QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) | ||
(Registrant’s telephone number, including area code) | |
Title of each class | Trading symbol | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||||||
Page | ||
ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED). |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | $ | $ | $ | |||||||||||
Cost of goods sold | |||||||||||||||
Gross profit | |||||||||||||||
Selling, general and administrative expenses | |||||||||||||||
Other operating expense, net | |||||||||||||||
Operating income | |||||||||||||||
Equity in net (income) from affiliated companies | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest expense, net | |||||||||||||||
Debt extinguishment costs | |||||||||||||||
Other expense, net | |||||||||||||||
Income before income taxes and noncontrolling interest | |||||||||||||||
Provision for income taxes | |||||||||||||||
Net income | |||||||||||||||
Less: Net income attributable to the noncontrolling interest | |||||||||||||||
Net income attributable to PQ Group Holdings Inc. | $ | $ | $ | $ | |||||||||||
Net income per share: | |||||||||||||||
Basic income per share | $ | $ | $ | $ | |||||||||||
Diluted income per share | $ | $ | $ | $ | |||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Pension and postretirement benefits | ( | ) | ( | ) | |||||||||||
Net (loss) gain from hedging activities | ( | ) | ( | ) | |||||||||||
Foreign currency translation | ( | ) | ( | ) | |||||||||||
Total other comprehensive income (loss) | ( | ) | ( | ) | |||||||||||
Comprehensive income (loss) | ( | ) | ( | ) | |||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( | ) | |||||||||||||
Comprehensive income (loss) attributable to PQ Group Holdings Inc. | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, net | |||||||
Inventories, net | |||||||
Prepaid and other current assets | |||||||
Total current assets | |||||||
Investments in affiliated companies | |||||||
Property, plant and equipment, net | |||||||
Goodwill | |||||||
Other intangible assets, net | |||||||
Right-of-use lease asset | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES | |||||||
Notes payable and current maturities of long-term debt | $ | $ | |||||
Accounts payable | |||||||
Operating lease liabilities—current | |||||||
Accrued liabilities | |||||||
Total current liabilities | |||||||
Long-term debt, excluding current portion | |||||||
Deferred income taxes | |||||||
Operating lease liabilities—noncurrent | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 17) | |||||||
EQUITY | |||||||
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 136,355,874 and 135,758,269 on June 30, 2019 and December 31, 2018, respectively; outstanding shares 136,101,083 and 135,592,045 on June 30, 2019 and December 31, 2018, respectively | |||||||
Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on June 30, 2019 and December 31, 2018 | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Treasury stock, at cost; shares 254,791 and 166,224 on June 30, 2019 December 31, 2018, respectively | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total PQ Group Holdings Inc. equity | |||||||
Noncontrolling interest | |||||||
Total equity | |||||||
Total liabilities and equity | $ | $ | |||||
Common stock | Additional paid-in capital | Retained earnings | Treasury stock, at cost | Accumulated other comprehensive income (loss) | Non- controlling interest | Total | ||||||||||||||||||||||
Balance, December 31, 2018, as previously reported | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||
Cumulative effect adjustment from adoption of new accounting standards | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Balance, December 31, 2018, as adjusted | ( | ) | ( | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||
Repurchases of common shares | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Stock compensation expense | — | — | — | — | — | |||||||||||||||||||||||
Shares issued under equity incentive plan, net of forfeitures | — | — | — | — | ||||||||||||||||||||||||
Balance, March 31, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
Stock compensation expense | — | — | — | — | — | |||||||||||||||||||||||
Shares issued under equity incentive plan, net of forfeitures | — | — | — | — | ||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||
Common stock | Additional paid-in capital | Accumulated deficit | Treasury stock, at cost | Accumulated other comprehensive income (loss) | Non- controlling interest | Total | ||||||||||||||||||||||
Balance, December 31, 2017 | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||
Repurchases of common shares | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Stock compensation expense | — | — | — | — | — | |||||||||||||||||||||||
Balance, March 31, 2018 | ( | ) | ( | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
Stock compensation expense | — | — | — | — | — | |||||||||||||||||||||||
Shares issued under equity incentive plan | — | — | — | — | ||||||||||||||||||||||||
Balance, June 30, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | ||||||||
Amortization | ||||||||
Amortization of inventory step-up | ||||||||
Amortization of deferred financing costs and original issue discount | ||||||||
Debt extinguishment costs | ||||||||
Foreign currency exchange loss | ||||||||
Pension and postretirement healthcare benefit expense | ||||||||
Pension and postretirement healthcare benefit funding | ( | ) | ( | ) | ||||
Deferred income tax provision | ||||||||
Net (gain) loss on asset disposals | ( | ) | ||||||
Stock compensation | ||||||||
Equity in net (income) from affiliated companies | ( | ) | ( | ) | ||||
Dividends received from affiliated companies | ||||||||
Net interest income on swaps designated as net investment hedges | ( | ) | ||||||
Other, net | ( | ) | ( | ) | ||||
Working capital changes that provided (used) cash, excluding the effect of acquisitions and dispositions: | ||||||||
Receivables | ( | ) | ( | ) | ||||
Inventories | ( | ) | ( | ) | ||||
Prepaids and other current assets | ( | ) | ||||||
Accounts payable | ( | ) | ||||||
Accrued liabilities | ( | ) | ( | ) | ||||
Net cash provided by operating activities | ||||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | ( | ) | ( | ) | ||||
Business combinations, net of cash acquired | ( | ) | ||||||
Proceeds from sale of product line | ||||||||
Net interest proceeds on swaps designated as net investment hedges | ||||||||
Other, net | ||||||||
Net cash used in investing activities | ( | ) | ( | ) | ||||
Cash flows from financing activities: | ||||||||
Draw down of revolving credit facilities | ||||||||
Repayments of revolving credit facilities | ( | ) | ( | ) | ||||
Issuance of long-term debt | ||||||||
Debt issuance costs | ( | ) | ||||||
Repayments of long-term debt | ( | ) | ( | ) | ||||
Stock repurchases | ( | ) | ( | ) | ||||
Proceeds from stock options exercised | ||||||||
Other, net | ( | ) | ( | ) | ||||
Net cash (used in) provided by financing activities | ( | ) | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
Net change in cash, cash equivalents and restricted cash | ( | ) | ||||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
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 | |
Three months ended June 30, 2019 | |||||||||||||||||||
Refining Services | Catalysts | Performance Materials | Performance Chemicals | Total | |||||||||||||||
Industrial & process chemicals | $ | $ | $ | $ | $ | ||||||||||||||
Fuels & emission control (1) | |||||||||||||||||||
Packaging & engineered plastics | |||||||||||||||||||
Highway safety & construction (1) | |||||||||||||||||||
Consumer products | |||||||||||||||||||
Natural resources | |||||||||||||||||||
Total segment sales | |||||||||||||||||||
Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Six months ended June 30, 2019 | |||||||||||||||||||
Refining Services | Catalysts | Performance Materials | Performance Chemicals | Total | |||||||||||||||
Industrial & process chemicals | $ | $ | $ | $ | $ | ||||||||||||||
Fuels & emission control (1) | |||||||||||||||||||
Packaging & engineered plastics | |||||||||||||||||||
Highway safety & construction (1) | |||||||||||||||||||
Consumer products | |||||||||||||||||||
Natural resources | |||||||||||||||||||
Total segment sales | |||||||||||||||||||
Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Three months ended June 30, 2018 | ||||||||||||||||||||
Refining Services | Catalysts | Performance Materials | Performance Chemicals | Total | ||||||||||||||||
Industrial & process chemicals | $ | $ | $ | $ | $ | |||||||||||||||
Fuels & emission control (1) | ||||||||||||||||||||
Packaging & engineered plastics | ||||||||||||||||||||
Highway safety & construction (1) | ||||||||||||||||||||
Consumer products | ||||||||||||||||||||
Natural resources | ||||||||||||||||||||
Total segment sales | ||||||||||||||||||||
Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||
Six months ended June 30, 2018 | ||||||||||||||||||||
Refining Services | Catalysts | Performance Materials | Performance Chemicals | Total | ||||||||||||||||
Industrial & process chemicals | $ | $ | $ | $ | $ | |||||||||||||||
Fuels & emission control (1) | ||||||||||||||||||||
Packaging & engineered plastics | ||||||||||||||||||||
Highway safety & construction (1) | ||||||||||||||||||||
Consumer products | ||||||||||||||||||||
Natural resources | ||||||||||||||||||||
Total segment sales | ||||||||||||||||||||
Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||
(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. |
• | 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. |
June 30, 2019 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Derivative contracts (Note 14) | $ | $ | $ | $ | ||||||||||||
Restoration plan assets | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative contracts (Note 14) | $ | $ | $ | $ | ||||||||||||
December 31, 2018 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Derivative contracts (Note 14) | $ | $ | $ | $ | ||||||||||||
Restoration plan assets | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative contracts (Note 14) | $ | $ | $ | $ | ||||||||||||
Three months ended June 30, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
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 of net gains and (losses) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||
Amortization of prior service cost | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Benefit plans, net | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net (loss) gain from hedging activities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||||||
Other comprehensive income (loss) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
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 of net gains and (losses) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||
Amortization of prior service cost | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Benefit plans, net | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net (loss) gain from hedging activities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Other comprehensive income (loss) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||
Defined benefit and other postretirement plans | Net gain (loss) from hedging activities | Foreign currency translation | Total | |||||||||||||
December 31, 2018 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income(1) | ( | ) | ||||||||||||||
Net current period other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||
Tax Cuts and Jobs Act, reclassification from AOCI to retained earnings | ||||||||||||||||
June 30, 2019 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
December 31, 2017 | $ | $ | $ | ( | ) | $ | ||||||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income(1) | ( | ) | ||||||||||||||
Net current period other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||
June 30, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
(1) | See the following table for details about these reclassifications. Amounts in parentheses indicate debits. |
Details about Accumulated Other Comprehensive Income Components | Amounts Reclassified from Accumulated Other Comprehensive Income(a) | Affected Line Item where Income is Presented | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
Amortization of defined benefit and other postretirement items | ||||||||||||||||||
Prior service credit (cost) | $ | $ | $ | $ | Other income (expense)(b) | |||||||||||||
Actuarial gains (losses) | ( | ) | ( | ) | Other income (expense)(b) | |||||||||||||
Total before tax | ||||||||||||||||||
( | ) | ( | ) | ( | ) | ( | ) | Tax expense | ||||||||||
$ | $ | $ | $ | Net of tax | ||||||||||||||
Gains and losses on cash flow hedges | ||||||||||||||||||
Interest rate caps | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | Interest expense | |||||
Natural gas swaps | ( | ) | ( | ) | ( | ) | Cost of goods sold | |||||||||||
( | ) | ( | ) | ( | ) | ( | ) | Total before tax | ||||||||||
Tax benefit | ||||||||||||||||||
$ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | Net of tax | ||||||
Total reclassifications for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | Net of tax | |||||
(a) | Amounts in parentheses indicate debits to profit/loss. |
(b) | These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 16 to these condensed consolidated financial statements for additional details). |
Refining Services | Catalysts | Performance Materials | Performance Chemicals | Total | ||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | $ | |||||||||||||||
Foreign exchange impact | ||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Amortization expense | $ | $ | $ | $ | ||||||||||||
Net (gain) loss on asset disposals(1) | ( | ) | ( | ) | ||||||||||||
Insurance recoveries(2) | ( | ) | ( | ) | ||||||||||||
Environmental related costs | ||||||||||||||||
Other, net | ||||||||||||||||
$ | $ | $ | $ | |||||||||||||
(1) | During the three and six months ended June 30, 2019, the Company recognized a gain of $ |
(2) | During the three and six months ended June 30, 2018, the Company recognized $ |
June 30, 2019 | December 31, 2018 | |||||||
Finished products and work in process | $ | $ | ||||||
Raw materials | ||||||||
$ | $ | |||||||
Valued at lower of cost or market: | ||||||||
LIFO basis | $ | $ | ||||||
Valued at lower of cost and net realizable value: | ||||||||
FIFO or average cost basis | ||||||||
$ | $ | |||||||
Company | Country | Percent Ownership | ||
PQ Silicates Ltd. | Taiwan | |||
Zeolyst International | USA | |||
Zeolyst C.V. | Netherlands | |||
Quaker Holdings | South Africa | |||
