Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38221 PQ Group Holdings Inc. Delaware 81-3406833 (State or other jurisdiction of incorporation or organization)(I. ...

Financial Data and Key Metrics Changes - The company achieved adjusted free cash flow of $153 million in 2020, with a high EBITDA margin of over 27% [9][15][21] - The leverage ratio improved to 3.8 times at year-end despite lower year-on-year adjusted EBITDA [21][26] Business Line Data and Key Metrics Changes - Refining Services segment reported sales of $103 million, with adjusted EBITDA of $41 million, showing a modest decline [17][18] - Silica Catalysts sales decreased by $3 million to $21 million, while Zeolyst joint venture sales fell 39% to $29 million due to deferred catalyst change outs [19] - Performance Chemicals saw a 2% increase in sales, reaching $36 million, with adjusted EBITDA up 7% [20] Market Data and Key Metrics Changes - Refining services experienced a rebound in the second half of 2020, recovering to approximately 90% of 2019 gasoline demand levels [10][11] - Virgin sulfuric acid demand from industrial and mining customers rebounded to 2019 levels by year-end [11] - Emissions control catalysts volumes began to recover near year-end, with expectations for continued improvement in 2021 [13] Company Strategy and Development Direction - The company is repositioning itself as a pure play catalyst and services growth company, focusing on higher top-line growth and expanding margins [8][28] - The strategic acquisition of Chem32 is aimed at enhancing service capabilities and diversifying offerings within the refining services sector [51][56] - The company anticipates high single-digit organic growth from 2020 to 2025, with a focus on operational efficiency and market demand [30][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong recovery in the second half of 2021, driven by increased demand for transportation fuels and refinery utilization [25][45] - The anticipated sale of Performance Chemicals is expected to provide additional capital for debt reduction and shareholder returns [26][30] - The company expects adjusted EBITDA margins to improve to approximately 31% in 2021, reflecting operational efficiencies [22][23] Other Important Information - The company completed multiple debt refinancings during the year to optimize financial flexibility [15][21] - A special dividend is planned in the range of $2.50 to $3.25 per share following the sale of Performance Chemicals [26] Q&A Session Summary Question: What are the organic growth expectations by segment? - Management indicated that both business segments are expected to grow at about the same high-single-digit level [33] Question: Why is there no operating leverage in the model? - Management explained that operating leverage comes from synergies and efficiencies, particularly in refining services and catalysts [33] Question: What is the outlook for MMA sales growth? - Management noted that MMA sales are expected to accelerate due to increased frequency of change outs and new plant installations [36] Question: How will the tax rate change going forward? - Management indicated that the tax accrual rate is expected to increase toward the 30% range, reflecting complexities from discontinued operations [49] Question: Is the acquisition of Chem32 indicative of future M&A activity? - Management confirmed that Chem32 fits into the strategy of expanding service capabilities and diversifying offerings, with plans for further acquisitions [51][56]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38221 PQ Group Holdings Inc. Delaware 81-3406833 (State or other jurisdiction of incorporation or organiz ...

