UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549

FORM 10-Q

(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2021
OR
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 NumberNumber: 1-11442

CHART INDUSTRIES, INC.
(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)

charter)
Delaware34-1712937
(State or Other Jurisdictionother jurisdiction of
Incorporation incorporation or Organization)
organization)
(I.R.S. Employer
Identification No.)
3055 Torrington Drive, Ball Ground, Georgia 30107
(Address of Principal Executive Offices)principal executive offices) (ZIP Code)
(770) 721-8800
(Registrant’s Telephone Number, Including Area Code)Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name, Former Addressname, former address and Former Fiscal Year,former fiscal year, if Changed Since Last Report)changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01GTLSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter)chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  ¨o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer¨☐
Non-accelerated filer¨(Do not check if a smaller reporting company)☐Smaller reporting company¨☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨☐     No  x
At October 23, 2017,
As of April 19, 2021, there were 30,771,07436,348,534 outstanding shares of the Company’s Common Stock,common stock, par value $0.01 per share.




CHART INDUSTRIES, INC.
INDEX
 
Item 1. Financial Statements
Page
Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016
3
Condensed Consolidated Statements of OperationsIncome and Comprehensive Income for the Three and Nine Months Ended September 30, 2017 and 2016
45
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016
56
Condensed Consolidated Statements of Equity
7
Notes to the Unaudited Condensed Consolidated Financial Statements
68
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
2628
Item 3. Quantitative and Qualitative Disclosures About Market Risk
3937
Item 4. Controls and Procedures
3938
Item 1. Legal Proceedings
40
Item 1A. Risk Factors
4140
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
4140
Item 4. Mine Safety Disclosures
4140
Item 6. Exhibits
4241
Signatures
4342


2
Table of Contents



PART I. FINANCIAL INFORMATION


Item 1.Financial Statements
Item 1.Financial Statements
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands,millions, except per share amounts)
March 31,
2021		December 31,
2020
ASSETS
Current Assets
Cash and cash equivalents$114.9 $125.1 
Accounts receivable, less allowances of $7.9 and $8.4, respectively186.4 200.8 
Inventories, net279.9 248.4 
Unbilled contract revenue74.6 79.4 
Prepaid expenses26.4 20.0 
Other current assets31.6 29.3 
Total Current Assets713.8 703.0 
Property, plant, and equipment, net409.3 414.5 
Goodwill911.3 865.9 
Identifiable intangible assets, net481.4 493.1 
Investments119.9 78.9 
Other assets16.6 15.1 
TOTAL ASSETS$2,652.3 $2,570.5 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$151.8 $140.1 
Customer advances and billings in excess of contract revenue106.3 118.9 
Accrued salaries, wages, and benefits27.3 39.7 
Accrued income taxes46.0 46.5 
Current portion of warranty reserve10.3 11.0 
Current convertible notes255.2 220.9 
Operating lease liabilities, current5.1 5.1 
Other current liabilities58.3 52.6 
Total Current Liabilities660.3 634.8 
Long-term debt303.1 221.6 
Long-term deferred tax liabilities49.9 60.2 
Accrued pension liabilities9.1 9.6 
Operating lease liabilities, non-current22.7 23.6 
Other long-term liabilities41.2 41.4 
Total Liabilities1,086.3 991.2 
3
Table of Contents

 September 30,
2017		 December 31,
2016
 (Unaudited)  
ASSETS   
Current Assets   
Cash and cash equivalents$124,658
 $281,959
Accounts receivable, less allowances of $10,349 and $10,217195,785
 142,762
Inventories, net213,590
 169,683
Unbilled contract revenue41,378
 26,736
Prepaid expenses15,982
 16,762
Other current assets30,808
 15,075
Total Current Assets622,201
 652,977
Property, plant, and equipment, net293,145
 251,049
Goodwill457,481
 217,970
Identifiable intangible assets, net298,878
 93,443
Other assets21,318
 17,643
TOTAL ASSETS$1,693,023
 $1,233,082
LIABILITIES AND EQUITY   
Current Liabilities   
Accounts payable$109,939
 $79,953
Customer advances and billings in excess of contract revenue100,696
 74,702
Accrued salaries, wages, and benefits45,237
 41,746
Current portion of warranty reserve13,151
 15,293
Short-term debt and current portion of long-term debt244,330
 6,487
Other current liabilities37,102
 43,353
Total Current Liabilities550,455
 261,534
Long-term debt304,012
 233,711
Long-term deferred tax liabilities74,136
 4,241
Long-term portion of warranty reserve2,504
 2,978
Accrued pension liabilities10,896
 14,362
Other long-term liabilities18,612
 17,579
Total Liabilities960,615
 534,405
    
Equity   
Common stock, par value $0.01 per share – 150,000,000 shares authorized, 30,767,789 and 30,613,166 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively308
 306
Additional paid-in capital404,502
 395,843
Retained earnings337,709
 336,328
Accumulated other comprehensive loss(12,712) (35,212)
Total Chart Industries, Inc. Shareholders’ Equity729,807
 697,265
Noncontrolling interests2,601
 1,412
Total Equity732,408
 698,677
TOTAL LIABILITIES AND EQUITY$1,693,023
 $1,233,082
The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

Equity
Common stock, par value $0.01 per share – 150,000,000 shares authorized, 36,347,850 and 36,185,829 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively0.4 0.4 
Additional paid-in capital750.0 780.8 
Treasury stock; 760,782 shares at March 31, 2021(19.3)(19.3)
Retained earnings844.7 808.4 
Accumulated other comprehensive (loss) income(16.8)2.4 
Total Chart Industries, Inc. Shareholders’ Equity1,559.0 1,572.7 
Noncontrolling interests7.0 6.6 
Total Equity1,566.0 1,579.3 
TOTAL LIABILITIES AND EQUITY$2,652.3 $2,570.5 
See accompanying notes to these unaudited condensed consolidated financial statements.

4
3
Table of Contents



CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSINCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(Dollars and shares in thousands,millions, except per share amounts)
 Three Months Ended March 31,
 20212020
Sales$288.5 $301.9 
Cost of sales204.6 219.6 
Gross profit83.9 82.3 
Selling, general, and administrative expenses46.2 52.5 
Amortization expense8.8 14.0 
Operating expenses55.0 66.5 
Operating income28.9 15.8 
Interest expense, net2.0 7.2 
Unrealized (gain) loss on investments in equity securities(3.3)4.8 
Financing costs amortization1.2 1.0 
Foreign currency (gain) loss and other(0.2)0.3 
Income from continuing operations before income taxes29.2 2.5 
Income tax expense3.1 0.4 
Net income from continuing operations26.1 2.1 
Income from discontinued operations, net of tax0 6.4 
Net income26.1 8.5 
Less: Income attributable to noncontrolling interests of continuing operations, net of taxes0.5 0 
Net income attributable to Chart Industries, Inc.$25.6 $8.5 
Net income attributable to Chart Industries, Inc.
Income from continuing operations$25.6 $2.1 
Income from discontinued operations, net of tax0 6.4 
Net income attributable to Chart Industries, Inc.$25.6 $8.5 
Basic earnings per common share attributable to Chart Industries, Inc.:
Income from continuing operations$0.72 $0.06 
Income from discontinued operations0 0.18 
Net income attributable to Chart Industries, Inc.$0.72 $0.24 
Diluted earnings per common share attributable to Chart Industries, Inc.
Income from continuing operations$0.63 $0.06 
Income from discontinued operations0 0.18 
Net income attributable to Chart Industries, Inc.$0.63 $0.24 
Weighted-average number of common shares outstanding:
Basic35.55 35.77 
Diluted40.62 36.01 
Comprehensive income (loss), net of taxes$6.9 $(1.4)
Less: Comprehensive income attributable to noncontrolling interests, net of taxes0.5 0 
Comprehensive income (loss) attributable to Chart Industries, Inc., net of taxes$6.4 $(1.4)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Sales$240,531
 $203,930
 $682,839
 $644,782
Cost of sales170,129
 134,307
 493,562
 435,507
Gross profit70,402
 69,623
 189,277
 209,275
Selling, general, and administrative expenses56,714
 45,430
 159,346
 143,862
Amortization expense3,240
 2,912
 9,301
 9,156
Asset impairments—
 1,217
 —
 1,217
Operating expenses59,954
 49,559
 168,647
 154,235
Operating income10,448
 20,064
 20,630
 55,040
Other expenses:       
Interest expense, net4,828
 4,291
 13,045
 12,556
Financing costs amortization321
 321
 963
 963
Foreign currency loss1,286
 4
 1,790
 117
Other expenses, net6,435
 4,616
 15,798
 13,636
Income before income taxes4,013
 15,448
 4,832
 41,404
Income tax expense1,907
 1,764
 2,346
 12,829
Net income2,106
 13,684
 2,486
 28,575
Less: Income (loss) attributable to noncontrolling interests, net of taxes596
 (1,341) 1,105
 (2,952)
Net income attributable to Chart Industries, Inc.$1,510
 $15,025
 $1,381
 $31,527
Net income attributable to Chart Industries, Inc. per common share:       
Basic$0.05
 $0.49
 $0.04
 $1.03
Diluted$0.05
 $0.48
 $0.04
 $1.02
Weighted-average number of common shares outstanding:       
Basic30,755
 30,585
 30,726
 30,578
Diluted31,311
 31,064
 31,288
 30,940
        
Comprehensive income, net of taxes$10,331
 $13,932
 $25,070
 $29,235
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of taxes641
 (1,364) 1,189
 (3,069)
Comprehensive income attributable to Chart Industries, Inc., net of taxes$9,690
 $15,296
 $23,881
 $32,304


See accompanying notes to these unaudited condensed consolidated financial statements.

5
4
Table of Contents



CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)millions)
 Three Months Ended March 31,
 20212020
OPERATING ACTIVITIES
Net income$26.1 $8.5 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization19.5 23.9 
Interest accretion of convertible notes discount0 1.9 
Employee share-based compensation expense3.4 2.9 
Financing costs amortization1.2 1.0 
Unrealized foreign currency transaction gain(4.6)0 
Unrealized (gain) loss on investments in equity securities(3.3)4.8 
Other non-cash operating activities1.9 3.2 
Changes in assets and liabilities, net of acquisitions:
Accounts receivable13.6 7.5 
Inventories(36.3)(16.1)
Unbilled contract revenues and other assets(6.8)8.4 
Accounts payable and other liabilities4.1 (17.0)
Customer advances and billings in excess of contract revenue(10.5)(3.5)
Net Cash Provided By Operating Activities8.3 25.5 
INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired(55.0)0 
Investments(40.0)0 
Capital expenditures(11.5)(10.3)
Government grants0.2 0.1 
Net Cash Used In Investing Activities(106.3)(10.2)
FINANCING ACTIVITIES
Borrowings on revolving credit facilities187.7 64.5 
Repayments on revolving credit facilities(102.5)(84.7)
Repayments on term loan0 (2.8)
Proceeds from exercise of stock options5.6 2.0 
Common stock repurchases from share-based compensation plans(3.0)(1.7)
Common stock repurchases0 (19.3)
Net Cash Provided By (Used In) Financing Activities87.8 (42.0)
Effect of exchange rate changes on cash and cash equivalents0 (3.0)
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents (1)
(10.2)(29.7)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period126.1 120.0 
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (2)
$115.9 $90.3 
 Nine Months Ended September 30,
 2017 2016
OPERATING ACTIVITIES   
Net income$2,486
 $28,575
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization28,659
 28,605
Asset impairments—
 1,217
Interest accretion of convertible notes discount10,027
 9,268
Employee share-based compensation expense9,555
 9,014
Financing costs amortization963
 963
Unrealized foreign currency transaction loss215
 318
Other non-cash operating activities975
 (390)
Changes in assets and liabilities, net of acquisitions:   
Accounts receivable(10,311) 55,706
Inventory(19,264) 16,246
Unbilled contract revenues and other assets(8,431) 38,721
Accounts payable and other liabilities(4,824) (43,393)
Customer advances and billings in excess of contract revenue7,487
 1,742
Net Cash Provided By Operating Activities17,537
 146,592
INVESTING ACTIVITIES   
Capital expenditures(23,407) (13,411)
Proceeds from sale of assets925
 —
Government grants407
 1,055
Acquisition of businesses, net of cash acquired(446,004) (1,383)
Net Cash Used In Investing Activities(468,079) (13,739)
FINANCING ACTIVITIES   
Borrowings on revolving credit facilities302,176
 3,820
Repayments on revolving credit facilities(5,097) (6,061)
Borrowings on term loan—
 13,167
Repayments on term loan—
 (1,508)
Proceeds from exercise of options1,057
 26
Excess tax benefits from share-based compensation—
 54
Common stock repurchases(1,954) (658)
Net Cash Provided By Financing Activities296,182
 8,840
Effect of exchange rate changes on cash4,854
 1,875
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents(149,506) 143,568
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period282,949
 123,708
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD(1)
$133,443
 $267,276
_______________(1)Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents represents cash flows of consolidated operations for all periods presented. For cash flows of discontinued operations, refer to Note 2, “Discontinued Operations.”
(2)Includes restricted cash and restricted cash equivalents of $1.0 in other assets for each of the periods presented. For further information regarding restricted cash and restricted cash equivalents balances, refer to Note 9, “Debt and Credit Arrangements.”

(1)
Refer to the Debt and Credit Arrangements and Business Combinations notes for further information regarding restricted cash and restricted cash equivalents balances.
See accompanying notes to these unaudited condensed consolidated financial statements.

5
6
Table of Contents

CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
(Dollars in millions)
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive
Income (Loss)		Non-controlling Interests
 Shares
Outstanding		AmountTreasury StockRetained
Earnings		Total
Equity
Balance at December 31, 202036.19 $0.4 $780.8 $(19.3)$808.4 $2.4 $6.6 $1,579.3 
Net income— — — — 25.6 — 0.5 26.1 
Cumulative effect of change in accounting principle (1)
— — (36.9)— 10.7 — — (26.2)
Other comprehensive loss— — — — — (19.2)— (19.2)
Share-based compensation expense— — 3.4 — — — — 3.4 
Common stock issued from share-based compensation plans0.18 — 5.6 — — — — 5.6 
Common stock repurchases from share-based compensation plans(0.02)— (3.0)— — — — (3.0)
Dividend distribution to noncontrolling interest— — — — — — — 0 
Other— — 0.1 — — — (0.1)0 
Balance at March 31, 202136.35 $0.4 $750.0 $(19.3)$844.7 $(16.8)$7.0 $1,566.0 
 Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossNon-controlling Interests
 Shares
Outstanding		AmountTreasury StockRetained
Earnings		Total
Equity
Balance as of December 31, 201935.80 $0.4 $762.8 $0 $500.3 $(35.9)$4.8 $1,232.4 
Net income— — — — 8.5 — — 8.5 
Other comprehensive loss— — — — — (9.9)— (9.9)
Share-based compensation expense— — 2.9 — — — — 2.9 
Common stock issued from share-based compensation plans0.16 — 2.0 — — — — 2.0 
Common stock repurchases (2)
— — — (19.3)— — — (19.3)
Common stock repurchases from share-based compensation plans(0.01)— (1.7)— — — — (1.7)
Balance at March 31, 202035.95 $0.4 $766.0 $(19.3)$508.8 $(45.8)$4.8 $1,214.9 
_______________
(1)Refer to Note 1, “ Basis of Preparation” for discussion regarding the cumulative effect of change in accounting principle.
(2)Includes $19.3 in shares repurchased through our share repurchase program. On March 11, 2021, the share repurchase program expired with no further repurchases. Refer to Note 1, “Basis of Preparation” for further information.

See accompanying notes to these unaudited condensed consolidated financial statements.
7
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts)



NOTE 1 — Basis of Preparation
The accompanying unaudited condensed consolidated financial statements of Chart Industries, Inc. and its consolidated subsidiaries (the “Company”(herein referred to as the “Company,” “Chart,” “we,” “us,” or “Chart”“our”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principlesGAAP for annual financial statements. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2017March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2021.
Nature of Operations: Chart Industries, Inc. and its consolidated subsidiaries (herein referred to as the “Company,” “Chart,” or “we”), isWe are a leading diversifiedindependent global manufacturer of highly engineered equipment forservicing multiple applications in the industrialClean Energy and Industrial Gas markets. Our unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and repair. Being at the forefront of the clean energy and biomedical industries. Chart’stransition, Chart is a leading provider of technology, equipment and engineered systemsservices related to liquefied natural gas, hydrogen, biogas and CO2 Capture amongst other applications. We are primarily usedcommitted to excellence in environmental, social and corporate governance (ESG) issues both for low-temperature and cryogenic applications utilizing our expertise in cryogenic systems and equipment which operate at low temperatures sometimes approaching absolute zero (0 Kelvin; -273° Centigrade; -459° Fahrenheit). The Company has domestic operations located acrosscompany as well as our customers. With over 25 global locations from the United States including principal executive offices located in Georgia, and an international presence into Asia, Australia, India, Europe Mexico and South America.America, we maintain accountability and transparency to our team members, suppliers, customers and communities.
Principles of Consolidation: The unaudited condensed consolidated financial statements include the accounts of the CompanyChart Industries, Inc. and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.
Reclassifications: Certain total assets by operatingReclassifications: As discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, on October 1, 2020, we closed on the sale of our cryobiological products business to Cryoport, Inc. (CYRX) (refer to Note 2, “Discontinued Operations” for further information). Furthermore, we reorganized our reporting structure such that the composition of our reportable segments changed effective October 1, 2020 (refer to Note 3, “Reportable Segments” for further information). As such, certain reclassifications have been made to the statement of income and restructuring activities as reportedcomprehensive income for the three months ended March 31, 2020 and certain notes to the unaudited condensed consolidated financial statements in 2016 were reclassifiedorder to conform to the 2017 presentation within the notes to the condensed consolidated financial statements.2021 presentation.
Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principlesGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. These estimates may also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
Cash, Cash Equivalents, Restricted Cash,While our production has been considered “essential” in all locations we operate in, we have experienced, and Restricted Cash Equivalents: The Company considers all investments with an initial maturity of three months or less when purchased to be cash equivalents. See the Debt and Credit Arrangements notefor additional information about restricted cash and restricted cash equivalents, which is included in other current assets and other assetsmay again experience in the accompanying condensed consolidated balance sheets.future, temporary facility closures while awaiting appropriate government approvals in certain jurisdictions. The Covid-19 outbreak could also disrupt our supply chain and materially adversely impact our ability to secure supplies for our facilities, which could materially adversely affect our operations. There may also be long-term effects on our customers in and the economies of affected countries. As a result of these uncertainties, actual results could differ from those estimates and assumptions. If the economy or markets in which we operate remain weak or deteriorate further, our business, financial condition and results of operations may be materially and adversely impacted.
Share Repurchase Program: As discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, on March 11, 2020, our Board of Directors authorized a share repurchase program for up to $75 million of the Company’s common stock over the next twelve months through various means, including open market transactions, block purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. During the first quarter of 2020, we repurchased 0.76 shares of our common stock at an average price of $25.40 per share for a total purchase price of $19.3. We suspended the program on March 20, 2020 (the “Suspension Date”) in light of uncertainty resulting from the Covid-19 pandemic and the desire to conserve cash resources. On March 11, 2021, the share repurchase program expired with no further repurchases since the Suspension Date.
Recently Issued Accounting Standards: Standards (Not Yet Adopted): In August 2017,March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, “Derivatives2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The ASU expands and enhances hedge accounting to become more closely aligned with an entity’s risk management activities through hedging strategies. The ASU provides changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements and creates more transparency and better understandability around how economic results are presented in the financial statements. In addition, the new guidance makes certain targeted improvements to ease the application of accounting guidance relative to hedge effectiveness. The guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the effect that the ASU will have on the Company’s financial position, results of operations, and disclosures.
In May 2017,January 2021, the FASB subsequently issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The FASB issued the guidance to provide clarity as to when modification accounting should be applied when there is a change to the terms or conditions of a share-based payment award in order to prevent diversity in practice. The ASU requires modification accounting to be applied unless all of the following conditions exist: (1) the fair value (or calculated value or intrinsic value, if such measurement is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such measurement is used) of the original award before the original award is modified; if the modification does not affect any of the inputs to the valuation, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award before it was modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award before it was modified. The guidance will be applied prospectively for annual periods and interim periods beginning

2021-01,
6
8
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued



after


“Reference Rate Reform (Topic 848): Scope.” ASU 2020-04 and the subsequent modifications are identified as Accounting Standards Codification (“ASC”) 848 (“ASC 848”). ASC 848 simplifies the accounting for modifying contracts (including those in hedging relationships) that refer to LIBOR and other interbank offered rates that are expected to be discontinued due to reference rate reform. The amendments in ASC 848 are effective for all entities as of March 12, 2020 through December 15, 2017. Early adoption31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is permitted. The Companysubsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in ASC 848 must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. We expect application of the amendments to impact accounting for our senior secured revolving credit facility due June 2024. We are currently assessing the effect that the ASUASC 848 will have on the Company’sour financial position, results of operations, and disclosures.
Recently Adopted Accounting Standards: In March 2017,August 2020, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entities Own Equity (Subtopic 815-40).” This ASU simplifies accounting for convertible instruments by eliminating two of the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”three models in ASC 470-20 that require separating embedded conversion features from convertible instruments. The new guidance requires companies with sponsored defined benefit pension and/or other postretirement benefit plans to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs. The other components of net periodic benefit cost will be presented separately and not included in operating income. In addition, only service costs are eligible to be capitalized as an asset. The standard will beis effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and2021. We adopted this guidance effective January 1, 2021 under the guidance will generally be applied retrospectively, whereas the capitalizationmodified retrospective adoption approach. The cumulative effect of the service cost component willchange was recognized as an adjustment to the opening balance of retained earnings at the date of adoption. The comparative information has not been restated and continues to be applied prospectively. Early adoption is permitted with allpresented according to accounting standards in effect for those periods.
As a result of the amendments adoptedadoption of ASU 2020-06, our convertible notes due November 2024 are no longer bifurcated into separate liability and equity components in our March 31, 2021 condensed consolidated balance sheet. Rather, the same period. If$258.8 principal amount of our convertible notes due November 2024 was classified as a liability only in our March 31, 2021 condensed consolidated balance sheet. Upon adoption of ASU 2020-06, we recorded an entity early adoptsadjustment to the guidance in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently assessing the effect that the ASU will have on the Company’s financial position, results of operations,convertible notes liability component, equity component (additional paid-in-capital) and disclosures.
In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates the requirement to calculate the implied fair value of goodwill (Step 2 of the current guidance’s goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment chargeretained earnings. This adjustment was calculated based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measureof the chargeconvertible notes as if it had always been treated as a liability only. Furthermore, we recorded an adjustment to the debt issuance costs contra liability and equity (additional paid-in-capital) components under the same premise, i.e. as if debt issuance costs had always been treated as a contra liability only. Lastly, we derecognized deferred income taxes associated with the convertible notes debt discount and adjusted deferred incomes taxes relative to unamortized debt issuance costs associated with our convertible notes due November 2024.
Interest expense related to the accretion of our convertible notes due November 2024 is no longer recognized. Interest accretion of convertible notes discount and net income from continuing operations attributable to Chart Industries, Inc. for the three months ended March 31, 2021 would have been $2.0 and $24.0, respectively, without the adoption of ASU 2020-06. As such, net income from continuing operations attributable to Chart Industries, Inc. per common share (both basic and diluted) for the three months ended March 31, 2021 is $0.04 higher due to the effect of adoption of ASU 2020-06. As further described in Note 9, “Debt and Credit Arrangements,” on December 31, 2020, we amended the Indenture governing our convertible notes due November 2024 to eliminate share settlement thus leaving us with two settlement options: (1) cash settlement or (2) cash for par and any combination of cash and shares for the excess settlement amount above the $258.8 principal amount of our convertible notes due November 2024. ASU 2020-06 requires usage of the if-converted method to compute diluted earnings per share for our convertible notes due November 2024, however, based on current guidance’s Step 1). The guidance will be applied prospectively for annual and interim impairment tests beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The adoption of this ASU would not materially impact the Company’s condensed consolidated financial statements unless Step 1terms of the annual goodwill impairment test fails.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The FASB issued the update to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years,amended Indenture and the guidance will generally be applied retrospectively. Earlycessation of interest accretion expense recognition from the transition at adoption, the if-converted method was modified such that interest expense is permitted with all ofno longer added to the amendments adopted in the same period. If an entity early adopts the guidance in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently assessing the effect that the ASU will have on the Company’s condensed consolidated statements of cash flows.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The FASB issued the update to require the recognition of lease assets and lease liabilities on the balance sheet of lessees. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company expects adoption to increase the assets and liabilities recorded on its condensed consolidated balance sheet and increase the level of disclosures related to leases. The Company also expects that adoption of the new standard will require changes to its internal controls to support recognition and disclosure requirements under the new standard. The Company is currently assessing the effect that the ASU will have on the Company’s condensed consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and subsequently issued additional guidance that modified ASU 2014-09. ASU 2014-09numerator, and the subsequent modifications are identified as “Accounting Standards Codification (“ASC”) 606.” ASC 606 replaces existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and provides for expanded disclosure requirements. The update requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amountdenominator only includes incremental shares that reflects the consideration to which the entity expects towould be entitled in exchange for those goods or services. ASC 606 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. ASC 606 becomes effective for fiscal years beginning after December 15, 2017. The Company plans to adopt ASC 606 as of January 1, 2018 and has developed an implementation plan to adopt ASC 606 using the modified retrospective approach through a cumulative adjustment to retained earnings.
As part of the implementation plan, the Company has identified its revenue streams and is in the process of performing contract reviews to assess the impact of ASC 606 on its results of operations. The Company expects to complete the contract reviews in the near future. While the Company continues to assess all impacts of the accounting change, the Company currently believes that the most significant impact will relate to the timing of revenue recognition. The Company expects the majority of

issued upon conversion.
7
9
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued



revenue that has historically been recognized when products are shipped, title has transferred and collection is reasonably assured will meet