Asociacion para el Estudio de las Tecnologias de Equipamiento de Carreteras, S.A. (“Aetec”) | Spain | |||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Sales | $ | $ | $ | $ | ||||||||||||
Gross profit | ||||||||||||||||
Operating income | ||||||||||||||||
Net income | ||||||||||||||||
(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. |
June 30, 2019 | December 31, 2018 | |||||||
Land | $ | $ | ||||||
Buildings | ||||||||
Machinery and equipment | ||||||||
Construction in progress | ||||||||
Less: accumulated depreciation | ( | ) | ( | ) | ||||
$ | $ | |||||||
Classification | June 30, 2019 | |||||
Assets | ||||||
Operating lease assets | Right-of-use lease assets | $ | ||||
Finance lease assets | Property, plant and equipment, net | |||||
Total leased assets | $ | |||||
Liabilities | ||||||
Current: | ||||||
Operating lease liabilities | Operating lease liabilities - current | $ | ||||
Finance lease liabilities | Accrued liabilities | |||||
Noncurrent: | ||||||
Operating lease liabilities | Operating lease liabilities - noncurrent | |||||
Finance lease liabilities | Other long-term liabilities | |||||
Total lease liabilities | $ | |||||
June 30, 2019 | |||
Weighted average remaining lease term (in years): | |||
Operating leases | |||
Finance leases | |||
Weighted average discount rate: | |||
Operating leases | % | ||
Finance leases | % | ||
Operating Leases | Finance Leases | |||||||
Remainder of 2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
Thereafter | ||||||||
Total lease payments | ||||||||
Less: Interest | ( | ) | ( | ) | ||||
Total lease liabilities (1) | $ | $ | ||||||
(1) | Refer to the above table regarding the Company’s right-of-use lease assets and lease liabilities for the presentation of the lease liabilities in the Company’s condensed consolidated balance sheet at June 30, 2019. |
Year | Amount | |||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
$ | ||||
Six months ended June 30, 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Payments on operating leases included in operating cash flows | $ | |||
Interest payments under finance lease obligations included in operating cash flows | ||||
Principal payments under finance lease obligations included in financing cash flows | ||||
Right-of-use assets obtained in exchange for new lease liabilities (non-cash): | ||||
Operating leases | ||||
Finance leases | ||||
June 30, 2019 | December 31, 2018 | |||||||
Term Loan Facility | $ | $ | ||||||
6.75% Senior Secured Notes due 2022 | ||||||||
5.75% Senior Unsecured Notes due 2025 | ||||||||
ABL Facility | ||||||||
Other | ||||||||
Total debt | ||||||||
Original issue discount | ( | ) | ( | ) | ||||
Deferred financing costs | ( | ) | ( | ) | ||||
Total debt, net of original issue discount and deferred financing costs | ||||||||
Less: current portion | ( | ) | ( | ) | ||||
Total long-term debt, excluding current portion | $ | $ | ||||||
Balance sheet location | June 30, 2019 | December 31, 2018 | |||||||
Derivative assets: | |||||||||
Derivatives designated as cash flow hedges: | |||||||||
Natural gas swaps | Prepaid and other current assets | $ | $ | ||||||
Interest rate caps | Prepaid and other current assets | ||||||||
Interest rate caps | Other long-term assets | ||||||||
Derivatives designed as net investment hedges: | |||||||||
Cross currency swaps | Prepaid and other current assets | ||||||||
Cross currency swaps | Other long-term assets | ||||||||
Total derivative assets | $ | $ | |||||||
Derivative liabilities: | |||||||||
Derivatives designated as cash flow hedges: | |||||||||
Natural gas swaps | Accrued liabilities | $ | $ | ||||||
Natural gas swaps | Other long-term liabilities | ||||||||
Interest rate caps | Other long-term liabilities | ||||||||
Total derivative liabilities | $ | $ | |||||||
Three months ended June 30, | ||||||||||||||||||
2019 | 2018 | |||||||||||||||||
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 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
Natural gas swaps | Cost of goods sold | ( | ) | ( | ) | ( | ) | |||||||||||
$ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||
Six months ended June 30, | ||||||||||||||||||
2019 | 2018 | |||||||||||||||||
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 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
Natural gas swaps | Cost of goods sold | ( | ) | ( | ) | |||||||||||||
$ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||
Location and amount of gain (loss) recognized in income on cash flow hedging relationships | ||||||||||||||||
Three months ended June 30, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
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 income in which the effects of cash flow hedges are recorded | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The effects of cash flow hedging: | ||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||
Interest contracts: | ||||||||||||||||
Amount of gain (loss) reclassified from AOCI into income | — | ( | ) | — | ( | ) | ||||||||||
Commodity contracts: | ||||||||||||||||
Amount of gain (loss) reclassified from AOCI into income | ( | ) | — | ( | ) | — | ||||||||||
Location and amount of gain (loss) recognized in income on cash flow hedging relationships | ||||||||||||||||
Six months ended June 30, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
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 income in which the effects of cash flow hedges are recorded | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
The effects of cash flow hedging: | ||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||
Interest contracts: | ||||||||||||||||
Amount of gain (loss) reclassified from AOCI into income | — | ( | ) | — | ( | ) | ||||||||||
Commodity contracts: | ||||||||||||||||
Amount of gain (loss) reclassified from AOCI into income | — | ( | ) | — | ||||||||||||
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 June 30, | Three months ended June 30, | Three months ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Cross currency swaps | $ | ( | ) | $ | Gain (loss) on sale of subsidiary | $ | $ | Interest (expense) income | $ | $ | ||||||||||||||
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) | ||||||||||||||||||||
Six months ended June 30, | Six months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Cross currency swaps | $ | $ | Gain (loss) on sale of subsidiary | $ | $ | Interest (expense) income | $ | $ | ||||||||||||||||
U.S. | Foreign | |||||||||||||||
Three months ended June 30, | Three months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Service cost | $ | $ | $ | $ | ||||||||||||
Interest cost | ||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of net loss | ||||||||||||||||
Amortization of prior service cost | ||||||||||||||||
Curtailment gain recognized | ( | ) | ||||||||||||||
Net periodic expense (benefit) | $ | $ | ( | ) | $ | $ | ||||||||||
U.S. | Foreign | |||||||||||||||
Six months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Service cost | $ | $ | $ | $ | ||||||||||||
Interest cost | ||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of net loss | ||||||||||||||||
Amortization of prior service cost | ||||||||||||||||
Curtailment gain recognized | ( | ) | ||||||||||||||
Net periodic expense (benefit) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||||||
Net periodic expense | $ | $ | $ | $ | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Service cost | $ | $ | $ | $ | ||||||||||||
Interest cost | ||||||||||||||||
Amortization of prior service credit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of net gain | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net periodic expense | $ | $ | ( | ) | $ | $ | ||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Sales: | ||||||||||||||||
Refining Services | $ | $ | $ | $ | ||||||||||||
Catalysts(1) | ||||||||||||||||
Performance Materials | ||||||||||||||||
Performance Chemicals | ||||||||||||||||
Eliminations(2) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Total | $ | $ | $ | $ | ||||||||||||
Segment Adjusted EBITDA:(3) | ||||||||||||||||
Refining Services | $ | $ | $ | $ | ||||||||||||
Catalysts(4) | ||||||||||||||||
Performance Materials | ||||||||||||||||
Performance Chemicals | ||||||||||||||||
Total Segment Adjusted EBITDA(5) | $ | $ | $ | $ | ||||||||||||
(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 $ |
(2) | The Company eliminates intersegment sales when reconciling to the Company’s condensed consolidated statements of income. |
(3) | The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Management evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the Company’s operating performance. Adjusted EBITDA as defined by the Company may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. |
(4) | The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $ |
(5) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA | ||||||||||||||||
Net income attributable to PQ Group Holdings Inc. | $ | $ | $ | $ | ||||||||||||
Provision for income taxes | ||||||||||||||||
Interest expense, net | ||||||||||||||||
Depreciation and amortization | ||||||||||||||||
Segment EBITDA | ||||||||||||||||
Unallocated corporate expenses | ||||||||||||||||
Joint venture depreciation, amortization and interest | ||||||||||||||||
Amortization of investment in affiliate step-up | ||||||||||||||||
Amortization of inventory step-up | ||||||||||||||||
Debt extinguishment costs | ||||||||||||||||
Net (gain) loss on asset disposals | ( | ) | ( | ) | ||||||||||||
Foreign currency exchange loss | ||||||||||||||||
LIFO expense | ||||||||||||||||
Transaction and other related costs | ||||||||||||||||
Equity-based compensation | ||||||||||||||||
Restructuring, integration and business optimization expenses | ( | ) | ||||||||||||||
Defined benefit pension plan cost (benefit) | ( | ) | ||||||||||||||
Other | ||||||||||||||||
Segment Adjusted EBITDA | $ | $ | $ | $ | ||||||||||||
Restricted Stock Units | Performance Stock Units | |||||||||||||
Number of Units | Weighted Average Grant Date Fair Value (per share) | Number of Units | Weighted Average Grant Date Fair Value (per share) | |||||||||||
Nonvested as of December 31, 2018 | $ | $ | ||||||||||||
Granted | $ | $ | ||||||||||||
Vested | ( | ) | $ | $ | ||||||||||
Nonvested as of June 30, 2019 | $ | $ | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Weighted average shares outstanding – Basic | ||||||||||||
Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions | ||||||||||||
Weighted average shares outstanding – Diluted | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Numerator: | ||||||||||||||||
Net income attributable to PQ Group Holdings Inc. | $ | $ | $ | $ | ||||||||||||
Denominator: | ||||||||||||||||
Weighted average shares outstanding – Basic | ||||||||||||||||
Weighted average shares outstanding – Diluted | ||||||||||||||||
Net income per share: | ||||||||||||||||
Basic income per share | $ | $ | $ | $ | ||||||||||||
Diluted income per share | $ | $ | $ | $ | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Restricted stock awards with performance only targets not yet achieved | ||||||||||||
Stock options with performance only targets not yet achieved | ||||||||||||
Anti-dilutive restricted stock awards, restricted stock units and performance stock units | ||||||||||||
Anti-dilutive stock options | ||||||||||||
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
Cash paid during the period for: | ||||||||
Income taxes, net of refunds | $ | $ | ||||||
Interest(1) | ||||||||
Non-cash investing activity(2): | ||||||||
Capital expenditures acquired on account but unpaid as of the period end | ||||||||
(1) | Excludes capitalized interest for the periods presented, as well as $ |
(2) | For the supplemental non-cash information on lease liabilities arising from obtaining right-of-use lease assets, see Note 12 to these condensed consolidated financial statements for additional details. |
June 30, | ||||||||
2019 | 2018 | |||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash included in prepaid and other current assets | ||||||||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ | $ | ||||||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
• | our exposure to local business risks and regulations in different countries; |
• | general economic conditions; |
• | exchange rate fluctuations; |
• | legal and regulatory compliance; |
• | significant developments relating to the U.S. administration, U.S. courts’ or the United Kingdom’s referendum on membership in the European Union; |
• | technological or other changes in our customers’ products; |
• | our and our competitors’ research and development; |
• | fluctuations in prices of raw materials and relationships with our key suppliers; |
• | substantial competition; |
• | non-payment or non-performance by our customers; |
• | reliance on a small number of customers; |
• | potential early termination or non-renewal of customer contracts in our Refining Services segment; |
• | reductions in highway safety spending or taxes earmarked for highway safety spending; |
• | seasonal fluctuations in demand for some of our products; |
• | retention of certain key personnel; |
• | realization of our growth projects; |
• | potential product liability claims; |
• | existing and potential future government regulation; |
• | the extensive environmental, health and safety regulations to which we are subject; |
• | disruption of production and distribution of our products; |
• | risk of loss beyond our available insurance coverage; |
• | product quality; |
• | successful integration of acquisitions; |
• | our joint venture investments; |
• | our failure to protect our intellectual property and infringement on the intellectual property rights of third parties; |
• | information technology risks; |
• | potential labor disruptions; |
• | litigation and other administrative and regulatory proceedings; |
• | our substantial indebtedness; and |
• | other factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018. |
• | Sales decreased $3.0 million to $431.7 million. The decrease in sales was primarily due to lower sales volumes and the unfavorable effects of foreign currency translation of $9.3 million, partially offset by higher average customer prices and favorable mix. |
• | Gross profit increased $7.1 million to $115.5 million. The increase in gross profit was primarily due to favorable pricing, which was partially offset by higher manufacturing costs and lower sales volumes. |
• | Operating income increased by $21.3 million to $70.3 million. The increase in operating income was due to the gain on the sale of a non-core product line and an increase in gross profit for the three months ended June 30, 2019. |