Financial Data and Key Metrics Changes - The company's top line improved by 6% from the second quarter, with adjusted EBITDA largely in line with the second quarter, resulting in a healthy adjusted EBITDA margin of 27% [9][20] - Sales for the year are projected to be in the range of $1.43 billion to $1.46 billion, with adjusted EBITDA expected to be between $410 million and $425 million, maintaining a margin of approximately 27% [25][26] Business Line Data and Key Metrics Changes - Refining Services: Sales of $108 million were down 9% year-over-year, but regeneration services volume was up nearly 30% from the second quarter [21] - Catalysts: Silica catalysts sales of $23 million declined by $2.5 million from the prior year, while sales in the Zeolyst Joint Venture were about half of prior year levels [22] - Performance Chemicals: Sales of $149 million were down 12% versus last year, reflecting lower volumes from weaker demand in various applications [23] - Performance Materials: Sales of $105 million declined 9%, with steady demand in North America but slowed striping activity due to COVID-related work restrictions [24] Market Data and Key Metrics Changes - Global gasoline demand has been steady at above 90% of 2019 levels since June, with US refinery utilization recovering to about 80% before temporary shutdowns due to hurricanes [11][12] - Demand for high-grade virgin sulfuric acid improved significantly, with volumes up 20% from the second quarter [21] - Automotive sales in the US continued to increase to greater than 90% of 2019 levels [13] Company Strategy and Development Direction - The company announced the sale of Performance Materials at an attractive valuation, representing a significant milestone in its strategy to focus on higher-margin and higher-growth potential businesses [10][30] - The strategic review of Performance Chemicals may lead to a sale in 2021, aimed at unlocking greater shareholder value [30][31] - The company plans to focus on refining services and catalysts, emphasizing businesses with higher margins and growth potential [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism that the trough is behind them, with expectations for demand recovery in the fourth quarter and beyond, except for catalysts which will have a delayed recovery timeline [19] - The company remains confident in its position with existing customers and anticipates utilization rates to return to normal levels [42] Other Important Information - The company is suspending adjusted EPS guidance for the year due to ongoing tax effects from the divestiture [27] - Plans to deploy up to $250 million to a special dividend, subject to board authorization [28] Q&A Session Summary Question: Q4 guidance appears wide; can you discuss business momentum? - Management noted continued volume recovery and maintained expectations for Q4 based on October performance [39] Question: Thoughts on Performance Chemicals in the portfolio? - Management confirmed a firm plan is in place and execution is ongoing [40] Question: Outlook for refining services business in 2021? - Management expressed confidence in the existing customer base and expected utilization rates to be at 90% to 92% [42] Question: CapEx outlook for core businesses? - Approximately 80% of remaining capital is for maintenance, with 20% for growth [44] Question: Insights on chemicals portfolio and long-term growth prospects? - Management highlighted recovery in end-user demand and positive outlook for Q4 and beyond [47] Question: Catalysts market outlook and potential pent-up demand? - Management anticipates recovery in 2021, with stronger acceleration expected towards the end of 2022 [50] Question: Impact of recent hurricanes on operations? - Management reported no substantial impact from recent hurricanes [54] Question: Silica catalysts guidance for Q4? - Management clarified that the yellow color in guidance indicates stabilization, not a drop in demand [57] Question: Changes in highway striping business due to COVID? - Management explained that operational procedures, not lockdowns, caused slowdowns in certain states [59]

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2020, including income, balance sheets, and cash flows, highlighting COVID-19 impact and debt refinancing Condensed Consolidated Statements of Income Highlights (in thousands) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $359,525 | $431,675 | $721,123 | $790,896 | | **Gross Profit** | $92,839 | $115,495 | $181,438 | $196,405 | | **Operating Income** | $41,178 | $70,301 | $64,537 | $99,764 | | **Net Income Attributable to PQ** | $15,926 | $30,574 | $16,150 | $33,725 | | **Diluted EPS** | $0.12 | $0.23 | $0.12 | $0.25 | Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $587,704 | $568,591 | | **Total Assets** | $4,247,210 | $4,320,845 | | **Total Current Liabilities** | $221,118 | $269,468 | | **Total Liabilities** | $2,471,036 | $2,535,527 | | **Total Equity** | $1,776,174 | $1,785,318 | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended, in thousands) | Metric | June 30, 2020 | June 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $62,109 | $59,992 | | **Net cash used in investing activities** | ($36,222) | ($33,857) | | **Net cash used in financing activities** | ($5,955) | ($401) | | **Net change in cash** | $16,671 | $24,233 | [Note 1. Background and Basis of Presentation](index=10&type=section&id=Note%201.