Impacts on Financial Statements
The following table summarizes the criteria for using point-in-time revenue recognition. The Company also expects that the majoritycumulative effect of the revenue that has historically been recognized using the percentage of completion method of accounting will meet the criteria for over time revenue recognition. At this time, the Company has identified the following impacts related to timing of revenue recognition:
Certain operations that have historically recognized revenue at a point-in-time will be required to change to the over time revenue recognition model as certain contracts contain language that meets the over time criteria established in ASC 606.
A portion of the revenue that has been deferred due to the current guidance for bill and hold revenues will be required to be recognized when the manufacturing process has been completed.
The Company is in the process of quantifying the above changes but does not expect them to be material to its consolidated financial statements. The Company expects adoption to increase the level of disclosures related to revenue recognition. In addition, the Company is in the process of identifying appropriate changes to its accounting policies, information technology systems, business processes,our condensed consolidated balance sheet as of December 31, 2020 from the adoption of ASU 2020-06:
Balance at
December 31, 2020		Adjustments due to ASU 2020-06 adoptionBalance at
January 1, 2021
Liabilities
Accrued income taxes$46.5 $(0.2)$46.3 
Current convertible notes (1)
220.9 34.0 254.9 
Long-term deferred tax liabilities60.2 (7.6)52.6 
Equity
Additional paid-in-capital$780.8 $(36.9)$743.9 
Retained earnings808.4 10.7 819.1 
_______________
(1)Current convertible notes is presented net of unamortized discount and internal control over financial reporting to support recognition under the new standard. The Company plans to complete the designdebt issuance costs of any necessary changes to its business processes, controls$34.8 and systems and implement the changes over the remainder$3.1, respectively at December 31, 2020. Current convertible notes is presented net of 2017.unamortized debt issuance costs of $3.9 at January 1, 2021.
Recently Adopted Accounting Standards: In November 2016,January 2020, the FASB issued ASU 2016-18, “Statement of Cash Flows2020-01, “Investments – Equity Securities (Topic 230): Restricted Cash.321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The FASB issuedThis ASU clarifies the update to clarify how restricted cash or restricted cash equivalents should be presentedinteractions between the measurement alternative in Topic 321, the statement of cash flows. The Company early adopted the amendments provided in ASU 2016-18 effective January 1, 2017 as reflected in these condensed consolidated financial statements to provide financial statement users with more transparent disclosure about restricted cash and restricted cash equivalents. The amendments were applied using a retrospective transitionequity method to each period presented. Prior periods were not restated as the impact of adoption of ASU 2016-18 was not material to prior periods. The cash, cash equivalents, restricted cash, and restricted cash equivalents balance included $8,785 of restricted cash and restricted cash equivalents at September 30, 2017. Restricted cash and restricted cash equivalents are included in other current assets and other assets in the accompanying condensed consolidated balance sheet at September 30, 2017.
In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The FASB issued the update to change certain aspects of accounting in Topic 323 and the application of guidance for share-based payments to employees. The update eliminated additional paid-in-capital poolscertain forward contracts and requires all income tax effectspurchased options that upon settlement or exercise would be accounted for under the equity method of awards to be recognizedaccounting in the statements of operations when the awards vest or settle. The Company prospectively recognized the excess income tax effects of awards as income tax expense or benefit in the condensed statements of operations and has elected to continue to estimate the number of share-based awards expected to vest rather than electing to accountTopic 815. This guidance is effective for forfeitures as they occur. In addition, the Company prospectively recognized the excess tax benefits along with other income tax cash flows as an operating activity in the condensed consolidated statements of cash flows. The Companyfiscal years ending after December 15, 2020. We adopted this guidance effective January 1, 2017.2021. The adoption of thethis guidance did not have a material impact on the Company’s condensed consolidatedour financial statements.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurementposition, results of Inventory.” The amendments require an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted this guidance prospectively for the fiscal year beginning January 1, 2017. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements.

operations or disclosures.
8
10
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued






NOTE 2 — InventoriesDiscontinued Operations
In January 2017,As discussed in our Annual Report on Form 10-K for the Company prospectively adoptedyear ended December 31, 2020, on October 1, 2020, we closed on the guidancesale of our cryobiological products business to Cryoport, Inc. (NASDAQ: CYRX) (the “Cryobiological Divestiture”). Our cryobiological products business asset group met the criteria to be held for sale. Furthermore, we determined that the assets held for sale qualified for discontinued operations. As such, the financial results of the cryobiological products business are reflected in our unaudited condensed consolidated statements of income and comprehensive income as discontinued operations for all prior periods presented.
Summarized Financial Information of Discontinued Operations
The following table represents income from discontinued operations, net of tax:
Three Months Ended March 31, 2020
Sales$19.2 
Cost of sales10.1 
Selling, general and administrative expenses1.4 
Operating income (1)
7.7 
Income before income taxes from discontinued operations7.7 
Income tax expense1.3 
Income from discontinued operations, net of tax$6.4 
________________
(1)Includes depreciation expense of $0.3 for the three months ended March 31, 2020.
The following table represents a summary of cash flows related to discontinued operations:
Three Months Ended March 31, 2020
Net cash provided by (used in):
Operating activities$7.2 
Investing activities(0.1)
Net cash provided by discontinued operations$7.1 
NOTE 3 — Reportable Segments
As reported in our Annual Report on Form 10-K for the year ended December 31, 2020, the structure of our internal organization is divided into the following 4 reportable segments, which are also our operating segments: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products and Repair, Service & Leasing.
Our Cryo Tank Solutions segment, which has principal operations in the United States, Europe and Asia, supplies bulk, microbulk and mobile equipment used in the storage, distribution, vaporization, and application of industrial gases. Our Heat Transfer Systems segment, which has principal operations in the United States, Europe and India, supplies mission critical engineered equipment and systems used in the separation, liquefaction, and purification of hydrocarbon and industrial gases that span gas-to-liquid applications. Our Specialty Products segment with locations globally supplies products used in our specialty market applications including hydrogen, HLNG vehicle tanks, food and beverage, space exploration, lasers, cannabis and water treatment, amongst others. Our Repair, Service & Leasing segment, which includes repair and service centers globally, provides installation, service, repair, maintenance, and refurbishment of cryogenic products as well as global equipment leasing solutions.
Corporate includes operating expenses for executive management, accounting, tax, treasury, corporate development, human resources, information technology, investor relations, legal, internal audit and risk management. Corporate support functions are not currently allocated to the segments. All prior period amounts presented in the tables below have been reclassified based on our current reportable segments.
11
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per ASU 2015-11, “Simplifyingshare amounts) – Continued





We evaluate performance and allocate resources based on operating income as determined in our condensed consolidated statements of income and comprehensive income.
Segment Financial Information
 Three Months Ended March 31, 2021
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsCorporateConsolidated
Sales to external customers
$103.9 $69.2 $77.3 $41.4 $(3.3)$0 $288.5 
Depreciation and amortization expense3.9 9.5 3.1 2.6 0 0.4 19.5 
Operating income (loss) (1) (2)
15.6 3.9 17.9 8.3 0 (16.8)28.9 
 Three Months Ended March 31, 2020
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsCorporateConsolidated
Sales to external customers$98.0 $112.9 $52.9 $40.7 $(2.6)$0 $301.9 
Depreciation and amortization expense4.4 14.1 1.4 3.3 0 0.4 23.6 
Operating income (loss) (1)
11.6 5.5 13.8 4.6 0 (19.7)15.8 
_______________
(1)Restructuring costs for the:
•three months ended March 31, 2021 were $0.7 ($0.3 - Cryo Tank Solutions, $0.4 - Heat Transfer Systems).
•three months ended March 31, 2020 were $5.2 ($1.8 - Cryo Tank Solutions, $2.8 - Heat Transfer Systems, $0.6 - Corporate ).
(2)Includes acquisition-related contingent consideration adjustments of $0.8 in our Specialty Products segment for the Measurementthree months ended March 31, 2021.
Sales by Geography
 Three Months Ended March 31, 2021
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
North America$41.1 $46.3 $26.1 $29.0 $(1.7)$140.8 
Europe, Middle East, Africa and India37.7 7.8 45.6 10.5 (1.0)100.6 
Asia-Pacific24.2 14.8 5.6 1.8 (0.6)45.8 
Rest of the World0.9 0.3 0 0.1 0 1.3 
Total$103.9 $69.2 $77.3 $41.4 $(3.3)$288.5 

 Three Months Ended March 31, 2020
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
North America$40.6 $82.2 $24.9 $32.1 $(1.3)$178.5 
Europe, Middle East, Africa and India34.3 9.5 25.6 6.7 (0.7)75.4 
Asia-Pacific20.1 20.9 2.2 1.7 (0.5)44.4 
Rest of the World3.0 0.3 0.2 0.2 (0.1)3.6 
Total$98.0 $112.9 $52.9 $40.7 $(2.6)$301.9 
12
Table of Inventory.Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





Total Assets
Corporate assets mainly include cash and cash equivalents and long-term deferred income taxes as well as certain corporate-specific property, plant and equipment, net and certain investments. Our allocation methodology for property, plant and equipment, net of the reportable segments differs from our allocation method of depreciation expense of a reportable segment and therefore, depreciation expense does not entirely align with the related depreciable assets of the reportable segments. Furthermore, since finite-lived intangible assets are excluded from total assets of reportable segments while amortization expense is allocated to each of our reportable segments, amortization expense by segment inherently does not align with the related amortizable intangible assets of the reportable segments.
March 31,
2021		December 31,
2020
Cryo Tank Solutions$392.0 $399.2 
Heat Transfer Systems230.1 247.2 
Specialty Products216.3 178.3 
Repair, Service & Leasing145.7 142.6 
Total assets of reportable segments984.1 967.3 
Goodwill (1)
911.3 865.9 
Identifiable intangible assets, net (1)
481.4 493.1 
Corporate275.5 244.2 
Total$2,652.3 $2,570.5 
_______________
(1)See Note 8, “Goodwill and Intangible Assets,” for further information related to goodwill and identifiable intangible assets, net.
NOTE 4 — Revenue
Disaggregation of Revenue
The Company previously measured its inventoryfollowing tables represent a disaggregation of revenue by timing of revenue along with the reportable segment for each category:
Three Months Ended March 31, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
Point in time$98.7 $5.6 $61.9 $26.7 $(2.9)$190.0 
Over time5.2 63.6 15.4 14.7 (0.4)98.5 
Total$103.9 $69.2 $77.3 $41.4 $(3.3)$288.5 
Three Months Ended March 31, 2020
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
Point in time$89.8 $7.1 $38.8 $28.0 $(1.5)$162.2 
Over time8.2 105.8 14.1 12.7 (1.1)139.7 
Total$98.0 $112.9 $52.9 $40.7 $(2.6)$301.9 
Refer to Note 3, “Reportable Segments,” for a table of revenue by reportable segment disaggregated by geography.
13
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





Contract Balances
The following table represents changes in our contract assets and contract liabilities balances:
March 31, 2021December 31, 2020Year-to-date Change ($)Year-to-date Change (%)
Contract assets
Accounts receivable, net of allowances$186.4 $200.8 $(14.4)(7.2)%
Unbilled contract revenue74.6 79.4 (4.8)(6.0)%
Contract liabilities
Customer advances and billings in excess of contract revenue$106.3 $118.9 $(12.6)(10.6)%
Long-term deferred revenue0.2 1.9 (1.7)(89.5)%
Revenue recognized for the three months ended March 31, 2021 and 2020, that was included in the contract liabilities balance at the lowerbeginning of costeach year was $52.5 and $17.1, respectively. The amount of revenue recognized during the three months ended March 31, 2021 from performance obligations satisfied or market with cost being determined bypartially satisfied in previous periods as a result of changes in the first-in, first-out (“FIFO”) method. Based onestimates of variable consideration related to long-term contracts, was not significant.
Remaining Performance Obligations
Remaining performance obligations represent the new guidance, the Company measures its inventory at the lowertransaction price of costfirm signed purchase orders or net realizable value with net realizable value beingother written contractual commitments from customers for which work has not been performed, or is partially completed, and excludes unexercised contract options and potential orders. As of March 31, 2021, the estimated selling pricesrevenue expected to be recognized in the ordinary coursefuture related to remaining performance obligations was$934.1. We expect to recognize revenue on approximately 76% of the remaining performance obligations over the next 12 months and with the remaining over the next few years thereafter.
14
Table of business, less reasonably predictable costsContents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





NOTE 5 — Investments
Investments in equity securities
We measure certain of completion, disposal,our investments in equity securities at fair value on a recurring basis. Furthermore, we categorize these investments in equity securities according to the fair value hierarchy as defined in Note 2, “Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2020. Mark-to-market fair value adjustments in these investments in equity securities are classified as unrealized (gain) loss on investments in equity securities in our condensed consolidated statements of income and transportation. The adoptioncomprehensive income.
For certain other investments in equity securities that are not measured at fair value on a recurring basis, we measure such investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the guidance didsame issuer.
The following table summarizes the components of our investments in equity securities:
Investments in Equity Securities,
Level 1 (1)
Investments in Equity Securities,
Level 2 (2)
Subtotal
Investments in Equity Securities, All Others (3) (4) (5)
Investments in Equity Securities, Total
Balance at December 31, 2020$53.8 $4.1 $57.9 $15.7 $73.6 
New investments0 0 0 40.0 40.0 
(Decrease) increase in fair value of investments in equity securities(2.6)5.9 3.3 0 3.3 
Foreign currency translation adjustments(2.4)0 (2.4)0.1 (2.3)
Balance at March 31, 2021$48.8 $10.0 $58.8 $55.8 $114.6 
_______________
(1)Represents our investment in McPhy (Euronext Paris: MCPHY - ISIN; FR001742329), which was 41.6 million euros ($48.8) and 39.8 million euros ($53.8) at March 31, 2021 and December 31, 2020, respectively. For the three months ended March 31, 2021, we recognized an unrealized loss of $2.6. For additional information see Note 6, “Investments” in our Annual Report on Form 10-K for the year ended December 31, 2020.
(2)Represents our investment in Stabilis Energy, Inc. (“Stabilis”), which was $10.0 and $4.1 at March 31, 2021 and December 31, 2020, respectively. For the three months ended March 31, 2021, we recognized an unrealized gain of $5.9. For additional information see Note 6, “Investments” in our Annual Report on Form 10-K for the year ended December 31, 2020.
(3)Represents our investment in HTEC Hydrogen Technology & Energy Corporation (“HTEC”), which was CAD 20.0 million at both March 31, 2021 and December 31, 2020 (equivalent to $15.8 and $15.7 at March 31, 2021 and December 31, 2020, respectively). For additional information see Note 6, “Investments” in our Annual Report on Form 10-K for the year ended December 31, 2020.
(4)During the first quarter of 2021, we completed an investment in Svante Inc. (“Svante”) in the amount of $15.0 for under 10% of its capital stock on a fully diluted basis. This investment was measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As of March 31, 2021, the value of the investment was $15.0. Svante offers companies in emissions-intensive industries a commercially viable way to capture large-scale CO2 emissions from existing infrastructure, either for safe storage or to be recycled for further industrial use in a closed loop.
(5)During the first quarter of 2021, we completed an investment in Transform Materials LLC (“Transform Materials”) in the amount of $25.0 for approximately 5% of its equity. This investment was measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As of March 31, 2021, the value of the investment was $25.0. Transform Materials is a sustainable chemical technology company that uses microwave plasma to convert natural gas into acetylene and hydrogen. Its highly selective, cost-effective, net-carbon-negative process converts the methane in natural gas into high-value products suitable for direct use or downstream reactions.
15
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





Equity method accounting investments
Our equity investments accounted for under the equity method of accounting include a 50% ownership interest in a joint venture with Hudson Products de Mexico S.A. de CV which totaled $2.8 at both March 31, 2021 and December 31, 2020. This investment is operated and managed by our joint venture partner and as such, we do not have control over the joint venture and therefore it is not consolidated. Additionally, we have a 25% ownership interest in Liberty LNG, which was valued at $2.2 and $2.1 at March 31, 2021 and December 31, 2020, respectively. Our equity in earnings from these equity method accounting investments were not material impact onfor the Company’speriods presented.
NOTE6 — Leases
As of March 31, 2021 and December 31, 2020, operating right-of-use (“ROU”) assets and lease liabilities were $28.0 and $27.7 ($5.1 of which was current) and $29.0 and $28.7 ($5.1 of which was current), respectively. The weighted-average remaining term for lease contracts was 5.6 years at March 31, 2021, with maturity dates ranging from April 2021 to February 2029. The weighted-average discount rate was 2.3% at March 31, 2021. ROU assets are classified as property, plant and equipment, net in the condensed consolidated financial statements.balance sheets.
We incurred $3.0 and $2.9 of rental expense under operating leases for the three months ended March 31, 2021 and 2020, respectively. Certain operating leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the minimum lease term. Adjustments for straight-line rental expense for the respective periods was not material and as such, the majority of expense recognized was reflected in cash provided by operating activities for the respective periods. This expense consisted primarily of payments for base rent on building and equipment leases. Payments related to short-term lease costs and taxes and variable service charges on leased properties were immaterial. In addition, we have the right, but no obligation, to renew certain leases for various renewal terms.
The following table summarizes future minimum lease payments for non-cancelable operating leases as of March 31, 2021:
2021$5.4 
20226.2 
20235.6 
20245.1 
20254.3 
Thereafter (1)
3.5 
Total future minimum lease payments$30.1 
_______________
(1)     As of March 31, 2021, future minimum lease payments for non-cancelable operating leases for period subsequent to 2024 relate to 7 leased facilities.
NOTE 7 — Inventories
The following table summarizes the components of inventory:
September 30,
2017		 December 31,
2016		March 31,
2021		December 31,
2020
Raw materials and supplies$98,226
 $65,719
Raw materials and supplies$140.6 $124.7 
Work in process37,047
 31,576
Work in process57.8 57.8 
Finished goods78,317
 72,388
Finished goods81.5 65.9 
Total inventories, net$213,590
 $169,683
Total inventories, net$279.9 $248.4 
The allowancesallowance for excess and obsolete inventory was $8,525 and $10,069balance at September 30, 2017both March 31, 2021 and December 31, 2016, respectively.2020 was $9.7.
16
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





NOTE 38 — Goodwill and Intangible Assets
Goodwill
The following table represents the changes in goodwill by segment:
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingConsolidated
Balance at December 31, 2020$93.2 $435.2 $172.4 $165.1 $865.9 
Goodwill acquired during the period (1)
0 0 52.1 0 52.1 
Foreign currency translation adjustments(4.8)(2.6)0 0 (7.4)
Purchase price adjustment (1)
0 0 0.7 0 0.7 
Balance at March 31, 2021$88.4 $432.6 $225.2 $165.1 $911.3 
 
Energy &
Chemicals
 Distribution & Storage BioMedical Total
Balance at December 31, 2016$27,873
 $165,520
 $24,577
 $217,970
Foreign currency translation adjustments and other—
 2,214
 (104) 2,110
Goodwill acquired during the year236,246
 1,155
 —
 237,401
Balance at September 30, 2017$264,119
 $168,889
 $24,473
 $457,481
        
Accumulated goodwill impairment loss at September 30, 2017 and December 31, 2016$64,603
 $—
 $131,243
 $195,846
_______________

(1)During the first quarter of 2021, we recorded a purchase price adjustment that increased goodwill by $0.7 in Specialty Products related to the Cryogenic Gas Technologies, Inc. acquisition. For further information regarding goodwill acquired and the purchase price adjustment during the period refer to Note 11, “Business Combinations.”
9
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(DollarsAmounts included in accumulated goodwill impairment loss at both March 31, 2021 and shares in thousands, except per share amounts) – Continued

December 31, 2020 were $129.0 ($23.5 - Cryo Tank Solutions, $49.3 - Heat Transfer Systems, $35.8 - Specialty Products, $20.4 - Repair, Service & Leasing).
Intangible Assets
The following table displays the gross carrying amount and accumulated amortization for finite-lived intangible assets and indefinite-lived intangible assets (exclusive of goodwill)(1) (2):
 September 30, 2017 December 31, 2016 March 31, 2021December 31, 2020
Weighted-average Estimated Useful Life 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 Weighted-average Estimated Useful LifeGross
Carrying
Amount		Accumulated
Amortization		Gross
Carrying
Amount		Accumulated
Amortization
Finite-lived intangible assets:        Finite-lived intangible assets:
Customer relationships12 years $233,208
 $(83,596) $119,320
 $(81,614)Customer relationships13 years$300.2 $(65.0)$302.5 $(59.9)
Unpatented technology12 years 27,686
 (3,836) 8,186
 (3,132)Unpatented technology12 years110.8 (24.2)110.4 (22.3)
Patents and otherPatents and other6 years5.6 (0.4)8.4 (1.8)
Trademarks and trade namesTrademarks and trade names11 years3.3 (1.6)3.6 (1.4)
Land use rights50 years 13,222
 (1,097) 12,650
 (860)Land use rights50 years11.0 (1.4)11.1 (1.4)
Trademarks and trade names14 years 5,517
 (2,767) 4,918
 (2,198)
Patents and other6 years 2,878
 (502) 1,235
 (695)
Total finite-lived intangible assets14 years $282,511
 $(91,798) $146,309
 $(88,499)Total finite-lived intangible assets13 years430.9 (92.6)436.0 (86.8)
Indefinite-lived intangible assets:        Indefinite-lived intangible assets:
Trademarks and trade names $108,165
 —
 $35,633
 —
Trademarks and trade names143.1 — 143.9 — 
Total intangible assets $390,676
 $(91,798) $181,942
 $(88,499)Total intangible assets$574.0 $(92.6)$579.9 $(86.8)
_______________
(1)
Amounts include the impact of foreign currency translation. Fully amortized amounts are written off.
(2)
The Company amortizes certain identifiable intangible assets primarily on a straight-line basis over their estimated useful lives, which range from one to 50 years.
Expense(1)Amounts include the impact of foreign currency translation. Fully amortized or impaired amounts are written off.
Amortization expense for intangible assets subject to amortization was $3,240$8.8 and $2,912$14.0 for the three months ended September 30, 2017March 31, 2021 and 2016, respectively, and $9,301 and $9,156 for the nine months ended September 30, 2017 and 2016,2020, respectively. The Company estimates futureWe estimate amortization expense for its current finite-lived intangible assetsto be recognized during the next five years as follows:
For the Year Ending December 31,
2021$35.7 
202234.6 
202334.4 
202434.1 
202533.2 
17
For the Year Ending December 31, 
2017$15,700
201824,400
201924,100
202022,200
202116,100
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





Government Grants
The CompanyWe received $407 incertain government grants during the first nine months of 2017. The government grants are related to property, plant, and equipment and land use rights related tofor capacity expansion in China. The grantsChina (“China Government Grants”). China Government Grants are generally recorded in other current liabilities and other long-term liabilities in the unaudited condensed consolidated balance sheets and generally recognized into income over the useful life of the associated assets (10 to 50 years).
China Government grants at September 30, 2017 and December 31, 2016Grants are presented in our unaudited condensed consolidated balance sheets as follows:
March 31,
2021		December 31,
2020
Current$0.5 $0.5 
Long-term7.1 7.3 
Total China Government Grants$7.6 $7.8 
 September 30,
2017		 December 31,
2016
Current$481
 $446
Long-term8,378
 8,153
Total government grants$8,859
 $8,599

10
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

NOTE 49 — Debt and Credit Arrangements
Summary of Outstanding Borrowings
The following table represents the components of the Company’sour borrowings:
 September 30,
2017		 December 31,
2016
Convertible notes, due August 2018, effective interest rate of 7.9%$238,142
 $228,115
Senior secured revolving credit facility, due October 2019, effective interest rate of 4.0%300,000
 —
Foreign facilities10,792
 13,208
Total debt548,934
 241,323
Unamortized debt issuance costs(592) (1,125)
Total debt, net of unamortized debt issuance costs548,342
 240,198
Less: current maturities (1)
(244,330) (6,487)
Long-term debt$304,012
 $233,711
 March 31,
2021		December 31,
2020
Senior secured revolving credit facility and term loan:
Term loan due June 2024 (1)
$103.1 $103.1 
Senior secured revolving credit facility due June 2024 (2) (3)
204.7 123.5 
Unamortized debt issuance costs(4.7)(5.0)
Senior secured revolving credit facility and term loan, net of debt issuance costs303.1 221.6 
Convertible notes due November 2024:
Principal amount258.8 258.8 
Unamortized discount (4)
0 (34.8)
Unamortized debt issuance costs(3.6)(3.1)
Convertible notes due November 2024, net of unamortized discount and debt issuance costs255.2 220.9 
Foreign facilities0 0 
Total debt, net of unamortized discount and debt issuance costs558.3 442.5 
Less: current maturities255.2 220.9 
Long-term debt$303.1 $221.6 
_______________
(1)Current maturities includes $238,142 current convertible notesAs of March 31, 2021, there were $103.1 in borrowings outstanding under the term loan due June 2024, which is due at September 30, 2017.
Convertible Notes
The outstanding aggregate principal amount of the Company’s 2.0% Convertible Senior Subordinated Notes due August 1, 2018 (the “Convertible Notes”) is $250,000. The Convertible Notes bearmaturity, bearing an interest at a fixed rate of 2.0% per year, payable semiannually(2.5% as of December 31, 2020).
(2)The senior secured revolving credit facility due 2024 includes $100.0 sub limit for letters of credit, a $250.0 sub limit for discretionary letters of credit and $50.0 sub limit for swingline loans. As of March 31, 2021, there were $204.7 in arrears on February 1 and August 1 of each year, and will mature on August 1, 2018. The effectiveborrowings outstanding under the senior secured revolving credit facility due 2024 bearing a weighted-average interest rate at issuance was 7.9%.
The Convertible Notes are senior subordinated unsecured obligations of the Company and are not guaranteed by any of the Company’s subsidiaries. The Convertible Notes are senior in right of payment to the Company’s future subordinated debt, equal in right of payment with the Company’s future senior subordinated debt, and are subordinated in right of payment to the Company’s existing and future senior indebtedness, including indebtedness under the Company’s existing credit agreement.
In connection with the issuance of the Convertible Notes, the Company entered into privately-negotiated convertible note hedge and capped call transactions with affiliates of certain of the underwriters (the “Option Counterparties”). The convertible note hedge and capped call transactions relate to, collectively, 3,622 shares, which represents the number of shares of the Company’s common stock underlying the Convertible Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes. These convertible note hedge and capped call transactions are expected to reduce the potential dilution with respect to the Company’s common stock upon conversion of the Convertible Notes and/or reduce the Company’s exposure to potential cash or stock payments that may be required upon conversion of the Convertible Notes, except, in the case of the capped call transactions, to the extent that the market price per share of the Company’s common stock exceeds the cap price of the capped call transactions. The Company also entered into separate warrant transactions with the Option Counterparties initially relating to the number of shares of the Company’s common stock underlying the convertible note hedge transactions, subject to customary anti-dilution adjustments. The warrant transactions will have a dilutive effect with respect to the Company’s common stock to the extent that the price per share of the Company’s common stock exceeds the strike price of the warrants unless the Company elects, subject to certain conditions, to settle the warrants in cash. These warrants were exercisable1.8% (2.1% as of December 31, 2020) and $53.1 in letters of credit and bank guarantees outstanding supported by the issuance datesenior secured revolving credit facility due 2024. As of March 31, 2021, the Convertible Notes. The cap pricesenior secured revolving credit facility due 2024 had availability of the capped call transactions and the strike price of the warrant transactions was initially $84.96 per share. Proceeds received from the issuance of the warrants totaled approximately $48,848 and were recorded as an addition to additional paid-in-capital. The net cost of the convertible note hedge and capped call transactions, taking into account the proceeds from the issuance of the warrants, was approximately $17,638.
In accordance with ASC 815, contracts are initially classified as equity if (1) the contract requires physical settlement or net-share settlement, or (2) the contract gives the entity a choice of net-cash settlement in its own shares (physical settlement or net-share settlement). The Company concluded that the settlement terms of the convertible note hedge, capped call, and warrant transactions permit net-share settlement. As such, the convertible note hedge, capped call, and warrant transactions were recorded in equity.