• | Equity in net income of affiliated companies for the three months ended June 30, 2019 was $12.3 million, compared to $13.7 million for the three months ended June 30, 2018. The decrease of $1.4 million was due to lower earnings generated by our Zeolyst Joint Venture for the three months ended June 30, 2019. |
Three months ended June 30, | Change | ||||||||||||||
2019 | 2018 | $ | % | ||||||||||||
(in millions, except percentages) | |||||||||||||||
Sales | $ | 431.7 | $ | 434.7 | $ | (3.0 | ) | (0.7 | )% | ||||||
Cost of goods sold | 316.2 | 326.3 | (10.1 | ) | (3.1 | )% | |||||||||
Gross profit | 115.5 | 108.4 | 7.1 | 6.5 | % | ||||||||||
Gross profit margin | 26.8 | % | 24.9 | % | |||||||||||
Selling, general and administrative expenses | 43.4 | 43.5 | (0.1 | ) | (0.2 | )% | |||||||||
Other operating expense, net | 1.8 | 15.9 | (14.1 | ) | (88.7 | )% | |||||||||
Operating income | 70.3 | 49.0 | 21.3 | 43.5 | % | ||||||||||
Operating income margin | 16.3 | % | 11.3 | % | |||||||||||
Equity in net (income) from affiliated companies | (12.3 | ) | (13.7 | ) | 1.4 | (10.2 | )% | ||||||||
Interest expense, net | 28.5 | 27.2 | 1.3 | 4.8 | % | ||||||||||
Other expense, net | 3.1 | 5.7 | (2.6 | ) | (45.6 | )% | |||||||||
Income before income taxes and noncontrolling interest | 51.0 | 29.8 | 21.2 | 71.1 | % | ||||||||||
Provision for income taxes | 20.3 | 13.6 | 6.7 | 49.3 | % | ||||||||||
Effective tax rate | 39.8 | % | 45.8 | % | |||||||||||
Net income | 30.7 | 16.2 | 14.5 | 89.5 | % | ||||||||||
Less: Net income attributable to the noncontrolling interest | 0.1 | 0.4 | (0.3 | ) | (75.0 | )% | |||||||||
Net income attributable to PQ Group Holdings Inc. | $ | 30.6 | $ | 15.8 | $ | 14.8 | 93.7 | % | |||||||
Three months ended June 30, | Change | ||||||||||||||
2019 | 2018 | $ | % | ||||||||||||
(in millions, except percentages) | |||||||||||||||
Sales: | |||||||||||||||
Refining Services | $ | 117.3 | $ | 112.1 | $ | 5.2 | 4.6 | % | |||||||
Catalysts | 20.9 | 17.3 | 3.6 | 20.8 | % | ||||||||||
Performance Materials | 118.9 | 126.5 | (7.6 | ) | (6.0 | )% | |||||||||
Performance Chemicals | 177.8 | 183.8 | (6.0 | ) | (3.3 | )% | |||||||||
Eliminations | (3.2 | ) | (5.0 | ) | 1.8 | ||||||||||
Total sales | $ | 431.7 | $ | 434.7 | $ | (3.0 | ) | (0.7 | )% | ||||||
Three months ended June 30, | Change | ||||||||||||||
2019 | 2018 | $ | % | ||||||||||||
(in millions, except percentages) | |||||||||||||||
Segment Adjusted EBITDA:(1) | |||||||||||||||
Refining Services | $ | 42.8 | $ | 41.3 | $ | 1.5 | 3.6 | % | |||||||
Catalysts(2) | 29.6 | 23.6 | 6.0 | 25.4 | % | ||||||||||
Performance Materials | 29.2 | 28.6 | 0.6 | 2.1 | % | ||||||||||
Performance Chemicals | 41.2 | 44.8 | (3.6 | ) | (8.0 | )% | |||||||||
Total Segment Adjusted EBITDA(3) | 142.8 | 138.3 | 4.5 | 3.3 | % | ||||||||||
Unallocated corporate expenses | (10.3 | ) | (9.4 | ) | (0.9 | ) | 9.6 | % | |||||||
Total Adjusted EBITDA | $ | 132.5 | $ | 128.9 | $ | 3.6 | 2.8 | % | |||||||
(1) | We define Segment Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Segment Adjusted EBITDA. Segment Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Segment Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. |
(2) | The Adjusted EBITDA from our Zeolyst Joint Venture included in the Catalysts segment is $17.6 million for the three months ended June 30, 2019, which includes $12.3 million of equity in net income, excluding $1.7 million of amortization of investment in affiliate step-up plus $3.7 million of joint venture depreciation, amortization and interest. The Adjusted EBITDA from our Zeolyst Joint Venture included in the Catalysts segment is $17.9 million for the three months ended June 30, 2018, which includes $13.6 million of equity in net income, excluding $1.7 million of amortization of investment in affiliate step-up plus $2.6 million of joint venture depreciation, amortization and interest. |
(3) | Our total Segment Adjusted EBITDA differs from our total consolidated Adjusted EBITDA due to unallocated corporate expenses. |
Three months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA | ||||||||
Net income attributable to PQ Group Holdings Inc. | $ | 30.6 | $ | 15.8 | ||||
Provision for income taxes | 20.3 | 13.6 | ||||||
Interest expense, net | 28.5 | 27.2 | ||||||
Depreciation and amortization | 45.1 | 47.0 | ||||||
EBITDA | 124.5 | 103.6 | ||||||
Joint venture depreciation, amortization and interest(a) | 3.7 | 2.6 | ||||||
Amortization of investment in affiliate step-up(b) | 1.7 | 1.7 | ||||||
Net (gain) loss on asset disposals(c) | (9.7 | ) | 4.8 | |||||
Foreign currency exchange loss(d) | 3.6 | 6.8 | ||||||
LIFO expense(e) | 0.1 | 0.1 | ||||||
Transaction and other related costs(f) | 1.0 | 0.3 | ||||||
Equity-based compensation | 5.4 | 3.8 | ||||||
Restructuring, integration and business optimization expenses(g) | — | 2.4 | ||||||
Defined benefit pension plan cost(h) | 0.6 | (0.4 | ) | |||||
Other(i) | 1.6 | 3.2 | ||||||
Adjusted EBITDA | 132.5 | 128.9 | ||||||
Unallocated corporate expenses | 10.3 | 9.4 | ||||||
Segment Adjusted EBITDA | $ | 142.8 | $ | 138.3 | ||||
(a) | We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in our Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of our Zeolyst Joint Venture. |
(b) | Represents the amortization of the fair value adjustments associated with the equity affiliate investment in our Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016 (the “Business Combination”). We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of our Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with fixed assets and intangible assets, including customer relationships and technical know-how. |
(c) | When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use. During the three months ended June 30, 2019, net (gain) loss on asset disposals reflects the gain related to the sale of a non-core product line. |
(d) | Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income which primarily relates to the non-permanent intercompany debt denominated in local currency translated to U.S. dollars. |
(e) | Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories. |
(f) | Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations. |
(g) | Includes the impact of restructuring, integration and business optimization expenses which are incremental costs that are not representative of our ongoing business operations. |
(h) | Represents adjustments for defined benefit pension plan costs in our statements of income. More than two-thirds of our defined benefit pension plan obligations are under defined benefit pension plans that are frozen, and the remaining obligations primarily relate to plans operated in certain of our non-U.S. locations that, pursuant to jurisdictional requirements, cannot be frozen. As such, we do not view such expenses as core to our ongoing business operations. |
(i) | Other costs consist of certain expenses that are not core to our ongoing business operations, including environmental remediation-related costs associated with the legacy operations of our business prior to the Business Combination, capital and franchise taxes, non-cash asset retirement obligation accretion and the initial implementation of procedures to comply with Section 404 of the Sarbanes-Oxley Act. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). |
Three months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Reconciliation of net income attributable to PQ Group Holdings Inc. to Adjusted Net Income(1)(2) | ||||||||
Net income attributable to PQ Group Holdings Inc. | $ | 30.6 | $ | 15.8 | ||||
Amortization of investment in affiliate step-up(b) | 1.0 | 1.0 | ||||||
Net (gain) loss on asset disposals(c) | (7.4 | ) | 3.1 | |||||
Foreign currency exchange loss(d) | 4.1 | 5.2 | ||||||
LIFO expense(e) | 0.2 | — | ||||||
Transaction and other related costs(f) | 0.6 | 0.2 | ||||||
Equity-based compensation | 3.5 | 2.5 | ||||||
Restructuring, integration and business optimization expenses(g) | — | 1.6 | ||||||
Defined benefit pension plan cost (benefit)(h) | 0.4 | (0.3 | ) | |||||
Other(i) | 1.0 | 2.0 | ||||||
Adjusted Net Income, including non-cash GILTI tax | $ | 34.0 | $ | 31.1 | ||||
Impact of non-cash GILTI tax(3) | 7.5 | 5.0 | ||||||
Impact of tax reform(4) | — | 1.1 | ||||||
Adjusted Net Income | $ | 41.5 | $ | 37.2 | ||||
(1) | We define adjusted net income as net income attributable to PQ Group Holdings adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted net income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted net income may not be comparable with net income or adjusted net income as defined by other companies. |
(2) | Refer to the Adjusted EBITDA notes above for more information with respect to each adjustment. |
(3) | Amount represents the impact to tax expense in net income before non-controlling interest and the related adjustments to net income associated with the Global Intangible Low Taxed Income (“GILTI”) provisions of the Tax Cuts and Jobs Act of 2017 (“TCJA”). Beginning January 1, 2018, GILTI results in taxation of “excess of foreign earnings,” which is defined as amounts greater than a 10% rate of return on applicable foreign tangible asset basis. The Company is required to record incremental tax provision impact with respect to GILTI as a result of having historical U.S. net operating loss (“NOL”) amounts to offset the GILTI taxable income inclusion. This NOL utilization precludes us from recognizing foreign tax credits (“FTCs”) which would otherwise help offset the tax impacts of GILTI. No FTCs will be recognized with respect to GILTI until our cumulative NOL balance has been exhausted. Because the GILTI provision does not impact our cash taxes (given available U.S. NOLs), and given that we expect to recognize FTCs to offset GILTI impacts once the NOLs are exhausted, we do not view this item as a component of core operations. |
(4) | Represents the provisional adjustment for the impact of the TCJA recorded in net income. |
• | Sales decreased $10.0 million to $790.9 million. The decrease in sales was primarily due to lower sales volumes and the unfavorable effects of foreign currency translation of $21.5 million, partially offset by higher average customer prices and favorable mix. |
• | Gross profit increased $9.9 million to $196.4 million. The increase in gross profit was primarily due to favorable pricing and product mix and lower depreciation expenses, which was partially offset by higher manufacturing costs and lower volumes. |
• | Operating income increased by $22.5 million to $99.7 million. The increase in operating income was due to a gain on the sale of a non-core product line and an increase in gross profit for the six months ended June 30, 2019. |
• | Equity in net income of affiliated companies for the six months ended June 30, 2019 was $14.4 million, compared to $25.5 million for the six months ended June 30, 2018. The decrease of $11.1 million was due to lower earnings generated by our Zeolyst Joint Venture for the six months ended June 30, 2019. |
Six months ended June 30, | Change | ||||||||||||||
2019 | 2018 | $ | % | ||||||||||||
(in millions, except percentages) | |||||||||||||||
Sales | $ | 790.9 | $ | 800.9 | $ | (10.0 | ) | (1.2 | )% | ||||||
Cost of goods sold | 594.5 | 614.4 | (19.9 | ) | (3.2 | )% | |||||||||
Gross profit | 196.4 | 186.5 | 9.9 | 5.3 | % | ||||||||||
Gross profit margin | 24.8 | % | 23.3 | % | |||||||||||
Selling, general and administrative expenses | 84.1 | 84.1 | — | — | % | ||||||||||
Other operating expense, net | 12.6 | 25.2 | (12.6 | ) | (50.0 | )% | |||||||||
Operating income | 99.7 | 77.2 | 22.5 | 29.1 | % | ||||||||||
Operating income margin | 12.6 | % | 9.6 | % | |||||||||||
Equity in net (income) from affiliated companies | (14.4 | ) | (25.5 | ) | 11.1 | (43.5 | )% | ||||||||
Interest expense, net | 57.2 | 56.4 | 0.8 | 1.4 | % | ||||||||||
Debt extinguishment costs | — | 5.9 | (5.9 | ) | (100.0 | )% | |||||||||
Other expense, net | — | 10.6 | (10.6 | ) | (100.0 | )% | |||||||||
Income before income taxes and noncontrolling interest | 56.9 | 29.8 | 27.1 | 90.9 | % | ||||||||||
Provision for income taxes | 22.8 | 13.1 | 9.7 | 74.0 | % | ||||||||||
Effective tax rate | 40.0 | % | 44.0 | % | |||||||||||
Net income | 34.1 | 16.7 | 17.4 | 104.2 | % | ||||||||||
Less: Net income attributable to the noncontrolling interest | 0.4 | 0.7 | (0.3 | ) | (42.9 | )% | |||||||||
Net income attributable to PQ Group Holdings Inc. | $ | 33.7 | $ | 16.0 | $ | 17.7 | 110.6 | % | |||||||
Six months ended June 30, | Change | ||||||||||||||
2019 | 2018 | $ | % | ||||||||||||
(in millions, except percentages) | |||||||||||||||
Sales: | |||||||||||||||
Refining Services | $ | 223.1 | $ | 212.8 | $ | 10.3 | 4.8 | % | |||||||
Catalysts | 36.7 | 33.8 | 2.9 | 8.6 | % | ||||||||||
Performance Materials | 180.0 | 189.3 | (9.3 | ) | (4.9 | )% | |||||||||
Performance Chemicals | 358.3 | 373.7 | (15.4 | ) | (4.1 | )% | |||||||||
Eliminations | (7.2 | ) | (8.7 | ) | 1.5 | ||||||||||
Total sales | $ | 790.9 | $ | 800.9 | $ | (10.0 | ) | (1.2 | )% | ||||||
Six months ended June 30, | Change | ||||||||||||||
2019 | 2018 | $ | % | ||||||||||||
(in millions, except percentages) | |||||||||||||||
Segment Adjusted EBITDA:(1) | |||||||||||||||
Refining Services | $ | 82.6 | $ | 76.8 | $ | 5.8 | 7.6 | % | |||||||
Catalysts(2) | 47.7 | 46.5 | 1.2 | 2.6 | % | ||||||||||
Performance Materials | 39.7 | 40.6 | (0.9 | ) | (2.2 | )% | |||||||||
Performance Chemicals | 83.8 | 89.9 | (6.1 | ) | (6.8 | )% | |||||||||
Total Segment Adjusted EBITDA(3) | 253.8 | 253.8 | — | — | % | ||||||||||
Unallocated corporate expenses | (20.3 | ) | (17.0 | ) | (3.3 | ) | 19.4 | % | |||||||
Total Adjusted EBITDA | $ | 233.5 | $ | 236.8 | $ | (3.3 | ) | (1.4 | )% | ||||||
(1) | We define Segment Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Segment Adjusted EBITDA. Segment Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Segment Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. |
(2) | The Adjusted EBITDA from our Zeolyst Joint Venture included in the Catalysts segment is $26.0 million for the six months ended June 30, 2019, which includes $14.3 million of equity in net income, excluding $4.2 million of amortization of investment in affiliate step-up plus $7.5 million of joint venture depreciation, amortization and interest. The Adjusted EBITDA from our Zeolyst Joint Venture included in the Catalysts segment is $34.7 million for the six months ended June 30, 2018, which includes $25.4 million of equity in net income, excluding $3.3 million of amortization of investment in affiliate step-up plus $5.9 million of joint venture depreciation, amortization and interest. |
