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, 20172022
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 Torrington2200 Airport Industrial Drive, Suite 100, 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
As of October 23, 2017,24, 2022, there were 30,771,07436,635,224 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
69
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
2639
Item 3. Quantitative and Qualitative Disclosures About Market Risk
3954
Item 4. Controls and Procedures
3955
Item 1. Legal Proceedings
56
Item 1A. Risk Factors
4156
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
4156
Item 4. Mine Safety Disclosures
4156
Item 6. Exhibits
4257
Signatures
4358


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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)
September 30,
2022		December 31,
2021
ASSETS
Current Assets
Cash and cash equivalents$89.5 $122.2 
Accounts receivable, less allowances of $4.4 and $6.0, respectively276.9 236.3 
Inventories, net357.5 321.5 
Unbilled contract revenue118.9 93.5 
Prepaid expenses34.5 20.9 
Other current assets52.2 59.1 
Total Current Assets929.5 853.5 
Property, plant, and equipment, net407.1 416.0 
Goodwill977.3 994.6 
Identifiable intangible assets, net535.5 556.1 
Equity method investments91.7 99.6 
Investments in equity securities66.9 77.8 
Other assets60.9 46.2 
Pension asset0.3 — 
TOTAL ASSETS$3,069.2 $3,043.8 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$206.1 $175.9 
Customer advances and billings in excess of contract revenue197.6 148.5 
Accrued salaries, wages, and benefits33.7 27.1 
Accrued income taxes2.9 16.1 
Current portion of warranty reserve6.1 9.7 
Current convertible notes256.7 255.9 
Operating lease liabilities, current5.3 5.8 
Other current liabilities46.5 54.9 
Total Current Liabilities754.9 693.9 
Long-term debt580.8 600.8 
Long-term deferred tax liabilities57.9 59.8 
Accrued pension liabilities— 1.6 
Operating lease liabilities, non-current16.4 21.4 
Other long-term liabilities33.3 41.1 
Total Liabilities1,443.3 1,418.6 
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 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, 36,634,383 and 36,548,330 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively0.4 0.4 
Additional paid-in capital784.3 779.0 
Treasury stock; 760,782 shares at both September 30, 2022 and December 31, 2021(19.3)(19.3)
Retained earnings942.6 878.2 
Accumulated other comprehensive loss(90.6)(21.7)
Total Chart Industries, Inc. Shareholders’ Equity1,617.4 1,616.6 
Noncontrolling interests8.5 8.6 
Total Equity1,625.9 1,625.2 
TOTAL LIABILITIES AND EQUITY$3,069.2 $3,043.8 
See accompanying notes to these unaudited condensed consolidated financial statements.

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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 September 30,Nine Months Ended September 30,
 2022202120222021
Sales$412.1 $328.3 $1,171.0 $938.8 
Cost of sales307.5 253.4 887.9 696.8 
Gross profit104.6 74.9 283.1 242.0 
Selling, general, and administrative expenses52.3 51.0 159.3 145.4 
Amortization expense10.6 10.1 32.4 28.5 
Operating expenses62.9 61.1 191.7 173.9 
Operating income41.7 13.8 91.4 68.1 
Interest expense, net5.7 3.2 13.3 7.4 
Unrealized (gain) loss on investments in equity securities(1.3)(10.4)10.9 (1.2)
Realized gain on equity method investment— — (0.3)— 
Financing costs amortization0.7 1.2 2.1 3.5 
Foreign currency (gain) loss(2.5)(0.8)(2.6)0.1 
Other income(0.7)(0.6)(1.5)— 
Income before income taxes and equity in earnings (loss) of unconsolidated affiliates, net39.8 21.2 69.5 58.3 
Income tax (benefit) expense(1.6)5.5 4.0 9.9 
Income before equity in earnings (loss) of unconsolidated affiliates, net41.4 15.7 65.5 48.4 
Equity in earnings (loss) of unconsolidated affiliates, net0.2 (0.1)(0.3)0.1 
Net income41.6 15.6 65.2 48.5 
Less: Income attributable to noncontrolling interests, net of taxes0.4 0.7 0.8 1.5 
Net income attributable to Chart Industries, Inc.$41.2 $14.9 $64.4 $47.0 
Net income attributable to Chart Industries, Inc. per common share:
Basic$1.15 $0.42 $1.80 $1.32 
Diluted$0.98 $0.36 $1.56 $1.15 
Weighted-average number of common shares outstanding:
Basic35.87 35.62 35.85 35.59 
Diluted41.86 41.44 41.40 40.96 
Comprehensive income (loss), net of taxes$9.2 $4.1 $(4.6)$25.4 
Less: Comprehensive (loss) income attributable to noncontrolling interests, net of taxes(0.1)0.7 (0.1)1.5 
Comprehensive income (loss) attributable to Chart Industries, Inc., net of taxes$9.3 $3.4 $(4.5)$23.9 
 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.

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CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)millions)
 Nine Months Ended September 30,
 20222021
OPERATING ACTIVITIES
Net income$65.2 $48.5 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization62.4 59.8 
Employee share-based compensation expense7.9 8.1 
Financing costs amortization2.1 3.5 
Unrealized foreign currency transaction gain(4.2)(5.8)
Unrealized loss (gain) on investments in equity securities10.9 (1.2)
Equity in loss (earnings) of unconsolidated affiliates0.3 (0.1)
Realized gain on equity method investment(0.3)— 
Other non-cash operating activities3.4 2.6 
Changes in assets and liabilities, net of acquisitions:
Accounts receivable(46.2)(31.9)
Inventories(58.4)(95.5)
Unbilled contract revenues and other assets(68.6)(73.7)
Accounts payable and other liabilities16.7 1.1 
Customer advances and billings in excess of contract revenue59.1 43.0 
Net Cash Provided By (Used In) Operating Activities50.3 (41.6)
INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired(25.8)(169.1)
Investments(4.9)(103.2)
Capital expenditures(48.2)(36.5)
Cash received from settlement of cross-currency swap agreements9.4 — 
Government grants and other(0.8)0.4 
Net Cash Used In Investing Activities(70.3)(308.4)
FINANCING ACTIVITIES
Borrowings on revolving credit facility503.3 644.1 
Repayments on revolving credit facility(511.2)(321.6)
Proceeds from exercise of stock options1.9 7.0 
Common stock repurchases from share-based compensation plans(3.4)(3.2)
Net Cash (Used in) Provided By Financing Activities(9.4)326.3 
Effect of exchange rate changes on cash and cash equivalents(3.5)0.7 
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents(32.9)(23.0)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period122.4 126.1 
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (1)
$89.5 $103.1 
 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)Includes restricted cash and restricted cash equivalents of $0.2 in other current assets as of December 31, 2021 and September 30, 2021 and $1.0 in other assets as of December 31, 2020. For further information regarding restricted cash and restricted cash equivalents balances, refer to Note 8, “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.