$292.2.
11
18
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued



Upon issuance


(3)A portion of the Convertible Notes, the Company bifurcated the $250,000 principal balanceborrowings outstanding under our senior secured revolving credit facility due 2024 are denominated in euros (“EUR Revolver Borrowings”). As of the Convertible Notes into a liability component of $170,885, which was recorded as long-term debt, and an equity component of $79,115, which was initially recorded as additional paid-in-capital. The liability component was recognized at the present value of its associated cash flows using a 7.9% straight-debt rate which represented the Company’s interest rate for similar debt instruments at that time without a conversion feature and is being accreted to interest expense over the term of the Convertible Notes. At September 30, 2017both March 31, 2021 and December 31, 2016, the carrying amount of the liability component was $238,142 (less debt issuance costs of $592)2020, EUR Revolver Borrowings outstanding were EUR 71.5 million (equivalent to $83.8 and $228,115 (less debt issuance costs of $1,125), respectively,$87.7 at March 31, 2021 and the unamortized debt discount of the Convertible Notes was $11,858 and $21,885, respectively.
ForDecember 31, 2020, respectively). During the three months ended September 30, 2017 and 2016, interest expense for the Convertible Notes was $4,658 and $4,400, respectively, which included $3,408 and $3,150March 31, 2021, we recognized an unrealized foreign currency gain of non-cash interest accretion expense related$3.9 relative to the carrying amounttranslation of the Convertible Notes, respectively,EUR Revolver Borrowings outstanding during the reporting period. This unrealized foreign currency gain is classified as foreign currency (gain) loss and $1,250other in the condensed consolidated statement of cash interestincome for both periods. For the nine months ended September 30, 2017 and 2016, interest expense for the Convertible Notes was $13,777 and $13,018, respectively, which included $10,027 and $9,268 of non-cash interest accretion expense related to the carrying amount of the Convertible Notes, respectively, and $3,750 of 2.0% cash interest for both periods. In accordance with ASC 470-20, which requires issuers to separately account for the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, the Company allocated debt issuance costs to the liability and equity components in proportion to their allocated value. Debt issuance costs were $7,277, with $2,303 recorded as a reduction in additional paid-in-capital. The remaining balance of $4,974 is being amortized over the term of the Convertible Notes. For the three months ended September 30, 2017 and 2016, total expenseMarch 31, 2021.
(4)We derecognized the debt discount associated with the amortizationconvertible notes due November 2024 upon adoption of these debt issuance costs was $178 for both periods. For the nine months ended September 30, 2017 and 2016, total expense associated with the amortization of these debt issuance costs was $533 for both periods.
Prior to MayASU 2020-06 on January 1, 2018, the Convertible Notes will be convertible at the option of the holders thereof only under the following circumstances: (1) during any fiscal quarter commencing after September 30, 2011 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price (currently $69.03) for the Convertible Notes on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which, as determined following a request by a holder of Convertible Notes as provided in the bond indenture (the “Indenture”), the trading price per $1,000 principal amount of Convertible Notes for each trading day of such Measurement Period was less than 97% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate for the Convertible Notes on each such trading day; or (3) upon the occurrence of specified corporate events pursuant to the terms of the Indenture. On or after May 1, 2018, until the close of business on the second scheduled trading day immediately preceding the maturity date of the Convertible Notes, holders of the Convertible Notes may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. It is the Company’s intention to settle any excess conversion value in shares of the Company’s common stock.
The conversion rate on the Convertible Notes will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. In addition, following the occurrence of a make-whole fundamental change, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Notes in connection with such make-whole fundamental change. The Company may not redeem the Convertible Notes prior to maturity. If the Company undergoes a fundamental change, subject to certain conditions, holders may require the Company to purchase the Convertible Notes in whole or in part for cash at a fundamental change purchase price equal to 100% of the principal amount of the Convertible Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. For purposes of calculating earnings per share, if the average market price of the Company’s common stock exceeds the applicable conversion price during the periods reported, shares contingently issuable under the Convertible Notes will have a dilutive effect with respect to the Company’s common stock.
The Company reassesses the convertibility of the Convertible Notes and the related balance sheet classification on a quarterly basis. The Convertible Notes are classified as current liabilities at September 30, 2017 as their maturity is within 12 months of the balance sheet date. At the end of the third quarter of 2017, events for early conversion were not met, and thus the Convertible Notes were not convertible as of and for the fiscal quarter beginning October 1, 2017. There have been no conversions as of the date of this filing.

12
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

2021.
Senior Secured Revolving Credit Facility and Term Loan
The Company hasOn June 14, 2019, we entered into the Fourth Amended and Restated Credit Agreement, which includes a five-year $450,000 senior secured revolving credit facility (the “SSRCF”) which matures on October 29, 2019. The SSRCF includes a $25,000 sub-limit for the issuance of swingline loans and a $100,000 sub-limit to be used for letters of credit. There is a foreign currency limit of $100,000 underterm loan (together, the SSRCF which can be used for foreign currency denominated letters of credit and borrowings in a foreign currency, in each case in currencies agreed upon with the lenders. In addition, the facility permits borrowings up to $100,000 made by the Company’s wholly-owned subsidiaries, Chart Industries Luxembourg S.à. r.l. (“Chart Luxembourg”) and Chart Asia Investment Company Limited (“Chart Asia”“2024 Credit Facilities”). The 2024 Credit Facilities mature on June 14, 2024.
•The SSRCF also includes an expansion option permitting the Company to add up to an aggregate $200,000 in term loans or revolving credit commitments from its lenders.has a borrowing capacity of $550.0.
•The Company recorded $2,869 in deferred debt issuance costs associated with the SSRCF which are being amortized over the five-year termprincipal amount of the SSRCF. This balanceterm loan is recorded in other assets in the condensed consolidated balance sheets. For the three months ended September 30, 2017 and 2016, total expense associated with the amortization of these debt issuance costs was $143 for both periods. For the nine months ended September 30, 2017 and 2016, the related financing costs amortization was $430 for both periods.$450.0.
Revolving loans under the SSRCF•The 2024 Credit Facilities bear interest at a base rate margin determined on a leveraged-based scale which ranges from 25 to 150 basis points for alternative base rate loans and 125 to 250 basis points for LIBOR loans.
•Interest and fees are payable on a quarterly basis (or if earlier, at the applicable Borrower’s election, at either LIBOR or the greatestend of (a) the JPMorgan prime rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%, or (c) the Adjusted LIBOR Rate (as defined in the SSRCF) for the relativeeach interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1% (the “Adjusted Base Rate”), plus a margin that varies with the Company’s leverage ratio. In addition, the Company is required to pay a commitment fee of between 0.25% and 0.40% of the unused revolver balance and a letter of credit participation fee equal to the daily aggregate letter of credit exposure at the rate per annum equal to the Applicable Margin for Eurocurrency Revolving Facility Borrowings (ranging from 1.5% to 2.75%, depending on the leverage ratio calculated at each fiscal quarter end)LIBOR loans). A fronting fee must be paid on each letter of credit that is issued equal to 0.125% per annum of the stated dollar amount of the letter of credit.
Significant financial covenants for the SSRCF2024 Credit Facilities include a minimum liquidity requirement equal tofinancial maintenance covenants that, as of the principallast day of any fiscal quarter ending on and after June 30, 2019, (i) require the ratio of the amount of Chart and its subsidiaries’ consolidated total net indebtedness to consolidated EBITDA to be less than specified maximum ratio levels and (ii) require the Convertible Notes outstanding six months prior to the maturity dateratio of the Convertible Notesamount of Chart and when holders of the Convertible Notes have the optionits subsidiaries’ consolidated EBITDA to require the Companyconsolidated cash interest expense to repurchase the Convertible Notes,be greater than a maximum leveragespecified minimum ratio of 3.25 and a minimum interest coverage to EBITDA ratio of 3.0.level. The required leverage ratio can be relaxed on up to two occasions, upon notification to the lenders, to 3.75 for up to four consecutive fiscal quarters, for acquisitions and plant expansions of $100,000 or greater. The SSRCF contains2024 Credit Facilities include a number of other customary covenants including, but not limited to, restrictions on the Company’sour ability to incur additional indebtedness, create liens or other encumbrances, sell assets, enter into sale and lease-back transactions, make certain payments, investments, loans, advances or guarantees, make acquisitions and engage in mergers or consolidations and pay dividends or distributions. On September 19, 2017, the Company entered into an amendment (“Amendment No. 2”) to its SSRCF to exclude the acquisition of RCHPH Holdings, Inc. (“Hudson”) (see Business Combinations footnote) from the pro forma leverage ratio requirement of the SSRCF. Concurrently with Amendment No. 2, the Company has exercised its right under the SSRCF to elect an increase in the maximum permissible leverage ratio thereunder to 3.75 for the four fiscal-quarter period ending September 30, 2018. At September 30, 2017, the Company wasMarch 31, 2021, we were in compliance with all covenants.
AsThe 2024 Credit Facilities also contain customary events of September 30, 2017, there were $300,000 in borrowings outstanding underdefault. If such an event of default occurs, the SSRCF (“SSRCF Debt”), bearing interest at 4.00%.lenders thereunder would be entitled to take various actions, including the acceleration of amounts due and all actions permitted to be taken by a secured creditor. The Company borrowed against this facility to fund the acquisition of Hudson. For both the three and nine months ended September 30, 2017, interest expense for the SSRCF Debt was $333. The Company had $44,828 in letters of credit and bank guarantees supported by the SSRCF, which had availability of $105,172 at September 30, 2017. The obligations under the SSRCF2024 Credit Facilities are guaranteed by the CompanyChart and substantially all of its U.S. subsidiaries and secured by substantially all of the assets of the CompanyChart and itsour U.S. subsidiaries and 65% of the capital stock of the Company’sour material non-U.S. subsidiaries (as defined by the SSRCF)Fourth Amended and Restated Credit Agreement) that are owned by U.S. subsidiaries.

On September 28, 2020 and April 20, 2020, we amended our 2024 Credit Facilities. The amendments, among other things, (i) reduce the LIBO Screen Rate (as defined in the Credit Agreement) floor by half, effectively reducing all interest payable by Chart (ii) provide Chart with further flexibility to complete divestitures at its discretion by changing the “catch-all” permitted divestiture basket from a small annual cap to a more substantial life-of the-facility cap, (iii) adjust the pricing grid in order to accommodate potentially higher leverage ratios, (iv) adjust factoring related definitions and other related provisions to provide Chart with greater flexibility to enter into such arrangements in the future, (v) incorporate a “cash hoarding” prevention covenant and (vi) incorporate various amendments to reflect interest rate floor and other changes to the Loan Syndications and Trading Association and Loan Market Association market standards for credit agreements. The terms and conditions under the 2024 Credit Facilities are otherwise substantially the same as those prior to the amendments. We recorded $1.9 in deferred debt issuance costs related to these amendments which are being amortized over the remaining term of the 2024 Credit Facilities.
We recorded $6.1 in deferred debt issuance costs in conjunction with the 2024 Credit Facilities, which is included in long-term debt in the unaudited condensed consolidated balance sheet at March 31, 2021, associated with the term loan, which is being amortized over its five-year term beginning in July 2019.
We paid $11.9 in deferred debt issuance costs related to the SSRCF. Deferred debt issuance costs are presented in other assets in the unaudited condensed consolidated balance sheets and are being amortized over the term of the SSRCF. At March 31, 2021, unamortized debt issuance costs associated with the SSRCF were $7.3.
13
19
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued



Foreign Facilities – China


The following table summarizes interest expense and financing costs amortization related to the 2024 Credit Facilities:
Three Months Ended March 31,
20212020
Interest expense, term loan due June 2024$0.6 $4.2 
Interest expense, senior secured revolving credit facility due June 20240.7 0.6 
Interest expense, senior secured revolving credit facility and term loan due June 2024$1.3 $4.8 
Financing costs amortization, senior secured revolving credit facility and term loan due 2024$1.0 $0.8 
2024 Convertible Notes
On November 6, 2017, we issued 1.00% Convertible Senior Subordinated Notes due November 2024 (the “2024 Notes”) in the aggregate principal amount of $258.8, pursuant to an Indenture, dated as of such date (the “Indenture”). On December 31, 2020, we entered into the First Supplemental Indenture (the “Supplemental Indenture”) to the Indenture, between Chart Cryogenic Engineering Systems (Changzhou) Company Limited (“CCESC”) and Wells Fargo Bank, National Association, as trustee, governing the 2024 Notes. Pursuant to the Supplemental Indenture, Chart Biomedical (Chengdu) Co. Ltd. (“Chengdu”)irrevocably elected (i) to eliminate Chart’s option to elect Physical Settlement (as defined in the Indenture) on any conversion of 2024 Notes that occurs on or after the date of the Supplemental Indenture and (ii) that, with respect to any Combination Settlement (as defined in the Indenture) for a conversion of 2024 Notes, the Specified Dollar Amount (as defined in the Indenture) that will be settled in cash per $1,000 principal amount of the Notes shall be no lower than $1,000. The 2024 Notes bear interest at an annual rate of 1.00%, wholly-owned subsidiariespayable on May 15 and November 15 of each year, beginning on May 15, 2018, and will mature on November 15, 2024 unless earlier converted or repurchased.
The 2024 Notes are senior subordinated unsecured obligations of the Company and Chart Cryogenic Distribution Equipment (Changzhou) Company Limited (“CCDEC”),are not guaranteed by any of our subsidiaries. The 2024 Notes are senior in right of payment to our future subordinated debt, equal in right of payment with the Company’s future senior subordinated debt and are subordinated in right of payment to our existing and future senior indebtedness, including indebtedness under our existing credit agreement.
Prior to December 31, 2020, a joint ventureconversion of the Company, maintain joint banking facilities (the “China Facilities”)2024 Notes could have been settled in cash, shares of our common stock or a combination of cash and shares of our common stock, at our election (subject to, and in accordance with, the settlement provisions of the Indenture). After December 31, 2020, a conversion of the 2024 Notes may be settled in either (1) cash or (2) cash for the principal amount of the 2024 Notes and any combination of cash and shares for the excess settlement amount above the principal amount of the 2024 Notes, at our election (subject to, and in accordance with, the settlement provisions of the Indenture and Supplemental Indenture). The initial conversion rate for the 2024 Notes is 17.0285 shares of common stock (subject to adjustment as provided for in the Indenture) per $1,000 principal amount of the 2024 Notes, which includeis equal to an initial conversion price of approximately $58.725 per share, representing a revolving facility with 50.0 million Chinese yuan (equivalentconversion premium of approximately 35% above the closing price of our common stock of $43.50 per share on October 31, 2017. In addition, following certain corporate events that occur prior to $7,534) in borrowing capacity which can be utilized for either revolving loans, bonds/guarantees, or bank draft acceptances. Any borrowings made by CCESC, CCDEC or Chengdu under the China Facilities are guaranteed by the Company. At September 30, 2017, there were no borrowings outstanding under the revolving facility, but CCESC and CCDEC had 2.6 million Chinese yuan (equivalent to $386), and 0.5 million Chinese yuan (equivalent to $78) in bank guarantees, respectively.
CCDEC maintains an unsecured credit facility whereby CCDEC may borrow up to 30.0 million Chinese yuan (equivalent to $4,520) for working capital purposes. At September 30, 2017, there was 15.0 million Chinese yuan (equivalent to $2,260) outstanding under this facility, bearing interest at 4.35%. CCDEC was negotiating new terms of this facility including a new maturity date as described in the Indenture, we will pay a make-whole premium by increasing the conversion rate for a holder who elects to convert its 2024 Notes in connection with such a corporate event in certain circumstances. For purposes of calculating earnings per share, if the average market price of our common stock exceeds the applicable conversion price during the periods reported, shares contingently issuable under the 2024 Notes will have a dilutive effect with respect to our common stock. Since our closing common stock price of $142.35 at the end of the third quarterperiod exceeded the conversion price of 2017.
CCESC$58.725, the if-converted value exceeded the principal amount of the 2024 Notes by approximately $368.5 at March 31, 2021. As described below, we entered into a term loanconvertible note hedge transactions, which are expected to reduce the potential dilution with respect to our common stock upon conversion of the 2024 Notes.
Holders of the 2024 Notes may convert their 2024 Notes at their option at any time prior to the close of business on the business day immediately preceding August 15, 2024 only under the following circumstances: (1) during any fiscal quarter commencing after December 31, 2017 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price for the 2024 Notes on each applicable trading day; (2) during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the Indenture) per one thousand U.S. dollar principal amount of Notes for each trading day of such measurement period was less than 97% of the product of the last reported sale price of our common stock and the applicable conversion rate for the 2024 Notes on each such
20
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





trading day; or (3) upon the occurrence of specified corporate events described in the Indenture. On or after August 15, 2024 until the close of business on the second quarterscheduled trading day immediately preceding November 15, 2024, holders may convert their 2024 Notes at the option of 2016.the holder regardless of the foregoing circumstances.
As of April 1, 2021, the 2024 Notes continue to be convertible at the option of the shareholders. This conversion right, which will remain available until June 30, 2021, was triggered since the closing price of our common stock was greater than or equal to $76.3425 (130% of the conversion price of the 2024 Notes) for at least 20 trading days during the last 30 trading days ending on March 31, 2021. Since the holders of the 2024 Notes could potentially convert their 2024 Notes at their option during the three month period subsequent to March 31, 2021, the $258.8 principal amount of the 2024 Notes was classified as a current liability in the consolidated balance sheet at March 31, 2021. As of December 31, 2020, the 2024 Notes were convertible at the option of the holders, and the liability component of the 2024 Notes was classified as a current liability. We will reassess the convertibility of the 2024 Notes and the related balance sheet classification on a quarterly basis. There have been no conversions as of the date of this filing.
Prior to the adoption of ASU 2020-06, we allocated the gross proceeds of the 2024 Notes between the liability and equity components of the 2024 Notes. The initial liability component of $200.1, which was recorded as long-term debt, represented the fair value of similar debt instruments that have no conversion rights. The initial equity component of $58.7, which was recorded as additional paid-in capital, represented the debt discount and was calculated as the difference between the fair value of the liability component and gross proceeds of the 2024 Notes. The liability component was recognized at the present value of its associated cash flows using a 4.8% straight-debt rate and was being accreted to interest expense over the term loanof the 2024 Notes.
After the adoption of ASU 2020-06, our convertible notes due November 2024 are no longer bifurcated into separate liability and equity components in our March 31, 2021 condensed consolidated balance sheet. Rather, the $258.8 principal amount of our convertible notes due November 2024 was classified as a liability only in our March 31, 2021 condensed consolidated balance sheet. Upon adoption of ASU 2020-06 and transition, we recorded an adjustment to the convertible notes liability component, equity component (additional paid-in-capital) and retained earnings. This adjustment was calculated based on the carrying amount of the convertible notes as if it had always been treated as a liability only. Refer to Note 1, “Basis of Preparation” for further discussion.
Prior to the adoption of ASU 2020-06, we recorded $5.3 in deferred debt issuance costs associated with the 2024 Notes, which was being amortized over the term of the 2024 Notes using the effective interest method. We also recorded $1.5 in equity issuance costs, which was recorded as a reduction to additional paid-in capital. After the adoption of ASU 2020-06, we recorded an adjustment to the debt issuance costs contra liability and equity (additional paid-in-capital) components under the same premise, i.e. as if debt issuance costs had always been treated as a contra liability only. We amortize the adjusted unamortized debt issuance costs balance over the term of the 2024 Notes using the effective interest method. Refer to Note 1, “Basis of Preparation” for further discussion. Furthermore, interest expense related to the accretion of our convertible notes due November 2024 is secured byno longer recognized.
The following table summarizes interest accretion of the 2024 Notes discount, 1.0% contractual interest coupon and financing costs amortization associated with the 2024 Notes:
Three Months Ended March 31,
20212020
2024 Notes, interest accretion of convertible notes discount$0 $1.9 
2024 Notes, 1.0% contractual interest coupon0.6 0.6 
2024 Notes, total interest expense$0.6 $2.5 
2024 Notes, financing costs amortization$0.2 $0.2 
Convertible Note Hedge and Warrant Transactions Associated with the 2024 Notes
In connection with the pricing of the 2024 Notes, we entered into convertible note hedge transactions (the “Note Hedge Transactions”) with certain CCESC land use rightsparties, including the initial purchasers of the 2024 Notes (the “Option Counterparties”). The Note Hedge Transactions are expected generally to reduce the potential dilution upon any future conversion of the 2024 Notes. Payments for the Note Hedge Transactions totaled approximately $59.5 and allows forwere recorded as a reduction to additional paid-in capital in the December 31, 2017 consolidated balance sheet.
21
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





We also entered into separate, privately negotiated warrant transactions (the “Warrant Transactions”) with the Option Counterparties to acquire up to 86.6 million Chinese yuan (equivalent4.41 shares of our common stock. Proceeds received from the issuance of the Warrant Transactions totaled approximately $46.0 and were recorded as an addition to $13,052)additional paid-in capital in borrowings.the December 31, 2017 consolidated balance sheet. The loan hasstrike price of the Warrant Transactions will initially be $71.775 per share (subject to adjustment), which is approximately 65% above the last reported sale price of our common stock on October 31, 2017. The Warrant Transactions could have a termdilutive effect to our stockholders to the extent that the market price per share of eight years with semi-annual installment paymentsour common stock, as measured under the terms of at least 10.0 million Chinese yuanthe Warrant Transactions, exceeds the applicable strike price of the warrants.
The Note Hedge Transactions and a final maturity dateWarrant Transactions effectively increased the conversion price of May 26, 2024. At September 30, 2017, therethe 2024 Notes. The net cost of the Note Hedge Transactions and Warrant Transactions was 56.6 million Chinese yuan (equivalent to $8,532) outstanding on this loan, bearing interest at 5.39%.approximately $13.5.
Foreign Facilities – Europe
Chart Ferox, a.s. (“Ferox”), a wholly-owned subsidiaryIn various markets where we do business, we have local credit facilities to meet local working capital demands, fund letters of the Company, maintains a secured credit facility with capacity ofand bank guarantees, and support other short-term cash requirements. The facilities generally have variable interest rates and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. We are permitted to borrow up to 125.0 million Czech koruna (equivalent to $5,680)USD equivalent $80.9 under certain of our foreign facilities. As of March 31, 2021 and two secured creditDecember 31, 2020 there were none outstanding in USD equivalent in borrowings outstanding under these facilities. The weighted-average interest rate on foreign facilities with capacitywas of up to 5.6 million euros (equivalent to $6,585). All three1.3% as of March 31, 2021.
Certain of our foreign facilities allow Feroxus to request bank guarantees and letters of credit. None of these facilities allow revolving credit borrowings. Under two of the facilities, Ferox must pay letterWe have foreign letters of credit and guarantee fees equal to 0.70% per annum on the face amount of each guarantee or letter of credit, and under one facility, Ferox must pay the letter of credit and guarantee fees equal to 0.50%. Ferox’s land, buildings, and cash collateral secure the credit facilities. As of September 30, 2017, there were bank guarantees of 147.1 million Czech koruna (equivalent to $6,683) supported by the Ferox credit facilities.
Chart Luxembourg maintains an overdraft facility with $5,000 in borrowing capacity. There were no borrowings under the Chart Luxembourg facilitythat totaled USD equivalent $51.6 and $47.7 as of September 30, 2017.March 31, 2021 and December 31, 2020, respectively.
Letters of Credit
Chart Energy & Chemicals, Inc. (“Chart E&C”), a wholly-owned subsidiary of the Company, has $6,442had $1.0 in deposits in a bank outside of the SSRCF to secure letters of credit. The deposits are treated as restricted cash and restricted cash equivalents in the unaudited condensed consolidated balance sheets ($5,445 in other current assets and $997$1.0 in other assets at September 30, 2017).both March 31, 2021 and December 31, 2020.
Fair Value Disclosures
The fair value of the Convertible2024 Notes was approximately 99% of their par value242% and approximately 96%210% of their par value as of September 30, 2017March 31, 2021 and December 31, 2016,2020, respectively. The Convertible2024 Notes are actively quoted instruments and, accordingly, the fair value of the Convertible2024 Notes was determined using Level 1 inputs as defined in the Fair Value Measurements note. The fair value of the SSRCF Debt as of September 30, 2017 was estimated based on the present value of the underlying cash flows discounted using market interest rates. Under this method, the fair value of the SSRCF Debt approximated its carrying amount as of September 30, 2017. The Company’s SSRCF Debt was valued using observable inputs and, accordingly, the valuation is performed using Level 2 inputs as defined in the Fair Value Measurements note.inputs.
NOTE 5 — Derivative Financial Instruments
The Company utilizes certain derivative financial instruments to enhance its ability to manage foreign currency risk that exists as part of ongoing business operations. Derivative instruments are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into contracts for speculative purposes, nor is it a party to any leveraged derivative instrument. The Company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The Company utilizes foreign currency forward purchase and sale contracts to manage the volatility associated with foreign currency purchases and certain intercompany transactions in the normal course of business. Contracts typically have maturities of less than one year. Principal currencies include the U.S. dollar, the euro, the Japanese yen, the Czech koruna, the Australian dollar, the British pound, the

