69 unchanged sentences
4.3 Description of Ecovyst Inc.’s common stock
+Added: 10-K 001-38221 4.3 3/1/2022
10.1 Partnership Agreement, dated as of February 1, 1988, by and between PQ Corporation and Shell Polymers and Catalysts Enterprises Inc.
10 unchanged sentences
S-1/A 333-218650 10.5 9/1/2017
−Removed: 10.6* Ecovyst Inc.
−Removed: 2017 Omnibus Incentive Plan, as Amended and Restated
−Removed: S-8 333-262180 4.1 1/14/2022
Incorporated by Reference
2 unchanged sentences
Exhibit Filing
+Added: 10.6* Ecovyst Inc.
+Added: 2017 Omnibus Incentive Plan, as Amended and Restated
+Added: S-8 333-262180 4.1 1/14/2022
10.7* Form of Stock Option Award Agreement under the Ecovyst Inc.
2017 Omnibus Incentive Plan, as Amended and Restated
+Added: 10-K 001-38221 10.7 3/1/2022
10.8* Form of Restricted Stock Award Agreement under the Ecovyst Inc.
2017 Omnibus Incentive Plan, as Amended and Restated
+Added: 10-K 001-38221 10.8 3/1/2022
10.9* Form of Restricted Stock Unit Award Agreement under the Ecovyst Inc.
2017 Omnibus Incentive Plan, as Amended and Restated
+Added: 10-K 001-38221 10.9 3/1/2022
10.10* Form of 2019 Performance Stock Unit Award Agreement under the Ecovyst Inc.
2017 Omnibus Incentive Plan, as Amended and Restated
+Added: 10-K 001-38221 10.1 3/1/2022
10.11* Form of 2020 Performance Stock Unit Award Agreement under the Ecovyst Inc.
2017 Omnibus Incentive Plan, as Amended and Restated
+Added: 10-K 001-38221 10.11 3/1/2022
10.12* PQ Group Holdings Inc.
11 unchanged sentences
8-K 001-38221 10.2 8/9/2018
−Removed: 10.17* Severance Agreement, dated August 31, 2017, by and between PQ Corporation and James F.
−Removed: S-1/A 333-218650 10.18 9/19/2017
−Removed: 10.18* Letter Agreement, dated August 9, 2018, by and between PQ Corporation, PQ Group Holdings Inc.
−Removed: 8-K 001-38221 10.1 8/9/2018
−Removed: 10.19* Separation and General Release Agreement, dated December 21, 2018, by and between PQ Corporation, PQ Group Holdings Inc.
−Removed: 8-K 001-38221 10.1 12/26/2018
−Removed: 10.20* Severance Agreement, dated August 31, 2017, by and between PQ Corporation and Michael Crews
−Removed: S-1/A 333-218650 10.19 9/19/2017
−Removed: 10.21* Severance Agreement, dated August 31, 2017, by and between PQ Corporation and Scott Randolph
−Removed: S-1/A 333-218650 10.20 9/19/2017
−Removed: 10.22* Severance Agreement, dated August 31, 2017, by and between PQ Corporation and Paul Ferrall
−Removed: S-1/A 333-218650 10.21 9/19/2017
−Removed: 10.23* Severance Agreement and General Release, dated August 31, 2017, by and between PQ Corporation and Michael R.
−Removed: S-1/A 333-218650 10.22 9/19/2017
−Removed: 10.24* Letter of employment, dated August 30, 2017, by and between PQ Corporation and David Taylor
−Removed: 10-Q 001-38221 10.2 5/10/2019
−Removed: 10.25* Consent under the August 31, 2017 Severance Agreement, dated March 29, 2019, by and between PQ Corporation and Scott Randolph
−Removed: 10-Q 001-38221 10.3 5/10/2019
−Removed: 10.26* Transition Agreement and General Release, dated November 15, 2019, between PQ Corporation and David J.
−Removed: 8-K 001-38221 10.1 11/21/2019
−Removed: 10.27* Transition Agreement and General Release, dated November 26, 2019, between PQ Corporation and Paul J.
−Removed: 8-K 001-38221 10.1 12/03/2019
−Removed: Incorporated by Reference
−Removed: Description Filed
−Removed: Herewith Form File
−Removed: Exhibit Filing
−Removed: 10.28* Consulting Agreement, dated November 26, 2019, between PQ Corporation and Paul J.
−Removed: 8-K 001-38221 10.2 12/03/2019
−Removed: 10.29* Amendment to the Severance Agreement, dated August 31, 2017, by and between PQ Corporation and Scott Randolph
−Removed: 10-K 001-38221 10.35 2/27/2020
−Removed: 10.30* Letter of employment, dated December 8, 2015, by and between PQ Corporation and Ray Kolberg
−Removed: 10-K 001-38221 10.36 2/27/2020
10.17* Severance Agreement, dated September 25, 2017, by and between PQ Corporation and Joseph S.
10-K 001-38221 10.37 2/27/2020
−Removed: 10.32* Transition Agreement and General Release and Waiver of Claims, dated December 16, 2020, between PQ Corporation and Scott Randolph
−Removed: 8-K 001-38221 10.1 12/18/2020
−Removed: 10.33* Transition Agreement and General Release and Waiver of Claims by and between the Company, PQ and Michael Crews
−Removed: 8-K 001-38221 10.1 3/23/2021
10.18 Term Loan Credit Agreement, dated as of June 9, 2021 among CPQ Midco I Corporation, PQ Corporation, Ecovyst Catalyst Technologies LLC, Eco Services Operations Corp., Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and the lenders from time to time party thereto, with Citibank, N.A., Credit Suisse Loan Funding LLC, BofA Securities, Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, KeyBanc Capital Markets Inc.
6 unchanged sentences
10-Q 001-38221 10.3 8/9/2021
+Added: Incorporated by Reference
+Added: Description Filed
+Added: Herewith Form File
+Added: Exhibit Filing
10.21* Form of Ecovyst Inc.
3 unchanged sentences
2017 Omnibus Incentive Plan, as Amended and Restated
+Added: 10-K 001-38221 10.38 3/1/2022
+Added: 10.23* General Release and Waiver of Claims, dated April 25, 2022, between Ecovyst Inc., Ecovyst Catalyst Technologies LLC and Belgacem Chariag
+Added: 8-K 001-38221 10.1 4/29/2022
+Added: 10.24* Severance Agreement, dated December 16, 2022, between Ecovyst Catalyst Technologies LLC and Kurt J.
+Added: 8-K 001-38221 10.1 12/16/2022
+Added: 10.25* Severance Agreement, dated December 16, 2022, between Ecovyst Catalyst Technologies LLC and Michael Feehan
+Added: 8-K 001-38221 10.2 12/16/2022
+Added: 10.26* Amended and Restated Severance Agreement, dated December 16, 2022, between Ecovyst Catalyst Technologies LLC and Joseph S.
+Added: 8-K 001-38221 10.3 12/16/2022
+Added: 10.27 First Amendment Agreement, dated February 9, 2023 to the Term Loan Credit Agreement, dated June 9, 2021, by and among Ecovyst Catalyst Technologies LLC , Ecovyst Midco II Inc, Eco Services Operations Corp and Credit Suisse AG
+Added: 10.28 Fourth Amendment, dated February 17, 2023 to the ABL Credit Agreement, dated May 4, 2016 by and among Ecovyst Catalyst Technologies LLC, Ecovyst Catalyst Technologies UK Limited, Ecovyst Midco II Inc.
+Added: and Citibank, N.A.
+Added: 10.29* Letter of employment, dated November 25, 2019, between PQ Corporation and Thomas Schneberger
+Added: 10.30* Letter of employment, dated July 19, 2022, between Ecoservices and George L.
+Added: 10.31* Letter of employment, dated November 28, 2022, between Ecovyst Catalyst Technologies LLC and Paul Whittleston
21.1 Subsidiaries of Ecovyst Inc.
2 unchanged sentences
23.2 Consent of PricewaterhouseCoopers LLP related to the financial statements of Zeolyst International as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022
−Removed: Incorporated by Reference
−Removed: Description Filed
−Removed: Herewith Form File
−Removed: Exhibit Filing
31.1 Certification of Chief Executive Officer of Ecovyst Inc.
5 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
+Added: Incorporated by Reference
+Added: Description Filed
+Added: Herewith Form File
+Added: Exhibit Filing
32.2 Certification of Chief Financial Officer of Ecovyst Inc.
9 unchanged sentences
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: March 1, 2022 By:
+Added: February 28, 2023 By:
/s/ MICHAEL FEEHAN
4 unchanged sentences
Signature Title Date
−Removed: /s/ BELGACEM CHARIAG Chairman of the Board, President and Chief Executive Officer March 1, 2022
−Removed: Belgacem Chariag (Principal Executive Officer)
−Removed: /s/ MICHAEL FEEHAN Vice President and Chief Financial Officer March 1, 2022
−Removed: Michael Feehan (Principal Financial and Accounting Officer)
−Removed: /s/ GREG BRENNEMAN Director March 1, 2022
−Removed: Greg Brenneman
−Removed: /s/ TIMOTHY WALSH Director March 1, 2022
+Added: BITTING Chief Executive Officer and Director February 28, 2023
+Added: Bitting (Principal Executive Officer)
+Added: /s/ MICHAEL FEEHAN Vice President and Chief Financial Officer February 28, 2023
+Added: Michael Feehan
+Added: FOGARTY Chairperson of the Board February 28, 2023
+Added: BRADLEY Director February 28, 2023
+Added: BROWN Director February 28, 2023
+Added: /s/ ANNA CATALANO Director February 28, 2023
+Added: Anna Catalano
+Added: /s/ ROBERT COXON Director February 28, 2023
+Added: /s/ JONNY GINNS Director February 28, 2023
+Added: /s/ KYLE VANN Director February 28, 2023
+Added: /s/ TIMOTHY WALSH Director February 28, 2023
Timothy Walsh
−Removed: /s/ MARK McFADDEN Director March 1, 2022
−Removed: Mark McFadden
−Removed: /s/ CHRISTOPHER BEHRENS Director March 1, 2022
−Removed: Christopher Behrens
−Removed: /s/ ROBERT COXON Director March 1, 2022
−Removed: /s/ ANDREW CURRIE Director March 1, 2022
−Removed: Andrew Currie
−Removed: /s/ JONNY GINNS Director March 1, 2022
−Removed: /s/ KYLE VANN Director March 1, 2022
−Removed: /s/ MARTIN S.
−Removed: CRAIGHEAD Director March 1, 2022
−Removed: WARD Director March 1, 2022
+Added: WARD Director February 28, 2023
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
2 unchanged sentences
Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )
−Removed: Consolidated Statements of Income for the Years Ended December 31, 2021, 2020 a nd 2019
+Added: Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020
21 unchanged sentences
Basis for Opinions
−Removed: The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.
+Added: The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits.
43 unchanged sentences
Philadelphia, Pennsylvania
−Removed: March 1, 2022
+Added: February 28, 2023
We have served as the Company’s auditor since 2015.
12 unchanged sentences
Debt extinguishment costs — 26,902 25,028
−Removed: Other (income) expense, net 4,511 ( 5,021 ) ( 1,916 )
+Added: Other expense (income), net 158 4,511 ( 5,021 )
Income from continuing operations before income taxes and noncontrolling interest 94,735 13,941 2,215
1 unchanged sentence
Net income from continuing operations 69,795 1,794 54,280
−Removed: Net (loss) income from discontinued operations, net of tax ( 141,410 ) ( 335,984 ) 49,190
−Removed: Net (loss) income ( 139,616 ) ( 281,704 ) 80,310
+Added: Net income (loss) from discontinued operations, net of tax 3,902 ( 141,410 ) ( 335,984 )
+Added: Net income (loss) 73,697 ( 139,616 ) ( 281,704 )
Net income (loss) attributable to the noncontrolling interest - discontinued operations — 333 ( 2,933 )
−Removed: Net (loss) income attributable to Ecovyst Inc.
+Added: Net income (loss) attributable to Ecovyst Inc.
$ 73,697 $ ( 139,949 ) $ ( 278,771 )
−Removed: Income from continuing operations $ 1,794 $ 54,280 $ 31,120
−Removed: (Loss) income from discontinued operations ( 141,743 ) ( 333,051 ) 48,419
−Removed: Net (loss) income attributable to Ecovyst Inc.
+Added: Income from continuing operations attributable to Ecovyst Inc.
$ 69,795 $ 1,794 $ 54,280
−Removed: Net (loss) income per share:
−Removed: Basic income per share - continuing operations:
+Added: Income (loss) from discontinued operations attributable to Ecovyst Inc.
3,902 ( 141,743 ) ( 333,051 )
−Removed: Diluted income per share - continuing operations:
+Added: Net income (loss) attributable to Ecovyst Inc.
$ 73,697 $ ( 139,949 ) $ ( 278,771 )
−Removed: Basic (loss) income per share - discontinued operations $ ( 1.04 ) $ ( 2.46 ) $ 0.36
−Removed: Diluted (loss) income per share - discontinued operations $ ( 1.03 ) $ ( 2.44 ) $ 0.36
−Removed: Basic (loss) income per share $ ( 1.03 ) $ ( 2.06 ) $ 0.59
−Removed: Diluted (loss) income per share $ ( 1.02 ) $ ( 2.04 ) $ 0.59
+Added: Net income (loss) per share:
+Added: Basic income per share—continuing operations $ 0.52 $ 0.01 $ 0.40
+Added: Diluted income per share—continuing operations $ 0.52 $ 0.01 $ 0.40
+Added: Basic income (loss) per share—discontinued operations $ 0.03 $ ( 1.04 ) $ ( 2.46 )
+Added: Diluted income (loss) per share—discontinued operations $ 0.03 $ ( 1.03 ) $ ( 2.44 )
+Added: Basic income (loss) per share $ 0.55 $ ( 1.03 ) $ ( 2.06 )
+Added: Diluted income (loss) per share $ 0.55 $ ( 1.02 ) $ ( 2.04 )
Weighted average shares outstanding:
6 unchanged sentences
2022 2021 2020
−Removed: Net (loss) income $ ( 139,616 ) $ ( 281,704 ) $ 80,310
+Added: Net income (loss) $ 73,697 $ ( 139,616 ) $ ( 281,704 )
Other comprehensive income (loss), net of tax:
Pension and postretirement benefits ( 2,676 ) 9,530 1,710
−Removed: Net gain (loss) from hedging activities 2,914 166 ( 2,665 )
+Added: Net gain from hedging activities 24,382 2,914 1,177
Foreign currency translation ( 9,922 ) ( 2,248 ) ( 4,467 )
Total other comprehensive income (loss) 11,784 10,196 ( 1,580 )
−Removed: Comprehensive (loss) income ( 120,297 ) ( 297,119 ) 102,964
−Removed: Comprehensive (loss) income attributable to noncontrolling interests 333 ( 3,856 ) 1,543
−Removed: Comprehensive (loss) income attributable to Ecovyst Inc.
+Added: Comprehensive income (loss) 85,481 ( 129,420 ) ( 283,284 )
+Added: Comprehensive income (loss) attributable to noncontrolling interests — 333 ( 4,596 )
+Added: Comprehensive income (loss) attributable to Ecovyst Inc.
$ 85,481 $ ( 129,753 ) $ ( 278,688 )
5 unchanged sentences
Cash and cash equivalents $ 110,920 $ 140,889
−Removed: Accounts receivables, net 80,802 45,943
+Added: Accounts receivable, net 74,758 80,802
Inventories, net 44,362 53,813
+Added: Derivative assets 18,510 —
Prepaid and other current assets 19,154 16,165
−Removed: Current assets held for sale — 205,090
Total current assets 267,704 291,669
5 unchanged sentences
Other long-term assets 34,587 15,374
−Removed: Long-term assets held for sale — 1,149,443
Total assets $ 1,884,553 $ 1,931,219
3 unchanged sentences
Accrued liabilities 72,229 75,915
−Removed: Current liabilities held for sale — 108,537
Total current liabilities 129,403 145,081
3 unchanged sentences
Other long-term liabilities 25,846 24,094
−Removed: Long-term liabilities held for sale — 155,354
Total liabilities 1,177,324 1,190,482
12 unchanged sentences
( 149,624 ) ( 12,551 )
−Removed: Accumulated other comprehensive loss ( 5,792 ) ( 15,265 )
−Removed: Total Ecovyst Inc.
−Removed: equity 740,737 1,277,126
−Removed: Noncontrolling interest — 53
+Added: Accumulated other comprehensive (loss) income 5,992 ( 5,792 )
Total equity 707,229 740,737
11 unchanged sentences
ling interest Total
−Removed: December 31, 2018 135,758,269 $ 1,358 $ 1,674,703 $ 25,523 ( 166,224 ) $ ( 2,920 ) $ ( 39,104 ) $ 4,585 $ 1,664,145
−Removed: Cumulative effect adjustment from adoption of new accounting standards — — — ( 2,049 ) — — 1,874 — ( 175 )
−Removed: December 31, 2018, as adjusted 135,758,269 $ 1,358 $ 1,674,703 $ 23,474 ( 166,224 ) $ ( 2,920 ) $ ( 37,230 ) $ 4,585 $ 1,663,970
−Removed: Net income — — — 79,539 — — — 771 80,310
−Removed: Other comprehensive income — — — — — — 21,882 772 22,654
−Removed: Tax withholdings on equity award vesting — — — — ( 230,197 ) ( 3,563 ) — — ( 3,563 )
−Removed: Distributions to noncontrolling interests — — — — — — — ( 260 ) ( 260 )
−Removed: Stock compensation expense — — 18,225 — — — — — 18,225
−Removed: Shares issued under equity incentive plan, net of forfeitures 1,103,113 11 3,971 — — — — — 3,982
−Removed: December 31, 2019 136,861,382 $ 1,369 $ 1,696,899 $ 103,013 ( 396,421 ) $ ( 6,483 ) $ ( 15,348 ) $ 5,868 $ 1,785,318
+Added: Balance, December 31, 2019 136,861,382 $ 1,369 $ 1,696,899 $ 103,013 ( 396,421 ) $ ( 6,483 ) $ ( 15,348 ) $ 5,868 $ 1,785,318
Net loss — — — ( 278,771 ) — — — ( 2,933 ) ( 281,704 )
−Removed: Other comprehensive loss — — — — — — ( 14,492 ) ( 923 ) ( 15,415 )
+Added: Other comprehensive income (loss) — — — — — — 83 ( 1,663 ) ( 1,580 )
Repurchases of common shares — — — — ( 211,700 ) ( 2,059 ) — — ( 2,059 )
3 unchanged sentences
— — ( 243,749 ) — — — — — ( 243,749 )
−Removed: Disposal of business — — — — — — 14,575 ( 740 ) 13,835
Stock compensation expense — — 24,366 — — — — — 24,366
Shares issued under equity incentive plan, net of forfeitures 240,761 2 343 — — — — — 345
−Removed: December 31, 2020 137,102,143 1,371 1,477,859 ( 175,758 ) ( 783,586 ) ( 11,081 ) ( 15,265 ) 53 1,277,179
+Added: Balance, December 31, 2020 137,102,143 1,371 1,477,859 ( 175,758 ) ( 783,586 ) ( 11,081 ) ( 15,265 ) 53 1,277,179
Net (loss) income — — — ( 139,949 ) — — — 333 ( 139,616 )
4 unchanged sentences
— — ( 435,593 ) — — — — — ( 435,593 )
−Removed: Disposal of business — — — — — — ( 9,846 ) 723 ( 9,123 )
Stock compensation expense — — 30,404 — — — — — 30,404
Shares issued under equity incentive plan, net of forfeitures 718,828 7 739 — — — — — 746
−Removed: December 31, 2021 137,820,971 $ 1,378 $ 1,073,409 $ ( 315,707 ) ( 882,213 ) $ ( 12,551 ) $ ( 5,792 ) $ — $ 740,737
+Added: Balance, December 31, 2021 137,820,971 1,378 1,073,409 ( 315,707 ) ( 882,213 ) ( 12,551 ) ( 5,792 ) — 740,737
+Added: Net income (loss) — — — 73,697 — — — — 73,697
+Added: Other comprehensive income — — — — — — 11,784 — 11,784
+Added: Repurchases of common shares — — — — ( 16,470,763 ) ( 136,741 ) — — ( 136,741 )
+Added: Tax withholdings on equity award vesting — — — — ( 32,058 ) ( 332 ) — — ( 332 )
+Added: Stock compensation expense — — 17,469 — — — — — 17,469
+Added: Shares issued under equity incentive plan, net of forfeitures 1,750,301 18 597 — — — — — 615
+Added: Balance, December 31, 2022 139,571,272 $ 1,396 $ 1,091,475 $ ( 242,010 ) ( 17,385,034 ) $ ( 149,624 ) $ 5,992 $ — $ 707,229
See accompanying notes to consolidated financial statements.