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CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
(Dollars in millions)
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive
Loss		Non-controlling Interests
 Shares
Outstanding		AmountTreasury StockRetained
Earnings		Total
Equity
Balance at December 31, 202136.55 $0.4 $779.0 $(19.3)$878.2 $(21.7)$8.6 $1,625.2 
Net income— — — — 10.2 — 0.1 10.3 
Other comprehensive loss— — — — — (6.0)— (6.0)
Share-based compensation expense— — 3.3 — — — — 3.3 
Common stock issued from share-based compensation plans0.08 — 1.0 — — — — 1.0 
Common stock repurchases from share-based compensation plans(0.02)— (3.2)— — — — (3.2)
Earthly Labs Inc. purchase price adjustment— — (1.2)— — — — (1.2)
Balance at March 31, 202236.61 0.4 778.9 (19.3)888.4 (27.7)8.7 1,629.4 
Net income— — — — 13.0 — 0.4 13.4 
Other comprehensive loss— — — — — (30.9)— (30.9)
Share-based compensation expense— — 2.3 — — — — 2.3 
Common stock issued from share-based compensation plans0.01 — 0.4 — — — — 0.4 
Common stock repurchases from share-based compensation plans— — (0.1)— — — — (0.1)
Other— — — — — — (0.5)(0.5)
Balance at June 30, 202236.62 0.4 781.5 (19.3)901.4 (58.6)8.6 1,614.0 
Net income— — — — 41.2 — 0.4 41.6 
Other comprehensive loss— — — — — (32.0)(0.5)(32.5)
Share-based compensation expense— — 2.3 — — — — 2.3 
Common stock issued from share-based compensation plans0.01 — 0.5 — — — — 0.5 
Common stock repurchases from share-based compensation plans— — (0.1)— — — — (0.1)
Other— — 0.1 — — — — 0.1 
Balance at September 30, 202236.63 $0.4 $784.3 $(19.3)$942.6 $(90.6)$8.5 $1,625.9 

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 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)
Other— — 0.1 — — — (0.1)— 
Balance at March 31, 202136.35 0.4 750.0 (19.3)844.7 (16.8)7.0 1,566.0 
Net income— — — — 6.5 — 0.3 6.8 
Other comprehensive income— — — — — 7.6 — 7.6 
Share-based compensation expense— — 2.4 — — — — 2.4 
Common stock issued from share-based compensation plans0.03 — 0.9 — — — — 0.9 
Other— — — — — — 0.1 0.1 
Balance at June 30, 202136.38 0.4 753.3 (19.3)851.2 (9.2)7.4 1,583.8 
Net income— — — — 14.9 — 0.7 15.6 
Other comprehensive loss— — — — — (11.5)— (11.5)
Share-based compensation expense— — 2.3 — — — — 2.3 
Common stock issued from share-based compensation plans— — 0.3 — — — — 0.3 
Balance at September 30, 202136.38 $0.4 $755.9 $(19.3)$866.1 $(20.7)$8.1 $1,590.5 
_______________
(1)Refer to Note 2, “Significant Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2021 for discussion regarding the cumulative effect of change in accounting principle.

See accompanying notes to these unaudited condensed consolidated financial statements.
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CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(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, 2016.2021. 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, 20172022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2022.
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 cryogenic equipment forservicing multiple applications in the industrial gas and clean energy markets. Our unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and biomedical industries. Chart’srepair. Being at the forefront of the clean energy transition, Chart is a leading provider of technology, equipment and engineered systemsservices related to liquefied natural gas, hydrogen, biogas, CO2 Capture and water treatment, among 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 manufacturing locations from the United States including principal executive offices located in Georgia,to Asia, India and an international presence in Asia, Australia, Europe, Mexicowe maintain accountability and South America.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 operating segmentsWe reclassified equity in earnings of unconsolidated affiliates, net from selling, general, and restructuring activities as reportedadministrative expenses to equity in 2016 were reclassifiedearnings of unconsolidated affiliates, net in the 2021 condensed consolidated statement of income and comprehensive income in order to conform to the 2017 presentation within2022 presentation.
Derivative Instruments: We utilize certain derivative financial instruments to enhance our ability to manage foreign currency risk that exists as part of ongoing business operations. We enter into a combination of cross-currency swaps and foreign exchange collars as a net investment hedge of our investments in certain international subsidiaries that use the noteseuro as their functional currency in order to reduce the volatility caused by changes in exchange rates. Our cross-currency swaps and foreign exchange collars are measured at fair value and recorded on the condensed consolidated financial statements.balance sheets within other assets or other long-term liabilities. Changes in fair value are recorded as foreign currency translation adjustments within accumulated other comprehensive loss. See Note 8, “Debt and Credit Arrangements,” for further information regarding the cross-currency swaps and foreign exchange collars.
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.assumptions, based on a number of factors including the current macroeconomic conditions such as inflation and supply chain disruptions, as well as risks set forth in our Annual Report on Form 10-K.
Cash, Cash Equivalents, Restricted Cash, 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 assets in the accompanying condensed consolidated balance sheets.
Recently Issued Accounting Standards: Standards (Not Yet Adopted): In August 2017,June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, “Derivatives and Hedging2022-03, “Fair Value Measurement (Topic 815)820): Targeted ImprovementsFair Value Measurement of Equity Securities Subject to Accounting for Hedging Activities.Contractual Sale Restrictions.” The ASU expandsamendments in this update clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the security and, enhances hedge accountingtherefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot recognize and measure a contractual sale restriction and adds additional disclosures for equity securities subject to become more closely aligned with an entity’s risk management activities through hedging strategies.contractual sale restrictions. The ASU provides changes to both the designation and measurement guidanceamendments in this update are effective 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 periodsfiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the effect that the2023, including interim periods within those fiscal years. We do not expect this ASU willto have a material impact on the Company’sour financial position, results of operations, and disclosures.
In May 2017,March 2022, the FASB issued ASU 2017-09, “Compensation – Stock Compensation2022-02, “Financial Instruments Credit Losses (Topic 718)326): Scope of Modification Accounting.Troubled Debt Restructurings and Vintage Disclosures.” 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 awardamendments 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, thethis update require that an 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