14
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

Canadian dollar, and the Chinese yuan. The Company’s foreign currency forward contracts do not qualify as hedges as defined by accounting guidance. Foreign currency forward contracts are measured at fair value and recorded on the condensed consolidated balance sheets as other current assets or liabilities and reported as financial assets and liabilities in the Fair Value Measurements note. Changes in their fair value are recorded in the condensed consolidated statements of operations and comprehensive income as foreign currency gains or losses. The Company’s foreign currency forward contracts are not exchange traded instruments and, accordingly, the valuation is performed using Level 2 inputs as defined in the Fair Value Measurements note. Gains or losses on settled or expired contracts are recorded in the condensed consolidated statements of operations and comprehensive income as foreign currency gains or losses.
The changes in fair value with respect to the Company’s foreign currency forward contracts generated a net gain of $65 and a net loss of $32 for the three months ended September 30, 2017 and 2016, respectively. The changes in fair value with respect to the Company’s foreign currency forward contracts generated a net gain of $267 and a net loss of $130 for the nine months ended September 30, 2017 and 2016, respectively.
NOTE 610 — Product Warranties
The Company providesWe provide product warranties with varying terms and durations for the majority of itsour products. The Company estimates itsWe estimate our warranty reserve by considering historical and projected warranty claims, historical and projected cost-per-claim, and knowledge of specific product issues that are outside itsour typical experience. The Company recordsWe record warranty expense in cost of sales in the unaudited condensed consolidated statements of operations.income and comprehensive income. Product warranty claims not expected to occur within one year are recordedincluded as part of other long-term liabilities in the long-term portion of the warranty reserve in theunaudited condensed consolidated balance sheets.
The following table represents changes in the Company’sour consolidated warranty reserve:
Balance at December 31, 2020$11.9 
Issued – warranty expense(0.9)
Warranty usage0.3 
Balance at March 31, 2021$11.3 
Balance at December 31, 2016$18,271
Issued – warranty expense5,510
Acquired – warranty reserve858
Change in estimate – warranty expense282
Warranty usage(9,266)
Balance at September 30, 2017$15,655
NOTE 711 — Business Combinations
HudsonCryo Technologies Acquisition
On September 20, 2017, the Company and Chart Sully Corporation, a wholly owned subsidiaryFebruary 16, 2021, we acquired 100% of the Companyequity interests of Cryogenic Gas Technologies, Inc. (“Merger Sub”Cryo Technologies”), completed the previously announced acquisition of Hudson pursuant for approximately $55.0 in cash (subject to the terms of the Agreement and Plan of Merger, as amended (the “Merger Agreement”)certain customary adjustments), by and between Chart, Merger Sub, Hudson and R/C Hudson Holdings, L.P., solely in its capacity as the Initial Holder Representative under the Merger Agreement. The acquisition was accomplished by the merger of Merger Sub with and into Hudson, with Hudson surviving the merger as a wholly owned subsidiary of the Company (the “Acquisition”). The preliminary estimated Acquisition purchase price was $419,394, net of $0.6 cash acquired, including an estimated net working capital adjustment amount of $5,894, and $3,500 in acquisition-related tax benefits acquired, as defined in the Merger Agreement. The total purchase priceacquired. Cryo Technologies is subject to further adjustments. Approximately $300,000 of the purchase price was funded through borrowings under the Company’s senior secured revolving credit facility, and the remainder of the purchase price was funded with cash on hand.
Hudson, which has operations in the United States, China and Italy and a joint venture in Mexico, designs, manufactures, sells and services products used in refining, heating, ventilation and air conditioning (HVAC), petrochemical, natural gas, power generation, industrial and commercial end markets.  Hudson is a North American leader in air-cooled heat exchangers and a global leader in axial flow cooling fans. Hudson’s results of operations are included in the Company’s Energy & Chemicals (“E&C”) segment since the date of the acquisition.
The Company preliminarily allocated the acquisition considerationcustom engineered process systems to tangibleseparate, purify, refrigerate, liquefy and identifiable intangible assets acquireddistribute high value industrial gases such as hydrogen, helium, argon and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. The preliminary fair value of the acquired tangible and identifiable intangible assets were determined based on inputs that are unobservable and significant to the overall fair value measurement. It is also based on estimates and assumptions made by management at the time of the acquisition. As such, this was classified as Level 3 fair value hierarchy measurements and disclosures.

hydrocarbons with design capabilities for cold boxes for hydrogen
15
22
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued






and helium use. The Companydistribution systems Cryo Technologies supplies are located within the helium and hydrogen liquefaction facilities and are inclusive of trailer loading systems, which facilitates the first step in product distribution. The preliminary estimated the preliminary fair value of the net assets acquired and goodwill at the date of acquisition was $2.9 and $52.1, respectively. Net assets includes $1.8 in intangible assets, which consists of unpatented technology and trademarks and trade names using the relief from royalty method. The preliminary fair values of acquired customer backlog and customer relationships were estimated using the multi-period excess earnings method. Under both the relief from royalty and multi-period excess earnings methods, the fair value models incorporate estimates of future cash flows, estimates of allocations of certain assets and cash flows, estimates of future growth rates, and management’s judgment regarding the applicable discount rates to use to discount such estimates of cash flows. The estimated useful lives of identifiable finite-lived intangible assets range from two to 12 years.
Hudson complements Chart’s E&C segment with the addition of its Fin-Fan® brand and other air cooled heat exchangers which broaden E&C’s end market diversity from primarily liquefied natural gas, industrial and natural gas to include HVAC, petrochemical and power generation.  The addition of Hudson’s fans business, known by the Tuf-Lite® and Cofimco® brands, allows E&C to offer a broader technology solution for Chart’s customers. Management anticipates the combination of strong engineering cultures will continue to further develop full service solutions for Chart’s customers. The preliminary estimated goodwill was established due to the benefits outlined above, as well as the benefits derived from the anticipated synergies of Hudson integrating with Chart’s E&C segment. Goodwill recorded for the Hudson acquisition is not expected to be deductible for tax purposes.
relationships. The acquisition consideration allocation below is preliminary pending completion of the fair valueand shall be further revised as we finalize third-party valuations and other analyses of acquiredto include identifiable intangible assets and liabilities as well as certain other analyses. The excess of the purchase price over the estimated fair values is assigned to goodwill. As additional information becomes available, the Company may further revise the preliminary acquisition consideration allocation during the remainder of the measurement period, which shall not exceed twelve months from the closing of the acquisition. Any such revisions or changes may be material.
Sustainable Energy Solutions, Inc. Acquisition
On December 23, 2020, we completed the acquisition of Sustainable Energy Solutions, Inc. (“SES”). SES’s Cryogenic Carbon Capture™ (CCC) technology eliminates most emissions from fossil fuels while enabling better use of intermittent renewables through grid-scale energy storage. The following table summarizes thestock purchase was completed for a closing purchase price of $20.0 in cash at closing, subject to a post-closing working capital adjustment, plus a potential earn-out not to exceed $25.0. The preliminary estimated fair valuesvalue of the net assets acquired and liabilities assumedgoodwill at the date of acquisition was $13.4 and $24.0, respectively. Net assets includes $17.3 in the Hudson acquisition:
Net assets acquired: 
Goodwill$227,397
Identifiable intangible assets202,000
Accounts receivable34,669
Property, plant and equipment30,590
Inventories24,900
Other current assets (1)
9,359
Unbilled contract revenue4,589
Other assets2,876
Prepaid expenses873
Deferred tax liabilities(68,559)
Accounts payable(21,246)
Customer advances and billings in excess of contract revenue(16,928)
Accrued salaries, wages and benefits(4,442)
Other current liabilities(3,984)
Other long-term liabilities(1,861)
Current portion of warranty reserve(839)
    Net assets acquired$419,394
_______________
(1)
Pursuant to the provisions of the Merger Agreement, Hudson deposited $2,343 into a Rabbi Trust which represents amounts payable to eligible parties under Long-Term Incentive Agreements. This balance is treated as restricted cash and restricted cash equivalents in the condensed consolidated balance sheets and is classified as other current assets.


16
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

Information regarding identifiable intangible assets, acquired inwhich consists of unpatented technology, trade names and non-compete contracts.
BlueInGreen, LLC Acquisition
On November 3, 2020, we completed the Hudson acquisition is presented below:
 Weighted-average Estimated Useful Life Preliminary Estimated Asset Fair Value
Finite-lived intangible assets:   
Customer relationships10 years $109,200
Unpatented technology12 years 19,200
Customer backlog (1)
2 years 1,200
Total finite-lived intangible assets acquired10 years 129,600
Indefinite-lived intangible assets:   
Trademarks and trade names  72,400
Total identifiable intangible assets acquired  $202,000
_______________
(1)
Customer backlog acquired is included in “Patents and other” in the Goodwill and Intangible Assets note.
For the period September 20, 2017 to September 30, 2017, net sales attributed to the acquired Hudson operations was $6,089. For the same period, Hudson contributed $1,202 to operating income which included $372 of intangible asset amortization expense. During the three and nine months ended September 30, 2017, the Company incurred $7,254 and $8,130, respectively, in acquisition related costs related to the Hudson acquisition which were recorded in selling, general and administrative expenses in the condensed consolidated statements of operations.
Supplemental Pro Forma Information
The following unaudited supplemental pro forma financial information is based on the Company’s historical condensed consolidated financial statements and Hudson’s historical condensed consolidated financial statements as adjusted to give effect to the September 20, 2017 acquisition of Hudson.BlueInGreen, LLC (“BIG”), a leading dissolved-gas expert providing custom-engineered solutions for water treatment and industrial process applications that delivers tangible economic, social and environmental value. The unaudited supplemental pro forma financial informationstock purchase was completed for the periods presented gives effect to the acquisition as if it had occurred on January 1, 2016.
The following adjustments are reflected in the pro forma financial table below:
the effect of decreased interest expense related to the repayment of the Hudson term loan and revolving credit facility, net of the additional borrowing on the Chart senior secured revolving credit facility,
•amortization of acquired intangible assets,
•step-up depreciation of acquired property, plant and equipment,
•inventory fair value step-up amortization expense,
nonrecurring acquisition-related expenses directly attributable to the Hudson acquisition of $15,917 and $16,529 were adjusted out of the pro forma net income attributable to Chart Industries, Inc. for the three and nine months ended September 30, 2017, respectively, and
nonrecurring acquisition-related expenses incurred by Chart directly related to the Hudson acquisition of $7,254 and $8,130, were adjusted out of the pro forma net income attributable to Chart Industries, Inc. for the three and nine months ended September 30, 2017, respectively.    
This unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the periods presented. In addition, the unaudited pro forma results are not intended to be a projection of future results and do not reflect any operating efficiencies or cost savings that might be achievable.

17
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

The following table presents pro forma sales, net income attributable to Chart Industries, Inc., and net income attributable to Chart Industries, Inc. per common share data assuming Hudson was acquired at the beginning of the 2016 fiscal year:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Pro forma sales$282,432
 $241,725
 $824,066
 $777,671
Pro forma net income attributable to Chart Industries, Inc.5,673
 15,434
 7,090
 36,341
        
Pro forma net income attributable to Chart Industries, Inc. per common share, basic$0.18
 $0.50
 $0.23
 $1.19
Pro forma net income attributable to Chart Industries, Inc. per common share, diluted$0.18
 $0.50
 $0.23
 $1.17
VCT Vogel GmbH Acquisition
On August 31, 2017, Chart Germany GmbH, a wholly-owned subsidiary of the Company, acquired 100% of the equity interests of VCT Vogel GmbH (“VCT”) for an estimated purchase price of 3.5 million euros (equivalent$20.0 in cash at closing (subject to $4,139)customary adjustments), subjectplus a potential earn-out not to a working capital adjustment. VCT, located in Gablingen, Germany, servicesexceed $6.0. The preliminary estimated fair value of the net assets acquired and repairs cryogenic and other mobile gas tank equipment and trucks. VCT also designs, manufactures and sells truck mounted drive and control systems for the operation of cryogenic pumps on trailers, rigid trucks and containers. VCT’s results are included in the Company’s Distribution & Storage (“D&S”) segment fromgoodwill at the date of acquisition.
Additional information related to the VCT acquisition has not been presented because the impact on the Company’s consolidated results of operationswas $8.8 and financial position is not material.
Hetsco, Inc. Acquisition
On January 13, 2017, the Company acquired 100% of the equity interests in Hetsco, Inc. from Global Power Equipment Group, Inc. for an estimated purchase price of $23,162, which was paid upon closing.$14.8, respectively. The purchase price allocation reported at MarchDecember 31, 20172020 was preliminary and was based on provisional fair values. During the second quarter,first three months of 2021, we received and analyzed new information about certain intangible assets and subsequently decreased their estimated fair value by $0.7. Net assets includes $6.2 in intangible assets, which consists of non-compete contracts, unpatented technology, trademarks and trade names, certifications and licenses and customer relationships.

Alabama Trailers Acquisition
On October 13, 2020, we completed the Company received revisedacquisition of the Theodore, Alabama cryogenic trailer and hydrogen trailer (transport) assets of Worthington Industries, Inc. (NYSE: WOR) for $10.0 in cash (“Alabama Trailers”). Worthington Industries, Inc. made the decision to exit the hydrogen trailer business and sold the business to Chart at a discount. As a result of the acquisition, we recorded a bargain purchase gain of $5.0. Alabama Trailers designs, manufactures and sells cryogenic trailers and hydrogen trailers used in industrial gas and energy applications.
The purchase price allocations of Cryo Technologies, SES, BIG and Alabama Trailers are preliminary and are based on provisional fair values and subject to revision as we finalize third-party valuations performedand other analyses and recorded $380 in accounts receivable for post-closing adjustments, which resulted in an adjusted net purchase priceanalyses. Final determination of $22,782. No adjustments were made during the third quarter of 2017. The post-closing adjustments and revised fair values resultedmay result in the followingfurther adjustments to the value of net assets acquired:
 September 30, 2017 Adjustments 
As Previously Reported
March 31, 2017
Goodwill$8,849
 $(1,271) $10,120
Identifiable intangible assets – customer relationships8,090
 810
 7,280
Other identifiable intangible assets1,150
 30
 1,120
Other net assets4,693
 51
 4,642
Net assets acquired$22,782
 $(380) $23,162
The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date.
Hetsco, Inc. is headquartered in Franklin, Indiana and provides emergency, specialty welding and construction services to natural gas processing, petrochemical, and air gas separation industries. Hetsco’s results are included in the Company’s E&C segment from the date of acquisition.
Pro-forma information related to the Hetsco, Inc. acquisition has not been presented because the impact on the Company’s consolidated results of operations and financial position is not material.acquired.
Contingent Consideration
The estimated fair value of contingent consideration relating to the 2015 D&S Thermax acquisition was $1,800$16.9 for SES and $3.2 for BIG at the date of acquisitionacquisitions and was valued according to a discounted cash flow approach, which includesincluded assumptions regarding the probability of achieving certain earnings targets and a discount rate applied to the potential payments. Potential payments may be paidare measured between

18
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars the period commencing April 1, 2021 and shares in thousands, except per share amounts) – Continued

October 1, 2017 and July 1, 2019ending on December 31, 2028 based on the attainment of certain earnings targets. The potential payments related to Thermaxboth SES and BIG contingent consideration areon a combined basis is between $0$0.0 and $11,288.$31.0.
Valuations are performed using Level 3 inputs as defined in Note 2, “Significant Accounting Policies” of our Annual Report on Form 10-K for the Fair Value Measurements noteyear ended December 31, 2020 and are evaluated on a quarterly basis based on forecasted sales and earnings targets. Contingent consideration liabilities are classified as other current liabilities and other long-term liabilities in the condensed consolidated balance sheets. Changes in fair value of contingent consideration, including accretion, are recorded as selling, general and administrative expenses in the condensed consolidated statements of operationsincome and comprehensive income.
The following table represents the changes into our contingent consideration liabilities:
23
Balance at December 31, 2016$1,923
Decrease in fair value of contingent consideration liabilities(1,622)
Balance at September 30, 2017$301
For the nine months ended September 30, 2017, the fair value of contingent consideration decreased by $1,622, which was primarily driven by economic circumstances that significantly reduced the likelihood of achieving certain earnings targets for the duration of the remaining potential payout period. There was no change in contingent consideration for the three months ended September 30, 2017. For the three and nine months ended September 30, 2016, the fair value of contingent consideration increased by $75 and $122, respectively.
NOTE 8 — Fair Value Measurements
The Company measures its financial assets and liabilities at fair value on a recurring basis using a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies. The three levels of inputs used to measure fair value are as follows:
Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Valuations based on unobservable inputs reflect the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.
Financial assets and liabilities measured at fair value on a recurring basis and presented in the Company’s condensed consolidated balance sheets are as follows:
 September 30, 2017
 Total Level 2 Level 3
Foreign currency forward contracts$20
 $20
 $—
Total financial assets$20
 $20
 $—
      
Foreign currency forward contracts$170
 $170
 $—
Contingent consideration liabilities301
 —
 301
Total financial liabilities$471
 $170
 $301

19
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued






 December 31, 2016
 Total Level 2 Level 3
Foreign currency forward contracts$39
 $39
 $—
Total financial assets$39
 $39
 $—
      
Foreign currency forward contracts$92
 $92
 $—
Contingent consideration liabilities1,923
 —
 1,923
Total financial liabilities$2,015
 $92
 $1,923
SESBIGTotal
Balance at December 31, 2020$16.9 $3.2 $20.1 
Increase in fair value of contingent consideration liabilities0.7 0.1 0.8 
Balance at March 31, 2021$17.6 $3.3 $20.9 
Refer to the Derivative Financial Instruments note for further information regarding derivative financial instruments and the Business Combinations note for further information regarding contingent consideration liabilities.
NOTE 912 — Accumulated Other Comprehensive Loss(Loss) Income
The following tables represent changes incomponents of accumulated other comprehensive loss by component:(loss) income are as follows:
 Foreign currency translation adjustmentsPension liability adjustments, net of taxesAccumulated other comprehensive income (loss)
Balance at December 31, 2020$13.8 $(11.4)$2.4 
Other comprehensive loss(19.6)0 (19.6)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes0 0.4 0.4 
Net current-period other comprehensive (loss) income, net of taxes(19.6)0.4 (19.2)
Balance at March 31, 2021$(5.8)$(11.0)$(16.8)
 Foreign currency translation adjustmentsPension liability adjustments, net of taxesAccumulated other comprehensive loss
Balance at December 31, 2019$(25.0)$(10.9)$(35.9)
Other comprehensive loss(10.2)0 (10.2)
Amounts reclassified from accumulated other comprehensive loss, net of income taxes0 0.3 0.3 
Net current-period other comprehensive (loss) income, net of taxes(10.2)0.3 (9.9)
Balance at March 31, 2020$(35.2)$(10.6)$(45.8)
24
 Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss
Balance at June 30, 2017$(10,784) $(10,108) $(20,892)
Other comprehensive income6,657
 —
 6,657
Amounts reclassified from accumulated other comprehensive loss, net of income taxes of $109 (1) (3)
1,322
 201
 1,523
Net current-period other comprehensive income, net of taxes7,979
 201
 8,180
Balance at September 30, 2017$(2,805) $(9,907) $(12,712)
 Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss
Balance at June 30, 2016$(12,506) $(11,892) $(24,398)
Other comprehensive income21
 —
 21
Amounts reclassified from accumulated other comprehensive loss, net of income taxes of $135 (1)
—
 250
 250
Net current-period other comprehensive income, net of taxes21
 250
 271
Balance at September 30, 2016$(12,485) $(11,642) $(24,127)
 Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss
Balance at December 31, 2016$(24,701) $(10,511) $(35,212)
Other comprehensive income20,574
 —
 20,574
Amounts reclassified from accumulated other comprehensive loss, net of income taxes of $326 (2) (3)
1,322
 604
 1,926
Net current-period other comprehensive income, net of taxes21,896
 604
 22,500
Balance at September 30, 2017$(2,805) $(9,907) $(12,712)

20
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017March 31, 2021
(Dollars and shares in thousands,millions, except per share amounts) – Continued




 Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss
Balance at December 31, 2015$(12,513) $(12,391) $(24,904)
Other comprehensive income28
 —
 28
Amounts reclassified from accumulated other comprehensive loss, net of income taxes of $404 (2)
—
 749
 749
Net current-period other comprehensive income, net of taxes28
 749
 777
Balance at September 30, 2016$(12,485) $(11,642) $(24,127)

_______________
(1)
Amounts reclassified from accumulated other comprehensive loss were expensed and included in cost of sales ($122 and $152) and selling, general, and administrative expenses ($188 and $233) for the three months ended September 30, 2017 and 2016, respectively, in the condensed consolidated statements of operations and comprehensive income. The components in accumulated other comprehensive loss are included in the computation of net periodic pension expense as reported in the Employee Benefit Plans note.
(2)
Amounts reclassified from accumulated other comprehensive loss were expensed and included in cost of sales ($366 and $454) and selling, general, and administrative expenses ($564 and $699) for the nine months ended September 30, 2017 and 2016, respectively, in the condensed consolidated statements of operations and comprehensive income. The components in accumulated other comprehensive loss are included in the computation of net periodic pension expense as reported in the Employee Benefit Plans note.
(3)
For the three and nine months ended September 30, 2017, $1,322 was reclassified from accumulated other comprehensive loss to foreign currency loss in the condensed consolidated statements of operations and comprehensive income related to certain intercompany transactions.
NOTE 1013 — Earnings Per Share
The following table presentsrepresents calculations of net incomeearnings per share of common stock:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income attributable to Chart Industries, Inc.$1,510
 $15,025
 $1,381
 $31,527
Net income attributable to Chart Industries, Inc. per common share:       
Basic$0.05
 $0.49
 $0.04
 $1.03
Diluted$0.05
 $0.48
 $0.04
 $1.02
        
Weighted average number of common shares outstanding — basic30,755
 30,585
 30,726
 30,578
Incremental shares issuable upon assumed conversion and exercise of share-based awards556
 479
 562
 362
Weighted average number of common shares outstanding — diluted31,311
 31,064
 31,288
 30,940
 Three Months Ended March 31,
 20212020
Net income attributable to Chart Industries, Inc.
Income from continuing operations$25.6 $2.1 
Income from discontinued operations, net of tax0 6.4 
Net income attributable to Chart Industries, Inc.$25.6 $8.5 
Earnings per common share – basic:
Income from continuing operations$0.72 $0.06 
Income from discontinued operations0 0.18 
Net income attributable to Chart Industries, Inc.$0.72 $0.24 
Earnings per common share – diluted:
Income from continuing operations$0.63 $0.06 
Income from discontinued operations0 0.18 
Net income attributable to Chart Industries, Inc.$0.63 $0.24 
Weighted average number of common shares outstanding – basic35.55 35.77 
Incremental shares issuable upon assumed conversion and exercise of share-based awards0.33 0.24 
Incremental shares issuable due to dilutive effect of convertible notes2.57 0 
Incremental shares issuable due to dilutive effect of warrants2.17 0 
Weighted average number of common shares outstanding – diluted40.62 36.01 
Diluted earnings per share does not reflect the following potential common shares as the effect would be anti-dilutive:
 Three Months Ended March 31,
 20212020
Share-based awards0.06 0.50 
Convertible note hedge and capped call transactions (1)
2.57 0 
Warrants0 4.41 
Total anti-dilutive securities2.63 4.91 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Share-based awards636
 555
 676
 750
Warrants3,368
 3,368
 3,368
 3,368
Total anti-dilutive securities4,004
 3,923
 4,044
 4,118
 _______________

(1)The convertible note hedge offsets any dilution upon actual conversion of the 2024 Notes up to a common stock price of $71.775 per share. For further information, refer to Note 9, “Debt and Credit Arrangements.”
21
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

