On December 14, 2020, the Company completed the sale of its Performance Materials business for $650,000. 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 represented a strategic shift that had a major effect on the Company’s operations and financial results. As a result, the Company’s condensed consolidated financial statements for the three and six months ended June 30, 2020 reflect the Performance Materials business as a discontinued operation. The divested business historically represented a reportable segment of the Company, including certain Australian operations that were historically reported in the Performance Chemicals reportable segment.


	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
Sales	$	105,995	$	173,886
Cost of goods sold	76,818		128,405
Selling, general and administrative expenses	8,342		17,627
Other operating (income) expense, net	(168)		12,706
Operating income	21,003		15,148

Interest expense, net (1)	3,784		8,916
Other expense, net	1,077		165

Income from discontinued operations before income tax	16,142		6,067
Provision for income taxes	7,790		3,505
Income from discontinued operations, net of tax	$	8,352	$	2,562

(1)The closing of the transaction triggered the Company’s obligation to provide partial repayment under 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. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s mandatory repayment of $275,787 of the Senior Secured Term Loan Facility due February 2027 and its mandatory repayment of $188,722 of the new Senior Secured Term Loan Facility due February 2027.

During the three months ended June 30, 2021, the Company incurred transaction costs of $84 and stock-based compensation expense of $630, and an associated tax benefit of $192 related to the Performance Materials divestiture which is included in loss from discontinued operations, net of tax. During the six months ended June 30, 2021, the Company incurred transaction costs of $1,530 and stock-based compensation expense of $1,283, and an associated tax benefit of $706 related to the Performance Materials divestiture which is included in loss from discontinued operations, net of tax.

Net income attributable to the noncontrolling interest related to the Performance Materials business, net of tax was $71 and $122 for the three and six months ended June 30, 2020. Net income attributable to Ecovyst Inc., related to the Performance Materials business, net of tax was $8,281 and $2,440 for the three and six months ended June 30, 2020.

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. The services under the Transition Services Agreement include information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services. These services are provided for a period of nine months, with three 30-day extensions available. The Company billed $1,401 and $3,061 under the Transition Services Agreement to the buyer during the three and six months ended June 30, 2021, respectively. Those billings are included in selling, general and administrative expenses on the condensed consolidated financial statements for the three and six months ended June 30, 2021.

On February 28, 2021, the Company entered into a definitive agreement to sell its Performance Chemicals business to Sparta Aggregator L.P., a partnership established by Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P., for $1,100,000, subject to certain adjustments including indebtedness, cash, working capital and transaction expenses. The Company completed the sale of the Performance Chemicals business effective on August 1, 2021.

In the first quarter of 2021, the Performance Chemicals business met the discontinued operations criteria set forth in ASC 205-20, as the sale represents a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, the Company’s condensed consolidated financial statements for all periods presented reflect the Performance Chemicals business as a discontinued operation. The Performance Chemicals business historically represented a reportable segment of the Company.

The disposal group was tested for recoverability as of each of the balance sheet dates since meeting the discontinued operations criteria, and the Company recognized an expected disposal loss of approximately $13,990 and $109,584 during the three and six months ended June 30, 2021. The expected disposal loss is included in net loss from discontinued operations, net of tax on the condensed consolidated statements of income. In the condensed consolidated balance sheet as of June 30, 2021, the Company recorded the disposal loss to goodwill and a valuation allowance of approximately $75,080 and $34,504, respectively, included in long-term assets held for sale. Completion of the sale may be for amounts that could vary from the current estimate. The Company’s estimate of fair value will be evaluated and recognized each reporting period until the divestiture is complete.


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Sales	$	170,374	$	140,034	$	334,897	$	311,218
Cost of goods sold	118,785		111,245		244,638		247,838
Selling, general and administrative expenses	11,490		9,998		23,206		21,731
Other operating expense, net	11,850		8,462		29,330		14,079
Impairment of assets held for sale	13,990		—		109,584		—
Operating income (loss)	14,259		10,329		(71,861)		27,570
Equity in net (income) from affiliated companies	(48)		(24)		(86)		(79)
Interest expense, net (1)	5,599		3,353		8,814		7,380
Other (income) expense, net	(840)		320		(6,363)		(3,434)
Income (loss) income from discontinued operations before income tax	9,548		6,680		(74,226)		23,703
Provision for income taxes	2,507		33,102		6,918		40,479
Income (loss) income from discontinued operations, net of tax	$	7,041	$	(26,422)	$	(81,144)	$	(16,776)

(1)Upon the close of the transaction, the Company used a portion of the net proceeds to repay a portion of its outstanding debt amounting to $526,363. Prior to the Company’s debt refinancing in June 2021, the Company’s outstanding term loan facilities had mandatory repayment provisions. As a result, interest expense has been allocated to discontinued operations on the basis of the Company’s total repayment of $526,363.

Net income attributable to the noncontrolling interest related to the Performance Chemicals business, net of tax was $140 and $250 for the three months ended June 30, 2021 and 2020, respectively. Net income (loss) income attributable to Ecovyst Inc., related to the Performance Chemicals business, net of tax was $6,901 and $(26,672) for the three months ended June 30, 2021 and 2020, respectively.

Net income attributable to the noncontrolling interest related to the Performance Chemicals business, net of tax was $257 and $485 for the six months ended June 30, 2021 and 2020, respectively. Net (loss) income attributable to Ecovyst Inc., related to the Performance Chemicals business, net of tax was $(81,401) and $(17,261) for the six months ended June 30, 2021 and 2020, respectively.


	June 30, 2021		December 31, 2020
ASSETS
Cash and cash equivalents	$	17,603	$	21,520
Accounts receivables, net	93,413		86,961
Inventories, net	69,697		74,647
Prepaid and other current assets	18,500		20,879
Current assets held for sale	$	199,213	$	204,007

Investments in affiliated companies	$	261	$	324
Property, plant and equipment, net	394,461		391,524
Goodwill	250,626		326,173
Other intangible assets, net	383,842		388,857
Right-of-use lease assets	20,823		19,296
Other long-term assets	19,984		23,269
Valuation allowance	(34,504)		—
Long-term assets held for sale	$	1,035,493	$	1,149,443

LIABILITIES
Accounts payable	$	65,749	$	74,754
Operating lease liabilities—current	6,544		8,479
Accrued liabilities	22,043		28,336
Current liabilities held for sale	$	94,336	$	111,569

Deferred income taxes	$	60,109	$	50,232
Operating lease liabilities—noncurrent	10,308		10,047
Other long-term liabilities	56,698		95,271
Long-term liabilities held for sale	$	127,115	$	155,550