%20Background%20and%20Basis%20of%20Presentation) This note describes the company's specialty businesses and the significant impact of the COVID-19 pandemic on economic activity, while manufacturing continued with limited interruptions - The company operates four specialty businesses: Refining Services, Catalysts, Performance Materials, and Performance Chemicals[24](index=24&type=chunk) - The COVID-19 outbreak was declared a national emergency in March 2020, impacting economic activity; the company's manufacturing operations have continued with limited interruptions[26](index=26&type=chunk) - Seasonality affects the Performance Materials and Refining Services segments, with lower sales typically in Q1 and Q4 for Performance Materials and fluctuations in Refining Services tied to gasoline demand[24](index=24&type=chunk) [Note 6. Asset Swap Transaction](index=22&type=section&id=Note%206.%20Asset%20Swap%20Transaction) On February 19, 2020, the company executed a non-cash asset swap, exchanging its ThermoDrop® product line for a beads business, resulting in **$7.7 million** goodwill and a **$6.5 million** pre-tax loss - On February 19, 2020, the company entered into a non-cash asset swap, exchanging its ThermoDrop® product line for a beads business to expand its geographic footprint[64](index=64&type=chunk)[65](index=65&type=chunk) Asset Swap Purchase Price Allocation (in thousands) | Item | Amount | | :--- | :--- | | Total consideration | $28,598 | | Fair value of net assets acquired | $20,868 | | **Goodwill** | **$7,730** | | Pre-tax loss on disposal recognized | $6,475 | [Note 13. Long-term Debt](index=27&type=section&id=Note%2013.%20Long-term%20Debt) As of June 30, 2020, total debt was approximately **$1.93 billion**, with a subsequent July 2020 refinancing of **$625 million** notes via a new **$650 million** term loan Long-term Debt Summary (in thousands) | Component | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Term Loan Facility | $947,497 | $947,497 | | 6.75% Senior Secured Notes | $625,000 | $625,000 | | 5.75% Senior Unsecured Notes | $295,000 | $295,000 | | **Total debt** | **$1,932,981** | **$1,932,126** | - In July 2020, the company refinanced its **$625 million** 6.75% Senior Secured Notes with a new **$650 million** senior secured term loan facility at a floating rate of LIBOR + 3.0% (with a 1.0% floor)[85](index=85&type=chunk) [Note 18. Reportable Segments](index=34&type=section&id=Note%2018.%20Reportable%20Segments) This note details sales and Segment Adjusted EBITDA by segment for Q2 2020, showing declines across most segments except for growth in Catalysts sales Sales by Segment (Three Months Ended June 30, in thousands) | Segment | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Refining Services | $90,432 | $117,290 | (22.9)% | | Catalysts | $25,208 | $20,857 | 20.9% | | Performance Materials | $104,203 | $118,872 | (12.3)% | | Performance Chemicals | $142,641 | $177,828 | (19.8)% | | **Total Sales** | **$359,525** | **$431,675** | **(16.7)%** | Segment Adjusted EBITDA (Three Months Ended June 30, in thousands) | Segment | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Refining Services | $34,996 | $42,824 | (18.2)% | | Catalysts | $25,312 | $29,607 | (14.5)% | | Performance Materials | $27,306 | $29,221 | (6.5)% | | Performance Chemicals | $34,011 | $41,165 | (17.5)% | | **Total Segment Adjusted EBITDA** | **$121,625** | **$142,817** | **(14.8)%** | [Note 22. Subsequent Events](index=40&type=section&id=Note%2022.%20Subsequent%20Events) Significant post-balance sheet events in July 2020 include the sale of a non-core product line, a major debt refinancing, and new interest rate cap agreements - In July 2020, the company sold a non-core product line in its Performance Chemicals segment for **$18 million** and entered into a related tolling arrangement with the buyer through July 2025[127](index=127&type=chunk) - In July 2020, the company completed a major debt refinancing, issuing a new senior secured term loan to redeem its 6.75% Senior Secured Notes due 2022[127](index=127&type=chunk) - In July 2020, the company entered into new interest rate cap agreements on a notional amount of **$400 million**[127](index=127&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial performance for Q2 and YTD 2020, detailing the significant negative impact of COVID-19 on sales and outlining liquidity management actions - The COVID-19 pandemic led to unprecedented disruptions and an overall lower sales volume demand during Q2 2020, with the Refining Services segment being impacted the most due to significant reductions in U.S. gasoline demand[136](index=136&type=chunk) - To mitigate the slowdown, the company adjusted production levels, reduced discretionary spending, implemented furloughs, and