NOTE 1114 — Income Taxes
The Company recorded incomeIncome tax expense of $1,907$3.1 and $1,764 in$0.4 for the three months ended September 30, 2017March 31, 2021 and 2016, respectively. The Company recorded2020, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax expenserate of $2,34610.6% and $12,829 in the nine months ended September 30, 2017 and 2016,16.0%, respectively.
The effective income tax rate of 47.5% and 48.6%10.6% for the three and nine months ended September 30, 2017March 31, 2021 differed from the U.S. federal statutory rate of 35%21% primarily due to losses incurred by certainsome of the Company’s Chineseour foreign operations for which no benefit was recorded, partially offset by the effect of income earned by our certain foreign exchangeentities being taxed at higher rates than the U.S. federal statutory rate and excess tax benefits associated with share-based compensation.
25
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





The effective income tax rate of 16.0% for the three months ended March 31, 2020 differed from the U.S. federal statutory rate of 21% primarily due to losses realized upon the receiptincurred by certain of previously taxed income, andour foreign operations for which no benefit was recorded, partially offset by the effect of income earned by certain of the Company’s internationalour foreign entities operating in lowerbeing taxed jurisdictions. The third quarter 2017 effective income tax rate was also impacted by transaction costs incurred with the acquisition of Hudson, a portion of which were non-deductible for U.S. federal income tax purposes. The effective income tax rate of 11.4% and 31.0% for the three and nine months ended September 30, 2016 differed fromat higher rates than the U.S. federal statutory rate of 35% primarily due to an insurance settlement for breaches of representations and warranties that resulted in an adjustment to our purchase price of Airsep shares forexcess tax purposes and offset by losses incurred by certain of the Company’s Chinese operations for which no benefit was recorded.benefits associated with share-based compensation.
As of both September 30, 2017March 31, 2021 and December 31, 2016, the Company has2020, we had a liability for gross unrecognized tax benefits of $710.$1.9. This amount includes $535$1.3 of unrecognized tax benefits as of September 30, 2017,both March 31, 2021 and December 31, 2020, which, if ultimately recognized, would reduce the Company’sour annual effective income tax rate. The Company recognizesWe recognized interest and penalties of $0.3 related to uncertain tax positions in income tax expense. The Company accrued approximately $89 and $86 for the payment of interest and penaltiesexpense as of September 30, 2017 and DecemberMarch 31, 2016, respectively.2021.
NOTE 12 — Employee Benefit Plans
The Company has a frozen defined benefit pension plan that covers certain U.S. hourly and salaried employees. The defined benefit plan provides benefits based primarily on the participants’ years of service and compensation.
The components of net periodic pension expense are as follows:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017
2016 2017 2016
Interest cost$543
 $572
 $1,627
 $1,714
Expected return on plan assets(698) (698) (2,094) (2,092)
Amortization of net loss310
 385
 930
 1,153
Total net periodic pension expense$155
 $259
 $463
 $775

The Company’s funding policy is to contribute at least the minimum funding amounts required by law. The Company contributed $3,000 to its defined benefit pension plan in the third quarter of 2017, and based upon current actuarial estimates, the Company does not expect to contribute to its defined benefit pension plan again until 2018.
NOTE 1315 — Share-based Compensation
During the ninethree months ended September 30, 2017, the CompanyMarch 31, 2021, we granted 3240.06 stock options, 1530.05 restricted stock units 7 shares of restricted stock, and 220.03 performance units. The total fair value of awards granted to employees during the ninethree months ended September 30, 2017March 31, 2021 was $13,246.$12.5. In addition, our non-employee directors received 13 stock awards with a total fair value of $487.$0.1. During the ninethree months ended September 30, 2017,March 31, 2021, participants in the Company’sour stock option plans exercised options to purchase 430.10 shares of the Company’sour common stock, while 80 stock options were forfeited and 22 stock options expired.stock.
Stock options generally vest ratably overhave a four-year graded vesting period. Restricted stock and restricted stock units generally vest ratably over a three-year period. Performance units generally vest at the end of a three-year performance period based on the achievementattainment of certain pre-determined performance conditions. Leveraged restricted share units generally vest on the third anniversary of the grant date.condition targets. During the ninethree months ended September 30, 2017, 129 shares ofMarch 31, 2021, 0.07 restricted stock and restricted stock units vested while 25 restricted stock units were forfeited. Also, during the nine months ended September 30, 2017, 22and 0.01 performance units vested while 8 performance units were forfeited. Additionally, during the nine months ended September 30, 2017, 6 leveraged restricted share units vested.
Share-based compensation expense was $1,569$3.4 and $1,826$2.9 for the three months ended September 30, 2017March 31, 2021 and 2016, respectively. Share-based compensation expense was $9,555 and $9,014 for the nine months ended September 30, 2017 and 2016,2020, respectively. Share-based compensation expense is included in selling, general, and administrative expenses in the unaudited condensed

22
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

consolidated statements of operationsincome and comprehensive income. As of September 30, 2017,March 31, 2021, total share-based compensation of $7,298$18.0 is expected to be recognized over the weighted-average period of approximately 2.22.4 years.
On May 25, 2017,
NOTE 16 — Commitments and Contingencies
Environmental
We are subject to federal, state, local, and foreign environmental laws and regulations concerning, among other matters, waste water effluents, air emissions, and handling and disposal of hazardous materials, such as cleaning fluids. We are involved with environmental compliance, investigation, monitoring, and remediation activities at certain of our owned and formerly owned manufacturing facilities and at one owned facility that is leased to a third party, and, except for these continuing remediation efforts, believe we are currently in substantial compliance with all known environmental regulations. At both March 31, 2021 and December 31, 2020, we had undiscounted accrued environmental reserves of $0.3.
Legal Proceedings
Stainless Steel Cryobiological Tank Legal Proceedings
During the Company held its annual meetingsecond quarter of stockholders. At the annual meeting, the Company’s stockholders approved the2018, Chart Industries, Inc. 2017 Omnibus Equity Plan (the “2017 Omnibus Equity Plan”). As describedwas named in lawsuits (including lawsuits filed in the Company’s definitive proxy statementU.S. District Court for the annual meeting, the Company’s directors, officers and employees (including its principal executive officer, principal financial officerNorthern District of California) filed against Chart and other “named executive officers”)defendants with respect to the alleged failure of a stainless steel cryobiological storage tank (model MVE 808AF-GB) at the Pacific Fertility Center in San Francisco, California.  We continue to evaluate the merits of such claims in light of the information available to date regarding use, maintenance and operation of the tank that was sold to the Pacific Fertility Center through an independent distributor and which has been out of our control for six years prior to the alleged failure.  Accordingly, an accrual related to any damages that may result from the lawsuits has not been recorded because a potential loss is not currently probable or estimable. In connection with the Cryobiological Divestiture, Chart retained certain potential liabilities and claims, including the claims asserted in connection with this litigation.
We have asserted various defenses against the claims in the lawsuits, including a defense that since manufacture, we were not in any way involved with the installation, ongoing maintenance or monitoring of the tank or related fertility center cryogenic systems at any time since the initial delivery of the tank.
We are eligibleoccasionally subject to be granted awardsvarious legal claims related to performance under contracts, product liability, taxes, employment matters, environmental matters, intellectual property, and other matters incidental to the 2017 Omnibus Equity Plan.normal course of our business. Based on our historical experience in litigating these claims, as well as our current assessment of the underlying
26
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – March 31, 2021
(Dollars and shares in millions, except per share amounts) – Continued





merits of the claims and applicable insurance, if any, management believes that the final resolution of these matters will not have a material adverse effect on our financial position, liquidity, cash flows, or results of operations. Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect.
NOTE 1417 — Restructuring Activities
The Company has implemented a numberRestructuring costs of cost reduction or avoidance actions, including$0.7 for the first three months of 2021 were primarily related to headcount reductions and facility closuresrelocation and relocations primarily relatingmoving expenses. As previously reported, on July 17, 2020, we announced internally our intention to the consolidation of certaintransfer operations of our facilitiesheat exchanger leased facility in China,Tulsa, Oklahoma to our Beasley, Texas location at which we own 260 acres of land. This closure is a cost reduction measure within our Heat Transfer Systems segment to continue to structure the Buffalo BioMedical respiratory consolidation,business for profitable growth and capacity efficiency. Total costs related to this closure are expected to be approximately $9.0, of which $2.7 was spent in 2020 and $0.4 has been spent year to date, associated with severance, relocation of the corporate headquarters. The Buffalo Biomedical respiratory facility consolidation into Ball Ground, Georgia, was completed during the first quarter of 2017. The E&C Wuxi, China facility consolidation was completed during the second quarter of 2017, and the D&S China facility consolidation is expectedmoving expenses. We expect this project to be completed by the end of 2017. Our corporate headquarters move from Garfield Heights, Ohio to Ball Ground, Georgia (which was official effective October 26, 2017) was substantially completed during the third quarter of 2017, and the Company’s Garfield Heights headquarters lease commitment ends December 31, 2017.
The following table is a summary of the severance and other restructuring costs, which included employee-related costs, facility rent and exit costs, relocation, recruiting, travel and other, for the three months and nine months ended SeptemberJune 30, 2017 and 2016:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Severance:       
Cost of sales$52
 $159
 $731
 $3,501
Selling, general, and administrative expenses920
 43
 2,767
 2,382
Total severance costs$972
 $202
 $3,498
 $5,883
Other restructuring:       
Cost of sales$278
 $—
 $4,072
 $—
Selling, general, and administrative expenses1,499
 103
 4,847
 420
Total other restructuring costs$1,777
 $103
 $8,919
 $420
        
Total restructuring costs$2,749
 $305
 $12,417
 $6,303
The Company is2021. We are closely monitoring itsour end markets and order rates and will continue to take appropriate and timely actions as necessary.
Restructuring costs of $5.2 for the three months ended March 31, 2020 were related to certain cost reduction actions across all segments and corporate to appropriately size our workforce with demand as well as eliminate redundant work. Costs were primarily related to headcount reductions.
The Company currently expects additionalfollowing table summarizes severance and other restructuring costs, in the remaining three months of 2017 to be approximately $1,530 ($1,000 - D&S, $310 - BioMedical,which includes employee-related costs, facility rent and $220 - Corporate), but further actions may be required based on future business conditions.exit costs, relocation, recruiting, travel and other:
Three Months Ended March 31,
20212020
Severance:
Cost of sales$0 $2.3 
Selling, general, and administrative expenses0.3 2.9 
Total severance costs0.3 5.2 
Other restructuring:
Cost of sales0.4 0 
Total other restructuring costs0.4 0 
Total restructuring costs$0.7 $5.2 
The following tables summarize the Company’sour restructuring activities for the three and nine months ended September 30, 2017 and 2016:activities:
Three Months Ended March 31, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingCorporateConsolidated
Balance at December 31, 2020$0.5 $0.2 $0 $0 $0.1 $0.8 
Restructuring charges0.3 0.4 0 0 0 0.7 
Cash payments and other(0.3)(0.6)0 0 (0.1)(1.0)
Balance at March 31, 2021$0.5 $0 $0 $0 $0 $0.5 
Three Months Ended March 31, 2020
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingCorporateConsolidated
Balance at December 30, 2019$0.5 $0.2 $0 $0 $0.2 $0.9 
Restructuring charges1.8 2.8 0 0 0.6 5.2 
Cash payments and other(0.8)(2.5)0 0 0 (3.3)
Balance at March 31, 2020$1.5 $0.5 $0 $0 $0.8 $2.8 
27
 Three Months Ended September 30, 2017
 Energy & Chemicals Distribution & Storage BioMedical Corporate Total
Balance as of June 30, 2017$—
 $1,865
 $847
 $1,493
 $4,205
Restructuring costs162
 648
 516
 1,423
 2,749
Cash payments(157) (1,381) (803) (1,480) (3,821)
Acquired restructuring reserve194
 —
 —
 —
 194
Balance as of September 30, 2017$199
 $1,132
 $560
 $1,436
 $3,327

23
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

 Three Months Ended September 30, 2016
 Energy & Chemicals Distribution & Storage BioMedical Corporate Total
Balance as of June 30, 2016$544
 $4,796
 $368
 $276
 $5,984
Restructuring costs159
 118
 —
 28
 305
Cash payments(267) (1,160) (168) (219) (1,814)
Balance as of September 30, 2016$436
 $3,754
 $200
 $85
 $4,475
 Nine Months Ended September 30, 2017
 Energy & Chemicals Distribution & Storage BioMedical Corporate Total
Balance as of December 31, 2016$127
 $2,864
 $1,308
 $3,025
 $7,324
Restructuring costs2,245
 1,085
 4,527
 4,560
 12,417
Cash payments(2,367) (2,817) (5,275) (6,149) (16,608)
Acquired restructuring reserve194
 —
 —
 —
 194
Balance as of September 30, 2017$199
 $1,132
 $560
 $1,436
 $3,327
 Nine Months Ended September 30, 2016
 Energy & Chemicals Distribution & Storage BioMedical Corporate Total
Balance as of December 31, 2015$1,106
 $3,446
 $430
 $850
 $5,832
Restructuring costs821
 3,929
 521
 1,032
 6,303
Cash payments(1,491) (3,621) (751) (1,797) (7,660)
Balance as of September 30, 2016$436
 $3,754
 $200
 $85
 $4,475

24
Table of Contents
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

NOTE 15 — Reportable Segments
The structure of the Company’s internal organization is divided into the following reportable segments, which are also the Company’s operating segments: E&C, D&S, and BioMedical. Corporate includes operating expenses for executive management, accounting, tax, treasury, human resources, information technology, legal, internal audit, and risk management.
The following table represents information for the Company’s reportable segments and its corporate function:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Sales       
Energy & Chemicals (1)
$46,588
 $23,711
 $126,473
 $122,865
Distribution & Storage139,281
 126,646
 390,057
 363,743
BioMedical54,662
 53,573
 166,309
 158,174
Consolidated$240,531
 $203,930
 $682,839
 $644,782
Operating Income (Loss) (1) (2) (3) (4)
       
Energy & Chemicals$329
 $(5,736) $(2,420) $14,190
Distribution & Storage21,016
 14,715
 49,186
 37,550
BioMedical9,539
 20,916
 24,387
 38,120
Corporate (4)
(20,436) (9,831) (50,523) (34,820)
Consolidated$10,448
 $20,064
 $20,630
 $55,040
___________
(1)
Includes results from the Hudson and Hetsco acquisitions, which are included in the Company’s E&C segment. Refer to the Business Combinations note for further details.
(2)
During the third quarter of 2016, the Company recovered for breaches of representations and warranties primarily related to warranty costs for certain product lines acquired in the 2012 acquisition of AirSep Corporation under the related representation and warranty insurance.  For the three months ended September 30, 2016, this reduced our BioMedical segment’s cost of sales by $15,145 and Corporate SG&A expenses by $859, net of associated legal fees.  For the nine months ended September 30, 2016, this reduced our BioMedical segment’s cost of sales by $15,145 and Corporate SG&A expenses by $376, net of associated legal fees recorded in the first nine months of 2016.
(3)
Includes restructuring costs of $2,749 and $305 for the three months ended September 30, 2017 and 2016, respectively, and $12,417 and $6,303 for the nine months ended September 30, 2017 and 2016 respectively.
(4)
Includes acquisition-related costs of $7,445 and $8,587 for the three and nine months ended September 30, 2017, respectively.
The following table represents total assets for the Company’s reportable segments and its corporate function:
 September 30, 2017 December 31, 2016
Total Assets   
Energy & Chemicals (1)
$782,553
 $172,494
Distribution & Storage679,350
 631,715
BioMedical165,195
 166,940
Corporate65,925
 261,933
Consolidated$1,693,023
 $1,233,082
___________
(1)
Includes assets acquired from the Hudson and Hetsco acquisitions, which are included in the Company’s E&C segment. Refer to the Business Combinations note for further details.

25
Table of Contents


Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our results of operations and financial condition should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements. Actual results may differ materially from those discussed below. See “Forward-Looking Statements” at the end of this discussion and Item 1A. “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with this discussion.
Overview
Chart Industries, Inc. and its consolidated subsidiaries (the “Company,” “Chart,” “we,” “us,” or “our”) isWe are a leading diversifiedindependent global manufacturer of highly engineered equipment forservicing multiple applications in the industrialClean Energy and Industrial Gas markets. Our unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and repair. Being at the forefront of the clean energy and biomedical industries. Ourtransition, Chart is a leading provider of technology, equipment and engineered systemsservices related to liquefied natural gas, hydrogen, biogas and CO2 Capture amongst other applications. We are primarily usedcommitted to excellence in environmental, social and corporate governance (ESG) issues both for low-temperatureour company as well as our customers. With over 25 global locations from the United States to Asia, Australia, India, Europe and cryogenic applications utilizingSouth America, we maintain accountability and transparency to our expertise in cryogenic systemsteam members, suppliers, customers and equipment which operate at low temperatures sometimes approaching absolute zero (0 Kelvin; -273° Centigrade; -459° Fahrenheit).communities.
Third QuarterCovid-19 Update
The outbreak and Year-to-date 2017 Highlights
Our consolidatedcontinued uncertainty associated with the coronavirus (Covid-19) did not have a material adverse effect on our reported results for the thirdfirst three months of 2021, however, we continue to actively monitor the impact of the Covid-19 outbreak on our results of operations for the remainder of 2021 and beyond. The extent to which our operations will be impacted by the outbreak will largely depend on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity, or reemergence, of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among other things.
First Quarter 2021 Highlights
Orders of $417.2 million were the highest in our history (excluding big LNG), driven by broad based demand including a recovery in certain end markets, continued demand for our clean products supporting the strongest current macroeconomic trend of sustainability, and the combination of larger liquefaction orders for LNG and hydrogen. Total orders increased across three out of four of our segments during the first quarter 20172021 as compared to the first quarter 2020. This continued record level order activity contributed to record ending total backlog as of March 31, 2021 of $934.1 million compared to $723.3 million as of March 31, 2020 and $810.0 million as of December 31, 2020, representing an increase of $210.8 million or 29.1% and $124.1 million or 15.3%, respectively. These increases were highlightedlargely driven by salesrecord orders in our Specialty Products segment mainly driven by orders in hydrogen equipment, HLNG vehicle tanks, lasers and LNG regasification applications. Specialty Products segment backlog was $270.5 million as of $240.5March 31, 2021 as compared to $130.3 million and operating income$199.7 million as of $10.4March 31, 2020 and December 31, 2020, respectively.
Although consolidated sales decreased to $288.5 million inclusivein the first quarter 2021 from $301.9 million in the first quarter 2020, which was mainly driven by volume softness in our Heat Transfer Systems segment and the timing of the in quarter acquisitions.  Gross profit for the third quarterrecognition of 2017 was $70.4 million, or 29.3% of sales, which was unfavorably impacted by $0.3 million of restructuring costs.  Energy & Chemicals (“E&C”) gross margin improved sequentially from 13.3% incertain orders into the second quarter, of 2017 to 18.6%sales increased in the thirdremaining three segments led by a $24.4 million or 46.1% increase in Specialty Products segment sales. Furthermore, first quarter of 2017, which includes 260 basis points from the inclusion of the results of RCHPH Holdings, Inc. (“Hudson”).  The strength in gross margin was driven in part by restructuring and additional LNG (“Liquefied Natural Gas”) FEED projects. Distribution & Storage (“D&S”) third quarter2021 gross margin as a percent of sales of 29.1% sequentially increased 340 basis points overfrom 27.3% in the secondfirst quarter of 2017.  Continued improvement2020 and from 28.1% in D&S cost structure from reductionsthe prior quarter. The increase in force taken this year combined with D&S European operational improvements contributed to the sequential increase. BioMedical third quarter gross margin as a percent of sales of 38.7% increased sequentially by 150 basis points, from 37.2% in the secondcurrent quarter over first quarter of 2017.  This reflects2020 was primarily driven by our Repair, Service & Leasing segment mainly on lower costs in our repair facilities. The improvement in gross margin as a percentage of sales compared to the reduced cost structure from the completionprior quarter was primarily driven by favorable product mix in cannabis and space-related products within our Specialty products segment as well as favorable execution, especially in China.
Consolidated selling, general and administrative (“SG&A”) expenses as a percentage of the Buffalo, New York respiratory facility consolidation. 
Market and order activity continues to increase year to date, with $258.0 million in orders receivedconsolidated sales in the quarter, inclusive of $3.8 million of orders from Hudson in the ten day Chart ownership period.  This is the fourth consecutivefirst quarter of sequential order growth for Chart.  E&C orders2021 increased by 2.9% as compared to the prior quarter primarily driven by ramp up in bothour Specialty Products business and decreased by 1.4% compared to the third and second quarters of 2017 were above $60 million, and BioMedical orders were up 7.3% sequentially over the secondfirst quarter of 2017 driven by continued demand for oxygen concentrators.  Backlog excluding third quarter acquisitions increased to $390.6 million from $367.2 million at the end of the second quarter of 2017.  We anticipate this sequential order trend will continue to increase through year end, with specific project orders expected in the E&C business and in D&S Asia related to LNG vehicle tanks. 
On September 20, 2017, we closed2020 based on the acquisitioneffect of Hudson. The estimated purchase price is $419.4 million and Hudson’s results of operations are includedcost reduction actions we took in our E&C segment since that date.   On August 31, 2017 we closed the acquisition of VCT Vogel (“VCT”).  The estimated purchase price is $4.1 million, and VCT’s results are included in our D&S segment since that date. 2020.
Outlook
Our 20172021 full year outlook reflects continued temperedexecution on the clean energy pricestransition including recovery in air cooled heat exchangers related to coregrowth in CO2 Capture applications, small scale LNG E&C business, year-to-date orderopportunities and growth in our segmentsSpecialty Products business, especially in water treatment, over the road trucking and hydrogen applications driven by strength in first quarter orders, including specific liquefaction projects and commercial opportunities increasing from our inorganic investments and acquisition completed in the impactpast six months.
28
Table of current year acquisitions (Hetsco, Inc., Hudson, and VCT).  We continue to anticipate thatContents

Our 2021 sales outlook is inclusive of $6.4 million of Venture Global’s Calcasieu Pass revenue for the forecasted global supply/demand LNG gas balance will be reached in 2022-2023, thereby driving LNG export facility orders in late 2018 / early 2019. A majorityremainder of upcoming projects for U.S. LNG export have transitioned from utilizing traditional single train base load plants to multi-train mid-scale projects, with a modular approach to achieve baseload capacities. This is important to us because multi-train mid-scale may use Chart’s patented IPSMR technology2021 as well as $30 million of 2021 revenue from the acquisition of Cryo Technologies. There is no additional Big LNG revenue included in our brazed aluminum heat exchanger and cold boxes asoutlook although we currently anticipate that at least one order will be received during the main liquefaction heat exchanger technology.
year. We continue to invest in our automation, process improvement, and productivity activities across the Company,Chart, with total anticipated 20172021 capital investment between $35 million and $45 million.  This is inclusive of capacity expansion in our brazed aluminum heat exchanger La Crosse, Wisconsin facility which is expected to be complete mid-2018 and totals approximately $24 million in capitalexpenditures spend of which approximately $15$40.0 million is included in our anticipated 2017 full year capital spend.to $50.0 million.
We expect full year restructuring costs to total $13.9 million of which $12.4 million has been incurred in the nine months ended September 30, 2017.  The remaining restructuring costs relate to the corporate office relocation from Garfield Heights, Ohio to Ball Ground, Georgia and consolidation of certain facilities in China.  We expect the 2017 restructuring actions to provide annualized run rate savings of $15 million beginning with the first full year of savings in 2018.