5 unchanged sentences
Cash flows from operating activities:
−Removed: Net (loss) income $ ( 139,616 ) $ ( 281,704 ) $ 80,310
−Removed: Net loss (income) from discontinued operations 141,410 335,984 ( 49,190 )
+Added: Net income (loss) $ 73,697 $ ( 139,616 ) $ ( 281,704 )
+Added: Net (income) loss from discontinued operations ( 3,902 ) 141,410 335,984
Adjustments to reconcile net income to net cash provided by operating activities:
3 unchanged sentences
Debt extinguishment costs — 21,166 22,658
−Removed: Foreign currency exchange (gain) loss 4,716 ( 5,264 ) 1,228
+Added: Foreign currency exchange loss (gain) 978 4,716 ( 5,264 )
Pension and postretirement healthcare (benefit) expense ( 1,015 ) ( 302 ) 416
13 unchanged sentences
Net cash provided by operating activities, continuing operations 180,295 137,338 140,099
−Removed: Net cash provided by operating activities, discontinued operations ( 7,420 ) 83,499 134,587
+Added: Net cash provided by (used in) operating activities, discontinued operations 6,311 ( 7,420 ) 83,499
Net cash provided by operating activities 186,606 129,918 223,598
1 unchanged sentence
Purchases of property, plant and equipment ( 58,870 ) ( 60,045 ) ( 54,837 )
−Removed: Proceeds from business divestiture, net of cash and indebtedness 978,449 624,256 —
+Added: Proceeds from business divestitures, net of cash — 978,449 624,256
+Added: Payments for business divestiture ( 3,744 ) — —
Proceeds from sale of assets — — 2,375
1 unchanged sentence
Other, net 81 ( 12 ) —
−Removed: Net cash provided by (used in) investing activities, continuing operations 875,753 571,794 ( 54,783 )
−Removed: Net cash (used in) provided by investing activities, discontinued operations ( 40,021 ) ( 20,322 ) 19,424
−Removed: Net cash provided by (used in) investing activities 835,732 551,472 ( 35,359 )
+Added: Net cash (used in) provided by investing activities, continuing operations ( 63,021 ) 875,753 571,794
+Added: Net cash used in investing activities, discontinued operations — ( 40,021 ) ( 20,322 )
+Added: Net cash (used in) provided by investing activities ( 63,021 ) 835,732 551,472
Years ended December 31,
13 unchanged sentences
Repayments of financing obligation ( 2,692 ) ( 1,435 ) —
−Removed: Other 1,545 ( 1,875 ) ( 155 )
+Added: Other, net ( 32 ) 1,545 ( 1,875 )
Net cash used in financing activities, continuing operations ( 148,186 ) ( 963,089 ) ( 720,180 )
5 unchanged sentences
Cash, cash equivalents and restricted cash at end of period 110,920 140,889 137,219
−Removed: Less cash, cash equivalents and restricted cash of discontinued operations — ( 22,202 ) ( 36,505 )
+Added: cash, cash equivalents and restricted cash of discontinued operations — — ( 22,202 )
Cash, cash equivalents and restricted cash at end of period of continuing operations $ 110,920 $ 140,889 $ 115,017
6 unchanged sentences
Description of Business
−Removed: and subsidiaries (the “Company” or “Ecovyst”), formerly known as PQ Group Holdings Inc.
−Removed: and subsidiaries (“PQ Group Holdings”), is a leading integrated and innovative global provider of specialty catalysts and services.
+Added: and subsidiaries (the “Company” or “Ecovyst”) is a leading integrated and innovative global provider of specialty catalysts and services.
The Company supports customers globally through its strategically located network of manufacturing facilities.
1 unchanged sentence
Basis of Presentation
−Removed: On December 14, 2020, the Company completed the sale of its Performance Materials business for $ 650,000 , and the financial results of this business have been presented as discontinued operations in the consolidated financial statements for all periods presented.
−Removed: See Note 4 for more information on the transaction.
−Removed: Effective on August 1, 2021, the Company completed the sale of its Performance Chemicals business for $ 1,100,000 , subject to certain purchase price adjustments as set forth in the agreement.
−Removed: Upon entering into the definitive agreement on February 28, 2021, the transaction met the held for sale criteria and consequently the financial results of the Performance Chemicals business are reported in discontinued operations in the consolidated financial statements for all periods presented.
−Removed: See Note 5 for more information on the transaction.
−Removed: In connection with the closing of the sale of the Performance Chemicals business, the Company changed its name from “PQ Group Holdings Inc.” to “ Ecovyst Inc.”, changed the ticker symbol of its common stock listed on the New York Stock Exchange from “PQG” to “ECVT” and rebranded PQ Group Holdings segments from “Refining Services” to “Ecoservices” and “Catalysts” to “Catalyst Technologies”.
−Removed: Financial information presented herein related to the Ecoservices and Catalyst Technologies segments remains unchanged from the Company’s previously issued financial statements filed on Form 10-K for the years ended December 31, 2020 and 2019, respectively.
+Added: On December 14, 2020, the Company completed the sale of its Performance Materials business for $ 650,000 and on August 1, 2021, completed the sale of its Performance Chemicals business for $ 1,100,000 .
+Added: T he financial results of these business are presented as discontinued operations in the consolidated financial statements for the 2021 and 2020 periods presented.
+Added: See Note 4 and Note 5 for more information on these transactions.
The Company has two uniquely positioned specialty businesses:
Ecoservices provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides on-purpose virgin sulfuric acid for water treatment, mining, and industrial applications;
−Removed: and Catalyst Technologies provides finished silica catalysts and catalyst supports necessary to produce high strength and high stiffness plastics and, through its Zeolyst joint venture, supplies zeolites used for catalysts that remove nitric oxide from diesel engine emissions as well as sulfur from fuels during the refining process.
+Added: and Catalyst Technologies provides finished silica catalysts and catalyst supports necessary to produce high strength and high stiffness plastics and, through its Zeolyst joint venture, supplies zeolites used for catalysts that help produce renewable fuels, remove nitric oxide from diesel engine emissions as well as sulfur from fuels during the refining process.
The Company’s regeneration services product group, which is a part of the Company’s Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months.
1 unchanged sentence
The notes to the consolidated financial statements, unless otherwise indicated, are on a continuing operations basis.
−Removed: In March 2020, the outbreak of a novel coronavirus (“COVID-19”) was declared a national emergency in the United States.
−Removed: The spread of COVID-19 in the United States and other parts of the world has adversely impacted economic activity and contributed to volatility in financial markets.
−Removed: In response to the COVID-19 pandemic, the federal government and various state, local and foreign governments have issued decrees and orders that have disrupted many businesses and implemented social distancing, travel and other restrictions.
−Removed: During the year ended December 31, 2020, the Company took actions to mitigate the slowdown in its business as a result of the effects of COVID-19, including adjusting its production levels to meet anticipated customer demand, reducing discretionary spending, furloughs, delaying headcount additions and deferring capital maintenance expenditures.
−Removed: The Company also implemented and refined its business continuity plans in an effort to minimize operational disruptions.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: The Company’s manufacturing plants require a limited number of on-site employees in order to continue to operate effectively.
−Removed: The Company has not experienced any material production issues, but has had limited and temporary shutdowns or slowdowns in some of its facilities.
−Removed: The Company has also seen limited disruptions in the availability of certain of its raw materials and other supplies, which to date have not had a material impact on production.
−Removed: During the year ended December 31, 2021, as the economy began to recover from the global pandemic, the demand for most of the Company’s products and services increased.
−Removed: With the increased demand for the Company’s products, its businesses began to produce and sell its products to its customers consistent with pre-pandemic levels.
Summary of Significant Accounting Policies:
7 unchanged sentences
Adjustments resulting from translation of the balance sheets are included in stockholders’ equity as part of accumulated other comprehensive income (loss).
−Removed: Adjustments resulting from translation of certain intercompany loans, which are not considered permanent and are denominated in foreign currencies, are included in other (income) expense, net in the consolidated statements of income.
+Added: Adjustments resulting from translation of certain intercompany loans, which are not considered permanent and are denominated in foreign currencies, are included in other expense (income), net in the consolidated statements of income.
The Company considers intercompany loans to be of a permanent or long-term nature if management expects and intends that the loans will not be repaid.
2 unchanged sentences
Income and expense items are translated at average exchange rates during the year.
−Removed: Net foreign currency exchange (gains) and losses included in other (income) expense, net were $ 4,716 , $( 5,264 ) and $ 1,228 for the years ended December 31, 2021, 2020 and 2019 , respectively.
−Removed: The n et foreign currency losses realized during these years were driven by the non-permanent intercompany debt denominated in local currency and translated to U.S.
+Added: Net foreign currency exchange (gains) and losses included in other expense (income), net were $ 978 , $ 4,716 and $( 5,264 ) for the years ended December 31, 2022, 2021 and 2020 , respectively.
+Added: The n et foreign currency (gains) and losses realized during these years were primarily driven by the non-permanent intercompany debt denominated in local currency and translated to U.S.
Cash and Cash Equivalents.
Cash and cash equivalents include highly liquid investments with original terms to maturity of 90 days or less from the time of purchase.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Restricted Cash.
Restricted cash, which is restricted as to withdrawal or usage, is classified separately from cash and cash equivalents on the Company’s consolidated balance sheets.
−Removed: The Company’s total restricted cash balances were $ 0 and $ 1,640 as of December 31, 2021 and 2020, respectively, and are included on the Company’s consolidated balance sheets as prepaid and other current assets.
+Added: The Company had no restricted cash balances as of December 31, 2022 and 2021.
Accounts Receivable and Allowance for Credit Losses.
7 unchanged sentences
Certain domestic inventories are stated at the lower of cost or market and valued using the last-in, first-out (“LIFO”) method.
−Removed: All other inventories are stated at the lower of cost and net realizable value and valued using the weighted average cost or first-in, first-out (“FIFO”) methods.
+Added: All other inventories are stated at the lower of cost or net realizable value and valued using the weighted average cost or first-in, first-out (“FIFO”) methods.
Property, Plant and Equipment.
2 unchanged sentences
Maintenance, repairs and minor renewals are charged to expense as incurred.
−Removed: The Company capitalizes
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: certain internal costs associated with the implementation of purchased software.
+Added: The Company capitalizes certain internal costs associated with the implementation of purchased software.
When property, plant and equipment is retired or otherwise disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time.
15 unchanged sentences
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
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.
15 unchanged sentences
Investments in Affiliated Companies.
−Removed: Investments in affiliated companies are accounted for using the equity method of accounting if the investment provides the Company with the ability to exercise significant influence, but not control,
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: over the investee.
+Added: Investments in affiliated companies are accounted for using the equity method of accounting if the investment provides the Company with the ability to exercise significant influence, but not control, over the investee.
Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate.
10 unchanged sentences
The Company performs its annual goodwill impairment test as of October 1.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Goodwill is tested for impairment at the reporting unit level.
15 unchanged sentences
When evaluating long-lived assets for impairment, if the carrying amount of an asset or asset group is found not to be recoverable, a potential impairment loss may be recognized.
−Removed: An impairment loss is measured by comparing the carrying amount of the asset or asset group to its
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: An impairment loss is measured by comparing the carrying amount of the asset or asset group to its fair value.
Fair value is determined using quoted market prices when available, or other techniques including discounted cash flows.
10 unchanged sentences
Cash flows from derivative instruments are reported in the same cash flow category as the cash flows from the items being hedged.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions.
6 unchanged sentences
A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.
−Removed: See Note 8 to these consolidated financial statements regarding the application of fair value measurements.
The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these items.
−Removed: See Note 18 to these consolidated financial statements regarding the fair value of debt.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: See Note 8 to these consolidated financial statements regarding the application of fair value measurements and Note 18 regarding the fair value of debt.
+Added: Treasury Stock.
+Added: The Company records repurchases of its common stock for treasury at cost.
+Added: Upon the reissuance of the Company’s common stock from treasury, differences between the proceeds from reissuance and the average cost of the treasury stock are credited or charged to capital in excess of par value to the extent of prior credits related to the reissuance of treasury stock.
+Added: If no such credits exist, the differences are charged to retained earnings.
+Added: See Note 9 of these consolidated financial statements regarding the Company’s treasury stock repurchases.
Revenue Recognition.
10 unchanged sentences
The Company measures the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement.
−Removed: Shipping and Handling Costs.
+Added: Shipping and Handling.
Amounts billed to a customer in a sale transaction related to shipping and handling, if any, represent revenues earned for the goods provided and are classified as revenue.
Costs related to shipping and handling of products shipped to customers are classified as cost of goods sold.
−Removed: Refer to Note 7 for disclosures regarding the recognition of revenue for shipping and handling costs that are billed to customers.
+Added: See Note 7 of these consolidated financial statements for disclosures regarding the recognition of revenue for shipping and handling costs that are billed to customers.
Research and Development.
5 unchanged sentences
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date.
−Removed: The Company evaluates its deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing, to result in their realizability.
+Added: The Company evaluates its deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: versus ordinary income treatment), amount and timing, to result in their realizability.
A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets, unless it is more likely than not that those assets will be realized.
10 unchanged sentences
These accrued liabilities represent a provision for taxes that are reasonably expected to be incurred on the basis of available information but which are not certain.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Environmental Expenditures.
3 unchanged sentences
Recoveries of expenditures for environmental remediation are recognized as assets only when recovery is deemed probable.
−Removed: See Note 25 to these consolidated financial statements regarding commitments and contingencies and Note 17 regarding the accrued environmental reserve.
+Added: See Note 25 to these consolidated financial statements regarding commitments and contingencies.
Deferred Financing Costs.
8 unchanged sentences
Pensions and Postretirement Benefits.
−Removed: The Company maintains qualified and non-qualified defined benefit pension plans that cover employees in the United States as well as certain employees in other international locations.
−Removed: Benefits for a majority of the plans are based on average final pay and years of service.
−Removed: Our funding policy, consistent with statutory requirements, is based on actuarial computations utilizing the projected unit credit method of calculation.
−Removed: Not all defined benefit pension plans are funded.
−Removed: In the United States the pension plans’ assets include equity and fixed income securities.
−Removed: In our other international locations, the pension plans’ assets include insurance contracts.
+Added: The Company sponsors two funded defined benefit pension plans that cover certain employees.
+Added: Benefits for the plans are generally based on average final pay and years of service.
+Added: The Company’s funding policy is to fund the minimum required contributions consistent with statutory requirements based on actuarial computations utilizing the projected unit credit method of calculation.
+Added: The pension plans’ assets include equity and fixed income securities.
Certain assumptions are made regarding the occurrence of future events affecting pension costs, such as mortality, withdrawal, disa blement and retirement, changes in compensation and benefits, and discount rates to reflect the time value of money.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The major elements in determining pension income and expense are pension liability discount rates and the expected return on plan assets.
11 unchanged sentences
In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
−Removed: If the assessment of a contingency indicates that it is probable that a loss has
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: been incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements.
+Added: If the assessment of a contingency indicates that it is probable that a loss has been incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements.
If the assessment indicates that a loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.
3 unchanged sentences
Actual results could differ from those estimates.
−Removed: Reclassifications.
−Removed: Certain reclassifications have been made to the historical presentation of notes accompanying the consolidated financial statements to conform with the current year presentation.
+Added: Reclassification and Correction of an Error.
+Added: Certain reclassifications and correction of an error have been made to the historical presentation of the consolidated financial statements and the notes accompanying the consolidated financial statements.
+Added: During the preparation of the condensed consolidated financial statements for the period ended September 30, 2022, the Company identified a presentation error in the condensed consolidated statements of comprehensive income for the 2021 comparable periods presented.
+Added: The presentation of comprehensive income (loss) inadvertently omitted the release of accumulated other comprehensive income (loss) related to foreign currency translation and deferred pension and postretirement benefit plan losses in conjunction with the sale of the Company’s Performance Chemicals business.
+Added: The presentation of other comprehensive income (loss) for the year ended December 31, 2021, was corrected for the additional comprehensive loss of $ 9,123 , of which $ 723 of comprehensive income was attributed to noncontrolling interest.
+Added: This presentation error in other comprehensive income (loss) was also corrected for the year ended December 31, 2020, which resulted in additional comprehensive income of $ 13,835 , of which $ 740 was attributed to noncontrolling interest.
+Added: Additionally, Note 9 was corrected for this presentation error.
+Added: The Company assessed the materiality of the error and concluded it was not material to the Company’s previously issued financial statements for the years ended December 31, 2021 and 2020.
+Added: There was no impact on the consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows for the years ended December 31, 2021 and 2020.
+Added: The previously disclosed disposal of business presented in accumulated other comprehensive income (loss) has been reclassified to other comprehensive income (loss) in the condensed consolidated statement of stockholders’ equity.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
New Accounting Standards:
Recently Adopted Accounting Standards
−Removed: In December 2019, the Financial Accounting Standards Board (“FASB”) issued new guidance to reduce the complexity in accounting for income taxes by removing certain exceptions to the general principles and simplifying areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes.
−Removed: The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years.
−Removed: The Company adopted the new guidance effective January 1, 2021, with no material impact to the Company’s condensed consolidated financial position, results of operations or cash flows.
−Removed: Accounting Standards Not Yet Adopted as of December 31, 2021
−Removed: In November 2021, the FASB issued guidance that requires entities to provide certain disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance.
+Added: In November 2021, the Financial Accounting Standards Board (“FASB”) issued guidance that requires entities to provide certain disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance.
Previously, there was no guidance under GAAP on recognizing or measuring government grants to business entities.
4 unchanged sentences
the Company has not identified any significant government assistance or grants subject to the scope of the guidance upon adoption.
−Removed: In October 2021, the FASB issued guidance that requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with revenue recognition guidance.
−Removed: Under current GAAP, contract assets and contract liabilities acquired in a business combination are recorded by the acquirer at fair value.
−Removed: The new guidance creates an exception to the general recognition and measurement principles related to business combinations, and is expected to result in the acquirer recognizing contract assets and liabilities at the same amounts recorded by the acquiree.
−Removed: The new guidance is effective for business combinations occurring during fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted.
−Removed: The Company is currently evaluating the impact of the new guidance, which would only be applied prospectively to business combinations upon the adoption of the guidance.
In March 2020 and January 2021, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.
1 unchanged sentence
The guidance is optional and may be elected over time as reference rate reform activities occur.
−Removed: During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: The time period through which the practical expedients provided in the guidance is available was set to expire on December 31, 2022, but was extended through December 31, 2024 by the FASB in December 2022.
+Added: During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives.
Application of these expedients preserves the presentation of derivatives consistent with past presentation.
−Removed: The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
+Added: In February 2023, the Company amended the 2021 Term Loan Facility, the ABL Facility and all existing interest rate caps agreements to replace LIBOR with a secured overnight financing rate (“SOFR”) as the benchmark interest rate.
+Added: See Notes 18 and 20 to these consolidated financial statements for additional information.
+Added: The Company plans to utilize the practical expedients under the guidance with respect to the transition of its debt facilities and interest rate hedging arrangements to SOFR, with no material impact to its consolidated financial statements anticipated.
+Added: Accounting Standards Not Yet Adopted as of December 31, 2022
+Added: In October 2021, the FASB issued guidance that requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with revenue recognition guidance.
+Added: Under current GAAP, contract assets and contract liabilities acquired in a business combination are recorded by the acquirer at fair value.
+Added: The new guidance creates an exception to the general recognition and measurement principles related to business combinations, and is expected to result in the acquirer recognizing contract assets and liabilities at the same amounts recorded by the acquiree.
+Added: The new guidance is effective for business combinations occurring during fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted.
+Added: The Company adopted the new guidance effective January 1, 2023 as required, and will apply the guidance prospectively to business combinations that occur after the adoption date.
Performance Materials Divestiture:
3 unchanged sentences
In the fourth quarter of 2020, the Performance Materials business met the criteria set forth in Accounting Standards Codification 205-20, Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”), as the sale represents a strategic shift that will have a major effect on the Company’s operations and financial results.
−Removed: As a result, the Company’s consolidated financial statements for all periods presented reflect the Performance Materials business as a discontinued operation.
+Added: As a result, the Company’s consolidated financial statements for all periods presented reflect the Performance Materials business as a
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: discontinued operation.
The divested business was historically reported in the Performance Materials reportable segment, with the exception of certain Australian operations that were historically reported in the Performance Chemicals reportable segment.
7 unchanged sentences
In connection with the sale of Performance Materials and the related loss, as noted above, the Company has recognized a tax expense of $ 58,008 within d iscontinued operations for the year ended December 31, 2020.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
The following table summarizes the results of discontinued operations for the periods presented:
6 unchanged sentences
Interest expense, net (1)
−Removed: 16,210 24,453
−Removed: Other (income) expense, net ( 3,481 ) 274
+Added: Other income, net ( 3,481 )
Loss on sale of Performance Materials 70,878
−Removed: (Loss) income from discontinued operations before income tax ( 44,233 ) 15,579
+Added: Loss from discontinued operations before income tax ( 44,233 )
Provision for income taxes 58,008
−Removed: (Loss) income from discontinued operations, net of tax $ ( 102,241 ) $ 14,557
+Added: Loss from discontinued operations, net of tax $ ( 102,241 )
(1) The closing of the transaction triggered the Company’s obligation to provide partial repayment under both its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016, and its New Term Loan Credit Agreement, dated as of July 22, 2020.
−Removed: As such, interest expense has been allocated to discontinued operations on the basis of the Company’s required refinancing of debt repayment provision of $ 275,787 of the Senior Secured Term Loan Facility due February 2027 and its required repayment of $ 188,722 of the Senior Secured Term Loan Facility due February 2027.
+Added: As such, interest expense has been allocated to discontinued operations on the basis of the Company’s required refinancing of debt repayment provision of $ 275,787 of the 2018 Term Loan Facility and its required repayment of $ 188,722 of the 2020 Term Loan Facility.
During the year ended December 31, 2021 , the Company incurred transaction costs of $ 2,054 and stock-based compensation expense of $ 1,970 , and an associated tax benefit of $ 988 related to the Performance Materials divestiture, as well as a provision to return benefit of $ 5,429 related to the filing of the 2020 tax returns filed in the fourth quarter of 2021, which is included in loss from discontinued operations, net of tax.
−Removed: Net income attributable to the noncontrolling interest related to the Performance Materials business, net of tax was $ 265 and $ 154 for the years ended December 31, 2020 and 2019, respectively.
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
−Removed: The following table summarizes the assets and liabilities of discontinued operations at December 31, 2019:
−Removed: Cash and cash equivalents $ 18,423
−Removed: Accounts receivables, net 40,484
−Removed: Inventories, net 143,323
−Removed: Prepaid and other current assets 4,139
−Removed: Current assets held for sale $ 206,369
−Removed: Investments in affiliated companies $ 115
−Removed: Property, plant and equipment, net 175,614
−Removed: Goodwill 286,227
−Removed: Other intangible assets, net 121,113
−Removed: Right-of-use lease assets 8,878
−Removed: Other long-term assets 71,697
−Removed: Long-term assets held for sale $ 663,644
−Removed: Notes payable and current maturities of long-term debt $ 7,766
−Removed: Accounts payable 30,267
−Removed: Operating lease liabilities—current 3,326
−Removed: Accrued liabilities 16,744
−Removed: Current liabilities held for sale $ 58,103
−Removed: Long-term debt, excluding current portion $ 55,972
−Removed: Deferred income taxes 8,612
−Removed: Operating lease liabilities—noncurrent 5,248
−Removed: Other long-term liabilities 17,366
−Removed: Long-term liabilities held for sale $ 87,198
−Removed: Upon the close of the transaction, the Company entered into a Transition Services Agreement with the buyer pursuant to which the buyer is receiving certain services to provide for the orderly transition of various functions and processes after the closing of the transaction.
