance | 6,800 | 6,800 |
Finite-Lived Intangible Assets | ||
Definite-lived Intangible assets, net | ||
Gross Carrying Amount | 646,590 | 646,590 |
Accumulated Amortization | (103,726) | (50,251) |
Impairment Charge | 0 | |
Foreign Exchange Impact | (3,868) | (19,486) |
Net Balance | 538,996 | 576,853 |
Technical know-how | ||
Definite-lived Intangible assets, net | ||
Gross Carrying Amount | 214,290 | 214,290 |
Accumulated Amortization | (21,138) | (10,029) |
Impairment Charge | 0 | |
Foreign Exchange Impact | (1,691) | (7,855) |
Net Balance | $ 191,461 | 196,406 |
Technical know-how | Minimum | ||
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 14 years | |
Technical know-how | Maximum | ||
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 20 years | |
Customer relationships | ||
Definite-lived Intangible assets, net | ||
Gross Carrying Amount | $ 368,000 | 368,000 |
Accumulated Amortization | (63,860) | (31,199) |
Impairment Charge | 0 | |
Foreign Exchange Impact | (1,979) | (11,064) |
Net Balance | $ 302,161 | 325,737 |
Customer relationships | Minimum | ||
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 7 years | |
Customer relationships | Maximum | ||
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 15 years | |
Contracts | ||
Definite-lived Intangible assets, net | ||
Gross Carrying Amount | $ 19,800 | 19,800 |
Accumulated Amortization | (9,205) | (3,658) |
Impairment Charge | 0 | |
Foreign Exchange Impact | 0 | 0 |
Net Balance | $ 10,595 | 16,142 |
Contracts | Minimum | ||
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 2 years | |
Contracts | Maximum | ||
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 16 years | |
Trademarks | ||
Definite-lived Intangible assets, net | ||
Gross Carrying Amount | $ 35,400 | 35,400 |
Accumulated Amortization | (3,911) | (1,573) |
Impairment Charge | 0 | |
Foreign Exchange Impact | (198) | (567) |
Net Balance | $ 31,291 | 33,260 |
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 15 years | |
Permits | ||
Definite-lived Intangible assets, net | ||
Gross Carrying Amount | $ 9,100 | 9,100 |
Accumulated Amortization | (5,612) | (3,792) |
Impairment Charge | 0 | |
Foreign Exchange Impact | 0 | 0 |
Net Balance | $ 3,488 | $ 5,308 |
Indefinite-lived intangible assets | ||
Finite lived intangible assets useful life | 5 years |
Goodwill and Other Intangibl100
Goodwill and Other Intangible Assets - Future Amortization (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2,018 | $ 51,883 |
2,019 | 50,914 |
2,020 | 47,363 |
2,021 | 46,421 |
2,022 | 46,354 |
Thereafter | 296,061 |
Total estimated future aggregate amortization expense | $ 538,996 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Compensation and bonus | $ 49,988 | $ 47,823 |
Interest | 15,936 | 9,139 |
Property tax | 1,622 | 2,499 |
Environmental reserves (see Note 22) | 5,790 | 8,346 |
Supply contract obligation (see Note 25) | 1,638 | 1,638 |
Income taxes | 1,166 | 8,035 |
Commissions and rebates | 1,820 | 2,253 |
Pension, postretirement and supplemental retirement plans (see Note 19) | 2,192 | 2,030 |
Other | 13,765 | 17,670 |
Total | $ 93,917 | $ 99,433 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 11, 2017 | Oct. 03, 2017 | Dec. 31, 2016 | Nov. 14, 2016 | May 04, 2016 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||||||
Document Period End Date | Dec. 31, 2017 | ||||||
Total debt | $ 2,270,279 | $ 2,617,970 | |||||
Original issue discount | (18,390) | (28,497) | |||||
Deferred financing costs | (21,403) | (27,275) | |||||
Total debt, net of original issue discount and deferred financing costs | 2,230,486 | 2,562,198 | |||||
Less: current portion | (45,166) | (14,481) | |||||
Total long-term debt | 2,185,320 | 2,547,717 | |||||
Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Original issue discount | $ (756) | ||||||
Deferred financing costs | $ (564) | ||||||
Term Loan | Term Loan Facility | USD | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 916,153 | 925,430 | |||||
Term Loan | Term Loan Facility | Euro | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 335,808 | 297,317 | |||||
Senior Notes | 6.75% Senior Secured Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 625,000 | 625,000 | |||||
Debt instrument stated interest rate | 6.75% | 6.75% | |||||
Senior Notes | 8.5% Senior Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 0 | 200,000 | $ 200,000 | ||||
Deferred financing costs | $ (5,207) | ||||||
Debt instrument stated interest rate | 8.50% | 8.50% | |||||
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 300,000 | 0 | |||||
Debt instrument stated interest rate | 5.75% | 5.75% | |||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 0 | $ 78,792 | 525,000 | ||||
Original issue discount | $ (1,176) | (7,555) | |||||
Deferred financing costs | $ (108) | $ (696) | |||||
Line of Credit | ABL Facility | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 0 | ||||||
Other | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 68,318 | $ 45,223 |
Long-term Debt - Other Narrativ
Long-term Debt - Other Narratives (Details) | Dec. 11, 2017USD ($) | Oct. 03, 2017USD ($) | Jun. 22, 2017USD ($) | Jun. 12, 2017EUR (€)tranche | Dec. 29, 2016USD ($) | Nov. 14, 2016USD ($) | May 17, 2016USD ($) | May 04, 2016USD ($) | Oct. 24, 2013USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017JPY (¥) | May 04, 2016EUR (€) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||||||||||||
Long term debt outstanding | $ 2,270,279,000 | $ 2,617,970,000 | |||||||||||||
Deferred financing costs | 21,403,000 | 27,275,000 | |||||||||||||
Original issue discount | 18,390,000 | 28,497,000 | |||||||||||||
Amortization of financing costs | 3,780,000 | $ 2,801,000 | |||||||||||||
Amortization of debt discount | 3,079,000 | $ 314,000 | |||||||||||||
Fair value aggregate differences | $ 59,319,000 | 68,477,000 | |||||||||||||
Debt covenant, net debt to EBITDA ratio, first three years | 3 | 3 | |||||||||||||
Debt covenant, net debt to EBITDA ratio, after three years | 2.5 | 2.5 | |||||||||||||
Foreign debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 0.55% | ||||||||||||||
Notes payable | $ 2,306,000 | 2,223,000 | |||||||||||||
Maximum borrowing capacity | 2,306,000 | ¥ 260,000,000 | |||||||||||||
Term Loan Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt extinguishment costs | $ 474,000 | ||||||||||||||
Deferred financing costs | 564,000 | ||||||||||||||
Original issue discount | $ 756,000 | ||||||||||||||
Previously Outstanding Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt extinguishment costs | 4,747,000 | ||||||||||||||
Deferred financing costs | 6,252,000 | ||||||||||||||
Original issue discount | 989,000 | ||||||||||||||
October 2013 NMTC Agreement | Chase | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | $ 6,634,000 | ||||||||||||||
October 2013 NMTC Agreement | Potters Industries, LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | 15,632,000 | ||||||||||||||
Notes payable | 21,000,000 | 21,000,000 | |||||||||||||
October 2013 NMTC Agreement | Potters Industries, LLC | Note payable I | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 5,368,000 | ||||||||||||||
October 2013 NMTC Agreement | Potters Industries, LLC | Notes payable II | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | $ 15,632,000 | ||||||||||||||
May 2016 NMTC Agreement | Potters Industries, LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | $ 7,822,000 | ||||||||||||||
Notes payable | 11,000,000 | 11,000,000 | |||||||||||||
May 2016 NMTC Agreement | Potters Industries, LLC | Note payable I | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 7,823,000 | ||||||||||||||
May 2016 NMTC Agreement | Potters Industries, LLC | Notes payable II | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 1,311,000 | ||||||||||||||
May 2016 NMTC Agreement | Potters Industries, LLC | Notes payable III | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 1,866,000 | ||||||||||||||
May 2016 NMTC Agreement | USB Investment Fund | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | $ 3,732,000 | ||||||||||||||
Debt instrument, term | 7 years | ||||||||||||||
December 2016 NMTC Agreement | Potters Industries, LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | $ 7,775,000 | ||||||||||||||
Notes payable | 11,000,000 | 11,000,000 | |||||||||||||
December 2016 NMTC Agreement | Potters Industries, LLC | Note payable I | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 7,775,000 | ||||||||||||||
December 2016 NMTC Agreement | Potters Industries, LLC | Notes payable II | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 1,402,000 | ||||||||||||||
December 2016 NMTC Agreement | Potters Industries, LLC | Notes payable III | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | 1,823,000 | ||||||||||||||
December 2016 NMTC Agreement | USB Investment Fund | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | $ 3,815,000 | ||||||||||||||
June 2017 NMTC Agreement | Potters Industries, LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Notes payable | $ 8,820,000 | 8,820,000 | |||||||||||||
Maximum indemnification liability | 24,649,000 | ||||||||||||||
June 2017 NMTC Agreement | USB Investment Fund | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | 3,054,000 | ||||||||||||||
Notes payable | 6,221,000 | ||||||||||||||
June 2017 NMTC Agreement | Community Reinvestment Fund, Inc. | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from contributions from affiliates | $ 9,000,000 | ||||||||||||||
Debt instrument, term | 7 years | ||||||||||||||
Term Loan | Term Loan Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument face amount | $ 1,200,000,000 | ||||||||||||||
Term Loan | Term Loan Facility | EURIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 4.75% | ||||||||||||||
Term Loan | Term Loan Facility | USD | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument face amount | $ 900,000,000 | ||||||||||||||
Long term debt outstanding | 916,153,000 | 925,430,000 | |||||||||||||
Term Loan | Term Loan Facility | Euro | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument face amount | 300,000,000 | € 265,000,000 | |||||||||||||