26
29
Table of Contents



Consolidated Results for the Three Months Ended September 30, 2017March 31, 2021 and 2016,2020, and June 30, 2017December 31, 2020
The following table includes key metrics used to evaluate our business and measure our performance and represents selected financial data for our operating segments for the three months ended September 30, 2017March 31, 2021 and 20162020 and June 30, 2017.December 31, 2020 (dollars in millions). Financial data for the three months ended June 30, 2017December 31, 2020 has been included to provide additional information regarding our business trends on a sequential quarter basis (dollars in thousands):basis.
Selected Financial Information
 Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter		Current Quarter vs.
Prior Sequential Quarter
March 31, 2021March 31, 2020December 31, 2020Variance
 ($)		Variance
(%)		Variance
 ($)		Variance
(%)
Sales
Cryo Tank Solutions$103.9 $98.0 $110.5 $5.9 6.0 %$(6.6)(6.0)%
Heat Transfer Systems69.2 112.9 78.9 (43.7)(38.7)%(9.7)(12.3)%
Specialty Products77.3 52.9 85.1 24.4 46.1 %(7.8)(9.2)%
Repair, Service & Leasing41.4 40.7 41.0 0.7 1.7 %0.4 1.0 %
Intersegment eliminations(3.3)(2.6)(3.1)(0.7)26.9 %(0.2)6.5 %
Consolidated$288.5 $301.9 $312.4 $(13.4)(4.4)%$(23.9)(7.7)%
Gross Profit
Cryo Tank Solutions$25.2 $24.1 $24.0 $1.1 4.6 %$1.2 5.0 %
Heat Transfer Systems15.8 26.1 19.5 (10.3)(39.5)%(3.7)(19.0)%
Specialty Products28.2 20.3 26.5 7.9 38.9 %1.7 6.4 %
Repair, Service & Leasing14.7 11.8 17.9 2.9 24.6 %(3.2)(17.9)%
Consolidated$83.9 $82.3 $87.9 $1.6 1.9 %$(4.0)(4.6)%
Gross Profit Margin
Cryo Tank Solutions24.3 %24.6 %21.7 %
Heat Transfer Systems22.8 %23.1 %24.7 %
Specialty Products36.5 %38.4 %31.1 %
Repair, Service & Leasing35.5 %29.0 %43.7 %
Consolidated29.1 %27.3 %28.1 %
SG&A Expenses
Cryo Tank Solutions$8.9 $11.1 $11.6 $(2.2)(19.8)%$(2.7)(23.3)%
Heat Transfer Systems7.0 11.2 8.2 (4.2)(37.5)%(1.2)(14.6)%
Specialty Products9.1 6.1 6.4 3.0 49.2 %2.7 42.2 %
Repair, Service & Leasing4.4 4.4 4.1 — — %0.3 7.3 %
Corporate16.8 19.7 10.7 (2.9)(14.7)%6.1 57.0 %
Consolidated$46.2 $52.5 $41.0 $(6.3)(12.0)%$5.2 12.7 %
SG&A Expenses (% of Sales)
Cryo Tank Solutions8.6 %11.3 %10.5 %
Heat Transfer Systems10.1 %9.9 %10.4 %
Specialty Products11.8 %11.5 %7.5 %
Repair, Service & Leasing10.6 %10.8 %10.0 %
Consolidated16.0 %17.4 %13.1 %



30
Table of Contents

 Three Months Ended 
Current Quarter vs.
Prior Year Quarter
 
Current Quarter vs.
Prior Sequential Quarter
 September 30, 2017 September 30, 2016 June 30, 2017 
Variance
 ($)
 
Variance
(%)
 
Variance
 ($)
 
Variance
(%)
Sales             
Energy & Chemicals$46,588
 $23,711
 $40,018
 $22,877
 96.5 % $6,570
 16.4 %
Distribution & Storage139,281
 126,646
 137,518
 12,635
 10.0 % 1,763
 1.3 %
BioMedical54,662
 53,573
 60,677
 1,089
 2.0 % (6,015) (9.9)%
Consolidated$240,531
 $203,930
 $238,213
 $36,601
 17.9 % $2,318
 1.0 %
Gross Profit             
Energy & Chemicals$8,682
 $1,803
 $5,327
 $6,879
 381.5 % $3,355
 63.0 %
Distribution & Storage40,542
 33,429
 35,327
 7,113
 21.3 % 5,215
 14.8 %
BioMedical21,178
 34,391
 22,561
 (13,213) (38.4)% (1,383) (6.1)%
Consolidated$70,402
 $69,623
 $63,215
 $779
 1.1 % $7,187
 11.4 %
Gross Profit Margin             
Energy & Chemicals18.6% 7.6 % 13.3 %        
Distribution & Storage29.1% 26.4 % 25.7 %        
BioMedical38.7% 64.2 % 37.2 %        
Consolidated29.3% 34.1 % 26.5 %        
SG&A Expenses             
Energy & Chemicals$7,394
 $7,050
 $7,414
 $344
 4.9 % $(20) (0.3)%
Distribution & Storage18,587
 15,978
 16,924
 2,609
 16.3 % 1,663
 9.8 %
BioMedical10,918
 12,601
 11,874
 (1,683) (13.4)% (956) (8.1)%
Corporate19,815
 9,801
 13,993
 10,014
 102.2 % 5,822
 41.6 %
Consolidated$56,714
 $45,430
 $50,205
 $11,284
 24.8 % $6,509
 13.0 %
SG&A Expenses (% of Sales)             
Energy & Chemicals15.9% 29.7 % 18.5 %        
Distribution & Storage13.3% 12.6 % 12.3 %        
BioMedical20.0% 23.5 % 19.6 %        
Consolidated23.6% 22.3 % 21.1 %        
Operating Income (Loss) (1) (2)
             
Energy & Chemicals$329
 $(5,736) $(2,568) $6,065
 (105.7)% $2,897
 (112.8)%
Distribution & Storage21,016
 14,715
 16,577
 6,301
 42.8 % 4,439
 26.8 %
BioMedical9,539
 20,916
 9,848
 (11,377) (54.4)% (309) (3.1)%
Corporate (3)
(20,436) (9,831) (13,922) (10,605) 107.9 % (6,514) 46.8 %
Consolidated$10,448
 $20,064
 $9,935
 $(9,616) (47.9)% $513
 5.2 %
Operating Margin (Loss)             
Energy & Chemicals0.7% (24.2)% (6.4)%        
Distribution & Storage15.1% 11.6 % 12.1 %        
BioMedical17.5% 39.0 % 16.2 %        
Consolidated4.3% 9.8 % 4.2 %        

 Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter		Current Quarter vs.
Prior Sequential Quarter
March 31, 2021March 31, 2020December 31, 2020Variance
 ($)		Variance
(%)		Variance
 ($)		Variance
(%)
Operating Income (Loss) (1)
Cryo Tank Solutions$15.6 $11.6 $11.2 $4.0 34.5 %$4.4 39.3 %
Heat Transfer Systems (2)
3.9 5.5 (9.9)(1.6)(29.1)%13.8 (139.4)%
Specialty Products (3)
17.9 13.8 19.9 4.1 29.7 %(2.0)(10.1)%
Repair, Service & Leasing8.3 4.6 12.1 3.7 80.4 %(3.8)(31.4)%
Corporate (4) (5)
(16.8)(19.7)(10.8)2.9 (14.7)%(6.0)55.6 %
Consolidated$28.9 $15.8 $22.5 $13.1 82.9 %$6.4 28.4 %
Operating Margin
Cryo Tank Solutions15.0 %11.8 %10.1 %
Heat Transfer Systems5.6 %4.9 %(12.5)%
Specialty Products23.2 %26.1 %23.4 %
Repair, Service & Leasing20.0 %11.3 %29.5 %
Consolidated10.0 %5.2 %7.2 %
_______________
(1)Restructuring costs (credits) for the three months ended:
September 30, 2017•March 31, 2021 were $2.7 million$0.7 ($0.2 million0.3 - E&C,Cryo Tank Solutions, $0.4 - Heat Transfer Systems).
•March 31, 2020 were $5.2 ($1.8 - Cryo Tank Solutions, $2.8 - Heat Transfer Systems, and $0.6 millionCorporate).
•December 31, 2020 were $0.9 ($0.1 - D&S, $0.5 million BioMedical,Cryo Tank Solutions, $0.6 - Heat Transfer Systems, $0.3 - Specialty Products, and $1.4 million$(0.1) - Corporate).

(2)Includes $16.0 impairment of our trademarks and trade names indefinite-lived intangible assets related to the AXC business in our Heat Transfer Systems segment for the three months ended December 31, 2020.
27
Table(3)Includes acquisition-related contingent consideration adjustments of Contents$0.8 in our Specialty Products segment for the three months ended March 31, 2021.

(4)Includes transaction-related costs of $4.3 for the three months ended March 31, 2020.

September 30, 2016(5)Includes transaction-related costs of $2.6 for the three months ended December 31, 2020, which were $0.3 million ($0.2 million - E&Cmainly related to the Sustainable Energy Solutions, Inc., BlueInGreen, LLC and $0.1 million - D&S)
June 30, 2017 were $5.0 million ($1.6 million - E&C, $0.3 million - D&S, $1.4 million - BioMedical, and $1.7 million - Corporate)
(2)
During the third quarter of 2016, the Company recovered for breaches of representations and warranties primarily related to warranty costs for certain product lines acquired in the 2012 acquisition of AirSep Corporation under the related representation and warranty insurance.  For the three months ended September 30, 2016, this reduced our BioMedical segment’s cost of sales by $15.1 million and Corporate SG&A expenses by $0.9 million, net of associated legal fees.
(3)
Includes acquisition-related expenses of $7.4 million and $1.0 million for the three months ended September 30, 2017 and June 30, 2017, respectively.

Alabama Trailers acquisitions.
Results of Operations for the Three Months Ended September 30, 2017March 31, 2021 and 2016,2020, and June 30, 2017December 31, 2020
Sales infor the thirdfirst quarter of 20172021 compared to the same quarter in 2016 increased $36.62020 decreased $13.4 million, from $203.9$301.9 million to $240.5$288.5 million, or 17.9%, with increases across all segments.4.4%. The largest increasesdecrease in sales was primarily driven by the continued softness in demand for midstream and upstream compression equipment within our Heat Transfer Systems segment, partially offset by an increase in Specialty Products segment sales. Furthermore, Cryo Tank Solutions sales increased in the first quarter of 2021 as compared to the first quarter of 2020. First quarter 2020 Cryo Tank Solutions sales were negatively impacted by the Covid-19 outbreak, particularly in E&C, $22.9Europe and Asia due to temporary facility shutdowns.
Gross profit increased during the first quarter of 2021 compared to the first quarter of 2020 by $1.6 million or 96.5%1.9%, and D&S, $12.6first quarter 2021 gross margin as a percent of sales of 29.1% increased from 27.3% in the first quarter of 2020. The increase in margin as a percent of sales in the current quarter over first quarter of 2020 was primarily driven by higher margins associated with our Repair, Service & Leasing segment mainly on lower costs in our repair facilities and increasing mix of our higher margined Specialty Products and Repair, Service & Leasing businesses. Restructuring costs recorded to cost of sales were $0.4 million or 10.0%. E&C’s Lifecycle business, which includes results from the Hetsco acquisition, added $11.4and $2.3 million in incremental sales to E&C duringfor the three months ended September 30, 2017,March 31, 2021 and E&C’s Hudson acquisition added $6.12020, respectively.
Consolidated SG&A expenses decreased by $6.3 million in incremental sales to E&Cor 12.0% during the periodfirst quarter of ownership from September 20, 2017 through September 30, 2017. D&S saw improvement in all regions during the three months ended September 30, 2017 as2021 compared to the same quarter in 2016, with2020. Consolidated selling, general and administrative (“SG&A”) expenses as a percentage of consolidated sales in the largest increase in China, driven by stronger LNG-related product sales. Sequentially over the secondfirst quarter of 2017, the overall sales increase of $2.3 million was largely driven2021 increased by sales incrementally added by the Hudson acquisition. This increase was partially offset by decreased sales in cryobiological applications within the BioMedical segment.
Gross profit increased during the third quarter of 2017 compared to the third quarter of 2016 by $0.8 million. Gross profit in the third quarter of 2016 included $15.1 million related to the impact of an insurance recovery received by the BioMedical segment for breaches of representations and warranties related to warranty costs for certain product lines acquired from AirSep Corporation (“AirSep”) in 2012. The increase is primarily due to gross profit added from the Hetsco and Hudson acquisitions in our E&C segment. Gross profit further increased2.9% as a result of higher volume at better margins in the D&S segment. Excluding the impact of the insurance recovery, BioMedical’s gross profit was up compared to the prior year on slightly higher sales. Sequentially over the second quarter of 2017, the increase in gross profit of $7.2 million, or 11.4%, was mainlyprimarily driven by the E&C segment’s incremental margin from the Hudson acquisitionramp up in our Specialty Products business and the D&S segment, where favorable product mix drove margins higher.
SG&A expenses increaseddecreased by $11.3 million, or 24.8%, during the third quarter of 20171.4% compared to the thirdfirst quarter of 2016. During2020 based on the third quartereffect of 2017, Corporate incurred $7.3 million of expenses associated with the Hudson acquisition. Sequentially over the second quarter of 2017, thecost reduction actions we took in 2020. Restructuring costs recorded to consolidated SG&A expenses increase was primarily driven by acquisition-related expenses associated with the Hudson acquisition and restructuring.
Restructuring costs were related to the previously announced corporate office relocation, the Buffalo BioMedical respiratory consolidation to our Ball Ground, Georgia facilities and our Wuxi, China facility consolidation. Restructuring costs were $2.7 million in the third quarter of 2017 and were recorded in cost of goods sold ($0.3 million) and SG&A ($2.4 million). Restructuring costs were $0.3 million inand $2.9 million for the third quarterthree months ended March 31, 2021 and 2020, respectively.
31
Table of 2016 and were recorded primarily in SG&A. Restructuring costs were $5.0 million in the second quarter of 2017 and were recorded in cost of goods sold ($2.0 million) and SG&A ($3.0 million).Contents

Interest Expense, Net and Financing Costs Amortization
Net interestInterest expense, net for the three months ended September 30, 2017March 31, 2021 and 20162020 was $4.8$2.0 million and $4.3$7.2 million, respectively.respectively, representing a decrease of $5.2 million. The decrease in interest expense, net, is primarily due to lower borrowings outstanding on our term loan due June 2024 during the first quarter of 2021 as compared to the first quarter of 2020. Furthermore, we no longer recognize interest accretion of convertible notes discount due to a change in accounting principle adopted at the beginning of fiscal year 2021 whereas we recognized $1.9 million in interest accretion expense in the first quarter of 2020. For further information regarding the change in accounting principle, refer to Note 1, “Basis of Preparation” to our unaudited condensed consolidated financial statements included under Item 1, “Financial Statements” in this report. Interest expense for both the three months ended September 30, 2017March 31, 2021 and 2020 included $1.3$0.6 million of 2.0%1.0% cash interest $3.4 million of non-cash interest accretion expense related to the carrying value of the Convertible Notes,our convertible notes due November 2024 and $0.3$1.3 million and $4.8 million, respectively, in interest related to borrowings on our senior secured revolving credit facility and term loan due 2024. Financing costs amortization was $1.2 million for the Hudson acquisition. For each of the three months ended September 30, 2017March 31, 2021 as compared to $1.0 million for the three months ended March 31, 2020.
Unrealized (Gain) Loss On Investments In Equity Securities
During the first quarter of 2021, we recognized an unrealized gain on investments in equity securities of $3.3 million, which was driven by a $5.9 million unrealized gain on the mark-to-market adjustment of our investment in Stabilis, partially offset by a $2.6 million unrealized loss on the mark-to-market adjustment of our investment in McPhy. We recognized an unrealized loss on investments in equity securities of $4.8 million in the first quarter of 2020 which was driven by a $4.8 million unrealized loss on the mark-to-market adjustment of our investment in Stabilis.
Foreign Currency (Gain) Loss and 2016, financing costs amortizationOther
For the three months ended March 31, 2021 foreign currency gain was zero as compared to foreign currency gain of $0.3 million.

28
Table of Contents


million for the three months ended March 31, 2020. The variance between periods was primarily driven by fluctuations in the U.S dollar as compared to the euro and Chinese yuan.
Income Tax Expense
Income tax expense of $1.9$3.1 million and $1.8$0.4 million for the three months ended September 30, 2017March 31, 2021 and 2016,2020, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 47.5%10.6% and 11.4%16.0%, respectively. The effective income tax rate of 47.5%10.6% for the third quarterthree months ended March 31, 2021 differed from the U.S. federal statutory rate of 201721% primarily due to losses incurred by some of our foreign operations for which no benefit was recorded, partially offset by the effect of income earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rate and excess tax benefits associated with share-based compensation.
The effective income tax rate of 35%16.0% for the three months ended March 31, 2020 differed from the U.S. federal statutory rate of 21% primarily due to losses incurred by certain of our Chineseforeign operations for which no tax benefit was recorded, partially offset by the effect of income earned by certain of our internationalforeign entities operating in lowerbeing taxed jurisdictions. The third quarter 2017 effective income tax rate was also impacted by transaction costs incurred with the acquisition of Hudson, a portion of which were non-deductible for U.S. federal income tax purposes. The effective income tax rate of 11.4% for the three months ended September 30, 2016 differed fromat higher rates than the U.S. federal statutory rate of 35% primarily due to the insurance settlement for breaches of representations and warranties that resulted in an adjustment to our purchase price of Airsep shares forexcess tax purposes and was offset by losses incurred by certain of our Chinese operations for which no benefit was recorded.benefits associated with share-based compensation.
Net Income from Continuing Operations
As a result of the foregoing, net income attributable to the CompanyChart for the three months ended September 30, 2017March 31, 2021 and 20162020 was $1.5$25.6 million and $15.0$2.1 million, respectively.

Discontinued Operations
29
TableThe results from our cryobiological related products business formerly reported in our Distribution & Storage Western Hemisphere segment are reflected in our condensed consolidated financial statements as discontinued operations for the three months ended March 31, 2020. For further information, refer to Note 2, “Discontinued Operations” of Contentsour unaudited condensed consolidated financial statements included under Item 1, “Financial Statements” in this report.


ConsolidatedSegment Results for the NineThree Months Ended September 30, 2017March 31, 2021 and 20162020
The following table includes key metrics used to evaluate our businessOur reportable and measure our performanceoperational segments include: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products, and represents selected financial data for our operating segments for the nine months ended September 30, 2017 and 2016 (dollars in thousands):
Selected Financial Information
 Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
Sales       
Energy & Chemicals$126,473
 $122,865
 $3,608
 2.9 %
Distribution & Storage390,057
 363,743
 26,314
 7.2 %
BioMedical166,309
 158,174
 8,135
 5.1 %
Consolidated$682,839
 $644,782
 $38,057
 5.9 %
Gross Profit       
Energy & Chemicals$22,434
 $39,147
 $(16,713) (42.7)%
Distribution & Storage106,417
 96,074
 10,343
 10.8 %
BioMedical60,426
 74,054
 (13,628) (18.4)%
Consolidated$189,277
 $209,275
 $(19,998) (9.6)%
Gross Profit Margin       
Energy & Chemicals17.7 % 31.9%    
Distribution & Storage27.3 % 26.4%    
BioMedical36.3 % 46.8%    
Consolidated27.7 % 32.5%    
SG&A Expenses       
Energy & Chemicals$22,610
 $23,295
 $(685) (2.9)%
Distribution & Storage53,269
 52,517
 752
 1.4 %
BioMedical33,609
 33,288
 321
 1.0 %
Corporate49,858
 34,762
 15,096
 43.4 %
Consolidated$159,346
 $143,862
 $15,484
 10.8 %
SG&A Expenses (% of Sales)       
Energy & Chemicals17.9 % 19.0%    
Distribution & Storage13.7 % 14.4%    
BioMedical20.2 % 21.0%    
Consolidated23.3 % 22.3%    
Operating (Loss) Income (1) (2)
       
Energy & Chemicals$(2,420) $14,190
 $(16,610) (117.1)%
Distribution & Storage49,186
 37,550
 11,636
 31.0 %
BioMedical24,387
 38,120
 (13,733) (36.0)%
Corporate (3)
(50,523) (34,820) (15,703) 45.1 %
Consolidated$20,630
 $55,040
 $(34,410) (62.5)%
Operating (Loss) Margin       
Energy & Chemicals(1.9)% 11.5%    
Distribution & Storage12.6 % 10.3%    
BioMedical14.7 % 24.1%    
Consolidated3.0 % 8.5%    
_______________
(1) Restructuring costs for the nine months ended:
September 30, 2017 were $12.4 million, ($2.2 million - E&C, $1.1 million - D&S, $4.5 million BioMedical, and $4.6 million - Corporate)
September 30, 2016 were $6.3 million ($0.8 million - E&C, $3.9 million - D&S, $0.5 million BioMedical, and $1.1 million - Corporate)

30
Table of Contents


(2)
During the third quarter of 2016, the Company recovered for breaches of representations and warranties primarily related to warranty costs for certain product lines acquired in the 2012 acquisition of AirSep Corporation under the related representation and warranty insurance.  For the nine months ended September 30, 2016, this reduced our BioMedical segment’s cost of sales by $15,145 and Corporate SG&A expenses by $376, net of associated legal fees recorded in the first nine months of 2016.
(3)
Includes acquisition-related expenses of $8.6 million for the nine months ended September 30, 2017.
Results of Operations for the Nine Months Ended September 30, 2017 and 2016
Sales in the nine months ended September 30, 2017 increased in all segments compared to the nine months ended September 30, 2016, by $38.1 million or 5.9%, primarily driven by stronger sales in D&S as a result of increased sales in bulk and packaged gas industrial applications, especially in the U.S and China. E&C sales include $37.6 million of incremental sales from Lifecycle, which includes the Hetsco acquisition, and the Hudson acquisition which added $6.1 million in incremental sales to E&C during the period of ownership from September 20, 2017 through September 30, 2017. E&C segment sales in 2016 included several short-lead time replacement equipment sales and contract expiration fees.
Gross profit decreased $20.0 million, and the related margin decreased from 32.5% to 27.7% during the first nine months of 2017 compared to the first nine months of 2016. The prior year included several high margin short-lead time replacement equipment sales and contract expiration fees in our E&C segment that did not recur in 2017 as well as the BioMedical insurance recovery for breaches of representations and warranties related to warranty costs for certain product lines acquired from AirSep in 2012. For the nine months ended September 30, 2016, this reduced BioMedical’s cost of sales by $15.1 million and added 9.6% to the year-to-date gross margin.
SG&A expenses increased by $15.5 million during the first nine months of 2017 compared to the first nine months of 2016. During the first nine months of 2017, Corporate incurred $8.6 million in acquisition-related costs, of which $8.1 million related to the Hudson acquisition. Restructuring expenses increased $6.1 million as further discussed below.
Restructuring costs of $12.4 million for the first nine months of 2017 were recorded in cost of goods sold ($4.8 million) and SG&A ($7.6 million) as a result of our cost reduction and operating efficiency initiatives primarily related to the corporate office relocation, the Buffalo BioMedical respiratory consolidation to our Ball Ground, Georgia facilities and our China facilities consolidation. Restructuring costs of $6.3 million for the first nine months of 2016 were recorded in cost of goods sold ($3.5 million) and SG&A ($2.8 million).
Interest Expense, Net and Financing Costs Amortization
Net interest expense for the nine months ended September 30, 2017 and 2016 was $13.0 million and $12.6 million, respectively. Interest expense for the nine months ended September 30, 2017 included $3.8 million of 2.0% cash interest, $10.0 million of non-cash interest accretion expense related to the carrying value of the Convertible Notes and $0.3 million in interest related to borrowings on our senior secured revolving credit facility for the Hudson acquisition. For each of the nine months ended September 30, 2017 and 2016, financing costs amortization was $1.0 million.
Income Tax Expense
Income tax expense of $2.3 million and $12.8 million for the nine months ended September 30, 2017 and 2016, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 48.6% and 31.0%, respectively. The effective income tax rate of 48.6% for the nine months ended September 30, 2017 was higher than the U.S. federal statutory rate of 35% primarily due to losses incurred by certain of the Company’s Chinese operations for which no benefit was recorded, partially offset by foreign exchange losses realized upon the receipt of previously taxed income and the effect of income earned by certain of the Company’s international entities operating in lower taxed jurisdictions. During the nine months ended September 30, 2017, the effective income tax rate was also impacted by transaction costs incurred with the acquisition of Hudson, a portion of which were non-deductible for U.S. federal income tax purposes. The effective income tax rate of 31.0% for the nine months ended September 30, 2016 differed from the U.S. federal statutory rate of 35% primarily due to the insurance settlement for breaches of representations and warranties that resulted in an adjustment to our purchase price of Airsep shares for tax purposes and offset by losses incurred by certain of our Chinese operations for which no benefit was recorded.
Net Income
As a result of the foregoing, net income attributable to the Company for the nine months ended September 30, 2017 and 2016 was $1.4 million and $31.5 million, respectively.