+Added: Net income attributable to the noncontrolling interest related to the Performance Materials business, net of tax was $ 265 for the year ended December 31, 2020.
+Added: Upon the close of the transaction, the Company entered into a Transition Services Agreement with the Purchaser pursuant to which the Purchaser was receiving certain services to provide for the orderly transition of various functions and processes after the closing of the transaction.
The services under the Transition Services Agreement include information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services.
−Removed: These services are being provided at cost for a period of 9 months, with three 30 -day extensions available.
−Removed: The Company billed $ 3,314 under the Transition Services Agreement to the buyer during the year ended December 31, 2021.
+Added: These services were provided at cost for a period of nine months following the close of the transaction.
+Added: The Company billed $ 3,314 under the Transition Services Agreement to the Purchaser during the year ended December 31, 2021.
Those billings are included in selling, general and administrative expenses on the consolidated financial statements.
Additionally, in connection with the transaction, the Company entered into various supply agreements with the Purchaser.
−Removed: Cash flows associated with these transition services and supply agreements are not expected to be material to the Company’s results of operations.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: Cash flows associated with these transition services and supply agreements were not material to the Company’s results of operations.
Performance Chemicals Divestiture:
13 unchanged sentences
Loss on sale of the Performance Chemicals business $ ( 150,230 )
−Removed: In connection with the sale of the Performance Chemicals business and the related loss, as noted above, the Company has recognized a tax benefit of $ 37,255 within net loss from discontinued operations, net of tax on the consolidated statement of income.
+Added: In connection with the sale of the Performance Chemicals business and the related loss, as noted above, the Company has recognized a tax benefit of $ 37,255 within net loss from discontinued operations, net of tax on the consolidated statement of income for the year ended December 31, 2021.
+Added: During the year ended December 31, 2022, the Company recognized $ 3,902 of net income from discontinued operations, net of tax, related to the sale of the Performance Chemicals business for an income tax benefit upon the finalization of the Company’s U.S.
+Added: income tax returns, partially offset by a tax indemnity claim resulting from the transaction.
AND SUBSIDIARIES
2 unchanged sentences
The following table summarizes the results of discontinued operations related to Performance Chemicals for the periods presented:
+Added: 2022 2021 2020
Sales $ — $ 389,870 $ 614,704
5 unchanged sentences
Loss on sale of the Performance Chemicals business — 150,230 —
−Removed: Operating (loss) income ( 164,281 ) ( 214,491 )
+Added: Operating loss ( 2,409 ) ( 164,281 ) ( 214,491 )
Equity in net income from affiliated companies — ( 111 ) ( 172 )
2 unchanged sentences
Other income, net — ( 6,210 ) ( 1,089 )
−Removed: (Loss) income from discontinued operations before income tax ( 168,690 ) ( 229,800 )
+Added: Loss from discontinued operations before income tax ( 2,409 ) ( 168,690 ) ( 229,800 )
(Benefit) Provision for income taxes ( 6,311 ) ( 24,886 ) 3,943
−Removed: (Loss) income from discontinued operations, net of tax $ ( 143,804 ) $ ( 233,743 )
+Added: Loss from discontinued operations, net of tax $ 3,902 $ ( 143,804 ) $ ( 233,743 )
(1) The Company reclassified transaction costs that were previously recorded to this line item and included those charges in the line item Loss on sale of the Performance Chemicals business during the years ended December 31, 2021 and 2020 .
3 unchanged sentences
As a result, interest expense has been allocated to discontinued operations on the basis of the Company’s total repayment of $ 526,363 .
−Removed: Net (loss) income attributable to the noncontrolling interest related to the Performance Chemicals business, net of tax was $ 333 and $( 3,198 ) for the years ended December 31, 2021 and 2020, respectively.
−Removed: Net (loss) income attributable to Ecovyst Inc., related to the Performance Chemicals business, net of tax was $( 144,137 ) and $( 230,545 ) for the years ended December 31, 2021 and 2020, respectively.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: The following table summarizes the assets and liabilities of discontinued operations at December 31, 2020 and 2019, respectively:
−Removed: 2020 December 31,
−Removed: Cash and cash equivalents $ 22,153 $ 17,736
−Removed: Accounts receivables, net 87,202 86,627
−Removed: Inventories, net 74,647 86,732
−Removed: Prepaid and other current assets 21,088 24,131
−Removed: Current assets held for sale $ 205,090 $ 215,226
−Removed: Investments in affiliated companies $ 324 $ 1,476
−Removed: Property, plant and equipment, net 391,524 401,595
−Removed: 326,173 583,075
−Removed: Other intangible assets, net 388,857 406,656
−Removed: Right-of-use lease assets 19,296 24,093
−Removed: Other long-term assets 23,269 17,688
−Removed: Long-term assets held for sale $ 1,149,443 $ 1,434,583
−Removed: Notes payable and current maturities of long-term debt $ — $ —
−Removed: Accounts payable 74,728 76,482
−Removed: Operating lease liabilities—current 8,479 6,341
−Removed: Accrued liabilities 25,330 26,182
−Removed: Current liabilities held for sale $ 108,537 $ 109,005
−Removed: Deferred income taxes $ 49,690 $ 47,848
−Removed: Operating lease liabilities—noncurrent 10,047 16,182
−Removed: Other long-term liabilities 95,617 72,538
−Removed: Long-term liabilities held for sale $ 155,354 $ 136,568
−Removed: (1) The Company applied the market approach to estimate the fair value of the Performance Chemicals business, which is consistent with the accounting policies described in Note 2 and the valuation techniques described in Note 15.
−Removed: In applying the market approach, the Company estimated the fair value using publicly traded comparable company values and applied the selected market multiples to a trailing twelve months adjusted EBITDA.
−Removed: As a result, the Company recorded an additional goodwill impairment charge of $ 75,080 in the first quarter of 2021 related to the Performance Chemicals business.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: Net income (loss) attributable to the noncontrolling interest related to the Performance Chemicals business, net of tax was $ 333 and $( 3,198 ) for the years ended December 31, 2021 and 2020, respectively.
+Added: Net loss attributable to Ecovyst Inc., related to the Performance Chemicals business, net of tax was $( 144,137 ) and $( 230,545 ) for the years ended December 31, 2021 and 2020, respectively.
In connection with the divestiture of the Performance Chemicals business, the Company entered into a five year contract manufacturing agreement effective on August 2, 2021 with PQ Silicas UK Ltd., a subsidiary of the Buyer, related to a facility in Warrington, United Kingdom.
1 unchanged sentence
Additionally, certain machinery, equipment, and other tangible personal property assets identified in the Agreement (“Catalyst Production Assets”) owned by the Buyer will be used exclusively in the manufacture of silica catalyst products for the Company.
−Removed: The Company does not meet the requirements for a sale-leaseback transaction as described in Accounting Standards Codification 842-40, Leases - Sale-Leaseback Transactions.
+Added: The Company did not meet the requirements for a sale-leaseback transaction as described in Accounting Standards Codification 842-40, Leases - Sale-Leaseback Transactions.
Under the failed-sale-leaseback accounting model, the Company is deemed under GAAP to still own the Catalyst Production Assets, which the Company must continue to reflect in its consolidated balance sheet and depreciate over the assets’ remaining useful lives.
−Removed: For the year ended December 31, 2021 , the Company recorded a financing lease liability of £ 11,648 (equivalent $ 16,005 ).
−Removed: The current portion of the obligation are included in accrued liabilities and the long term portion in other long term liabilities on the consolidated financial statements.
−Removed: Based on the estimated fair market values of the Catalyst Production Assets, the failed-sale-leaseback accounting treatment resulted in a loss of $ 16,005 due to the requirement to treat a certain amount of the pre-tax cash proceeds from the divestiture as though it were the result of a financing obligation.
+Added: For the year ended December 31, 2021 , the Company recorded a financing obligation of £ 11,648 (equivalent $ 16,005 ).
+Added: The current portion of the obligation is included in accrued liabilities and the long-term portion in other long-term liabilities on the consolidated balance sheets.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: Based on the estimated fair market value of the Catalyst Production Assets, the failed-sale-leaseback accounting treatment resulted in an allocation of $ 16,005 of the cash proceeds from the sale to cash flows from financing activities in the consolidated statement of cash flows for the year ended December 31, 2021, due to the requirement to treat this portion of the proceeds as though it were the result of a financing obligation.
The agreement has an initial term of five years, with an option to renew, as well as an “Option Bill of Sale” which provides for the transfer from the Buyer to the Company of the Catalyst Production Assets upon the Company’s exercise of a one-dollar purchase option.
−Removed: Payments made to the Buyer under the contact manufacturing agreement were $ 3,395 for the year ended December 31, 2021 .
−Removed: In addition to the contract manufacturing agreement noted above, the Company also entered into certain supply agreements with the Buyer, as well as a Transition Services Agreement, pursuant to which the Buyer is receiving and performing certain services to provide for the orderly transition of various functions and processes after the closing of the transaction.
+Added: Payments made to the Buyer under the contact manufacturing agreement were $ 7,872 and $ 3,395 for the years ended December 31, 2022 and 2021, respectfully .
+Added: In addition to the contract manufacturing agreement noted above, the Company also entered into certain supply agreements with the Buyer, as well as a Transition Services Agreement, pursuant to which the Buyer was receiving and performing certain services to provide for the orderly transition of various functions and processes after the closing of the transaction.
The services under the Transition Services Agreement include information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services.
−Removed: These services are provided for a period of six months, which ended in January 2022.
−Removed: Billings under the Transition Services Agreement to the Buyer during the year ended December 31, 2021 were immaterial.
−Removed: T hose billings are included in selling, general and administrative expenses on the consolidated financial statements for the year ended December 31, 2021 .
+Added: These services were provided for a period of six months, which ended in January 2022.
+Added: Billings under the Transition Services Agreement to the Buyer during the years ended December 31, 2022 and 2021 were immaterial.
+Added: T hose billings are included in selling, general and administrative expenses on the consolidated financial statements for the years ended December 31, 2022 and 2021 .
On March 1, 2021 (the “Closing Date”), the Company completed the acquisition of Chem32, LLC (“Chem32”) as part of a stock transaction (the “Acquisition”) for $ 44,000 in cash.
+Added: Based in Orange, Texas, Chem32 is a leader in ex situ sulfiding and pre-activation for hydro-processing catalysts.
The net cash paid by the Company was $ 42,639 , after certain customary adjustments for indebtedness, working capital, cash and a holdback amount pursuant to the agreement.
−Removed: Based in Orange, Texas, Chem32 is a leader in ex situ pre-sulfiding and pre-activation for hydro-processing catalysts.
+Added: A portion of the holdback was settled in September 2022 for $ 488 , with $ 512 of the holdback remaining as of December 31, 2022.
+Added: Chem32 is reported as part of the Ecoservices segment.
+Added: The Company’s consolidated financial statements include Chem32’s results of operations from the Closing Date through December 31, 2021.
+Added: Net sales and net income attributable to Chem32 during this period are included in the Company’s consolidated statement of income for the year ended December 31, 2021 and totaled $ 14,419 and $ 4,755 , respectively.
+Added: Acquisition and integration costs were $ 1,235 for the year ended December 31, 2021 and are included in other operating expense, net in the Company’s consolidated statements of income.
+Added: The Company believes that the Acquisition will offer a more robust portfolio of services within the refining industry by leveraging the Company’s existing relationships, therefore contributing to a total purchase price that resulted in the recognition of $ 14,778 of goodwill, which was deductible for tax purposes during the year ended December 31, 2021.
The Acquisition was accounted for using the acquisition method of accounting.
1 unchanged sentence
The excess of the purchase price over fair values of the identifiable net assets acquired was recorded to goodwill.
+Added: During the year ended December 31, 2022, the Company recorded an immaterial adjustment between goodwill and deferred tax liabilities related to the final tax purchase price allocation.
+Added: See Note 16 to these consolidated financial statements for further information.
AND SUBSIDIARIES
2 unchanged sentences
The following table sets forth the calculation and allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition, which was complete as of December 31, 2021:
−Removed: Provisional Purchase
−Removed: Price Allocation Adjustments Purchase
Price Allocation
14 unchanged sentences
Goodwill 14,778
−Removed: $ 43,994 $ ( 355 ) $ 43,639
In accordance with the requirements of the purchase method of accounting for acquisitions, accounts receivable and inventories were recorded at fair market value.
2 unchanged sentences
Fair value of inventory is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity, which the Company determined acquired cost equaled fair value of the inventory acquired.
−Removed: The Company believes that the Acquisition will enable it to offer a more robust portfolio of services within the refining industry leveraging the Company’s existing relationships, which contributed to a total purchase price that resulted in the recognition of goodwill.
−Removed: The Company assigned all of the goodwill to the Ecoservices segment.
−Removed: The goodwill associated with the Acquisition is deductible for tax purposes.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: The valuation of the intangible assets acquired and the related weighted-average amortization periods are as follows:
+Added: The valuation of the intangible assets acquired and the related weighted-average amortization periods were as follows:
Amount Weighted-Average
6 unchanged sentences
Total intangible assets subject to amortization $ 22,100
−Removed: The Company’s consolidated financial statements include Chem32’s results of operations from the Closing Date through December 31, 2021.
−Removed: Net sales and net income attributable to Chem32 during this period are included in the Company’s consolidated statement of income for the year ended December 31, 2021 and total $ 14,419 and $ 4,755 , respectively.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: The Company’s cost of goods sold for the year ended December 31, 2021 includes a pre-tax charge of $ 317 of additional amortization expense related to identified intangible assets, which would have been recorded during the reporting period if the adjustments to the provisional amounts had been recognized as of the Closing Date.
+Added: The Company’s other operating expense, net for the year ended December 31, 2021 includes a pre-tax charge of $ 1,583 of additional amortization expense related to identified intangible assets, which would have been recorded during the reporting period if the adjustments to the provisional amounts had been recognized as of the Closing Date.
Pro forma financial information has not been presented as it is immaterial for the year ended December 31, 2021 .
−Removed: Acquisition and integration costs were $ 1,235 for the year ended December 31, 2021 and are included in other operating expense, net in the Company’s consolidated statements of income.
Revenue from Contracts with Customers:
15 unchanged sentences
Revenues related to stand-ready provisions and reservation of capacity fees are recognized on a ratable basis throughout the contract term and billed to the customer on a monthly basis.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Revenue from product sales are recorded at the sales price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns or other allowances that are offered within contracts between the Company and its customers.
3 unchanged sentences
The Company does not have any significant payment terms as payment is received at, or shortly after, the point of sale.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Contracts between the Company’s Ecoservices segment and its customers are typically evidenced by entering into a MSA which generally has a term in excess of one year.
7 unchanged sentences
The Company reviews each contract with minimum purchase requirements to determine if the customer will meet the provisions within the current calendar year.
−Removed: During the year ended December 31, 2021, there have been no material issues in which Ecoservices customers failed to meet their contractual obligations.
+Added: During the years ended December 31, 2022 and 2021, there have been no material issues in which Ecoservices customers failed to meet their contractual obligations.
During the year ended December 31, 2020, some customers fell short of monthly orders due to the pandemic and take-or-pay provisions within contracts were acted upon.
10 unchanged sentences
The Company has no contract assets or material contract liabilities recorded on its consolidated balance sheets as of December 31, 2022 and 2021, respectively.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Practical Expedients and Accounting Policy Elections
−Removed: The Company has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the new revenue recognition guidance.
+Added: The Company has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the revenue recognition guidance.
The majority of the Company’s contracts with customers are based on an individual purchase order;
5 unchanged sentences
As such, the Company has elected to utilize the “as-invoiced” practical expedient, which permits the Company to recognize revenue in the amount to which it has a right to invoice the customer, provided that the amount corresponds directly with the value provided by the performance obligation as completed to date.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
When the Company performs shipping and handling activities after the transfer of control to the customer (e.g.
7 unchanged sentences
Key End Uses Key Products
−Removed: Industrial & process chemicals • Sulfur derivatives for industrial production
−Removed: • Treatment services
−Removed: Fuels & emission control • Refining hydrocracking catalysts
+Added: Clean fuels, emission control & other • Refining hydrocracking catalysts
• Emission control catalysts
−Removed: • Catalyst recycling regeneration services
−Removed: Packaging & engineered plastics • Catalysts for high-density polyethylene and chemicals syntheses
+Added: • Catalysts used in production of renewable fuels
+Added: • Catalyst activation
+Added: • Aluminum sulfate solution
+Added: • Ammonium bisulfite solution
+Added: Polymers & engineered plastics • Catalysts for high-density polyethylene and chemicals syntheses
• Antiblocks for film packaging
−Removed: • Sulfur derivatives for nylon production
−Removed: Natural resources • Sulfur derivatives for mining
+Added: • Niche custom catalyst
+Added: Regeneration and treatment services • Sulfuric acid regeneration services
+Added: • Treatment services
+Added: Industrial, mining, & automotive • Sulfur derivatives for industrial production
+Added: • Sulfuric acid for mining
+Added: • Sulfuric derivatives for nylon production
AND SUBSIDIARIES
3 unchanged sentences
Year ended December 31, 2022
−Removed: Ecoservices Catalyst Technologies Total
−Removed: Industrial & process chemicals $ 88,844 $ — $ 88,844
−Removed: Fuels & emission control (1)
+Added: Ecoservices Catalyst Technologies (2)
+Added: Clean fuels, emission control & other $ 28,966 $ — $ 28,966
+Added: Polymers & engineered plastics — 117,687 117,687
+Added: Regeneration and treatment services (1)
342,645 — 342,645
−Removed: Packaging & engineered plastics 71,991 110,688 182,679
−Removed: Natural resources 82,608 — 82,608
−Removed: Total $ 500,513 $ 110,688 $ 611,201
+Added: Industrial, mining & automotive 330,861 — 330,861
+Added: Total segment sales $ 702,472 $ 117,687 $ 820,159
Year ended December 31, 2021
−Removed: Ecoservices Catalyst Technologies Total
−Removed: Industrial & process chemicals $ 70,648 $ 125 $ 70,773
−Removed: Fuels & emission control (1)
+Added: Ecoservices Catalyst Technologies (2)
+Added: Clean fuels, emission control & other $ 25,673 $ — $ 25,673
+Added: Polymers & engineered plastics — 110,688 110,688
+Added: Regeneration and treatment services (1)
262,026 — 262,026
−Removed: Packaging & engineered plastics 38,772 93,882 132,654
−Removed: Natural resources 67,451 — 67,451
−Removed: Total $ 401,913 $ 94,007 $ 495,920
+Added: Industrial, mining & automotive 212,814 — 212,814
+Added: Total segment sales $ 500,513 $ 110,688 $ 611,201
Year ended December 31, 2020
−Removed: Ecoservices Catalyst Technologies Total
−Removed: Industrial & process chemicals $ 80,661 $ 109 $ 80,770
−Removed: Fuels & emission control (1)
+Added: Ecoservices Catalyst Technologies (2)
+Added: Clean fuels, emission control & other $ 11,955 $ — $ 11,955
+Added: Polymers & engineered plastics — 94,007 94,007
+Added: Regeneration and treatment services (1)
233,122 — 233,122
−Removed: Packaging & engineered plastics 48,056 85,558 133,614
−Removed: Natural resources 66,070 — 66,070
−Removed: Total $ 447,080 $ 85,667 $ 532,747
−Removed: (1) As described in Note 1, the Company experiences seasonal sales fluctuations to customers in the fuels & emission control end use.
+Added: Industrial, mining & automotive 156,836 — 156,836
+Added: Total segment sales $ 401,913 $ 94,007 $ 495,920
+Added: (1) As described in Note 1, the Company experiences seasonal sales fluctuations to customers in the regeneration and treatment services end use.
+Added: (2) Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V.
+Added: joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 12 to these condensed consolidated financial statements for further information).
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Fair Value Measurements:
6 unchanged sentences
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).
−Removed: The classification of an asset or a liability is based on the lowest level
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: input that is significant to its measurement.
+Added: 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).
10 unchanged sentences
(Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
−Removed: Derivative contracts (Note 20) $ 1,288 $ — $ 1,288 $ —
+Added: Derivative assets:
+Added: Interest rate caps (Note 20) $ 34,374 $ — $ 34,374 $ —
+Added: Derivative liabilities:
+Added: Interest rate caps (Note 20) $ 2,071 $ — $ 2,071 $ —
2021 Quoted Prices in
1 unchanged sentence
(Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
−Removed: Derivative contracts (Note 20) $ 3,704 $ — $ 3,704 $ —
+Added: Derivative assets:
+Added: Interest rate caps (Note 20) $ 1,080 $ — $ 1,080 $ —
+Added: Derivative liabilities:
+Added: Interest rate caps (Note 20) $ 1,288 $ — $ 1,288 $ —
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Derivative contracts
6 unchanged sentences
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.
−Removed: The Company has interest rate caps that are fair valued using Level 2 inputs.
+Added: As of December 31, 2022, the Company had interest rate caps that were 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.
2 unchanged sentences
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.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Stockholders' Equity:
Accumulated Other Comprehensive Income (Loss)
+Added: The stockholders’ equity footnote disclosures have been revised to include the impact of discontinued operations on pensions and postretirement benefits and foreign currency translation for the year ended December 31, 2021 in other comprehensive income (loss) and accumulated other comprehensive income (loss).
+Added: See Note 1 to these consolidated financial statements for further information on the reclassification and correction of errors in historical presentation.