Long term debt outstanding | 335,808,000 | 297,317,000 | |||||||||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument face amount | $ 525,000,000 | 525,000,000 | |||||||||||||
Long term debt outstanding | 78,792,000 | 0 | 525,000,000 | ||||||||||||
Debt extinguishment costs | $ 6,043,000 | 32,284,000 | 47,875,000 | 0 | |||||||||||
Deferred financing costs | 108,000 | 696,000 | |||||||||||||
Original issue discount | 1,176,000 | $ 7,555,000 | |||||||||||||
Senior Notes | 6.75% Senior Secured Notes due 2022 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument face amount | $ 625,000,000 | ||||||||||||||
Long term debt outstanding | $ 625,000,000 | 625,000,000 | |||||||||||||
Debt instrument stated interest rate | 6.75% | 6.75% | 6.75% | 6.75% | |||||||||||
Senior Notes | 8.5% Senior Notes due 2022 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument face amount | $ 200,000,000 | ||||||||||||||
Long term debt outstanding | $ 200,000,000 | $ 0 | $ 200,000,000 | ||||||||||||
Debt extinguishment costs | 7,996,000 | ||||||||||||||
Deferred financing costs | $ 5,207,000 | ||||||||||||||
Debt instrument stated interest rate | 8.50% | 8.50% | 8.50% | ||||||||||||
Line of Credit | Belfius Bank NV | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | € | € 14,500,000 | ||||||||||||||
Number of tranches | tranche | 4 | ||||||||||||||
Line of Credit | Euro Roll-over Line of Credit Maturing December 2021 | Belfius Bank NV | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of credit outstanding | $ 7,201,000 | ||||||||||||||
Debt instrument stated interest rate | 1.10% | 1.10% | |||||||||||||
Maximum borrowing capacity | € | € 7,500,000 | ||||||||||||||
Periodic principal payment | € | € 750,000 | ||||||||||||||
Line of Credit | Euro Roll-over Line of Credit Maturing December 2021 | Belfius Bank NV | EURIBOR | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 1.10% | ||||||||||||||
Line of Credit | Euro Roll-over Line of Credit Maturing December 2021 | Belfius Bank NV | EURIBOR | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 1.55% | ||||||||||||||
Line of Credit | Euro Roll-over Line of Credit Maturing September 2022 | Belfius Bank NV | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of credit outstanding | $ 3,601,000 | ||||||||||||||
Debt instrument stated interest rate | 1.85% | 1.85% | |||||||||||||
Maximum borrowing capacity | € | € 3,000,000 | ||||||||||||||
Line of Credit | Euro Roll-over Line of Credit Maturing September 2022 | Belfius Bank NV | EURIBOR | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 1.85% | ||||||||||||||
Line of Credit | Euro Roll-over Line of Credit Maturing September 2022 | Belfius Bank NV | EURIBOR | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 2.15% | ||||||||||||||
Line of Credit | Working Capital | Belfius Bank NV | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of credit outstanding | $ 2,160,000 | ||||||||||||||
Debt instrument stated interest rate | 0.90% | 0.90% | |||||||||||||
Maximum borrowing capacity | € | € 3,000,000 | ||||||||||||||
Line of Credit | Working Capital | Belfius Bank NV | EURIBOR | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 0.90% | ||||||||||||||
Line of Credit | Working Capital | Belfius Bank NV | EURIBOR | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 1.20% | ||||||||||||||
Line of Credit | CAPEX Line | Belfius Bank NV | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of credit outstanding | $ 1,200,000 | ||||||||||||||
Debt instrument stated interest rate | 1.40% | 1.40% | |||||||||||||
Maximum borrowing capacity | € | € 1,000,000 | ||||||||||||||
Line of Credit | CAPEX Line | Belfius Bank NV | EURIBOR | Minimum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 1.25% | ||||||||||||||
Line of Credit | CAPEX Line | Belfius Bank NV | EURIBOR | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Variable rate on spread | 1.80% |
Long-term Debt - Term Loans and
Long-term Debt - Term Loans and ABL Facility Narrative (Details) | Aug. 07, 2017USD ($) | Nov. 14, 2016USD ($) | May 04, 2016USD ($) | Dec. 31, 2017USD ($) | Aug. 07, 2017EUR (€) | Dec. 31, 2016USD ($) | Nov. 14, 2016EUR (€) | May 04, 2016EUR (€) |
Debt Instrument [Line Items] | ||||||||
Unamortized deferred financing costs | $ 21,403,000 | $ 27,275,000 | ||||||
Original issue discount | 18,390,000 | 28,497,000 | ||||||
Long term debt outstanding | 2,270,279,000 | 2,617,970,000 | ||||||
Debt covenant, fixed-charge coverage ratio minimum | 1 | 1 | ||||||
Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument issued, percentage of principal | 99.00% | 99.00% | ||||||
New financing costs | $ 474,000 | |||||||
Unamortized deferred financing costs | 564,000 | |||||||
Original issue discount | 756,000 | |||||||
First Amendment | ||||||||
Debt Instrument [Line Items] | ||||||||
New financing costs | $ 199,000 | |||||||
Unamortized deferred financing costs | 105,000 | |||||||
Original issue discount | 162,000 | |||||||
Term Loan | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | $ 1,200,000,000 | |||||||
Scheduled quarterly principal payments | 0.25% | 0.25% | ||||||
Term Loan | Term Loan Facility | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate floor | 1.00% | |||||||
Term Loan | Term Loan Facility | EURIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 4.75% | |||||||
Term Loan | Term Loan Facility | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 3.75% | |||||||
Debt instrument, interest rate floor | 2.00% | |||||||
USD | Term Loan | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | $ 900,000,000 | |||||||
Long term debt outstanding | 916,153,000 | 925,430,000 | ||||||
USD | Term Loan | First Amendment | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | $ 927,750,000 | 927,750,000 | ||||||
Additional borrowings | $ 30,000,000 | |||||||
USD | Term Loan | First Amendment | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 3.25% | 4.25% | ||||||
Debt instrument, interest rate floor | 0.00% | |||||||
Euro | Term Loan | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | 300,000,000 | € 265,000,000 | ||||||
Long term debt outstanding | 335,808,000 | 297,317,000 | ||||||
Euro | Term Loan | First Amendment | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | € | € 283,338,000 | € 283,338,000 | ||||||
Additional borrowings | € | € 19,000,000 | |||||||
Euro | Term Loan | First Amendment | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 4.00% | |||||||
Euro | Term Loan | First Amendment | EURIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 3.25% | |||||||
Debt instrument, interest rate floor | 0.75% | |||||||
Euro | Term Loan | First Amendment | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 3.25% | |||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Long term debt outstanding | $ 0 | |||||||
Revolving Credit Facility | Line of Credit | ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 200,000,000 | |||||||
Commitment fee percentage | 0.375% | |||||||
Potential commitment fee percentage | 0.25% | |||||||
Long term debt outstanding | 25,000,000 | |||||||
Letters of credit outstanding | $ 19,741,000 | |||||||
Revolving Credit Facility | Line of Credit | ABL Facility | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 1.50% | |||||||
Revolving Credit Facility | Line of Credit | ABL Facility | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 2.00% | |||||||
Revolving Credit Facility | Line of Credit | ABL Facility | Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 0.50% | |||||||
Revolving Credit Facility | Line of Credit | ABL Facility | Base Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate on spread | 1.00% | |||||||
Revolving Credit Facility | USD | Line of Credit | ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 150,000,000 | |||||||
Revolving Credit Facility | Canada, Dollars | Line of Credit | ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 10,000,000 | |||||||
Revolving Credit Facility | Euro | Line of Credit | ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 40,000,000 |
Long-term Debt - Notes (Details
Long-term Debt - Notes (Details) - USD ($) | Dec. 11, 2017 | Oct. 03, 2017 | May 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||||
Long term debt outstanding | $ 2,270,279,000 | $ 2,617,970,000 | |||||
Unamortized deferred financing costs | 21,403,000 | 27,275,000 | |||||
Original issue discount | 18,390,000 | 28,497,000 | |||||
Repayments of long-term debt | $ 739,472,000 | 479,059,000 | $ 5,000,000 | ||||
Senior Notes | 6.75% Senior Secured Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | $ 625,000,000 | ||||||
Debt instrument stated interest rate | 6.75% | 6.75% | |||||
Long term debt outstanding | $ 625,000,000 | 625,000,000 | |||||
Senior Notes | 8.5% Senior Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | $ 200,000,000 | ||||||
Debt instrument stated interest rate | 8.50% | 8.50% | |||||
Redemption premium paid | $ 8,500,000 | ||||||
Debt instrument issued, percentage of principal | 100.00% | ||||||
Long term debt outstanding | $ 200,000,000 | $ 0 | 200,000,000 | ||||
Debt extinguishment costs | 7,996,000 | ||||||
Unamortized deferred financing costs | 5,207,000 | ||||||
Interest expense, debt | $ 3,000,000 | ||||||
Repayments of long-term debt | 200,000,000 | ||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | $ 525,000,000 | $ 525,000,000 | |||||
Redemption premium paid | 7,091,000 | ||||||
Debt instrument issued, percentage of principal | 98.00% | ||||||
Long term debt outstanding | 78,792,000 | 0 | 525,000,000 | ||||
Debt extinguishment amount | 78,792,000 | 446,208,000 | |||||
Debt extinguishment costs | 6,043,000 | 32,284,000 | $ 47,875,000 | 0 | |||
Unamortized deferred financing costs | 108,000 | 696,000 | |||||
Original issue discount | 1,176,000 | $ 7,555,000 | |||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate on spread | 10.75% | ||||||
Debt instrument, interest rate floor | 1.00% | ||||||
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | $ 300,000,000 | ||||||