(3) | Our total Segment Adjusted EBITDA differs from our total consolidated Adjusted EBITDA due to unallocated corporate expenses. |
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA | ||||||||
Net income attributable to PQ Group Holdings Inc. | $ | 33.7 | $ | 16.0 | ||||
Provision for income taxes | 22.8 | 13.1 | ||||||
Interest expense, net | 57.2 | 56.4 | ||||||
Depreciation and amortization | 91.0 | 95.5 | ||||||
EBITDA | 204.7 | 181.0 | ||||||
Joint venture depreciation, amortization and interest(a) | 7.5 | 5.9 | ||||||
Amortization of investment in affiliate step-up(b) | 4.2 | 3.3 | ||||||
Amortization of inventory step-up(c) | — | 1.6 | ||||||
Debt extinguishment costs | — | 5.9 | ||||||
Net (gain) loss on asset disposals(d) | (8.8 | ) | 5.9 | |||||
Foreign currency exchange loss(e) | 0.9 | 11.8 | ||||||
LIFO expense(f) | 10.3 | 5.0 | ||||||
Transaction and other related costs(g) | 1.1 | 0.7 | ||||||
Equity-based compensation | 8.8 | 7.6 | ||||||
Restructuring, integration and business optimization expenses(h) | 0.7 | 3.5 | ||||||
Defined benefit pension plan cost(i) | 1.5 | 0.1 | ||||||
Other(j) | 2.6 | 4.5 | ||||||
Adjusted EBITDA | 233.5 | 236.8 | ||||||
Unallocated corporate expenses | 20.3 | 17.0 | ||||||
Total Segment Adjusted EBITDA | $ | 253.8 | $ | 253.8 | ||||
(a) | We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in our Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of our Zeolyst Joint Venture. |
(b) | Represents the amortization of the fair value adjustments associated with the equity affiliate investment in our Zeolyst Joint Venture as a result of the Business Combination. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of our Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with fixed assets and intangible assets, including customer relationships and technical know-how. |
(c) | As a result of the Sovitec acquisition there was a step-up in the fair value of inventory, which is amortized through cost of goods sold in the statements of income. |
(d) | When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use. During the six months ended June 30, 2019, net (gain) loss on asset disposals reflects the gain related to the sale of a non-core product line. |
(e) | Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income primarily related to the non-permanent intercompany debt denominated in local currency translated to U.S. dollars for the six months ended June 30, 2019 and primarily related to the Euro denominated term loan (which was settled as part of the February 2018 term loan refinancing) for the six months ended June 30, 2018. |
(f) | Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories. |
(g) | Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations. |
(h) | Includes the impact of restructuring, integration and business optimization expenses which are incremental costs that are not representative of our ongoing business operations. |
(i) | Represents adjustments for defined benefit pension plan costs in our statements of income. More than two-thirds of our defined benefit pension plan obligations are under defined benefit pension plans that are frozen, and the remaining obligations primarily relate to plans operated in certain of our non-U.S. locations that, pursuant to jurisdictional requirements, cannot be frozen. As such, we do not view such expenses as core to our ongoing business operations. |
(j) | Other costs consist of certain expenses that are not core to our ongoing business operations, including environmental remediation-related costs associated with the legacy operations of our business prior to the Business Combination, capital and franchise taxes, non-cash asset retirement obligation accretion and the initial implementation of procedures to comply with Section 404 of the Sarbanes-Oxley Act. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). |
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Adjusted Net Income(1)(2) | ||||||||
Net income attributable to PQ Group Holdings Inc. | $ | 33.7 | $ | 16.0 | ||||
Amortization of investment in affiliate step-up(b) | 2.7 | 2.2 | ||||||
Amortization of inventory step-up(c) | — | 1.1 | ||||||
Debt extinguishment costs | — | 4.1 | ||||||
Net (gain) loss on asset disposals(d) | (6.9 | ) | 3.9 | |||||
Foreign currency exchange loss(e) | 2.1 | 8.1 | ||||||
LIFO expense(f) | 6.6 | 3.4 | ||||||
Transaction and other related costs(g) | 0.7 | 0.5 | ||||||
Equity-based compensation | 5.6 | 5.1 | ||||||
Restructuring, integration and business optimization expenses(h) | 0.5 | 2.3 | ||||||
Defined benefit pension plan cost(i) | 1.0 | 0.1 | ||||||
Other(j) | 1.7 | 2.7 | ||||||
Adjusted Net Income, including non-cash GILTI tax | $ | 47.7 | $ | 49.5 | ||||
Impact of non-cash GILTI tax(3) | 11.2 | 7.5 | ||||||
Impact of tax reform(4) | — | 1.1 | ||||||
Adjusted Net Income | $ | 58.9 | $ | 58.1 | ||||
(1) | We define adjusted net income as net income attributable to PQ Group Holdings adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted net income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted net income may not be comparable with net income or adjusted net income as defined by other companies. |
(2) | Refer to the Adjusted EBITDA notes above for more information with respect to each adjustment. |
(3) | Amount represents the impact to tax expense in net income before non-controlling interest and the related adjustments to net income associated with the GILTI provisions of the TCJA. Beginning January 1, 2018, GILTI results in taxation of “excess of foreign earnings,” which is defined as amounts greater than a 10% rate of return on applicable foreign tangible asset basis. The Company is required to record incremental tax provision impact with respect to GILTI as a result of having historical U.S. NOL amounts to offset the GILTI taxable income inclusion. This NOL utilization precludes us from recognizing FTCs which would otherwise help offset the tax impacts of GILTI. No FTCs will be recognized with respect to GILTI until our cumulative NOL balance has been exhausted. Because the GILTI provision does not impact our cash taxes (given available U.S. NOLs), and given that we expect to recognize FTCs to offset GILTI impacts once the NOLs are exhausted, we do not view this item as a component of core operations. |
(4) | Represents the provisional adjustment for the impact of the TCJA recorded in net income. |
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Net cash provided by (used in): | ||||||||
Operating activities | $ | 60.0 | $ | 50.1 | ||||
Investing activities | (33.9 | ) | (66.3 | ) | ||||
Financing activities | (0.3 | ) | 4.7 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1.5 | ) | (1.8 | ) | ||||
Net change in cash, cash equivalents and restricted cash | 24.3 | (13.3 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 59.7 | 67.2 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 84.0 | $ | 53.9 | ||||
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Net income | $ | 34.1 | $ | 16.7 | ||||
Non-cash and non-working capital related activities(1) | 91.7 | 122.8 | ||||||
Changes in working capital | (60.2 | ) | (81.9 | ) | ||||
Other operating activities | (5.6 | ) | (7.5 | ) | ||||
Net cash provided by operating activities | $ | 60.0 | $ | 50.1 | ||||
(1) | Includes depreciation, amortization, charges related to purchase accounting fair value adjustments, amortization of deferred financing costs and original issue discount, debt extinguishment costs, foreign currency exchange gains and losses, pension and postretirement healthcare benefit expense and funding, deferred income tax provision (benefit), net losses on asset disposals, stock compensation expense, and equity in net income and dividends received from affiliated companies. |
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Working capital changes that provided (used) cash: | ||||||||
Receivables | $ | (46.3 | ) | $ | (54.3 | ) | ||
Inventories | (12.2 | ) | (9.9 | ) | ||||
Prepaids and other current assets | 2.2 | (3.6 | ) | |||||
Accounts payable | (0.2 | ) | 1.0 | |||||
Accrued liabilities | (3.7 | ) | (15.1 | ) | ||||
$ | (60.2 | ) | $ | (81.9 | ) | |||
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Purchases of property, plant and equipment | $ | (65.5 | ) | $ | (66.1 | ) | ||
Business combinations, net of cash acquired | — | (1.0 | ) | |||||
Net interest proceeds on swaps designated as net investment hedges | 4.5 | — | ||||||
Proceeds from sale of product line | 26.7 | — | ||||||
Other, net | 0.4 | 0.8 | ||||||
Net cash used in investing activities | $ | (33.9 | ) | $ | (66.3 | ) | ||
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Net revolving credit facilities borrowings | $ | 2.6 | $ | 9.1 | ||||
Net cash repayments on debt obligations | (5.0 | ) | (4.2 | ) | ||||
Other financing activities | 2.1 | (0.2 | ) | |||||
Net cash (used in) provided by financing activities | $ | (0.3 | ) | $ | 4.7 | |||
June 30, 2019 | December 31, 2018 | |||||||
(in millions) | ||||||||
Term Loan Facility | 1,157.5 | 1,157.5 | ||||||
6.75% Senior Secured Notes due 2022 | 625.0 | 625.0 | ||||||
5.75% Senior Unsecured Notes due 2025 | 295.0 | 300.0 | ||||||
ABL Facility | — | — | ||||||
Other | 68.7 | 65.9 | ||||||
Total debt | 2,146.2 | 2,148.4 | ||||||
Original issue discount | (17.2 | ) | (18.6 | ) | ||||
Deferred financing costs | (14.3 | ) | (15.9 | ) | ||||
Total debt, net of original issue discount and deferred financing costs | 2,114.7 | 2,113.9 | ||||||
Less: current portion | (10.0 | ) | (7.2 | ) | ||||
Total long-term debt, excluding current portion | $ | 2,104.7 | $ | 2,106.7 | ||||
Six months ended June 30, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Maintenance capital expenditures | $ | 36.3 | $ | 47.9 | ||||
Growth capital expenditures | 15.1 | 11.3 | ||||||
Total capital expenditures | $ | 51.4 | $ | 59.2 | ||||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. | CONTROLS AND PROCEDURES. |
ITEM 1. | LEGAL PROCEEDINGS. |
ITEM 1A. | RISK FACTORS. |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
ITEM 6. | EXHIBITS. |
Exhibit No. | Description |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101 | The following financial statements from the Quarterly Report on Form 10-Q of PQ Group Holdings Inc. for the quarter ended June 30, 2019, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags |
104 | The cover page from the Quarterly Report on Form 10-Q of PQ Group Holdings Inc. for the quarter ended June 30, 2019, formatted in Inline XBRL |
PQ GROUP HOLDINGS INC. | |||
Date: | August 8, 2019 | By: | /s/ MICHAEL CREWS |
Michael Crews | |||
Executive Vice President and Chief Financial Officer | |||
(Duly Authorized Officer and Principal Financial and Accounting Officer) | |||
1. | I have reviewed this quarterly report on Form 10-Q of PQ Group Holdings Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 8, 2019 | /s/ BELGACEM CHARIAG | |
Belgacem Chariag | |||
Chief Executive Officer, President and Director | |||
(Principal Executive Officer) | |||
1. | I have reviewed this quarterly report on Form 10-Q of PQ Group Holdings Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 8, 2019 | /s/ MICHAEL CREWS | |
Michael Crews | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial Officer) | |||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 8, 2019 | /s/ BELGACEM CHARIAG | |
Belgacem Chariag | |||
Chief Executive Officer, President and Director | |||
(Principal Executive Officer) | |||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 8, 2019 | /s/ MICHAEL CREWS | |
Michael Crews | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial Officer) | |||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Income Statement [Abstract] | ||||
| Sales | $ 431,675 | $ 434,713 | $ 790,896 | $ 800,910 |
| Cost of goods sold | 316,180 | 326,309 | 594,491 | 614,385 |
| Gross profit | 115,495 | 108,404 | 196,405 | 186,525 |
| Selling, general and administrative expenses | 43,375 | 43,477 | 84,083 | 84,095 |
| Other operating expense, net | 1,819 | 15,873 | 12,558 | 25,187 |
| Operating income | 70,301 | 49,054 | 99,764 | 77,243 |
| Equity in net (income) from affiliated companies | (12,300) | (13,666) | (14,364) | (25,518) |
| Interest expense, net | 28,540 | 27,221 | 57,158 | 56,384 |
| Debt extinguishment costs | 0 | 0 | 0 | 5,879 |
| Other expense, net | 3,035 | 5,691 | 56 | 10,663 |
| Income before income taxes and noncontrolling interest | 51,026 | 29,808 | 56,914 | 29,835 |
| Provision for income taxes | 20,307 | 13,649 | 22,754 | 13,120 |
| Net income | 30,719 | 16,159 | 34,160 | 16,715 |
| Less: Net income attributable to the noncontrolling interest | 145 | 377 | 435 | 719 |
| Net income attributable to PQ Group Holdings Inc. | $ 30,574 | $ 15,782 | $ 33,725 | $ 15,996 |
| Net income per share: | ||||
| Basic income per share (usd per share) | $ 0.23 | $ 0.12 | $ 0.25 | $ 0.12 |
| Diluted income per share (usd per share) | $ 0.23 | $ 0.12 | $ 0.25 | $ 0.12 |
| Weighted average shares outstanding: | ||||
| Basic (shares) | 134,142,552 | 133,222,463 | 134,044,972 | 133,188,303 |
| Diluted (shares) | 135,323,024 | 134,209,740 | 135,107,007 | 134,047,362 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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| Statement of Comprehensive Income [Abstract] | ||||
| Net income | $ 30,719 | $ 16,159 | $ 34,160 | $ 16,715 |
| Other comprehensive income (loss), net of tax: | ||||
| Pension and postretirement benefits | (31) | 1,375 | (61) | 1,357 |
| Net (loss) gain from hedging activities | (1,167) | 553 | (2,719) | 2,736 |
| Foreign currency translation | 6,085 | (29,493) | 13,252 | (20,822) |
| Total other comprehensive income (loss) | 4,887 | (27,565) | 10,472 | (16,729) |
| Comprehensive income (loss) | 35,606 | (11,406) | 44,632 | (14) |
| Less: Comprehensive income (loss) attributable to noncontrolling interests | 285 | (1,167) | 890 | 479 |
| Comprehensive income (loss) attributable to PQ Group Holdings Inc. | $ 35,321 | $ (10,239) | $ 43,742 | $ (493) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| 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) | 136,355,874 | 135,758,269 |
| Common stock, shares outstanding (shares) | 136,101,083 | 135,592,045 |
| 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) | 254,791 | 166,224 |
Background and Basis of Presentation |
6 Months Ended |
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Jun. 30, 2019 | |