disclose current-period gross
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(Dollars and shares in thousands,millions, except per share amounts) – Continued






writeoffs by year of origination for financing receivables and net investments in leases within the scope of Accounting Standards Codification (“ASC”) 326. The amendments in this update are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the effect that the2022, including interim periods within those fiscal years. We do not expect this ASU willto have a material impact on the Company’sour financial position, results of operations, and disclosures.
In March 2017,2020, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits2020-04, “Reference Rate Reform (Topic 715)848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” and in January 2021, the FASB subsequently issued ASU 2021-01, “Reference Rate Reform (Topic 848): ImprovingScope.” ASU 2020-04 and the Presentationsubsequent modifications are identified as 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 Net Periodic Pension CostMarch 12, 2020 through December 31, 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 subsequent 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 October 2026. We do not expect this ASU to have a material impact on our financial position, results of operations, and Net Periodic Postretirement Benefit Cost.disclosures.
Recently Adopted Accounting Standards: In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” The newamendments in this update require annual disclosures about transactions with a government that are accounted for by applying a grant or contribution model by analogy. The amendments in this update are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendments is permitted. We adopted this guidance requires companieseffective January 1, 2022. The adoption of this guidance did not have a material impact on our financial position, results of operations or disclosures.
In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with sponsored defined benefit pension and/or other postretirement benefit plans to presentCustomers.” The amendments in this update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. For public business entities, the service cost component of net periodic benefit costamendments 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 coststhis update are eligible to be capitalized as an asset. The standard will be effective for fiscal years beginning after December 15, 2017,2022, including interim periods within those years, and thefiscal years. We adopted this guidance will generally be applied retrospectively, whereas the capitalizationeffective April 1, 2022. The adoption of the service cost component will be applied prospectively. Early adoption is permitted with all of the amendments adopted in the same period. If an entity early adopts thethis 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 willdid not have a material impact on the Company’sour financial position, results of operations andor disclosures.
In January 2017,
NOTE 2 — Reportable Segments
As reported in our Annual Report on Form 10-K for the FASB issued ASU 2017-04, “Intangibles – Goodwillyear ended December 31, 2021, the structure of our internal organization is divided into the following four reportable segments, which are also our operating segments: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products and Other (Topic 350): SimplifyingRepair, Service & Leasing.
Our Cryo Tank Solutions segment supplies bulk, microbulk and mobile equipment used in the Teststorage, distribution, vaporization, and application of industrial gases and certain hydrocarbons. Our Heat Transfer Systems segment 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 supplies products used in specialty end-market applications including hydrogen, biofuels, CO2 Capture, food and beverage, space exploration, gas by rail, lasers, cannabis and water treatment, among others. Our Repair, Service & Leasing segment provides installation, service, repair, maintenance, and refurbishment of cryogenic products in addition to providing equipment leasing solutions.
Corporate includes operating expenses for Goodwill Impairment.” The new guidance eliminatesexecutive 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 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 chargesegments.
We evaluate performance and allocate resources based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge 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 1 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, and the guidance will generally be applied retrospectively. Early adoption is permitted with all of the amendments adoptedoperating income as determined 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’sour 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 assetsincome 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 2014-09 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 amount that reflects the consideration to which the entity expects to 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

income.
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(Dollars and shares in thousands,millions, except per share amounts) – Continued



revenue that has historically been recognized when products are shipped, title has transferred


Segment Financial Information
 Three Months Ended September 30, 2022
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsCorporateConsolidated
Sales$126.9 $132.1 $108.1 $49.7 $(4.7)$— $412.1 
Depreciation and amortization expense4.0 7.2 4.3 4.2 — 0.5 20.2 
Operating income (loss) (1) (2)
12.2 18.3 16.7 12.0 — (17.5)41.7 

 Three Months Ended September 30, 2021
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsCorporateConsolidated
Sales$112.2 $56.4 $116.9 $46.3 $(3.5)$— $328.3 
Depreciation and amortization expense3.3 9.5 4.4 2.9 — 0.4 20.5 
Operating income (loss) (1) (2)
13.0 (10.0)26.4 2.2 — (17.8)13.8 

Nine Months Ended September 30, 2022
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsCorporateConsolidated
Sales$377.9 $314.3 $330.9 $154.4 $(6.5)$— $1,171.0 
Depreciation and amortization expense12.2 22.3 13.6 12.7 — 1.6 62.4 
Operating income (loss) (1) (2)
36.2 23.8 53.7 32.3 — (54.6)91.4 

Nine Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsCorporateConsolidated
Sales$313.9 $190.8 $301.0 $142.3 $(9.2)$— $938.8 
Depreciation and amortization expense11.0 28.5 10.9 8.2 — 1.2 59.8 
Operating income (loss) (1) (2)
42.0 (6.7)67.7 16.1 — (51.0)68.1 
_______________
(1)Restructuring (credits)/costs for the:
•three months ended September 30, 2022 were $(1.4) ($(1.3) - Repair, Service & Leasing and collection is reasonably assured will meet the criteria for using point-in-time revenue recognition. The Company also expects that the majority 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$(0.1) - Specialty Products).
•three months ended September 30, 2021 were $1.9 ($0.5 - Heat Transfer Systems and $1.4 - Repair, Service & Leasing).
•nine months ended September 30, 2022 were $(1.1) ($(1.3) - Repair, Service & Leasing, $0.1 - Cryo Tank Solutions and $0.1 Heat Transfer Systems).
•nine months ended September 30, 2021 were $2.9 ($0.3 - Cryo Tank Solutions, $1.2 - Heat Transfer Systems and $1.4 - Repair, Service & Leasing).
(2)Acquisition-related contingent consideration (credits)/charges in our Specialty Products Segment were related to timingour 2020 acquisitions of revenue recognition:Sustainable Energy Solutions, Inc. (“SES”) and BlueInGreen, LLC (“BIG”) and for the:
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, and internal control over financial reporting to support recognition under the new standard. The Company plans to complete the design of any necessary changes to its business processes, controls and systems and implement the changes over the remainder of 2017.
Recently Adopted Accounting Standards: In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The FASB issued the update to clarify how restricted cash or restricted cash equivalents should be presented in 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 transition 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•three months ended 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 at2022 were $(1.7).
•three months ended 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 for share-based payments to employees. The update eliminated additional paid-in-capital pools and requires all income tax effects of awards to be recognized 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 account 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 Company adopted this guidance effective January 1, 2017. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement 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.