Debt instrument stated interest rate | 5.75% | 5.75% | |||||
Debt instrument, redemption price percentage | 105.75% | 100.00% | |||||
Long term debt outstanding | $ 300,000,000 | $ 0 | |||||
Debt instrument, call premium | 1.00% | ||||||
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | U.S. Treasury | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate on spread | 5.00% | ||||||
Change of Control | Senior Notes | 6.75% Senior Secured Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, redemption price percentage | 101.00% | ||||||
Change of Control | Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, redemption price percentage | 101.00% | ||||||
Minimum | Event of Default | Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Potential percentage of principal redeemed | 30.00% | ||||||
Maximum | Exercise of Call Option | Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Potential percentage of principal redeemed | 40.00% |
Long-term Debt - Senior Credit
Long-term Debt - Senior Credit Facilities (Details) - USD ($) | Dec. 01, 2014 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Original issue discount | $ 18,390,000 | $ 28,497,000 | ||
Senior Secured Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 555,000,000 | |||
Effective interest rate | 4.75% | |||
Line of Credit | Senior Secured Credit Facilities | Federal Fund Rate | ||||
Debt Instrument [Line Items] | ||||
Variable rate on spread | 0.50% | |||
Line of Credit | Senior Secured Credit Facilities | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Variable rate on spread | 1.00% | |||
Term Loan | Senior Secured Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 500,000,000 | |||
Line of credit outstanding | $ 500,000,000 | |||
Debt instrument issued, percentage of principal | 99.50% | |||
Original issue discount | $ 2,500,000 | |||
Revolving Credit Facility | Line of Credit | Senior Secured Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 55,000,000 | |||
Line of credit outstanding | $ 0 | |||
Proceeds from lines of credit | 12,000,000 | |||
Repayments of lines of credit | 12,000,000 | |||
Revolving Credit Facility | Letter of Credit | Senior Secured Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Remaining borrowing capacity | $ 25,000,000 |
Long-term Debt - Debt Maturity
Long-term Debt - Debt Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term Debt, Fiscal Year Maturity | ||
2,018 | $ 45,166 | |
2,019 | 14,479 | |
2,020 | 14,479 | |
2,021 | 14,488 | |
2,022 | 1,829,846 | |
Thereafter | 351,821 | |
Total debt | $ 2,270,279 | $ 2,617,970 |
Long-term Debt - Redemption Rat
Long-term Debt - Redemption Rate (Details) | Dec. 11, 2017 | Dec. 31, 2017 |
Senior Notes | 6.75% Senior Secured Notes due 2022 | Debt Instrument, Redemption, Period One | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 103.375% | |
Senior Notes | 6.75% Senior Secured Notes due 2022 | Debt Instrument, Redemption, Period Two | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 101.688% | |
Senior Notes | 6.75% Senior Secured Notes due 2022 | Debt Instrument, Redemption, Period Three | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 100.00% | |
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 105.75% | 100.00% |
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | Debt Instrument, Redemption, Period One | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 102.875% | |
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | Debt Instrument, Redemption, Period Two | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 101.438% | |
Unsecured Debt | 5.75% Senior Unsecured Notes due 2025 | Debt Instrument, Redemption, Period Three | ||
Debt Instrument, Redemption | ||
Debt instrument, redemption price percentage | 100.00% |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Pension benefits | $ 69,914 | $ 71,443 |
Supply contract (see Note 25) | 20,612 | 22,250 |
Other postretirement benefits | 4,503 | 3,991 |
Supplemental retirement plans | 11,667 | 12,055 |
Reserve for uncertain tax positions | 4,244 | 4,149 |
Asset retirement obligation | 4,094 | 3,700 |
Other | 5,437 | 5,567 |
Total | $ 120,471 | $ 123,155 |
Financial Instruments - Narrati
Financial Instruments - Narratives (Details) MMBTU in Millions | 1 Months Ended | 12 Months Ended |
Jul. 31, 2016USD ($) | Dec. 31, 2017USD ($)MMBTU | |
Derivatives | ||
Derivative, notional quantity (in MMBTU) | MMBTU | 4.3 | |
Amount of derivative loss expected to be transfered from OCI | $ 574,000 | |
Interest rate caps | ||
Derivatives | ||
Premium paid to acquire derivative instrument | $ 1,551,000 | |
Derivative, notional amount | $ 1,000,000,000 | |
Interest rate caps | Minimum | ||
Derivatives | ||
Derivative, cap interest rate | 1.50% | |
Interest rate caps | Maximum | ||
Derivatives | ||
Derivative, cap interest rate | 3.00% |
Financial Instruments - Fair Va
Financial Instruments - Fair Value (Details) - Derivatives designated as cash flow hedges: - Cash Flow Hedging - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Asset derivatives: | ||
Total asset derivatives | $ 1,043 | $ 6,434 |
Liability derivatives: | ||
Total liability derivatives | 448 | 0 |
Natural gas swaps | Current assets | ||
Asset derivatives: | ||
Total asset derivatives | 0 | 573 |
Natural gas swaps | Other long-term assets | ||
Asset derivatives: | ||
Total asset derivatives | 0 | 58 |
Natural gas swaps | Current liabilities | ||
Liability derivatives: | ||
Total liability derivatives | 318 | 0 |
Natural gas swaps | Other long-term liabilities | ||
Liability derivatives: | ||
Total liability derivatives | 130 | 0 |
Interest rate caps | Current assets | ||
Asset derivatives: | ||
Total asset derivatives | 44 | 0 |
Interest rate caps | Other long-term assets | ||
Asset derivatives: | ||
Total asset derivatives | $ 999 | $ 5,803 |
Financial Instruments - Effect
Financial Instruments - Effect on Other Comprehensive Income (Details) - Net loss (gain) from hedging activities - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax | ||
AOCI derivative gain at beginning of year | $ 4,881 | $ 0 |
Amount of gain (loss) reclassified from accumulated OCI into income (effective portion) | ||
AOCI derivative gain (loss) at end of year | (917) | 4,881 |
Interest rate caps | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | (4,760) | 4,250 |
Interest rate caps | Interest expense | ||
Amount of gain (loss) reclassified from accumulated OCI into income (effective portion) | ||
Amount of gain (loss) reclassified from accumulated OCI into income (effective portion) | 40 | 0 |
Natural gas swaps | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | (1,300) | (802) |
Natural gas swaps | Cost of goods sold | ||
Amount of gain (loss) reclassified from accumulated OCI into income (effective portion) | ||
Amount of gain (loss) reclassified from accumulated OCI into income (effective portion) | $ 222 | $ 1,433 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (137,147) | $ (84,094) | $ 11,427 |
Foreign | 76,513 | 14,977 | 0 |
Income (loss) before income taxes and noncontrolling interest | $ (60,634) | $ (69,117) | $ 11,427 |
Income Taxes - Narratives (Deta
Income Taxes - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards | |||
Tax Cuts And Jobs Act Of 2017, provisional income tax benefit | $ 64,343 | ||
Tax Cuts And Jobs Act Of 2017, transition adjustment | 25,196 | ||
Tax Cuts And Jobs Act Of 2017, repatriation of non-US earnings | $ 43,000 | ||
Effective income tax rate | 35.00% | 35.00% | |
(Benefit) provision for income taxes | $ (119,197) | $ 10,041 | $ 0 |
Change in Tax Status-Eco-Passthrough to C-Corp | 0 | 33,891 | |
Net deferred tax liability | 187,036 | 318,463 | |
Deferred tax asset non-current | 2,300 | ||
Deferred income taxes | 189,336 | 318,463 | |
Unremitted and no invested earnings from non- U.S subsidiaries and affiliates | 210,979 | 190,586 | |
Cumulative undistributed foreign earnings | 194,444 | ||
Unrecognized tax benefit that would impact effective tax rate | 11,431 | 16,128 | |
Interest and penalties from unrecognized tax positions | 52 | 2,054 | |
Accrued penalties and interest | 1,270 | 1,177 | |
Operating loss carry forward | 127,949 | ||
Net operating loss carryforwards | 144,267 | 157,811 | |
Federal | |||
Operating Loss Carryforwards | |||
Operating loss carry forward | 426,851 | ||
Operating loss carryforwards, without limitation on use | 332,376 | 94,475 | |
State and local | |||
Operating Loss Carryforwards | |||
Operating loss carry forward | 657,738 | ||
Operating loss carryforwards, without limitation on use | 15,071 | ||
Operating loss incurred during the period | 119,742 | ||
Operating loss carry forward, valuation allowance | 16,318 | ||
Net operating loss carryforwards | 31,389 | ||
Foreign | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, without limitation on use | 1,566 | ||
Operating loss carry forward, valuation allowance | 29,728 | ||
Operating carryforward not subject to expiration | 116,093 | ||
Net operating loss carryforwards | 31,294 | ||
Foreign | Tax Year 2023 | |||
Operating Loss Carryforwards | |||
Operating carryforward subject to expiration | 4,880 | ||
Foreign | Tax Year 2027 | |||
Operating Loss Carryforwards | |||
Operating carryforward subject to expiration | 2,932 | ||
Foreign | Tax Year 2035 | |||
Operating Loss Carryforwards | |||
Operating carryforward subject to expiration | 2,441 | ||
Foreign | Tax Year 2038 | |||
Operating Loss Carryforwards | |||
Operating carryforward subject to expiration | 1,604 | ||
Potters | |||
Operating Loss Carryforwards | |||
Net deferred tax liability | $ 45,873 | $ 75,539 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ 0 | $ 0 | |
State | 806 | 91 | |
Foreign | 20,209 | 10,088 | |
Current income tax | 21,015 | 10,179 | |
Deferred: | |||
Federal | (135,970) | 8,654 | |
State | (1,817) | 292 | |
Foreign | (2,425) | (9,084) | |
Deferred income tax | (140,212) | (138) | $ 0 |
Total | $ (119,197) | $ 10,041 | $ 0 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 144,267 | $ 157,811 |
Pension | 16,255 | 21,454 |
Post retirement health | 561 | 1,040 |