31
Table of Contents


Segment Results
The structure of the Company’s internal organization is divided into the following reportable segments, which are also the Company’s operating segments: E&C, D&S, and BioMedical.Repair, Service & Leasing. Corporate includes operating expenses for executive management, accounting, tax, treasury, corporate development, human resources, information technology, investor relations, legal, internal audit, and risk management. Corporate support functions are not currently allocated to the segments. For further information, refer to Note 3, “Reportable Segments” note of our Reportable Segments note to ourunaudited condensed consolidated financial statements included elsewhereunder Item 1, “Financial Statements” in this report. The following tables include key metrics used to evaluate our business and measure our performance and represents
32
Table of Contents

selected financial data for our operating segments for the three and nine months ended September 30, 2017March 31, 2021 and 20162020 (dollars in thousands)millions):
Energy & ChemicalsCryo Tank Solutions
Results for the Three Months Ended September 30, 2017 and 2016
Three Months Ended Current Quarter vs.
Prior Year Quarter		Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
March 31, 2021March 31, 2020Variance
($)		Variance
(%)
Sales$46,588
 $23,711
 $22,877
 96.5 %Sales$103.9 $98.0 $5.9 6.0 %
Gross Profit8,682
 1,803
 6,879
 381.5 %Gross Profit25.2 24.1 1.1 4.6 %
Gross Profit Margin18.6% 7.6 %    Gross Profit Margin24.3 %24.6 %
SG&A Expenses$7,394
 $7,050
 $344
 4.9 %SG&A Expenses$8.9 $11.1 $(2.2)(19.8)%
SG&A Expenses (% of Sales)15.9% 29.7 %    SG&A Expenses (% of Sales)8.6 %11.3 %
Operating (Loss) Income$329
 $(5,736) $6,065
 (105.7)%
Operating (Loss) Margin0.7% (24.2)%    
Operating IncomeOperating Income$15.6 $11.6 $4.0 34.5 %
Operating MarginOperating Margin15.0 %11.8 %
For the thirdfirst quarter of 2017, E&C segment2021, Cryo Tank Solutions sales increased by $5.9 million as compared to the same quarter in 2016. E&C’s Lifecycle business, which includes results from the Hetsco acquisition, added $11.4 million2020 primarily due to higher volume in incrementalengineered systems globally and higher sales to E&C during the three months ended September 30, 2017, and E&C’s Hudson acquisition added $6.1 million in incrementalstorage equipment. Cryo Tank Solutions sales to E&C during the period of ownership from September 20, 2017 through September 30, 2017. Overall, the increase in sales was driven primarily by a continued increase in activity in the Natural Gas Liquids (“NGL”) and Petrochemical applications, while lower energy prices continued to have an impact on LNG related opportunities within the E&C segment.
For the thirdfirst quarter of 2017, E&C2020 were negatively impacted by the Covid-19 outbreak, particularly in Europe and Asia due to temporary facility shutdowns.
During the first quarter of 2021, Cryo Tank Solutions segment gross profit and the related margin increased by $1.1 million as compared to the same quarter in 2016 primarily due to an2020. The increase in high margin short lead-time replacement equipment projects and improved productivitygross profit was mainly driven by the volume increase in the NGL and Petrochemical applications.volume.
E&CCryo Tank Solutions segment SG&A expenses increased slightlydecreased by $2.2 million during the thirdfirst quarter of 20172021 as compared to the same quarter in 2016 primarily driven by incremental2020. Furthermore, Cryo Tank Solutions segment SG&A expenses from the Hetsco and Hudson acquisitions.
Results for the Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
Sales$126,473
 $122,865
 $3,608
 2.9 %
Gross Profit22,434
 39,147
 (16,713) (42.7)%
Gross Profit Margin17.7 % 31.9%    
SG&A Expenses$22,610
 $23,295
 $(685) (2.9)%
SG&A Expenses (% of Sales)17.9 % 19.0%    
Operating (Loss) Income$(2,420) $14,190
 $(16,610) (117.1)%
Operating (Loss) Margin(1.9)% 11.5%    
Foras a percentage of Cryo Tank Solutions segment sales improved by 270 basis points in the first nine monthsquarter of 2017, E&C segment sales increased2021 as compared to the same periodquarter in 2016. The increase was2020 primarily driven by our Lifecycle business, which includes the Hetsco acquisition, which contributed $39.8 millioneffect of cost reduction efforts completed in sales during2020, lower severance costs and lower employee-related costs.
Heat Transfer Systems
Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
March 31, 2021March 31, 2020Variance
($)		Variance
(%)
Sales$69.2 $112.9 $(43.7)(38.7)%
Gross Profit15.8 26.1 (10.3)(39.5)%
Gross Profit Margin22.8 %23.1 %
SG&A Expenses$7.0 $11.2 $(4.2)(37.5)%
SG&A Expenses (% of Sales)10.1 %9.9 %
Operating Income$3.9 $5.5 $(1.6)(29.1)%
Operating Margin5.6 %4.9 %
For the first nine monthsquarter of 2017 compared to $2.22021, Heat Transfer Systems segment sales decreased by $43.7 million in sales during the prior-year period. Additionally, the Hudson acquisition added $6.1 million of sales in the current year. These increases were largely offset by more significant short lead-time replacement equipment sales in 2016 as compared to 2017. Overall, E&C sales performance during the first nine months of 2017 was primarily

32
Table of Contents


driven by an increase in activity in the NGL and Petrochemical applications, while lower energy prices continued to have an impact on LNG related opportunities.
E&C gross profit and the related margin decreased during the first nine months of 2017 as compared to the same periodquarter in 2016. Included2020 primarily due to continued industry-wide softness in 2016 were several short lead-time replacementdemand for midstream and upstream compression equipment that mainly impacted air cooled heat exchanger sales. Furthermore, during the first quarter of 2021 we recognized $14.7 million in sales and contract expiration fees which contributed approximately $31relative to Venture Global’s Calcasieu Pass LNG export terminal project (“Calcasieu Pass”) as compared to $22.9 million recognized during the first quarter of 2020.
During the first quarter of 2021, Heat Transfer Systems segment gross profit during 2016.decreased by $10.3 million as compared to the same quarter in 2020 mainly driven by lower volume partially offset by lower restructuring costs. Heat Transfer Systems segment gross profit as a percentage of Heat Transfer Systems segment sales was 22.8% in the first quarter of 2021 as compared to 23.1% in the first quarter of 2020, which is a decline of 30 basis points on a quarter over prior year quarter basis primarily due to the Calcasieu Pass volume mix which drove higher margins in the first quarter of 2020.
E&CHeat Transfer Systems segment SG&A expenses decreased during the first nine months of 2017 as lower employee-related costs, short-term variable compensation incentives, bad debt expense and headcount reductions were partially offset by incremental SG&A expenses added by the Hetsco and Hudson acquisitions.
Distribution & Storage
Results for the Three Months Ended September 30, 2017 and 2016
 Three Months Ended Current Quarter vs.
Prior Year Quarter
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
Sales$139,281
 $126,646
 $12,635
 10.0%
Gross Profit40,542
 33,429
 7,113
 21.3%
Gross Profit Margin29.1% 26.4%    
SG&A Expenses$18,587
 $15,978
 $2,609
 16.3%
SG&A Expenses (% of Sales)13.3% 12.6%    
Operating Income$21,016
 $14,715
 $6,301
 42.8%
Operating Margin15.1% 11.6%    
D&S segment sales increased during the third quarter of 20172021 as compared to the same quarter in 20162020 primarily duedriven by cost reduction efforts relative to a $7.8the transfer of operations of our heat exchanger leased facility in Tulsa, Oklahoma to our Beasley, Texas location, lower restructuring costs and lower employee-related costs.
33
Table of Contents

Specialty Products
Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
 March 31, 2021March 31, 2020Variance
($)		Variance
(%)
Sales$77.3 $52.9 $24.4 46.1 %
Gross Profit28.2 20.3 7.9 38.9 %
Gross Profit Margin36.5 %38.4 %
SG&A Expenses$9.1 $6.1 $3.0 49.2 %
SG&A Expenses (% of Sales)11.8 %11.5 %
Operating Income$17.9 $13.8 $4.1 29.7 %
Operating Margin23.2 %26.1 %
Specialty Products segment sales increased by $24.4 million increase in sales for liquefied natural gas applications, a $2.2 million increase in packaged gas industrial applications, and a $2.6 million increase in bulk industrial gas applications.
D&S segment gross profit increased during the thirdfirst quarter of 20172021 as compared to the same quarter in 2016 mainly2020. This increase was primarily driven by higher volume across all regions,favorable sales in HLNG vehicle tanks, laser, cannabis and the related marginhydrogen applications.
Specialty Products segment gross profit increased primarily due to favorable product mix.
D&S segment SG&A expenses increasedby $7.9 million during the thirdfirst quarter of 20172021 as compared to the same quarter in 2016 mainly2020 primarily due to higher employee-related costs and restructuring expense.
Results for the Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
Sales$390,057
 $363,743
 $26,314
 7.2%
Gross Profit106,417
 96,074
 10,343
 10.8%
Gross Profit Margin27.3% 26.4%    
SG&A Expenses$53,269
 $52,517
 $752
 1.4%
SG&A Expenses (% of Sales)13.7% 14.4%    
Operating Income$49,186
 $37,550
 $11,636
 31.0%
Operating Margin12.6% 10.3%    
D&S segment sales increased during the first nine months of 2017 as compared to the same period in 2016 mainly due to $22.8 million increase in sales for liquefied natural gas applications and a $13.2 million increase in packaged gas industrial applications, partially offset by a $9.7 million decrease in bulk industrial gas applications.
D&S segment gross profit increased during the first nine months of 2017 as compared to the same period in 2016 mainlyvolume. The related margin decreased driven by higher volume across all regions, and the related margin increased, especially in Asia, primarily due to improved execution.product mix.
D&SSpecialty Products segment SG&A expenses increased by $3.0 million during the first nine months of 2017 as compared to the same period in 2016 mainly due to higher employee-related costs and were partially offset by the impact of a reduction in a contingent consideration

33
Table of Contents


liability associated with a prior acquisition, which was recorded during the nine months ended September 30, 2017, and lower restructuring costs.
BioMedical
Results for the Three Months Ended September 30, 2017 and 2016
 Three Months Ended Current Quarter vs.
Prior Year Quarter
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
Sales$54,662
 $53,573
 $1,089
 2.0 %
Gross Profit21,178
 34,391
 (13,213) (38.4)%
Gross Profit Margin38.7% 64.2%    
SG&A Expenses$10,918
 $12,601
 $(1,683) (13.4)%
SG&A Expenses (% of Sales)20.0% 23.5%    
Operating Income$9,539
 $20,916
 $(11,377) (54.4)%
Operating Margin17.5% 39.0%    
For the third quarter of 2017, the BioMedical segment sales increase was primarily driven by respiratory therapy equipment applications2021 as compared to the same quarter in 2016.
During2020 primarily driven by ramp up in the thirdbusiness. Furthermore, Specialty Products segment SG&A expenses increased by $0.8 million relative to acquisition-related contingent consideration adjustments recognized during the first quarter of 2017, BioMedical2021.
Repair, Service & Leasing
Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
 March 31, 2021March 31, 2020Variance
($)		Variance
(%)
Sales$41.4 $40.7 $0.7 1.7 %
Gross Profit14.7 11.8 2.9 24.6 %
Gross Profit Margin35.5 %29.0 %
SG&A Expenses$4.4 $4.4 $— — %
SG&A Expenses (% of Sales)10.6 %10.8 %
Operating Income$8.3 $4.6 $3.7 80.4 %
Operating Margin20.0 %11.3 %
For the first quarter of 2021, Repair, Service & Leasing segment gross profit decreasedsales increased by $0.7 million as compared to the same quarter in 2016. The third2020. This increase was mainly driven by favorable sales in our Cryo-Lease and Lifecycle businesses partially offset by lower sales in aftermarket air cooled heat exchangers and fans.
During the first quarter of 2016 included the impact of an insurance recovery for breaches of representations and warranties related to warranty costs for certain product lines acquired from AirSep in 2012. For the three months ended September 30, 2016, this reduced BioMedical’s cost of sales by $15.1 million and added 28.3% to the margin. Excluding this impact,2021, Repair, Service & Leasing segment gross profit increased by $1.9$2.9 million and the related margin increased 2.8 percentage points primarily due to volume and favorable mix associated with military-based respiratory therapy applications.
BioMedical segment SG&A expenses during the third quarter of 2017, decreased as compared to the same quarter in 2016 primarily due to lower employee-related costs associated with the operations and engineering transition from our Buffalo BioMedical respiratory facilities to our Ball Ground, Georgia facilities along with the divestiture of our Qdrive® business.
Results for the Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
Sales$166,309
 $158,174
 $8,135
 5.1 %
Gross Profit60,426
 74,054
 (13,628) (18.4)%
Gross Profit Margin36.3% 46.8%    
SG&A Expenses$33,609
 $33,288
 $321
 1.0 %
SG&A Expenses (% of Sales)20.2% 21.0%    
Operating Income$24,387
 $38,120
 $(13,733) (36.0)%
Operating Margin14.7% 24.1%    
For the first nine months of 2017, the increase in BioMedical segment sales as compared to the same period in 2016 was primarily driven military-based respiratory therapy equipment sales, stainless freezer sales within our life sciences applications, particularly in Asia, and an increase in projects within commercial oxygen generation systems applications.
During the first nine months of 2017, BioMedical segment gross profit2020, and the related margin decreased as comparedpercentage increased by 650 basis points mainly driven by lower costs in our repair facilities.
Repair, Service & Leasing segment SG&A expenses were flat to the same periodquarter in 2016. The third quarter of 2016 included the impact of an insurance recovery for breaches of representations and warranties related to warranty costs for certain product lines acquired from AirSep in 2012. For the nine months ended September 30, 2016, this reduced BioMedical’s cost of sales by $15.1 million and added 9.6% to the year-to-date margin. Excluding this impact, gross profit increased by $1.5 million mainly on increased volume.
BioMedical segment SG&A expenses, which included $2.0 million of restructuring costs during the first nine months of 2017, increased as compared to the same period in 2016 primarily due to one-time costs related to expansion into a direct-to-consumer sales channel, regulatory, and legal fees. Higher restructuring costs were incurred during the nine months ended

34
Table of Contents


September 30, 2017 to support the operations and engineering transition from our Buffalo BioMedical respiratory facilities to our Ball Ground, Georgia facilities along with the divestiture of our Qdrive® business.2020.
Corporate
Corporate SG&A expenses increased by $10.0 million duringdecreased in the thirdfirst quarter of 20172021 as compared to the same quarter in 2016,2020 by $2.9 million primarily due to $7.4 million in acquisition-relatedlower employee-related costs and restructuring costs.
34
Table of which $7.3 million related to the Hudson acquisition. Corporate SG&A expenses increased by $15.1 million during the first nine months of 2017 as compared to the same period in 2016 primarily due to $8.6 million in acquisition-related costs, of which $8.1 million related to the Hudson acquisition and $4.6 million in corporate restructuring costs in the nine months ended September 30, 2017 compared to $1.1 million in the same period in 2016.Contents

Liquidity and Capital Resources
Debt Instruments and Related Covenants
Convertible Notes: The outstanding aggregate principal amount of the Company’s Convertible Notes is $250.0 million. The Convertible Notes bear interest at a fixed rate of 2.0% per year, payable semiannuallyOur debt instruments and related covenants are described in arrears on February 1 and August 1 of each year, and will mature on August 1, 2018. The effective interest rate at issuance, under generally accepted accounting principles, was 7.9%. Upon conversion, holders of the Convertible Notes will receive cash up to the principal amount of the Convertible Notes. It is the Company’s intention to settle any excess conversion value in shares of the Company’s common stock. However, the Company may elect to settle, at its discretion, any such excess value in cash, shares of the Company’s common stock, or a combination of cash and shares. The initial conversion price of $69.03 per share represents a conversion premium of 30% over the last reported sale price of the Company’s common stock on July 28, 2011, the date of the Convertible Notes offering, which was $53.10 per share. The Convertible Notes are classified as current liabilities at September 30, 2017 as their maturity is within 12 months of the balance sheet date. At the end of the third quarter of 2017, events for early conversion were not met; and thus, the Convertible Notes were not convertible as of, and for the fiscal quarter beginning October 1, 2017. There have been no conversions as of the date of this filing. In the event that holders of Convertible Notes elect to convert, the Company expects to fund any cash settlement of any such conversion from cash balances or borrowings under its senior secured revolving credit facility.
Senior Secured Revolving Credit Facility: The Company has a five-year $450.0 million senior secured revolving credit facility (the “SSRCF”) which matures on October 29, 2019. The SSRCF includes a $25.0 million sub-limit for the issuance of swingline loans and a $100.0 million sub-limit to be used for letters of credit. There is a foreign currency limit of $100.0 million under the SSRCF which can be used for foreign currency denominated letters of credit and borrowings in a foreign currency, in each case in currencies agreed upon with the lenders. In addition, the facility permits borrowings up to $100.0 million made by the Company’s wholly-owned subsidiaries, Chart Industries Luxembourg S.à r.l. (“Chart Luxembourg”), and Chart Asia Investment Company Limited. The SSRCF also includes an expansion option permitting the Company to add up to an aggregate $200.0 million in term loans or revolving credit commitments from its lenders. Loans under the SSRCF bear interest at LIBOR or the Adjusted Base Rate as defined in the DebtNote 9, “Debt and Credit Arrangements noteArrangements” to our unaudited condensed consolidated financial statements included elsewhere in this report, plus a margin that varies with the Company’s leverage ratio. Significant financial covenants for the SSRCF include a minimum liquidity requirement equal to the principal amount of the Convertible Notes outstanding six months prior to the maturity date of the Convertible Notes and when holders of the Convertible Notes have the option to require the Company to repurchase the Convertible Notes, a leverage ratio and an interest ratio. On September 19, 2017, the Company entered into an amendment (“Amendment No. 2”) to its SSRCF to exclude the acquisition of Hudson from the pro forma leverage ratio requirement of the SSRCF. Concurrently with Amendment No. 2, the Company has exercised its right under the SSRCF to elect an increase in the maximum permissible leverage ratio thereunder to 3.75 for the four fiscal-quarter period ending September 30, 2018. As of September 30, 2017, there were $300.0 million borrowings outstanding under the SSRCF. The Company borrowed against this facility to fund the Hudson acquisition. The Company had $44.8 million in letters of credit and bank guarantees supported by the SSRCF, which had availability of $105.2 million, at September 30, 2017. The Company was in compliance with all covenants, including its financial covenants at September 30, 2017. The Company is currently negotiating a refinancing of the SSRCF, which is expected to close in November 2017. We anticipate that the refinanced SSRCF will extend the current SSRCF maturity to 2022 and otherwise be similar in size, structure and collateral packages to the current SSRCF, along with other changes favorable to the Company and its subsidiaries.
Foreign Facilities – China: Chart Cryogenic Engineering Systems (Changzhou) Company Limited (“CCESC”) and Chart Biomedical (Chengdu) Co. Ltd. (“Chengdu”), wholly-owned subsidiaries of the Company, and Chart Cryogenic Distribution Equipment (Changzhou) Company Limited (“CCDEC”), a joint venture of the Company, maintain joint banking facilities (the “China Facilities”) which include a revolving facility with 50.0 million Chinese yuan (equivalent to $7.5 million) in borrowing capacity which can be utilized for either revolving loans, bonds/guarantees, or bank draft acceptances. Any borrowings made by CCESC, CCDEC or Chengdu under the China Facilities are guaranteed by the Company. At September 30, 2017, there were no
borrowings under the revolving facility, but CCESC and CCDEC had 2.6 million Chinese yuan (equivalent to $0.4 million) and 0.5 million Chinese yuan (equivalent to $0.08 million) in bank guarantees, respectively.
CCDEC maintains an unsecured credit facility whereby CCDEC may borrow up to 30.0 million Chinese yuan (equivalent to $4.5 million) for working capital purposes. At September 30, 2017 there was 15.0 million Chinese yuan (equivalent to $2.3 million) outstanding under this facility, bearing interest at 4.35%. CCDEC was negotiating new terms of this facility including a new maturity date as of the end of the third quarter of 2017.
CCESC entered into a term loan during the second quarter of 2016. The term loan is secured by certain CCESC land use rights and allows for up to 86.6 million Chinese yuan (equivalent to $13.1 million) in borrowings. The loan has a term of eight years with semi-annual installment payments of at least 10.0 million Chinese yuan and a final maturity date of May 26, 2024. At September 30, 2017, there was 56.6 million Chinese yuan (equivalent to $8.5 million) outstanding on this loan, bearing interest at 5.39%.
Foreign Facilities – Europe: Chart Ferox, a.s. (“Ferox”), a wholly-owned subsidiary of the Company, maintains a secured credit facility with capacity of up to 125.0 million Czech koruna (equivalent to $5.7 million) and two secured credit facilities with capacity of up to 5.6 million euros (equivalent to $6.6 million). All three facilities allow Ferox to request bank guarantees and letters of credit. None of these facilities allow revolving credit borrowings. Under two of the facilities, Ferox must pay letter of credit and guarantee fees equal to 0.70% per annum on the face amount of each guarantee or letter of credit, and under one facility, Ferox must pay the letter of credit and guarantee fees equal to 0.50%. Ferox’s land, buildings and cash collateral secure the credit facilities. As of September 30, 2017, there were bank guarantees of 147.1 million Czech koruna (equivalent to $6.7 million) supported by the Ferox credit facilities.
Chart Luxembourg maintains an overdraft facility with $5.0 million in borrowing capacity. There were no borrowings under the Chart Luxembourg facility as of September 30, 2017.
Our debt and related covenants are further described in the Debt and Credit Arrangements note to our condensed consolidated financial statements included elsewhereItem 1, “Financial Statements” in this report.
Sources and UseUses of Cash
Our cash and cash equivalents totaled $124.7$114.9 million at September 30, 2017,March 31, 2021, a decrease of $157.3$10.2 million from the balance at December 31, 2016 primarily driven by the Hudson acquisition.2020. Our foreign subsidiaries held cash of approximately $83.3$102.0 million and $72.9$102.7 million, at September 30, 2017,March 31, 2021, and December 31, 2016,2020, respectively, to meet their liquidity needs. No material restrictions exist to accessing cash held by our foreign subsidiaries. We expect to meet our U.S. funding needs without repatriating non-U.S. cash and incurring incremental U.S. taxes. Cash equivalents are primarily invested in money market funds that invest in high quality, short-term instruments, such as U.S. government obligations, certificates of deposit, repurchase obligations, and commercial paper issued by corporations that have been highly rated by at least one nationally recognized rating organization, and in the case of cash equivalents in China, obligations of local banks. We believe that our existing cash and cash equivalents, funds available under our SSRCF,senior secured revolving credit facility due June 2024 (“SSRCF”) or other financing alternatives, and cash provided by operations will be sufficient to financemeet our normal working capital needs, acquisitions,capital expenditures, investments and investments in properties, facilities, and equipmentprioritize the pay down of debt for the foreseeable future. We further anticipate repaying the Convertible Notes, which mature on August 1, 2018, on or before maturity with some combination of cash and liquid investments, availability under the SSRCF or additional financing sources.
Cash provided by operating activities was $17.5$8.3 million for the ninethree months ended September 30, 2017,March 31, 2021, a decrease of $129.1$17.2 million from the nine months ended September 30, 2016, primarily duecompared to lower net income and working capital increases within accounts receivable and inventory. Cashcash provided by operating activities was $146.6of $25.5 million for the ninethree months ended September 30, 2016 largelyMarch 31, 2020 primarily due to improvementsa decrease in operating cash provided by working capital including greater cash collections duringin the first halfthree months of 2016, and reductions in inventory, partially offset by reduced accounts payable.2021.
Cash used in investing activities was $468.1$106.3 million and $13.7$10.2 million for the ninethree months ended September 30, 2017March 31, 2021 and 2016,2020, respectively. During the ninethree months ended September 30, 2017,March 31, 2021, we used $419.4approximately $55.0 million for the acquisition of cash related toCryo Technologies and $40.0 million for investments in Svante and Transform Materials. During the Hudson acquisition, $23.2 million of cash related to the Hetsco acquisition, $3.4 million cash related to the VCT acquisition and $23.4three months ended March 31, 2021, we paid approximately $11.5 million for capital expenditures. Duringexpenditures as compared to $10.3 million for the ninethree months ended September 30, 2016, we used $13.4 million for capital expenditures.March 31, 2020.
Cash provided by financing activities was $296.2 million and $8.8$87.8 million for the ninethree months ended September 30, 2017 and 2016, respectively.March 31, 2021 compared to cash used in financing activities of $42.0 million for the three months ended March 31, 2020. During the ninethree months ended September 30, 2017,March 31, 2021, we borrowed $300.0$187.7 million on our SSRCFcredit facilities and repaid $102.5 million in borrowings on credit facilities primarily to fund the Hudson acquisition. We also borrowed 15.0acquisition of Cryo Technologies and investments in Svante and Transform Materials. During the first quarter of 2020, we used $19.3 million Chinese yuan (equivalent to $2.2 million) and repaid 35.0 million Chinese yuan (equivalent to $5.1 million) on our China Facilities. We received $1.1 million in proceeds from stock option exercises and used $2.0 million for the purchaserepurchase shares of Chart common stock which was surrenderedrelated to cover tax withholding electionsour share purchase program during the ninethree months ended September 30, 2017. DuringMarch 31, 2020. We suspended the nine months ended September 30, 2016, we borrowed 111.6 million Chinese yuan (equivalent to $17.0 million) and repaid 50.0 million Chinese yuan (equivalent to $7.6 million)program on our China Facilities.