The following table presents the components of accumulated other comprehensive income (loss), net of tax, as of December 31, 2022 and 2021:
−Removed: Amortization and unrealized gains (losses) on pension and postretirement plans, net of tax of $( 3,567 ) and $( 1,649 )
+Added: Amortization and unrealized gains on pension and postretirement plans, net of tax of $( 4,078 ) and $( 4,957 )
$ 12,132 $ 14,808
Net changes in fair values of derivatives, net of tax of $( 9,057 ) and $( 759 )
−Removed: 2,254 ( 660 )
Foreign currency translation adjustments, net of tax of $ 8,177 and $ 8,177
( 32,776 ) ( 22,854 )
−Removed: Accumulated other comprehensive loss $ ( 5,792 ) $ ( 15,265 )
+Added: Accumulated other comprehensive income (loss) $ 5,992 $ ( 5,792 )
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The following table presents the tax effects of each component of other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020:
9 unchanged sentences
Benefit plans, net ( 3,554 ) 878 ( 2,676 ) 12,744 ( 3,214 ) 9,530 2,459 ( 749 ) 1,710
−Removed: Net (loss) gain from hedging activities 3,885 ( 971 ) 2,914 221 ( 55 ) 166 ( 3,553 ) 888 ( 2,665 )
+Added: Net gain from hedging activities 33,194 ( 8,812 ) 24,382 3,885 ( 971 ) 2,914 1,569 ( 392 ) 1,177
Foreign currency translation (1)
1 unchanged sentence
Other comprehensive income (loss) $ 19,718 $ ( 7,934 ) $ 11,784 $ 7,427 $ 2,769 $ 10,196 $ 5,812 $ ( 7,392 ) $ ( 1,580 )
−Removed: (1) The income tax benefit or expense included in other comprehensive income is attributed to the portion of foreign currency translation associated with the Company’s cross-currency interest rate swaps, for which the tax effect is
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: based on the applicable U.S.
+Added: (1) The income tax benefit or expense included in other comprehensive income is attributed to the portion of foreign currency translation associated with the Company’s cross-currency interest rate swaps, for which the tax effect is based on the applicable U.S.
deferred income tax rate.
See Note 20 to these consolidated financial statements for information regarding the Company’s cross currency interest rate swaps.
−Removed: The following table presents the change in accumulated other comprehensive income (loss), net of tax, by component for the years ended December 31, 2021 and 2020:
+Added: The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the years ended December 31, 2022 and 2021:
Defined benefit
3 unchanged sentences
December 31, 2020 $ 5,278 $ ( 660 ) $ ( 19,883 ) $ ( 15,265 )
−Removed: Other comprehensive income (loss) before reclassifications 1,850 125 ( 16,596 ) ( 14,621 )
+Added: Other comprehensive income before reclassifications 5,622 2,580 11,043 19,245
Amounts reclassified from accumulated other comprehensive income (1)
−Removed: Disposal of business ( 228 ) 1,012 13,791 14,575
−Removed: Net current period other comprehensive loss 1,710 1,178 ( 2,805 ) 83
+Added: 3,908 334 ( 14,014 ) ( 9,772 )
+Added: Net current period other comprehensive income (loss) 9,530 2,914 ( 2,971 ) 9,473
December 31, 2021 14,808 2,254 ( 22,854 ) ( 5,792 )
2 unchanged sentences
156 514 — 670
−Removed: Disposal of business — — ( 9,846 ) ( 9,846 )
−Removed: Net current period other comprehensive income 5,794 2,914 765 9,473
+Added: Net current period other comprehensive income (loss) ( 2,676 ) 24,382 ( 9,922 ) 11,784
December 31, 2022 $ 12,132 $ 26,636 $ ( 32,776 ) $ 5,992
10 unchanged sentences
Amortization of defined benefit and other postretirement plans:
−Removed: Prior service credit (cost) $ ( 232 ) $ 119 Other income (expense) (2)
−Removed: Actuarial gains (losses) 5 ( 232 ) Other income (expense) (2)
+Added: Prior service credit $ ( 210 ) $ ( 232 ) Other (expense) income (2)
+Added: Actuarial losses 3 5 Other (expense) income (2)
+Added: Release of actuarial losses — ( 3,737 ) Net loss from discontinued operations, net of tax
( 207 ) ( 3,964 ) Total before tax
5 unchanged sentences
( 514 ) ( 334 ) Net of tax
+Added: Release of foreign currency translation — 14,014 Net loss from discontinued operations, net of tax
Total reclassifications for the period $ ( 670 ) $ 9,772 Net of tax
3 unchanged sentences
2020 Stock Repurchase Program
−Removed: The Company records repurchases of its common stock for treasury at cost.
−Removed: Upon the reissuance of the Company’s common stock from treasury, differences between the proceeds from reissuance and the average cost of the treasury stock are credited or charged to capital in excess of par value to the extent of prior credits related to the reissuance of treasury stock.
−Removed: If no such credits exist, the differences are charged to retained earnings.
−Removed: On March 12, 2020, the Company announced plans to purchase up to $ 50,000 of Ecovyst Inc.
−Removed: common stock under a stock repurchase program approved by the Company’s Board of Directors.
−Removed: The Company may repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions in accordance with applicable federal securities laws.
+Added: On March 12, 2020, the Company’s Board of Directors (the “Board”) approved a plan to purchase up to $ 50,000 of the Company’s common stock under a stock repurchase program approved by the Board.
+Added: Under the plan, the Company could repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions in accordance with applicable federal securities laws.
+Added: The Company determined the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors.
+Added: The stock repurchase program expired in March 2022, with no repurchases made in 2022 through the expiration of the program, no r during the year ended December 31, 2021.
+Added: 2022 Stock Repurchase Program
+Added: On April 27, 2022, the Board approved a stock repurchase program that permits the Company to purchase up to $ 450,000 of the Company’s common stock over the next four years .
+Added: Under the plan, the Company can repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions in accordance with applicable federal securities laws.
The Company will determine the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors.
−Removed: The stock repurchase program is valid until March 2022.
−Removed: From the announcement of the program through March 31, 2020, the Company repurchased 211,700 shares on the open market at an average price of $ 9.73 for a total of $ 2,059 .
−Removed: The Company has not made any additional repurchases under the program.
−Removed: As of December 31, 2021, $ 47,941 was available for additional share repurchases under the program.
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
+Added: During the year ended December 31, 2022, the Company repurchased 1,970,763 shares of its common stock on the open market at an average price of $ 9.82 per share, for a total of $ 19,356 .
+Added: Additionally, i n connection with secondary offerings of the Company’s common stock, the Company repurchased 6,500,000 shares of its common stock sold in the August 2022 offering from the underwriters at a price of $ 8.36 per share and 8,000,000 shares of its common stock sold in the November 2022 offering from the underwriters at a price of $ 7.88 per share, for a total of $ 117,346 .
+Added: As of December 31, 2022, $ 313,298 was available for additional share repurchases under the program.
Tax Withholdings on Equity Award Vesting
5 unchanged sentences
The dividend was paid to our stockholders of record at the close of business on December 31, 2020.
−Removed: Refer to Note 4 of these consolidated financial statements for additional details.
+Added: See Note 4 of these consolidated financial statements for additional details.
On August 4, 2021, the Company’s Board declared a special cash dividend of $ 3.20 per share, using after tax cash proceeds from the sale of the Performance Chemicals business.
The dividend was paid on August 23, 2021 to the Company’s stockholders of record at the close of business on August 12, 2021.
−Removed: Refer to Note 5 of these consolidated financial statements for additional details.
+Added: See Note 5 of these consolidated financial statements for additional details.
Other Operating Expense, Net:
4 unchanged sentences
Restructuring, integration and business optimization costs (1)
+Added: 11,566 3,866 1,994
Net loss on asset disposals 3,594 5,666 4,722
1 unchanged sentence
$ 34,911 $ 24,273 $ 17,842
+Added: (1) During the year ended December 31, 2022, the Company’s results were impacted by costs associated with severance charges for certain executives and employees.
+Added: The severance charges were not related to a specific restructuring plan of the Company, but rather were incurred primarily in connection with the leadership transition in April 2022 and the retirement of several executives.
AND SUBSIDIARIES
16 unchanged sentences
The Company accounts for investments in affiliated companies under the equity method.
−Removed: Affiliated companies accounted for on the equity method as of December 31, 2021 are as follows:
+Added: Affiliated companies accounted for on the equity basis as of December 31, 2022 are as follows:
Company Country Percent
51 unchanged sentences
Lease income is not material to the results of operations for the years ended December 31, 2022 and 2021.
−Removed: The table below presents the operating and finance right-of-use lease assets and lease liabilities recognized on the consolidated balance sheet as of December 31, 2021 and 2020:
+Added: The table below presents the operating leases, finance leases, and financing obligation right-of-use assets and liabilities recognized on the consolidated balance sheet as of December 31, 2022 and 2021:
Classification December 31,
7 unchanged sentences
Finance lease and financing obligation liabilities Other long-term liabilities 7,633 11,667
−Removed: Total lease liabilities $ 44,873 $ 29,281
+Added: Total leased liabilities $ 38,664 $ 44,873
AND SUBSIDIARIES
5 unchanged sentences
Operating leases 4.45 4.79
−Removed: Finance leases and financing obligations 4.69 2.46
+Added: Finance leases and financing obligation 3.57 4.69
Weighted average discount rate:
Operating leases 5.24 % 5.02 %
−Removed: Finance leases and financing obligations 2.86 % 4.70 %
+Added: Finance leases and financing obligation 2.86 % 2.86 %
Maturities of lease liabilities as of December 31, 2022 are as follows:
1 unchanged sentence
Leases Finance
−Removed: Leases and Financing Obligations
−Removed: 2021 $ 9,459 $ 3,478
+Added: Leases and Financing Obligation
2023 $ 9,339 $ 3,063
6 unchanged sentences
Total lease liabilities (1)
−Removed: (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 consolidated balance sheet at December 31, 2021.
−Removed: The following table presents other information related to the Company’s operating and finance leases and financing obligations and the impact on the Company’s consolidated statement of cash flows:
+Added: $ 28,176 $ 10,488
+Added: (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 consolidated balance sheet as of December 31, 2022.
+Added: The following table presents other information related to the Company’s operating leases, finance leases and financing obligation and the impact on the Company’s consolidated statement of cash flows:
Cash paid for amounts included in the measurement of lease liabilities:
Payments on operating leases included in operating cash flows $ 10,327 $ 9,755
−Removed: Interest payments under finance leases and financing obligations included in operating cash flows 189 20
−Removed: Principal payments under finance leases and financing obligations included in financing cash flows 1,466 209
+Added: Interest payments under finance leases and financing obligation included in operating cash flows 339 189
+Added: Principal payments under finance leases and financing obligation included in financing cash flows 2,724 1,466
Right-of-use assets obtained in exchange for new lease liabilities (non-cash):
Operating leases 7,462 9,526
−Removed: Finance leases and financing obligations — 353
AND SUBSIDIARIES
2 unchanged sentences
Reportable Segments:
−Removed: The Company has organized its business around two operating segments based on the review of discrete financial results for each of the operating segments by the Company’s chief operating decision maker (the Company’s Chairman of the Board, President and Chief Executive Officer), or CODM, for performance assessment and resource allocation purposes.
+Added: The Company has organized its business around two operating segments based on the review of discrete financial results for each of the operating segments by the Company’s chief operating decision maker (the Company’s Chief Executive Officer), or CODM, for performance assessment and resource allocation purposes.
Each of the Company’s operating segments represents a reportable segment under GAAP.
2 unchanged sentences
(1) Ecoservices provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides on-purpose virgin sulfuric acid for water treatment, mining, and industrial applications;
−Removed: and (2) Catalyst Technologies serves the packaging and engineered plastics and the global refining, petrochemical and emissions control industries.
+Added: and (2) Catalyst Technologies serves the polymers and engineered plastics and the global refining, petrochemical and emissions control industries.
The Catalyst Technologies segment includes equity in net income from Zeolyst International and Zeolyst C.V.
20 unchanged sentences
77,978 88,028 74,504
−Removed: Unallocated corporate expenses ( 38,089 ) ( 39,087 ) ( 43,263 )
−Removed: Total $ 227,611 $ 192,615 $ 240,185
+Added: Adjusted EBITDA from reportable segments $ 305,738 $ 265,700 $ 231,702
(1) Excludes the Company’s proportionate share of sales from the Zeolyst Joint Venture accounted for using the equity method.
10 unchanged sentences
(Dollars in thousands, except share and per share amounts)
−Removed: A reconciliation of net income attributable to Ecovyst to Adjusted EBITDA is as follows:
+Added: A reconciliation of income from continuing operations before income taxes to Adjusted EBITDA from reportable segments is as follows:
2022 2021 2020
−Removed: Reconciliation of net income attributable to Ecovyst Inc.
−Removed: to Adjusted EBITDA
−Removed: Net income from continuing operations $ 1,794 $ 54,280 $ 31,120
−Removed: Provision (benefit) for income taxes 12,147 ( 52,065 ) 12,299
+Added: Reconciliation of income from continuing operations before income taxes to Adjusted EBITDA from reportable segments
+Added: Income from continuing operations before income taxes $ 94,735 $ 13,941 $ 2,215
Interest expense, net 37,217 36,990 50,409
Depreciation and amortization 79,163 79,741 76,926
−Removed: EBITDA 130,672 129,550 185,072
+Added: Unallocated corporate expenses 29,042 38,089 39,087
Joint venture depreciation, amortization and interest 15,997 15,565 14,724
2 unchanged sentences
Net loss on asset disposals 3,594 5,666 4,722
−Removed: Foreign currency exchange (gain) loss 4,716 ( 5,264 ) 1,228
−Removed: LIFO (benefit) expense ( 1,931 ) ( 5,262 ) 6,458
+Added: Foreign currency exchange loss (gain) 1,388 4,716 ( 5,264 )
+Added: LIFO benefit ( 165 ) ( 1,931 ) ( 5,262 )
Transaction and other related costs 6,988 2,009 1,118
1 unchanged sentence
Restructuring, integration and business optimization expenses 11,566 3,866 1,994
−Removed: Defined benefit pension plan (benefit) cost ( 858 ) ( 598 ) 553
Other ( 821 ) 1,828 2,177
−Removed: Adjusted EBITDA $ 227,611 $ 192,615 $ 240,185
+Added: Adjusted EBITDA from reportable segments $ 305,738 $ 265,700 $ 231,702
The Company’s consolidated results include equity in net income from affiliated companies of $ 27,725 , $ 27,737 and $ 21,065 for the years ended December 31, 2022, 2021, and 2020, respectively.
16 unchanged sentences
Total assets by segment are not disclosed by the Company because the information is not prepared or used by the CODM to assess performance and to allocate resources.
−Removed: Sales and long-lived assets by geographic area are presented in the following tables.
+Added: Sales by geographic area are presented in the following table.
Sales are attributed to countries based upon location of products shipped.
5 unchanged sentences
The Company sold products through its Ecoservices and Catalyst Technologies segments to customer A, which accounted for 12.3 %, 12.6 % and 10.4 % of the Company’s total sales as of December 31, 2022, 2021, and 2020 respectively.
+Added: Long-lived assets by geographic area is presented in the following table.
+Added: Long-lived assets includes property, plant and equipment, net and right-of-use lease assets.
Long-lived assets:
2 unchanged sentences
Total $ 613,154 $ 626,346
−Removed: (1) Long-lived assets includes property, plant and equipment, net and right-of-use lease assets.
AND SUBSIDIARIES
5 unchanged sentences
Balance as of December 31, 2020 $ 311,892 $ 79,673 $ 391,565
+Added: Goodwill recognized (Note 6)
+Added: 14,778 — 14,778
Foreign exchange impact — ( 204 ) ( 204 )
Balance as of December 31, 2021 326,670 79,469 406,139
−Removed: Goodwill recognized (Note 6)
+Added: Goodwill adjustments (1)
( 81 ) — ( 81 )
1 unchanged sentence
Balance as of December 31, 2022 $ 326,589 $ 76,574 $ 403,163
+Added: (1) During the year ended December 31, 2022, the Company recorded an adjustment of $ 81 between goodwill and deferred tax liabilities related to the final tax purchase price allocation for the Chem32 acquisition.
The Company completed its annual goodwill impairment assessments as of October 1, 2022 and 2021.
27 unchanged sentences
Trade names 1,600 ( 293 ) 1,307 1,600 ( 133 ) 1,467
−Removed: Permits 9,100 ( 9,100 ) — 9,100 ( 9,100 ) —
Total definite-lived intangible assets 195,203 ( 94,324 ) 100,879 197,152 ( 81,062 ) 116,090
2 unchanged sentences
Total intangible assets $ 224,256 $ ( 94,324 ) $ 129,932 $ 226,679 $ ( 81,062 ) $ 145,617
−Removed: The Company amortizes technical know-how over periods that range from eleven years to twenty years , customer relationships over periods that range from seven years to fifteen years , trademarks over periods that range from eleven years to fifteen years , and permits over five years .
+Added: The Company amortizes technical know-how over periods that range from ten years to twenty years , customer relationships over periods that range from ten years to fifteen years , non-compete agreements over five years , trademarks over fifteen years , and trade names over ten years .
In-process research and development intangible assets are considered indefinite-lived until such time as the associated projects are completed, at which time amortization commences on the assets, or abandoned, which results in the impairment of the assets.
−Removed: Amortization expense related to technical know-how, contracts, non-compete agreements, and permits is included in cost of goods sold in the consolidated statements of income and was $ 3,465 , $ 3,111 and $ 3,111 for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Amortization expense related to customer relationships and trademarks is included in other operating expense, net in the consolidated statements of income and was $ 10,321 , $ 8,678 and $ 8,678 for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: Amortization expense related to technical know-how is included in cost of goods sold in the consolidated statements of income and was $ 3,480 , $ 3,465 and $ 3,111 for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Amortization expense related to customer relationships, non-compete agreements, trademarks, and tradenames is included in other operating expense, net in the consolidated statements of income and was $ 10,562 , $ 10,321 and $ 8,678 for the years ended December 31, 2022, 2021 and 2020, respectively.
Estimated future aggregate amortization expense of intangible assets is as follows:
13 unchanged sentences
Dividends payable 4,062 8,574
−Removed: Derivative liabilities 1,288 1,954
Accrued closing adjustments for Performance Chemicals divestiture (Note 5) — 3,745
3 unchanged sentences
The summary of long-term debt is as follows:
−Removed: Senior Secured Term Loan Facility due February 2027 (the “2016 Term Loan Facility”) $ — $ 671,710
−Removed: Senior Secured Term Loan Facility due February 2027 (the “2020 Term Loan Facility”) — 459,653
Senior Secured Term Loan Facility due June 2028 (the "2021 Term Loan Facility") $ 886,500 $ 895,500
−Removed: 5.75% Senior Unsecured Notes due 2025 — 295,000
ABL Facility — —
5 unchanged sentences
Total long-term debt, excluding current portion $ 865,870 $ 872,839
−Removed: Senior Secured Credit Facilities
−Removed: On May 4, 2016, PQ Corporation (“PQ Corp”), an indirect, wholly owned subsidiary of the Company prior to the closing of the sale of the Performance Chemical business entered into senior secured credit facilities (collectively, the “2016 Senior Secured Credit Facilities”) comprised of a $ 1,200,000 term loan facility, which consisted of a $ 900,000 U.S.
−Removed: dollar-denominated tranche and a $ 300,000 Euro-denominated (or € 265,000 ) tranche (the “2016 Term Loan Facility”), and a $ 200,000 asset-based revolving credit facility (the “ABL Facility”), which provided for $ 150,000 in U.S.
−Removed: available borrowings, up to $ 10,000 in Canadian available borrowings and up to $ 40,000 of European available borrowings.
−Removed: Borrowings under the ABL Facility bore interest at a rate equal to the LIBOR rate or the base rate elected by PQ Corp at the time of the borrowing plus a margin of between 1.50 %- 2.00 % or 0.50 %- 1.00 %, respectively, depending on availability under the ABL Facility.
−Removed: In addition, there was an annual commitment fee equal to 0.375 %, with a step-down to 0.25 % based on the average usage of the revolving credit borrowings available.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: On February 8, 2018 (the “2018 Amendment Closing Date”), PQ Corp, refinanced its existing U.S.
−Removed: Dollar and Euro denominated senior secured term loan facilities with a new $ 1,267,000 senior secured term loan facility (the “2018 Term Loan Facility”) by entering into the Third Amendment Agreement to the 2016 Term Loan Facility (the “2018 Amendment”), which amended and restated the Term Loan Credit Agreement dated as of May 4, 2016, among PQ Corp, CPQ Midco I Corporation, Credit Suisse AG, Cayman Island Branch, as administrative agent and collateral agent, and the lenders and the other parties party thereto from time to time.
−Removed: On February 7, 2020, PQ Corp amended its 2018 Term Loan Facility to, among other things, (a) reduce the interest rate applicable to all LIBOR rate tranche B-1 term loans to LIBOR plus 2.25 % per annum, (b) reduce the interest rate applicable to all base rate tranche B-1 term loans to the alternate base rate plus 1.25 % per annum and (c) extend the maturity date of all tranche B-1 term loans to February 7, 2027.
+Added: On May 4, 2016, PQ Corporation (“PQ Corp”), an indirect, wholly owned subsidiary of the Company prior to the closing of the sale of the Performance Chemical business entered into a $ 200,000 senior secured asset-based revolving credit facility (the “ABL Facility”), which provided for $ 200,000 revolving credit commitments.
On March 20, 2020, PQ Corp amended its existing ABL Facility to increase the aggregate amount of the revolving loan commitments available by $ 50,000 to $ 250,000 , consisting of up to $ 195,000 in U.S.
1 unchanged sentence
The maturity of the facility was extended to March 20, 2025.
−Removed: Following the amendment, the borrowings under the amended ABL Facility bear interest at a rate equal to the LIBOR rate or the base rate plus a margin of between 1.25 % to 1.75 % or 0.25 % to 0.75 % respectively.
−Removed: On July 22, 2020, PQ Corp entered into an agreement for a new senior secured term loan facility (the “2020 Term Loan Facility”, collectively with the Senior Secured Term Loan Facility, the “Term Loan Facilities”) in an aggregate principal amount of $ 650,000 with an original issue discount of 1.5 % and interest at a floating rate of LIBOR (with a 1.0 % minimum LIBOR floor) plus 3.0 % per annum.
−Removed: The proceeds were used to redeem its existing $ 625,000 of 6.75 % Senior Secured Notes due 2022 and pay the associated early redemption premiums.
−Removed: The 2020 Term Loan Facility required scheduled quarterly amortization payments, each equal to 0.25 % of the original principal amount of the loans under the 2020 Term Loan Facility.