2021 were $0.3.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(Dollars and shares in thousands,millions, except per share amounts) – Continued






•nine months ended September 30, 2022 were $(2.7).
•nine months ended September 30, 2021 were $2.3.
Sales by Geography
Three Months Ended September 30, 2022
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
North America$61.6 $103.3 $74.5 $40.2 $(2.3)$277.3 
Europe, Middle East, Africa and India41.1 12.8 26.0 6.8 (1.5)85.2 
Asia-Pacific23.5 15.7 7.3 2.5 (0.8)48.2 
Rest of the World0.7 0.3 0.3 0.2 (0.1)1.4 
Total$126.9 $132.1 $108.1 $49.7 $(4.7)$412.1 
Three Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
North America$49.8 $38.9 $59.1 $29.3 $(1.7)$175.4 
Europe, Middle East, Africa and India31.5 4.4 46.9 6.6 (1.0)88.4 
Asia-Pacific30.2 13.0 10.4 9.5 (0.7)62.4 
Rest of the World0.7 0.1 0.5 0.9 (0.1)2.1 
Total$112.2 $56.4 $116.9 $46.3 $(3.5)$328.3 
 Nine Months Ended September 30, 2022
 Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
North America$151.9 $232.9 $221.1 $110.7 $(3.5)$713.1 
Europe, Middle East, Africa and India138.7 48.5 82.5 26.1 (1.8)294.0 
Asia-Pacific83.2 31.4 26.9 16.4 (1.1)156.8 
Rest of the World4.1 1.5 0.4 1.2 (0.1)7.1 
Total$377.9 $314.3 $330.9 $154.4 $(6.5)$1,171.0 
Nine Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
North America$125.3 $127.4 $128.5 $87.8 $(4.4)$464.6 
Europe, Middle East, Africa and India101.9 21.0 145.8 26.2 (2.7)292.2 
Asia-Pacific83.5 41.8 25.6 27.2 (2.0)176.1 
Rest of the World3.2 0.6 1.1 1.1 (0.1)5.9 
Total$313.9 $190.8 $301.0 $142.3 $(9.2)$938.8 
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
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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.
September 30,
2022		December 31,
2021
Cryo Tank Solutions$479.6 $407.2 
Heat Transfer Systems256.9 225.8 
Specialty Products369.8 327.5 
Repair, Service & Leasing170.4 186.2 
Total assets of reportable segments1,276.7 1,146.7 
Goodwill (1)
977.3 994.6 
Identifiable intangible assets, net (1)
535.5 556.1 
Corporate279.7 346.4 
Total$3,069.2 $3,043.8 
_______________
(1)See Note 6, “Goodwill and Intangible Assets,” for further information related to goodwill and identifiable intangible assets, net.
NOTE 3 — Revenue
Disaggregation of Revenue
The following tables represent a disaggregation of revenue by timing of revenue along with the reportable segment for each category:
Three Months Ended September 30, 2022
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
Point in time$109.1 $7.7 $53.3 $23.6 $(3.4)$190.3 
Over time17.8 124.4 54.8 26.1 (1.3)221.8 
Total$126.9 $132.1 $108.1 $49.7 $(4.7)$412.1 
Three Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
Point in time$98.1 $4.6 $82.3 $29.2 $(3.1)$211.1 
Over time14.1 51.8 34.6 17.1 (0.4)117.2 
Total$112.2 $56.4 $116.9 $46.3 $(3.5)$328.3 
Nine Months Ended September 30, 2022
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
Point in time$338.4 $18.9 $165.0 $77.6 $(4.1)$595.8 
Over time39.5 295.4 165.9 76.8 (2.4)575.2 
Total$377.9 $314.3 $330.9 $154.4 $(6.5)$1,171.0 
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2022
(Dollars and shares in millions, except per share amounts) – Continued