Transaction costs | 1,183 | 2,896 |
Unrealized translation losses | 5,065 | 6,046 |
Other | 38,290 | 44,351 |
Valuation allowance | (64,945) | (38,271) |
Deferred tax asset net of valuation | 140,901 | 195,327 |
Deferred tax liabilities: | ||
Depreciation | (86,532) | (114,749) |
Undistributed earnings of non-US subsidiaries | (8,334) | (73,205) |
LIFO reserve | 0 | 0 |
Inventory | (11,324) | (20,159) |
Intangible assets | (184,937) | (276,671) |
Natural gas contracts | 0 | (241) |
Other accruals | 0 | (1,621) |
Other | (36,810) | (27,144) |
Deferred tax liability | (327,937) | (513,790) |
Deferred Tax Liabilities, Net | (187,036) | (318,463) |
Natural gas swaps | ||
Deferred tax assets: | ||
Derivative instrument | 110 | 0 |
Interest rate swaps | ||
Deferred tax assets: | ||
Derivative instrument | $ 115 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate | $ (21,222) | $ (24,191) | |
State income taxes, net of federal income tax benefit | (7,754) | (4,110) | |
Repatriation of non-US earnings inclusive of mandatory repatriation toll tax | (24,912) | 4,576 | |
Change in Tax Status-Eco-Passthrough to C-Corp | 0 | 33,891 | |
Changes in uncertain tax positions | 974 | (2,383) | |
Change in valuation allowances | 6,771 | 2,577 | |
Rate changes | (63,319) | 0 | |
Change in state effective rates | (340) | (290) | |
Foreign withholding taxes | 978 | 1,505 | |
Foreign tax rate differential | (10,131) | (1,354) | |
Non-deductible transaction costs | 1,679 | 667 | |
Other, net | (1,921) | (847) | |
Total | $ (119,197) | $ 10,041 | $ 0 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset Valuation Rolforward (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Valuation Allowances and Reserves | ||
Beginning Balance | $ 38,271 | $ 0 |
Additions | 34,863 | 46,347 |
Reductions | (8,189) | (8,076) |
Ending Balance | 64,945 | $ 38,271 |
Net change in period | $ 26,674 |
Income Taxes - Change in Unreco
Income Taxes - Change in Unrecognized Tax Position (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of period | $ 16,128 | $ 0 |
Increases related to prior year tax positions | 68 | 19,419 |
Decreases related to prior year tax positions | (5,508) | (68) |
Increases related to current year tax positions | 743 | 691 |
Decreases related to current year tax positions | 0 | 0 |
Decreases related to settlements with taxing authorities | 0 | (3,914) |
Decreases related to lapsing of statute of limitations | 0 | 0 |
Balance at end of period | $ 11,431 | $ 16,128 |
Income Taxes - Payment for Taxe
Income Taxes - Payment for Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards | |||
Cash paid for taxes | $ 29,199 | $ 16,981 | $ 8 |
Domestic | |||
Operating Loss Carryforwards | |||
Cash paid for taxes | 1,647 | 373 | 8 |
Foreign | |||
Operating Loss Carryforwards | |||
Cash paid for taxes | $ 27,552 | $ 16,608 | $ 0 |
Benefit Plans - Change in Benef
Benefit Plans - Change in Benefit Obligation and Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Pension Plans | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Fair value of plan assets at beginning of period | $ 285,060 | ||
Fair value of plan assets at end of the period | 314,892 | $ 285,060 | |
Defined Benefit Pension Plans | U.S. | |||
Defined Benefit Plan, Change in Benefit Obligation | |||
Benefit obligation at beginning of period | 247,418 | 71,605 | |
Service cost | 1,219 | 2,130 | $ 2,778 |
Interest cost | 10,115 | 7,680 | 2,913 |
Participant contributions | 0 | 0 | |
Plan curtailments | 0 | (1,325) | |
Plan settlements | (2,264) | (4,772) | |
Benefits paid | (9,591) | (5,390) | |
Expenses paid | 0 | 0 | |
Net transfer in(1) | 0 | 192,120 | |
Actuarial (gains) losses | 14,205 | (14,630) | |
Translation adjustment | 0 | 0 | |
Benefit obligation at end of the period | 261,102 | 247,418 | 71,605 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Fair value of plan assets at beginning of period | 198,915 | 52,678 | |
Actual return on plan assets | 27,554 | 6,897 | |
Employers contributions | 3,760 | 1,425 | |
Employee contributions | 0 | 0 | |
Plan settlements | (2,264) | (4,772) | |
Benefits paid | (9,591) | (5,390) | |
Expenses paid | 0 | 0 | |
Acquisitions1 | 0 | 148,077 | |
Translation adjustment | 0 | 0 | |
Fair value of plan assets at end of the period | 218,374 | 198,915 | 52,678 |
Funded status of the plans (underfunded) | (42,728) | (48,503) | |
Defined Benefit Pension Plans | Foreign | |||
Defined Benefit Plan, Change in Benefit Obligation | |||
Benefit obligation at beginning of period | 106,025 | 0 | |
Service cost | 3,686 | 2,106 | 0 |
Interest cost | 3,271 | 2,224 | 0 |
Participant contributions | 493 | 300 | |
Plan curtailments | 0 | (1,204) | |
Plan settlements | 0 | 0 | |
Benefits paid | (2,967) | (1,305) | |
Expenses paid | (319) | (66) | |
Net transfer in(1) | 0 | 99,025 | |
Actuarial (gains) losses | (2,169) | 9,804 | |
Translation adjustment | 11,690 | (4,859) | |
Benefit obligation at end of the period | 119,710 | 106,025 | 0 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Fair value of plan assets at beginning of period | 86,145 | 0 | |
Actual return on plan assets | 217 | 8,274 | |
Employers contributions | 3,781 | 921 | |
Employee contributions | 493 | 300 | |
Plan settlements | 0 | 0 | |
Benefits paid | (2,967) | (1,305) | |
Expenses paid | (319) | (66) | |
Acquisitions1 | 0 | 81,974 | |
Translation adjustment | 9,168 | (3,953) | |
Fair value of plan assets at end of the period | 96,518 | 86,145 | 0 |
Funded status of the plans (underfunded) | (23,192) | (19,880) | |
Supplemental Retirement Plans | |||
Defined Benefit Plan, Change in Benefit Obligation | |||
Benefit obligation at beginning of period | 13,225 | 0 | |
Interest cost | 489 | 328 | 0 |
Benefits paid | (1,179) | (767) | |
Net transfer in(1) | 0 | 14,671 | |
Actuarial (gains) losses | 246 | (1,007) | |
Benefit obligation at end of the period | 12,781 | 13,225 | 0 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Fair value of plan assets at beginning of period | 0 | 0 | |
Employers contributions | 1,179 | 767 | |
Benefits paid | (1,179) | (767) | |
Fair value of plan assets at end of the period | 0 | 0 | 0 |
Funded status of the plans (underfunded) | (12,781) | (13,225) | |
Other Postretirement Benefits Plans | |||
Defined Benefit Plan, Change in Benefit Obligation | |||
Benefit obligation at beginning of period | 4,620 | 1,296 | |
Service cost | 21 | 37 | 39 |
Interest cost | 174 | 151 | 57 |
Participant contributions | 251 | 176 | |
Plan amendments | 0 | (443) | |
Benefits paid | (923) | (484) | |
Medical subsidies received | 0 | 90 | |
Premiums paid | (3) | (2) | |
Net transfer in(1) | 0 | 4,868 | |
Actuarial (gains) losses | 418 | (1,057) | |
Translation adjustment | 54 | (12) | |
Benefit obligation at end of the period | 4,612 | 4,620 | 1,296 |
Defined Benefit Plan, Change in Fair Value of Plan Assets | |||
Fair value of plan assets at beginning of period | 0 | 0 | |
Employers contributions | 675 | 220 | |
Employee contributions | 251 | 176 | |
Benefits paid | (923) | (484) | |
Medical subsidies received | 0 | 90 | |
Premiums paid | (3) | (2) | |
Fair value of plan assets at end of the period | 0 | 0 | $ 0 |
Funded status of the plans (underfunded) | $ (4,612) | $ (4,620) |
Benefit Plans - Recognized on t
Benefit Plans - Recognized on the Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Pension Plans | U.S. | ||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position | ||
Noncurrent asset | $ 0 | $ 0 |
Current liability | 0 | 0 |
Noncurrent liability | (42,728) | (48,503) |
Accumulated other comprehensive income (loss) | 10,499 | 8,190 |
Net amount recognized | (32,229) | (40,313) |
Defined Benefit Pension Plans | Foreign | ||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position | ||
Noncurrent asset | 3,503 | 3,391 |
Current liability | (673) | (331) |
Noncurrent liability | (26,022) | (22,940) |
Accumulated other comprehensive income (loss) | (2,871) | (2,085) |
Net amount recognized | (26,063) | (21,965) |
Supplemental Retirement Plans | ||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position | ||
Current liability | (1,115) | (1,170) |
Noncurrent liability | (11,667) | (12,055) |
Accumulated other comprehensive income (loss) | 573 | 623 |
Net amount recognized | (12,209) | (12,602) |
Other Postretirement Benefits Plans | ||
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position | ||
Current liability | (561) | (629) |
Noncurrent liability | (4,051) | (3,991) |
Accumulated other comprehensive income (loss) | 885 | 877 |
Net amount recognized | $ (3,727) | $ (3,743) |
Benefit Plans - Accumulated Oth
Benefit Plans - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Pension Plans | U.S. | ||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | ||
Prior service credit | $ 0 | $ 0 |
Net gain (loss) | 13,943 | 12,920 |
Gross amount recognized | 13,943 | 12,920 |
Deferred income taxes | (3,444) | (4,730) |
Net amount recognized | 10,499 | 8,190 |
Defined Benefit Pension Plans | Foreign | ||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | ||
Prior service credit | 0 | 0 |
Net gain (loss) | (3,923) | (2,686) |
Gross amount recognized | (3,923) | (2,686) |
Deferred income taxes | 1,052 | 601 |
Net amount recognized | (2,871) | (2,085) |
Supplemental Retirement Plans | ||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | ||
Net gain (loss) | 761 | 1,007 |
Gross amount recognized | 761 | 1,007 |
Deferred income taxes | (188) | (384) |
Net amount recognized | 573 | 623 |
Other Postretirement Benefits Plans | ||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | ||
Prior service credit | 366 | 0 |
Net gain (loss) | 719 | 1,163 |
Gross amount recognized | 1,085 | 1,163 |
Deferred income taxes | (200) | (286) |
Net amount recognized | $ 885 | $ 877 |
Benefit Plans - Net Periodic Pe
Benefit Plans - Net Periodic Pension Expense Benefit (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Pension Plans | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | |||
Estimated amortization of actuarial gain for next fiscal period | $ 50,000 | ||