| 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”) is a leading integrated and innovative global provider of specialty catalysts, materials, chemicals and services. The Company supports customers globally through its strategically located network of manufacturing facilities. The Company believes that its products, which are predominantly inorganic, and services contribute to improving the sustainability of the environment. The Company has four uniquely positioned specialty businesses: Refining Services provides sulfuric acid recycling to the North American refining industry; Catalysts serves the packaging and engineered plastics and the global refining, petrochemical and emissions control industries; Performance Materials produces transportation reflective safety markings for roads and airports; and Performance Chemicals supplies diverse product end uses, including personal and industrial cleaning products, fuel-efficient tires, surface coatings, and food and beverage products. Effective March 1, 2019, the Company changed the structure of its internal organization to create the four independent businesses described above in order to promote increased visibility to business unit performance, optimize the Company’s product portfolio and create efficiencies. Previously, the Company had two reportable segments, namely the Environmental Catalysts and Services segment and the Performance Materials and Chemicals segment. Beginning with the quarter ended March 31, 2019, the segment results and disclosures included in the Company’s consolidated financial statements reflect the new segment structure for all periods presented. The changes to the Company’s segment structure affect only the manner in which the results of the Company’s reportable segments were previously reported; there are no changes to the Company’s consolidated balance sheet, statement of income or cash flows for the prior periods. For the purposes of the Company’s goodwill impairment testing, the four new operating segments align with the Company’s reporting units at which level goodwill has been assigned and historically tested for impairment. Seasonal changes and weather conditions typically affect the Company’s Performance Materials and Refining Services segments. In particular, the Company’s Performance Materials segment 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 segment 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 second 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 segments, 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, 2018. Other than the update to our lease accounting policies described in Note 12, the Company has continued to follow the accounting policies set forth in those consolidated financial statements.
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New Accounting Standards |
6 Months Ended |
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Jun. 30, 2019 | |
| New Accounting Standards [Abstract] | |
| New Accounting Standards | 2. New Accounting Standards: Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance (with subsequent targeted amendments) that modifies the accounting for leases. Under the new guidance, a lessee will recognize right-of-use lease assets and lease liabilities for most leases (including those classified under existing GAAP as operating leases, which based on previous standards are not reflected on the balance sheet), but will recognize expenses in a manner that is generally consistent with existing practices. The new guidance also requires companies to provide expanded disclosures regarding leasing arrangements. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. The new guidance must be adopted using a modified retrospective transition method. The Company adopted the new lease guidance effective January 1, 2019 as required using the modified retrospective transition method and applied the provisions of the guidance at the effective date with a cumulative-effect adjustment to the opening balance of retained earnings without adjusting the comparative periods presented. The new guidance provides practical expedients and allows for certain policy elections with regard to the Company’s lease population. The Company has elected the short term lease accounting policy and will not record right-of-use lease assets or lease liabilities for leases with an initial term of twelve months or less. Additionally, the Company has elected to utilize the portfolio approach to apply incremental borrowing rates to its leases. The Company has elected the package of practical expedients which provides the Company with the ability to bypass reassessment of the following for leases existing at the date of adoption: (1) whether any existing contracts are, or contain, leases; (2) the lease classification for any existing leases; and (3) initial direct costs for any existing leases. The Company also elected the land easement practical expedient to carry forward existing accounting treatment on existing land easements. Adoption of the new lease guidance resulted in the recognition of right-of-use lease assets of $60,726, which included $57,832 of right-of-use lease assets related to lease commitments and $2,895 related to the reclassification of favorable lease contracts, and lease liabilities of $58,929. The new guidance had no impact on the Company’s operating results or liquidity upon adoption. Disclosures related to the Company’s leases are included in Note 12 to these condensed consolidated financial statements. In February 2018, the FASB issued guidance which permits entities to make a one-time election to reclassify the residual (“stranded”) income tax effects included in accumulated other comprehensive income (“AOCI”) to beginning retained earnings as a result of tax reform legislation enacted by the U.S. government on December 22, 2017, namely the Tax Cuts and Jobs Act of 2017 (“TCJA”). The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. 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, which were included in AOCI at the adoption date of the new guidance. The Company adopted the new guidance effective January 1, 2019 as required, and elected to reclassify the income tax effects stranded in AOCI related to the change in the U.S. federal corporate income tax rate from the TCJA of $1,874 from AOCI to beginning retained earnings. There were no other income tax effects related to the application of the TCJA that were included in this reclassification. The Company’s accounting policy for releasing income tax effects from AOCI is based on individual units of account. 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 adopted the new guidance on January 1, 2019 as required, with no material impact on its consolidated financial statements upon adoption. Accounting Standards Not Yet Adopted 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 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 (with subsequent targeted amendments) 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.
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Revenue from Contracts with Customers |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contracts with Customers | 3. Revenue from Contracts with Customers: Disaggregated Revenue The Company’s primary means of disaggregating revenues is by reportable segments, which can be found in Note 18 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.
The following tables disaggregate the Company’s sales, by segment and end use, for the three and six months ended June 30, 2019 and 2018:
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. The Company has not recorded any contract assets on its condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, and no contract liabilities existed as of December 31, 2018. The Company recognized a $9,000 contract liability associated with the sale of a portion of its sulfate salts product line as of June 30, 2019. Refer to Note 6 of these condensed consolidated financial statements for additional information related to the sale of the product line.
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Fair Value Measurements |
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| 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:
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
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 16 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 income. Unrealized gains and losses associated with the underlying stock and fixed income mutual funds were immaterial as of June 30, 2019 and December 31, 2018, 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.
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Accumulated Other Comprehensive Income |
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| 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 for the three and six months ended June 30, 2019 and 2018:
The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the six months ended June 30, 2019 and 2018:
The following table presents the reclassifications out of accumulated other comprehensive income for the three and six months ended June 30, 2019 and 2018:
(b) These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 16 to these condensed consolidated financial statements for additional details).
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Sale of Product Line |
6 Months Ended |
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Jun. 30, 2019 | |
| Discontinued Operations and Disposal Groups [Abstract] | |
| Sale of product line | 6. Sale of Product Line: On June 28, 2019, the Company completed the sale of a portion of its sulfate salts product line within its Performance Chemicals segment for $28,000, subject to a working capital adjustment, and recorded a pre-tax gain on sale of $11,362. The transaction was recorded as an asset sale, with the gain on disposition included in the other operating expense, net line item in the Company’s condensed consolidated statement of income for the three and six months ended June 30, 2019 (see Note 8 to these condensed consolidated financial statements for additional details). At the time of disposition, the carrying value of the Company’s net working capital related to this non-core product line was $4,215. In addition to the net working capital sold as part of the transaction, the Company also derecognized $3,423 of property, plant and equipment related to the product line and allocated $9,000 of the consideration received to a liability for deferred revenue. Concurrent with the product line sale, the Company entered into a tolling arrangement with the buyer in which the Company will use its existing manufacturing facilities for the product line to manufacture the product for the buyer, the majority of which runs until June 2021. The Company deferred $9,000 of the $28,000 consideration received as a liability, to be recognized as the Company executes its performance obligations over the term of the contractual agreement with the buyer. Additionally, the Company concluded that an embedded lease arrangement exists as a result of the combination of the sale and tolling agreements. Given the ability of the buyer to control substantially all of the output of the facilities and the existence of bargain purchase options on the manufacturing assets, the Company determined that the buyer is effectively leasing the assets from the Company and derecognized the associated property, plant and equipment under a sales-type leasing arrangement. The gain on the sale of fixed assets is included as part of the Company’s overall gain on sale related to the transaction, with the Company’s net investment in the leased assets having been settled as part of the consideration received in the transaction with no additional future cash flows to be recognized on the lease.
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Goodwill |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | 7. Goodwill: The change in the carrying amount of goodwill for the six months ended June 30, 2019 is summarized as follows:
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Other Operating Expense, Net |
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| Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Operating Expense, Net | 8. Other Operating Expense, Net: A summary of other operating expense, net is as follows:
(2) During the three and six months ended June 30, 2018, the Company recognized $1,000 and $2,500, respectively, of insurance recoveries in its condensed consolidated statements of income related to the Company’s claim for losses sustained during Hurricane Harvey in August 2017. For the three months ended June 30, 2018, $313 was recorded as a gain in other operating expense, net, as reimbursement of expenses, while the remaining $687 represented recoveries in excess of the Company’s property losses which was recorded as a non-operating gain in other expense, net, in the Company’s condensed consolidated statements of income. For the six months ended June 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 recoveries in excess of the Company’s property losses which was recorded as a non-operating gain in other expense, net, in the Company’s condensed consolidated statements of income.
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Inventories, Net |
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories, Net | 9. Inventories, Net: Inventories, net, are classified and valued as follows:
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Investments in Affiliated Companies |
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| 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 June 30, 2019 are as follows:
Following is summarized information of the combined investments(1):
The Company’s investments in affiliated companies balance as of June 30, 2019 and December 31, 2018 includes net purchase accounting fair value adjustments of $253,849 and $258,066, respectively, related to the series of transactions consummated on May 4, 2016 to reorganize and combine the businesses of PQ Holdings Inc. and Eco Services Operations LLC, 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 $1,659 and $4,217 of amortization expense related to purchase accounting fair value adjustments for the three and six months ended June 30, 2019, respectively. Consolidated equity in net income from affiliates is net of $1,659 and $3,317 of amortization expense related to purchase accounting fair value adjustments for the three and six months ended June 30, 2018, respectively.
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Property, Plant and Equipment |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
Depreciation expense was $32,381 and $33,962 for the three months ended June 30, 2019 and 2018, respectively. Depreciation expense was $65,535 and $68,865 for the six months ended June 30, 2019 and 2018, respectively.
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases, Finance Leases | 12. Leases: The Company has operating and finance lease agreements with remaining lease terms as of June 30, 2019 of up to 28 years, including leases of land, buildings, railcars, vehicles, manufacturing equipment and general office equipment. Some leases include options to terminate or extend for one or more years. These options are incorporated in the Company’s lease term when it is reasonably certain that the option will be exercised. Some leases include options to purchase, which the Company assesses under the guidance to determine if these leases should be classified as finance lease agreements. When the Company enters into an arrangement, at inception, the Company determines if the arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance). The Company accounts for the lease and non-lease components based on the estimated standalone price of each component. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate and these are initially measured using the index or rate in effect at the commencement date. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognizes a right-of-use lease asset and lease liability at the lease commencement date based on the present value of the remaining lease payments over the lease term using the Company’s incremental borrowing rate. The Company is required to use the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When the Company is unable to readily determine the discount rate implicit in the lease agreement, the Company utilizes its incremental borrowing rate over the relevant lease term. Short-term leases, which have an initial term of twelve months or less, are not recorded on the Company’s balance sheet. Lease expense for operating leases and financing leases is recognized on a straight-line basis over the lease term and is included in cost of goods sold or selling, general, and administrative expense on the condensed consolidated statements of income. The table below presents the operating and finance right-of-use lease assets and lease liabilities recognized on the condensed consolidated balance sheet as of June 30, 2019:
The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2019 are as follows:
Maturities of lease liabilities as of June 30, 2019 are as follows:
At December 31, 2018, future minimum payments under non-cancelable operating leases under previous lease guidance was as follows:
Operating lease costs of $4,680 and $9,359 are included in cost of goods sold and in selling, general and administrative expenses for the three and six months ended June 30, 2019, respectively. Finance lease, short-term lease and variable lease costs for the three and six months ended June 30, 2019 were not material. Lease income is not material to the results of operations for the three and six months ended June 30, 2019. The following table presents other information related to our operating and finance leases and the impact on the Company’s condensed consolidated statement of cash flows:
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| Leases, Operating Leases | 12. Leases: The Company has operating and finance lease agreements with remaining lease terms as of June 30, 2019 of up to 28 years, including leases of land, buildings, railcars, vehicles, manufacturing equipment and general office equipment. Some leases include options to terminate or extend for one or more years. These options are incorporated in the Company’s lease term when it is reasonably certain that the option will be exercised. Some leases include options to purchase, which the Company assesses under the guidance to determine if these leases should be classified as finance lease agreements. When the Company enters into an arrangement, at inception, the Company determines if the arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance). The Company accounts for the lease and non-lease components based on the estimated standalone price of each component. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate and these are initially measured using the index or rate in effect at the commencement date. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognizes a right-of-use lease asset and lease liability at the lease commencement date based on the present value of the remaining lease payments over the lease term using the Company’s incremental borrowing rate. The Company is required to use the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When the Company is unable to readily determine the discount rate implicit in the lease agreement, the Company utilizes its incremental borrowing rate over the relevant lease term. Short-term leases, which have an initial term of twelve months or less, are not recorded on the Company’s balance sheet. Lease expense for operating leases and financing leases is recognized on a straight-line basis over the lease term and is included in cost of goods sold or selling, general, and administrative expense on the condensed consolidated statements of income. The table below presents the operating and finance right-of-use lease assets and lease liabilities recognized on the condensed consolidated balance sheet as of June 30, 2019:
The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2019 are as follows:
Maturities of lease liabilities as of June 30, 2019 are as follows:
At December 31, 2018, future minimum payments under non-cancelable operating leases under previous lease guidance was as follows:
Operating lease costs of $4,680 and $9,359 are included in cost of goods sold and in selling, general and administrative expenses for the three and six months ended June 30, 2019, respectively. Finance lease, short-term lease and variable lease costs for the three and six months ended June 30, 2019 were not material. Lease income is not material to the results of operations for the three and six months ended June 30, 2019. The following table presents other information related to our operating and finance leases and the impact on the Company’s condensed consolidated statement of cash flows:
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Long-term Debt |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term Debt | 13. Long-term Debt: The summary of long-term debt is as follows:
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 June 30, 2019 and December 31, 2018, the fair value of the term loan facility and senior secured and unsecured notes was $2,094,148 and $2,010,023, 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).
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Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | 14. 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 condensed consolidated statements of income in the period in which the associated inventory is sold. As of June 30, 2019, the Company’s natural gas swaps had a remaining notional quantity of 3.9 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 condensed consolidated statements of income 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 June 30, 2019 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 February 2018, the Company entered into multiple cross currency interest rate swap arrangements with an aggregate notional amount of €280,000 ($319,161 as of June 30, 2019) 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 June 30, 2019 and December 31, 2018 are shown below:
The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI for the three and six months ended June 30, 2019 and 2018:
The following tables show the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018:
The amount of unrealized losses in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the condensed consolidated statement of income over the next twelve months is $1,083 as of June 30, 2019. The following tables show the effect of the Company’s net investment hedges on AOCI and the condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 15. Income Taxes: The effective income tax rate for the three months ended June 30, 2019 was 39.8% compared to 45.8% for the three months ended June 30, 2018. The effective income tax rate for the six months ended June 30, 2019 was 40.0% compared to 44.0% for the six months ended June 30, 2018. The Company’s effective income tax rate has fluctuated primarily because of changes in income mix (including the effect of loss companies), the impact of including foreign earnings in U.S. taxable income 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 six months ended June 30, 2019 was mainly due to the tax effect of permanent differences related to foreign currency exchange gain or loss, inclusion of foreign earnings in U.S. taxable income, pre-tax losses with no associated tax benefit, the discrete tax effects of the Company’s sale of a non-core product line and state taxes. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the six months ended June 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, discrete impacts of opening balance sheet adjustments related to the Sovitec acquisition and state taxes. 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 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 regards to GILTI’s impact 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 six months ended June 30, 2019, the Company has continued to incorporate an estimate of the GILTI income inclusion when estimating annual effective tax rate used for GAAP purposes. The Company expects this amount to be included in its 2019 U.S. taxable income. However, the estimated 2019 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 changes to the Company’s current structure and business.
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Benefit Plans |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Benefit Plans | 16. 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
Supplemental Retirement Plans
Other Postretirement Benefit Plans
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Commitments and Contingent Liabilities |
6 Months Ended |
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Jun. 30, 2019 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingent Liabilities | 17. 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 comply 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 the Company’s condensed consolidated financial statements. When these matters are ultimately concluded and determined, the Company believes that there will be no material adverse effect on its consolidated financial position, results of operations or liquidity.
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Reportable Segments |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable Segments | 18. Reportable Segments: Summarized financial information for the Company’s reportable segments is shown in the following table:
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $25,993 for the six months ended June 30, 2019, which includes $14,300 of equity in net income plus $4,217 of amortization of investment in affiliate step-up and $7,476 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $34,681 for the six months ended June 30, 2018, which includes $25,442 of equity in net income plus $3,317 of amortization of investment in affiliate step-up and $5,922 of joint venture depreciation, amortization and interest.
A reconciliation of net income attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:
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Stock-Based Compensation |
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| Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | 19. Stock-Based Compensation: The Company is authorized to issue shares for common stock awards to employees, directors and affiliates of the Company in connection with the PQ Group Holdings Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”). During the six months ended June 30, 2019, the Company granted 1,245,628 restricted stock units and 550,676 performance stock units at target under the 2017 Plan as part of its equity incentive compensation program. Each restricted stock unit provides the recipient with the right to receive a share of common stock subject to graded vesting terms based on service, which for the awards granted during the six months ended June 30, 2019, require approximately one year of service for members of the Company’s board of directors and approximately three years of service for employees. The performance stock units granted during the six months ended June 30, 2019 provide the recipients with the right to receive shares of common stock dependent on the achievement of two Company-specific financial performance targets and the provision of service through the vesting date. Achievement of the metrics is measured based on the average levels of achievement across the three-year period from January 1, 2019 through December 31, 2021. Depending on the Company’s performance against the pre-determined thresholds for achievement, each performance stock unit award holder is eligible to earn a percentage of the target number of shares granted to the holder, ranging from zero to 200%. The performance stock units, to the extent earned, will vest on the date the Company’s compensation and governance committee certifies the achievement of the performance metrics for the three-year period ending December 31, 2021, which will occur no later than March 1, 2022. The value of the restricted stock units granted during the six months ended June 30, 2019 was based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, in accordance with the Company’s policy for valuing such awards. Compensation expense related to the restricted stock units is recognized on a straight-line basis over the respective vesting period. The value of the performance stock units granted during the six months ended June 30, 2019 was measured on the same basis as that of the restricted stock units, and based on the target number of shares granted; because the performance vesting conditions affect the ability of the recipients to vest in the awards, they are not factored into the fair value measure of the award. Compensation expense related to the performance stock units is recognized ratably over the requisite service period, and the Company must assess the probability that the performance conditions will be met each reporting period, and the level at which they are estimated to be attained. Should the probability assessment change during a given reporting period, the total compensation cost (both recognized and unrecognized) will be adjusted to reflect the revised assessment. The following table summarizes the activity for the Company’s restricted stock units and performance stock units for the six months ended June 30, 2019:
Total stock-based compensation expense for all of the Company’s equity incentive awards was $5,370 and $3,796 for the three months ended June 30, 2019 and 2018, respectively, and $8,770 and $7,627 for the six months ended June 30, 2019 and 2018, respectively. The income tax benefit recognized in the condensed consolidated statements of income was $1,326 and $938 for the three months ended June 30, 2019 and 2018, respectively, and $2,166 and $1,885 for the six months ended June 30, 2019 and 2018, respectively. With the new grants of restricted stock units and performance stock units during the six months ended June 30, 2019, unrecognized compensation cost at June 30, 2019 related to nonvested awards was $26,452 and $7,626 for restricted stock units and performance stock units, respectively. The weighted-average period over which these costs are expected to be recognized at June 30, 2019 is 1.95 years for the restricted stock units and 2.67 years for the performance stock units. At June 30, 2019, 3,702,921 shares of common stock were available for issuance under the 2017 Plan, after giving effect to the new grants as well as other minor activity during the six months ended June 30, 2019. Activity related to the Company’s stock options and restricted stock awards was not material for the six months ended June 30, 2019.
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Earnings per Share |
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| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per Share | 20. 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 common shares reflect (1) unvested restricted stock awards and restricted stock units with service vesting conditions, (2) performance stock units with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of 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:
Basic and diluted earnings per share are calculated as follows:
The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share:
Restricted stock awards and stock options with performance only vesting conditions were not included in the dilution calculation, as the performance targets have not been achieved nor were probable of achievement as of the end of the respective periods. On a weighted average basis, options to purchase 621,747 shares of common stock at $16.97 per share for the three and six months ended June 30, 2019 and 2018, and 241,316 shares of common stock at $17.50 per share for the three and six months ended June 30, 2019 were excluded from the computation of diluted earnings per share for the respective periods, because the combination of the options’ exercise price and remaining unamortized stock-based compensation expense was greater than the average market price of the common shares. The 621,747 stock options expire on October 2, 2027, while the 241,316 stock options expire on August 9, 2028. All of the options were outstanding as of June 30, 2019. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.
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Supplemental Cash Flow Information |
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| Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Cash Flow Information | 21. Supplemental Cash Flow Information: The following table presents supplemental cash flow information for the Company:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of June 30, 2019 and 2018 to the total of the same amounts shown in the condensed consolidated statements of cash flows for the six months then ended:
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2019 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | 22. Subsequent Events: On August 7, 2019, the Company prepaid $100,000 of outstanding principal balance on the Term Loan Facility. Other than such debt repayment, the Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose.
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Background and Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
| 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, 2018. Other than the update to our lease accounting policies described in Note 12, the Company has continued to follow the accounting policies set forth in those consolidated financial statements.
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| Recently Issued Accounting Standards | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance (with subsequent targeted amendments) that modifies the accounting for leases. Under the new guidance, a lessee will recognize right-of-use lease assets and lease liabilities for most leases (including those classified under existing GAAP as operating leases, which based on previous standards are not reflected on the balance sheet), but will recognize expenses in a manner that is generally consistent with existing practices. The new guidance also requires companies to provide expanded disclosures regarding leasing arrangements. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. The new guidance must be adopted using a modified retrospective transition method. The Company adopted the new lease guidance effective January 1, 2019 as required using the modified retrospective transition method and applied the provisions of the guidance at the effective date with a cumulative-effect adjustment to the opening balance of retained earnings without adjusting the comparative periods presented. The new guidance provides practical expedients and allows for certain policy elections with regard to the Company’s lease population. The Company has elected the short term lease accounting policy and will not record right-of-use lease assets or lease liabilities for leases with an initial term of twelve months or less. Additionally, the Company has elected to utilize the portfolio approach to apply incremental borrowing rates to its leases. The Company has elected the package of practical expedients which provides the Company with the ability to bypass reassessment of the following for leases existing at the date of adoption: (1) whether any existing contracts are, or contain, leases; (2) the lease classification for any existing leases; and (3) initial direct costs for any existing leases. The Company also elected the land easement practical expedient to carry forward existing accounting treatment on existing land easements. Adoption of the new lease guidance resulted in the recognition of right-of-use lease assets of $60,726, which included $57,832 of right-of-use lease assets related to lease commitments and $2,895 related to the reclassification of favorable lease contracts, and lease liabilities of $58,929. The new guidance had no impact on the Company’s operating results or liquidity upon adoption. Disclosures related to the Company’s leases are included in Note 12 to these condensed consolidated financial statements. In February 2018, the FASB issued guidance which permits entities to make a one-time election to reclassify the residual (“stranded”) income tax effects included in accumulated other comprehensive income (“AOCI”) to beginning retained earnings as a result of tax reform legislation enacted by the U.S. government on December 22, 2017, namely the Tax Cuts and Jobs Act of 2017 (“TCJA”). The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. 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, which were included in AOCI at the adoption date of the new guidance. The Company adopted the new guidance effective January 1, 2019 as required, and elected to reclassify the income tax effects stranded in AOCI related to the change in the U.S. federal corporate income tax rate from the TCJA of $1,874 from AOCI to beginning retained earnings. There were no other income tax effects related to the application of the TCJA that were included in this reclassification. The Company’s accounting policy for releasing income tax effects from AOCI is based on individual units of account. 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 adopted the new guidance on January 1, 2019 as required, with no material impact on its consolidated financial statements upon adoption. Accounting Standards Not Yet Adopted 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 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 (with subsequent targeted amendments) 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.
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| 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 16 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 income. Unrealized gains and losses associated with the underlying stock and fixed income mutual funds were immaterial as of June 30, 2019 and December 31, 2018, 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.
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| Leases | The Company has operating and finance lease agreements with remaining lease terms as of June 30, 2019 of up to 28 years, including leases of land, buildings, railcars, vehicles, manufacturing equipment and general office equipment. Some leases include options to terminate or extend for one or more years. These options are incorporated in the Company’s lease term when it is reasonably certain that the option will be exercised. Some leases include options to purchase, which the Company assesses under the guidance to determine if these leases should be classified as finance lease agreements. When the Company enters into an arrangement, at inception, the Company determines if the arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance). The Company accounts for the lease and non-lease components based on the estimated standalone price of each component. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate and these are initially measured using the index or rate in effect at the commencement date. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognizes a right-of-use lease asset and lease liability at the lease commencement date based on the present value of the remaining lease payments over the lease term using the Company’s incremental borrowing rate. The Company is required to use the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When the Company is unable to readily determine the discount rate implicit in the lease agreement, the Company utilizes its incremental borrowing rate over the relevant lease term. Short-term leases, which have an initial term of twelve months or less, are not recorded on the Company’s balance sheet. Lease expense for operating leases and financing leases is recognized on a straight-line basis over the lease term and is included in cost of goods sold or selling, general, and administrative expense on the condensed consolidated statements of income.
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Revenue from Contracts with Customers Revenue from Contracts with Customers (Tables) |
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| 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.
The following tables disaggregate the Company’s sales, by segment and end use, for the three and six months ended June 30, 2019 and 2018:
(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.
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 June 30, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
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Accumulated Other Comprehensive Income (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables present the tax effects of each component of other comprehensive income for the three and six months ended June 30, 2019 and 2018:
The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the six months ended June 30, 2019 and 2018:
(1) See the following table for details about these reclassifications. Amounts in parentheses indicate debits.
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| Reclassification out of Accumulated Other Comprehensive Income | The following table presents the reclassifications out of accumulated other comprehensive income for the three and six months ended June 30, 2019 and 2018:
(b) These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 16 to these condensed consolidated financial statements for additional details).
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Goodwill (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill | The change in the carrying amount of goodwill for the six months ended June 30, 2019 is summarized as follows:
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Other Operating Expense, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Operating (Income) Expense | A summary of other operating expense, net is as follows:
(2) During the three and six months ended June 30, 2018, the Company recognized $1,000 and $2,500, respectively, of insurance recoveries in its condensed consolidated statements of income related to the Company’s claim for losses sustained during Hurricane Harvey in August 2017. For the three months ended June 30, 2018, $313 was recorded as a gain in other operating expense, net, as reimbursement of expenses, while the remaining $687 represented recoveries in excess of the Company’s property losses which was recorded as a non-operating gain in other expense, net, in the Company’s condensed consolidated statements of income. For the six months ended June 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 recoveries in excess of the Company’s property losses which was recorded as a non-operating gain in other expense, net, in the Company’s condensed consolidated statements of income.
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Inventories (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventory, Current | Inventories, net, are classified and valued as follows:
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Investments in Affiliated Companies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 June 30, 2019 are as follows:
Following is summarized information of the combined investments(1):
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Property, Plant and Equipment (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Right-of-Use Lease Assets and Lease Liabilities | The table below presents the operating and finance right-of-use lease assets and lease liabilities recognized on the condensed consolidated balance sheet as of June 30, 2019:
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| Weighted Average Remaining Lease Term and Discount Rate | The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2019 are as follows:
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| Maturities of Lease Liabilities | Maturities of lease liabilities as of June 30, 2019 are as follows:
(1) Refer to the above table regarding the Company’s right-of-use lease assets and lease liabilities for the presentation of the lease liabilities in the Company’s condensed consolidated balance sheet at June 30, 2019.
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| Schedule of Future Minimum Rental Payments for Operating Leases | At December 31, 2018, future minimum payments under non-cancelable operating leases under previous lease guidance was as follows:
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| Cash Flow Information Related to Leases | The following table presents other information related to our operating and finance leases and the impact on the Company’s condensed consolidated statement of cash flows:
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Long-term Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt Instruments | The summary of long-term debt is as follows:
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Financial Instruments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Derivatives Held | The fair values of derivative instruments held as of June 30, 2019 and December 31, 2018 are shown below:
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| 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 AOCI for the three and six months ended June 30, 2019 and 2018:
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| 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 income for the three and six months ended June 30, 2019 and 2018:
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| 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 income for the three and six months ended June 30, 2019 and 2018:
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Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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
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| Supplemental Retirement Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Defined Benefit Plan Disclosure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Net Periodic Expense | Supplemental Retirement Plans
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| Other Postretirement Benefits Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Defined Benefit Plan Disclosure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Net Periodic Expense | Other Postretirement Benefit Plans
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Reportable Segments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Revenue from Reportable Segments to Consolidated | Summarized financial information for the Company’s reportable segments is shown in the following table:
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $25,993 for the six months ended June 30, 2019, which includes $14,300 of equity in net income plus $4,217 of amortization of investment in affiliate step-up and $7,476 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $34,681 for the six months ended June 30, 2018, which includes $25,442 of equity in net income plus $3,317 of amortization of investment in affiliate step-up and $5,922 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.
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| Reconciliation of Net Income to Segment Adjusted EBITDA | A reconciliation of net income attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:
|
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Stock-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Nonvested Restricted Stock and Performance Stock Unit Activity | The following table summarizes the activity for the Company’s restricted stock units and performance stock units for the six months ended June 30, 2019:
|
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Earnings per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation from Basic to Diluted Weighted Average Number of Shares Outstanding | The reconciliation from basic to diluted weighted average shares outstanding is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share are calculated as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Securities Excluded from Computation of Earnings Per Share | The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information Supplemental Cash Flow Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Cash Flow, Supplemental Disclosures | The following table presents supplemental cash flow information for the Company:
(2) For the supplemental non-cash information on lease liabilities arising from obtaining right-of-use lease assets, see Note 12 to these condensed consolidated financial statements for additional details.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of June 30, 2019 and 2018 to the total of the same amounts shown in the condensed consolidated statements of cash flows for the six months then ended:
|
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| Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of June 30, 2019 and 2018 to the total of the same amounts shown in the condensed consolidated statements of cash flows for the six months then ended:
|
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Background and Basis of Presentation (Details) |
12 Months Ended | |
|---|---|---|
Mar. 01, 2019 |
Dec. 31, 2018 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Number of reportable segments | 4 | 2 |
| Number of operating segments | 4 | 2 |
| Number of reporting units | 4 | 4 |
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Contract with Customer, Asset and Liability [Abstract] | ||
| Contract assets | $ 0 | $ 0 |
| Contract liabilities | $ 9,000 | $ 0 |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Assets: | ||
| Derivative contracts | $ 24,852 | $ 20,768 |
| Restoration plan assets | 4,381 | 4,244 |
| Total | 29,233 | 25,012 |
| Liabilities: | ||
| Derivative contracts | 4,090 | 2,026 |
| Quoted Prices in Active Markets (Level 1) | ||
| Assets: | ||
| Derivative contracts | 0 | 0 |
| Restoration plan assets | 4,381 | 4,244 |
| Total | 4,381 | 4,244 |
| Liabilities: | ||
| Derivative contracts | 0 | 0 |
| Significant Other Observable Inputs (Level 2) | ||
| Assets: | ||
| Derivative contracts | 24,852 | 20,768 |
| Restoration plan assets | 0 | 0 |
| Total | 24,852 | 20,768 |
| Liabilities: | ||
| Derivative contracts | 4,090 | 2,026 |
| Significant Unobservable Inputs (Level 3) | ||
| Assets: | ||
| Derivative contracts | 0 | 0 |
| Restoration plan assets | 0 | 0 |
| Total | 0 | 0 |
| Liabilities: | ||
| Derivative contracts | $ 0 | $ 0 |
Accumulated Other Comprehensive Income - Pre-tax and After-tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| After-tax amount | ||||||
| Pre-tax amount | $ 3,872 | $ (27,377) | $ 11,045 | $ (14,375) | ||
| Tax benefit/(expense) | 1,015 | (188) | (573) | (2,354) | ||
| Total other comprehensive income (loss) | 4,887 | $ 5,585 | (27,565) | $ 10,836 | 10,472 | (16,729) |
| Amortization of net gains and (losses) | ||||||
| After-tax amount | ||||||
| Pre-tax amount | (8) | 1,853 | (16) | 1,848 | ||
| Tax benefit/(expense) | 2 | (463) | 4 | (462) | ||
| Total other comprehensive income (loss) | (6) | 1,390 | (12) | 1,386 | ||
| Amortization of prior service cost | ||||||
| After-tax amount | ||||||
| Pre-tax amount | (33) | (20) | (65) | (39) | ||
| Tax benefit/(expense) | 8 | 5 | 16 | 10 | ||
| Total other comprehensive income (loss) | (25) | (15) | (49) | (29) | ||
| Benefit plans, net | ||||||
| After-tax amount | ||||||
| Pre-tax amount | (41) | 1,833 | (81) | 1,809 | ||
| Tax benefit/(expense) | 10 | (458) | 20 | (452) | ||
| Total other comprehensive income (loss) | (31) | 1,375 | (61) | 1,357 | ||
| Net (loss) gain from hedging activities | ||||||
| After-tax amount | ||||||
| Pre-tax amount | (1,556) | 737 | (3,625) | 3,649 | ||
| Tax benefit/(expense) | 389 | (184) | 906 | (913) | ||
| Total other comprehensive income (loss) | (1,167) | 553 | (2,719) | 2,736 | ||
| Foreign currency translation | ||||||
| After-tax amount | ||||||
| Pre-tax amount | 5,469 | (29,947) | 14,751 | (19,833) | ||
| Tax benefit/(expense) | 616 | 454 | (1,499) | (989) | ||
| Total other comprehensive income (loss) | $ 6,085 | $ (29,493) | $ 13,252 | $ (20,822) | ||