Nine Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingIntersegment EliminationsConsolidated
Point in time$286.6 $15.4 $217.6 $93.7 $(7.5)$605.8 
Over time27.3 175.4 83.4 48.6 (1.7)333.0 
Total$313.9 $190.8 $301.0 $142.3 $(9.2)$938.8 
Refer to Note 2, “Reportable Segments,” for a table of revenue by reportable segment disaggregated by geography.
Contract Balances
The following table represents changes in our contract assets and contract liabilities balances:
September 30, 2022December 31, 2021Year-to-date Change ($)Year-to-date Change (%)
Contract assets
Accounts receivable, net of allowances$276.9 $236.3 $40.6 17.2 %
Unbilled contract revenue118.9 93.5 25.4 27.2 %
Contract liabilities
Customer advances and billings in excess of contract revenue$197.6 $148.5 $49.1 33.1 %
Long-term deferred revenue0.1 0.4 (0.3)(75.0)%
Revenue recognized for the three months ended September 30, 2022 and 2021, that was included in the contract liabilities balance at the beginning of each year was $17.7 and $19.8, respectively. Revenue recognized for the nine months ended September 30, 2022 and 2021 that was included in the contract liabilities balance at the beginning of each year was $114.6 and $97.4, respectively. The amount of revenue recognized during the three and nine months ended September 30, 2022 from performance obligations satisfied or partially satisfied in previous periods as a result of changes in the estimates of variable consideration related to long-term contracts, was not significant.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price of firm signed purchase orders or other 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 September 30, 2022, the estimated revenue expected to be recognized in the future related to remaining performance obligations was $2,254.1. We expect to recognize revenue on approximately 50% to 55% of the remaining performance obligations over the next 12 months and the remaining over the next few years thereafter.
NOTE 4 — Inventories
In January 2017, the Company prospectively adopted the guidance per ASU 2015-11, “Simplifying the Measurement of Inventory.” The Company previously measured its inventory at the lower of cost or market with cost being determined by the first-in, first-out (“FIFO”) method. Based on the new guidance, the Company measures its inventory at the lower of cost or net realizable value with net realizable value being the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements.
The following table summarizes the components of inventory:
September 30,
2017		 December 31,
2016		September 30,
2022		December 31,
2021
Raw materials and supplies$98,226
 $65,719
Raw materials and supplies$211.8 $178.8 
Work in process37,047
 31,576
Work in process63.6 64.4 
Finished goods78,317
 72,388
Finished goods82.1 78.3 
Total inventories, net$213,590
 $169,683
Total inventories, net$357.5 $321.5 
The allowancesallowance for excess and obsolete inventory was $8,525 and $10,069balance at September 30, 20172022 and December 31, 2016,2021 was $7.6 and $10.9, respectively.
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NOTE5 — Leases
Lessee Accounting
As of September 30, 2022 and December 31, 2021, operating right-of-use (“ROU”) assets and lease liabilities were $21.8 and $21.7 ($5.3 of which was current) and $27.3 and $27.2 ($5.8 of which was current), respectively. The weighted-average remaining term for lease contracts was 3.7 years at September 30, 2022, with maturity dates ranging from September 2022 to June 2031. The weighted-average discount rate was 3.1% at September 30, 2022. ROU assets are classified as property, plant and equipment, net in the condensed consolidated balance sheets.
We incurred $4.7 and $3.0 of rental expense under operating leases for the three months ended September 30, 2022 and 2021, respectively, and $12.3 and $9.0 for the nine months ended September 30, 2022 and 2021, 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 September 30, 2022:
2022$1.6 
20236.3 
20245.8 
20254.8 
20262.7 
Thereafter (1)
1.4 
Total future minimum lease payments$22.6 
_______________
(1)     As of September 30, 2022, future minimum lease payments for non-cancelable operating leases for the period subsequent to 2026 relate to four leased facilities.
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Lessor Accounting
We lease equipment manufactured by Chart primarily through our Cryo-Lease program as sales-type and operating leases. As of September 30, 2022 and December 31, 2021, our short-term net investment in sales-type leases was $13.0 and $9.3, respectively and is included in other current assets in our condensed consolidated balance sheets. Our long-term net investment in sales type leases was $39.2 and $31.9 as of September 30, 2022 and December 31, 2021, respectively, and is included in other assets in our condensed consolidated balance sheets. For sales type leases, interest income was $0.6 and $0.3 in the condensed consolidated statements of income for the three months ended September 30, 2022 and 2021, respectively, and $1.7 and $0.5 for the nine months ended September 30, 2022 and 2021, respectively.
Operating leases offered by Chart may include early termination options. At the end of a lease, a lessee generally has the option to either extend the lease, purchase the underlying equipment for a fixed price or return it to Chart. The lease agreements clearly define applicable return conditions and remedies for non-compliance to ensure that leased equipment will be in good operating condition upon return.
The following table represents sales from sales-type and operating leases:
Three Months Ended September 30,
20222021
Sales-type leases$7.3 $13.0 
Operating leases1.0 0.7 
Total sales from leases$8.3 $13.7 
Nine Months Ended September 30,
20222021
Sales-type leases$18.5 $36.2 
Operating leases3.0 1.7 
Total sales from leases$21.5 $37.9 
The following table represents scheduled payments for sales-type leases:
September 30, 2022
2022$3.4 
202313.4 
202413.4 
202513.4 
202610.2 
Thereafter6.5 
Total60.3 
Less: unearned income8.1 
Total$52.2 
The following table represents the cost of equipment leased to others:
September 30, 2022December 31, 2021
Equipment leased to others, cost$14.3 $13.6 
Less: accumulated depreciation2.6 2.1 
Equipment leased to others, net$11.7 $11.5 
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The following table represents payments due for operating leases:
September 30, 2022
2022$0.3 
20230.4 
20240.1 
20250.1 
20260.1 
Thereafter0.1 
Total$1.1 
NOTE 36 — 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, 2021$84.9 $433.6 $300.9 $175.2 $994.6 
Goodwill acquired during the period (1)
— — 15.3 3.8 19.1 
Foreign currency translation adjustments and other(13.8)(7.5)(0.1)(0.7)(22.1)
Purchase price adjustments (2)
— — (14.3)— (14.3)
Balance at September 30, 2022$71.1 $426.1 $301.8 $178.3 $977.3 
Accumulated goodwill impairment loss at December 31, 2021$23.5 $49.3 $35.8 $20.4 $129.0 
Impairment loss— — — — — 
Accumulated goodwill impairment loss at September 30, 2022$23.5 $49.3 $35.8 $20.4 $129.0 
 
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)Goodwill acquired during the period was $19.1. Goodwill acquired during the period for the Fronti and AdEdge India acquisitions of $14.2 and $1.1, respectively, was allocated to our Specialty Products segment. Goodwill acquired during the period for our CSC acquisition of $3.8 was allocated to our Repair, Service & Leasing segment.
(2)During the first nine months of 2022, we recorded purchase price adjustments that decreased goodwill by $14.3 in our Specialty Products segment related to the Earthly Labs, Inc., L.A. Turbine and AdEdge acquisitions. For further information regarding goodwill acquired and the purchase price adjustments during the period refer to Note 10, “Business Combinations.”
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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 September 30, 2022December 31, 2021
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$307.6 $(97.4)$312.1 $(82.2)
Unpatented technology12 years 27,686
 (3,836) 8,186
 (3,132)Unpatented technology13 years197.5 (41.2)184.6 (30.1)
Patents and otherPatents and other6 years6.7 (1.8)7.9 (2.3)
Trademarks and trade namesTrademarks and trade names15 years2.8 (1.8)3.5 (1.8)
Land use rights50 years 13,222
 (1,097) 12,650
 (860)Land use rights50 years10.2 (1.6)11.4 (1.6)
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 assets14 years524.8 (143.8)519.5 (118.0)
Indefinite-lived intangible assets:        Indefinite-lived intangible assets:
Trademarks and trade names $108,165
 —
 $35,633
 —
Trademarks and trade names (2)
Trademarks and trade names (2)
154.5 — 154.6 — 
Total intangible assets $390,676
 $(91,798) $181,942
 $(88,499)Total intangible assets$679.3 $(143.8)$674.1 $(118.0)
_______________
(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.
(2)Accumulated indefinite-lived intangible assets impairment loss was $16.0 at both September 30, 2022 and December 31, 2021.
Amortization expense for intangible assets subject to amortization was $3,240$10.6 and $2,912$10.1 for the three months ended September 30, 20172022 and 2016,2021, respectively, and $9,301$32.4 and $9,156$28.5 for the nine months ended September 30, 20172022 and 2016,2021, 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, 
2017$15,700
201824,400
201924,100
202022,200
202116,100
For the Year Ending December 31,
2022$43.2 
202342.9 
202441.7 
202540.8 
202640.2 
Government Grants
During the fourth quarter of 2021, we were selected by the U.S. Department of Energy (“DOE”) for funding of up to $5.0 million to engineer and build our Cryogenic Carbon CaptureTM system for a cement plant. During the project’s duration, the DOE shall reimburse us in cash for approved expenses we incur. This project began on February 1, 2022, at which point expenses incurred may be submitted for reimbursement. The Companyagreement will be effective until April 30, 2025. We have not yet received $407 inany funding for this grant.
We received certain 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).
Government grants at September 30, 2017 and December 31, 2016 are as follows:
18
 September 30,
2017		 December 31,
2016
Current$481
 $446
Long-term8,378
 8,153
Total government grants$8,859
 $8,599