Estimated amortization of prior service credit for next fiscal period | 0 | ||
Defined Benefit Pension Plans | U.S. | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | |||
Service cost | 1,219,000 | $ 2,130,000 | $ 2,778,000 |
Interest cost | 10,115,000 | 7,680,000 | 2,913,000 |
Expected return on plan assets | (12,277,000) | (9,293,000) | (2,885,000) |
Amortization of net gain | 0 | 0 | 0 |
Curtailment gain recognized | 0 | (1,311,000) | 0 |
Settlement (gain) loss recognized | (48,000) | 152,000 | (2,000) |
Net periodic expense (benefit) | (991,000) | (642,000) | 2,804,000 |
Defined Benefit Pension Plans | Foreign | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | |||
Service cost | 3,686,000 | 2,106,000 | 0 |
Interest cost | 3,271,000 | 2,224,000 | 0 |
Expected return on plan assets | (3,208,000) | (2,038,000) | 0 |
Amortization of net gain | (9,000) | (10,000) | 0 |
Curtailment gain recognized | 0 | (517,000) | 0 |
Settlement (gain) loss recognized | 0 | 0 | 0 |
Net periodic expense (benefit) | 3,740,000 | 1,765,000 | 0 |
Supplemental Retirement Plans | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | |||
Interest cost | 489,000 | 328,000 | 0 |
Net periodic expense (benefit) | 489,000 | 328,000 | 0 |
Estimated amortization of actuarial gain for next fiscal period | 0 | ||
Other Postretirement Benefits Plans | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | |||
Service cost | 21,000 | 37,000 | 39,000 |
Interest cost | 174,000 | 151,000 | 57,000 |
Amortization of prior service credit | (78,000) | 0 | 0 |
Amortization of net gain | (45,000) | (17,000) | 0 |
Net periodic expense (benefit) | 72,000 | $ 171,000 | $ 96,000 |
Estimated amortization of actuarial gain for next fiscal period | 44,000 | ||
Estimated amortization of prior service credit for next fiscal period | $ 78,000 |
Benefit Plans - Accumulated Ben
Benefit Plans - Accumulated Benefit Obligation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Pension Plans | U.S. | ||
Defined Benefit Plan Disclosure | ||
Accumulated benefit obligation | $ 257,882 | $ 244,003 |
Defined Benefit Plan, Funded (Unfunded) Status of Plan | ||
Projected benefit obligation | 261,102 | 247,418 |
Accumulated benefit obligation | 257,882 | 244,003 |
Fair value of plan assets | 218,374 | 198,915 |
Defined Benefit Pension Plans | Foreign | ||
Defined Benefit Plan Disclosure | ||
Accumulated benefit obligation | 114,095 | 100,473 |
Defined Benefit Plan, Funded (Unfunded) Status of Plan | ||
Projected benefit obligation | 67,750 | 58,837 |
Accumulated benefit obligation | 64,526 | 55,981 |
Fair value of plan assets | 42,632 | 36,771 |
Supplemental Retirement Plans | ||
Defined Benefit Plan Disclosure | ||
Accumulated benefit obligation | $ 12,781 | $ 13,225 |
Benefit Plans - Weighted Averag
Benefit Plans - Weighted Average Assumptions for Pension Obligation (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation | ||
Immediate trend rate | 6.20% | 6.84% |
Ultimate trend rate | 4.50% | 4.50% |
Year that the rate reaches ultimate trend rate | 2,037 | 2,035 |
Defined Benefit Pension Plans | U.S. | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation | ||
Discount rate | 3.74% | 4.24% |
Rate of compensation increase | 3.00% | 3.00% |
Defined Benefit Pension Plans | U.S. | Eco Services Hourly Pension Plan | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation | ||
Rate of compensation increase | 3.00% | 3.00% |
Defined Benefit Pension Plans | Foreign | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation | ||
Discount rate | 2.91% | 2.99% |
Rate of compensation increase | 2.57% | 2.97% |
Supplemental Retirement Plans | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation | ||
Discount rate | 3.60% | 3.90% |
Other Postretirement Benefits Plans | ||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation | ||
Discount rate | 3.53% | 3.74% |
Benefit Plans - Weighted Ave127
Benefit Plans - Weighted Average Assumptions for Net Periodic Cost (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Immediate trend rate | 6.84% | 7.28% | |
Ultimate trend rate | 4.50% | 4.50% | |
Year that the rate reaches ultimate trend rate | 2,035 | 2,035 | |
Defined Benefit Pension Plans | U.S. | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 4.24% | 4.02% | 4.09% |
Rate of compensation increase | 3.00% | 3.10% | |
Expected return on assets | 6.37% | 6.34% | |
Defined Benefit Pension Plans | U.S. | Eco Services Hourly Pension Plan | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Rate of compensation increase | 3.00% | ||
Defined Benefit Pension Plans | Foreign | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 2.99% | 5.16% | 0.00% |
Rate of compensation increase | 2.97% | 3.95% | 0.00% |
Expected return on assets | 3.58% | 5.62% | 0.00% |
Supplemental Retirement Plans | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 3.90% | 3.40% | |
Other Postretirement Benefits Plans | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 3.74% | 3.92% | 4.36% |
Benefit Plans - Plan Assets (De
Benefit Plans - Plan Assets (Details) - Defined Benefit Pension Plans - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 314,892 | $ 285,060 | |
U.S. | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 218,374 | 198,915 | $ 52,678 |
Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 158,790 | 147,449 | |
Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 151,952 | 134,325 | |
Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 4,150 | 3,286 | $ 0 |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 1,072 | 1,979 | |
Cash and cash equivalents | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 934 | 1,863 | |
Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 138 | 116 | |
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 0 | 0 | |
Equity Securities | PQ Corporation Retirement Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Target asset plan allocation percentage | 45.00% | ||
Equity Securities | Eco Services Pension Equity Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Target asset plan allocation percentage | 50.00% | ||
Equity Securities | Eco Services Hourly Pension Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Target asset plan allocation percentage | 48.00% | ||
U.S. investment funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 56,309 | 60,179 | |
U.S. investment funds | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 43,625 | 41,529 | |
U.S. investment funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 12,684 | 18,650 | |
U.S. investment funds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
International investment funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 70,308 | 58,457 | |
International investment funds | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 28,827 | 26,119 | |
International investment funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 41,481 | 32,338 | |
International investment funds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 0 | 0 | |
Fixed income securities | PQ Corporation Retirement Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Target asset plan allocation percentage | 55.00% | ||
Fixed income securities | Eco Services Pension Equity Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Target asset plan allocation percentage | 50.00% | ||
Fixed income securities | Eco Services Hourly Pension Plan | U.S. | |||
Defined Benefit Plan Disclosure | |||
Target asset plan allocation percentage | 52.00% | ||
Government securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 11,433 | 25,437 | |
Government securities | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Government securities | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 11,433 | 25,437 | |
Government securities | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 82,585 | 4,981 | |
Corporate bonds | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 77,685 | 0 | |
Corporate bonds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 4,900 | 4,981 | |
Corporate bonds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Investment fund bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 54,263 | 113,460 | |
Investment fund bonds | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 7,719 | 77,938 | |
Investment fund bonds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 46,544 | 35,522 | |
Investment fund bonds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Insurance policies | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 38,922 | 20,567 | |
Insurance policies | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Insurance policies | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 34,772 | 17,281 | |
Insurance policies | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 4,150 | $ 3,286 |
Benefit Plans - Level 3 Rollfor
Benefit Plans - Level 3 Rollforward (Details) - Defined Benefit Pension Plans - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure | ||
Fair value of plan assets at beginning of period | $ 285,060 | |
Fair value of plan assets at end of the period | 314,892 | $ 285,060 |
Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets at beginning of period | 3,286 | 0 |
Acquisition (May 4, 2016) | 0 | 3,226 |
Actual return on plan assets | (41) | 23 |
Benefits paid | (48) | (27) |
Contributions | 466 | 236 |
Exchange rate changes | 487 | (172) |
Fair value of plan assets at end of the period | $ 4,150 | $ 3,286 |
Benefit Plans - Benefit Plan, F
Benefit Plans - Benefit Plan, Future Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Defined Benefit Pension Plans | U.S. | |
Defined Benefit Plan, Expected Future Benefit Payment | |
2,018 | $ 14,626 |
2,019 | 15,363 |
2,020 | 15,718 |
2,021 | 16,371 |
2,022 | 15,373 |
Years 2023-2026 | 76,506 |
Expected future payments | 1,760 |
Defined Benefit Pension Plans | Foreign | |
Defined Benefit Plan, Expected Future Benefit Payment | |
2,018 | 2,588 |
2,019 | 3,331 |
2,020 | 2,943 |
2,021 | 3,197 |
2,022 | 3,630 |
Years 2023-2026 | 22,716 |
Expected future payments | 4,769 |
Supplemental Retirement Plans | |