−Removed: On June 9, 2021, PQ Corp and Ecovyst Catalyst Technologies LLC (“Ecovyst LLC” and, following the closing of the sale of the Performance Chemicals business, the “Borrower”), an indirect, wholly owned subsidiary of the Company, entered into an agreement (the “2021 Credit Agreement”) for a new senior secured term loan facility (the “2021 Term Loan Facility”) in an aggregate principal amount of $ 900,000 with an original issue discount of 0.25 % and interest at a floating rate of LIBOR (with a 0.50 % minimum LIBOR floor) plus 2.75 % per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50 %).
−Removed: The 2021 Term Loan Facility requires scheduled quarterly amortization payments, each equal to 0.25 % of the original principal amount of the loans under the 2021 Term Loan Facility.
−Removed: The proceeds of the 2021 Term Loan Facility were used to pay in full the 2020 Term Loan Facility, partially pay the 2016 Term Loan Facility and pay the associated fees and expenses.
−Removed: On June 9, 2021, PQ Corp and Ecovyst LLC entered into a third amendment agreement (the “ABL Amendment”), which amended its ABL Credit Agreement, dated as of May 4, 2016 (the “ABL Credit Agreement” and, as amended by the ABL Amendment, the “Amended ABL Credit Agreement”).
−Removed: The ABL Amendment amended the ABL Credit Agreement to, among other things, following the sale of Performance Chemicals, decrease the aggregate amount of revolving loan commitments available to the borrowers thereunder by an aggregate amount of $ 150,000 to $ 100,000 , consisting of $ 90,000 in U.S.
−Removed: commitments and $ 10,000 in European commitments and extended the maturity date with respect to borrowings under the Amended ABL Credit Agreement to August 2, 2026.
−Removed: On August 1, 2021, the Company used a portion of the net cash proceeds from the sale of the Performance Chemicals business to repay the entire 2016 Term Loan Facility balance of $ 231,363 .
−Removed: As a result, Ecovyst LLC wrote off $ 849 of unamortized deferred financing costs and $ 2,395 of original issue discount as debt extinguishment costs during the year ended December 31, 2021.
−Removed: As of December 31, 2021, the 2021 Term Loan Facility accrued interest at a floating rate of LIBOR plus 2.75 % per annum and is scheduled to mature in June 2028.
−Removed: As of December 31, 2021, there were no revolving credit borrowings outstanding under the ABL Facility.
−Removed: Revolving credit borrowings are payable at the option of the Borrower throughout the term of the ABL Facility with the balance due August 2, 2026.
+Added: In addition, there was an annual commitment fee equal to 0.375 %, with a step-down to 0.25 % based on average usage of the revolving credit borrowings available
+Added: Following the amendment, the borrowings under the amended ABL Facility bore interest at a rate equal to the LIBOR rate or the base rate plus a margin of between 1.25 % to 1.75 % or 0.25 % to 0.75 %, respectively.
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
+Added: On June 9, 2021, PQ Corp and Ecovyst LLC (as defined below) entered into a third amendment agreement (the “ABL Amendment”), which amended its ABL Credit Agreement, dated as of May 4, 2016 (the “ABL Credit Agreement” and, as amended by the ABL Amendment, the “Amended ABL Credit Agreement”).
+Added: The ABL Amendment, among other things, following the sale of Performance Chemicals, decreased the aggregate amount of revolving loan commitments available to the borrowers thereunder by an aggregate amount of $ 150,000 to $ 100,000 , consisting of $ 90,000 in U.S.
+Added: commitments and $ 10,000 in European commitments and extended the maturity date with respect to borrowings under the Amended ABL Credit Agreement to August 2, 2026.
+Added: On February 17, 2023, the Company amended the ABL Facility to replace LIBOR with a SOFR as the benchmark interest rate with respect to U.S.
+Added: dollar-denominated borrowings.
+Added: Following these amendments, U.S.
+Added: dollar-denominated borrowings under the ABL Facility will bear interest at a rate equal to an adjusted SOFR rate or the base rate plus a margin of between 1.25 % and 1.75 % or 0.25 % to 0.75 %, respectively.
+Added: As of December 31, 2022, there were no revolving credit borrowings outstanding under the ABL Facility.
+Added: Revolving credit borrowings are payable at the option of the Borrower throughout the term of the ABL Facility with the balance due August 2, 2026.
The Company has the ability to request letters of credit under the ABL Facility.
The Company had $ 4,043 of letters of credit outstanding as of December 31, 2022, which reduce available borrowings under the ABL Facility by such amounts.
−Removed: The Company may at any time or from time to time voluntarily prepay loans under the 2021 Term Loan Facility in whole or in part without premium or penalty.
−Removed: The 2021 Term Loan Facility requires mandatory prepayments from (i) 50% of “Excess Cash Flow” (as defined in the 2021 Credit Agreement) on an annual basis with step downs to lower percentages based on the Borrower’s leverage ratio, if applicable, (ii) net cash proceeds from the issuance or incurrence of certain indebtedness and (iii) net cash proceeds received from certain non-ordinary course disposition of assets and casualty events to the extent such net cash proceeds were not reinvested in the Company’s business within a certain specified time period.
−Removed: Prepayments are applied to remaining amortization installments in direct order of maturity.
−Removed: The remaining principal balance of the term loans are due upon maturity.
−Removed: The 2021 Term Loan Facility is guaranteed by Ecovyst Catalyst Technologies LLC and Ecoservices Operations Corp, subsidiaries of the Company.
−Removed: The obligations under the Term Facility are secured (i) by a first-priority security interest in, among other things, a pledge of substantially all of the Borrower’s and the guarantors’ assets (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral of the Borrower and the U.S.
−Removed: subsidiary guarantors securing the ABL Facility.
The obligations of the Borrower under the ABL Facility are guaranteed by the same U.S.
−Removed: subsidiary guarantors that guarantee the 2021 Term Loan Facility and the obligations of the European Borrowers under the ABL Facility are guaranteed by a certain European subsidiary of the Borrower.
+Added: subsidiary guarantors that guarantee the 2021 Term Loan Facility (as described below) and the obligations of the European Borrowers under the ABL Facility are guaranteed by a certain European subsidiary of the Borrower.
The obligations of the borrowers and guarantors under the ABL Facility are secured (i) by a first-priority security interest in, among other things, substantially all of their receivables, inventory, deposit accounts and other collateral securing the ABL Facility on a first-priority basis and (ii) by a second-priority security interest in the property and assets of the Borrower and the U.S.
1 unchanged sentence
In addition, the ABL Facility is secured by the equity interests in, and substantially all of the assets of, certain foreign guarantors in connection with the Euro-denominated availability.
−Removed: The 2021 Term Loan Facility and the ABL Facility contain various non-financial restrictive covenants.
−Removed: Each limits the ability of the Borrower and its restricted subsidiaries to incur certain indebtedness or liens, merge, consolidate or liquidate, dispose of certain property, make investments or declare or pay dividends, make optional payments, modify certain debt instruments, enter into certain transactions with affiliates, enter into certain sales and leasebacks, and certain other non-financial restrictive covenants.
+Added: The ABL Facility and the 2021 Term Loan Facility contain various non-financial restrictive covenants.
The ABL Facility also contains one financial covenant which applies when minimum availability under the ABL Facility exceeds a certain threshold.
1 unchanged sentence
The Company is in compliance with all debt covenants as of December 31, 2022 and 2021, respectively.
−Removed: During the year ended December 31, 2020, PQ Corp prepaid $ 466,134 of outstanding principal balance on the 2018 Term Loan Facility and the 2020 Term Loan Facility.
−Removed: The Company wrote off $ 162 of previously unamortized deferred financing costs and original issue discount of $ 12,781 as debt extinguishment costs.
−Removed: The prepayments were applied against the remaining scheduled installments of principal due in respect of the loans under the 2018 Term Loan Facility and the 2020 Term Loan Facility in direct order of maturity.
−Removed: Debt extinguishment costs resulting from Term Loan amendments
−Removed: As a result of amending the term loan facilities during the year ended December 31, 2021, Ecovyst LLC recorded $ 5,736 of new creditor and third-party financing costs as debt extinguishment costs.
−Removed: In addition, previous unamortized deferred financing costs of $ 1,725 and original issue discount of $ 3,664 associated with the previously outstanding debt were written off as debt extinguishment costs during the year ended December 31, 2021.
−Removed: As a result of the ABL Amendment, unamortized deferred financing costs of $ 485 and original issue discount of $ 107 associated with the ABL Credit Agreement were written off as debt extinguishment costs during the year ended December 31, 2021.
−Removed: As a result of amending the term loan facilities during the year ended December 31, 2020, PQ Corp recorded $ 2,188 of new creditor and third-party financing costs as debt extinguishment costs.
−Removed: In addition, previous unamortized
+Added: 2021 Term Loan Facility
+Added: On June 9, 2021, PQ Corp and Ecovyst Catalyst Technologies LLC (“Ecovyst LLC” and, following the closing of the sale of the Performance Chemicals business, the “Borrower”), an indirect, wholly owned subsidiary of the Company, entered into an agreement (the “2021 Credit Agreement”) for the 2021 Term Loan Facility in an aggregate principal amount of $ 900,000 with an original issue discount of 0.25 % and interest at a floating rate of LIBOR (with a 0.50 % minimum LIBOR floor) plus 2.75 % per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50 %).
+Added: The 2021 Term Loan Facility requires scheduled quarterly amortization payments, each equal to 0.25 % of the original principal amount of the loans under the 2021 Term Loan Facility.
+Added: The proceeds of the 2021 Term Loan Facility were used to pay in full the 2020 Term Loan Facility, partially pay the 2018 Term Loan Facility (each as described below) and pay the associated fees and expenses.
+Added: As of December 31, 2022, the 2021 Term Loan Facility accrued interest at a floating rate of LIBOR plus 2.75 % per annum and is scheduled to mature in June 2028.
+Added: On February 9, 2023, the Company amended the 2021 Term Loan Facility to replace LIBOR with SOFR as the benchmark interest rate.
+Added: Following this amendments, the 2021 Term Loan Facility bears interest at an adjusted SOFR rate (with a 0.50 % minimum floor) plus 2.75 % per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50 %).
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
−Removed: deferred financing costs of $ 97 and original issue discount of $ 228 associated with the previously outstanding debt were written off as debt extinguishment costs.
−Removed: 6.75% Senior Secured Notes - Redeemed in 2020
−Removed: On May 4, 2016, PQ Corp issued $ 625,000 of 6.750 % Senior Secured Notes due November 2022 (the “6.75% Senior Secured Notes”) in transactions exempt from or not subject to registration under the Securities Act pursuant to Rule 144A and Regulation S under the Securities Act of 1933.
−Removed: The 6.75% Senior Secured Notes were guaranteed by guaranteed by PQ Holdings Inc.
−Removed: and by the U.S.
−Removed: subsidiary guarantors that guaranteed the 2016 Term Loan Facility and were secured by liens on the assets of the Borrower and the U.S.
−Removed: subsidiary guarantors on a pari passu with the liens securing the 2016 Term Loan Facility subject to the pari passu intercreditor agreement.
−Removed: The guarantee by PQ Holdings Inc.
−Removed: was unsecured.
−Removed: The indenture relating to the 6.75% Senior Secured Notes contained various limitations on the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, pay dividends or repay certain debt, make loans and investments, sell assets, create liens, enter into transactions with affiliates, enter into agreements restricting the Borrower’s subsidiaries ability to pay dividends, and merge and consolidate with other companies, among other things.
−Removed: Interest on the 6.75% Senior Secured Notes was payable semi-annually on May 15 and November 15 of each year, commencing November 15, 2016.
−Removed: No principal payments were required with respect to the 6.75% Senior Secured Notes prior to their final maturity.
−Removed: Prior to redeeming the notes, the 6.75% Senior Secured Notes had a maturity date of November 15, 2022.
−Removed: As a result of redeeming the 6.75% Senior Secured Notes due 2022 on July 22, 2020, PQ Corp paid a redemption premium of $ 10,550 which was recorded as debt extinguishment costs during the year ended December 31, 2020.
−Removed: In addition, previous unamortized deferred financing costs of $ 2,085 and original issue discount of $ 1,186 associated with the previously outstanding debt were written off as debt extinguishment costs for the year ended December 31, 2020.
+Added: The Company may at any time or from time to time voluntarily prepay loans under the 2021 Term Loan Facility in whole or in part without premium or penalty.
+Added: The 2021 Term Loan Facility requires mandatory prepayments from (i) 50% of “Excess Cash Flow” (as defined in the 2021 Credit Agreement) on an annual basis with step downs to lower percentages based on the Borrower’s leverage ratio, if applicable, (ii) net cash proceeds from the issuance or incurrence of certain indebtedness and (iii) net cash proceeds received from certain non-ordinary course disposition of assets and casualty events to the extent such net cash proceeds were not reinvested in the Company’s business within a certain specified time period.
+Added: Prepayments are applied to remaining amortization installments in direct order of maturity.
+Added: The remaining principal balance of the term loans are due upon maturity.
+Added: The 2021 Term Loan Facility is guaranteed by Ecovyst Catalyst Technologies LLC and Ecoservices Operations Corp, subsidiaries of the Company.
+Added: The obligations under the Term Facility are secured (i) by a first-priority security interest in, among other things, a pledge of substantially all of the Borrower’s and the guarantors’ assets (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral of the Borrower and the U.S.
+Added: subsidiary guarantors securing the ABL Facility.
+Added: 2018 Term Loan Facility - Repaid in 2021
+Added: On February 8, 2018, PQ Corp entered in an agreement for a senior secured term loan facility (the “2018 Term Loan Facility”) for an aggregate principal amount of $ 1,267,000 .
+Added: The 2018 Term Loan Facility was amended on February 7, 2020 and partially repaid on June 9, 2021 with a portion of the proceeds of the 2021 Term Loan Facility.
+Added: On August 1, 2021, the Company used a portion of the net cash proceeds from the sale of the Performance Chemicals business to repay the entire 2018 Term Loan Facility balance of $ 231,363 .
+Added: As a result, Ecovyst LLC wrote off $ 849 of unamortized deferred financing costs and $ 2,395 of original issue discount as debt extinguishment costs during the year ended December 31, 2022.
+Added: 2020 Term Loan Facility - Repaid in 2021
+Added: On July 22, 2020, PQ Corp entered into an agreement for a new senior secured term loan facility (the “2020 Term Loan Facility”) in an aggregate principal amount of $ 650,000 .
+Added: The proceeds were used to redeem its existing $ 625,000 of 6.75 % Senior Secured Notes due 2022 and pay the associated early redemption premiums.
+Added: The 2020 Term Loan Facility was fully repaid with the proceeds of the 2021 Term Loan Facility.
5.75% Senior Unsecured Notes due 2025 - Redeemed in 2021
−Removed: On December 11, 2017, PQ Corp issued $ 300,000 aggregate principal amount of 5.75% Senior Unsecured Notes due 2025 (the “ 5.75 % Senior Unsecured Notes”) in a private placement exempt from the registration requirements of the Securities Act.
−Removed: Prior to being redeemed, the 5.75 % Senior Unsecured Notes had a maturity date of December 15, 2025.
−Removed: Interest on the 5.75 % Senior Unsecured Notes was to be paid semi-annually on February 15 and August 15, commencing August 15, 2018, at an annual rate of 5.75 %.
−Removed: The indenture relating to the 5.75 % Senior Unsecured Notes contained various limitations on the Borrower’s and its restricted subsidiaries’ ability to incur additional indebtedness, pay dividends or repay certain debt, make loans and investments, sell assets, create liens, enter into transactions with affiliates, enter into agreements restricting the Borrower’s subsidiaries ability to pay dividends, and merge and consolidate with other companies, among other things.
−Removed: No principal payments were required with respect to the Senior Secured Notes prior to their final maturity.
−Removed: The obligations of the Borrower under the 5.75 % Senior Unsecured Notes and the related indenture were guaranteed by its U.S.
−Removed: subsidiary guarantors that guarantee the 2016 Term Loan Facility.
−Removed: The obligations of the Company under the 5.75 % Senior Unsecured Notes and the indenture were unsecured.
−Removed: Concurrent with, and using a portion of the net proceeds from, the divestiture of the Performance Chemicals business on August 1, 2021, the Company redeemed the remaining principal balance of $ 295,000 of its 5.75% Senior Notes due 2025.
−Removed: In connection with the redemption of the 5.75% Senior Notes due 2025, PQ Corp paid a redemption premium of $ 8,481 which was recorded as debt extinguishment costs during the year ended December 31, 2021.
+Added: On December 11, 2017, PQ Corp issued $ 300,000 aggregate principal amount of 5.75% Senior Unsecured Notes due 2025 (the “ 5.75 % Senior Unsecured Notes”).
+Added: Concurrent with, and using a portion of the net proceeds from, the divestiture of the Performance Chemicals business on August 1, 2021, the Company redeemed the remaining principal balance of $ 295,000 of its 5.75% Senior Unsecured Notes due 2025.
+Added: In connection with the redemption of the 5.75% Senior Unsecured Notes, PQ Corp paid a redemption premium of $ 8,481 which was recorded as debt extinguishment costs during the year ended December 31, 2021.
In addition, previous unamortized deferred financing costs of $ 2,262 and original issue discount of $ 1,198 associated with the previously outstanding debt were written off as debt extinguishment costs during the year ended December 31, 2021.
6 unchanged sentences
(Dollars in thousands, except share and per share amounts)
+Added: Debt extinguishment costs resulting from Term Loan amendments
+Added: As a result of amending the term loan facilities during the year ended December 31, 2021, Ecovyst LLC recorded $ 5,736 of new creditor and third-party financing costs as debt extinguishment costs.
+Added: In addition, previous unamortized deferred financing costs of $ 1,725 and original issue discount of $ 3,664 associated with the previously outstanding debt were written off as debt extinguishment costs during the year ended December 31, 2021.
+Added: As a result of the ABL Amendment, unamortized deferred financing costs of $ 485 and original issue discount of $ 107 associated with the ABL Credit Agreement were written off as debt extinguishment costs during the year ended December 31, 2021.
Aggregate Long-term Debt Maturities
5 unchanged sentences
Other postretirement benefit plan liabilities 428 607
+Added: Derivative liabilities 2,071 —
Finance lease and financing obligation liabilities 7,633 11,667
2 unchanged sentences
$ 25,846 $ 24,094
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Financial Instruments:
7 unchanged sentences
The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates.
13 unchanged sentences
In March 2020, the Company again amended such interest rate cap agreements to lower the cap rate to 0.84 % and paid an additional $ 900 premium annuitized during the effective period.
−Removed: The term and notional amount remained unchanged, and the total cumulative annuitized premium on the $ 500,000 of notional variable-rate debt is $ 4,410 .
+Added: The term and notional amount remained unchanged, and the total cumulative annuitized premium on the $ 500,000 of notional variable-rate debt was $ 4,410 .
Upon the expiration of the July 2016 interest rate cap agreements in July 2020, the Company entered into additional interest rate cap agreements to mitigate interest rate volatility from August 2020 to August 2023, with a cap rate of 1.00 % on $ 400,000 of notional variable-rate debt.
−Removed: In January 2022, the Company entered into two new interest rate cap agreements, with notional amounts of $ 250,000 each and cap rates of 1.00 % and paid $ 4,450 in premiums.
−Removed: The term for one of the interest rate caps is August 2022 through October 2024 and the term for the other is September 2023 through October 2025.
+Added: The total annuitized premium on the $ 400,000 of notional variable-rate debt was $ 137 .
+Added: In August 2021, PQ Corporation novated $ 900,000 of its interest rate caps to Ecovyst Catalyst Technologies LLC.
+Added: Other than the novation, there were no other changes to the interest rate caps in connection with the novation.
+Added: In January 2022, the Company entered into two new forward starting interest rate cap agreements, with notional amounts of $ 250,000 each and with a cap rate of 1.00 %.
+Added: The term for one of the interest rate caps is July 2022 through October 2024 and the term for the other is September 2023 through October 2025.
+Added: The total cumulative annuitized premium is $ 4,450 .
+Added: The cap rate in effect at December 31, 2022 was 1.00 %.
+Added: In November 2022, the Company entered into a new interest rate cap agreement to mitigate interest rate volatility from July 2023 through July 2024, with a cap rate of 1.00 % on $ 150,000 of notional variable-rate debt and annuitized premium of $ 5,268 during the effective period, and mitigate interest rate volatility from July 2024 through July 2026, with a cap rate of 1.00 % and 175,000 notional variable-rate debt and annuitized premium of $ 6,145 during the effective period.
+Added: On February 21, 2023, we amended all existing interest rate cap agreements to replace LIBOR with SOFR as the benchmark interest rate, with all other terms of the agreements remaining the same.
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, and prior to the sale of the Performance Materials and Performance Chemicals businesses, particularly between the United States dollar and the Euro.
−Removed: In connection with the February 2018 term loan refinancing (see Note 18 to these consolidated financial statements), the Company entered into multiple cross-currency interest rate swap arrangements with an aggregate notional amount of € 280,000 to hedge this exposure on the net investments of certain of its Euro-denominated
+Added: The Company entered into multiple cross-currency interest rate swap arrangements with an aggregate notional amount of € 280,000 in October 2019 to hedge the exposure on the net investments of certain of its Euro-denominated
AND SUBSIDIARIES
2 unchanged sentences
subsidiaries in its Performance Materials and Performance Chemicals businesses.
−Removed: The Company records these swap agreements at fair value as assets or liabilities in its consolidated balance sheet.
−Removed: The swaps were to mature in February 2023.
−Removed: In October 2019, the Company settled all of its February 2018 swaps and concurrently entered into the October 2019 swaps with the same notional amount of € 280,000 and same maturity date of February 2023, which resulted in cash proceeds to the Company of $ 38,070 , which the Company used for additional debt repayment on the Company’s Term Loan Facility.
−Removed: Consistent with the February 2018 swaps, the October 2019 swaps were designed to enable the Company to effectively convert a portion of its fixed-rate U.S.
−Removed: dollar-denominated debt obligations under the 2018 Term Loan Facility into a Euro-denominated equivalent.
−Removed: The October 2019 swaps were designated and qualify as net investment hedges of the Company’s foreign currency exchange rate exposure on the net investments of certain of its Euro-denominated subsidiaries in its Performance Materials and Performance Chemicals businesses.