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China Government Grants are presented in our unaudited condensed consolidated balance sheets as follows:
September 30,
2022		December 31,
2021
Current$0.5 $0.5 
Long-term6.1 7.0 
Total China Government Grants$6.6 $7.5 
We also received government grants from certain local jurisdictions within the United States, which are recorded in other assets in the condensed consolidated balance sheets and were not significant for the periods presented.
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NOTE 7 — Investments
Equity Method Investments
The following table represents the activity in equity method investments:
Equity Method Investments(1) (2) (3)
Balance at December 31, 2021$99.6 
New investments0.5 
Reclassification due to acquisition of investee (4)
(0.8)
Realized gain on equity method investment (4)
0.3 
Equity in loss of unconsolidated affiliates(0.3)
Foreign currency translation adjustments and other(7.6)
Balance at September 30, 2022$91.7 
_______________
(1)Cryomotive: Our equity method investment in Cryomotive GmbH (“Cryomotive”) was $4.9 and $7.1 at September 30, 2022 and December 31, 2021, respectively. Equity in loss of unconsolidated affiliates, net of this investment was $0.4 and $0.3 for the three months ended September 30, 2022 and 2021, respectively, and $1.3 and $0.3 for the nine months ended September 30, 2022 and 2021, respectively, and is classified in equity in (loss) earnings of unconsolidated affiliates, net in the condensed consolidated statements of income for the three and nine months ended September 30, 2022 and in selling, general and administrative expenses for the three and nine months ended September 30, 2021.
(2)HTEC: Our equity method investment in HTEC Hydrogen Technology & Energy Corporation (“HTEC”) was $79.6 and $86.4 at September 30, 2022 and December 31, 2021, respectively. The decrease in value for the nine months ended September 30, 2022 was driven by foreign currency translation. We recognized $0.2 in equity in earnings of unconsolidated affiliates, net of this investment for the three months ended September 30, 2022 and $0.3 in equity in loss of unconsolidated affiliates, net for the nine months ended September 30, 2022.
(3)Hudson Products: Also included in our equity method investments is a 50% ownership interest in a joint venture with Hudson Products de Mexico S.A. de CV which totaled $4.0 and $3.3 at September 30, 2022 and December 31, 2021, respectively. 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. We recognized equity in earnings of unconsolidated affiliates, net of this investment of $0.3 and $0.1 for the three months ended September 30, 2022 and 2021, respectively, and $0.9 and $0.2 for the nine months ended September 30, 2022 and 2021, respectively.
Liberty LNG: Additionally, we have a 25% ownership interest in Liberty LNG, which totaled $2.8 and $2.4 at September 30, 2022 and December 31, 2021, respectively. We recognized equity in earnings of unconsolidated affiliates, net of this investment of $0.2 and $0.1 for the three months ended September 30, 2022 and 2021, respectively, and $0.4 and $0.2 for the nine months ended September 30, 2022 and 2021, respectively.
We have another immaterial investment in an unconsolidated affiliate of $0.4 for all periods presented.
(4)AdEdge India: In connection with our acquisition of AdEdge Holdings, LLC (“AdEdge”), we recorded a 50% ownership interest in a joint venture in AdEdge India at a fair value of $0.5. On May 4, 2022, we completed the acquisition of the remaining 50% of the shares of our joint venture in AdEdge India. On the acquisition date, we recognized a gain of $0.3 from the remeasurement of our initial 50% of the shares in the joint venture, which is classified as realized gain on equity method investment in the condensed consolidated statements of income for the three and nine months ended September 30, 2022. See Note 10, “Business Combinations” for further information regarding the AdEdge India acquisition.
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Investments in Equity Securities
The following table summarizes the components of our investments in equity securities:
Investment in Equity Securities,
Level 1 (1)
Investment in Equity Securities,
Level 2 (1)
Investments in Equity Securities, All Others (2)
Investments Total
Balance at December 31, 2021$31.3 $6.2 $40.3 $77.8 
New investments (3)
— — 4.4 4.4 
Change in fair value of investments in equity securities(16.1)5.2 — (10.9)
Foreign currency translation adjustments and other(3.4)— (1.0)(4.4)
Balance at September 30, 2022$11.8 $11.4 $43.7 $66.9 
_______________
(1)McPhy: Investment in equity securities Level 1 includes our investment in McPhy (Euronext Paris: MCPHY - ISIN; FR001742329). McPhy’s common stock trades on the Euronext Paris stock exchange and therefore we measure our investment in McPhy using Level 1 fair value inputs. The fair value of our investment in McPhy was $11.8 and $31.3 at September 30, 2022 and December 31, 2021, respectively. We recognized an unrealized loss in our investment in McPhy of $4.1 and $6.0 for the three months ended September 30, 2022 and 2021, respectively, and an unrealized loss of $16.1 and $25.8 for the nine months ended September 30, 2022 and 2021, respectively.
Stabilis: Investment in equity securities Level 2 includes our investment in Stabilis Energy, Inc. (NasdaqCM: SLNG) (“Stabilis”). Stabilis represents an instrument with quoted prices that trades less frequently than certain of our other exchange-traded instruments and therefore we measure our investment in Stabilis using Level 2 fair value inputs. The fair value of our investment in Stabilis was $11.4 and $6.2 at September 30, 2022 and December 31, 2021, respectively. We recognized an unrealized gain of $5.4 and an unrealized loss of $4.3 for the three months ended September 30, 2022 and 2021, respectively, and an unrealized gain of $5.2 and $6.3 for the nine months ended September 30, 2022 and 2021, respectively, in our investment in Stabilis.
(2)Transform: The fair value of our investment in Transform Materials LLC (“Transform Materials”) was $25.1 at both September 30, 2022 and December 31, 2021.
Svante: The fair value of our investment in Svante Inc. (“Svante”) was $15.1 at both September 30, 2022 and December 31, 2021.
(3)Hy24 (f/k/a FiveT Hydrogen Fund and Clean H2 Infra Fund): During the first quarter of 2022, we completed an investment in Hy24. Our investment in Hy24 is measured at fair value using the net asset value (“NAV”) per share practical expedient and is not classified in the fair value hierarchy. The fair value of our investment in the Hy24 was euro 1.5 million (equivalent to $1.5) at September 30, 2022. See “Hy24 (f/k/a FiveT Hydrogen Fund and Clean H2 Infra Fund)” below for further information.
Cemvita Factory Inc., Gold Hydrogen LLC: During the first quarter of 2022, we completed an investment in Gold Hydrogen LLC (“Gold Hydrogen”) in the amount of $1.0. During the third quarter of 2022, we invested an additional $1.0 in Gold Hydrogen. This investment is 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 and is included in the investments in equity securities, all others category in the table above. As of September 30, 2022, the value of the investment was $2.0. Gold Hydrogen is a subsidiary company established by Cemvita Factory, Inc. focused on commercializing viable technologies for the subsurface production of biohydrogen.
Our investments in Transform Materials, Svante and Gold Hydrogen represent equity instruments without a readily determinable fair value.
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Co-Investment Agreement
On September 7, 2021, we entered into a Co-Investment Agreement with I Squared Capital (“ISQ”), an infrastructure-focused private equity firm (the “Co-Investment Agreement”), pursuant to which Chart and ISQ have agreed to the following:
•In the following circumstances, ISQ shall have the right but not the obligation to require Chart to purchase all (and not less than all) of the shares of HTEC common stock acquired as part of ISQ’s investment described above (the “Put Option”):
i.the third anniversary of the Closing Date,
ii.the date Chart undergoes a change of control (subject to certain exceptions),
iii.the date upon which Chart, during the period from the Closing Date through the third anniversary of the Closing Date, has made certain distributions to its shareholders (including cash or other dividends, or via a spin-off transaction), in excess of $900.0,
iv.the date, if any, upon which our leverage ratio exceeds certain thresholds and
v.the date, if any, of a bankruptcy event (including certain insolvency-related actions) involving Chart.
•In the event that ISQ exercises its Put Option, we shall pay to ISQ an amount in cash in exchange for the HTEC common stock then held by ISQ such that ISQ shall realize the greater of (i) an internal rate of return of 10% and (ii) a multiple on ISQ’s invested capital of 1.65x.
•Conversely, at any time after the third anniversary of the Closing Date, we shall have the right to purchase from ISQ up to 20% of the shares of HTEC common stock acquired as part of the ISQ Investment. In exchange for the common stock, we shall pay ISQ the greater of (i) an internal rate of return of 12.5% and (ii) a multiple on ISQ’s invested capital of 1.65x.
•In addition, we shall have (i) a right of first offer: if ISQ desires to transfer any of its HTEC common stock to any third party, we shall have the right to first offer provided that upon notice, we shall have the option to make a first offer to purchase the offered interest in cash exclusively and (ii) a right of first refusal: if ISQ desires to sell its HTEC common stock to any third party pursuant to a definitive agreement therewith, we shall have the right of first refusal provided that the purchase consideration paid by Chart to ISQ upon our exercise of such right of first refusal must be equal to 102% of the purchase consideration agreed to be paid by such third party.
•The Co-Investment Agreement shall terminate automatically upon the consummation of an initial public offering by HTEC of its common stock.
Accounting Treatment of Put and Call Options
We record the Put and Call Options (together “the Options”) at fair value and record any change in fair value through earnings at each reporting period. The fair value of the Options was not material on September 30, 2022.
Hy24 (f/k/a FiveT Hydrogen Fund and Clean H2 Infra Fund)
As previously announced on April 5, 2021, we were admitted as an anchor investor in Hy24 (the “Hydrogen Fund”). Hy24 is a joint venture between Ardian, Europe’s largest private investment house with managed assets of c. $114 billion, and FiveT Hydrogen, a new investment manager specialized purely on clean hydrogen investments. As discussed in the “Investments in Equity Securities” section above, our investment to date is euro 1.5 million, making our unfunded commitment euro 48.5 million.
The fund manager of the Hydrogen Fund (the “Management Company”) has established a Limited Partners Advisory Committee (the “LPAC”), which met for the first time in January 2022, to consult with and help advise the Management Company with respect to certain key decisions governing the fund that the Management Company shall make. The LPAC is expected be comprised by up to fifteen (15) members, the majority of whom shall be chosen by certain industrial investors and who shall be (i) representatives of the anchor investors and (ii) subject to any remaining available seats, representatives of the non-anchor investors selected by the Management Company.
Class A1 Shares, which we hold, are entitled to the return of any associated paid-up capital contributions (excluding any subscription premium or default interest, if any), the Preferred Return calculated thereon as described below, and their share of the Hydrogen Fund’s capital gain beyond the Preferred Return in accordance with the order of distributions set forth in the by-laws of the Hydrogen Fund (in each case to the extent of available funds). The “Preferred Return” equals an annual interest rate of seven percent (7%) if fifteen percent (15%) of the Hydrogen Fund’s aggregate capital commitments from all investors is invested in strategic investments; provided, however, that such seven percent (7%) interest rate shall be reduced in a linear
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fashion to six and one-half percent (6.5%) if twenty percent (20%) of the Hydrogen Fund’s aggregate capital commitments from all investors is invested in strategic investments. In October 2022, the Management Company closed the Hydrogen Fund at euro 2.0 billion of capital commitments, exceeding initial ambitions.
The Hydrogen Fund shall determine the net asset value of each class of its shares at the end of each quarter (including the Class A1 Shares that we hold), which will be used to record the fair value of our investment.
The Hydrogen Fund will have a term of twelve (12) years, commencing from December 16th, 2021, subject to certain potential extensions. Investors cannot request the redemption of their shares by the Hydrogen Fund at any time prior to the final liquidation of the fund. Capital calls will be made by the Management Company in accordance with investment opportunities and the financing needs of the Hydrogen Fund’s activities.
The Management Company is required to send capital call requests to investors at least ten (10) business days prior to their deadline for payment. In the event that, following any capital call made by the Management Company, an investor of the Hydrogen Fund does not timely fund all or any portion of its capital commitment required thereby, such investor will be charged interest thereon equal to the Preferred Return plus one-half percent (0.5%), and shall not be entitled to receive distributions from the Hydrogen Fund until it is no longer delinquent.
NOTE 8 — 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
 September 30,
2022		December 31,
2021
Senior secured revolving credit facility due October 2026 (1) (2)
$580.8 $600.8 
Convertible notes due November 2024:
Principal amount258.8 258.8 
Unamortized debt issuance costs(2.1)(2.9)
Convertible notes due November 2024, net of unamortized debt issuance costs256.7 255.9 
Total debt, net of unamortized debt issuance costs837.5 856.7 
Less: current maturities (3)
256.7 255.9 
Long-term debt$580.8 $600.8 
_______________
(1)Current maturities includes $238,142 current convertible notesAs of September 30, 2022, there were $580.8 in borrowings outstanding under the senior secured revolving credit facility due October 2026 bearing an interest rate of 3.1% (2.1% as of December 31, 2021) and $75.1 in letters of credit and bank guarantees outstanding supported by the senior secured revolving credit facility due 2026. As of September 30, 2022, the senior secured revolving credit facility due 2026 had availability of $344.1.
(2)A portion of borrowings outstanding under our senior secured revolving credit facility due 2026 are denominated in euros (“EUR Revolver Borrowings”). EUR Revolver Borrowings outstanding were euro 88.0 million (equivalent to $85.8) at September 30, 2017.
Convertible Notes
The outstanding aggregate principal amount2022 and euro 78.0 million (equivalent to $88.3) at December 31, 2021. During the three months ended September 30, 2022 and 2021, we recognized an unrealized foreign currency gain of $5.7 and $2.4, respectively, and for the nine months ended September 30, 2022 and 2021 we recognized an unrealized foreign currency gain of $12.3 and $5.4 relative to the translation of the Company’s 2.0% Convertible EUR Revolver Borrowings outstanding. This unrealized foreign currency gain is classified within foreign currency (gain) loss in the condensed consolidated statements of income for all periods presented.
(3)Our convertible notes due November 2024, net of unamortized debt issuance costs, are included in current maturities for both periods presented.
Senior Subordinated Notes due August 1, 2018 (the “Convertible Notes”) is $250,000. The Convertible Notes bear interest at a fixed rate of 2.0% per year, payable semiannually in arrears on February 1 and August 1 of each year, and will mature on August 1, 2018. The effective interest rate at issuance was 7.9%.Secured Revolving Credit Facility
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 CompanyOn October 18, 2021 we entered into privately-negotiated convertible note hedgethe Fifth Amended and capped call transactions with affiliates of certain of the underwritersRestated Credit Agreement, which provides for a Senior Secured Revolving Credit Facility (the “Option Counterparties”“SSRCF”). 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 exercisable as of the issuance date of the Convertible Notes. The cap price 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.