Defined Benefit Plan, Expected Future Benefit Payment | |
2,018 | 1,115 |
2,019 | 1,087 |
2,020 | 1,056 |
2,021 | 1,024 |
2,022 | 987 |
Years 2023-2026 | 4,371 |
Expected future payments | 1,115 |
Other Postretirement Benefits Plans | |
Defined Benefit Plan, Expected Future Benefit Payment | |
2,018 | 629 |
2,019 | 607 |
2,020 | 457 |
2,021 | 413 |
2,022 | 273 |
Years 2023-2026 | 1,015 |
Expected future payments | $ 629 |
Benefit Plans - 1% Change in Ac
Benefit Plans - 1% Change in Accumulated Postretirement Benefit Obligation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rate | |
Accumulated postretirement benefit obligation (1 percent increase) | $ 172 |
Accumulated postretirement benefit obligation (1 percent decrease) | (152) |
Periodic postretirement benefit cost (1 percent increase) | 6 |
Periodic postretirement benefit cost (1 percent decrease) | $ (5) |
Benefit Plans - Defined Contrib
Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Defined Contribution expense | $ 13,103 | $ 6,864 | $ 1,511 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation from Basic to Diluted Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Weighted average shares outstanding – Basic (shares) | 133,138,140 | 104,096,837 | 104,015,815 | 103,947,888 | 103,947,888 | 103,783,719 | 77,842,216 | 22,694,161 | 111,299,670 | 78,016,005 | 22,615,787 |
Dilutive effect of unvested common shares with service conditions and assumed stock option exercises and conversions (shares) | 369,367 | 0 | 0 | ||||||||
Weighted average shares outstanding – Diluted (shares) | 133,895,646 | 104,096,837 | 104,015,815 | 103,947,888 | 103,947,888 | 103,783,719 | 77,842,216 | 22,694,161 | 111,669,037 | 78,016,005 | 22,615,787 |
Earnings per Share - Reconci134
Earnings per Share - Reconciliation of Net Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income (loss) attributable to PQ Group Holdings Inc. | $ 65,011 | $ (3,345) | $ (1,609) | $ (2,454) | $ 10,664 | $ (10,017) | $ (77,262) | $ (3,131) | $ 57,603 | $ (79,746) | $ 11,427 |
Denominator: | |||||||||||
Weighted average shares outstanding – Basic (shares) | 133,138,140 | 104,096,837 | 104,015,815 | 103,947,888 | 103,947,888 | 103,783,719 | 77,842,216 | 22,694,161 | 111,299,670 | 78,016,005 | 22,615,787 |
Weighted average shares outstanding – Diluted (shares) | 133,895,646 | 104,096,837 | 104,015,815 | 103,947,888 | 103,947,888 | 103,783,719 | 77,842,216 | 22,694,161 | 111,669,037 | 78,016,005 | 22,615,787 |
Net income (loss) per share: | |||||||||||
Basic income (loss) per share (usd per share) | $ 0.49 | $ (0.03) | $ (0.02) | $ (0.02) | $ 0.10 | $ (0.10) | $ (0.99) | $ (0.14) | $ 0.52 | $ (1.02) | $ 0.51 |
Diluted income (loss) per share (usd per share) | $ 0.49 | $ (0.03) | $ (0.02) | $ (0.02) | $ 0.10 | $ (0.10) | $ (0.99) | $ (0.14) | $ 0.52 | $ (1.02) | $ 0.51 |
Earnings per Share - Anti-dilut
Earnings per Share - Anti-dilutive Shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Performance based restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares | 1,769,447 | 1,731,522 | 0 |
Performance based stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares | 586,523 | 417,086 | 293,150 |
Restricted stock awards and restricted units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares | 0 | 751,410 | 0 |
Stock option | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares | 621,747 | 1,381,352 | 1,085,152 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narratives (Details) - USD ($) | Oct. 02, 2017 | May 04, 2016 | Jan. 13, 2015 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Oct. 03, 2017 | May 03, 2016 | Dec. 31, 2014 |
PQ Holdings, Eco Services | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Stock awards transferred as consideration | $ 1,400,000 | ||||||||||
Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Stock based compensation expense not yet recognized (options) | $ 3,909,000 | ||||||||||
Period for which unrecognized compensation will be recognized | 2 years 3 months 25 days | ||||||||||
Restricted Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Nonvested units (shares) | 2,444,070 | 2,482,932 | 2,096,637 | 2,482,932 | |||||||
Granted (shares) | 21,067 | 266,955 | 51,907 | ||||||||
Stock compensation | $ 8,799,000 | $ 7,029,000 | $ 2,256,000 | ||||||||
Tax benefit from exercise of stock options | $ 3,345,000 | 2,662,000 | 0 | ||||||||
Period for which unrecognized compensation will be recognized | 2 years 6 months | ||||||||||
Stock based compensation expense not yet recognized (other than options) | $ 27,544,000 | ||||||||||
Performance Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Stock compensation | 0 | $ 0 | $ 0 | ||||||||
Compensation costs not yet recognized | $ 16,472,000 | ||||||||||
Performance Awards | Exit Event Exceeding Threshold | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Awards vesting rights percentage | 100.00% | ||||||||||
Incentive Unit Agreement | Stock Awards | Class B units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Stock options granted (shares) | 14,419 | 14,419 | |||||||||
Granted (weighted average exercise price, usd per share) | $ 1,000 | $ 1,000 | |||||||||
Options outstanding (shares) | 25,093 | 25,093 | 11,367 | ||||||||
Fair value of options granted (usd per share) | $ 448 | ||||||||||
Expected term (in years) | 7 years | ||||||||||
Expected volatility | 40.27% | ||||||||||
Risk-free interest rate | 2.02% | ||||||||||
Expected dividend yield | 0.00% | ||||||||||
Service period | 4 years | ||||||||||
Weighted average exercise price (usd per share) | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||
Incentive Unit Agreement | Stock Awards | Class B units | Employee | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Options outstanding (shares) | 10,674 | ||||||||||
Incentive Unit Agreement | Stock Awards | Class B units | Employee | Time based | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Awards vesting rights percentage | 50.00% | ||||||||||
Incentive Unit Agreement | Stock Awards | Class B units | Employee | Performance based | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Awards vesting rights percentage | 50.00% | ||||||||||
Incentive Unit Agreement | Stock Awards | Class B units | Employee | Annual Vesting as of Dec 1, 2015 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Awards vesting rights percentage | 25.00% | ||||||||||
Incentive Unit Agreement | Stock Awards | Class B units | Directors and affiliates | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Options outstanding (shares) | 14,419 | ||||||||||
2016 Plan | Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Stock options granted (shares) | 621,747 | 7,644,518 | |||||||||
Options outstanding (shares) | 1,378,302 | ||||||||||
Shares authorized (shares) | 8,017,038 | ||||||||||
Weighted average exercise price (usd per share) | $ 8.04 | ||||||||||
Accelerated compensation cost | $ 1,174,000 | ||||||||||
Expiration period | 10 years | 10 years | |||||||||
2017 Omnibus Plan | Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||
Stock options granted (shares) | 538,908 | 1,051,496 | |||||||||
Granted (weighted average exercise price, usd per share) | $ 8.05 | $ 13.70 | |||||||||
Options outstanding (shares) | 1,738,527 | 1,798,438 | 2,715,170 | 1,798,438 | |||||||
Expected term (in years) | 5 years 10 months 6 days | 5 years | |||||||||
Expected volatility | 34.85% | 45.79% | |||||||||
Risk-free interest rate | 2.00% | 1.54% | |||||||||
Expected dividend yield | 0.00% | 0.00% | |||||||||
Shares reserved for issuance (shares) | 7,344,000 | ||||||||||
Number of shares available for grant (shares) | 5,427,526 | 372,520 | |||||||||
Weighted average exercise price (usd per share) | $ 7.80 | $ 7.96 | $ 10.18 | $ 7.96 |
Stock-Based Compensation - Eco
Stock-Based Compensation - Eco Services Class B Units Rollforward (Details) - Incentive Unit Agreement - Stock Awards - Class B units - $ / shares | Jan. 13, 2015 | Dec. 31, 2015 | Sep. 30, 2017 | May 03, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | ||||
Beginning balance (shares) | 11,367 | 25,093 | ||
Granted (shares) | 14,419 | 14,419 | ||
Forfeitures (shares) | (693) | |||
Ending balance (shares) | 25,093 | |||
Exercisable (shares) | 4,939 | 4,939 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | ||||
Beginning balance (weighted average exercise price, usd per share) | $ 1,000 | $ 1,000 | ||
Granted (weighted average exercise price, usd per share) | $ 1,000 | 1,000 | ||
Forfeited (weighted average exercise price, usd per share) | 1,000 | |||
Ending balance (weighted average exercise price, usd per share) | 1,000 | |||
Exercisable (weighted average exercise price, usd per share) | $ 1,000 | $ 1,000 |
Stock-Based Compensation - 2017
Stock-Based Compensation - 2017 Plan (Details) - 2017 Omnibus Plan - Stock Option - USD ($) $ / shares in Units, $ in Thousands | 8 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | ||
Beginning balance (shares) | 1,738,527 | 1,798,438 |
Granted (shares) | 538,908 | 1,051,496 |
Exercised (shares) | (32,366) | |
Forfeited and expired (shares) | (478,997) | (102,398) |
Ending balance (shares) | 1,798,438 | 2,715,170 |
Exercisable (shares) | 827,210 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | ||
Beginning balance (weighted average exercise price, usd per share) | $ 7.80 | $ 7.96 |
Granted (weighted average exercise price, usd per share) | 8.05 | 13.70 |
Exercised (weighted average exercise price, usd per share) | 8.04 | |
Forfeited and expired (weighted average exercise price, usd per share) | 7.49 | 7.98 |
Ending balance (weighted average exercise price, usd per share) | $ 7.96 | 10.18 |
Exercisable (weighted average exercise price, usd per share) | $ 8.02 | |
Vested or expected to vest (shares) | 2,064,450 | |
Vested or expected to vest (weighted average exercise price) | $ 10.79 | |
Vested or expected to vest (weighted average contractual term) | 8 years 10 months 2 days | |
Vested or expected to vest (aggregate intrinsic value) | $ 12,004 | |
Exercisable (weighted average contractual term) | 8 years 4 months 2 days | |