−Removed: In March 2021, as a result of the Performance Materials and Performance Chemicals divestitures, the Company settled its October 2019 cross-currency swaps.
+Added: The Company recorded these swap agreements at fair value as assets or liabilities in its consolidated balance sheet.
+Added: In March 2021, as a result of the Performance Materials and Performance Chemicals divestitures, the Company settled its cross-currency swaps.
At the date of settlement, the total notional value of the cross-currency swaps was $ 311,380 .
−Removed: The Company paid $ 13,170 in cash to settle the swaps, which is included in n et cash used in investing activities, discontinued operations in the Company’s consolidated statement of cash flows for the year ended December 31, 2021, as the underlying subsidiary subject to the net investment hedging relationship is part of the Performance Chemicals business.
−Removed: As the derivatives were 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.
−Removed: 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.
−Removed: 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.
−Removed: In connection with the sale of the Performance Materials business in December 2020, a portion of the amount deferred in CTA related to the cross-currency swaps was reclassified from accumulated other comprehensive income and recognized as part of the loss on sale.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: The Company paid $ 13,170 in cash to settle the swaps, which is included in n et cash used in investing activities, discontinued operations in the Company’s consolidated statement of cash flows for the year ended December 31, 2021, as the underlying subsidiary subject to the net investment hedging relationship was part of the Performance Chemicals business.
+Added: As the derivatives were designated and qualified 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.
+Added: Changes in the fair value of the swaps attributable to the cross currency basis spread were excluded from the assessment of hedge effectiveness and were recorded in current period earnings.
+Added: Upon such sale or liquidation, the amount recognized in CTA was reclassified to earnings and reported in the same line item as the gain or loss on the liquidation of the net investments.
+Added: In connection with the sales of the Performance Materials business in December 2020 and Performance Chemicals business in August 2021, amounts deferred in CTA related to the cross-currency swaps were reclassified from accumulated other comprehensive income and recognized as part of the respective losses on sale.
The fair values of derivative instruments held as of December 31, 2022 and 2021 are shown below:
2 unchanged sentences
Derivatives designated as cash flow hedges:
+Added: Interest rate caps Prepaid and other current assets $ 18,510 $ —
Interest rate caps Other long-term assets 15,864 1,080
10 unchanged sentences
Interest rate caps Interest (expense) income $ 32,510 $ ( 683 ) $ 3,441 $ ( 444 ) $ 167 $ ( 54 )
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The following table shows the effect of the Company’s cash flow hedge accounting on the consolidated statements of income for the years ended December 31, 2022, 2021 and 2020:
9 unchanged sentences
The amount of unrealized losses in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the consolidated statement of income over the next twelve months is $ 214 as of December 31, 2022.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: The following table shows the effect of the Company’s net investment hedges on AOCI and the consolidated statements of income for the years ended December 31, 2021, 2020 and 2019:
+Added: The following table shows the effect of the Company’s net investment hedges on AOCI and the consolidated statements of income for the years ended December 31, 2021 and 2020, respectively:
Amount of pre-tax 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)
11 unchanged sentences
Total $ 94,735 $ 13,941 $ 2,215
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The provision (benefit) for income taxes as shown in the accompanying consolidated statements of income consists of the following:
8 unchanged sentences
1,652 4,548 ( 60,060 )
−Removed: (Benefit) provision for income taxes $ 12,147 $ ( 52,065 ) $ 12,299
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: Provision (benefit) for income taxes $ 24,940 $ 12,147 $ ( 52,065 )
A reconciliation of income tax expense (benefit) at the U.S.
3 unchanged sentences
State income taxes, net of federal income tax benefit 248 3,942 ( 401 )
−Removed: Impact of Discrete Tax Items, GILTI Inclusion 390 ( 105 ) 1,003
Changes in uncertain tax positions 558 877 164
−Removed: Change in valuation allowances ( 119 ) 135 1,415
Rate changes — 5,209 4,274
−Removed: Foreign withholding taxes — — ( 6,651 )
−Removed: Foreign tax rate differential ( 4 ) 165 217
+Added: Stock compensation 1,876 197 318
+Added: Compensation Disallowance under 162(m) 3,146 466 206
Foreign tax credits — ( 759 ) ( 56,359 )
2 unchanged sentences
Provision (benefit) for income taxes $ 24,940 $ 12,147 $ ( 52,065 )
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
Deferred tax assets (liabilities) are comprised of the following:
7 unchanged sentences
Foreign withholding tax credits 9,083 9,083
−Removed: Foreign tax credit — 62,752
Valuation allowance ( 30,615 ) ( 39,857 )
8 unchanged sentences
Net deferred tax liabilities $ ( 135,406 ) $ ( 126,580 )
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Under the tax laws of various jurisdictions in which we operate, deductions or credits that cannot be fully utilized for tax purposes during the year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future year.
4 unchanged sentences
The Company has $ 13,705 of deferred tax assets related to state net operating losses, which are subject to various carryforward periods of 5 to 20 years or an indefinite carryforward period.
−Removed: A partial valuation allowance of $ 18,762 has been recorded due to the expected expiration of these credits before they are able to be utilized.
−Removed: The change in net deferred tax liabilities for the years ended December 31, 2021 and 2020 was primarily related to the usage of U.S.
−Removed: federal credit carryforwards reducing those deferred tax assets, activity related to book amortization of intangible assets with no corresponding tax basis reducing those deferred tax liabilities, activity with respect to tax deductible goodwill, as well as the impact of the Performance Chemicals business being classified as held for sale for year ended December 31, 2020.
−Removed: The net change in the total valuation allowance was an increase of $ 5,668 in 2021.
+Added: A partial valuation allowance of $ 10,752 has been recorded due to the expected expiration of these state net operating losses before they are able to be utilized.
+Added: The change in net deferred tax liabilities for the years ended December 31, 2022 and 2021 was primarily related to activity connected to book amortization of intangible assets with no corresponding tax basis reducing those deferred tax liabilities, activity with respect to tax deductible goodwill, activity with respect to interest rate caps recorded against other comprehensive income, and activity with respect to stock compensation.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: The net change in the total valuation allowance was a decrease of $ 9,242 in 2022.
The valuation allowance at December 31, 2022 was related to state net operating loss carryforwards and tax credits that, in the judgment of management, are not more likely than not to be realized.
7 unchanged sentences
Determination of the deferred withholding tax liability on these unremitted earnings is not practicable.
−Removed: The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:
−Removed: Balance at beginning of period $ 7,787 $ 8,080
−Removed: Increases related to current year tax positions — 164
−Removed: Decreases related to settlements with taxing authorities — ( 457 )
−Removed: Balance at end of period $ 7,787 $ 7,787
−Removed: The total unrecognized tax benefits of $ 7,787 and $ 7,787 as of December 31, 2021 and 2020, respectively.
+Added: The Company had total unrecognized tax benefits of $ 7,787 as of December 31, 2022 and 2021, respectively, and there was no activity related to these balances during the year then ended.
If these amounts are recognized in future periods, it would affect the effective tax rate on income from continuing operations for the years in which they are recognized.
−Removed: Interest and penalties released related to uncertain tax positions amounted to $ 0 and $ 37 for the years ended December 31, 2021 and 2020, respectively.
To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment.
−Removed: The Company recorded no accrued interest and penalties as of December 31, 2021 and 2020, respectively, in other long-term liabilities on its consolidated balance sheets.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: The Company recorded accrued interest and penalties amounting to $ 558 as of December 31, 2022 in other long-term liabilities on its consolidated balance sheets.
+Added: The Company did no t record accrued interest and penalties in December 31, 2021.
The Company files numerous consolidated and separate income tax returns in the U.S.
2 unchanged sentences
Jurisdiction Period
−Removed: United States-Federal 2010-Present
−Removed: United States-State 2010-Present
+Added: United States-Federal 2011-2022
+Added: United States-State 2011-2022
Given that the Company has utilized state net operating loss in the current and prior years, the statute for examination by the state taxing authorities will typically remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above.
−Removed: As of December 31, 2021, the Company does not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
−Removed: As of December 31, 2021, the Company no longer has a federal NOL or foreign tax credit carryforward.
−Removed: There are no foreign net operating losses as of December 31, 2021.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: As of December 31, 2022 and 2021, the Company does not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months.
+Added: As of December 31, 2022 and 2021, the Company no longer has a federal net operating loss or foreign tax credit carryforward.
Cash payments for income taxes, net of refunds, are as follows:
3 unchanged sentences
$ 13,636 $ 618 $ 1,923
+Added: On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law.
+Added: Among other things, the IRA imposes a 15 % corporate alternative minimum tax for certain large corporations with average annual adjusted financial statement income in excess of $ 1 billion for tax years beginning after December 31, 2022, levies a 1 % excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy.
+Added: Historically the Company has made discretionary share repurchases under its share repurchase programs.
+Added: Beginning in 2023, these transactions will be subject to the excise tax of the IRA.
+Added: Based on the Company’s historical net repurchase activity, the excise tax and the other provisions of the IRA are not expected to have a material impact on the Company’s results of operations or financial position.
Benefit Plans:
−Removed: The Company sponsors defined benefit pension plans covering certain of its employees.
−Removed: Benefits under the plans are generally based on average final pay and years of service.
−Removed: The Company’s funding policy is to fund the minimum required contribution under local statutory requirements.
−Removed: The Company sponsors an unfunded plan to provide health care benefits to certain retired employees in the United States.
−Removed: The plan pays a stated percentage of medical expenses reduced by deductibles and other coverage.
−Removed: The plan is unfunded and obligations are paid out of the Company’s operations.
+Added: The Company sponsors two funded defined benefit pension plans that cover certain employees.
+Added: Benefits for the plans are generally based on average final pay and years of service.
+Added: The Company’s funding policy is to fund the minimum required contributions consistent with statutory requirements based on actuarial computations utilizing the projected unit credit method of calculation.
+Added: The Company sponsors an unfunded plan to provide health care benefits to certain retired employees.
+Added: The plan pays a stated percentage of medical expenses reduced by deductibles and other coverage and obligations are paid out of the Company’s operations.
+Added: The Company uses a December 31 measurement date for all of its defined benefit pension and postretirement medical plans.
+Added: Of the Company’s two defined benefit pension plans, the Eco Services Hourly Pension Plan was frozen to future accruals as of December 31, 2020, and the Eco Services Pension Equity Plan was frozen to future accruals as of December 31, 2016.
+Added: The retiree healthcare plan was closed to new retirees effective July 1, 2017.
+Added: The Company no longer has a defined benefit pension plan covering its employees at a foreign subsidiary, as the plan was converted to a defined contribution plan during the year ended December 31, 2021.
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
−Removed: The Company uses a December 31 measurement date for all of its defined benefit pension and postretirement medical plans.
−Removed: Of the Company’s two defined benefit pension plans covering employees in the U.S., the Eco Services Hourly Pension Plan was frozen to future accruals as of December 31, 2020, and the Eco Services Pension Equity Plan was frozen to future accruals as of December 31, 2016.
−Removed: The retiree healthcare plan was closed to new retirees effective July 1, 2017.
−Removed: The Company no longer has a defined benefit pension plan covering its employees at a foreign subsidiary since during the year ended December 31, 2021, that plan was converted to a defined contribution plan.
Defined Benefit Pension Plans
4 unchanged sentences
Benefit obligation at beginning of period $ 86,465 $ 91,937 $ 22,210
−Removed: Service cost — 769 — 1,080
Interest cost 2,569 2,210 255
−Removed: Participant contributions — — — 112
−Removed: Plan curtailments — — — ( 1,603 )
Plan settlements ( 862 ) ( 1,795 ) ( 21,622 )
Benefits paid ( 2,552 ) ( 2,069 ) —
−Removed: Expenses paid — — — ( 60 )
−Removed: Actuarial (gains) losses ( 3,818 ) 8,743 — 949
+Added: Actuarial gains ( 18,741 ) ( 3,818 ) —
Translation adjustment — — ( 843 )
3 unchanged sentences
Actual return on plan assets ( 18,871 ) 6,383 255
−Removed: Employer contributions — 2,372 — 820
−Removed: Employee contributions — — — 112
Plan settlements ( 862 ) ( 1,795 ) ( 21,622 )
Benefits paid ( 2,552 ) ( 2,069 ) —
−Removed: Expenses paid — — — ( 60 )
Translation adjustment — — ( 843 )
1 unchanged sentence
Funded status of the plans (underfunded) $ ( 6,250 ) $ ( 3,551 ) $ —
+Added: The total actuarial gains for the year ended December 31, 2022 was $ 18,741 , which was driven by declines in the discount rates of $ 18,641 and declines in general experience of $ 100 .
The total actuarial gains for the year ended December 31, 2021 was $ 3,818 , which was driven by declines in the discount rates of $ 3,989 and changes in the lump sum conversion of $ 545 offset by changes in mortality assumptions of $ 204 and declines in general experience of $ 512 .
−Removed: The total actuarial losses for the year ended December 31, 2020 was $ 8,743 , which was driven by declines in the discount rates of $ 8,938 and declines in general demographic experience of $ 343 , which was offset by favorable changes in mortality assumptions of $ 538 .
AND SUBSIDIARIES
2 unchanged sentences
Amounts recognized in the consolidated balance sheets consist of:
−Removed: December 31, December 31,
−Removed: 2021 2020 2021 2020
Noncurrent liability $ ( 6,250 ) $ ( 3,551 )
2 unchanged sentences
Amounts recognized in accumulated other comprehensive income (loss) consist of:
−Removed: December 31, December 31,
−Removed: 2021 2020 2021 2020
−Removed: Net gain (loss) 2,486 ( 3,328 ) — ( 2,166 )
+Added: Net (loss) gain $ ( 1,039 ) $ 2,486
Gross amount recognized ( 1,039 ) 2,486
7 unchanged sentences
Expected return on plan assets ( 3,433 ) ( 4,360 ) ( 3,898 ) ( 255 ) ( 287 )
−Removed: Amortization of net (gain) loss — — — — 95 —
−Removed: Settlement (gain) loss recognized ( 26 ) 78 49 2,084 — —
−Removed: Net periodic expense (benefit) $ ( 2,176 ) $ ( 386 ) $ 682 $ 2,084 $ 1,187 $ 1,057
+Added: Amortization of net loss — — — — 95
+Added: Settlement loss (gain) recognized 38 ( 26 ) 78 2,084 —
+Added: Net periodic (benefit) expense $ ( 826 ) $ ( 2,176 ) $ ( 386 ) $ 2,084 $ 1,187
All components of net periodic benefit cost other than service cost are presented within other expense (income), net in the Company’s consolidated statements of income.
−Removed: The net amount of projected benefit obligation and plan assets for all underfunded and unfunded plans was $ 3,551 and $ 11,542 as of December 31, 2021 and 2020, respectively, and was classified as noncurrent liabilities.
−Removed: The total accumulated benefit obligation as of December 31, 2021 and 2020 for the Company’s U.S.
−Removed: pension plans was $ 86,465 and $ 91,937 , respectively.
+Added: Components of other changes in plan assets and benefit obligations recognized in other comprehensive income consists of:
+Added: Net loss (gain) $ 3,563 $ ( 5,841 )
+Added: Translation adjustment — ( 82 )
+Added: Amortization or settlement recognition of net gain (loss) ( 38 ) ( 2,058 )
+Added: Total recognized in other comprehensive income 3,525 ( 7,981 )
+Added: Total recognized in net periodic benefit cost and other comprehensive income $ 2,699 $ ( 7,991 )
+Added: The net amount of projected benefit obligation and plan assets for all underfunded plans was $ 6,250 and $ 3,551 as of December 31, 2022 and 2021, respectively, and was classified as noncurrent liabilities.
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
−Removed: The following table presents selected information about the Company’s pension plans with accumulated benefit obligations in excess of plan assets:
−Removed: December 31, December 31,
−Removed: 2021 2020 2021 2020
+Added: The following table presents selected information about the Company’s pension plans with projected benefit obligations and accumulated benefit obligations in excess of plan assets:
Projected benefit obligation $ 66,879 $ 86,465
1 unchanged sentence
Fair value of plan assets 60,629 82,914
−Removed: The following table presents selected information about the Company’s pension plans with projected benefit obligations in excess of plan assets:
−Removed: December 31, December 31,
−Removed: 2021 2020 2021 2020
−Removed: Projected benefit obligation $ 86,465 $ 91,937 $ — —
−Removed: Fair value of plan assets 82,914 80,395 — —
Significant weighted average assumptions used in determining the pension obligations include the following:
−Removed: December 31, December 31,
−Removed: 2021 2020 2021 2020
−Removed: Discount rate 2.90 % 2.50 % N/A 1.20 %
+Added: Discount rate 5.40 % 2.90 %
Rate of compensation increase (1)
−Removed: N/A N/A N/A 1.75 %
Significant weighted average assumptions used in determining net periodic benefit cost include the following:
3 unchanged sentences
Rate of compensation increase (1)
−Removed: N/A 3.00 % 3.00 % 1.75 % 1.75 % 1.75 %
+Added: N/A N/A 3.00 % 1.75 % 1.75 %
Expected return on assets 4.90 % 5.60 % 5.70 % 1.20 % 1.50 %
3 unchanged sentences
The discount rate is then set as the weighted average spot rate, using the respective plan’s expected benefit cash flows as the weights.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
The investment objective for the plans is to generate returns sufficient to meet future obligations.
13 unchanged sentences
• 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.
−Removed: Such inputs include market interest rates and volatilities, spreads and yield curves.
+Added: Such inputs include market interest rates and volatilities,
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: spreads and yield curves.
Level 2 assets primarily consist of fixed-income securities and commingled funds that are not actively traded or whose underlying investments are valued using observable marketplace inputs.
4 unchanged sentences
Level 3 assets include investments covered by insurance contracts and real estate funds valued using significant unobservable inputs.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
The following tables set forth by level, within the fair value hierarchy, plan assets at fair value:
18 unchanged sentences
Corporate bonds 33,877 33,877 — —
−Removed: Insurance contracts 22,210 — 22,210 —
Total $ 82,914 $ 82,914 $ — $ —
−Removed: The Company does not expect to contribute to the U.S.
−Removed: pension plans or to the foreign pension plan in 2022.
−Removed: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
−Removed: Years 2027-2031 22,707
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
+Added: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
+Added: Years 2028-2032 22,937
+Added: The Company does not expect to contribute to its pension plans in 2023.
Other Postretirement Benefit Plan
5 unchanged sentences
Premiums paid ( 3 ) ( 2 )
−Removed: Actuarial (gains) losses ( 40 ) 82
+Added: Actuarial gains ( 192 ) ( 40 )
Benefit obligation at end of period $ 446 $ 624
5 unchanged sentences
Funded status of the plan (underfunded) $ ( 446 ) $ ( 624 )
+Added: The total actuarial gains for the year ended December 31, 2022 was $ 192 , which was driven by increases in the discount rates.
The total actuarial gains for the year ended December 31, 2021 was $ 40 , which was driven by increases in the discount rates of $ 27 , changes in mortality assumptions of $ 1 , and general experience of $ 12 .
−Removed: The total actuarial losses for the year ended December 31, 2020 was $ 82 , which was driven by declines in the discount rates of $ 83 , declines in general demographic experience of $ 4 , and declines in mortality assumptions of $ 3 .
Amounts recognized in the consolidated balance sheets consist of:
8 unchanged sentences
Prior service credit $ 154 $ 364
−Removed: Net gain ( 114 ) ( 159 )
+Added: Net gain (loss) 80 ( 114 )
Gross amount recognized 234 250
3 unchanged sentences
2022 2021 2020
−Removed: Service cost $ — $ — $ 10
Interest cost $ 18 $ 17 $ 19
Amortization of prior service credit ( 210 ) ( 232 ) ( 232 )
−Removed: Amortization of net loss (gain) 5 1 ( 11 )
+Added: Amortization of net loss 3 5 1
Net periodic benefit $ ( 189 ) $ ( 210 ) $ ( 212 )
All components of net periodic benefit cost other than service cost are presented within other expense (income), net in the Company’s consolidated statements of income.
+Added: Components of other changes in plan assets and benefit obligations recognized in other comprehensive income consists of:
+Added: Net gain $ ( 192 ) $ ( 40 )
+Added: Amortization of prior service credit 210 232
+Added: Amortization or settlement recognition of net loss ( 3 ) ( 5 )
+Added: Total recognized in other comprehensive income $ 15 $ 187
+Added: Total recognized in net periodic benefit cost and other comprehensive income $ ( 174 ) $ ( 23 )
The discount rate used in determining the other postretirement benefit plan obligation was 5.50 % and 2.90 % as of December 31, 2022 and 2021, respectively.
1 unchanged sentence
There was no rate of interest crediting rate, as there are no cash balance accounts associated with this plan.
−Removed: Assumed health care cost trend rates were as follows:
−Removed: Immediate trend rate NA NA
−Removed: Ultimate trend rate NA NA
−Removed: Year that the rate reaches ultimate trend rate NA NA
−Removed: The Company expects to contribute $ 17 to the retiree health plan in 2022.
−Removed: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
−Removed: Years 2025-2029 128
−Removed: There are no expected Medicare subsidy receipts expected in future periods.
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
+Added: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
+Added: Years 2028-2032 138
+Added: The Company expects to contribute $ 18 to the retiree health plan in 2023.
+Added: There are no expected Medicare subsidy receipts expected in future periods.
Defined Contribution Plans
3 unchanged sentences
The Company has an equity incentive plan under which it grants common stock awards to employees, directors and affiliates of the Company.
−Removed: At December 31, 2021, 12,405,315 shares of common stock were available for issuance under the plan.
+Added: As of December 31, 2022, 10,065,830 shares of common stock were available for issuance under the plan.
The Company settles these awards through the issuance of new shares.
41 unchanged sentences
Forfeited ( 39,996 ) $ 3.53
+Added: Expired ( 40,484 ) $ 14.52
Outstanding at December 31, 2021 1,884,351 $ 6.99 (2)
7 unchanged sentences
The aggregate intrinsic value per the above table represents the difference between the fair value the Company’s common stock on the last trading day of the reporting period (determined in accordance with the plan terms) and the exercise price of in-the-money stock options multiplied by the respective number of stock options as of that date.
−Removed: The total intrinsic value of stock options exercised during the year ended December 31, 2019 and the resulting tax benefits recognized by the Company were $ 3,615 ;
−Removed: the total intrinsic value of stock options exercised during the years ended December 31, 2020 and 2021 was no t material for either year.
−Removed: Additionally, cash proceeds received by the Company from the exercise of stock options were $ 3,975 during the year ended December 31, 2019 and were no t material for the years ended December 31, 2020 and 2021.
+Added: The total intrinsic value of stock options exercised during the years ended December 31, 2022 and 2021 and the resulting tax benefits recognized by the Company were $ 1,306 and $ 1,767 , respectively, and were not material for the year ended December 31, 2020.
+Added: Additionally, cash proceeds received by the Company from the exercise of stock options were no t material for the years ended December 31, 2022, 2021, and 2020.
There were no stock option awards granted during the years ended December 31, 2022, 2021 and 2020.
6 unchanged sentences
Although achievement of the performance condition is subject to continued service with the Company, the terms of awards issued with performance conditions stipulate that the performance vesting condition can be attained for a period of six months following separation from service under certain circumstances, depending on the means of separation from the Company and subject to other factors such as individual separation agreements.
−Removed: The same performance vesting condition for the Company’s restricted stock awards also governs the achievement of the
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
−Removed: performance vesting condition for the Company’s stock options.
+Added: performance vesting condition for the Company’s restricted stock awards also governs the achievement of the performance vesting condition for the Company’s stock options.
As of December 31, 2022, all of the Company’s outstanding unvested restricted stock awards were subject to the performance vesting condition.
5 unchanged sentences
Performance Stock Units
−Removed: The Company granted performance stock units during the year ended December 31, 2019, which 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.
−Removed: Attainment 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.
−Removed: 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 %.
−Removed: 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 subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year then ended.
−Removed: The Company also granted performance stock units during the year ended December 31, 2020.
+Added: During the year ended December 31, 2022, the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) certified the achievement of the performance metrics for the three -year period ended December 31, 2021, related to the performance stock units granted during the year ended December 31, 2019.
+Added: These awards provided 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, with each award holder eligible to earn a percentage of the target number of shares granted to the holder, ranging from zero to 200 %.
+Added: The awards vested during the year ended December 31, 2022 at 100 % of target.
+Added: The Company granted 456,311 performance stock units (at target) during the year ended December 31, 2020.
The performance stock units granted in 2020 provide the recipients with the right to receive shares of common stock dependent 50% on the achievement of a Company-specific financial performance target and 50% on a total shareholder return (“TSR”) goal, and are generally subject to the provision of service through the vesting date of the award.
3 unchanged sentences
Depending on the Company’s performance against the predetermined thresholds for achievement, each performance stock unit award recipient is eligible to earn a percentage of the target number of shares granted to the recipient, ranging from zero to 200 %.
−Removed: 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, 2022, which will occur subsequent to the end of the performance period but before the Company files its annual consolidated financial statements for the year then ended.
−Removed: The value of the portions of the performance stock units granted during the years ended December 31, 2020 and 2019 eligible to be earned based on the achievement of the Company-specific financial performance targets was measured on the same basis as that of the restricted stock units, and based on the target number of shares granted;
+Added: The performance stock units, to the extent earned, will vest on the date the Compensation Committee certifies the achievement of the performance metrics for the three -year period ending December 31, 2022, which will occur subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year ended December 31, 2022.
+Added: As of December 31, 2022, the Company adjusted the anticipated vesting amount of these awards to approximately 37% of target based on actual performance.
+Added: The value of the portion of the performance stock units granted during the year ended December 31, 2020 eligible to be earned based on the achievement of the Company-specific financial performance target 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.
6 unchanged sentences
Because a market condition is not considered a vesting condition, it is reflected in the grant date fair value of an award and the associated compensation cost based on the fair value of the award is recognized over the performance period, regardless of whether the Company actually achieves the market condition or the level of achievement, as long as service is provided by the recipient.
−Removed: The Company used a Monte Carlo simulation to estimate the fair value of the portion of the awards subject to the TSR goal, with the following assumptions:
+Added: The Company used a Monte Carlo simulation to estimate the $ 24.11 weighted average fair value of the portion of the awards subject to the TSR goal, with the following weighted average assumptions:
Expected dividend yield — %
2 unchanged sentences
Expected term (in years) 2.95
−Removed: Grant date fair value $ 24.11
−Removed: The performance stock units granted during the year ended December 31, 2021 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award.
+Added: The Company granted 211,985 performance stock units (at target) during the year ended December 31, 2021 that provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award.
The performance period for the TSR goal is measured based on a three -year performance period from January 1, 2021 through December 31, 2023.
1 unchanged sentence
Depending on the Company’s performance relative to the TSR goal, each performance stock unit award recipient is eligible to earn a percentage of the target number of shares granted to the recipient, ranging from zero to 200 %.
−Removed: 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 metric for the three-year period ending December 31, 2023, which will occur subsequent to the end of the performance period but before the Company files its annual consolidated financial statements for the year ending December 31, 2023.
−Removed: The Company used a Monte Carlo simulation to estimate the fair value of the awards, with the following assumptions:
+Added: The performance stock units, to the extent earned, will vest on the date the Compensation Committee certifies the achievement of the performance metric for the three-year period ending December 31, 2023, which will occur subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2023.
+Added: The Company used a Monte Carlo simulation to estimate the $ 13.21 weighted average fair value of the awards, with the following weighted average assumptions:
Expected dividend yield — %
2 unchanged sentences
Expected term (in years) 2.95
−Removed: Grant date fair value $ 13.21
AND SUBSIDIARIES
1 unchanged sentence
(Dollars in thousands, except share and per share amounts)
+Added: During the year ended December 31, 2022, the Company granted 295,132 performance stock units (at target) under its equity incentive plan.
+Added: The performance stock units granted during the year ended December 31, 2022 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award.
+Added: The performance period for the TSR goal is measured based on a three -year performance period from January 1, 2022 through December 31, 2024.
+Added: The TSR goal is based on the Company’s actual TSR percentage increase over the performance period.
+Added: Depending on the Company’s performance relative to the TSR goal, each performance stock unit award recipient is eligible to receive a percentage of the target number of shares granted to the recipient, ranging from zero to 200 %.
+Added: The performance stock units, to the extent earned, will vest on the date the Compensation Committee certifies the achievement of the performance metric for the three-year period ending December 31, 2024, which will occur subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2024.
+Added: The Company used a Monte Carlo simulation to estimate the $ 8.82 weighted average fair value of the awards, with the following weighted average assumptions:
+Added: Expected dividend yield — %
+Added: Risk-free interest rate 1.51 %
+Added: Expected volatility 44.51 %
+Added: Expected term (in years) 2.91
Award Activity
18 unchanged sentences
(1) Reflects the impact of the modification on all unvested restricted stock awards as described above.
+Added: (2) Based on target.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The total fair value of restricted stock awards that vested during the years ended December 31, 2022, 2021 and 2020 was $ 749 , $ 0 and $ 510 , respectively.
The total fair value of restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $ 15,579 , $ 11,507 and $ 11,269 , respectively.
−Removed: None of the Company’s performance stock units vested during the years ended December 31, 2021, 2020 and 2019.
+Added: The total fair value of performance stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $ 5,277 , $ 0 and $ 0 , respectively.
Total Stock-Based Compensation Expense
2 unchanged sentences
As of December 31, 2022, there was no unrecognized compensation cost related to nonvested stock options or nonvested restricted stock awards subject to service vesting conditions.
−Removed: As of December 31, 2021, there was $ 22,069 of total unrecognized compensation cost related to nonvested restricted stock units and $ 6,554 of total unrecognized compensation cost related to nonvested performance stock units considered probable of vesting, which include costs for both continuing and discontinued operations.
+Added: As of December 31, 2022, unrecognized compensation cost was $ 13,966 for restricted stock units and $ 1,650 for performance stock units considered probable of vesting.
The weighted-average period over which these costs are expected to be recognized at December 31, 2020 is 1.24 years for the restricted stock units and 1.03 years for the performance stock units.
−Removed: No expense has been recognized for any restricted stock awards or stock options subject to the performance condition for the years ended December 31, 2021, 2020 and 2019, as the performance-based criteria was not achieved nor considered probable of achievement.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
+Added: No expense has been recognized for any stock options subject to the performance condition for the years ended December 31, 2022, 2021 and 2020, and no expense has been recognized for any restricted stock awards subject to the performance condition for the years ended December 31, 2021 and 2020, as the performance-based criteria was not achieved nor considered probable of achievement.
+Added: During the year ended December 31, 2022, $ 749 of stock-based compensation expense was recognized for a modification to a set of restricted stock awards subject to the performance condition for an individual whose awards immediately vested in connection with a separation agreement.
Restricted stock awards and stock options issued with performance conditions vest based on the occurrence of a defined liquidity event upon which certain investment funds affiliated with CCMP receive proceeds exceeding certain thresholds.
−Removed: All of the Company’s equity incentive awards with performance-based vesting, whether in the form of stock options or restricted stock awards, are subject to achievement of the same performance condition.
−Removed: If an exit event occurs that exceeds the defined threshold, then all performance-based awards of the Company vest 100 %, with no potential for partial vesting or excess achievement.
−Removed: If an exit event or events occur with no further possibility of meeting the defined threshold, then all of the Company’s awards subject to the performance vesting condition will be forfeited.
+Added: If an exit event occurs that exceeds the defined threshold, then all of these restricted stock awards and stock options of the Company vest 100 %, with no potential for partial vesting or excess achievement.
+Added: If an exit event or events occur with no further possibility of meeting the defined threshold, then all of the Company’s restricted stock awards and stock options subject to the performance vesting condition will be forfeited.
In addition to the defined liquidity event, subsequent to the Company’s IPO, the performance vesting condition can also be achieved if the average closing trading price of the Company’s common stock on the NYSE over any consecutive ten-day trading period equals or exceeds a price that would be equivalent to the achievement of the threshold proceeds to CCMP.
−Removed: See Note 24 to these consolidated financial statements for further information on the number of awards outstanding subject to performance-based vesting.
+Added: See Note 24 to these consolidated financial statements for further information on the number of restricted stock awards and stock options outstanding subject to performance-based vesting.
Earnings per Share:
3 unchanged sentences
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.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
The reconciliation from basic to diluted weighted average shares outstanding is as follows:
3 unchanged sentences
Weighted average shares outstanding – Diluted 135,088,172 137,708,931 136,450,953
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
−Removed: Basic and diluted earnings per share are calculated as follows:
+Added: Basic and diluted income (loss) per share are calculated as follows:
2022 2021 2020
−Removed: Net (loss) income attributable to Ecovyst Inc.
+Added: Income from continuing operations attributable to Ecovyst Inc.
$ 69,795 $ 1,794 $ 54,280
+Added: Income (loss) from discontinued operations attributable to Ecovyst Inc.
+Added: 3,902 ( 141,743 ) ( 333,051 )
+Added: Net income (loss) attributable to Ecovyst Inc.
+Added: $ 73,697 $ ( 139,949 ) $ ( 278,771 )
Weighted average shares outstanding – Basic 133,601,322 136,167,384 135,528,977
Weighted average shares outstanding – Diluted 135,088,172 137,708,931 136,450,953
−Removed: Net (loss) income per share:
−Removed: Basic (loss) income per share $ ( 1.03 ) $ ( 2.06 ) $ 0.59
−Removed: Diluted (loss) income per share $ ( 1.02 ) $ ( 2.04 ) $ 0.59
+Added: Net income (loss) per share:
+Added: Basic income per share - continuing operations $ 0.52 $ 0.01 $ 0.40
+Added: Diluted income per share - continuing operations $ 0.52 $ 0.01 $ 0.40
+Added: Basic (loss) income per share - discontinued operations $ 0.03 $ ( 1.04 ) $ ( 2.46 )
+Added: Diluted (loss) income per share - discontinued operations $ 0.03 $ ( 1.03 ) $ ( 2.44 )
+Added: Basic income (loss) per share $ 0.55 $ ( 1.03 ) $ ( 2.06 )
+Added: Diluted income (loss) per share $ 0.55 $ ( 1.02 ) $ ( 2.04 )
The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective year that were excluded from the calculation of diluted earnings per share:
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
2022 2021 2020
6 unchanged sentences
Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Commitments and Contingent Liabilities:
19 unchanged sentences
A Corrective Measures Plan approved in October 2011 requires (1) soil vapor extraction (“SVE”) in affected areas, (2) covering of unpaved areas containing pesticide impacted soil, and (3) annual groundwater monitoring of the perched water-bearing zone.
−Removed: Annual groundwater sampling and soil vapor monitoring indicates that the SVE system has been effective in reducing subsurface contaminant levels.
+Added: Annual groundwater sampling and soil vapor monitoring indicates that the SVE system has been
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Dollars in thousands, except share and per share amounts)
+Added: effective in reducing subsurface contaminant levels.
The Company is moving in the direction of rendering the SVE system dormant and potentially closing this matter within the next few years following rebound testing, including the preparation of an updated long-term Operations and Maintenance Plan as requested by the California Department of Toxic Substances Control.
4 unchanged sentences
The letters of credit are supported by the Company’s ABL facility.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Dollars in thousands, except share and per share amounts)
Related Party Transactions:
8 unchanged sentences
The terms of this lease are evergreen as long as the ZI Partnership Agreement is in place.
−Removed: The Partnership recognized no sales to the Company’s of during the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: The Partnership had no sales to the Company during the years ended December 31, 2022, 2021 and 2020, respectively.
The Partnership purchases certain of its raw materials from the Company and is charged for various manufacturing costs incurred at the Company’s Kansas City production facility.
4 unchanged sentences
These charges to the Partnership are recorded as reductions in either cost of goods sold or selling, general and administrative expenses in the consolidated statements of income, depending on the nature of the expenditures.
−Removed: From time to time, the Company makes sales to and purchases raw materials from portfolio companies of funds that are affiliated with CCMP and companies that are affiliated with INEOS Capital Partners.
+Added: As of December 31, 2022 and 2021, the Company had an accounts receivable from the Partnership of $ 2,636 and $ 2,943 .
+Added: As of December 31, 2022 and 2021, there were no accounts payable with the Partnership.
+Added: From time to time, the Company makes sales to and purchases raw materials from portfolio companies of funds that are affiliated with INEOS Capital Partners.
The Company had sales of $ 10,880 , $ 3,923 and $ 11,212 to companies affiliated with INEOS Capital Partners during the years ended December 31, 2022, 2021, and December 31, 2020, respectively.
−Removed: The Company purchases of raw materials from companies affiliated with INEOS Capital Partners were immaterial for the year ended December 31, 2021 and the Company did no t purchase raw materials during the years ended December 31, 2020 and December 31, 2019, respectively.
+Added: Purchases of raw materials from companies affiliated with INEOS Capital Partners were immaterial for the years ended December 31, 2022, 2021 and 2020.
AND SUBSIDIARIES
2 unchanged sentences
Quarterly Financial Summary (Unaudited):
+Added: The quarterly financial data is presented for each quarter of the two most recent fiscal years to reflect the material retrospective change in 2021, which was previously disclosed in 2021, to reflect the sale of the Performance Chemicals business as discontinued operations.
+Added: See Note 5 of these consolidated financial statements for further discussion on the transaction.
The following tables summarize the Company’s quarterly financial results during the years ended December 31, 2022 and 2021:
5 unchanged sentences
Operating income 16,436 27,411 38,536 22,002
−Removed: Net income (loss) from continuing operations ( 2,748 ) ( 7,870 ) 4,689 7,723
−Removed: Net income (loss) from discontinued operations, net of tax ( 89,770 ) 6,520 ( 75,872 ) 17,712
−Removed: Net (loss) income ( 92,518 ) ( 1,350 ) ( 71,183 ) 25,435
−Removed: Net income (loss) attributable to the noncontrolling interest - discontinued operations 117 140 76 —
−Removed: Net income (loss) attributable to Ecovyst Inc.
+Added: Net income from continuing operations 7,875 19,245 21,325 21,350
+Added: Net income from discontinued operations, net of tax — — — 3,902
+Added: Net income 7,875 19,245 21,325 25,252
+Added: Net income attributable to Ecovyst Inc.
7,875 19,245 21,325 25,252
−Removed: Earnings (loss) per common share - basic
−Removed: Continuing operations $ ( 0.02 ) $ ( 0.06 ) $ 0.03 $ 0.06
+Added: Earnings per common share - basic:
+Added: Continued operations $ 0.06 $ 0.14 $ 0.16 $ 0.17
Discontinued operations $ — $ — $ — $ 0.03
−Removed: Net earnings (loss) per share - basic $ ( 0.68 ) $ ( 0.01 ) $ ( 0.52 ) $ 0.19
−Removed: Earnings (loss) per common share - diluted:
−Removed: Continuing operations $ ( 0.02 ) $ ( 0.06 ) $ 0.03 $ 0.06
+Added: Net earnings per share - basic $ 0.06 $ 0.14 $ 0.16 $ 0.20
+Added: Earnings per common share - diluted:
+Added: Continued operations $ 0.06 $ 0.14 $ 0.16 $ 0.17
Discontinued operations $ — $ — $ — $ 0.03
−Removed: Net earnings (loss) per share - diluted $ ( 0.68 ) $ ( 0.01 ) $ ( 0.52 ) $ 0.18
+Added: Net earnings per share - diluted $ 0.06 $ 0.14 $ 0.16 $ 0.20
Weighted average shares outstanding:
10 unchanged sentences
Operating income 2,482 11,652 22,494 17,979
−Removed: Net income from continuing operations ( 3,347 ) 34,317 ( 22,658 ) 45,968
−Removed: Net income (loss) from discontinued operations, net of tax 3,856 ( 18,071 ) 30,470 ( 352,239 )
−Removed: Net income 509 16,246 7,812 ( 306,271 )
+Added: Net (loss) income from continuing operations ( 2,748 ) ( 7,870 ) 4,689 7,723
+Added: Net (loss) income from discontinued operations, net of tax ( 89,770 ) 6,520 ( 75,872 ) 17,712
+Added: Net (loss) income ( 92,518 ) ( 1,350 ) ( 71,183 ) 25,435
Net income attributable to the noncontrolling interest - discontinued operations 117 140 76 —
−Removed: Net income attributable to Ecoyvst Inc.
+Added: Net (loss) income attributable to Ecoyvst Inc.
( 92,635 ) ( 1,490 ) ( 71,259 ) 25,435
−Removed: Earnings (loss) per common share - basic:
+Added: (Loss) Earnings per common share - basic:
Continuing operations $ ( 0.02 ) $ ( 0.06 ) $ 0.03 $ 0.06
Discontinued operations $ ( 0.66 ) $ 0.05 $ ( 0.56 ) $ 0.13
−Removed: Net earnings per share - basic $ — $ 0.12 $ 0.06 $ ( 2.23 )
−Removed: Earnings (loss) per common share - diluted:
+Added: Net (loss) earnings per share - basic $ ( 0.68 ) $ ( 0.01 ) $ ( 0.52 ) $ 0.19
+Added: (Loss) Earnings per common share - diluted:
Continuing operations $ ( 0.02 ) $ ( 0.06 ) $ 0.03 $ 0.06
Discontinued operations $ ( 0.66 ) $ 0.05 $ ( 0.55 ) $ 0.13
−Removed: Net earnings per share - diluted $ — $ 0.12 $ 0.06 $ ( 2.22 )
+Added: Net (loss) earnings per share - diluted $ ( 0.68 ) $ ( 0.01 ) $ ( 0.52 ) $ 0.18
Weighted average shares outstanding:
20 unchanged sentences
Subsequent Events:
−Removed: In January 2022, the Company entered into two new interest rate cap agreements.
−Removed: See Note 20 to these consolidated financial statements for additional details.
+Added: On February 9, 2023, we amended the 2021 Term Loan Facility to replace LIBOR with secured overnight financing rate (“SOFR”) as the benchmark interest rate, and on February 17, 2023, we amended the ABL Facility to replace LIBOR with SOFR as the benchmark interest rate with respect to U.S.
+Added: dollar-denominated borrowings.
+Added: See Note 18 of these consolidated financial statements for further discussion.
+Added: On February 21, 2023, we also amended all existing interest rate caps to replace the LIBOR with SOFR as the benchmark interest rate.
+Added: See Note 20 of these consolidated financial statements for further discussion.
Other than this item, the Company has evaluated subsequent events since the balance sheet date and determined that there are no additional matters to disclose.
5 unchanged sentences
Stock compensation expense $ 20,632 $ 39,523 $ 25,200
−Removed: Equity in net loss (income) from subsidiaries 100,426 253,571 ( 97,764 )
−Removed: Net (loss) income ( 139,949 ) ( 278,771 ) 79,539
+Added: Equity in net (income) loss from subsidiaries ( 94,329 ) 100,426 253,571
+Added: Net income (loss) 73,697 ( 139,949 ) ( 278,771 )
Other comprehensive income (loss), net of tax:
Pension and postretirement benefits ( 2,676 ) 9,530 1,710
−Removed: Net gain (loss) from hedging activities 2,914 166 ( 2,665 )
+Added: Net gain from hedging activities 24,382 2,914 1,177
Foreign currency translation ( 9,922 ) ( 2,248 ) ( 2,804 )
−Removed: Total other comprehensive income (loss) 19,319 ( 14,492 ) 21,882
−Removed: Comprehensive (loss) income $ ( 120,630 ) $ ( 293,263 ) $ 101,421
+Added: Total other comprehensive income 11,784 10,196 83
+Added: Comprehensive income (loss) $ 85,481 $ ( 129,753 ) $ ( 278,688 )
See accompanying notes to condensed financial statements.
20 unchanged sentences
( 149,624 ) ( 12,551 )
−Removed: Accumulated other comprehensive loss ( 5,792 ) ( 15,265 )
−Removed: Total Ecovyst Inc.