35
Table of Contents


Accounts Receivable and Allowance for Doubtful Accounts
Our accounts receivable, net, balance was $195.8 million at September 30, 2017 compared to $142.8 million at December 31, 2016, representing an increase of $53.0 million. The Hudson acquisition added $34.7 million to our accounts receivable balance at September 30, 2017. Our accounts receivable allowance was $10.3 million at September 30, 2017 and $10.2 million at December 31, 2016. The reserve includes approximately $7.2 million attributed to receivables in ChinaMarch 20, 2020 (the “Suspension Date”) in light of uncertainty resulting from the economic environmentCovid-19 pandemic and collection challenges in China.the desire to conserve cash resources. On March 11, 2021, the share repurchase program expired with no further repurchases since the Suspension Date.
Cash Requirements
We do not currently anticipate any unusual cash requirements for working capital needs for the year ending December 31, 2017.2021. Management anticipates we will be able to satisfy cash requirements for our ongoing business for the foreseeable future with cash generated by operations, existing cash balances and available borrowings under our credit facilities. We may repurchase a portion of our Convertible Notes on the open market from time to time to the extent permitted by our debt covenants with available cash. To the extent that we repurchase Convertible Notes, we would expect to enter into an agreement with each of the Option Counterparties to our convertible note hedge, warrants, and capped call agreements providing for the partial unwind of such agreements in a notional amount corresponding to the aggregate principal amount of Convertible Notes that we repurchase. We expect to satisfy the minimum liquidity requirement under our SSRCF during the six months prior to the August 1, 2018 maturity of the Convertible Notes as well as the ultimate payment of the Convertible Notes with some combination of cash and liquid investments, availability under the SSRCF or additional financing sources. We expect capitalCapital expenditures for the remaining threenine months of 20172021 is expected to be $12.0in the range of $28.5 million to $22.0 million, which will be deployed primarily for an expansion of the brazed aluminum heat exchanger facility in La Crosse, Wisconsin, as well as cost saving improvement projects and routine maintenance across all businesses. For the remaining three months of 2017, we contemplate the use of approximately $8.0 million to $9.0 million of cash to pay U.S. and foreign income taxes.$38.5 million.
Orders and Backlog
We consider orders to be those for which we have received a firm signed purchase order or other written contractual commitmentcommitments from the customer. Backlog is comprised of the portion of firm signed purchase orders or other written contractual commitments received from customers for which work has not been performed, or is partially completed, that we have not recognized as revenue upon shipment or under the percentage of completion method. Backlog can be significantly affected by the timing of orders for large projects, particularly in the E&C segment, and is not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as sales. Orders included in our backlog may include customary cancellation provisions under which the customer could cancel part or all of the order, potentially subject to the payment of certain costs and/or fees. Backlog may be negatively impacted by ability or likelihood of customers to fulfill their obligations.excludes unexercised contract options and potential orders. Our backlog as of September 30, 2017March 31, 2021 was $480.7$934.1 million, inclusive of $6.4 million of backlog remaining on Calcasieu Pass, compared to $384.4$723.3 million, inclusive of $93.0 million of Calcasieu Pass backlog as of September 30, 2016March 31, 2020 and $367.2$810.0 million, inclusive of $21.0 million of Calcasieu Pass backlog as of June 30, 2017. The Hudson acquisition added $90.2December 31, 2020. Excluding Calcasieu Pass, backlog increased by $297.4 million or 47.2% in the current quarter compared to our backlog at September 30, 2017.the prior year same quarter and $138.7 million or 17.6% compared to the prior quarter.
35
Table of Contents

The tabletables below representsrepresent orders received and backlog by segment for the periods indicated (dollar amounts(dollars in thousands)millions):
 Three Months Ended
 March 31,
2021		March 31,
2020		December 31,
2020
Orders
Cryo Tank Solutions$129.5 $100.9 $132.0 
Heat Transfer Systems104.9 91.6 139.9 
Specialty Products144.5 57.1 94.4 
Repair, Service & Leasing40.5 42.9 54.5 
Intersegment eliminations(2.2)(6.7)(3.8)
Consolidated$417.2 $285.8 $417.0 
 Three Months Ended
 September 30,
2017		 September 30,
2016		 June 30,
2017
Orders     
Energy & Chemicals$65,939
 $27,889
 $64,630
Distribution & Storage134,145
 121,010
 134,037
BioMedical57,870
 52,347
 53,924
Total$257,954
 $201,246
 $252,591
As of
March 31,
2021		March 31,
2020		December 31,
2020
Backlog
Cryo Tank Solutions$245.8 $222.3 $222.6 
Heat Transfer Systems361.4 334.4 329.2 
Specialty Products270.5 130.3 199.7 
Repair, Service & Leasing57.4 39.9 63.1 
Intersegment eliminations(1.0)(3.6)(4.6)
Consolidated$934.1 $723.3 $810.0 
 As of
 September 30,
2017		 September 30,
2016		 June 30,
2017
Backlog     
Energy & Chemicals$234,605
 $113,482
 $122,749
Distribution & Storage222,966
 246,197
 224,993
BioMedical23,171
 24,751
 19,434
Total$480,742
 $384,430
 $367,176
E&CCryo Tank Solutions segment orders for the three months ended September 30, 2017March 31, 2021 were $65.9$129.5 million compared to $27.9$100.9 million for the three months ended September 30, 2016March 31, 2020 and $64.6$132.0 million for the three months ended June 30, 2017. Low energy prices continue to

36
Table of Contents


delay LNG-related opportunities. However, natural gas demand, from Petrochemical and LNG export projects, is driving new gas transmission pipelines creating further opportunity for Chart’s products. E&C backlog totaled $234.6 million as of September 30, 2017, compared to $113.5 million as of September 30, 2016 and $122.7 million as of June 30, 2017.December 31, 2020. The increase in backlog asCryo Tank Solutions segment orders during the three months ended March 31, 2021 when compared to the balance as of September 30, 2016same quarter last year was primarily driven by petrochemicalstrong order intake for mobile equipment, particularly in China. Cryo Tank Solutions orders were negatively impacted in the first quarter of 2020 due to Covid-19-related shut downs. Cryo Tank Solutions segment backlog at March 31, 2021 totaled $245.8 million and is a record high compared to $222.3 million as of March 31, 2020 and $222.6 million as of December 31, 2020.
Heat Transfer Systems segment orders for the three months ended March 31, 2021 were $104.9 million compared to $91.6 million for the three months ended March 31, 2020, and $139.9 million for the three months ended December 31, 2020. The increase in Heat Transfer Systems segment orders during the three months ended March 31, 2021 when compared to the same quarter last year was primarily driven by large project orders for ethylene and natural gas processing applicationsliquefaction.Heat Transfer Systems segment backlog at March 31, 2021 totaled $361.4 million, up 8.1% over the first quarter of 2020 and inclusion9.8% over the fourth quarter of Hudson’s2020, which was then a record. Excluding Calcasieu Pass, Heat Transfer Systems backlog which added $90.2increased by $113.6 million to our backlog as of September 30, 2017. Order flowor 47.1% in the E&C segment is historically volatile duecurrent quarter compared to project sizethe prior year same quarter and it is not unusual$46.8 million or 15.2% compared to see order intake change significantly year over year.the prior quarter. Included in the E&CHeat Transfer Systems segment backlog for all periods presented is approximately $40$40.0 million related to the previously announced Magnolia LNG order where production release is delayed into at least late-2018.delayed. As we previously reported, in general, similar projects previously put on hold in the market are beginning to move ahead as the clean energy infrastructure build out ramps up.
D&SSpecialty Products segment orders for the three months ended September 30, 2017March 31, 2021 were $134.1$144.5 million compared to $121.0$57.1 million for the three months ended September 30, 2016March 31, 2020 and $134.0$94.4 million for the three months ended June 30, 2017.December 31, 2020. The slight increase in D&S orders from the secondincreases over prior quarter of 2017 was primarily attributable to a $10.4 million increase in bulk industrial gas products, partially offset by a $5.2 million decrease in LNG applications and a $5.0 million decrease in packaged gas industrial applications. The increase in D&S orders during the third quarter of 2017 when compared to theprior year same quarter last year waswere mainly attributable to U.S.driven by strong orders in hydrogen equipment, HLNG vehicle tanks, lasers and Asia bulk industrial gasLNG regasification applications. D&SSpecialty Products segment backlog totaled $223.0 million at September 30, 2017 compared to $246.2$270.5 million as of September 30, 2016 and $225.0March 31, 2021, compared to $130.3 million as of June 30, 2017.March 31, 2020 and $199.7 million as of December 31, 2020.
BioMedicalRepair, Service & Leasing segment orders for the three months ended September 30, 2017March 31, 2021 were $57.9$40.5 million compared to $52.3$42.9 million for the three months ended September 30, 2016March 31, 2020 and $53.9$54.5 million for the three months ended June 30, 2017.December 31, 2020. The increase from the second quarter of 2017decrease in BioMedical orders was mainly attributable to the addition of projects within commercial oxygen generations systems applications and an increase in orders within respiratory therapy applications, especially in Europe and North America. The increase in BioMedicalRepair, Service & Leasing segment orders during the three months ended September 30, 2017March 31, 2021 when compared to the prior year same quarter last year was mainly attributableprimarily due to the addition of projects within commercial oxygen generations systems applications. BioMedicalramp up in our Cryo-Lease business. Repair, Service & Leasing segment backlog at September 30, 2017 totaled $23.2 million compared to $24.8$57.4 million as of September 30, 2016 and $19.4March 31, 2021, compared to $39.9 million as of June 30, 2017.March 31, 2020 and $63.1 million as of December 31, 2020.
36
Table of Contents

Off-Balance Sheet Arrangements
We do not have any material off-balance sheet arrangements.
Application of Critical Accounting Policies
The Company’sOur unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. As such, some accounting policies have a significant impact on amounts reported in these unaudited condensed consolidated financial statements. A summary of those significant accounting policies can be found in the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2020. In particular, judgment is used in areas such as revenue recognition for long-termfrom contracts with customers, goodwill, indefinite-lived intangibles, long-lived assets (including finite-lived intangible assets), product warranty costs, and pensions. There have been no significant changes to our critical accounting policies since December 31, 2016.2020.
Forward-Looking Statements
The Company isWe are making this statement in order to satisfy the “safe harbor” provisions contained in the Private Securities Litigation Reform Act of 1995. This Quarterly Report on Form 10-Q includes “forward-looking statements.” These forward-looking statements include statements relating to our business. In some cases, forward-lookingconcerning the Company’s business plans, including statements regarding completed acquisitions, investments, cost synergies and efficiency savings, objectives, future orders, revenues, margins, earnings or performance, liquidity and cash flow, capital expenditures, business trends, clean energy market opportunities, governmental initiatives, including executive orders and other information that is not historical in nature.  Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “outlook,” “guidance,” “continue,” “target,” or the negative of such terms or comparable terminology.
Forward-looking statements contained herein (including future cash contractual obligations, liquidity, cash flow, orders, results of operations, projected revenues, margins, capital expenditures, industry and business trends, cost synergies and savings objectives, clean energy market opportunities and government initiatives, among other matters) or in other statements made by us are made based on management’s expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by forward-looking statements. We believe that the following factors, among others (including those described under Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2016), could affect our future performance and the liquidity and value of our securities and cause ourCompany’s actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf:
•behalf. These include: the cyclicality of the markets which we serveother factors discussed in Item 1A. “Risk Factors” and the vulnerabilityfactors discussed in Item 7. “Management’s Discussion and Analysis of those marketsFinancial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2020, which should be reviewed carefully; risks relating to economic downturns;
the lossrecent outbreak and continued uncertainty associated with the coronavirus (Covid-19); Chart’s ability to successfully integrate recent acquisitions, and achieve the anticipated revenue, earnings, accretion and other benefits from these acquisitions; slower than anticipated growth and market acceptance of or a significant reduction or delay in purchases by, our largest customers;
new clean energy product offerings; estimated segment revenues, future revenue, earnings, cash flows and margin targets and run rates; our ability to control our costs and successfully manage our operations;
fluctuations in energy prices;
competitionremediate the material weaknesses identified during the preparation of the consolidated financial statements which are included in our markets;
Annual Report on Form 10-K for the potential for negative developments in the natural gas industry related to hydraulic fracturing;

37
Table of Contents


the impairment of our goodwill or other intangible assets;
degradation of our backlogyear ended December 31, 2020. These factors should not be construed as a result of modification or termination of orders;
our ability to successfully acquire or integrate companies, such as the recent acquisition of Hudson, that provide complementary products or technologies;
governmental energy policies could change, or expected changes could fail to materialize;
our ability to manage our fixed-price contract exposure;
economic downturnsexhaustive and deteriorating financial conditions;
our reliance on the availability of key supplies and services;
changes in government health care regulations and reimbursement policies;
litigation and disputes involving us, including the extent of product liability, warranty, contract, employment, intellectual property and environmental claims asserted against us;
fluctuations in foreign currency exchange rates and interest rates;
the loss of key employees;
general economic, political, business and market risks associated with our global operations, including collection issues related to receivables in China;
our warranty reservesthere may not adequately cover our warranty obligations;
technological security threats and our reliance on information systems;
financial distress of third parties;
our ability to protect our intellectual property and know-how;
United States Food and Drug Administration and comparable foreign regulation of our products;
the pricing and availability of raw materials;
claims that our products or processes infringe intellectual property rights of others;
the cost of compliance with environmental, health, and safety laws and responding to potential liabilities under these laws;
additional liabilities related to taxes;
our ability to continue our technical innovation in our product lines;
the underfunded status of our pension plan;
the risk of potential violations of the Foreign Corrupt Practices Act;
increased government regulation;
labor costs and disputes and the deterioration of our relations with our employees;
disruptions in our operations due to severe weather;
regulations governing the export of our products and other regulations applicable to us as a supplier of products to the U.S. government;
fluctuations or adjustments in the Company’s effective tax rate;
risks associated with our indebtedness, leverage and liquidity;
fluctuations in the price of our stock;
potential dilution to existing holders of our common stock as a result of the conversion of our Convertible Notes, and the need to utilize our cash balances and/or credit facility to fund any cash settlement related to such conversions; and
other factors described herein.
There mayalso be other factorsrisks that may cause our actual resultswe are unable to differ materially from the forward-looking statements.predict at this time.
All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this Quarterly Report and are expressly qualified in their entirety by the cautionary statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016,2020, as the same may be updated from time to time. We undertake no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the filing date of this document or to reflect the occurrence of unanticipated events.events, except as otherwise required by law.

38
Table of Contents


Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 3.Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, the Company’sour operations are exposed to fluctuations in interest rates and foreign currency values that can affect the cost of operating and financing. Accordingly, the Company addresseswe address a portion of these risks through a program of risk management.
Interest Rate Risk: The Company’s Our primary interest rate risk exposure results from the SSRCF’s various floating rate pricing mechanisms. If interest rates were to increase 200100 basis points (2(1 percent) from the weighted-average interest rate of 4.00%1.8% at September 30, 2017,March 31, 2021, and assuming no changes in the $300.0$204.7 million of borrowings outstanding under the SSRCF at September 30, 2017,March 31, 2021, our additional annual expense would be approximately $6.0$2.0 million on a pre-tax basis.
Foreign Currency Exchange Rate Risk:The Company operates We operate in the United States Asia, Australia, Europe, Mexico and South America, creatingother foreign countries, which creates exposure to foreign currency exchange fluctuations in the normal course of business, which can impact our financial position,
37
Table of Contents

results of operations, cash flow,flows, and competitive position. The financial statements of foreign subsidiaries are translated into their U.S. dollar equivalents at end-of-period exchange rates for assets and liabilities, while income and expenses are translated at average monthly exchange rates. Translation gains and losses are components of other comprehensive (loss) income as reported in the unaudited condensed consolidated statements of operationsincome and comprehensive income. Translation exposure is primarily with the euro, the Czech koruna, the Chinese yuan, and the Japanese yen.Indian rupee. During the thirdfirst quarter of 2017,2021, the euro and Chinese yuanU.S. dollar strengthened in relation to the U.S. dollarChinese yuan by 3%1%, the euro by 5%, the Czech koruna by 4% and 2%, respectively, while the Japanese yenYen by 7%. Additionally, the euro remained relatively unchanged versusflat in relation to the U.S. dollar.Czech koruna, weakening by less than 1%. At September 30, 2017,March 31, 2021, a hypothetical further 10% weakening of the U.S. dollar would not materially affect the Company’sour financial statements.
Chart’s primary transaction exchange rate exposures are with the euro, the Japanese yen,Chinese yuan, the Czech koruna, the Indian rupee, the Australian dollar, the British pound, the Canadian dollar and the Chinese yuan.Japanese yen. Transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in the unaudited condensed consolidated statements of operationsincome and comprehensive income as a component of foreign currency loss. The Company enters(gain) loss and other. We enter into foreign exchange forward contracts to hedge anticipated and firmly committed foreign currency transactions. Chart doesWe do not use derivative financial instruments for speculative or trading purposes. The terms of the contracts are generally one year or less. At September 30, 2017,March 31, 2021, a hypothetical 10% weakening of the U.S. dollar would not materially affect the Company’sour outstanding foreign exchange forward contracts. Additionally, assuming no changes in the EUR 71.5 million in EUR Revolver Borrowings outstanding under the SSRCF and an additional 100 basis points (1 percent) strengthening in the U.S dollar in relation to the euro as of the beginning of 2021, during the three months ended March 31, 2021, our additional unrealized foreign currency gain would be approximately $0.9 million on a pre-tax basis.
Market Price Sensitive Instruments
In connection with the issuancepricing of the Convertible2024 Notes, the Companywe entered into privately-negotiated convertible note hedge and capped call transactions (the “Note Hedge Transactions”) with certain parties, including affiliates of certainthe initial purchasers of the underwriters2024 Notes (the “Option Counterparties”). The convertible note hedge and capped call transactions relate to, collectively, 3.6 million shares, which represents the number of shares of the Company’s common stock underlying the Convertible Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes. These convertible note hedge and capped call transactionsNote Hedge Transactions are expected to reduce the potential dilution with respect to the Company’s common stock upon any future conversion of the Convertible Notes and/or reduce the Company’s exposure to potential cash or stock payments that may be required upon conversion of the Convertible Notes, except, in the case of the capped call transactions, to the extent that the market price per share of the Company’s common stock exceeds the cap price of the capped call transactions.2024 Notes.
The CompanyWe also entered into separate, privately-negotiated warrant transactions with the Option Counterparties initially relating to the number ofacquire up to 4.41 million shares of the Company’sour common stock underlying the convertible note hedge transactions, subject to customary anti-dilution adjustments.stock. The warrant transactions will have a dilutive effect with respect to the Company’sour common stock to the extent that the price per share of the Company’sour common stock exceeds the strike price of the warrants unless the Company elects,we elect, subject to certain conditions, to settle the warrants in cash. The cap price of the capped call transactions and the strike price of the warrant transactions related to the 2024 Notes was initially $84.96$71.775 per share. Further information is located in the DebtNote 9, “Debt and Credit Arrangements noteArrangements” to the Company’sour unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Item 4.Controls and Procedures
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of September 30, 2017,We performed an evaluation, was performed, under the supervision and with the participation of the Company’sour management, including the Company’sour Chief Executive Officer and Chief Financial Officer and Treasurer, of the effectiveness of the design and operation of the Company’sour disclosure controls and procedures pursuant to Rule 13a-15 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, such officers as of March 31, 2021. As a result of the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’sas of March 31, 2021, our disclosure controls and procedures arewere not effective to ensure that information required to be disclosed by the Companyus in the reports it fileswe file or submitssubmit under the Exchange Act (1) is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) is accumulated and communicated to the Company’sour management,

39
Table of Contents


including theour Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’sour internal control over financial reporting that occurred during the Company’sour most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management has assessed the effectiveness of its internal control over financial reporting as of December 31, 2020 based on the framework established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the “COSO criteria”).
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis.
38
Table of Contents

As a result of its review during the preparation of the consolidated financial statements which are included in our Annual Report on Form 10-K for the year ended December 31, 2020, management concluded that we had material weaknesses in our internal control over financial reporting that were identified in connection with our annual goodwill and trademark impairment testing, consisting of the following:
•Control Activities – The Company did not maintain effective control activities based on criteria established by the COSO framework as the control activities that involve more complex judgments did not adequately consider the competency of personnel assigned to perform the review.
•Goodwill and Identifiable Intangible Assets, Net – As a result of the material weakness identified above, the Company failed to adequately design and implement internal controls over the review of its goodwill and indefinite-lived intangible assets for impairment.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2020, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of the material weaknesses in the Company’s internal control over financial reporting except thatdescribed above, as of such date, our disclosure controls and procedures were not effective.
In response to the material weaknesses described above, during the three months ended March 31, 2021, we began implementing, evaluating, and designing new controls and procedures. The following measures have been implemented effective March 31, 2021:
•Evaluated and re-assessed the design of our goodwill and intangible asset impairment process, including control activities associated with the review of data provided to third-party valuation specialists and evaluated the appropriateness of the assumptions and methodology used to measure fair value of reporting units and the reasonableness of the conclusions in the third-party valuation specialists’ reports;
•Evaluated the assignment of responsibilities associated with the accounting for goodwill and intangible asset impairment, including hiring additional resources and providing additional training to existing resources; and
•In order to ensure the quality and consistency of accounting treatments and interpretation across the impairment analysis process and maintain effective control activities, designated one of our senior accounting personnel to provide enhanced oversight to monitor the process, provided guidance on accounting treatment and assumptions and ensured quality-control for the process.
With respect to our annual impairment analysis, we plan to complete the formal review of the annual forecast by no later than September 20, 201730, 2021.
Our remediation of the Company acquired RCHPH Holdings, Inc. (“Hudson”). As a result, the Company is currently integrating Hudson’s operations into its overall system ofidentified material weaknesses and strengthening our internal control over financial reporting. Underenvironment is ongoing. We will test the guidelines established byongoing design and implementation and operating effectiveness of the Securitiesnew and Exchange Commission, companiesexisting controls in future periods. The material weaknesses cannot be considered remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are permitteddesigned and operating effectively. Accordingly, we will continue to exclude acquisitions from their assessmentmonitor and evaluate the effectiveness of our internal control over financial reporting duringin the first year of acquisition. Accordingly, we expect to exclude Hudson fromareas affected by the assessment of internal control over financial reporting for 2017.

material weaknesses described above.
40
39
Table of Contents




PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As disclosed in Note 16, “Commitments and Contingencies”, Chart was named in lawsuits (including lawsuits filed in the U.S. District Court for the Northern District of California) filed against Chart and other defendants with respect to the alleged failure of a stainless steel cryobiological storage tank (model MVE 808AF-GB) at the Pacific Fertility Center in San Francisco, California. We hereby incorporate by reference into this Item 1 the disclosure under the headings “Note 16, Commitments and Contingencies – Stainless Steel Cryobiological Tank Legal Proceedings.”
Although we have not completed our factual investigations into these proceedings, which remain in their early stages, we believe that we have strong factual and legal defenses to the claims and intend to vigorously assert such defenses.
We are occasionally subject to various legal claims related to performance under contracts, product liability, taxes, employment matters, environmental matters, intellectual property, and other matters incidental to the normal course of our business. Based on our historical experience in litigating these claims, as well as our current assessment of the underlying merits of the claims and applicable insurance, if any, management believes that the final resolution of these matters will not have a material adverse effect on our financial position, liquidity, cash flows, or results of operations. Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect.
Item 1A.Risk Factors
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A. “Risk Factors,” of the Company’sour Annual Report on Form 10-K for the fiscal year ended December 31, 2016.2020.
Item 2.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities
PeriodTotal
Number
of
Shares
Purchased		 Average Price
Paid Per
Share		 Total Number of
Shares Purchased
As Part of Publicly
Announced Plans
or Programs		 Approximate Dollar
Value of Shares
that May Yet Be
Purchased Under
the Plans or
Programs
July 1 – 31, 2017478
 $37.11
 —
 $—
August 1 – 31, 20172,125
 33.73
 —
 —
September 1 – 30, 2017252
 35.54
 —
 —
Total2,855
 $34.46
 —
 $—
Issuer Purchases of Equity Securities
Period
Total
Number
of
Shares
Purchased (1)
Average Price
Paid Per
Share (1)
Total Number of
Shares Purchased
As Part of Publicly
Announced Plans
or Programs (2)
Approximate Dollar
Value of Shares
that May Yet Be
Purchased Under
the Plans or
Programs (2)
January 1 - 31, 202121,151 $119.32 — $— 
February 1 – 28, 20212,643 154.54 — — 
March 1 – 31, 2021382 150.88 — — 
Total24,176 123.67 — $— 
During the third quarter of 2017, 2,855_______________
(1)Includes shares of common stock were surrendered to us during the first quarter of 2021 by participants under our share-based compensation plans to satisfy tax withholding obligations relating to the vesting or payment of equity awards for an aggregate purchase price of approximately $98,371.$2,989,846. The total number of shares repurchased represents the net shares issued to satisfy tax withholdings. All such repurchased shares were subsequently retired during the three months ended September 30, 2017.March 31, 2021.
(2)On March 11, 2020, our Board of Directors authorized a share repurchase program for up to $75 million of the Company’s common stock over the next twelve months through various means, including open market transactions, block purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. We suspended the program on March 20, 2020 (the “Suspension Date”) in light of uncertainty resulting from the Covid-19 pandemic and the desire to conserve cash resources. On March 11, 2021, the share repurchase program expired with no further repurchases since the Suspension Date.
Item 4. Mine Safety Disclosures
Not applicable.

40
41
Table of Contents



Item 6.Exhibits
Item 6.Exhibits
The following exhibits are included with this report:
2.1
Amendment No. 1, dated September 19, 2017, to Agreement and Plan of Merger, among Chart Industries, Inc., Chart Sully Corporation, RCHPH Holdings, Inc., and R/C Hudson Holdings, L.P., solely in its capacity as the Initial Holder Representative under the Merger Agreement, dated as of June 30, 2017 (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-k filed with the SEC on September 21, 2017 (File No. 001-11442))
31.1    Rule 13a-14(a) Certification of the Company’s Chief Executive Officer and President (Principal Executive Officer). (x)
31.2    Rule 13a-14(a) Certification of the Company's Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer). (x)
32.1    Section 1350 Certification of the Company’s Chief Executive Officer and President (Principal Executive Officer). (xx)
32.2    Section 1350 Certification of the Company's Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer). (xx)
101.INS    XBRL Instance Document *
101.SCH    XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF    XBRL Taxonomy Extension Definition Linkbase Document
101.LAB    XBRL Taxonomy Extension Label Linkbase Document
101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document
10.1
Amendment No. 2 to Employment Agreement, dated September 8, 2017, between the Company and Mary C. Cook (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 8, 2017 (File No. 001-11442)).*
10.2
Amendment No. 2, dated September 19, 2017, to the Second Amended and Restated Credit Agreement, dated October 29, 2014, among Chart Industries, Inc., Chart Industries Luxembourg S.à r.l., Chart Asia Investment Company, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A. as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 21, 2017 (File No. 001-11442)).
31.1
Rule 13a-14(a) Certification of Chief Executive Officer. (x)
31.2
Rule 13a-14(a) Certification of Chief Financial Officer. (x)
32.1
Section 1350 Certification of Chief Executive Officer. (xx)
32.2
Section 1350 Certification of Chief Financial Officer. (xx)
101.INSXBRL Instance Document (x)
101.SCHXBRL Taxonomy Extension Schema Document (x)
101.CALXBRL Taxonomy Extension Calculation Linkbase Document (x)
101.DEFXBRL Taxonomy Extension Definition Linkbase Document (x)
101.LABXBRL Taxonomy Extension Label Linkbase Document (x)
101.PREXBRL Taxonomy Extension Presentation Linkbase Document (x)
_______________
(x)
(x)    Filed herewith.
(xx)Furnished herewith.
*Management contract or compensatory plan or arrangement.


(xx)     Furnished herewith.

*    The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
42
41


SIGNATURES
Pursuant to the requirements 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.
 
Chart Industries, Inc.
(Registrant)
 
Date:April 22, 2021By:/s/ Jillian C. Evanko
Jillian C. Evanko
Chief Executive Officer and President
(Principal Executive Officer)
Date:October 26, 2017April 22, 2021By:/s/ Jillian C. EvankoScott W. Merkle
Jillian C. EvankoScott W. Merkle
Vice President, Chief Financial Officer Chief Accounting Officer and Treasurer
(Principal Financial Officer)
(Duly Authorized Officer)


4342