Exercisable (aggregate intrinsic value) | $ 6,975 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions and Methodology (Details) - 2017 Omnibus Plan - Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | ||
Expected term (in years) | 5 years 10 months 6 days | 5 years |
Expected volatility | 34.85% | 45.79% |
Risk-free interest rate | 2.00% | 1.54% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant date fair value of options granted (usd per share) | $ 4.71 | $ 3.33 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) - $ / shares | Oct. 02, 2017 | Dec. 31, 2016 | Dec. 31, 2017 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Beginning balance nonvested (shares) | 2,444,070 | 2,482,932 | |
Granted (shares) | 21,067 | 266,955 | 51,907 |
Vested (shares) | (207,915) | (187,837) | |
Forfeited (shares) | (20,178) | (250,365) | |
Ending balance nonvested (shares) | 2,482,932 | 2,096,637 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Beginning balance nonvested (weighted average grant date fair value, usd per share) | $ 9.27 | $ 9.34 | |
Granted (weighted average grant date fair value, usd per share) | 12.32 | 16.11 | |
Vested (weighted average grant date fair value, usd per share) | 12.32 | 12.84 | |
Forfeited (weighted average grant date fair value, usd per share) | 10.52 | 12.03 | |
Ending balance nonvested (weighted average grant date fair value, usd per share) | $ 9.34 | $ 8.87 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Beginning balance nonvested (shares) | 0 | 0 | |
Granted (shares) | 0 | 1,654,690 | |
Vested (shares) | 0 | 0 | |
Forfeited (shares) | 0 | 0 | |
Ending balance nonvested (shares) | 0 | 1,654,690 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Beginning balance nonvested (weighted average grant date fair value, usd per share) | $ 0 | $ 0 | |
Granted (weighted average grant date fair value, usd per share) | 0 | 16.97 | |
Vested (weighted average grant date fair value, usd per share) | 0 | 0 | |
Forfeited (weighted average grant date fair value, usd per share) | 0 | 0 | |
Ending balance nonvested (weighted average grant date fair value, usd per share) | $ 0 | $ 16.97 |
Commitments and Contingent L141
Commitments and Contingent Liabilities - Narratives (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Nov. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2005 | |
Loss Contingencies | ||||||
Rent expense | $ 22,704,000 | $ 16,315,000 | $ 6,096,000 | |||
Purchase obligation | 35,038,000 | |||||
Accrued taxes | 363,000 | 1,919,000 | ||||
Pending Litigation | PADEP | ||||||
Loss Contingencies | ||||||
Accrual for environmental loss contingencies | 1,500,000 | |||||
Value sought by counterparty | $ 1,739,000 | |||||
Settlement amount awarded to counterparty | $ 1,550,000 | |||||
Judicial Ruling | PADEP | ||||||
Loss Contingencies | ||||||
Final penalty assessment | $ 215,000 | |||||
Payments for legal settlement | 215 | |||||
Soil and Groundwater Contamination | ||||||
Loss Contingencies | ||||||
Accrual for environmental loss contingencies | 837,000 | 913,000 | ||||
Subsurface Remedial and Wetlands/Marsh Management | ||||||
Loss Contingencies | ||||||
Accrual for environmental loss contingencies | 1,245,000 | 1,776,000 | ||||
Subsurface Remediation and Soil Vapor Extraction | ||||||
Loss Contingencies | ||||||
Accrual for environmental loss contingencies | 1,220,000 | 1,755,000 | ||||
New Jersey Locations | PCB Remediation | ||||||
Loss Contingencies | ||||||
Accrual for environmental loss contingencies | 842,000 | 700,000 | $ 500,000 | |||
Chester And Baltimore Facilities | PCB Remediation | ||||||
Loss Contingencies | ||||||
Accrual for environmental loss contingencies | $ 701,000 | $ 1,048,000 |
Commitments and Contingent L142
Commitments and Contingent Liabilities - Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity | |
2,018 | $ 16,779 |
2,019 | 11,992 |
2,020 | 9,695 |
2,021 | 7,253 |
2,022 | 5,145 |
Thereafter | 12,432 |
Future minimum operating lease rent due | $ 63,296 |
Commitments and Contingent L143
Commitments and Contingent Liabilities - Schedule of Purchase Obligations (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Purchase Obligation, Fiscal Year Maturity | |
2,018 | $ 24,113 |
2,019 | 2,827 |
2,020 | 1,188 |
2,021 | 1,186 |
2,022 | 1,186 |
Thereafter | 4,538 |
Total | $ 35,038 |
Restructuring and Other Rela144
Restructuring and Other Related Costs - Components of Restructuring and Other Related Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other related costs | $ 8,490 | $ 12,630 | $ 4,147 |
Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Estimated remaining restructuring costs | 500 | ||
Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Estimated remaining restructuring costs | 1,000 | ||
Other related costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other related costs | 2,949 | 7,537 | 176 |
Legacy Eco Restructuring Plan | Severance and other employee costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other related costs | 830 | 5,093 | 3,971 |
Legacy Eco Restructuring Plan | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other related costs | 830 | 5,093 | 1,293 |
Legacy Eco Restructuring Plan | One-time benefit arrangements | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other related costs | 2,678 | ||
Performance Materials Plant Closure | Severance and other employee costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other related costs | $ 4,711 | $ 0 | $ 0 |
Restructuring and Other Rela145
Restructuring and Other Related Costs - Schedule of Restructuring Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve | |||
Beginning balance | $ 1,643 | $ 1,293 | $ 247 |
Restructuring charges | 5,541 | 5,093 | 3,971 |
Cash payments | (3,846) | (4,743) | (2,925) |
Ending balance | 3,338 | 1,643 | 1,293 |
Legacy Eco Restructuring Plan | |||
Restructuring Reserve | |||
Beginning balance | 1,643 | 1,293 | 247 |
Restructuring charges | 830 | 5,093 | 3,971 |
Cash payments | (2,258) | (4,743) | (2,925) |
Ending balance | 215 | 1,643 | 1,293 |
Performance Materials Plant Closure | |||
Restructuring Reserve | |||
Beginning balance | 0 | 0 | 0 |
Restructuring charges | 4,711 | 0 | 0 |
Cash payments | (1,588) | 0 | 0 |
Ending balance | $ 3,123 | $ 0 | $ 0 |
Relationship with Solvay (Detai
Relationship with Solvay (Details) - USD ($) $ in Thousands | Dec. 01, 2014 | Jul. 28, 2014 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disaggregation of Revenue | |||||||||||||
Selling, general and administrative expenses | $ 145,107 | $ 107,601 | $ 34,613 | ||||||||||
Product revenue | $ 358,074 | $ 391,829 | $ 389,267 | $ 332,931 | $ 322,731 | $ 369,979 | $ 277,554 | $ 93,913 | 1,472,101 | 1,064,177 | 388,875 | ||
Transition Services Agreement | Solvay | |||||||||||||
Disaggregation of Revenue | |||||||||||||
Selling, general and administrative expenses | 4,882 | ||||||||||||
Cross-Services Agreement | Aroma | |||||||||||||
Disaggregation of Revenue | |||||||||||||
Arrangement term | 5 years | ||||||||||||
Product revenue | 1,068 | 1,047 | 1,272 | ||||||||||
Service revenue | 1,600 | 1,615 | 1,544 | ||||||||||
Shared costs reimbursements | 2,028 | 2,686 | 3,745 | ||||||||||
Silica Sales Agreement | Silicia | |||||||||||||
Disaggregation of Revenue | |||||||||||||
Arrangement term | 5 years | ||||||||||||
Product revenue | $ 1,666 | $ 1,743 | $ 1,983 |
Long-term Supply Contract (Deta
Long-term Supply Contract (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 30, 2014 |
Commitments and Contingencies Disclosure [Abstract] | |||
Supply agreement liability | $ 22,250 | $ 23,888 | $ 27,300 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 11, 2017 | Oct. 03, 2017 | May 04, 2016 | Jan. 13, 2015 | Jul. 30, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 29, 2014 |
Related Party Transaction | ||||||||||
Management advisory fees | $ 3,777,000 | $ 3,584,000 | $ 590,000 | |||||||
Affiliated Entity | ||||||||||
Related Party Transaction | ||||||||||
Annual monitoring fee | $ 5,000,000 | |||||||||
Investor | ||||||||||
Related Party Transaction | ||||||||||
Expenses from transactions with related party | $ 1,600,000 | |||||||||
Proceeds from contributed capital | $ 1,600,000 | |||||||||
Board of Managers | ||||||||||
Related Party Transaction | ||||||||||
Proceeds from contributed capital | 1,538,000 | |||||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | ||||||||||
Related Party Transaction | ||||||||||
Debt instrument face amount | $ 525,000,000 | $ 525,000,000 | ||||||||
Debt extinguishment costs | $ 6,043,000 | $ 32,284,000 | 47,875,000 | 0 | ||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | Board of Directors | ||||||||||
Related Party Transaction | ||||||||||
Debt instrument face amount | $ 4,000,000 | |||||||||
Debt extinguishment costs | 338,000 | |||||||||
Payment for financing expenses | 362,000 | 300,000 | ||||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | LIBOR | ||||||||||
Related Party Transaction | ||||||||||
Variable rate on spread | 10.75% | |||||||||
Debt instrument, interest rate floor | 1.00% | |||||||||
Unsecured Debt | Floating Rate Senior Unsecured Notes due 2022 | LIBOR | Board of Directors | ||||||||||
Related Party Transaction | ||||||||||
Variable rate on spread | 10.75% | |||||||||
Debt instrument, interest rate floor | 1.00% | |||||||||
Unsecured Debt | Senior Unsecured Notes due 2025 | ||||||||||
Related Party Transaction | ||||||||||
Debt instrument face amount | 300,000,000 | |||||||||
Advisory Services And Monitors Agreement - One-Time Management Fee | Affiliated Entity | ||||||||||
Related Party Transaction | ||||||||||
Expenses from transactions with related party | $ 8,000,000 | |||||||||
Advisory Services And Monitors Agreement - Annual Advisory Fee | Affiliated Entity | ||||||||||
Related Party Transaction | ||||||||||
Expenses from transactions with related party | $ 500,000 | |||||||||
Services Agreement | Affiliated Entity | ||||||||||
Related Party Transaction | ||||||||||
Expenses from transactions with related party | 1,616,000 | |||||||||