deferred capital maintenance expenditures[136](index=136&type=chunk) - As of June 30, 2020, the company had total available liquidity of **$285.3 million** and believes its existing cash and credit facilities are sufficient to meet cash needs for at least the next twelve months[210](index=210&type=chunk) [Results of Operations - Three Months Ended June 30, 2020 vs 2019](index=47&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202020%20vs%202019) Q2 2020 sales decreased **16.7%** to **$359.5 million**, with gross profit down **19.7%** and net income attributable to PQ Group Holdings falling **48.0%** Q2 2020 vs Q2 2019 Performance (in millions) | Metric | Q2 2020 | Q2 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $359.5 | $431.7 | $(72.2) | (16.7)% | | **Gross Profit** | $92.8 | $115.5 | $(22.7) | (19.7)% | | **Operating Income** | $41.2 | $70.3 | $(29.1) | (41.4)% | | **Net Income (to PQ)** | $15.9 | $30.6 | $(14.7) | (48.0)% | - Refining Services sales fell **22.9%** due to lower gasoline consumption from COVID-19 stay-at-home orders; Catalysts sales grew **20.6%** due to increased demand for chemical and polyolefin catalysts[155](index=155&type=chunk) - Performance Chemicals sales decreased **19.8%** due to lower volumes of sodium silicate sold to industrial customers affected by COVID-19 related slowdowns[157](index=157&type=chunk) [Results of Operations - Six Months Ended June 30, 2020 vs 2019](index=55&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202020%20vs%202019) YTD 2020 sales decreased **8.8%** to **$721.1 million**, with gross profit down **7.6%** and net income attributable to PQ Group Holdings falling **51.9%** YTD 2020 vs YTD 2019 Performance (in millions) | Metric | YTD 2020 | YTD 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $721.1 | $790.9 | $(69.8) | (8.8)% | | **Gross Profit** | $181.4 | $196.4 | $(15.0) | (7.6)% | | **Operating Income** | $64.5 | $99.7 | $(35.2) | (35.3)% | | **Net Income (to PQ)** | $16.2 | $33.7 | $(17.5) | (51.9)% | - Catalysts sales grew **36.5%** YTD due to higher customer demand for polyolefin catalysts and timing of chemical catalyst orders[184](index=184&type=chunk) - Other operating expense increased by **$22.1 million**, driven by transaction-related costs and asset write-offs from the asset swap, compared to a prior-year period that included a gain on an asset sale[189](index=189&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=65&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash from operations and its ABL facility, with **$285.3 million** available liquidity as of June 30, 2020, deemed sufficient for the next 12 months Cash Flow Summary (Six Months Ended June 30, in millions) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62.1 | $60.0 | | Net cash used in investing activities | $(36.2) | $(33.9) | | Net cash used in financing activities | $(5.9) | $(0.3) | - Capital expenditures were significantly lower in the first six months of 2020 (**$33.7 million**) compared to 2019 (**$51.4 million**), with reductions in both maintenance and growth spending[220](index=220&type=chunk) - As of June 30, 2020, total debt was **$1.933 billion**, with net debt of **$1.844 billion** after accounting for **$88.6 million** in cash[217](index=217&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, including foreign currency, interest rates, and commodity prices, and its use of derivative instruments for hedging - The company's major market risks are foreign currency exchange, interest rate, commodity price, and credit risk[228](index=228&type=chunk) - In 2020, the company entered into several new interest rate cap agreements to manage interest rate risk, including agreements in February, March, and July covering notional amounts of **$500 million** and **$400 million**[229](index=229&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of June 30, 2020, with remote work due to COVID-19 not materially affecting internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2020[231](index=231&type=chunk) - Despite the majority of office personnel working remotely due to COVID-19, there were no changes that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[232](index=232&type=chunk) [PART II OTHER INFORMATION](index=72&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company believes no pending litigation is likely to have a material adverse effect on its business, financial condition, or operations - The company is not aware of any pending litigation that is likely to have a material adverse effect on its business, financial condition, or operations[235](index=235&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, focusing on the significant and ongoing adverse effects of the COVID-19 pandemic on operations, sales demand, and supply chain disruptions - The COVID-19 pandemic has adversely affected the company's operations and is expected to have continued negative effects, the full extent of which is unpredictable[236](index=236&type=chunk) - The pandemic has led to lower sales volume demand, especially in the Refining Services, Performance Chemicals, and Catalysts segments, and has caused disruptions in the availability of raw materials[236](index=236&type=chunk) - Employee absenteeism related to COVID-19 has caused production delays at several manufacturing facilities, and further outbreaks or government orders could lead to additional disruptions[236](index=236&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including the new Term Loan Credit Agreement and required Sarbanes-Oxley Act certifications from the CEO and CFO - A key exhibit filed is the New Term Loan Credit Agreement from July 2020, reflecting the company's recent debt refinancing activities[238](index=238&type=chunk) - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits[238](index=238&type=chunk)

Financial Performance and Key Metrics - The company reported revenues of $360 million for Q2 2020, leading to adjusted EBITDA of $113 million, which exceeded the recently increased guidance [9][10] - Adjusted EBITDA margins for the quarter were 28%, consistent with the previous year, reflecting effective cost management despite lower demand [9][10] - Adjusted free cash flow for the quarter totaled $44 million, significantly higher than the prior year, driven by capital discipline and reduced interest costs [25] Business Segment Performance - **Refining Services**: Sales decreased by 23% to $90 million, primarily due to lower volumes from reduced driving miles, but volumes improved by approximately 10% in June compared to April [26] - **Catalysts**: Silica Catalysts sales increased by 24% to $25 million, driven by strong demand for packaging and engineering plastics, while Zeolyst Joint Venture sales rose 5% to $41 million [28] - **Performance Materials**: Sales declined by 11% on a constant currency basis, with stable North American highway safety volumes offset by weakness in industrial applications [29] - **Performance Chemicals**: Sales were down 15% to $143 million, with a favorable sales mix offset by an 18% decline in volumes [30] Market Trends and Key Indicators - Approximately 70% of product sales are expected to come from end uses that are stable or improving in the second half of the year [15] - Gasoline consumption in the U.S. rebounded to about 90% of 2019 levels by the end of June, indicating a potential recovery in demand [16] - Demand for sodium silicates is expected to improve as GDP growth drives industrial and construction activities [70] Company Strategy and Industry Competition - The company is focused on safeguarding existing business and securing new contracts, with nearly 15% of future annual volume locked in under long-term contracts [8][21] - The company aims to maintain high margins and cash flows while exploring additional ways to reshape its portfolio for future growth [42][90] - The management emphasized the importance of cost management and capital discipline to navigate the ongoing challenges presented by the COVID-19 pandemic [46] Management Commentary on Operating Environment and Future Outlook - Management expressed cautious optimism about demand recovery in the second half of the year, despite uncertainties regarding the timing [12][36] - The company is raising its adjusted free cash flow outlook for the full year to $145 million to $155 million, reflecting improved operating cash flow and lower interest costs [40] - Management highlighted the importance of maintaining a strong focus on safety and operational integrity during the ongoing pandemic [45] Other Important Information - The company completed a comprehensive refinancing during the quarter, extending maturities and significantly lowering cash interest costs [10][32] - The company has a strong liquidity position with $285 million of availability, including $89 million in cash [34] Q&A Session Summary Question: Trends in Silica Catalysts business - Management noted that demand was pulled forward in the Silica Catalysts business, with some orders accelerated into the quarter [50] Question: Margin improvement sustainability - Management indicated that cost savings will continue to benefit margins, guiding for a full-year margin around 27% [53] Question: Free cash flow and EBITDA conversion - Management explained that lower interest costs and tight working capital management contributed to improved cash conversion rates [56] Question: Asset monetization pipeline - Management confirmed a pipeline of smaller transactions aimed at optimizing the quality of earnings and cash flow [58] Question: Capital allocation strategy - Management emphasized debt reduction as the top priority, with potential for dividends and bolt-on acquisitions in the future [62] Question: Recovery expectations for Performance Chemicals - Management anticipates a steady recovery in sodium silicate orders as GDP growth stabilizes [70] Question: Catalysts business outlook for 2021 - Management expects a positive rebound in the Catalysts segment, particularly in hydrocracking demand [74]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38221 PQ Group Holdings Inc. Delaware 81-3406833 (State or other jurisdiction of incorporation or organizatio ...

Sales Performance - Total sales attributable to the Zeolyst Joint Venture for the year ended December 31, 2019, were $170.3 million, representing 50% of its total sales[1]. - For the year ended December 31, 2019, total sales reached $1,567.1 million, with Performance Chemicals contributing 43.7% of total sales at $685.1 million[40]. - Fuels & Emission Controls accounted for 22% of total sales in 2019, driven by global regulatory requirements to reduce nitrogen oxides and sulfur emissions[2]. - Consumer Products represented 15% of total sales, with growth driven by the demand for environmentally friendly chemical additives[2]. - Highway Safety & Construction sales were 18% of total sales, supported by the demand for enhanced visibility in road markings[2]. - Industrial & Process Chemicals made up 20% of total sales, with demand in the tire industry for reduced rolling resistance[2]. - The Refining Services segment generated sales of $447.1 million, accounting for 28.5% of total sales, with an adjusted EBITDA of $175.6 million, representing 34.1% of total adjusted EBITDA[40]. - Approximately 25% of the company's sales for the year ended December 31, 2019, were derived from its top 10 customers, with no single customer representing more than 4% of total sales[116]. - About 19% of the company's sales for the year ended December 31, 2019, were from products sold into highway safety applications, making them sensitive to government budget allocations[118]. Market Position and Competition - In 2019, the company held an estimated number one supply share position in the U.S. for sulfuric acid regeneration, based on sales volume exceeding 50%[28]. - The company has developed zeolite-based catalysts to help customers meet stringent vehicle emission standards worldwide[30]. - The Silica Catalysts product group competes primarily with W.R. Grace, while the Zeolyst Joint Venture faces competition from global producers like BASF and UOP[52]. - The company’s strategic presence in the Gulf Coast and California enhances its competitive advantage in the North American refining services industry[44]. - The company faces significant competition from large international producers and smaller regional competitors, which could adversely affect its financial condition and results of operations[113]. Financial Stability and Risks - The company maintained stable margins and cash flow generation despite changing macroeconomic cycles, supported by long-term sales contracts and material cost pass-through[37]. - The company has a substantial indebtedness totaling approximately $1,932.1 million as of December 31, 2019, which could limit operational flexibility and increase vulnerability to economic conditions[109]. - The company reported $245.1 million of net operating losses for U.S. federal income tax purposes, providing cash tax savings as taxable income is generated[37]. - The company’s cash flow generation is supported by disciplined capital investment and tax attributes, enhancing overall financial stability[37]. - The company is exposed to risks from non-payment or non-performance by customers, which could materially affect its business and financial condition[114]. - The company may face challenges in passing on increases in raw material prices to customers, which could negatively impact profitability[110]. - The company is exposed to product liability claims and recalls, which could result in unexpected expenditures and affect consumer confidence[123]. Research and Development - The company operates six research and development facilities globally, focusing on new product development and customer collaboration[80]. - The company is investing significantly in research and development for new products, but there is a risk of technical or market failure, which could impact competitive positioning[106]. - As of December 31, 2019, the company owned 50 patented inventions in the U.S. and had approximately 326 patents issued worldwide[81]. Environmental and Regulatory Compliance - The company has implemented a sustainability function and hired a dedicated sustainability manager in 2019[85]. - The company is subject to extensive environmental regulations, with potential liabilities for contamination and noncompliance that could significantly impact financial condition[127]. - Existing and proposed regulations to limit greenhouse gas emissions may lead to significant additional operating and capital expenses for the company[131]. - The company has established reserves of approximately $6.6 million for environmental remediation and enforcement matters[129]. Employee and Labor Relations - As of December 31, 2019, the company had 3,279 employees worldwide, with 1,491 in the United States and 956 in Europe[86]. - Approximately 50% of the company's employees were represented by a union or other employee representative body[86]. - The company employs 3,279 employees globally, with approximately 50% represented by unions, and labor disputes could disrupt operations[149]. Strategic Initiatives and Acquisitions - Strategic acquisitions and joint ventures, such as the Business Combination and Zeolyst Joint Venture, may present financial and operational challenges, including integration difficulties[137]. - The company may opportunistically pursue asset dispositions, which could adversely affect its financial condition and liquidity[139]. Currency and Market Risks - The company generated 40% of its sales in currencies other than U.S. dollars for the year ended December 31, 2019, exposing it to currency transaction risks[100]. - The company has experienced economic loss due to foreign currency exchange rate fluctuations, impacting financial results[100]. Miscellaneous Risks - The company may face damages from customer claims if products fail to meet quality specifications, which could harm its reputation and financial condition[136]. - The company is currently subject to various asbestos premises liability claims related to employee or contractor exposure, which could result in significant liability[150]. - Information technology risks, including cyber attacks and data breaches, could materially disrupt operations and harm financial condition[147].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38221 PQ Group Holdings Inc. Delaware 81-3406833 (State or other jurisdiction of incorporation or organiz ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38221 PQ Group Holdings Inc. Delaware 81-3406833 (State or other jurisdiction of incorporation or organization ...