Sale of Product Line (Details) - USD ($) $ in Thousands |
Jun. 28, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|---|
| Sale of Product Line [Line Items] | |||
| Property, plant and equipment, net | $ 1,193,178 | $ 1,208,979 | |
| Sulfate Salts Product Line | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
| Sale of Product Line [Line Items] | |||
| Consideration for sale of product line | $ 28,000 | ||
| Pre-tax gain on sale | 11,362 | ||
| Net working capital | 4,215 | ||
| Property, plant and equipment, net | 3,423 | ||
| Deferred revenue | $ 9,000 |
Goodwill (Details) $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Goodwill | |
| Beginning balance | $ 1,254,929 |
| Foreign exchange impact | 3,312 |
| Ending balance | 1,258,241 |
| Refining Services | |
| Goodwill | |
| Beginning balance | 311,892 |
| Foreign exchange impact | 0 |
| Ending balance | 311,892 |
| Catalysts | |
| Goodwill | |
| Beginning balance | 77,759 |
| Foreign exchange impact | 90 |
| Ending balance | 77,849 |
| Performance Materials | |
| Goodwill | |
| Beginning balance | 274,947 |
| Foreign exchange impact | 742 |
| Ending balance | 275,689 |
| Performance Chemicals | |
| Goodwill | |
| Beginning balance | 590,331 |
| Foreign exchange impact | 2,480 |
| Ending balance | $ 592,811 |
Other Operating Expense, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Other Income and Expenses [Abstract] | ||||
| Amortization expense | $ 8,636 | $ 8,744 | $ 17,300 | $ 17,693 |
| Net (gain) loss on asset disposals | (9,659) | 4,752 | (8,839) | 5,904 |
| Insurance recoveries | 0 | (313) | 0 | (1,557) |
| Environmental related costs | 848 | 398 | 1,327 | 487 |
| Other, net | 1,994 | 2,292 | 2,770 | 2,660 |
| Other operating expense, net | $ 1,819 | 15,873 | $ 12,558 | 25,187 |
| Total gain related to insurance recoveries | 1,000 | 2,500 | ||
| Insurance recoveries recorded as gain on asset disposals | 207 | |||
| Insurance recoveries recorded as non-operating income | $ 687 | $ 736 | ||
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Inventory, Net | ||
| Finished products and work in process | $ 221,995 | $ 206,188 |
| Raw materials | 53,213 | 58,560 |
| Inventories, net | 275,208 | 264,748 |
| Valued at lower of cost or market: | ||
| LIFO basis | 166,121 | 160,863 |
| Valued at lower of cost and net realizable value: | ||
| FIFO or average cost basis | 109,087 | 103,885 |
| Inventories, net | $ 275,208 | $ 264,748 |
Investments in Affiliated Companies - Ownership Percentage (Details) |
Jun. 30, 2019 |
|---|---|
| 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% |
| Asociacion para el Estudio de las Tecnologias de Equipamiento de Carreteras, S.A. (“Aetec”) | |
| Schedule of Equity Method Investments | |
| Ownership percentage | 20.00% |
Investments in Affiliated Companies - Summarized Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Equity Method Investment, Summarized Financial Information | ||||
| Sales | $ 89,938 | $ 108,898 | $ 158,032 | $ 197,474 |
| Gross profit | 35,137 | 40,669 | 54,551 | 76,191 |
| Operating income | 27,052 | 31,622 | 36,259 | 57,663 |
| Net income | $ 27,910 | $ 30,638 | $ 37,150 | $ 57,660 |
Investments in Affiliated Companies - Narratives (Details) - Business Combination - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
| Business Combination | |||||
| Net purchase accounting fair value adjustments | $ 253,849 | $ 253,849 | $ 258,066 | ||
| Amortization of investment in affiliate step-up | $ 1,659 | $ 1,659 | $ 4,217 | $ 3,317 | |
Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Property, Plant and Equipment | ||
| Property, plant and equipment, gross | $ 1,673,440 | $ 1,630,358 |
| Less: accumulated depreciation | (480,262) | (421,379) |
| Property, plant and equipment, net | 1,193,178 | 1,208,979 |
| Land | ||
| Property, Plant and Equipment | ||
| Property, plant and equipment, gross | 191,408 | 190,772 |
| Buildings | ||
| Property, Plant and Equipment | ||
| Property, plant and equipment, gross | 221,823 | 212,284 |
| Machinery and equipment | ||
| Property, Plant and Equipment | ||
| Property, plant and equipment, gross | 1,167,604 | 1,125,117 |
| Construction in progress | ||
| Property, Plant and Equipment | ||
| Property, plant and equipment, gross | $ 92,605 | $ 102,185 |
Property, Plant and Equipment - Narratives (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Property, Plant and Equipment [Abstract] | ||||
| Depreciation | $ 32,381 | $ 33,962 | $ 65,535 | $ 68,865 |
Leases - Narratives (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
| Leases | ||
| Operating lease costs | $ 4,680 | $ 9,359 |
| Maximum | ||
| Leases | ||
| Remaining lease term | 28 years |
Leases - Right-of-Use Lease Assets and Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Assets | ||
| Operating lease assets | $ 55,095 | $ 0 |
| Finance lease assets | 1,612 | |
| Total leased assets | 56,707 | |
| Current: | ||
| Operating lease liabilities | 13,997 | 0 |
| Finance lease liabilities | 177 | |
| Noncurrent: | ||
| Operating lease liabilities | 39,352 | $ 0 |
| Finance lease liabilities | 410 | |
| Total lease liabilities | $ 53,936 |
Leases - Remaining Average Weighted Average Lease Term and Discount Rate (Details) |
Jun. 30, 2019 |
|---|---|
| Weighted average remaining lease term (in years): | |
| Operating leases | 5 years 6 months 7 days |
| Finance leases | 3 years 1 month 20 days |
| Weighted average discount rate: | |
| Operating leases | 5.76% |
| Finance leases | 4.67% |
Leases - Lease Maturity Schedule - ASC 842 (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
|---|---|
| Operating Leases | |
| Remainder of 2019 | $ 16,438 |
| 2020 | 13,462 |
| 2021 | 10,190 |
| 2022 | 7,605 |
| 2023 | 5,125 |
| Thereafter | 10,222 |
| Total lease payments | 63,042 |
| Less: Interest | (9,693) |
| Total lease liabilities | 53,349 |
| Finance Leases | |
| Remainder of 2019 | 100 |
| 2020 | 201 |
| 2021 | 201 |
| 2022 | 123 |
| 2023 | 4 |
| Thereafter | 0 |
| Total lease payments | 629 |
| Less: Interest | 42 |
| Total lease liabilities | $ 587 |
Leases - Lease Maturity Schedule - ASC 840 (Details) |
Dec. 31, 2018
USD ($)
|
|---|---|
| Leases [Abstract] | |
| 2019 | $ 18,457 |
| 2020 | 14,344 |
| 2021 | 11,432 |
| 2022 | 8,354 |
| 2023 | 6,198 |
| Thereafter | 17,477 |
| Total | $ 76,262 |
Leases - Other Lease Information (Details) $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Cash paid for amounts included in the measurement of lease liabilities: [Abstract] | |
| Payments on operating leases included in operating cash flows | $ 8,064 |
| Interest payments under finance lease obligations included in operating cash flows | 19 |
| Principal payments under finance lease obligations included in financing cash flows | 109 |
| Right-of-use assets obtained in exchange for new lease liabilities (non-cash): | |
| Operating leases | 1,566 |
| Finance leases | $ 0 |
Long-term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Debt Instrument | ||
| Total debt | $ 2,146,192 | $ 2,148,423 |
| Original issue discount | (17,214) | (18,584) |
| Deferred financing costs | (14,296) | (15,882) |
| Total debt, net of original issue discount and deferred financing costs | 2,114,682 | 2,113,957 |
| Less: current portion | (10,033) | (7,237) |
| Total long-term debt, excluding current portion | 2,104,649 | 2,106,720 |
| Term Loan Facility | ||
| Debt Instrument | ||
| Total debt | 1,157,498 | 1,157,498 |
| Senior Notes | 6.75% Senior Secured Notes due 2022 | ||
| Debt Instrument | ||
| Total debt | 625,000 | 625,000 |
| Senior Notes | 5.75% Senior Unsecured Notes due 2025 | ||
| Debt Instrument | ||
| Total debt | 295,000 | 300,000 |
| ABL Facility | ||
| Debt Instrument | ||
| Total debt | 0 | 0 |
| Other | ||
| Debt Instrument | ||
| Total debt | $ 68,694 | $ 65,925 |
Long-term Debt - Narratives (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Term Loan And Senior Notes | ||
| Debt Instrument | ||
| Long-term debt, fair value | $ 2,094,148 | $ 2,010,023 |
Financial Instruments - Narratives (Details) € in Thousands, $ in Thousands, MMBTU in Millions |
1 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
|
Jul. 31, 2016
USD ($)
|
Jun. 30, 2019
USD ($)
MMBTU
|
Nov. 30, 2018
USD ($)
|
Feb. 28, 2018
EUR (€)
|
|
| Natural gas swaps | ||||
| Derivative | ||||
| Derivative, notional quantity | MMBTU | 3.9 | |||
| July 2016 interest rate cap | ||||
| Derivative | ||||
| Premium paid to acquire derivative instrument | $ 1,551 | |||
| Derivative, cap interest rate | 2.50% | |||
| Derivative, notional amount | $ 1,000,000 | |||
| July 2016 interest rate cap | Minimum | ||||
| Derivative | ||||
| Derivative, cap interest rate | 1.50% | |||
| July 2016 interest rate cap | Maximum | ||||
| Derivative | ||||
| Derivative, cap interest rate | 3.00% | |||
| November 2018 interest rate cap | ||||
| Derivative | ||||
| Derivative, cap interest rate | 3.50% | |||
| Derivative, notional amount | $ 500,000 | |||
| Currency swap | ||||
| Derivative | ||||
| Derivative, notional amount | $ 319,161 | € 280,000 | ||
| Cash flow hedging | ||||
| Derivative | ||||
| Amount of derivative loss expected to be transferred from OCI | $ 1,083 |
Financial Instruments - Cash Flow Hedge Impact on Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Derivative | ||||
| Cost of goods sold | $ (316,180) | $ (326,309) | $ (594,491) | $ (614,385) |
| Interest (expense) income | (28,540) | (27,221) | (57,158) | (56,384) |
| Gain (loss) on cash flow hedging relationships | Amount of gain (loss) reclassified from AOCI into income | ||||
| Derivative | ||||
| Cost of goods sold | (87) | (99) | 104 | (71) |
| Interest (expense) income | $ (169) | $ (58) | $ (292) | $ (93) |
Financial Instruments - Net Investment Hedge Impact on AOCI (Details) - Cross currency swaps - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Derivative | ||||
| Amount of gain (loss) recognized in OCI on derivative | $ (2,613) | $ 16,937 | $ 5,940 | $ 7,661 |
| 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) | $ 2,465 | $ 2,224 | $ 3,912 | $ 3,391 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Income Tax Disclosure [Abstract] | ||||
| Effective income tax rate | 39.80% | 45.80% | 40.00% | 44.00% |
Reportable Segments - Summary Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Segment Reporting | ||||
| Sales | $ 431,675 | $ 434,713 | $ 790,896 | $ 800,910 |
| Equity in net income from affiliated companies | 12,300 | 13,666 | 14,364 | 25,518 |
| Refining Services | ||||
| Segment Reporting | ||||
| Sales | 116,395 | 111,259 | 221,352 | 211,161 |
| Catalysts | ||||
| Segment Reporting | ||||
| Sales | 21,071 | 17,293 | 36,661 | 33,766 |
| Performance Materials | ||||
| Segment Reporting | ||||
| Sales | 118,768 | 126,277 | 179,809 | 188,947 |
| Performance Chemicals | ||||
| Segment Reporting | ||||
| Sales | 175,441 | 179,884 | 353,074 | 367,036 |
| Operating segments | ||||
| Segment Reporting | ||||
| Sales | 434,847 | 439,717 | 798,108 | 809,609 |
| Segment Adjusted EBITDA | 142,817 | 138,253 | 253,863 | 253,826 |
| Operating segments | Refining Services | ||||
| Segment Reporting | ||||
| Sales | 117,290 | 112,071 | 223,134 | 212,785 |
| Segment Adjusted EBITDA | 42,824 | 41,277 | 82,555 | 76,809 |
| Operating segments | Catalysts | ||||
| Segment Reporting | ||||
| Sales | 20,857 | 17,347 | 36,723 | 33,820 |
| Segment Adjusted EBITDA | 29,607 | 23,587 | 47,734 | 46,476 |
| Operating segments | Performance Materials | ||||
| Segment Reporting | ||||
| Sales | 118,872 | 126,538 | 179,961 | 189,280 |
| Segment Adjusted EBITDA | 29,221 | 28,567 | 39,736 | 40,625 |
| Operating segments | Performance Chemicals | ||||
| Segment Reporting | ||||
| Sales | 177,828 | 183,761 | 358,290 | 373,724 |
| Segment Adjusted EBITDA | 41,165 | 44,822 | 83,838 | 89,916 |
| Eliminations | ||||
| Segment Reporting | ||||
| Sales | (3,172) | (5,004) | (7,212) | (8,699) |
| Zeolyst Joint Venture | Catalysts | ||||
| Segment Reporting | ||||
| Sales | 39,124 | 49,513 | 68,602 | 87,862 |
| Segment Adjusted EBITDA | 17,636 | 17,874 | 25,993 | 34,681 |
| Equity in net income from affiliated companies | 12,264 | 13,616 | 14,300 | 25,442 |
| Amortization of investment in affiliate step-up | 1,659 | 1,659 | 4,217 | 3,317 |
| Joint venture depreciation, amortization and interest | $ 3,713 | $ 2,599 | $ 7,476 | $ 5,922 |
Earnings per Share - Reconciliation from Basic to Diluted Weighted Average Shares Outstanding (Details) - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Earnings Per Share [Abstract] | ||||
| Weighted average shares outstanding – Basic (shares) | 134,142,552 | 133,222,463 | 134,044,972 | 133,188,303 |
| Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions (shares) | 1,180,472 | 987,277 | 1,062,035 | 859,059 |
| Weighted average shares outstanding – Diluted (shares) | 135,323,024 | 134,209,740 | 135,107,007 | 134,047,362 |
Earnings per Share - Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Numerator: | ||||
| Net income attributable to PQ Group Holdings Inc. | $ 30,574 | $ 15,782 | $ 33,725 | $ 15,996 |
| Denominator: | ||||
| Weighted average shares outstanding – Basic (shares) | 134,142,552 | 133,222,463 | 134,044,972 | 133,188,303 |
| Weighted average shares outstanding – Diluted (shares) | 135,323,024 | 134,209,740 | 135,107,007 | 134,047,362 |
| Net income per share: | ||||
| Basic income per share (usd per share) | $ 0.23 | $ 0.12 | $ 0.25 | $ 0.12 |
| Diluted income per share (usd per share) | $ 0.23 | $ 0.12 | $ 0.25 | $ 0.12 |
Supplemental Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Cash paid during the period for: | ||
| Income taxes, net of refunds | $ 8,301 | $ 11,053 |
| Interest | 59,035 | 60,210 |
| Non-cash investing activity: | ||
| Capital expenditures acquired on account but unpaid as of the period end | 10,405 | 11,875 |
| Net interest proceeds on swaps designated as net investment hedges | $ 4,478 | $ 0 |
Supplemental Cash Flow Information - Cash and Restricted Cash Reconciliation (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
|---|---|---|---|---|
| Supplemental Cash Flow Elements [Abstract] | ||||
| Cash and cash equivalents | $ 82,200 | $ 57,854 | $ 52,553 | |
| Restricted cash included in prepaid and other current assets | 1,759 | 1,332 | ||
| Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 83,959 | $ 59,726 | $ 53,885 | $ 67,243 |
Subsequent Events (Details) $ in Thousands |
Aug. 07, 2019
USD ($)
|
|---|---|
| Subsequent event | |
| Subsequent event | |
| Principal repayment of Term Loan Faciity | $ 100,000 |