Operating Lease Rental Payments | Corporate Joint Venture | ||||||||||
Related Party Transaction | ||||||||||
Revenue from related parties | 295,000 | 187,000 | 0 | |||||||
Manufacturing Costs | Corporate Joint Venture | ||||||||||
Related Party Transaction | ||||||||||
Revenue from related parties | 17,470,000 | 10,707,000 | 0 | |||||||
Services | Corporate Joint Venture | ||||||||||
Related Party Transaction | ||||||||||
Revenue from related parties | 12,248,000 | 8,169,000 | 0 | |||||||
Product Demonstration Costs | Corporate Joint Venture | ||||||||||
Related Party Transaction | ||||||||||
Revenue from related parties | $ 2,175,000 | $ 1,663,000 | $ 0 |
Quarterly Financial Summary 149
Quarterly Financial Summary (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 358,074 | $ 391,829 | $ 389,267 | $ 332,931 | $ 322,731 | $ 369,979 | $ 277,554 | $ 93,913 | $ 1,472,101 | $ 1,064,177 | $ 388,875 |
Gross profit | 84,151 | 102,559 | 107,414 | 82,712 | 70,394 | 95,299 | 62,298 | 26,101 | 376,836 | 254,092 | 110,084 |
Operating income | 27,882 | 46,558 | 55,149 | 37,915 | 15,139 | 44,254 | 16,749 | 8,048 | 167,504 | 84,190 | 55,775 |
Net income (loss) | 65,564 | (3,016) | (1,670) | (2,315) | 10,527 | (9,606) | (76,948) | (3,131) | 58,563 | (79,158) | 11,427 |
Net income (loss) attributable to PQ Group Holdings Inc. | $ 65,011 | $ (3,345) | $ (1,609) | $ (2,454) | $ 10,664 | $ (10,017) | $ (77,262) | $ (3,131) | $ 57,603 | $ (79,746) | $ 11,427 |
Net income (loss) per share: | |||||||||||
Basic income (loss) per share (usd per share) | $ 0.49 | $ (0.03) | $ (0.02) | $ (0.02) | $ 0.10 | $ (0.10) | $ (0.99) | $ (0.14) | $ 0.52 | $ (1.02) | $ 0.51 |
Diluted income (loss) per share (usd per share) | $ 0.49 | $ (0.03) | $ (0.02) | $ (0.02) | $ 0.10 | $ (0.10) | $ (0.99) | $ (0.14) | $ 0.52 | $ (1.02) | $ 0.51 |
Weighted average shares outstanding: | |||||||||||
Basic (shares) | 133,138,140 | 104,096,837 | 104,015,815 | 103,947,888 | 103,947,888 | 103,783,719 | 77,842,216 | 22,694,161 | 111,299,670 | 78,016,005 | 22,615,787 |
Diluted (shares) | 133,895,646 | 104,096,837 | 104,015,815 | 103,947,888 | 103,947,888 | 103,783,719 | 77,842,216 | 22,694,161 | 111,669,037 | 78,016,005 | 22,615,787 |
Supplemental Cash Flow Infor150
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | May 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income taxes | $ 29,199 | $ 16,981 | $ 8 | |
Interest | 170,131 | 132,579 | 44,074 | |
Noncash Investing and Financing Items | ||||
Capital expenditures acquired on account but unpaid as of the period end | 18,762 | 18,161 | 624 | |
Non-cash equity contribution | 0 | 0 | 1,600 | |
PQ Holdings, Eco Services | ||||
Noncash Investing and Financing Items | ||||
Equity consideration for the Business Combination | $ 910,800 | 0 | 910,800 | 0 |
Debt assumed | 0 | 22,911 | 0 | |
Sovitec Mondial S.A. | ||||
Noncash Investing and Financing Items | ||||
Debt assumed | $ 16,609 | $ 0 | $ 0 |
Supplemental Cash Flow Infor151
Supplemental Cash Flow Information - Narratives (Details) - 2017 Omnibus Plan - Stock Option | 12 Months Ended |
Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercised (shares) | 32,366 |
Shares reserved for stock options exercised (shares) | 20,303 |
Common stock | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Shares issued, shares | 12,063 |
Subsequent Events - Narratives
Subsequent Events - Narratives (Details) - Subsequent Event € in Thousands | Feb. 08, 2018USD ($) | Feb. 08, 2018EUR (€) |
USD | Currency Swap | ||
Subsequent Event | ||
Derivative, notional amount | $ 342,561,000 | |
Euro | Currency Swap | ||
Subsequent Event | ||
Derivative, notional amount | € | € 280,000 | |
New Term Loan Facility | Term Loan | ||
Subsequent Event | ||
Debt instrument face amount | $ 1,267,000,000 | |
Scheduled repayment percentage | 0.25% | 0.25% |
Debt instrument, call premium | 1.00% | 1.00% |
New Term Loan Facility | LIBOR | Term Loan | ||
Subsequent Event | ||
Debt instrument, interest rate floor | 0.00% | |
Variable rate on spread | 2.50% |
Schedule I - Condensed Statemen
Schedule I - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions | |||||||||||
Stock compensation | $ 8,799 | $ 5,432 | $ 2,256 | ||||||||
Net income (loss) attributable to PQ Group Holdings Inc. | $ 65,011 | $ (3,345) | $ (1,609) | $ (2,454) | $ 10,664 | $ (10,017) | $ (77,262) | $ (3,131) | 57,603 | (79,746) | 11,427 |
Other comprehensive income (loss), net of tax: | |||||||||||
Comprehensive income (loss) attributable to PQ Group Holdings Inc. | 115,625 | (134,105) | $ 12,075 | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions | |||||||||||
Stock compensation | 8,799 | 7,029 | |||||||||
Equity in income (loss) of subsidiaries | 66,402 | (72,717) | |||||||||
Net income (loss) attributable to PQ Group Holdings Inc. | 57,603 | (79,746) | |||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Pension and postretirement benefits | (101) | 6,865 | |||||||||
Net (loss) gain from hedging activities | (3,590) | 4,557 | |||||||||
Foreign currency translation | 61,713 | (65,781) | |||||||||
Total other comprehensive income (loss) | 58,022 | (54,359) | |||||||||
Comprehensive income (loss) attributable to PQ Group Holdings Inc. | $ 115,625 | $ (134,105) |
Schedule I - Condensed Balance
Schedule I - Condensed Balance Sheet - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Total current assets | $ 548,968 | $ 492,678 |
Total assets | 4,415,455 | 4,259,671 |
LIABILITIES | ||
Total current liabilities | 288,409 | 242,392 |
Total liabilities | 2,783,536 | 3,231,727 |
STOCKHOLDERS' EQUITY | ||
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 135,244,379 and 106,452,330 on December 31, 2017 and December 31, 2016, respectively; outstanding shares 135,244,379 and 106,430,811 on December 31, 2017 and December 31, 2016, respectively | 1,352 | 73 |
Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on December 31, 2017 and December 31, 2016 | 0 | 0 |
Additional paid-in capital | 1,655,114 | 1,167,137 |
Accumulated deficit | (32,777) | (90,380) |
Treasury stock, at cost; shares 21,519 on December 31, 2016 | 0 | (239) |
Accumulated other comprehensive income (loss) | 4,311 | (53,711) |
Total PQ Group Holdings Inc. equity | 1,628,000 | 1,022,880 |
Total liabilities and equity | 4,415,455 | 4,259,671 |
Parent Company | ||
ASSETS | ||
Total current assets | 0 | 0 |
Investment in subsidiaries | 1,628,000 | 1,022,880 |
Total assets | 1,628,000 | 1,022,880 |
LIABILITIES | ||
Total current liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
STOCKHOLDERS' EQUITY | ||
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 135,244,379 and 106,452,330 on December 31, 2017 and December 31, 2016, respectively; outstanding shares 135,244,379 and 106,430,811 on December 31, 2017 and December 31, 2016, respectively | 1,352 | 73 |
Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on December 31, 2017 and December 31, 2016 | 0 | 0 |
Additional paid-in capital | 1,655,114 | 1,167,137 |
Accumulated deficit | (32,327) | (90,380) |
Treasury stock, at cost; shares 21,519 on December 31, 2016 | 0 | 239 |
Accumulated other comprehensive income (loss) | 4,311 | (53,711) |
Total PQ Group Holdings Inc. equity | 1,628,000 | 1,022,880 |
Total liabilities and equity | $ 1,628,000 | $ 1,022,880 |
Schedule I - Condensed Balan155
Schedule I - Condensed Balance Sheet Parenthetical - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity Attributable to Parent | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (shares) | 135,244,379 | 106,452,330 |
Common stock, shares outstanding (shares) | 135,244,379 | 106,430,811 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Treasury stock (shares) | 21,519 | |
Parent Company | ||
Stockholders' Equity Attributable to Parent | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (shares) | 135,244,379 | 106,452,330 |
Common stock, shares outstanding (shares) | 135,244,379 | 103,430,811 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Treasury stock (shares) | 21,519 |
Schedule I - Condensed State156
Schedule I - Condensed Statement of Cashflow - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ 65,011 | $ (3,345) | $ (1,609) | $ (2,454) | $ 10,664 | $ (10,017) | $ (77,262) | $ (3,131) | $ 57,603 | $ (79,746) | $ 11,427 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Stock compensation | 8,799 | 5,432 | 2,256 | ||||||||
Net cash provided by operating activities | 116,062 | 119,720 | 44,715 | ||||||||
Cash flows from investing activities: | |||||||||||
Net cash used in investing activities | (182,695) | (1,929,680) | (38,725) | ||||||||
Cash flows from financing activities: | |||||||||||
IPO proceeds | 507,500 | 0 | 0 | ||||||||
IPO costs | (26,804) | 0 | 0 | ||||||||
Net cash provided by (used in) financing activities | 68,944 | 1,861,433 | (3,462) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (6,858) | (5,886) | 0 | ||||||||
Net change in cash and cash equivalents | (4,547) | 45,587 | 2,528 | ||||||||
Cash and cash equivalents at beginning of period | 70,742 | 25,155 | 70,742 | 25,155 | 22,627 | ||||||
Cash and cash equivalents at end of period | 66,195 | 70,742 | 66,195 | 70,742 | 25,155 | ||||||
Parent Company | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | 57,603 | (79,746) | |||||||||
Equity in net (income) loss from subsidiaries | (66,402) | 72,717 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Stock compensation | 8,799 | 7,029 | |||||||||
Net cash provided by operating activities | 0 | 0 | |||||||||
Cash flows from investing activities: | |||||||||||
Investment in subsidiaries | (480,696) | 0 | |||||||||
Net cash used in investing activities | (480,696) | 0 | |||||||||
Cash flows from financing activities: | |||||||||||
IPO proceeds | 507,500 | 0 | |||||||||
IPO costs | (26,804) | 0 | |||||||||
Net cash provided by (used in) financing activities | 480,696 | 0 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | |||||||||
Net change in cash and cash equivalents | 0 | 0 | |||||||||
Cash and cash equivalents at beginning of period | $ 0 | $ 0 | 0 | 0 | |||||||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |