Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PQ Group Holdings Inc. | |
Entity Central Index Key | 1,708,035 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 135,590,622 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 427,203 | $ 391,829 | $ 1,228,113 | $ 1,114,027 |
Cost of goods sold | 319,703 | 289,270 | 934,088 | 821,342 |
Gross profit | 107,500 | 102,559 | 294,025 | 292,685 |
Selling, general and administrative expenses | 42,145 | 36,341 | 126,240 | 106,411 |
Other operating expense, net | 16,501 | 19,833 | 41,688 | 47,156 |
Operating income | 48,854 | 46,385 | 126,097 | 139,118 |
Equity in net (income) from affiliated companies | (5,605) | (10,257) | (31,123) | (24,879) |
Interest expense, net | 28,238 | 49,079 | 84,622 | 144,041 |
Debt extinguishment costs | 864 | 453 | 6,743 | 453 |
Other expense, net | 2,451 | 4,954 | 13,114 | 21,235 |
Income (loss) before income taxes and noncontrolling interest | 22,906 | 2,156 | 52,741 | (1,732) |
Provision for income taxes | 8,470 | 5,172 | 21,590 | 5,269 |
Net income (loss) | 14,436 | (3,016) | 31,151 | (7,001) |
Less: Net income attributable to the noncontrolling interest | 251 | 329 | 970 | 407 |
Net income (loss) attributable to PQ Group Holdings Inc. | $ 14,185 | $ (3,345) | $ 30,181 | $ (7,408) |
Net income (loss) per share: | ||||
Basic income (loss) per share (usd per share) | $ 0.11 | $ (0.03) | $ 0.23 | $ (0.07) |
Diluted income (loss) per share (usd per share) | $ 0.11 | $ (0.03) | $ 0.22 | $ (0.07) |
Weighted average shares outstanding: | ||||
Basic (shares) | 133,336,352 | 104,096,837 | 133,237,653 | 104,020,180 |
Diluted (shares) | 134,576,162 | 104,096,837 | 134,223,628 | 104,020,180 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 14,436 | $ (3,016) | $ 31,151 | $ (7,001) |
Other comprehensive income (loss), net of tax: | ||||
Pension and postretirement benefits | (52) | (20) | 1,305 | (223) |
Net gain (loss) from hedging activities | 370 | (301) | 3,106 | (3,326) |
Foreign currency translation | 5,186 | 18,850 | (15,636) | 60,492 |
Total other comprehensive income (loss) | 5,504 | 18,529 | (11,225) | 56,943 |
Comprehensive income | 19,940 | 15,513 | 19,926 | 49,942 |
Less: Comprehensive income attributable to noncontrolling interests | 1,218 | 82 | 1,697 | 661 |
Comprehensive income attributable to PQ Group Holdings Inc. | $ 18,722 | $ 15,431 | $ 18,229 | $ 49,281 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 56,684 | $ 66,195 |
Receivables, net | 230,388 | 193,456 |
Inventories | 249,298 | 262,388 |
Prepaid and other current assets | 39,264 | 26,929 |
Total current assets | 575,634 | 548,968 |
Investments in affiliated companies | 467,558 | 469,276 |
Property, plant and equipment, net | 1,204,901 | 1,230,384 |
Goodwill | 1,262,979 | 1,305,956 |
Other intangible assets, net | 747,352 | 786,144 |
Other long-term assets | 98,167 | 74,727 |
Total assets | 4,356,591 | 4,415,455 |
LIABILITIES | ||
Notes payable and current maturities of long-term debt | 21,372 | 45,166 |
Accounts payable | 129,188 | 149,326 |
Accrued liabilities | 91,510 | 93,917 |
Total current liabilities | 242,070 | 288,409 |
Long-term debt, excluding current portion | 2,147,086 | 2,185,320 |
Deferred income taxes | 194,650 | 189,336 |
Other long-term liabilities | 110,312 | 120,471 |
Total liabilities | 2,694,118 | 2,783,536 |
Commitments and contingencies (Note 16) | ||
EQUITY | ||
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 135,249,216 and 135,244,379 on September 30, 2018 and December 31, 2017, respectively; outstanding shares 135,206,108 and 135,244,379 on September 30, 2018 and December 31, 2017, respectively | 1,352 | 1,352 |
Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on September 30, 2018 and December 31, 2017 | 0 | 0 |
Additional paid-in capital | 1,667,036 | 1,655,114 |
Accumulated deficit | (2,596) | (32,777) |
Treasury stock, at cost; shares 43,108 and 0 on September 30, 2018 and December 31, 2017, respectively | (768) | 0 |
Accumulated other comprehensive income (loss) | (7,641) | 4,311 |
Total PQ Group Holdings Inc. equity | 1,657,383 | 1,628,000 |
Noncontrolling interest | 5,090 | 3,919 |
Total equity | 1,662,473 | 1,631,919 |
Total liabilities and equity | $ 4,356,591 | $ 4,415,455 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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) | 135,249,216 | 135,244,379 |
Common stock, shares outstanding (shares) | 135,206,108 | 135,244,379 |
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) | 43,108 | 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED 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 at Dec. 31, 2016 | $ 1,027,944 | $ 73 | $ 1,167,137 | $ (90,380) | $ (239) | $ (53,711) | $ 5,064 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (7,001) | (7,408) | 407 | ||||
Stock split and conversion | 0 | 989 | (1,228) | 239 | |||
Other comprehensive income | 56,943 | 56,689 | 254 | ||||
Distributions to noncontrolling interests | (785) | (785) | |||||
Stock compensation expense | 3,869 | 3,869 | 0 | ||||
Ending balance at Sep. 30, 2017 | 1,080,970 | 1,062 | 1,169,778 | (97,788) | 0 | 2,978 | 4,940 |
Beginning balance at Dec. 31, 2017 | 1,631,919 | 1,352 | 1,655,114 | (32,777) | 0 | 4,311 | 3,919 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 31,151 | 30,181 | 970 | ||||
Other comprehensive income | (11,225) | (11,952) | 727 | ||||
Repurchase of common shares | (768) | (768) | |||||
Distributions to noncontrolling interests | (526) | (526) | |||||
Stock compensation expense | 11,879 | 11,879 | |||||
Shares issued under equity incentive plan | 43 | 43 | |||||
Ending balance at Sep. 30, 2018 | $ 1,662,473 | $ 1,352 | $ 1,667,036 | $ (2,596) | $ (768) | $ (7,641) | $ 5,090 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 31,151 | $ (7,001) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 99,491 | 89,987 |
Amortization | 39,807 | 39,148 |
Acquisition accounting valuation adjustments on inventory sold | 1,603 | 871 |
Amortization of deferred financing costs and original issue discount | 4,629 | 6,626 |
Debt extinguishment costs | 4,619 | 253 |
Foreign currency exchange loss | 15,347 | 21,612 |
Pension and postretirement healthcare benefit expense | 347 | 2,642 |
Pension and postretirement healthcare benefit funding | (6,415) | (7,525) |
Deferred income tax provision (benefit) | 1,494 | (12,447) |
Net loss on asset disposals | 11,106 | 6,419 |
Stock compensation | 11,879 | 3,869 |
Equity in net (income) from affiliated companies | (31,123) | (24,879) |
Dividends received from affiliated companies | 35,890 | 19,071 |
Net interest income on swaps designated as net investment hedges | (4,279) | 0 |
Other, net | (6,473) | (3,243) |
Working capital changes that provided (used) cash, excluding the effect of business combinations: | ||
Receivables | (43,106) | (28,900) |
Inventories | 8,778 | 4,897 |
Prepaids and other current assets | (1,555) | (6,000) |
Accounts payable | (7,594) | (9,044) |
Accrued liabilities | 407 | 13,460 |
Net cash provided by operating activities | 166,003 | 109,816 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (95,322) | (90,229) |
Investment in affiliated companies | (5,000) | (9,000) |
Loan receivable under the New Markets Tax Credit Arrangement | 0 | (6,221) |
Business combinations, net of cash acquired | (1,006) | (41,572) |
Net interest proceeds on swaps designated as net investment hedges | 4,279 | 0 |
Other, net | 1,142 | 491 |
Net cash used in investing activities | (95,907) | (146,531) |
Cash flows from financing activities: | ||
Draw down of revolver | 139,577 | 302,725 |
Repayments of revolver | (163,103) | (270,088) |
Issuance of long-term debt | 1,267,000 | 8,820 |
Debt issuance costs | (6,156) | (1,205) |
Repayments of long-term debt | (1,313,832) | (10,289) |
Distributions to noncontrolling interests | (526) | (785) |
Repurchase of common shares | (768) | 0 |
Other | 43 | 0 |
Net cash (used in) provided by financing activities | (77,765) | 29,178 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,557) | (6,402) |
Net change in cash, cash equivalents and restricted cash | (9,226) | (13,939) |
Cash, cash equivalents and restricted cash at beginning of period | 67,243 | 85,077 |
Cash, cash equivalents and restricted cash at end of period | $ 58,017 | $ 71,138 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 (“EC&S”): 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 emissions 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 (“PM&C”): 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 The condensed consolidated financial statements included herein are unaudited. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations for interim reporting. In the opinion of management, all adjustments of a normal and recurring nature necessary to state fairly the financial position and results of operations have been included. The results of operations are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Other than the update to our accounting policies described in Note 3 , the Company has continued to follow the accounting policies set forth in those consolidated financial statements. |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | 2. New Accounting Standards: Recently Adopted Accounting Standards In August 2017, the Financial Accounting Standards Board (“FASB”) issued amendments related to hedge accounting. The amendments expand hedge accounting for non-financial and financial risk components and revise the measurement methodologies to better align with an entity’s 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 guidance should be applied prospectively for the amended presentation and disclosure requirements, and through a cumulative-effect adjustment to beginning retained earnings for any cash flow and net investment hedges existing at the date of adoption. The Company early adopted the guidance effective January 1, 2018. The Company’s cash flow hedges in place at the date of adoption yielded an immaterial amount of ineffectiveness; therefore, the Company did not reflect an adjustment to beginning retained earnings upon adoption. The amended presentation and disclosure requirements are reflected under the new guidance in Note 13 to these condensed consolidated financial statements. 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 condensed consolidated financial statements upon adoption. 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 condensed consolidated statements of operations, depending on whether the costs were associated with employees involved in manufacturing or back office support functions. Under the new guidance, the service cost component of the Company’s pension costs remained in the same line items of the condensed consolidated statements of operations, but the remaining components are now reported as part of nonoperating income in the other (income) expense, net line item of the condensed 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 post-retirement benefit plan note as its basis of estimation for the prior comparative periods. The Company utilized the practical expedient, and $172 and $504 of a net pension benefit for the three and nine months ended September 30, 2017 , respectively, was reclassified to other (income) expense, net. For the three and nine months ended September 30, 2018 , the amount of pension costs included in other (income) expense, net was a net benefit of $803 and $2,572 , respectively. In January 2017, the FASB issued guidance that 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 condensed 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 September 30, 2018 and 2017 , the Company had $1,333 and $2,300 , respectively, of restricted cash included in prepaid and other current assets on its condensed consolidated balance sheets related to its New Market Tax Credit financing arrangements as well as other small restricted cash balances. Changes in the Company’s restricted cash balances prior to the adoption of the new guidance were reflected within cash flows from investing activities in the Company’s condensed consolidated statements of cash flows. The prior comparative period in the Company’s condensed consolidated statement of cash flows has been updated to conform to the new guidance. See Note 20 to these condensed consolidated financial statements for supplemental cash flow disclosures. 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 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. There was no impact to the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2017 . The Company applied the new guidance to the term loan refinancing that occurred during the nine months ended September 30, 2018 ; see Note 12 to these condensed consolidated financial statements for further information on the debt refinancing transaction. There were no other items in the new guidance which necessitated a change in the Company’s reporting in its condensed consolidated statements of cash flows for the nine months ended September 30, 2018 or 2017 . In May 2014, the FASB issued accounting guidance (with subsequent targeted amendments) to 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. The Company implemented the guidance under the modified retrospective transition method of adoption. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of adoption of the new revenue recognition guidance was immaterial for the nine months ended September 30, 2018 , and there was no transition adjustment required upon adoption. See Note 3 to these condensed consolidated financial statements for additional disclosures required by the new guidance. Accounting Standards Not Yet Adopted In August 2018, the FASB issued guidance which will align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement (i.e., a hosting arrangement) that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company is currently evaluating the effect that the new guidance would have on its consolidated financial statements. In August 2018, the FASB issued guidance which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance eliminates certain disclosure requirements, including the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and the effects of a one-percentage point change in assumed health care cost trend rates. The guidance also requires additional disclosure of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The guidance is effective for fiscal years ending after December 15, 2020 with early adoption permitted, and is required to be applied on a retrospective basis to all periods presented. The Company will modify its benefit plan disclosures in accordance with the new guidance upon adoption, and the guidance will not have a material impact on its consolidated financial statements. In August 2018, the FASB issued guidance which modifies certain disclosure requirements over fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company believes that the new guidance will not have a material impact on its consolidated financial statements. In June 2018, the FASB issued guidance which conforms the accounting for the issuance of all share-based payments using the same accounting model. Previously, the accounting for share-based payments to non-employees was covered under a different framework than those made to employees. Under the new guidance, awards to both employees and non-employees will essentially follow the same model, with small variations related to determining the term assumption when valuing a non-employee award as well as a different expense attribution model for non-employee awards. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the effect that the new guidance would have on its consolidated financial statements. In February 2018, the FASB issued guidance which will permit entities to make an election to reclassify income tax effects stranded in accumulated other comprehensive income (“AOCI”) to retained earnings as a result of tax reform legislation enacted by the U.S. government on December 22, 2017. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted in any interim period for which the financial statements have not yet been issued. Prior to the enactment of the tax reform legislation on December 22, 2017, the Company had amounts recorded in AOCI related to its domestic pension, postretirement and supplementary benefit plans and cash flow hedging relationships that were based on pre-enactment tax rates. The Company is evaluating the impact that the new guidance will have on its consolidated financial statements. If the Company makes the election to reclassify the stranded income tax effects from AOCI, it may do so using one of two transition methods: restrospectively, or at the beginning of the period of adoption. 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 Securities and Exchange Commission (“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. The Company will apply the guidance prospectively to goodwill impairment tests subsequent to the adoption date. In June 2016, the FASB issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash. Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company believes that the new guidance will not have a material impact on its consolidated financial statements. 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. The Company can choose to apply the new guidance at the beginning of the earliest period presented in the financial statements, or at the date of adoption, with a cumulative-effect adjustment to the opening balance of retained earnings. 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. The Company has prepared a detailed plan to implement the new guidance, gathered the information related to its current lease population, and is assessing its leases in the context of the new framework. The Company is working with a vendor to implement a lease management system which will assist in delivering the required accounting changes. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements, business processes, systems and control environment. The Company does not plan to implement the guidance prior to the required adoption date of January 1, 2019, and the Company plans to initially apply the transition requirements of the guidance at the date of adoption. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | 3. Revenue from Contracts with Customers: Revenue Recognition Model In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the contract with the customer; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company identifies a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that the Company will collect the consideration to which it is entitled. Evidence of a contract between the Company and its customers may take the form of a master service agreement (“MSA”), a MSA in combination with an underlying purchase order, a combination of a pricing quote with an underlying purchase order or an individual purchase order received from a customer. The Company and certain of its customers enter into MSAs that establish the terms, including prices, under which orders to purchase goods may be placed. In cases where the MSA contains a distinct order for goods or contains an enforceable minimum quantity to be purchased by the customer, the Company considers the MSA to be evidence of a contract between the Company and its customer as the MSA creates enforceable rights and obligations. In cases where the MSA does not contain a distinct order for goods, the Company’s contract with a customer is the purchase order issued under the MSA. Customers of the Company may also negotiate orders via pricing quotes, which typically detail product pricing, delivery terms and payment information. When a customer procures goods under this method, the Company considers the combination of the pricing quote and the purchase order to create enforceable rights and obligations. Absent either a MSA or pricing quote, the Company considers an individual purchase order to create enforceable rights and obligations. The Company identifies a performance obligation in a contract for each promised good that is separately identifiable from other promises in the contract and for which the customer can benefit from the good. The majority of the Company’s contracts have a single performance obligation, which is the promise to transfer individual goods to the customer. The Company has certain contracts that include multiple performance obligations under which the purchase price for each distinct performance obligation is defined in the contract. These distinct performance obligations may include stand-ready provisions, which are arrangements to provide a customer assurance that they will have access to output from the Company’s manufacturing facilities, or monthly reservations of capacity fees. The Company considers stand-ready provisions and reservation of capacity fees to be performance obligations satisfied over time. Revenues related to stand-ready provisions and reservation of capacity fees are recognized on a ratable basis throughout the contract term and billed to the customer on a monthly basis. As described above, the Company’s MSAs with its customers may outline prices for individual products or contract provisions. MSAs in the Company’s performance chemicals and refining services product groups may contain provisions whereby raw materials costs are passed-through to the customer per the terms of their contract. The Company’s exposure to fluctuations in raw materials prices is limited, as the majority of pass-through contract provisions reset based on fluctuations in the underlying raw material price. MSAs in the Company’s refining services product group also contain take-or-pay arrangements, whereby the customer would incur a penalty in the form of a shortfall volume fee. Currently there is no history in which customers fail to meet the contractual minimum. Revenue from product sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns or other allowances that are offered within contracts between the Company and its customers. The Company recognizes revenues when performance obligations under the terms of a contract with its customer are satisfied, which generally occurs at a point in time by transferring control of a product to the customer. The Company determines the point in time when a customer obtains control of a product and the Company satisfies the performance obligation by considering factors including when the Company has a right to payment for the product, the customer has legal title to the product, the Company has transferred possession of the product, the customer has assumed the risks and rewards of ownership of the product and the customer has accepted the product. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The Company does not have any significant payment terms as payment is received at, or shortly after, the point of sale. Contract Assets and Liabilities A contract asset is a right to consideration in exchange for goods that the Company has transferred to a customer when that right is conditional on something other than the passage of time. A contract liability exists when the Company receives consideration in advance of performance obligations. Other than trade accounts receivable and customer return accruals, the Company has not recorded any additional contract assets or contract liabilities on its condensed consolidated balance sheet as of September 30, 2018 . Practical Expedients and Accounting Policy Elections The Company has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the new revenue recognition guidance. Certain of the Company’s contracts with customers are based on an individual purchase order; thus, the duration of these contracts are for one year or less. The Company has made an accounting policy election to omit certain disclosures related to remaining performance obligations for contracts which have an initial term of one year or less. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities as opposed to separate performance obligations, and the Company recognizes revenue upon the transfer of control to the customer. Accordingly, the costs associated with these shipping and handling activities are accrued when the related revenue is recognized under the Company’s policy election. The Company expenses incremental costs of obtaining a contract as incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Sales, value added and other taxes the Company collects concurrent with revenue producing activities are excluded from revenues. Disaggregated Revenue The Company’s primary means of disaggregating revenues is by product group, which can be found in Note 17 to these condensed consolidated financial statements. The Company’s portfolio of products are integrated into a variety of end uses, which are described in the table below. Key End Uses Key Products Industrial & process chemicals • Silicate precursors for the tire industry • Glass beads, or microspheres, for metal finishing end uses Fuels & emission control • Refinery catalysts • Emission control catalysts • Catalyst recycling services • Silicate for catalyst manufacturing Packaging & engineered plastics • Catalysts for high-density polyethlene and chemicals syntheses • Antiblocks for film packaging • Solid and hollow microspheres for composite plastics • Sulfur derivatives for nylon production Highway safety & construction • Reflective markings for roadways and airports • Silica gels for surface coatings Consumer products • Silica gels for edible oil and beer clarification • Precipitated silicas, silicates and zeolites for the dentifrice and dishwasher and laundry detergent applications Natural resources • Silicates for drilling muds • Hollow glass beads, or microspheres, for oil well cements • Silicates and alum for water treatment mining • Bleaching aids for paper The following tables disaggregate the Company’s sales, by segment and end use, for the three and nine months ended September 30, 2018 : Three months ended September 30, 2018 Environmental Catalysts & Services Performance Materials & Chemicals Total Industrial & process chemicals $ 21,027 $ 65,070 $ 86,097 Fuels & emission control (1) 66,095 — 66,095 Packaging & engineered plastics 32,983 31,848 64,831 Highway safety & construction (1) — 105,204 105,204 Consumer products — 67,138 67,138 Natural resources 19,611 19,059 38,670 Total 139,716 288,319 428,035 Inter-segment sales eliminations (832 ) — (832 ) Total segment sales $ 138,884 $ 288,319 $ 427,203 Nine months ended September 30, 2018 Environmental Catalysts & Services Performance Materials & Chemicals Total Industrial & process chemicals $ 55,401 $ 216,152 $ 271,553 Fuels & emission control (1) 182,304 — 182,304 Packaging & engineered plastics 95,145 97,622 192,767 Highway safety & construction (1) — 263,095 263,095 Consumer products — 209,256 209,256 Natural resources 53,471 58,177 111,648 Total 386,321 844,302 1,230,623 Inter-segment sales eliminations (2,510 ) — (2,510 ) Total segment sales $ 383,811 $ 844,302 $ 1,228,113 (1) As described in Note 1 , the Company experiences seasonal sales fluctuations to customers in the fuels & emission control and highway safety & construction end uses. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 and December 31, 2017 , and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. 9/30/2018 Quoted Prices in Significant Other Observable Inputs (Level 2) Significant Assets: Derivative contracts (Note 13) $ 13,486 $ — $ 13,486 $ — Restoration plan assets 4,865 4,865 — — Total $ 18,351 $ 4,865 $ 13,486 $ — Liabilities: Derivative contracts (Note 13) $ 114 $ — $ 114 $ — Total $ 114 $ — $ 114 $ — 12/31/2017 Quoted Prices in Significant Other Observable Inputs (Level 2) Significant Assets: Derivative contracts (Note 13) $ 1,043 $ — $ 1,043 $ — Restoration plan assets 5,576 5,576 — — Total $ 6,619 $ 5,576 $ 1,043 $ — Liabilities: Derivative contracts (Note 13) $ 448 $ — $ 448 $ — Total $ 448 $ — $ 448 $ — 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 15 to these condensed consolidated financial statements regarding defined supplementary retirement plans. The Company’s restoration plan assets are included in other long-term assets on its condensed consolidated balance sheets. Gains and losses related to these investments are included in other expense, net in the Company’s condensed consolidated statements of operations. Unrealized gains and losses associated with the underlying stock and fixed income mutual funds were immaterial as of September 30, 2018 and December 31, 2017 , respectively. 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, natural gas swaps and cross currency 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | 5. Accumulated Other Comprehensive Income: The following tables present the tax effects of each component of other comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017 : Three months ended September 30, 2018 2017 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 $ (69 ) $ 17 $ (52 ) $ (33 ) $ 13 $ (20 ) Benefit plans, net (69 ) 17 (52 ) (33 ) 13 (20 ) Net gain (loss) from hedging activities 494 (124 ) 370 (486 ) 185 (301 ) Foreign currency translation 3,391 1,795 5,186 21,343 (2,493 ) 18,850 Other comprehensive income $ 3,816 $ 1,688 $ 5,504 $ 20,824 $ (2,295 ) $ 18,529 Nine months ended September 30, 2018 2017 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 $ 1,740 $ (435 ) $ 1,305 $ (261 ) $ 38 $ (223 ) Benefit plans, net 1,740 (435 ) 1,305 (261 ) 38 (223 ) Net gain (loss) from hedging activities 4,143 (1,037 ) 3,106 (5,373 ) 2,047 (3,326 ) Foreign currency translation (16,442 ) 806 (15,636 ) 69,202 (8,710 ) 60,492 Other comprehensive income (loss) $ (10,559 ) $ (666 ) $ (11,225 ) $ 63,568 $ (6,625 ) $ 56,943 The following table presents the change in accumulated other comprehensive income, net of tax, by component for the nine months ended September 30, 2018 and 2017 : Defined benefit Net gain (loss) from hedging activities Foreign Total December 31, 2017 $ 7,412 $ 967 $ (4,068 ) $ 4,311 Other comprehensive income (loss) before reclassifications 1,360 2,906 (16,363 ) (12,097 ) Amounts reclassified from accumulated other comprehensive income (1) (55 ) 200 — 145 Net current period other comprehensive income (loss) 1,305 3,106 (16,363 ) (11,952 ) September 30, 2018 $ 8,717 $ 4,073 $ (20,431 ) $ (7,641 ) December 31, 2016 $ 7,513 $ 4,557 $ (65,781 ) $ (53,711 ) Other comprehensive income (loss) before reclassifications (126 ) (3,404 ) 60,238 56,708 Amounts reclassified from accumulated other comprehensive income (1) (97 ) 78 — (19 ) Net current period other comprehensive income (loss) (223 ) (3,326 ) 60,238 56,689 September 30, 2017 $ 7,290 $ 1,231 $ (5,543 ) $ 2,978 (1) See the following table for details about these reclassifications. Amounts in parentheses indicate credits to profit/loss. The following table presents the reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 . Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income(a) Affected Line Item in the Statements of Operations Three months ended Nine months ended 2018 2017 2018 2017 Defined benefit and other postretirement plans Amortization of prior service credit $ (40 ) $ (19 ) $ (79 ) $ (58 ) (b) Amortization of net (gain) loss 2 (19 ) 5 (58 ) (b) (38 ) (38 ) (74 ) (116 ) Total before tax 13 6 19 19 Tax expense (benefit) $ (25 ) $ (32 ) $ (55 ) $ (97 ) Net of tax Net (gain) loss from hedging activities Interest rate caps $ 71 $ 13 $ 164 $ 22 Interest expense Natural gas swaps 30 94 101 104 Cost of goods sold 101 107 265 126 Total before tax (24 ) (41 ) (65 ) (48 ) Tax expense (benefit) $ 77 $ 66 $ 200 $ 78 Net of tax Total reclassifications for the period $ 52 $ 34 $ 145 $ (19 ) Net of tax (a) Amounts in parentheses indicate credits to profit/loss. (b) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost (see Note 15 to these condensed consolidated financial statements for additional details). |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | 6. Acquisition: Acquisitions are accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to the identifiable net assets acquired based on the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. The excess of the purchase price over the fair values of the identifiable net assets acquired is recorded as goodwill. On June 12, 2017 (the “Acquisition 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 results of operations of Sovitec have been included in the Company’s consolidated financial statements since the Acquisition Date. The following table sets forth the calculation and allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition, which was complete as of March 31, 2018. Provisional Purchase Price Allocation Adjustments Purchase Price Allocation Total consideration, net of cash acquired $ 41,572 $ — $ 41,572 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 14,305 $ — $ 14,305 Inventories 7,645 1,603 9,248 Prepaid and other current assets 400 — 400 Property, plant and equipment 9,020 15,960 24,980 Other intangible assets — 5,753 5,753 Other long-term assets 129 15,921 16,050 Fair value of assets acquired 31,499 39,237 70,736 Current debt (6,420 ) — (6,420 ) Accounts payable (10,748 ) — (10,748 ) Long-term debt (10,189 ) — (10,189 ) Deferred income taxes — (4,426 ) (4,426 ) Other long-term liabilities (154 ) — (154 ) Fair value of net assets acquired 3,988 34,811 38,799 Goodwill 37,584 (34,811 ) 2,773 $ 41,572 $ — $ 41,572 As of the Acquisition Date, the fair value of accounts receivable approximated historical cost. The gross contractual amount of accounts receivable at the Acquisition Date was $14,607 , of which $302 was deemed uncollectible. The fair value of inventory 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 $1,603 higher than the historical cost. The Company’s cost of goods sold for the nine months ended September 30, 2018 includes a pre-tax charge of $1,603 relating to the step-up on inventory, $108 of additional amortization expense related to identified intangible assets and $421 of additional depreciation expense, which would have been recorded during the year ended December 31, 2017 if the adjustments to the provisional amounts had been recognized as of the Acquisition Date. The Company’s other expense, net for the nine months ended September 30, 2018 includes additional amortization expense related to identified intangible assets of $101 which would have been recorded during the year ended December 31, 2017 if the adjustments to the provisional amounts had been recognized as of the Acquisition Date. The Company’s provision for income taxes for the nine months ended September 30, 2018 includes an additional $990 tax benefit associated with the year ended December 31, 2017, to reflect impacts as if the adjustments to the provisional amounts had been recognized as of the Acquisition Date. This amount is primarily a result of opening balance sheet adjustments recorded during the nine months ended September 30, 2018 , which needed to be re-measured through the income statement because of income tax rate changes that occurred subsequent to the Acquisition Date. 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 PM&C reporting segment. The goodwill associated with the Acquisition 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 Expected Useful Life (in years) Intangible assets subject to amortization: Trademarks $ 1,767 11 Technical know-how 1,892 11 Total intangible assets subject to amortization 3,659 Trade names, not subject to amortization 2,094 Indefinite Total $ 5,753 Net sales and net income generated by the Sovitec legal entities included in the Company’s condensed consolidated statements of operations are as follows: Three months ended Nine months ended 2018 2017 2018 2017 Net sales $ 16,455 $ 13,490 $ 46,702 $ 17,194 Net income 386 644 1,200 1,148 Acquisition costs were immaterial for the three and nine months ended September 30, 2018 and were $737 and $2,065 for the three and nine months ended September 30, 2017 , respectively. Acquisition costs are included in other operating expense, net in the Company’s condensed consolidated statements of operations. Pro Forma Financial Information The unaudited pro forma financial information for the nine months ended September 30, 2017 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. Unaudited Nine months ended September 30, 2017 Pro forma sales $ 1,130,454 Pro forma net loss (6,865 ) Pro forma net loss attributable to PQ Group Holdings Inc. (7,272 ) Pro forma basic and diluted net loss per share $ (0.07 ) The results of operations for the three months ended September 30, 2017 and for the three and nine months ended September 30, 2018 include the operating results of the combined company for the full period and therefore, there is no pro forma presentation for such periods included in the table above. Certain non-recurring charges included in the Company’s results of operations for the nine months ended September 30, 2017 were allocated to the respective prior year periods for pro forma purposes. For the nine months ended September 30, 2017 , non-recurring charges allocated to the prior year period include transaction fee charges of $2,065 which were excluded from pro forma net loss. Also included in pro forma net loss for the nine months ended September 30, 2017 is amortization expense of $272 and depreciation expense of $521 associated with the fair value step-up of identifiable intangible assets and property, plant and equipment, respectively. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill: The change in the carrying amount of goodwill for the nine months ended September 30, 2018 is summarized as follows: Performance Environmental Total Balance as of December 31, 2017 $ 914,623 $ 391,333 $ 1,305,956 Goodwill recognized 649 — 649 Goodwill adjustments (1) (34,811 ) — (34,811 ) Foreign exchange impact (7,816 ) (999 ) (8,815 ) Balance as of September 30, 2018 $ 872,645 $ 390,334 $ 1,262,979 (1) Represents the measurement period adjustments on the net assets acquired as part of the Acquisition (see Note 6 to these condensed consolidated financial statements for further information regarding the Acquisition). |
Other Operating Expense, Net
Other Operating Expense, Net | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense, Net | 8. Other Operating Expense, Net: A summary of other operating expense, net is as follows: Three months ended Nine months ended 2018 2017 2018 2017 Amortization expense $ 8,711 $ 9,146 $ 26,404 $ 23,270 Transaction and other related costs (1) 215 966 827 5,295 Restructuring and other related costs (Note 18) 273 4,106 403 5,578 Net loss on asset disposals (2) 5,202 3,494 11,106 6,419 Management advisory fees — 1,250 — 3,750 Insurance proceeds (2) — — (1,557 ) — Other, net 2,100 871 4,505 2,844 $ 16,501 $ 19,833 $ 41,688 $ 47,156 (1) Transaction and other related costs for the three and nine months ended September 30, 2018 and 2017 primarily include transaction costs associated with the Company’s initial public offering (exclusive of the direct costs recorded in stockholders’ equity net of the proceeds from the offering) and the Acquisition (see Note 6 to these condensed consolidated financial statements for further information). (2) During the nine months ended September 30, 2018 , the Company recognized $2,500 of insurance proceeds in its condensed consolidated statement of operations related to the Company’s claim for losses sustained during Hurricane Harvey in August 2017. For the nine months ended September 30, 2018 , $1,557 was recorded as a gain in other operating expense, net, as reimbursement of expenses, $207 was recorded as a gain in net loss on asset disposals within other operating expense, net, for the Company’s previously recognized property losses, and $736 represented proceeds in excess of the Company’s property losses which was recorded as a non-operating gain in other expense, net, in the Company’s consolidated statement of operations. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 9. Inventories: Inventories are classified and valued as follows: September 30, December 31, Finished products and work in process $ 189,004 $ 199,919 Raw materials 60,294 62,469 $ 249,298 $ 262,388 Valued at lower of cost or market: LIFO basis $ 153,093 $ 162,315 Valued at lower of cost and net realizable value: FIFO or average cost basis 96,205 100,073 $ 249,298 $ 262,388 |
Investments in Affiliated Compa
Investments in Affiliated Companies | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Affiliated Companies | 10. Investments in Affiliated Companies: The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of September 30, 2018 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) : Three months ended Nine months ended 2018 2017 2018 2017 Net sales $ 74,088 $ 83,983 $ 271,562 $ 225,770 Gross profit 24,495 33,276 100,686 91,862 Operating income 14,594 22,713 72,257 60,408 Net income 14,545 23,819 72,204 63,663 (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 September 30, 2018 and December 31, 2017 includes net purchase accounting fair value adjustments of $ 259,725 and $ 264,700 , respectively, related to the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016, consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names. Consolidated equity in net income from affiliates is net of $ 1,658 and $4,975 of amortization expense related to purchase accounting fair value adjustments for the three and nine months ended September 30, 2018 , respectively. Consolidated equity in net income from affiliates is net of $1,658 and $6,941 of amortization expense related to purchase accounting fair value adjustments for the three and nine months ended September 30, 2017 . |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
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: September 30, December 31, Land $ 191,883 $ 191,006 Buildings 210,314 200,054 Machinery and equipment 1,082,219 1,005,025 Construction in progress 114,042 145,414 1,598,458 1,541,499 Less: accumulated depreciation (393,557 ) (311,115 ) $ 1,204,901 $ 1,230,384 Depreciation expense was $ 30,626 and $ 31,957 for the three months ended September 30, 2018 and 2017 , respectively. Depreciation expense was $99,491 and $89,987 for the nine months ended September 30, 2018 and 2017 , respectively. |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 12. Long-term Debt: The summary of long-term debt is as follows: September 30, December 31, 2017 Term Loan Facility (U.S. dollar denominated) $ — $ 916,153 Term Loan Facility (Euro denominated) — 335,808 New Term Loan Facility 1,212,498 — 6.75% Senior Secured Notes due 2022 625,000 625,000 5.75% Senior Unsecured Notes due 2025 300,000 300,000 ABL Facility — 25,000 Other 68,361 68,318 Total debt 2,205,859 2,270,279 Original issue discount (20,050 ) (18,390 ) Deferred financing costs (17,351 ) (21,403 ) Total debt, net of original issue discount and deferred financing costs 2,168,458 2,230,486 Less: current portion (21,372 ) (45,166 ) Total long-term debt, excluding current portion $ 2,147,086 $ 2,185,320 The fair value of a financial instrument is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. As of September 30, 2018 and December 31, 2017 , the fair value of the senior secured term loans and senior secured and unsecured notes was higher than book value by $ 26,578 and $ 59,319 , respectively. The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 4 to these condensed consolidated financial statements for further information on fair value measurements). New Term Loan Facility 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, 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 Loan Facility bears interest at a floating rate of LIBOR plus 2.50% per annum and matures in February 2025, effectively lowering the interest rate margin, eliminating the interest rate floor that existed on the Euro-denominated tranche prior to refinancing, 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. 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. The Company recorded $2,124 of new creditor and third-party financing costs as debt extinguishment costs during the nine months ended September 30, 2018 . In addition, previous unamortized deferred financing costs of $1,403 and original issue discount of $2,352 associated with the previously outstanding debt were written off as debt extinguishment costs during the nine months ended September 30, 2018 . On the Closing Date, the Company also entered into multiple cross currency swap arrangements to hedge foreign currency risk. The swaps are designed to enable the Company to effectively convert a portion of its fixed-rate U.S. dollar denominated debt obligations into approximately €280,000 equivalent ( $324,940 as of September 30, 2018 ). The swaps are expected to mature in February 2023. During the quarter ended September 30, 2018 , the Company prepaid $45,000 of outstanding principal balance on the New Term Loan Facility. The Company wrote off $258 of previously unamortized deferred financing costs and original issue discount of $606 as debt extinguishment costs for the three and nine months ended September 30, 2018 . |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 13. Financial Instruments: The Company uses (1) interest rate related derivative instruments to manage its exposure to changes in interest rates on its variable-rate debt instruments, (2) commodity derivatives to manage its exposure to commodity price fluctuations, and (3) foreign currency related derivative instruments to manage its foreign currency exposure to its net investments in certain foreign operations. The Company does not speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, commodity prices and foreign currency, 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 the Company’s derivative instruments 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, in the Company’s consolidated balance sheet. As the derivatives are designated and qualify as cash flow hedges, the gains or losses on the natural gas swaps are recorded in stockholders’ equity as a component of other comprehensive income (loss) (“OCI”), net of tax. Reclassifications of the gains and losses on natural gas hedges into earnings are recorded in production costs and subsequently charged to cost of goods sold in the consolidated statements of operations in the period in which the associated inventory is sold. As of September 30, 2018 , the Company’s natural gas swaps had a remaining notional quantity of 4.6 million MMBTU to mitigate commodity price volatility through December 2021. 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. Changes in interest rates will not affect the market value of such debt but will affect 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 in its consolidated balance sheet. As the derivatives are designated and qualify as cash flow hedges, the gains or losses on the interest rate cap agreements are recorded in stockholders’ equity as a component of OCI, net of tax. Reclassifications of the gains and losses on the interest rate cap agreements into earnings are recorded as part of interest expense in the consolidated statements of operations as the Company makes its interest payments on the hedged portion of its senior secured credit facilities. 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 cap rate currently in effect at September 30, 2018 is 2.50% . In November 2018, the Company entered into additional interest rate cap agreements to mitigate interest rate volatility from July 2020 through July 2022, with a cap rate of 3.50% on $500,000 of notional variable-rate debt. Use of Derivative Financial Instruments to Manage Foreign Currency Risk. The Company is exposed to risks related to its net investments in foreign operations due to fluctuations in foreign currency exchange rates, particularly between the United States dollar and the Euro. In connection with the February 2018 term loan refinancing (see Note 12 to these condensed consolidated financial statements), the Company entered into multiple cross currency interest rate swap arrangements with an aggregate notional amount of €280,000 ( $324,940 as of September 30, 2018 ) to hedge this exposure on the net investments of certain of its Euro-denominated subsidiaries. The Company records these swap agreements at fair value as assets or liabilities in its consolidated balance sheet. As the derivatives are designated and qualify as net investment hedges, changes in the fair value of the swaps attributable to changes in the spot exchange rates are recognized in cumulative translation adjustment (“CTA”) within OCI and are held there until the hedged net investments are sold or substantially liquidated. Changes in the fair value of the swaps attributable to the cross currency basis spread are excluded from the assessment of hedge effectiveness and are recorded in current period earnings. Upon such sale or liquidation, the amount recognized in CTA is reclassified to earnings and reported in the same line item as the gain or loss on the liquidation of the net investments. The fair values of derivative instruments held as of September 30, 2018 and December 31, 2017 are shown below: Balance sheet location September 30, 2018 December 31, 2017 Derivative assets: Derivatives designated as cash flow hedges: Natural gas swaps Prepaid and other current assets $ 248 $ — Interest rate caps Prepaid and other current assets 1,825 $ 44 Interest rate caps Other long-term assets 2,614 999 4,687 1,043 Derivatives designed as net investment hedges: Cross currency swaps Prepaid and other current assets 6,894 — Cross currency swaps Other long-term assets 1,905 — 8,799 — Total derivative assets $ 13,486 $ 1,043 Derivative liabilities: Derivatives designated as cash flow hedges: Natural gas swaps Accrued liabilities $ — $ 318 Natural gas swaps Other long-term liabilities 114 130 Total derivative liabilities $ 114 $ 448 The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on accumulated other comprehensive income (“AOCI”) for the three and nine months ended September 30, 2018 and 2017 : Three months ended September 30, 2018 2017 Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Interest rate caps Interest (expense) income $ 93 $ (71 ) $ (1,842 ) $ (13 ) Natural gas swaps Cost of goods sold 300 (30 ) (28 ) (94 ) $ 393 $ (101 ) $ (1,870 ) $ (107 ) Nine months ended September 30, 2018 2017 Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Interest rate caps Interest (expense) income $ 3,396 $ (164 ) $ (4,712 ) $ (22 ) Natural gas swaps Cost of goods sold 482 (101 ) (787 ) (104 ) $ 3,878 $ (265 ) $ (5,499 ) $ (126 ) The following tables show the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 : Location and amount of gain (loss) recognized in income on cash flow hedging relationships Three months ended September 30, 2018 2017 Cost of goods sold Interest (expense) income Cost of goods sold Interest (expense) income Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow hedges are recorded $ (319,703 ) $ (28,238 ) $ (289,270 ) $ (49,079 ) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income — (71 ) — (13 ) Commodity contracts: Amount of gain (loss) reclassified from AOCI into income (30 ) — (94 ) — Location and amount of gain (loss) recognized in income on cash flow hedging relationships Nine months ended September 30, 2018 2017 Cost of goods sold Interest (expense) income Cost of goods sold Interest (expense) income Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow hedges are recorded (934,088 ) (84,622 ) (821,342 ) (144,041 ) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income — (164 ) — (22 ) Commodity contracts: Amount of gain (loss) reclassified from AOCI into income (101 ) — (104 ) — The following tables show the effect of the Company’s net investment hedges on AOCI and the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 : Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Three months ended September 30, Three months ended September 30, Three months ended September 30, 2018 2017 2018 2017 2018 2017 Cross currency swaps $ 1,138 $ — Gain (loss) on sale of subsidiary $ — $ — Interest (expense) income $ 2,271 $ — Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Nine months ended Nine months ended Nine months ended 2018 2017 2018 2017 2018 2017 Cross currency swaps $ 8,799 $ — Gain (loss) on sale of subsidiary $ — $ — Interest (expense) income $ 5,662 $ — The amount of unrealized losses in AOCI that are expected to be reclassified to the consolidated statement of operations over the next twelve months is $ 294 as of September 30, 2018 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes: The effective income tax rate for the three months ended September 30, 2018 was 37.0% compared to 239.9% for the three months ended September 30, 2017 . The effective income tax rate for the nine months ended September 30, 2018 was 40.9% compared to (304.2)% for the nine months ended September 30, 2017 . The Company’s effective income tax rate has fluctuated primarily because of changes in income mix (including the effect of loss companies), the impacts of recently enacted U.S. tax law, the recording of provision to return adjustments in the U.S. and changes in foreign exchange gains and losses, which create permanent differences in certain jurisdictions. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2018 was mainly due to the tax effect of permanent differences related to foreign currency exchange gain or loss, inclusion of foreign earnings in the U.S. as a result of recently enacted tax law, pre-tax losses with no associated tax benefit, the recording of provision to return adjustments in the U.S., discrete impacts of opening balance sheet adjustments related to the Sovitec acquisition and state taxes. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for nine months ended September 30, 2017 was mainly due to the tax effect of repatriating foreign earnings back to the United States as dividends offset by lower tax rates in foreign jurisdictions as compared to the U.S. tax rate, foreign withholdings taxes, state taxes and non-deductible transaction costs. On December 22, 2017, the U.S. government enacted tax reform legislation (the Tax Cuts and Jobs Act of 2017, or “TCJA”) that introduced significant changes to the taxation of multination corporations. As a result of the TCJA, at December 31, 2017 the Company recorded a provisional tax benefit of $64,343 related to the corporate rate reduction from 35% to 21%, a provisional tax expense of $43,000 related to the one-time mandatory transition tax and a provisional tax benefit of $25,196 related to undistributed foreign earnings that are no longer intended to be permanently reinvested. Due to the complexities involved in accounting for the enactment of the TCJA, the SEC staff issued Staff Accounting Bulletin (“SAB”) No. 118, which allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB No. 118 provides that where reasonable estimates can be made, provisional accounting should be employed with respect to such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect prior to the TCJA. The income tax provision for the nine months ended September 30, 2018 reflects a discrete tax benefit with respect to a $1,459 adjustment made to our year-end provisional estimate of the one-time mandatory transition tax. The Company will continue to analyze the effects of the TCJA on its financial statements. Additional revised impacts with respect to the TCJA will be recorded as they are identified during the allowed measurement period prescribed by SAB No. 118. This measurement period extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other items, changes in the Company’s interpretation of the TCJA, legislative or administrative actions taken to clarify the intent of the statutory language which may differ from the Company’s current interpretation, any changes in accounting standards for income taxes made in response to the TCJA or any updates or changes to original estimates used to compute the provisional amounts. Updates to original estimates may include changes to earnings estimates as well as applicable foreign exchange rates. The TCJA enacted certain provisions that became effective on January 1, 2018. These provisions include, but are not limited to, the new Global Intangible Low-Taxed Income (“GILTI”) tax rules. Due to the complexity of the new GILTI tax, the Company is continuing to evaluate the GILTI provision of the TCJA and its impact on the financial statements, which remains uncertain. Per recent guidance issued by the FASB, the Company is permitted to make an accounting policy election to either (1) treat the taxes incurred as a result of the GILTI provision as a current-period expense when incurred or (2) factor such amounts into its measurement of deferred taxes. At this time, the Company is electing to treat any tax expense incurred as a result of GILTI as a current-period expense. Additionally, in assessing the ability to realize deferred tax assets, the Company has made a policy election to use the tax law ordering approach. With respect to operating results for the three and nine months ended September 30, 2018 , the Company has continued to incorporate an estimate of the GILTI income inclusion when estimating its U.S. GAAP annual effective tax rate. The Company expects this inclusion to be included in its 2018 U.S. taxable income. However, the estimated 2018 GILTI income inclusion may change materially as the Company continues to evaluate future legislative or administrative guidance that is put forth, any updates to assumptions and figures used for the current estimate or as a result of future tax planning or changes to the Company’s current structure and business. |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Benefit Plans | 15. Benefit Plans: The following information is provided for (1) the Company-sponsored defined benefit pension plans covering employees in the U.S. and certain employees at its foreign subsidiaries, (2) the Company-sponsored unfunded plans to provide certain health care benefits to retired employees in the U.S. and Canada, and (3) the Company’s defined benefit supplementary retirement plans which provide benefits for certain U.S. employees in excess of qualified plan limitations. Components of net periodic expense (benefit) are as follows: Defined Benefit Pension Plans U.S. Foreign Three months ended Three months ended 2018 2017 2018 2017 Service cost $ 243 $ 305 $ 933 $ 859 Interest cost 2,395 2,536 (601 ) 1,339 Expected return on plan assets (3,165 ) (3,061 ) 453 (1,111 ) Amortization of net loss — — 13 — Net periodic expense (benefit) $ (527 ) $ (220 ) $ 798 $ 1,087 U.S. Foreign Nine months ended Nine months ended 2018 2017 2018 2017 Service cost $ 776 $ 914 $ 2,665 $ 2,642 Interest cost 7,137 7,608 2,512 4,024 Expected return on plan assets (9,515 ) (9,183 ) (2,494 ) (3,329 ) Amortization of net less — — 38 — Curtailment gain recognized (576 ) — — — Net periodic expense (benefit) $ (2,178 ) $ (661 ) $ 2,721 $ 3,337 Supplemental Retirement Plans Three months ended Nine months ended 2018 2017 2018 2017 Interest cost $ 110 $ 123 $ 330 $ 370 Net periodic expense $ 110 $ 123 $ 330 $ 370 Other Postretirement Benefit Plans Three months ended Nine months ended 2018 2017 2018 2017 Service cost $ 3 $ 5 $ 12 $ 15 Interest cost 43 40 108 122 Amortization of prior service credit (40 ) (19 ) (79 ) (58 ) Amortization of net gain (11 ) (19 ) (33 ) (58 ) Net periodic expense (benefit) $ (5 ) $ 7 $ 8 $ 21 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | 16. Commitments and Contingent Liabilities: 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. While management believes that the liabilities resulting from such lawsuits and claims are not probable or reasonably estimable, certain accruals have been reflected in our condensed consolidated financial statements and are described in detail within this note. 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 September 30, 2018 and December 31, 2017 , the Company has recorded a reserve of $ 861 and $ 842 , respectively, for costs required for contamination assessment and removal work at Rahway. 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 September 30, 2018 and December 31, 2017 , the Company has recorded a reserve of $ 630 and $ 701 , respectively, for the remediation costs of PCB impacted soils at the Company’s facilities. 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 September 30, 2018 and December 31, 2017 , the Company has recorded a reserve of $ 752 and $837 , respectively, for costs related to this potential liability. The Company has recorded a reserve of $ 1,047 and $ 1,245 as of September 30, 2018 and December 31, 2017 , 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 September 30, 2018 and December 31, 2017 , the Company has recorded a reserve of $ 1,013 and $ 1,220 , 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. |
Reportable Segments
Reportable Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Reportable Segments | 17. Reportable Segments: Summarized financial information for the Company’s (1) Environmental Catalysts & Services and (2) Performance Materials & Chemicals reportable segments is shown in the following table: Three months ended Nine months ended 2018 2017 2018 2017 Net sales: Silica Catalysts $ 16,347 $ 15,117 $ 50,167 $ 52,302 Refining Services 123,369 100,424 336,154 298,512 Environmental Catalysts & Services (1) 139,716 115,541 386,321 350,814 Performance Chemicals 174,722 175,467 548,446 515,454 Performance Materials 115,380 104,433 304,660 257,676 Eliminations (1,783 ) (2,828 ) (8,804 ) (7,349 ) Performance Materials & Chemicals 288,319 277,072 844,302 765,781 Inter-segment sales eliminations (2) (832 ) (784 ) (2,510 ) (2,568 ) Total $ 427,203 $ 391,829 $ 1,228,113 $ 1,114,027 Segment Adjusted EBITDA: (3) Environmental Catalysts & Services (4) $ 65,309 $ 61,900 $ 188,594 $ 182,578 Performance Materials & Chemicals 63,088 65,885 193,629 184,741 Total Segment Adjusted EBITDA (5) $ 128,397 $ 127,785 $ 382,223 $ 367,319 (1) Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 10 to these condensed consolidated financial statements for further information). The proportionate share of sales is $32,297 and $37,622 for the three months ended September 30, 2018 and 2017 , respectively. The proportionate share of sales is $120,159 and $100,991 for the nine months ended September 30, 2018 and 2017 , 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 $10,513 for the three months ended September 30, 2018 , which includes $5,563 of equity in net income plus $1,658 of amortization of investment in affiliate step-up plus $3,292 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $14,398 for the three months ended September 30, 2017 , which includes $10,151 of equity in net income plus $1,658 of amortization of investment in affiliate step-up plus $2,563 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $45,194 for the nine months ended September 30, 2018 , which includes $31,005 of equity in net income plus $4,975 of amortization of investment in affiliate step-up plus $9,214 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $39,690 for the nine months ended September 30, 2017 , which includes $24,594 of equity in net income plus $6,941 of amortization of investment in affiliate step-up plus $8,073 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 of net income (loss) attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows: Three months ended Nine months ended 2018 2017 2018 2017 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income (loss) attributable to PQ Group Holdings Inc. $ 14,185 $ (3,345 ) $ 30,181 $ (7,408 ) Provision for income taxes 8,470 5,172 21,590 5,269 Interest expense, net 28,238 49,079 84,622 144,041 Depreciation and amortization 43,827 45,929 139,298 129,135 Segment EBITDA 94,720 96,835 275,691 271,037 Unallocated corporate expenses 10,276 7,885 27,322 23,474 Joint venture depreciation, amortization and interest 3,292 2,563 9,214 8,073 Amortization of investment in affiliate step-up 1,658 1,658 4,975 6,941 Amortization of inventory step-up — — 1,603 871 Debt extinguishment costs 864 453 6,743 453 Net loss on asset disposals 5,202 3,494 11,106 6,419 Foreign currency exchange loss 3,527 5,256 15,347 21,612 LIFO expense 856 750 5,903 3,229 Management advisory fees — 1,250 — 3,750 Transaction and other related costs 210 966 895 5,300 Equity-based and other non-cash compensation 4,252 1,041 11,879 3,869 Restructuring, integration and business optimization expenses 2,178 4,957 5,662 8,009 Defined benefit pension plan cost 112 791 260 2,200 Other 1,250 (114 ) 5,623 2,082 Segment Adjusted EBITDA $ 128,397 $ 127,785 $ 382,223 $ 367,319 |
Restructuring and Other Related
Restructuring and Other Related Costs | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Costs | 18. Restructuring and Other Related Costs: The following table presents the components of restructuring and other related costs for the three and nine months ended September 30, 2018 and 2017 included in other operating expense, net in the accompanying condensed consolidated statements of operations: Three months ended Nine months ended 2018 2017 2018 2017 Severance and other employee costs related to legacy Eco restructuring plan $ — $ — $ — $ 830 Severance and other employee costs related to performance materials plant closure 219 3,868 326 3,868 Other related costs 54 238 77 880 $ 273 $ 4,106 $ 403 $ 5,578 Legacy Eco Restructuring Plan On July 30, 2014, Eco Services Operations LLC (“Eco Services”), a newly formed Delaware limited liability company and indirect subsidiary of certain investment funds affiliated with CCMP Capital Advisors, LP, 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 $0 and $830 for the nine months ended September 30, 2018 and 2017 , respectively. No severance costs were incurred related to this plan for the three months ended September 30, 2018 and 2017 . 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, and subsequently reduced production. The plan was part of the Company’s overall strategy with respect to the Acquisition (see Note 6 to these condensed consolidated financial statements) and the realization of cost and other synergies in connection with the transaction. As a result of a change in the market and increased customer demand for the products produced at this facility, the Company intends to keep the facility open and expanded production at this facility during the third quarter of 2018 from the previously reduced levels. However, the Company continues to pay its obligations to the individuals originally separated from service as part of the reorganization, with additional payments anticipated through 2019, primarily for individuals who extended their separation dates as a result of the decision to continue operations at the facility. The Company considers the restructuring plan related to the original decision to close the facility substantially complete, with no additional restructuring charges anticipated. 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 nine months ended September 30, 2018 : Legacy Eco Performance Materials Plant Closure Total Restructuring Charges Balance at December 31, 2017 $ 215 $ 3,123 $ 3,338 Cash payments (215 ) (2,136 ) (2,351 ) Other adjustments — 326 326 Foreign exchange impact — (18 ) (18 ) Balance at September 30, 2018 $ — $ 1,295 $ 1,295 Other Related Costs The Company incurred severance and other costs of $54 and $238 for the three months ended September 30, 2018 and 2017 , respectively, and $77 and $880 for the nine months ended September 30, 2018 and 2017 , respectively. These costs were not associated with formal restructuring plans and primarily related to severance charges for certain employees, professional fees and other expenses related to the Company’s organizational changes. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 19. Earnings per Share: 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. 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. 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, 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. The reconciliation from basic to diluted weighted average shares outstanding is as follows: Three months ended Nine months ended 2018 2017 2018 2017 Weighted average shares outstanding – Basic 133,336,352 104,096,837 133,237,653 104,020,180 Dilutive effect of unvested common shares and restricted stock units with service conditions and assumed stock option exercises and conversions 1,239,810 — 985,975 — Weighted average shares outstanding – Diluted 134,576,162 104,096,837 134,223,628 104,020,180 Basic and diluted earnings per share are calculated as follows: Three months ended Nine months ended 2018 2017 2018 2017 Numerator: Net income (loss) attributable to PQ Group Holdings Inc. $ 14,185 $ (3,345 ) $ 30,181 $ (7,408 ) Denominator: Weighted average shares outstanding – Basic 133,336,352 104,096,837 133,237,653 104,020,180 Weighted average shares outstanding – Diluted 134,576,162 104,096,837 134,223,628 104,020,180 Net income (loss) per share: Basic income (loss) per share $ 0.11 $ (0.03 ) $ 0.23 $ (0.07 ) Diluted income (loss) per share $ 0.11 $ (0.03 ) $ 0.22 $ (0.07 ) The table below presents the details of the Company’s equity-based awards outstanding at the end of each respective period that were excluded from the calculation of diluted earnings per share: September 30, 2018 2017 Restricted stock awards with performance only targets not yet achieved 1,659,050 1,769,447 Stock options with performance only targets not yet achieved 586,253 586,253 Anti-dilutive restricted stock awards and restricted stock units — 340,380 Anti-dilutive stock options — 1,539,266 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 periods. For the three and nine months ended September 30, 2017 , all of the Company’s restricted stock awards and stock options subject to service vesting conditions were considered anti-dilutive, as the Company was in a net loss position. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 20. Supplemental Cash Flow Information: The following table presents supplemental cash flow information for the Company: Nine months ended 2018 2017 Cash paid during the period for: Income taxes $ 16,121 $ 21,005 Interest (1) 79,333 118,793 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the period end 10,624 12,924 (1) Excludes capitalized interest and the net interest proceeds on swaps designated as net investment hedges, which are included within cash flows from investing activities in the Company’s condensed consolidated statements of cash flows. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets as of September 30, 2018 and 2017 to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows for the nine months then ended: September 30, 2018 2017 Cash and cash equivalents $ 56,684 $ 68,838 Restricted cash included in prepaid and other current assets 1,333 2,300 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 58,017 $ 71,138 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21. Subsequent Events: Other than the $500,000 notional amount of interest rate cap agreements entered into by the Company in November 2018 as described in Note 13 to these condensed consolidated financial statements, the Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements included herein are unaudited. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations for interim reporting. In the opinion of management, all adjustments of a normal and recurring nature necessary to state fairly the financial position and results of operations have been included. The results of operations are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Other than the update to our accounting policies described in Note 3 , the Company has continued to follow the accounting policies set forth in those consolidated financial statements. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards In August 2017, the Financial Accounting Standards Board (“FASB”) issued amendments related to hedge accounting. The amendments expand hedge accounting for non-financial and financial risk components and revise the measurement methodologies to better align with an entity’s 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 guidance should be applied prospectively for the amended presentation and disclosure requirements, and through a cumulative-effect adjustment to beginning retained earnings for any cash flow and net investment hedges existing at the date of adoption. The Company early adopted the guidance effective January 1, 2018. The Company’s cash flow hedges in place at the date of adoption yielded an immaterial amount of ineffectiveness; therefore, the Company did not reflect an adjustment to beginning retained earnings upon adoption. The amended presentation and disclosure requirements are reflected under the new guidance in Note 13 to these condensed consolidated financial statements. 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 condensed consolidated financial statements upon adoption. 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 condensed consolidated statements of operations, depending on whether the costs were associated with employees involved in manufacturing or back office support functions. Under the new guidance, the service cost component of the Company’s pension costs remained in the same line items of the condensed consolidated statements of operations, but the remaining components are now reported as part of nonoperating income in the other (income) expense, net line item of the condensed 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 post-retirement benefit plan note as its basis of estimation for the prior comparative periods. The Company utilized the practical expedient, and $172 and $504 of a net pension benefit for the three and nine months ended September 30, 2017 , respectively, was reclassified to other (income) expense, net. For the three and nine months ended September 30, 2018 , the amount of pension costs included in other (income) expense, net was a net benefit of $803 and $2,572 , respectively. In January 2017, the FASB issued guidance that 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 condensed 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 September 30, 2018 and 2017 , the Company had $1,333 and $2,300 , respectively, of restricted cash included in prepaid and other current assets on its condensed consolidated balance sheets related to its New Market Tax Credit financing arrangements as well as other small restricted cash balances. Changes in the Company’s restricted cash balances prior to the adoption of the new guidance were reflected within cash flows from investing activities in the Company’s condensed consolidated statements of cash flows. The prior comparative period in the Company’s condensed consolidated statement of cash flows has been updated to conform to the new guidance. See Note 20 to these condensed consolidated financial statements for supplemental cash flow disclosures. 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 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. There was no impact to the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2017 . The Company applied the new guidance to the term loan refinancing that occurred during the nine months ended September 30, 2018 ; see Note 12 to these condensed consolidated financial statements for further information on the debt refinancing transaction. There were no other items in the new guidance which necessitated a change in the Company’s reporting in its condensed consolidated statements of cash flows for the nine months ended September 30, 2018 or 2017 . In May 2014, the FASB issued accounting guidance (with subsequent targeted amendments) to 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. The Company implemented the guidance under the modified retrospective transition method of adoption. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of adoption of the new revenue recognition guidance was immaterial for the nine months ended September 30, 2018 , and there was no transition adjustment required upon adoption. See Note 3 to these condensed consolidated financial statements for additional disclosures required by the new guidance. Accounting Standards Not Yet Adopted In August 2018, the FASB issued guidance which will align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement (i.e., a hosting arrangement) that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company is currently evaluating the effect that the new guidance would have on its consolidated financial statements. In August 2018, the FASB issued guidance which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance eliminates certain disclosure requirements, including the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and the effects of a one-percentage point change in assumed health care cost trend rates. The guidance also requires additional disclosure of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The guidance is effective for fiscal years ending after December 15, 2020 with early adoption permitted, and is required to be applied on a retrospective basis to all periods presented. The Company will modify its benefit plan disclosures in accordance with the new guidance upon adoption, and the guidance will not have a material impact on its consolidated financial statements. In August 2018, the FASB issued guidance which modifies certain disclosure requirements over fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company believes that the new guidance will not have a material impact on its consolidated financial statements. In June 2018, the FASB issued guidance which conforms the accounting for the issuance of all share-based payments using the same accounting model. Previously, the accounting for share-based payments to non-employees was covered under a different framework than those made to employees. Under the new guidance, awards to both employees and non-employees will essentially follow the same model, with small variations related to determining the term assumption when valuing a non-employee award as well as a different expense attribution model for non-employee awards. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the effect that the new guidance would have on its consolidated financial statements. In February 2018, the FASB issued guidance which will permit entities to make an election to reclassify income tax effects stranded in accumulated other comprehensive income (“AOCI”) to retained earnings as a result of tax reform legislation enacted by the U.S. government on December 22, 2017. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted in any interim period for which the financial statements have not yet been issued. Prior to the enactment of the tax reform legislation on December 22, 2017, the Company had amounts recorded in AOCI related to its domestic pension, postretirement and supplementary benefit plans and cash flow hedging relationships that were based on pre-enactment tax rates. The Company is evaluating the impact that the new guidance will have on its consolidated financial statements. If the Company makes the election to reclassify the stranded income tax effects from AOCI, it may do so using one of two transition methods: restrospectively, or at the beginning of the period of adoption. 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 Securities and Exchange Commission (“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. The Company will apply the guidance prospectively to goodwill impairment tests subsequent to the adoption date. In June 2016, the FASB issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash. Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company believes that the new guidance will not have a material impact on its consolidated financial statements. 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. The Company can choose to apply the new guidance at the beginning of the earliest period presented in the financial statements, or at the date of adoption, with a cumulative-effect adjustment to the opening balance of retained earnings. 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. The Company has prepared a detailed plan to implement the new guidance, gathered the information related to its current lease population, and is assessing its leases in the context of the new framework. The Company is working with a vendor to implement a lease management system which will assist in delivering the required accounting changes. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements, business processes, systems and control environment. The Company does not plan to implement the guidance prior to the required adoption date of January 1, 2019, and the Company plans to initially apply the transition requirements of the guidance at the date of adoption. Revenue Recognition Model In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the contract with the customer; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company identifies a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that the Company will collect the consideration to which it is entitled. Evidence of a contract between the Company and its customers may take the form of a master service agreement (“MSA”), a MSA in combination with an underlying purchase order, a combination of a pricing quote with an underlying purchase order or an individual purchase order received from a customer. The Company and certain of its customers enter into MSAs that establish the terms, including prices, under which orders to purchase goods may be placed. In cases where the MSA contains a distinct order for goods or contains an enforceable minimum quantity to be purchased by the customer, the Company considers the MSA to be evidence of a contract between the Company and its customer as the MSA creates enforceable rights and obligations. In cases where the MSA does not contain a distinct order for goods, the Company’s contract with a customer is the purchase order issued under the MSA. Customers of the Company may also negotiate orders via pricing quotes, which typically detail product pricing, delivery terms and payment information. When a customer procures goods under this method, the Company considers the combination of the pricing quote and the purchase order to create enforceable rights and obligations. Absent either a MSA or pricing quote, the Company considers an individual purchase order to create enforceable rights and obligations. The Company identifies a performance obligation in a contract for each promised good that is separately identifiable from other promises in the contract and for which the customer can benefit from the good. The majority of the Company’s contracts have a single performance obligation, which is the promise to transfer individual goods to the customer. The Company has certain contracts that include multiple performance obligations under which the purchase price for each distinct performance obligation is defined in the contract. These distinct performance obligations may include stand-ready provisions, which are arrangements to provide a customer assurance that they will have access to output from the Company’s manufacturing facilities, or monthly reservations of capacity fees. The Company considers stand-ready provisions and reservation of capacity fees to be performance obligations satisfied over time. Revenues related to stand-ready provisions and reservation of capacity fees are recognized on a ratable basis throughout the contract term and billed to the customer on a monthly basis. As described above, the Company’s MSAs with its customers may outline prices for individual products or contract provisions. MSAs in the Company’s performance chemicals and refining services product groups may contain provisions whereby raw materials costs are passed-through to the customer per the terms of their contract. The Company’s exposure to fluctuations in raw materials prices is limited, as the majority of pass-through contract provisions reset based on fluctuations in the underlying raw material price. MSAs in the Company’s refining services product group also contain take-or-pay arrangements, whereby the customer would incur a penalty in the form of a shortfall volume fee. Currently there is no history in which customers fail to meet the contractual minimum. Revenue from product sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns or other allowances that are offered within contracts between the Company and its customers. The Company recognizes revenues when performance obligations under the terms of a contract with its customer are satisfied, which generally occurs at a point in time by transferring control of a product to the customer. The Company determines the point in time when a customer obtains control of a product and the Company satisfies the performance obligation by considering factors including when the Company has a right to payment for the product, the customer has legal title to the product, the Company has transferred possession of the product, the customer has assumed the risks and rewards of ownership of the product and the customer has accepted the product. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The Company does not have any significant payment terms as payment is received at, or shortly after, the point of sale. Contract Assets and Liabilities A contract asset is a right to consideration in exchange for goods that the Company has transferred to a customer when that right is conditional on something other than the passage of time. A contract liability exists when the Company receives consideration in advance of performance obligations. Other than trade accounts receivable and customer return accruals, the Company has not recorded any additional contract assets or contract liabilities on its condensed consolidated balance sheet as of September 30, 2018 . Practical Expedients and Accounting Policy Elections The Company has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the new revenue recognition guidance. Certain of the Company’s contracts with customers are based on an individual purchase order; thus, the duration of these contracts are for one year or less. The Company has made an accounting policy election to omit certain disclosures related to remaining performance obligations for contracts which have an initial term of one year or less. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities as opposed to separate performance obligations, and the Company recognizes revenue upon the transfer of control to the customer. Accordingly, the costs associated with these shipping and handling activities are accrued when the related revenue is recognized under the Company’s policy election. The Company expenses incremental costs of obtaining a contract as incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Sales, value added and other taxes the Company collects concurrent with revenue producing activities are excluded from revenues. |
Fair Value Measurement | 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 15 to these condensed consolidated financial statements regarding defined supplementary retirement plans. The Company’s restoration plan assets are included in other long-term assets on its condensed consolidated balance sheets. Gains and losses related to these investments are included in other expense, net in the Company’s condensed consolidated statements of operations. Unrealized gains and losses associated with the underlying stock and fixed income mutual funds were immaterial as of September 30, 2018 and December 31, 2017 , respectively. 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, natural gas swaps and cross currency 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 from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company’s portfolio of products are integrated into a variety of end uses, which are described in the table below. Key End Uses Key Products Industrial & process chemicals • Silicate precursors for the tire industry • Glass beads, or microspheres, for metal finishing end uses Fuels & emission control • Refinery catalysts • Emission control catalysts • Catalyst recycling services • Silicate for catalyst manufacturing Packaging & engineered plastics • Catalysts for high-density polyethlene and chemicals syntheses • Antiblocks for film packaging • Solid and hollow microspheres for composite plastics • Sulfur derivatives for nylon production Highway safety & construction • Reflective markings for roadways and airports • Silica gels for surface coatings Consumer products • Silica gels for edible oil and beer clarification • Precipitated silicas, silicates and zeolites for the dentifrice and dishwasher and laundry detergent applications Natural resources • Silicates for drilling muds • Hollow glass beads, or microspheres, for oil well cements • Silicates and alum for water treatment mining • Bleaching aids for paper The following tables disaggregate the Company’s sales, by segment and end use, for the three and nine months ended September 30, 2018 : Three months ended September 30, 2018 Environmental Catalysts & Services Performance Materials & Chemicals Total Industrial & process chemicals $ 21,027 $ 65,070 $ 86,097 Fuels & emission control (1) 66,095 — 66,095 Packaging & engineered plastics 32,983 31,848 64,831 Highway safety & construction (1) — 105,204 105,204 Consumer products — 67,138 67,138 Natural resources 19,611 19,059 38,670 Total 139,716 288,319 428,035 Inter-segment sales eliminations (832 ) — (832 ) Total segment sales $ 138,884 $ 288,319 $ 427,203 Nine months ended September 30, 2018 Environmental Catalysts & Services Performance Materials & Chemicals Total Industrial & process chemicals $ 55,401 $ 216,152 $ 271,553 Fuels & emission control (1) 182,304 — 182,304 Packaging & engineered plastics 95,145 97,622 192,767 Highway safety & construction (1) — 263,095 263,095 Consumer products — 209,256 209,256 Natural resources 53,471 58,177 111,648 Total 386,321 844,302 1,230,623 Inter-segment sales eliminations (2,510 ) — (2,510 ) Total segment sales $ 383,811 $ 844,302 $ 1,228,113 (1) As described in Note 1 , the Company experiences seasonal sales fluctuations to customers in the fuels & emission control and highway safety & construction end uses. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 and December 31, 2017 , and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. 9/30/2018 Quoted Prices in Significant Other Observable Inputs (Level 2) Significant Assets: Derivative contracts (Note 13) $ 13,486 $ — $ 13,486 $ — Restoration plan assets 4,865 4,865 — — Total $ 18,351 $ 4,865 $ 13,486 $ — Liabilities: Derivative contracts (Note 13) $ 114 $ — $ 114 $ — Total $ 114 $ — $ 114 $ — 12/31/2017 Quoted Prices in Significant Other Observable Inputs (Level 2) Significant Assets: Derivative contracts (Note 13) $ 1,043 $ — $ 1,043 $ — Restoration plan assets 5,576 5,576 — — Total $ 6,619 $ 5,576 $ 1,043 $ — Liabilities: Derivative contracts (Note 13) $ 448 $ — $ 448 $ — Total $ 448 $ — $ 448 $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables present the tax effects of each component of other comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017 : Three months ended September 30, 2018 2017 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 $ (69 ) $ 17 $ (52 ) $ (33 ) $ 13 $ (20 ) Benefit plans, net (69 ) 17 (52 ) (33 ) 13 (20 ) Net gain (loss) from hedging activities 494 (124 ) 370 (486 ) 185 (301 ) Foreign currency translation 3,391 1,795 5,186 21,343 (2,493 ) 18,850 Other comprehensive income $ 3,816 $ 1,688 $ 5,504 $ 20,824 $ (2,295 ) $ 18,529 Nine months ended September 30, 2018 2017 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 $ 1,740 $ (435 ) $ 1,305 $ (261 ) $ 38 $ (223 ) Benefit plans, net 1,740 (435 ) 1,305 (261 ) 38 (223 ) Net gain (loss) from hedging activities 4,143 (1,037 ) 3,106 (5,373 ) 2,047 (3,326 ) Foreign currency translation (16,442 ) 806 (15,636 ) 69,202 (8,710 ) 60,492 Other comprehensive income (loss) $ (10,559 ) $ (666 ) $ (11,225 ) $ 63,568 $ (6,625 ) $ 56,943 The following table presents the change in accumulated other comprehensive income, net of tax, by component for the nine months ended September 30, 2018 and 2017 : Defined benefit Net gain (loss) from hedging activities Foreign Total December 31, 2017 $ 7,412 $ 967 $ (4,068 ) $ 4,311 Other comprehensive income (loss) before reclassifications 1,360 2,906 (16,363 ) (12,097 ) Amounts reclassified from accumulated other comprehensive income (1) (55 ) 200 — 145 Net current period other comprehensive income (loss) 1,305 3,106 (16,363 ) (11,952 ) September 30, 2018 $ 8,717 $ 4,073 $ (20,431 ) $ (7,641 ) December 31, 2016 $ 7,513 $ 4,557 $ (65,781 ) $ (53,711 ) Other comprehensive income (loss) before reclassifications (126 ) (3,404 ) 60,238 56,708 Amounts reclassified from accumulated other comprehensive income (1) (97 ) 78 — (19 ) Net current period other comprehensive income (loss) (223 ) (3,326 ) 60,238 56,689 September 30, 2017 $ 7,290 $ 1,231 $ (5,543 ) $ 2,978 (1) See the following table for details about these reclassifications. Amounts in parentheses indicate credits to profit/loss. |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 . Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income(a) Affected Line Item in the Statements of Operations Three months ended Nine months ended 2018 2017 2018 2017 Defined benefit and other postretirement plans Amortization of prior service credit $ (40 ) $ (19 ) $ (79 ) $ (58 ) (b) Amortization of net (gain) loss 2 (19 ) 5 (58 ) (b) (38 ) (38 ) (74 ) (116 ) Total before tax 13 6 19 19 Tax expense (benefit) $ (25 ) $ (32 ) $ (55 ) $ (97 ) Net of tax Net (gain) loss from hedging activities Interest rate caps $ 71 $ 13 $ 164 $ 22 Interest expense Natural gas swaps 30 94 101 104 Cost of goods sold 101 107 265 126 Total before tax (24 ) (41 ) (65 ) (48 ) Tax expense (benefit) $ 77 $ 66 $ 200 $ 78 Net of tax Total reclassifications for the period $ 52 $ 34 $ 145 $ (19 ) Net of tax (a) Amounts in parentheses indicate credits to profit/loss. (b) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost (see Note 15 to these condensed consolidated financial statements for additional details). |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Preliminary Purchase Price Allocation | The following table sets forth the calculation and allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition, which was complete as of March 31, 2018. Provisional Purchase Price Allocation Adjustments Purchase Price Allocation Total consideration, net of cash acquired $ 41,572 $ — $ 41,572 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 14,305 $ — $ 14,305 Inventories 7,645 1,603 9,248 Prepaid and other current assets 400 — 400 Property, plant and equipment 9,020 15,960 24,980 Other intangible assets — 5,753 5,753 Other long-term assets 129 15,921 16,050 Fair value of assets acquired 31,499 39,237 70,736 Current debt (6,420 ) — (6,420 ) Accounts payable (10,748 ) — (10,748 ) Long-term debt (10,189 ) — (10,189 ) Deferred income taxes — (4,426 ) (4,426 ) Other long-term liabilities (154 ) — (154 ) Fair value of net assets acquired 3,988 34,811 38,799 Goodwill 37,584 (34,811 ) 2,773 $ 41,572 $ — $ 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 Expected Useful Life (in years) Intangible assets subject to amortization: Trademarks $ 1,767 11 Technical know-how 1,892 11 Total intangible assets subject to amortization 3,659 Trade names, not subject to amortization 2,094 Indefinite Total $ 5,753 |
Business Acquisition, Pro Forma Information | Net sales and net income generated by the Sovitec legal entities included in the Company’s condensed consolidated statements of operations are as follows: Three months ended Nine months ended 2018 2017 2018 2017 Net sales $ 16,455 $ 13,490 $ 46,702 $ 17,194 Net income 386 644 1,200 1,148 Unaudited Nine months ended September 30, 2017 Pro forma sales $ 1,130,454 Pro forma net loss (6,865 ) Pro forma net loss attributable to PQ Group Holdings Inc. (7,272 ) Pro forma basic and diluted net loss per share $ (0.07 ) |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill for the nine months ended September 30, 2018 is summarized as follows: Performance Environmental Total Balance as of December 31, 2017 $ 914,623 $ 391,333 $ 1,305,956 Goodwill recognized 649 — 649 Goodwill adjustments (1) (34,811 ) — (34,811 ) Foreign exchange impact (7,816 ) (999 ) (8,815 ) Balance as of September 30, 2018 $ 872,645 $ 390,334 $ 1,262,979 (1) Represents the measurement period adjustments on the net assets acquired as part of the Acquisition (see Note 6 to these condensed consolidated financial statements for further information regarding the Acquisition). |
Other Operating Expense, Net (T
Other Operating Expense, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | A summary of other operating expense, net is as follows: Three months ended Nine months ended 2018 2017 2018 2017 Amortization expense $ 8,711 $ 9,146 $ 26,404 $ 23,270 Transaction and other related costs (1) 215 966 827 5,295 Restructuring and other related costs (Note 18) 273 4,106 403 5,578 Net loss on asset disposals (2) 5,202 3,494 11,106 6,419 Management advisory fees — 1,250 — 3,750 Insurance proceeds (2) — — (1,557 ) — Other, net 2,100 871 4,505 2,844 $ 16,501 $ 19,833 $ 41,688 $ 47,156 (1) Transaction and other related costs for the three and nine months ended September 30, 2018 and 2017 primarily include transaction costs associated with the Company’s initial public offering (exclusive of the direct costs recorded in stockholders’ equity net of the proceeds from the offering) and the Acquisition (see Note 6 to these condensed consolidated financial statements for further information). (2) During the nine months ended September 30, 2018 , the Company recognized $2,500 of insurance proceeds in its condensed consolidated statement of operations related to the Company’s claim for losses sustained during Hurricane Harvey in August 2017. For the nine months ended September 30, 2018 , $1,557 was recorded as a gain in other operating expense, net, as reimbursement of expenses, $207 was recorded as a gain in net loss on asset disposals within other operating expense, net, for the Company’s previously recognized property losses, and $736 represented proceeds in excess of the Company’s property losses which was recorded as a non-operating gain in other expense, net, in the Company’s consolidated statement of operations. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories are classified and valued as follows: September 30, December 31, Finished products and work in process $ 189,004 $ 199,919 Raw materials 60,294 62,469 $ 249,298 $ 262,388 Valued at lower of cost or market: LIFO basis $ 153,093 $ 162,315 Valued at lower of cost and net realizable value: FIFO or average cost basis 96,205 100,073 $ 249,298 $ 262,388 |
Investments in Affiliated Com_2
Investments in Affiliated Companies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of September 30, 2018 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) : Three months ended Nine months ended 2018 2017 2018 2017 Net sales $ 74,088 $ 83,983 $ 271,562 $ 225,770 Gross profit 24,495 33,276 100,686 91,862 Operating income 14,594 22,713 72,257 60,408 Net income 14,545 23,819 72,204 63,663 (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. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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: September 30, December 31, Land $ 191,883 $ 191,006 Buildings 210,314 200,054 Machinery and equipment 1,082,219 1,005,025 Construction in progress 114,042 145,414 1,598,458 1,541,499 Less: accumulated depreciation (393,557 ) (311,115 ) $ 1,204,901 $ 1,230,384 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The summary of long-term debt is as follows: September 30, December 31, 2017 Term Loan Facility (U.S. dollar denominated) $ — $ 916,153 Term Loan Facility (Euro denominated) — 335,808 New Term Loan Facility 1,212,498 — 6.75% Senior Secured Notes due 2022 625,000 625,000 5.75% Senior Unsecured Notes due 2025 300,000 300,000 ABL Facility — 25,000 Other 68,361 68,318 Total debt 2,205,859 2,270,279 Original issue discount (20,050 ) (18,390 ) Deferred financing costs (17,351 ) (21,403 ) Total debt, net of original issue discount and deferred financing costs 2,168,458 2,230,486 Less: current portion (21,372 ) (45,166 ) Total long-term debt, excluding current portion $ 2,147,086 $ 2,185,320 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivatives Held | The fair values of derivative instruments held as of September 30, 2018 and December 31, 2017 are shown below: Balance sheet location September 30, 2018 December 31, 2017 Derivative assets: Derivatives designated as cash flow hedges: Natural gas swaps Prepaid and other current assets $ 248 $ — Interest rate caps Prepaid and other current assets 1,825 $ 44 Interest rate caps Other long-term assets 2,614 999 4,687 1,043 Derivatives designed as net investment hedges: Cross currency swaps Prepaid and other current assets 6,894 — Cross currency swaps Other long-term assets 1,905 — 8,799 — Total derivative assets $ 13,486 $ 1,043 Derivative liabilities: Derivatives designated as cash flow hedges: Natural gas swaps Accrued liabilities $ — $ 318 Natural gas swaps Other long-term liabilities 114 130 Total derivative liabilities $ 114 $ 448 |
Effect of Derivative Instruments Designated as Hedges on Other Comprehensive Income | The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on accumulated other comprehensive income (“AOCI”) for the three and nine months ended September 30, 2018 and 2017 : Three months ended September 30, 2018 2017 Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Interest rate caps Interest (expense) income $ 93 $ (71 ) $ (1,842 ) $ (13 ) Natural gas swaps Cost of goods sold 300 (30 ) (28 ) (94 ) $ 393 $ (101 ) $ (1,870 ) $ (107 ) Nine months ended September 30, 2018 2017 Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Interest rate caps Interest (expense) income $ 3,396 $ (164 ) $ (4,712 ) $ (22 ) Natural gas swaps Cost of goods sold 482 (101 ) (787 ) (104 ) $ 3,878 $ (265 ) $ (5,499 ) $ (126 ) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables show the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 : Location and amount of gain (loss) recognized in income on cash flow hedging relationships Three months ended September 30, 2018 2017 Cost of goods sold Interest (expense) income Cost of goods sold Interest (expense) income Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow hedges are recorded $ (319,703 ) $ (28,238 ) $ (289,270 ) $ (49,079 ) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income — (71 ) — (13 ) Commodity contracts: Amount of gain (loss) reclassified from AOCI into income (30 ) — (94 ) — Location and amount of gain (loss) recognized in income on cash flow hedging relationships Nine months ended September 30, 2018 2017 Cost of goods sold Interest (expense) income Cost of goods sold Interest (expense) income Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow hedges are recorded (934,088 ) (84,622 ) (821,342 ) (144,041 ) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income — (164 ) — (22 ) Commodity contracts: Amount of gain (loss) reclassified from AOCI into income (101 ) — (104 ) — |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The following tables show the effect of the Company’s net investment hedges on AOCI and the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 : Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Three months ended September 30, Three months ended September 30, Three months ended September 30, 2018 2017 2018 2017 2018 2017 Cross currency swaps $ 1,138 $ — Gain (loss) on sale of subsidiary $ — $ — Interest (expense) income $ 2,271 $ — Amount of gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Nine months ended Nine months ended Nine months ended 2018 2017 2018 2017 2018 2017 Cross currency swaps $ 8,799 $ — Gain (loss) on sale of subsidiary $ — $ — Interest (expense) income $ 5,662 $ — |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Pension Plans | |
Defined Benefit Plan Disclosure | |
Components of Net Periodic Expense | Components of net periodic expense (benefit) are as follows: Defined Benefit Pension Plans U.S. Foreign Three months ended Three months ended 2018 2017 2018 2017 Service cost $ 243 $ 305 $ 933 $ 859 Interest cost 2,395 2,536 (601 ) 1,339 Expected return on plan assets (3,165 ) (3,061 ) 453 (1,111 ) Amortization of net loss — — 13 — Net periodic expense (benefit) $ (527 ) $ (220 ) $ 798 $ 1,087 U.S. Foreign Nine months ended Nine months ended 2018 2017 2018 2017 Service cost $ 776 $ 914 $ 2,665 $ 2,642 Interest cost 7,137 7,608 2,512 4,024 Expected return on plan assets (9,515 ) (9,183 ) (2,494 ) (3,329 ) Amortization of net less — — 38 — Curtailment gain recognized (576 ) — — — Net periodic expense (benefit) $ (2,178 ) $ (661 ) $ 2,721 $ 3,337 |
Supplemental Retirement Plans | |
Defined Benefit Plan Disclosure | |
Components of Net Periodic Expense | Supplemental Retirement Plans Three months ended Nine months ended 2018 2017 2018 2017 Interest cost $ 110 $ 123 $ 330 $ 370 Net periodic expense $ 110 $ 123 $ 330 $ 370 |
Other Postretirement Benefits Plans | |
Defined Benefit Plan Disclosure | |
Components of Net Periodic Expense | Other Postretirement Benefit Plans Three months ended Nine months ended 2018 2017 2018 2017 Service cost $ 3 $ 5 $ 12 $ 15 Interest cost 43 40 108 122 Amortization of prior service credit (40 ) (19 ) (79 ) (58 ) Amortization of net gain (11 ) (19 ) (33 ) (58 ) Net periodic expense (benefit) $ (5 ) $ 7 $ 8 $ 21 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Reportable Segments to Consolidated | Summarized financial information for the Company’s (1) Environmental Catalysts & Services and (2) Performance Materials & Chemicals reportable segments is shown in the following table: Three months ended Nine months ended 2018 2017 2018 2017 Net sales: Silica Catalysts $ 16,347 $ 15,117 $ 50,167 $ 52,302 Refining Services 123,369 100,424 336,154 298,512 Environmental Catalysts & Services (1) 139,716 115,541 386,321 350,814 Performance Chemicals 174,722 175,467 548,446 515,454 Performance Materials 115,380 104,433 304,660 257,676 Eliminations (1,783 ) (2,828 ) (8,804 ) (7,349 ) Performance Materials & Chemicals 288,319 277,072 844,302 765,781 Inter-segment sales eliminations (2) (832 ) (784 ) (2,510 ) (2,568 ) Total $ 427,203 $ 391,829 $ 1,228,113 $ 1,114,027 Segment Adjusted EBITDA: (3) Environmental Catalysts & Services (4) $ 65,309 $ 61,900 $ 188,594 $ 182,578 Performance Materials & Chemicals 63,088 65,885 193,629 184,741 Total Segment Adjusted EBITDA (5) $ 128,397 $ 127,785 $ 382,223 $ 367,319 (1) Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 10 to these condensed consolidated financial statements for further information). The proportionate share of sales is $32,297 and $37,622 for the three months ended September 30, 2018 and 2017 , respectively. The proportionate share of sales is $120,159 and $100,991 for the nine months ended September 30, 2018 and 2017 , 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 $10,513 for the three months ended September 30, 2018 , which includes $5,563 of equity in net income plus $1,658 of amortization of investment in affiliate step-up plus $3,292 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $14,398 for the three months ended September 30, 2017 , which includes $10,151 of equity in net income plus $1,658 of amortization of investment in affiliate step-up plus $2,563 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $45,194 for the nine months ended September 30, 2018 , which includes $31,005 of equity in net income plus $4,975 of amortization of investment in affiliate step-up plus $9,214 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $39,690 for the nine months ended September 30, 2017 , which includes $24,594 of equity in net income plus $6,941 of amortization of investment in affiliate step-up plus $8,073 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 of net income (loss) attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows: Three months ended Nine months ended 2018 2017 2018 2017 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income (loss) attributable to PQ Group Holdings Inc. $ 14,185 $ (3,345 ) $ 30,181 $ (7,408 ) Provision for income taxes 8,470 5,172 21,590 5,269 Interest expense, net 28,238 49,079 84,622 144,041 Depreciation and amortization 43,827 45,929 139,298 129,135 Segment EBITDA 94,720 96,835 275,691 271,037 Unallocated corporate expenses 10,276 7,885 27,322 23,474 Joint venture depreciation, amortization and interest 3,292 2,563 9,214 8,073 Amortization of investment in affiliate step-up 1,658 1,658 4,975 6,941 Amortization of inventory step-up — — 1,603 871 Debt extinguishment costs 864 453 6,743 453 Net loss on asset disposals 5,202 3,494 11,106 6,419 Foreign currency exchange loss 3,527 5,256 15,347 21,612 LIFO expense 856 750 5,903 3,229 Management advisory fees — 1,250 — 3,750 Transaction and other related costs 210 966 895 5,300 Equity-based and other non-cash compensation 4,252 1,041 11,879 3,869 Restructuring, integration and business optimization expenses 2,178 4,957 5,662 8,009 Defined benefit pension plan cost 112 791 260 2,200 Other 1,250 (114 ) 5,623 2,082 Segment Adjusted EBITDA $ 128,397 $ 127,785 $ 382,223 $ 367,319 |
Restructuring and Other Relat_2
Restructuring and Other Related Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 three and nine months ended September 30, 2018 and 2017 included in other operating expense, net in the accompanying condensed consolidated statements of operations: Three months ended Nine months ended 2018 2017 2018 2017 Severance and other employee costs related to legacy Eco restructuring plan $ — $ — $ — $ 830 Severance and other employee costs related to performance materials plant closure 219 3,868 326 3,868 Other related costs 54 238 77 880 $ 273 $ 4,106 $ 403 $ 5,578 |
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 nine months ended September 30, 2018 : Legacy Eco Performance Materials Plant Closure Total Restructuring Charges Balance at December 31, 2017 $ 215 $ 3,123 $ 3,338 Cash payments (215 ) (2,136 ) (2,351 ) Other adjustments — 326 326 Foreign exchange impact — (18 ) (18 ) Balance at September 30, 2018 $ — $ 1,295 $ 1,295 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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: Three months ended Nine months ended 2018 2017 2018 2017 Weighted average shares outstanding – Basic 133,336,352 104,096,837 133,237,653 104,020,180 Dilutive effect of unvested common shares and restricted stock units with service conditions and assumed stock option exercises and conversions 1,239,810 — 985,975 — Weighted average shares outstanding – Diluted 134,576,162 104,096,837 134,223,628 104,020,180 |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share are calculated as follows: Three months ended Nine months ended 2018 2017 2018 2017 Numerator: Net income (loss) attributable to PQ Group Holdings Inc. $ 14,185 $ (3,345 ) $ 30,181 $ (7,408 ) Denominator: Weighted average shares outstanding – Basic 133,336,352 104,096,837 133,237,653 104,020,180 Weighted average shares outstanding – Diluted 134,576,162 104,096,837 134,223,628 104,020,180 Net income (loss) per share: Basic income (loss) per share $ 0.11 $ (0.03 ) $ 0.23 $ (0.07 ) Diluted income (loss) per share $ 0.11 $ (0.03 ) $ 0.22 $ (0.07 ) |
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 period that were excluded from the calculation of diluted earnings per share: September 30, 2018 2017 Restricted stock awards with performance only targets not yet achieved 1,659,050 1,769,447 Stock options with performance only targets not yet achieved 586,253 586,253 Anti-dilutive restricted stock awards and restricted stock units — 340,380 Anti-dilutive stock options — 1,539,266 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table presents supplemental cash flow information for the Company: Nine months ended 2018 2017 Cash paid during the period for: Income taxes $ 16,121 $ 21,005 Interest (1) 79,333 118,793 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the period end 10,624 12,924 (1) Excludes capitalized interest and the net interest proceeds on swaps designated as net investment hedges, which are included within cash flows from investing activities in the Company’s condensed consolidated statements of cash flows. |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets as of September 30, 2018 and 2017 to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows for the nine months then ended: September 30, 2018 2017 Cash and cash equivalents $ 56,684 $ 68,838 Restricted cash included in prepaid and other current assets 1,333 2,300 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 58,017 $ 71,138 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets as of September 30, 2018 and 2017 to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows for the nine months then ended: September 30, 2018 2017 Cash and cash equivalents $ 56,684 $ 68,838 Restricted cash included in prepaid and other current assets 1,333 2,300 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 58,017 $ 71,138 |
Background and Basis of Prese_3
Background and Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | ||||
Pension benefit included in other (income) expense, net | $ 803 | $ 172 | $ 2,572 | $ 504 |
Restricted cash | $ 1,333 | $ 2,300 | $ 1,333 | $ 2,300 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | ||||
Sales | $ 427,203 | $ 391,829 | $ 1,228,113 | $ 1,114,027 |
Environmental Catalysts & Services | ||||
Disaggregation of Revenue | ||||
Sales | 138,884 | 383,811 | ||
Performance Materials & Chemicals | ||||
Disaggregation of Revenue | ||||
Sales | 288,319 | 844,302 | ||
Operating segments | ||||
Disaggregation of Revenue | ||||
Sales | 428,035 | 1,230,623 | ||
Operating segments | Industrial & process chemicals | ||||
Disaggregation of Revenue | ||||
Sales | 86,097 | 271,553 | ||
Operating segments | Fuels & emission control | ||||
Disaggregation of Revenue | ||||
Sales | 66,095 | 182,304 | ||
Operating segments | Packaging & engineered plastics | ||||
Disaggregation of Revenue | ||||
Sales | 64,831 | 192,767 | ||
Operating segments | Highway safety & construction | ||||
Disaggregation of Revenue | ||||
Sales | 105,204 | 263,095 | ||
Operating segments | Consumer products | ||||
Disaggregation of Revenue | ||||
Sales | 67,138 | 209,256 | ||
Operating segments | Natural resources | ||||
Disaggregation of Revenue | ||||
Sales | 38,670 | 111,648 | ||
Operating segments | Environmental Catalysts & Services | ||||
Disaggregation of Revenue | ||||
Sales | 139,716 | 386,321 | ||
Operating segments | Environmental Catalysts & Services | Industrial & process chemicals | ||||
Disaggregation of Revenue | ||||
Sales | 21,027 | 55,401 | ||
Operating segments | Environmental Catalysts & Services | Fuels & emission control | ||||
Disaggregation of Revenue | ||||
Sales | 66,095 | 182,304 | ||
Operating segments | Environmental Catalysts & Services | Packaging & engineered plastics | ||||
Disaggregation of Revenue | ||||
Sales | 32,983 | 95,145 | ||
Operating segments | Environmental Catalysts & Services | Highway safety & construction | ||||
Disaggregation of Revenue | ||||
Sales | 0 | 0 | ||
Operating segments | Environmental Catalysts & Services | Consumer products | ||||
Disaggregation of Revenue | ||||
Sales | 0 | 0 | ||
Operating segments | Environmental Catalysts & Services | Natural resources | ||||
Disaggregation of Revenue | ||||
Sales | 19,611 | 53,471 | ||
Operating segments | Performance Materials & Chemicals | ||||
Disaggregation of Revenue | ||||
Sales | 288,319 | 844,302 | ||
Operating segments | Performance Materials & Chemicals | Industrial & process chemicals | ||||
Disaggregation of Revenue | ||||
Sales | 65,070 | 216,152 | ||
Operating segments | Performance Materials & Chemicals | Fuels & emission control | ||||
Disaggregation of Revenue | ||||
Sales | 0 | 0 | ||
Operating segments | Performance Materials & Chemicals | Packaging & engineered plastics | ||||
Disaggregation of Revenue | ||||
Sales | 31,848 | 97,622 | ||
Operating segments | Performance Materials & Chemicals | Highway safety & construction | ||||
Disaggregation of Revenue | ||||
Sales | 105,204 | 263,095 | ||
Operating segments | Performance Materials & Chemicals | Consumer products | ||||
Disaggregation of Revenue | ||||
Sales | 67,138 | 209,256 | ||
Operating segments | Performance Materials & Chemicals | Natural resources | ||||
Disaggregation of Revenue | ||||
Sales | 19,059 | 58,177 | ||
Inter-segment sales eliminations | ||||
Disaggregation of Revenue | ||||
Sales | (832) | (2,510) | ||
Inter-segment sales eliminations | Environmental Catalysts & Services | ||||
Disaggregation of Revenue | ||||
Sales | (832) | (2,510) | ||
Inter-segment sales eliminations | Performance Materials & Chemicals | ||||
Disaggregation of Revenue | ||||
Sales | $ 0 | $ 0 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Derivative contracts (Note 13) | $ 13,486 | $ 1,043 |
Restoration plan assets | 4,865 | 5,576 |
Total | 18,351 | 6,619 |
Liabilities: | ||
Derivative contracts (Note 13) | 114 | 448 |
Total | 114 | 448 |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Derivative contracts (Note 13) | 0 | 0 |
Restoration plan assets | 4,865 | 5,576 |
Total | 4,865 | 5,576 |
Liabilities: | ||
Derivative contracts (Note 13) | 0 | 0 |
Total | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Derivative contracts (Note 13) | 13,486 | 1,043 |
Restoration plan assets | 0 | 0 |
Total | 13,486 | 1,043 |
Liabilities: | ||
Derivative contracts (Note 13) | 114 | 448 |
Total | 114 | 448 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Derivative contracts (Note 13) | 0 | 0 |
Restoration plan assets | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Derivative contracts (Note 13) | 0 | 0 |
Total | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Pre-tax and After-tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
After-tax amount | ||||
Pre-tax amount | $ 3,816 | $ 20,824 | $ (10,559) | $ 63,568 |
Tax benefit/(expense) | 1,688 | (2,295) | (666) | (6,625) |
Total other comprehensive income (loss) | 5,504 | 18,529 | (11,225) | 56,943 |
Defined benefit and other postretirement plans: | ||||
After-tax amount | ||||
Pre-tax amount | (69) | (33) | 1,740 | (261) |
Tax benefit/(expense) | 17 | 13 | (435) | 38 |
Total other comprehensive income (loss) | (52) | (20) | 1,305 | (223) |
Net gain (loss) from hedging activities | ||||
After-tax amount | ||||
Pre-tax amount | 494 | (486) | 4,143 | (5,373) |
Tax benefit/(expense) | (124) | 185 | (1,037) | 2,047 |
Total other comprehensive income (loss) | 370 | (301) | 3,106 | (3,326) |
Foreign currency translation | ||||
After-tax amount | ||||
Pre-tax amount | 3,391 | 21,343 | (16,442) | 69,202 |
Tax benefit/(expense) | 1,795 | (2,493) | 806 | (8,710) |
Total other comprehensive income (loss) | $ 5,186 | $ 18,850 | $ (15,636) | $ 60,492 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Change by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | $ 1,631,919 | $ 1,027,944 | ||
Amounts reclassified from accumulated other comprehensive income | $ 52 | $ 34 | 145 | (19) |
Total other comprehensive income (loss) | 5,504 | 18,529 | (11,225) | 56,943 |
Ending balance | 1,662,473 | 1,080,970 | 1,662,473 | 1,080,970 |
Total | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 4,311 | (53,711) | ||
Other comprehensive income (loss) before reclassifications | (12,097) | 56,708 | ||
Amounts reclassified from accumulated other comprehensive income | 145 | (19) | ||
Total other comprehensive income (loss) | (11,952) | 56,689 | ||
Ending balance | (7,641) | 2,978 | (7,641) | 2,978 |
Defined benefit and other postretirement plans | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 7,412 | 7,513 | ||
Other comprehensive income (loss) before reclassifications | 1,360 | (126) | ||
Amounts reclassified from accumulated other comprehensive income | (25) | (32) | (55) | (97) |
Total other comprehensive income (loss) | 1,305 | (223) | ||
Ending balance | 8,717 | 7,290 | 8,717 | 7,290 |
Net gain (loss) from hedging activities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 967 | 4,557 | ||
Other comprehensive income (loss) before reclassifications | 2,906 | (3,404) | ||
Amounts reclassified from accumulated other comprehensive income | 200 | 78 | ||
Total other comprehensive income (loss) | 3,106 | (3,326) | ||
Ending balance | 4,073 | 1,231 | 4,073 | 1,231 |
Foreign currency translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (4,068) | (65,781) | ||
Other comprehensive income (loss) before reclassifications | (16,363) | 60,238 | ||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | ||
Total other comprehensive income (loss) | (16,363) | 60,238 | ||
Ending balance | $ (20,431) | $ (5,543) | $ (20,431) | $ (5,543) |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Income - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification, net | $ 52 | $ 34 | $ 145 | $ (19) |
Interest expense, net | 28,238 | 49,079 | 84,622 | 144,041 |
Cost of goods sold | 319,703 | 289,270 | 934,088 | 821,342 |
Income (loss) before income taxes and noncontrolling interest | (22,906) | (2,156) | (52,741) | 1,732 |
Tax expense (benefit) | 8,470 | 5,172 | 21,590 | 5,269 |
Net loss | (14,436) | 3,016 | (31,151) | 7,001 |
Defined benefit and other postretirement plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification, before tax | (38) | (38) | (74) | (116) |
Reclassification, tax | 13 | 6 | 19 | 19 |
Reclassification, net | (25) | (32) | (55) | (97) |
Amortization of prior service credit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification, before tax | (40) | (19) | (79) | (58) |
Amortization of net (gain) loss | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification, before tax | 2 | (19) | 5 | (58) |
Net gain (loss) from hedging activities | Amount of gain (loss) reclassified from AOCI into income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (loss) before income taxes and noncontrolling interest | 101 | 107 | 265 | 126 |
Tax expense (benefit) | (24) | (41) | (65) | (48) |
Net loss | 77 | 66 | 200 | 78 |
Net gain (loss) from hedging activities | Amount of gain (loss) reclassified from AOCI into income | Interest rate caps | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | 71 | 13 | 164 | 22 |
Net gain (loss) from hedging activities | Amount of gain (loss) reclassified from AOCI into income | Natural gas swaps | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of goods sold | $ 30 | $ 94 | $ 101 | $ 104 |
Acquisition - Allocation of Pur
Acquisition - Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 12, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition | ||||||
Total consideration, net of cash acquired | $ 1,006 | $ 41,572 | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Goodwill | 1,262,979 | $ 1,305,956 | ||||
Sovitec Mondial S.A. | ||||||
Business Acquisition | ||||||
Total consideration, net of cash acquired | $ 41,572 | $ 41,572 | ||||
Measurement Period Adjustments, Total consideration, net of cash acquired | $ 0 | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Receivables | 14,305 | 14,305 | 14,305 | |||
Measurement Period Adjustments, Receivables | 0 | |||||
Inventories | 9,248 | 7,645 | 9,248 | |||
Measurement Period Adjustments, Inventories | 1,603 | 1,603 | ||||
Prepaid and other current assets | 400 | 400 | 400 | |||
Measurement Period Adjustments, Prepaids and other current assets | 0 | |||||
Property, plant and equipment | 24,980 | 9,020 | 24,980 | |||
Measurement Period Adjustments, Property, plant and equipment | 15,960 | |||||
Other intangible assets | 5,753 | 0 | $ 5,753 | 5,753 | ||
Measurement Period Adjustments, Other intangible assets | 5,753 | |||||
Other long-term assets | 16,050 | 129 | 16,050 | |||
Measurement Period Adjustments, other long-term assets | 15,921 | |||||
Fair value of assets acquired | 70,736 | 31,499 | 70,736 | |||
Measurement Period Adjustments, fair value of assets acquired | 39,237 | |||||
Current debt | (6,420) | (6,420) | (6,420) | |||
Measurement Period Adjustments, Current debt | 0 | |||||
Accounts payable | (10,748) | (10,748) | (10,748) | |||
Measurement Period Adjustments, Accounts payable | 0 | |||||
Long-term debt | (10,189) | (10,189) | (10,189) | |||
Measurement Period Adjustments, Long-term liabilities | 0 | |||||
Deferred income taxes | (4,426) | 0 | (4,426) | |||
Measurement Period Adjustments, Deferred income taxes | (4,426) | |||||
Other long-term liabilities | (154) | (154) | (154) | |||
Measurement Period Adjustments, Other long-term liabilities | 0 | |||||
Fair value of net assets acquired | 38,799 | 3,988 | 38,799 | |||
Measurement Period Adjustments, Fair value of net assets acquired | 34,811 | |||||
Goodwill | 2,773 | 37,584 | 2,773 | |||
Measurement Period Adjustments, Goodwill | (34,811) | |||||
Net assets including goodwill acquired | $ 41,572 | $ 41,572 | 41,572 | |||
Measurement Period Adjustments, Net assets including goodwill | $ 0 |
Acquisition - Narratives (Detai
Acquisition - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 10 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Jun. 12, 2017 | |
Business Acquisition | ||||||
Transaction and other related costs | $ 215 | $ 966 | $ 827 | $ 5,295 | ||
Net income (loss) | (14,185) | 3,345 | (30,181) | 7,408 | ||
Sovitec Mondial S.A. | ||||||
Business Acquisition | ||||||
Gross contract receivable | $ 14,607 | |||||
Uncollectable gross contract receivable | $ 302 | |||||
Measurement Period Adjustments, Inventories | 1,603 | $ 1,603 | ||||
Measurement period adjustments, depreciation | 421 | |||||
Measurement period adjustments, tax benefit | 990 | |||||
Transaction and other related costs | $ 0 | $ 737 | 0 | 2,065 | ||
Cost of Goods Sold | Sovitec Mondial S.A. | ||||||
Business Acquisition | ||||||
Measurement period adjustments, amortization | 108 | |||||
Other Expense, Net | Sovitec Mondial S.A. | ||||||
Business Acquisition | ||||||
Measurement period adjustments, amortization | $ 101 | |||||
Transaction Fee Charges | ||||||
Business Acquisition | ||||||
Net income (loss) | 2,065 | |||||
Intangible Assets Fair Value Adjustment | ||||||
Business Acquisition | ||||||
Net income (loss) | 272 | |||||
Property, Plant, and Equipment Fair Value Adjustment | ||||||
Business Acquisition | ||||||
Net income (loss) | $ 521 |
Acquisition - Intangible Assets
Acquisition - Intangible Assets Acquired (Details) - Sovitec Mondial S.A. - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Mar. 31, 2018 | Jun. 12, 2017 | |
Business Acquisition | |||
Total intangible assets subject to amortization | $ 3,659 | ||
Total | 5,753 | $ 5,753 | $ 0 |
Trade names | |||
Business Acquisition | |||
Trade names, not subject to amortization | 2,094 | ||
Trademarks | |||
Business Acquisition | |||
Total intangible assets subject to amortization | $ 1,767 | ||
Weighted-Average Expected Useful Life (in years) | 11 years | ||
Technical know-how | |||
Business Acquisition | |||
Total intangible assets subject to amortization | $ 1,892 | ||
Weighted-Average Expected Useful Life (in years) | 11 years |
Acquisition - Pro Forma Disclos
Acquisition - Pro Forma Disclosure (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition | ||||
Pro forma sales | $ 1,130,454 | |||
Pro forma net loss | (6,865) | |||
Pro forma net loss attributable to PQ Group Holdings Inc. | $ (7,272) | |||
Pro forma basic and diluted net loss per share (usd per share) | $ (0.07) | |||
Sovitec Mondial S.A. | ||||
Business Acquisition | ||||
Pro forma sales | $ 16,455 | $ 13,490 | $ 46,702 | $ 17,194 |
Net income | $ 386 | $ 644 | $ 1,200 | $ 1,148 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill | |
Beginning balance | $ 1,305,956 |
Goodwill recognized | 649 |
Goodwill adjustments | (34,811) |
Foreign exchange impact | (8,815) |
Ending balance | 1,262,979 |
Performance Materials & Chemicals | |
Goodwill | |
Beginning balance | 914,623 |
Goodwill recognized | 649 |
Goodwill adjustments | (34,811) |
Foreign exchange impact | (7,816) |
Ending balance | 872,645 |
Environmental Catalysts & Services | |
Goodwill | |
Beginning balance | 391,333 |
Goodwill recognized | 0 |
Goodwill adjustments | 0 |
Foreign exchange impact | (999) |
Ending balance | $ 390,334 |
Other Operating Expense, Net (D
Other Operating Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Amortization expense | $ 8,711 | $ 9,146 | $ 26,404 | $ 23,270 |
Transaction and other related costs | 215 | 966 | 827 | 5,295 |
Restructuring and other related costs (Note 18) | 273 | 4,106 | 403 | 5,578 |
Net loss on asset disposals | 5,202 | 3,494 | 11,106 | 6,419 |
Management advisory fees | 0 | 1,250 | 0 | 3,750 |
Insurance proceeds | 0 | 0 | (1,557) | 0 |
Other, net | 2,100 | 871 | 4,505 | 2,844 |
Other operating expense, net | $ 16,501 | $ 19,833 | 41,688 | $ 47,156 |
Proceeds from insurance settlement | 2,500 | |||
Reimbursement revenue recorded in other operating expenses | 207 | |||
Proceeds from reimbursement categorized as non operating income | $ 736 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory, Net | ||
Finished products and work in process | $ 189,004 | $ 199,919 |
Raw materials | 60,294 | 62,469 |
Inventory, Net | 249,298 | 262,388 |
Valued at lower of cost or market: | ||
LIFO basis | 153,093 | 162,315 |
FIFO or average cost basis | 96,205 | 100,073 |
Inventory, Net | $ 249,298 | $ 262,388 |
Investments in Affiliated Com_3
Investments in Affiliated Companies - Ownership Percentage (Details) | Sep. 30, 2018 |
PQ Silicates Ltd. | |
Schedule of Equity Method Investments | |
Ownership percentage | 50.00% |
Zeolyst International | |
Schedule of Equity Method Investments | |
Ownership percentage | 50.00% |
Zeolyst C.V. | |
Schedule of Equity Method Investments | |
Ownership percentage | 50.00% |
Quaker Holdings | |
Schedule of Equity Method Investments | |
Ownership percentage | 49.00% |
Investments in Affiliated Com_4
Investments in Affiliated Companies - Summarized Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity Method Investment, Summarized Financial Information | ||||
Net sales | $ 74,088 | $ 83,983 | $ 271,562 | $ 225,770 |
Gross profit | 24,495 | 33,276 | 100,686 | 91,862 |
Operating income | 14,594 | 22,713 | 72,257 | 60,408 |
Net income | $ 14,545 | $ 23,819 | $ 72,204 | $ 63,663 |
Investments in Affiliated Com_5
Investments in Affiliated Companies - Narratives (Details) - Business Combination - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Business Acquisition | |||||
Purchase accounting fair value adjustments | $ 259,725 | $ 264,700 | |||
Charges related to purchase accounting fair value adjustments | $ 1,658 | $ 1,658 | $ 4,975 | $ 6,941 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 1,598,458 | $ 1,541,499 |
Less: accumulated depreciation | (393,557) | (311,115) |
Property, plant and equipment, net | 1,204,901 | 1,230,384 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 191,883 | 191,006 |
Buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 210,314 | 200,054 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 1,082,219 | 1,005,025 |
Construction in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 114,042 | $ 145,414 |
Property, Plant and Equipment -
Property, Plant and Equipment - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 30,626 | $ 31,957 | $ 99,491 | $ 89,987 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument | ||
Total debt | $ 2,205,859 | $ 2,270,279 |
Original issue discount | (20,050) | (18,390) |
Deferred financing costs | (17,351) | (21,403) |
Total debt, net of original issue discount and deferred financing costs | 2,168,458 | 2,230,486 |
Less: current portion | (21,372) | (45,166) |
Total long-term debt, excluding current portion | 2,147,086 | 2,185,320 |
Term Loan | Term Loan Facility | USD | ||
Debt Instrument | ||
Total debt | 0 | 916,153 |
Term Loan | Term Loan Facility | Euro | ||
Debt Instrument | ||
Total debt | 0 | 335,808 |
Term Loan | New Term Loan Facility | ||
Debt Instrument | ||
Total debt | 1,212,498 | 0 |
Senior Notes | 6.75% Senior Secured Notes due 2022 | ||
Debt Instrument | ||
Total debt | $ 625,000 | 625,000 |
Debt instrument stated interest rate | 6.75% | |
Senior Notes | 5.75% Senior Unsecured Notes due 2025 | ||
Debt Instrument | ||
Total debt | $ 300,000 | 300,000 |
Debt instrument stated interest rate | 5.75% | |
Line of Credit | ABL Facility | ||
Debt Instrument | ||
Total debt | $ 0 | 25,000 |
Other | ||
Debt Instrument | ||
Total debt | $ 68,361 | $ 68,318 |
Long-term Debt - Narratives (De
Long-term Debt - Narratives (Details) € in Thousands | Feb. 08, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Dec. 31, 2017USD ($) |
Debt Instrument | |||||
Long-term debt, fair value difference from carrying value | $ 26,578,000 | $ 26,578,000 | $ 59,319,000 | ||
Currency swap | |||||
Debt Instrument | |||||
Derivative instrument | 324,940,000 | 324,940,000 | € 280,000 | ||
Term Loan | New Term Loan Facility | |||||
Debt Instrument | |||||
Debt instrument face amount | $ 1,267,000,000 | ||||
Scheduled repayment percentage | 0.25% | ||||
Debt extinguishment costs, write-off of deferred financing costs | 258,000 | 258,000 | |||
Debt extinguishment costs, write-off of debt discounts | 606,000 | 606,000 | |||
Repayments of notes | $ 45,000,000 | ||||
Term Loan | New Term Loan Facility | LIBOR | |||||
Debt Instrument | |||||
Variable rate on spread | 2.50% | ||||
Term Loan | Term Loan Facility | |||||
Debt Instrument | |||||
Debt extinguishment costs, financing costs | 2,124,000 | ||||
Debt extinguishment costs, write-off of deferred financing costs | 1,403,000 | ||||
Debt extinguishment costs, write-off of debt discounts | $ 2,352,000 |
Financial Instruments - Narrati
Financial Instruments - Narratives (Details) € in Thousands, MMBTU in Millions | 1 Months Ended | 9 Months Ended | ||
Jul. 31, 2016USD ($) | Sep. 30, 2018USD ($)MMBTU | Nov. 13, 2018USD ($) | Sep. 30, 2018EUR (€) | |
Derivative | ||||
Document Period End Date | Sep. 30, 2018 | |||
Derivative, notional quantity (in MMBTU) | MMBTU | 4.6 | |||
Amount of derivative loss expected to be transferred from OCI | $ 294,000 | |||
Interest rate caps | ||||
Derivative | ||||
Premium paid to acquire derivative instrument | $ 1,551,000 | |||
Derivative, cap interest rate | 2.50% | 2.50% | ||
Derivative, notional amount | $ 1,000,000,000 | |||
Interest rate caps | Minimum | ||||
Derivative | ||||
Derivative, cap interest rate | 1.50% | |||
Interest rate caps | Maximum | ||||
Derivative | ||||
Derivative, cap interest rate | 3.00% | |||
Interest rate cap II | Subsequent Event | ||||
Derivative | ||||
Derivative, cap interest rate | 3.50% | |||
Derivative, notional amount | $ 500,000,000 | |||
Currency swap | ||||
Derivative | ||||
Derivative instrument | $ 324,940,000 | € 280,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value (Details) - Derivatives designated as hedging instrument - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative assets: | ||
Total derivative assets | $ 13,486 | $ 1,043 |
Derivative liabilities: | ||
Total derivative liabilities | 114 | 448 |
Cash Flow Hedging | ||
Derivative assets: | ||
Total derivative assets | 4,687 | 1,043 |
Cash Flow Hedging | Prepaid and other current assets | Natural gas swaps | ||
Derivative assets: | ||
Total derivative assets | 248 | 0 |
Cash Flow Hedging | Prepaid and other current assets | Interest rate caps | ||
Derivative assets: | ||
Total derivative assets | 1,825 | 44 |
Cash Flow Hedging | Other long-term assets | Interest rate caps | ||
Derivative assets: | ||
Total derivative assets | 2,614 | 999 |
Cash Flow Hedging | Accrued liabilities | Natural gas swaps | ||
Derivative liabilities: | ||
Total derivative liabilities | 0 | 318 |
Cash Flow Hedging | Other long-term liabilities | Natural gas swaps | ||
Derivative liabilities: | ||
Total derivative liabilities | 114 | 130 |
Net Investment Hedging | ||
Derivative assets: | ||
Total derivative assets | 8,799 | 0 |
Net Investment Hedging | Prepaid and other current assets | Cross currency swaps | ||
Derivative assets: | ||
Total derivative assets | 6,894 | 0 |
Net Investment Hedging | Other long-term assets | Cross currency swaps | ||
Derivative assets: | ||
Total derivative assets | $ 1,905 | $ 0 |
Financial Instruments - Effect
Financial Instruments - Effect on Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Amount of gain (loss) recognized in OCI on derivatives | ||||
Amount of gain (loss) recognized in OCI on derivatives | $ 393 | $ (1,870) | $ 3,878 | $ (5,499) |
Amount of gain (loss) reclassified from AOCI into income | ||||
Amount of gain (loss) reclassified from AOCI into income | (101) | (107) | (265) | (126) |
Interest rate caps | ||||
Amount of gain (loss) recognized in OCI on derivatives | ||||
Amount of gain (loss) recognized in OCI on derivatives | 93 | (1,842) | 3,396 | (4,712) |
Interest rate caps | Interest expense | ||||
Amount of gain (loss) reclassified from AOCI into income | ||||
Amount of gain (loss) reclassified from AOCI into income | (71) | (13) | (164) | (22) |
Natural gas swaps | ||||
Amount of gain (loss) recognized in OCI on derivatives | ||||
Amount of gain (loss) recognized in OCI on derivatives | 300 | (28) | 482 | (787) |
Natural gas swaps | Cost of goods sold | ||||
Amount of gain (loss) reclassified from AOCI into income | ||||
Amount of gain (loss) reclassified from AOCI into income | $ (30) | $ (94) | $ (101) | $ (104) |
Financial Instruments - Cash Fl
Financial Instruments - Cash Flow Hedge Impact on AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative | ||||
Cost of goods sold | $ (319,703) | $ (289,270) | $ (934,088) | $ (821,342) |
Interest (expense) income | (28,238) | (49,079) | (84,622) | (144,041) |
Gain (loss) on cash flow hedging relationships | Amount of gain (loss) reclassified from AOCI into income | ||||
Derivative | ||||
Cost of goods sold | (30) | (94) | (101) | (104) |
Interest (expense) income | $ (71) | $ (13) | $ (164) | $ (22) |
Financial Instruments - Net Inv
Financial Instruments - Net Investment Hedge Impact on AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Gain (loss) on sale of subsidiary | ||||
Derivative | ||||
Amount of gain (loss) reclassified from AOCI into income | $ 0 | $ 0 | $ 0 | $ 0 |
Interest (expense) income | ||||
Derivative | ||||
Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) | 2,271 | 0 | 5,662 | 0 |
Cross currency swaps | ||||
Derivative | ||||
Amount of gain (loss) recognized in OCI on derivative | $ 1,138 | $ 0 | $ 8,799 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 37.00% | 239.90% | 40.90% | (304.20%) | |
Tax Cuts And Jobs Act Of 2017, provisional income tax benefit | $ 64,343 | ||||
Tax Cuts And Jobs Act Of 2017, repatriation of non-US earnings | 43,000 | ||||
Tax Cuts And Jobs Act Of 2017, benefit from undistributed foreign earnings | $ 25,196 | ||||
Discrete tax benefit | $ 1,459 |
Benefit Plans - Net Periodic Pe
Benefit Plans - Net Periodic Pension Expense Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Pension Plans | U.S. | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | ||||
Service cost | $ 243 | $ 305 | $ 776 | $ 914 |
Interest cost | 2,395 | 2,536 | 7,137 | 7,608 |
Expected return on plan assets | (3,165) | (3,061) | (9,515) | (9,183) |
Amortization of net loss | 0 | 0 | 0 | 0 |
Curtailment gain recognized | (576) | 0 | ||
Net periodic expense (benefit) | (527) | (220) | (2,178) | (661) |
Defined Benefit Pension Plans | Foreign | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | ||||
Service cost | 933 | 859 | 2,665 | 2,642 |
Interest cost | (601) | 1,339 | 2,512 | 4,024 |
Expected return on plan assets | 453 | (1,111) | (2,494) | (3,329) |
Amortization of net loss | 13 | 0 | 38 | 0 |
Curtailment gain recognized | 0 | 0 | ||
Net periodic expense (benefit) | 798 | 1,087 | 2,721 | 3,337 |
Supplemental Retirement Plans | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | ||||
Interest cost | 110 | 123 | 330 | 370 |
Net periodic expense (benefit) | 110 | 123 | 330 | 370 |
Other Postretirement Benefits Plans | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | ||||
Service cost | 3 | 5 | 12 | 15 |
Interest cost | 43 | 40 | 108 | 122 |
Amortization of prior service credit | (40) | (19) | (79) | (58) |
Amortization of net loss | (11) | (19) | (33) | (58) |
Net periodic expense (benefit) | $ (5) | $ 7 | $ 8 | $ 21 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2005 |
Soil and Groundwater Contamination | |||
Loss Contingencies | |||
Accrual for environmental loss contingencies | $ 752 | $ 837 | |
Subsurface Remedial and Wetlands/Marsh Management | |||
Loss Contingencies | |||
Accrual for environmental loss contingencies | 1,047 | 1,245 | |
Subsurface Remediation and Soil Vapor Extraction | |||
Loss Contingencies | |||
Accrual for environmental loss contingencies | 1,013 | 1,220 | |
New Jersey Locations | PCB Remediation | |||
Loss Contingencies | |||
Accrual for environmental loss contingencies | 861 | 842 | $ 500 |
Chester And Baltimore Facilities | PCB Remediation | |||
Loss Contingencies | |||
Accrual for environmental loss contingencies | $ 630 | $ 701 |
Reportable Segments - Summary
Reportable Segments - Summary Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | $ 427,203 | $ 391,829 | $ 1,228,113 | $ 1,114,027 |
Equity in net income from affiliated companies | 5,605 | 10,257 | 31,123 | 24,879 |
Environmental Catalysts & Services | Zeolyst Joint Venture | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Segment Adjusted EBITDA | 10,513 | 14,398 | 45,194 | 39,690 |
Equity in net income from affiliated companies | 5,563 | 10,151 | 31,005 | 24,594 |
Investment in affiliate and inventory step-up amortization | 1,658 | 1,658 | 4,975 | 6,941 |
Joint venture depreciation, amortization, and interest | 3,292 | 2,563 | 9,214 | 8,073 |
Operating segments | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Segment Adjusted EBITDA | 128,397 | 127,785 | 382,223 | 367,319 |
Operating segments | Environmental Catalysts & Services | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 139,716 | 115,541 | 386,321 | 350,814 |
Segment Adjusted EBITDA | 65,309 | 61,900 | 188,594 | 182,578 |
Operating segments | Environmental Catalysts & Services | Zeolyst Joint Venture | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 32,297 | 37,622 | 120,159 | 100,991 |
Operating segments | Environmental Catalysts & Services | Reportable Subsegments | Silica Catalysts | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 16,347 | 15,117 | 50,167 | 52,302 |
Operating segments | Environmental Catalysts & Services | Reportable Subsegments | Refining Services | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 123,369 | 100,424 | 336,154 | 298,512 |
Operating segments | Performance Materials & Chemicals | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 288,319 | 277,072 | 844,302 | 765,781 |
Segment Adjusted EBITDA | 63,088 | 65,885 | 193,629 | 184,741 |
Operating segments | Performance Materials & Chemicals | Reportable Subsegments | Performance Chemicals | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 174,722 | 175,467 | 548,446 | 515,454 |
Operating segments | Performance Materials & Chemicals | Reportable Subsegments | Performance Materials | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | 115,380 | 104,433 | 304,660 | 257,676 |
Operating segments | Performance Materials & Chemicals | Intersubsegment Eliminations | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | (1,783) | (2,828) | (8,804) | (7,349) |
Eliminations | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Net sales | $ (832) | $ (784) | $ (2,510) | $ (2,568) |
Reportable Segments - Reconcil
Reportable Segments - Reconciliation of Net Loss to Adjusted EBITA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information | ||||
Net income (loss) attributable to PQ Group Holdings Inc. | $ 14,185 | $ (3,345) | $ 30,181 | $ (7,408) |
Provision for income taxes | 8,470 | 5,172 | 21,590 | 5,269 |
Interest expense, net | 28,238 | 49,079 | 84,622 | 144,041 |
Depreciation and amortization | 43,827 | 45,929 | 139,298 | 129,135 |
Segment EBITDA | 94,720 | 96,835 | 275,691 | 271,037 |
Debt extinguishment costs | 864 | 453 | 6,743 | 453 |
Losses on disposal of fixed assets | 5,202 | 3,494 | 11,106 | 6,419 |
Foreign currency exchange loss | 15,347 | 21,612 | ||
Management advisory fees | 0 | 1,250 | 0 | 3,750 |
Transaction and other related costs | 215 | 966 | 827 | 5,295 |
Corporate, non-segment | ||||
Segment Reporting Information | ||||
Unallocated corporate expenses | 10,276 | 7,885 | 27,322 | 23,474 |
Segment reconciling items | ||||
Segment Reporting Information | ||||
Joint venture depreciation, amortization, and interest | 3,292 | 2,563 | 9,214 | 8,073 |
Investment in affiliate and inventory step-up amortization | 1,658 | 1,658 | 4,975 | 6,941 |
Amortization of inventory step-up | 0 | 0 | 1,603 | 871 |
Debt extinguishment costs | 864 | 453 | 6,743 | 453 |
Losses on disposal of fixed assets | 5,202 | 3,494 | 11,106 | 6,419 |
Foreign currency exchange loss | 3,527 | 5,256 | 15,347 | 21,612 |
LIFO expense | 856 | 750 | 5,903 | 3,229 |
Management advisory fees | 0 | 1,250 | 0 | 3,750 |
Transaction and other related costs | 210 | 966 | 895 | 5,300 |
Equity-based and other non-cash compensation | 4,252 | 1,041 | 11,879 | 3,869 |
Restructuring, integration and business optimization expenses | 2,178 | 4,957 | 5,662 | 8,009 |
Defined benefit pension plan cost | 112 | 791 | 260 | 2,200 |
Other | 1,250 | (114) | 5,623 | 2,082 |
Operating segments | ||||
Segment Reporting Information | ||||
Segment Adjusted EBITDA | $ 128,397 | $ 127,785 | $ 382,223 | $ 367,319 |
Restructuring and Other Relat_3
Restructuring and Other Related Costs - Components of Restructuring and Other Related Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve | ||||
Restructuring and other related costs | $ 273,000 | $ 4,106,000 | $ 403,000 | $ 5,578,000 |
Other related costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring and other related costs | 54,000 | 238,000 | 77,000 | 880,000 |
Performance Materials Plant Closure | Employee Severance | ||||
Restructuring Cost and Reserve | ||||
Restructuring and other related costs | 219,000 | 3,868,000 | 326,000 | 3,868,000 |
Legacy Eco Restructuring Plan | Employee Severance | ||||
Restructuring Cost and Reserve | ||||
Restructuring and other related costs | $ 0 | $ 0 | $ 0 | $ 830,000 |
Restructuring and Other Relat_4
Restructuring and Other Related Costs - Schedule of Restructuring Reserve (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Restructuring Reserve | |
Beginning balance | $ 3,338 |
Cash payments | (2,351) |
Other adjustments | 326 |
Foreign exchange impact | (18) |
Ending balance | 1,295 |
Legacy Eco Restructuring Plan | |
Restructuring Reserve | |
Beginning balance | 215 |
Cash payments | (215) |
Other adjustments | 0 |
Foreign exchange impact | 0 |
Ending balance | 0 |
Performance Materials Plant Closure | |
Restructuring Reserve | |
Beginning balance | 3,123 |
Cash payments | (2,136) |
Other adjustments | 326 |
Foreign exchange impact | (18) |
Ending balance | $ 1,295 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation from Basic to Diluted Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Weighted average shares outstanding – Basic (shares) | 133,336,352 | 104,096,837 | 133,237,653 | 104,020,180 |
Dilutive effect of unvested common shares and restricted stock units with service conditions and assumed stock option exercises and conversions (shares) | 1,239,810 | 0 | 985,975 | 0 |
Weighted average shares outstanding – Diluted (shares) | 134,576,162 | 104,096,837 | 134,223,628 | 104,020,180 |
Earnings per Share - Reconcil_2
Earnings per Share - Reconciliation of Net Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (loss) attributable to PQ Group Holdings Inc. | $ 14,185 | $ (3,345) | $ 30,181 | $ (7,408) |
Denominator: | ||||
Weighted average shares outstanding – Basic (shares) | 133,336,352 | 104,096,837 | 133,237,653 | 104,020,180 |
Weighted average shares outstanding – Diluted (shares) | 134,576,162 | 104,096,837 | 134,223,628 | 104,020,180 |
Net income (loss) per share: | ||||
Basic income (loss) per share (usd per share) | $ 0.11 | $ (0.03) | $ 0.23 | $ (0.07) |
Diluted income (loss) per share (usd per share) | $ 0.11 | $ (0.03) | $ 0.22 | $ (0.07) |
Earnings per Share - Anti-dilut
Earnings per Share - Anti-dilutive Shares (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Restricted stock awards with performance only targets not yet achieved | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 1,659,050 | 1,769,447 |
Stock options with performance only targets not yet achieved | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 586,253 | 586,253 |
Anti-dilutive restricted stock awards and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 0 | 340,380 |
Anti-dilutive stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 0 | 1,539,266 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash paid during the period for: | ||
Income taxes | $ 16,121 | $ 21,005 |
Interest1 | 79,333 | 118,793 |
Non-cash investing activity: | ||
Capital expenditures acquired on account but unpaid as of the period end | $ 10,624 | $ 12,924 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Cash and Restricted Cash Reconciliation (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 56,684 | $ 66,195 | $ 68,838 | |
Restricted cash included in prepaid and other current assets | 1,333 | 2,300 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 58,017 | $ 67,243 | $ 71,138 | $ 85,077 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 13, 2018USD ($) |
Subsequent Event | Interest rate cap II | |
Subsequent Events | |
Derivative, notional amount | $ 500,000,000 |