−Removed: equity 740,737 1,277,126
+Added: Accumulated other comprehensive (loss) income 5,992 ( 5,792 )
+Added: Total equity 707,229 740,737
Total liabilities and equity $ 707,229 $ 740,737
6 unchanged sentences
Cash flows from operating activities:
−Removed: Net (loss) income $ ( 139,949 ) $ ( 278,771 ) $ 79,539
+Added: Net income (loss) $ 73,697 $ ( 139,949 ) $ ( 278,771 )
Adjustments to reconcile net income to net cash provided by operating activities:
31 unchanged sentences
The dividend was paid on December 29, 2020 to the Company’s stockholders of record at the close of business on December 21, 2020.
−Removed: On August 4, 2021, the Company’s Board of Directors declared a special cash dividend of $3.20 per share, using the proceeds from the sale of the Performance Chemicals business.
+Added: On August 4, 2021, Ecovyst’s Board of Directors declared a special cash dividend of $3.20 per share, using the proceeds from the sale of the Performance Chemicals business.
The dividend was paid on August 23, 2021 to the Company’s stockholders of record at the close of business on August 12, 2021.
2 unchanged sentences
We have audited the accompanying financial statements of Zeolyst International (the “Partnership”), which comprise the balance sheets as of December 31, 2022 and 2021, and the related statements of operations and accumulated earnings, of changes in partners’ capital and of cash flows for the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in accordance with accounting principles generally accepted in the United States of America.
+Added: In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the three years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
1 unchanged sentence
Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report.
−Removed: We are required to be independent of the Partnership and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
+Added: We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
4 unchanged sentences
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
−Removed: In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Partnership’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.
+Added: In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.
Auditors’ Responsibilities for the Audit of the Financial Statements
14 unchanged sentences
Philadelphia, Pennsylvania
−Removed: March 1, 2022
+Added: February 28, 2023
ZEOLYST INTERNATIONAL
14 unchanged sentences
Total assets $ 364,328 $ 360,792
−Removed: Revolver $ — $ —
Trade accounts payable 16,399 13,429
1 unchanged sentence
Operating lease liability—current 109 109
−Removed: Other current liabilities 6,848 2,965
+Added: Accrued liabilities 4,277 6,848
Total current liabilities 34,991 37,817
Operating lease liability—noncurrent 5,721 5,841
+Added: Revolver 10,000 —
Total liabilities 50,712 43,658
19 unchanged sentences
Related party SG&A 33,463 28,333 32,204
+Added: Other operating (income) expense, net (31) 20 (323)
Operating income 67,262 67,086 53,470
Interest expense, net 270 144 224
−Removed: Other (income) expense, net 1,008 (178) (1,712)
+Added: Other expense (income), net 510 988 (194)
Net income 66,482 65,954 53,440
32 unchanged sentences
Total partners' capital at December 31, 2022 $ 54,930 $ 258,686 $ 313,616
−Removed: Total partners' capital at December 31, 2020 $ 54,930 $ 246,250 $ 301,180
−Removed: Total partners' capital at December 31, 2021 $ 54,930 $ 262,204 $ 317,134
See accompanying notes to financial statements.
7 unchanged sentences
Depreciation and amortization 20,393 18,460 17,397
−Removed: Loss on sale or disposal of capital assets (5) 25 47
+Added: Loss (Gain) on sale or disposal of capital assets 37 (5) 25
Amortization of deferred financing fees 51 45 30
2 unchanged sentences
Net change in inventory reserve 300 (96) —
+Added: Other (3,326) — —
Working capital changes that provided (used) cash:
10 unchanged sentences
Cash flows from financing activities:
−Removed: Proceeds from revolver — — 25,000
+Added: Draw down of revolver 46,000 — —
Payments on revolver (36,000) — (15,000)
21 unchanged sentences
The Partnership has significant transactions with its partners and related affiliates.
−Removed: Refer to the Related Party Transactions footnote for further disclosure.
+Added: See Note 15 for further information on related party transactions.
Partnership Business:
−Removed: The Partnership manufactures zeolites and zeolytic catalysts that are used by refiners to capture impurities in the processing of petroleum and other chemicals.
−Removed: The filtration ability of zeolites placed into a customer’s chemical process generally extends two to three years.
+Added: The Partnership manufactures zeolites and zeolytic catalysts that are used by refiners to capture impurities in the processing of petroleum based feed streams while increasing value.
+Added: The selectivity and activity of zeolites used for this purpose can improve yields and have a general life cyle of 3-4 years.
As a result, a significant portion of the Partnership’s customer base tends to change on an annual basis.
−Removed: A significant percentage of the base materials purchased for the Partnership’s manufacturing process is acquired from related parties.
−Removed: In addition, a significant portion of the Partnership’s sales is transacted through Criterion Catalyst Company (“Criterion”) which is a subsidiary of CRI.
+Added: A significant percentage of the base materials purchased for the Partnership’s manufacturing process are acquired from related parties.
+Added: In addition, a significant portion of the Partnership’s sales are transacted through Criterion Catalyst Company (“Criterion”) which is a subsidiary of CRI.
The Partnership compensates Criterion with a 2% sales commission or royalty fee on specific sales transactions.
39 unchanged sentences
Other long-term assets primarily include intangible assets, at cost and spare parts.
+Added: In May 2017, the Partnership made a $6,500 strategic investment for license of materials-based solutions for catalytic and separations processes.
In April 2018, the Partnership made a $4,000 strategic investment to buy down royalty obligations related to certain license agreements.
−Removed: On May 10, 2017, the Partnership made a $6,500 strategic investment for license of materials-based solutions for catalytic and separations processes.
The Partnership amortizes these intangible assets over a ten-year period and includes the expense in selling, general and administrative expenses on its statements of operations.
These investments are accounted for under the cost method of accounting.
−Removed: The Partnership incurred intangible asset related amortization expense of $1,050 for each of the years ended December 31 2021, 2020 and 2019, respectively.
+Added: The Partnership incurred intangible asset related amortization expense of $1,050 for each of the years ended December 31, 2022, 2021 and 2020, respectively, related to these investments.
Revenue Recognition:
6 unchanged sentences
The Partnership identifies a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that the Partnership will collect the consideration to which it is entitled.
−Removed: The Partnership may offer rebates to customers who have reached a specified volume of optional purchases.
−Removed: The Partnership recognizes rebates given to customers as a reduction of revenue based on an allocation of the cost of honoring rebates earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate.
−Removed: Rebates are recognized at the time revenue is recorded.
−Removed: The Partnership measures
+Added: The Partnership may recognize revenue from bill-and-hold arrangements initiated by a customer.
+Added: Under these bill-and-hold arrangements, a customer pays for the goods, but does not take physical possession immediately.
+Added: The Partnership considers satisfaction of performance obligations when they have finished manufacturing the products based
ZEOLYST INTERNATIONAL
1 unchanged sentence
(in thousands)
−Removed: the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement.
+Added: on the agreed upon specifications in accordance with the order.
+Added: These products are custom made to each customer’s specifications and cannot be made available for use with another customer’s order.
+Added: Once the goods have been segregated in a designated space in the warehouse and the customer has been invoiced, title to the goods and risk of loss has transferred to the customer.
+Added: The customers have access to their products to inspect and can take possession of even prior to the scheduled delivery dates.
+Added: The Partnership may offer rebates to customers who have reached a specified volume of optional purchases.
+Added: The Partnership recognizes rebates given to customers as a reduction of revenue based on an allocation of the cost of honoring rebates earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate.
+Added: Rebates are recognized at the time revenue is recorded.
+Added: The Partnership measures the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement.
The Partnership recognizes revenue when all essential elements of the sales order have shipped and both title and risk of loss has passed to the customer.
3 unchanged sentences
The Partnership reserves 3% of the Hydrocracking Catalyst sales due to a clause in the contract that allows customers to return up to 5% of the unused products they purchase within 90 days, and based on historical experience.
−Removed: The total sales returns reserve as of December 31, 2021 and 2020 amounted to $1,015 and $677, respectively.
+Added: The total sales returns reserve was $1,052 and $1,015 as of December 31, 2022 and 2021, respectively.
Shipping and Handling Costs:
7 unchanged sentences
Gains and losses on foreign currency transactions are included in other (income) / expense, net on the statements of operations.
−Removed: Foreign exchange loss of $1,551, gain of $41 and loss of $967 were recognized for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: Foreign exchange loss of $1,824 and $1,551 and gain of $41 were recognized for the years ended December 31, 2022, 2021 and 2020, respectively.
Fair Value Measurements:
6 unchanged sentences
Actual results could differ from those estimates.
−Removed: Recently Issued Accounting Standards:
−Removed: Recently Adopted Accounting Standards
−Removed: In February 2016, the FASB issued guidance (with subsequent targeted amendments) that modifies the accounting for leases.
−Removed: Under the new guidance, a lessee will recognize assets and liabilities for most leases (including those classified under existing GAAP as operating leases, which based on current standards are not reflected on the balance sheet), but will recognize expenses similar to current lease accounting.
−Removed: The new guidance also requires companies to provide expanded disclosures regarding leasing arrangements.
−Removed: The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted.
−Removed: The new guidance must be adopted using a modified retrospective transition method.
−Removed: The Partnership can choose to apply the new guidance at the beginning of the earliest period presented in the financial statements, or at the date of adoption, with a cumulative-effect adjustment to the opening balance of retained earnings and no recast of prior period results presented within the Partnership’s financial statements.
−Removed: The Partnership adopted the new guidance as of January 1, 2019 (date of adoption) and has included all relevant disclosures within Note 3 and Note 9 to these financial statements.
−Removed: In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash.
−Removed: Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets.
−Removed: The new guidance is
+Added: Reclassification and Correction of an Error.
+Added: Certain reclassifications have been made to the historical presentation of the consolidated financial statements and the notes accompanying the consolidated financial statements.
ZEOLYST INTERNATIONAL
1 unchanged sentence
(in thousands)
−Removed: effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years.
−Removed: The Partnership adopted the new guidance effective January 1, 2020, with no material impact to the Partnership’s consolidated financial position, results of operations or cash flows.
−Removed: Accounting Standards Not Yet Adopted as of December 31, 2021
+Added: Recently Issued Accounting Standards:
In March 2020 and January 2021, the Financial Accounting Standards Board issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.
1 unchanged sentence
The guidance is optional and may be elected over time as reference rate reform activities occur.
+Added: The time period through which the practical expedients provided in the guidance is available was set to expire on December 31, 2022, but was extended through December 31, 2024 by the FASB in December 2022.
+Added: During the year ended December 31, 2020, the Partnership elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives.
+Added: Application of these expedients preserves the presentation of derivatives consistent with past presentation.
The Partnership continues to evaluate the impact of the guidance and may apply elections as applicable as additional changes in the market occur.
19 unchanged sentences
A contract asset is a right to consideration in exchange for goods that the Partnership has transferred to a customer when that right is conditional on something other than the passage of time.
−Removed: A contract liability exists when the Partnership receives consideration in advance of performance obligations.
−Removed: The Partnership has not recorded any contract assets or contract liabilities on its balance sheet as of December 31, 2021 and 2020.
+Added: A contract liability exists when the
ZEOLYST INTERNATIONAL
1 unchanged sentence
(in thousands)
+Added: Partnership receives consideration in advance of performance obligations.
+Added: The Partnership has not recorded any contract assets or contract liabilities on its balance sheet as of December 31, 2022 and 2021.
Practical Expedients and Accounting Policy Elections
12 unchanged sentences
Disaggregated Revenue
−Removed: The following table disaggregates the Partnership’s sales by end use for the year ended December 31, 2021, 2020, and 2019:
+Added: The following table disaggregates the Partnership’s sales by end use for the years ended December 31, 2022, 2021, and 2020:
2022 2021 2020
−Removed: Fuels and Emission Controls $ 165,086 $ 185,722 $ 245,926
−Removed: Packaging & Engineered Plastics 97,578 71,524 94,749
+Added: Clean Fuels, Emission Control & Other $ 206,907 $ 227,586 $ 202,885
+Added: Polymers & Engineered Plastics 58,153 35,078 54,361
Total $ 265,060 $ 262,664 $ 257,246
7 unchanged sentences
(in thousands)
−Removed: Inventories were classified and valued as follows:
+Added: Inventories were classified is as follows:
Finished products and work in process $ 127,975 $ 110,926
10 unchanged sentences
Depreciation expense was $19,254, $17,197 and $16,134 for the years ended December 31, 2022, 2021, and 2020, respectively.
−Removed: Disposal of assets reduced PP&E and accumulated depreciation by $192, $4,268, and $8,356, respectively with a $5 increase, a $25 reduction, and a $47 reduction to earnings for the years ended December 31, 2021, 2020, and 2019, respectively.
−Removed: Operating lease costs of $310 are included in cost of goods sold on the consolidated statements of income for the year ended December 31, 2021.
+Added: Disposal of assets reduced PP&E and accumulated depreciation by $1,014, $192, and $4,268, respectively with a $37 reduction, a $5 increase, and a $25 reduction to earnings for the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: Operating lease costs of $310 are included in cost of goods sold on the consolidated statements of income for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Cash payments on operating leases included in operating cash flows was $310 for the years ended December 31, 2022, 2021, and 2020, respectively.
The weighted average lease term is 29 years with a weighted average discount rate of 3.25%.
−Removed: Cash payments on operating leases included in operating cash flows was $310 for the year ended December 31, 2021.
The current portion of the lease liability is included on the Partnership’s balance sheet in other current liabilities.
−Removed: Finance lease costs for the year ended December 31, 2021 is $0.
−Removed: Maturities of lease liabilities as of December 31, 2021 are as follows:
+Added: There was no finance lease costs for the year ended December 31, 2022.
ZEOLYST INTERNATIONAL
1 unchanged sentence
(in thousands)
+Added: Maturities of lease liabilities as of December 31, 2022 are as follows:
Thereafter 7,440
2 unchanged sentences
Total lease liabilities $ 5,831
−Removed: Other Current Liabilities:
−Removed: A summary of other current liabilities is as follows:
−Removed: Accrued royalties and license fees $ 487 $ 224
+Added: Accrued Liabilities:
+Added: A summary of accrued liabilities is as follows:
Accrued commissions $ 3,041 $ 2,425
+Added: Accrued rebates 823 3,470
Accrued other 413 953
$ 4,277 $ 6,848
−Removed: On March 2, 2016, the Partnership entered into a five-year revolving line of credit facility of $60,000, which carries an initial interest rate of LIBOR.
+Added: On March 2, 2016, the Partnership entered into a five-year revolving line of credit facility of $60,000, which carries an initial interest rate of LIBOR or the base rate plus an interest margin of 0.75% per annum.
On May 26, 2020 this agreement was initially amended and extended to May 25, 2022.
On November 30, 2021, this agreement was amended and extended to November 29, 2026.
−Removed: The interest rate on the facility is LIBOR plus an interest margin of 1.00% per annum.
+Added: The interest rate on the facility is LIBOR or the base rate plus an interest margin of 1.00% per annum.
A commitment fee is paid to the bank for this agreement.
5 unchanged sentences
The carrying amount of the revolving line of credit approximates fair value because it is a short- term liquidity tool to fund operations, which is drawn down and paid back with cash generated from operations.
−Removed: Partners’ Contributions:
−Removed: In accordance with the Agreement, in the event that cash flow from operations is insufficient to meet the Partnership’s requirements, following a majority vote by the Management Committee of the Partnership to request capital from the partners, the partners will provide additional capital to enable the Partnership to meet its obligations.
−Removed: No such contributions were made during the years ended December 31, 2021, 2020, or 2019 as the Partnership had the ability to finance operations through cash flow from operations and borrowings under the Partnership’s revolving line of credit facility.
ZEOLYST INTERNATIONAL
1 unchanged sentence
(in thousands)
+Added: Partners’ Contributions:
+Added: In accordance with the Agreement, in the event that cash flow from operations is insufficient to meet the Partnership’s requirements, following a majority vote by the Management Committee of the Partnership to request capital from the partners, the partners will provide additional capital to enable the Partnership to meet its obligations.
+Added: No such contributions were made during the years ended December 31, 2022, 2021, or 2020 as the Partnership had the ability to finance operations through cash flow from operations and borrowings under the Partnership’s revolving line of credit facility.
Income Taxes:
1 unchanged sentence
Net income and losses are allocated to the respective partners on an annual basis, and it is the partners’ responsibility to pay income taxes, if any, thereon according to their respective tax positions.
−Removed: ZEOLYST INTERNATIONAL
−Removed: NOTES TO FINANCIAL STATEMENTS
−Removed: (in thousands)
Commitments and Contingent Liabilities:
9 unchanged sentences
The product license intangible is being amortized over the life of the agreement on a straight-line basis, which is estimated to be 15 years.
−Removed: Amortization expense of $213 was recognized in 2021, 2020 and 2019.
+Added: Amortization expense of $89 was recognized for the year ended December 31, 2022 and $213 was recognized for the year ended December 31, 2021 and 2020, respectively.
The royalty period of 10 years began in 2013, immediately after the date on which the Partnership had cumulatively produced the first 250 metric tons of Powder and Shaped catalyst.
If at the end of the Royalty Period, the cumulative of running royalties actually paid by the Partnership is less than $3,000, the Partnership will be obligated to pay the difference between the $3,000 and the actual cumulative running royalty amount.
−Removed: As of December 31, 2021 and 2020 there were $200 and $200, respectively, liabilities recorded related to this agreement.
+Added: The agreement ended in 2022 and the Partnership paid $216 in March 2022.
+Added: As of December 31, 2022 there were no liabilities recorded related this agreement and in December 31, 2021, there was $200 of liabilities recorded.
Related Party Transactions:
6 unchanged sentences
All related party transactions are reviewed, approved and documented by the appropriate level of the Partnership’s management in accordance with these policies and procedures.
+Added: ZEOLYST INTERNATIONAL
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: (in thousands)
Pursuant to the Contribution Agreement, PQ transferred and Ecovyst assumed PQ’s interest in a Lease Agreement by and between PQ and the Partnership dated February 1, 1988 (the “Lease”) pursuant to which the Partnership leases certain land used in its Kansas City production facilities, and PQ transferred to Ecovyst the land underlying the Partnership’s Kansas City production facility.
7 unchanged sentences
During the years ended December 31, 2022, 2021 and 2020, the Partnership was charged by PQ and Ecovyst $13,908, $11,406 and $12,229, respectively, for these services.
−Removed: These amounts are included in the related party selling, general and administrative line item in the accompanying statements of
−Removed: ZEOLYST INTERNATIONAL
−Removed: NOTES TO FINANCIAL STATEMENTS
−Removed: (in thousands)
+Added: These amounts are included in the related party selling, general and administrative line item in the accompanying statements of operations.
In addition, certain product demonstration costs of $1,621, $924 and $1,853 during the years ended December 31, 2022, 2021 and 2020, respectively, were recorded in the related party cost of goods sold line of the accompanying statements of operations.
−Removed: The Partnership recognized sales to PQ and Ecovyst of $0, $861, and $803 to a wholly owned subsidiary of PQ in the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: The Partnership recognized no sales to Ecovyst for the years ended December 31, 2022 and 2021, respectively, and recognized $861 to the former wholly owned subsidiary of PQ in the year ended December 31, 2020.
As of December 14, 2020, PQ divested its ownership of this subsidiary.
1 unchanged sentence
Subsequent to the date of sale, the Partnership includes this activity as third party.
−Removed: At December 31, 2021 and 2020, the accounts payable to affiliates consisted of $2,943 due to Ecovyst and $2,166 due to PQ.
−Removed: Included in trade accounts receivable at December 31, 2021 and 2020 was $0 due from Ecovyst and $0 due from PQ, respectively.
+Added: As of December 31, 2022 and 2021, the accounts payable to affiliates consisted of $2,636 and $2,943 due to Ecovyst.
+Added: As of December 31, 2022 and 2021, there were no trade receivables due from Ecovyst.
On December 18, 2013, PQ and ZI, entered into a real estate tax abatement agreement with the Unified Government of Wyandotte County and Kansas City, Kansas, assigned by PQ to Ecovyst in 2021, that will utilize an Industrial Revenue Bond financing structure to achieve a 75% real estate tax abatement on the value of the improvements that will be constructed during the expansion of Ecovyst’s and ZI’s facilities at the jointly-operated Kansas City, Kansas plant.
12 unchanged sentences
These amounts are included in the related party selling, general and administrative line item in the accompanying statements of operations.
−Removed: At December 31, 2021 and 2020, the accounts payable to affiliates balance consisted of $9,498 and $6,727, respectively, due to CRI and Shell affiliates.
−Removed: Included in trade accounts receivable at December 31, 2021 and 2020 was $42,138 and $9,132, respectively, of receivables related to sales transacted through Criterion, as described above.
+Added: ZEOLYST INTERNATIONAL
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: (in thousands)
+Added: As of December 31, 2022 and 2021, the accounts payable to affiliates balance consisted of $11,570 and $9,498, respectively, due to CRI and Shell affiliates.
+Added: Included in trade accounts receivable as of December 31, 2022 and 2021 was $36,030 and $42,138, respectively, of receivables related to sales transacted through Criterion, as described above.
is a limited partnership formed in 1993 pursuant to a joint venture agreement between PQ Zeolites B.V.
9 unchanged sentences
The Partnership currently does not have any exposure to any losses by Zeolyst C.V.
−Removed: ZEOLYST INTERNATIONAL
−Removed: NOTES TO FINANCIAL STATEMENTS
−Removed: (in thousands)
The Partnership has purchased $39,027, $54,366 and $43,104 through the sales agreement during the years ended December 31, 2022, 2021 and 2020, respectively.
These costs are a component of production costs and are included in the related party cost of goods sold line item in the accompanying statements of operations when the inventory is sold.
−Removed: At December 31, 2021 and 2020, the accounts payable to affiliates balance consisted of $4,990 and $12,173, respectively, due to Zeolyst C.V.
+Added: As of December 31, 2022 and 2021, the accounts payable to affiliates balance consisted of $6,592 and $4,990, respectively, due to Zeolyst C.V.
Subsequent Events:
−Removed: In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through March 1, 2022, the date the financial statements were available to be issued.
−Removed: During the period from January 1, 2022 through March 1, 2022, the Partnership had no material subsequent events that were not reflected in the financial statements.
+Added: The Partnership has evaluated subsequent events from the balance sheet date through February 28, 2023 and determined there are no further items to disclose.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.