SSRCF matures on October 19, 2026.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(Dollars and shares in thousands,millions, except per share amounts) – Continued



Upon issuance


•The SSRCF has a borrowing capacity of the Convertible Notes, the Company bifurcated the $250,000 principal balance$1,000.0 and includes a $100.0 sub limit for letters of the Convertible Notes intocredit, a liability component$250.0 sub limit for discretionary letters of $170,885, which was recorded as long-term debt,credit 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$100.0 sub-limit 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, 2017 and December 31, 2016, the carrying amount of the liability component was $238,142 (less debt issuance costs of $592) and $228,115 (less debt issuance costs of $1,125), respectively, and the unamortized debt discount of the Convertible Notes was $11,858 and $21,885, respectively.swingline loans.
For 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 $3,150 of non-cash interest accretion expense related•We may, subject to the carrying amountsatisfaction of the Convertible Notes, respectively, and $1,250 of cash interest 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 expense associated with the amortization 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 May 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 acertain conditions, request by a holder of Convertible Notes as providedincreases 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 therevolving credit facility commitments in an aggregate principal amount of the Convertible Notesup to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock,$500.0 or a combinationlesser amount in integral multiples of cash$25.0 to the extent existing or new lenders agree to provide such increased or additional commitments, as applicable.
•The SSRCF bears interest at a base rate plus an applicable margin determined on a leveraged-based scale which (before giving effect to the sustainability pricing adjustments described below) ranges from 25 to 125 basis points for base rate loans and shares125 to 225 basis points for LIBOR loans.
•The applicable margin described above is subject to further adjustments based on the reductions in the ratio between (i) the total greenhouse gas emissions, measured in metric tons CO2e, 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 ofChart and its subsidiaries during such calendar year and (ii) the aggregate principal amountrevenue, measured in U.S. Dollars, of the Convertible Notes being converted. It is the Company’s intentionChart and its subsidiaries during such calendar year. These additional pricing adjustments range from an addition of 0.05% to settle any excess conversion valuea reduction of 0.025% 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 respectmargin described above.
•We are required to the Company’s common stock.
The Company reassesses the convertibility of the Convertible Notes and the related balance sheet classificationpay commitment fees 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.

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Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

Senior Secured Revolving Credit Facility
The Company has 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 $100,000any unused commitments under the SSRCF which, can be used for foreign currency denominated lettersbefore giving effect to the sustainability fee adjustments (as described below), is determined on a leverage-based sliding scale ranging from 20 to 35 basis points.
•The commitment fees described above are also subject to sustainability fee adjustments based on the aforementioned ratio. The sustainability fee adjustments range from an addition of credit0.01% to a reduction of 0.01%.
•Interest and borrowings infees are payable on 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”). 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.
The Company recorded $2,869 in deferred debt issuance costs associated with the SSRCF which are being amortized over the five-year term of the SSRCF. This balance 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.
Revolving loans under the SSRCF bear interest,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 SSRCF include a minimum liquidity requirement equal tofinancial maintenance covenants that, as of the principallast day of any fiscal quarter ending on and after September 30, 2021, (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. 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.level. The SSRCF containsincludes 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 was2022, we were in compliance with all covenants.
AsThe SSRCF also contains customary events of September 30, 2017, there were $300,000 in borrowings outstanding underdefault. If such an event of default occurs, the 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 SSRCF (“SSRCF Debt”), bearing interest at 4.00%. 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 SSRCF areis guaranteed by the CompanyChart and substantially all of its U.S. subsidiaries, and secured by substantially all of the assets of the CompanyChart and its U.S. subsidiaries and 65% of the capital stock of the Company’sour material non-U.S. subsidiaries (as defined by the SSRCF)Fifth Amended and Restated Credit Agreement) that are owned by U.S. subsidiaries.

We recorded $9.1 in deferred debt issuance costs related to the SSRCF, which includes $6.1 in unamortized debt issuance costs from previous credit facilities. Deferred debt issuance costs related to the SSRCF are presented in other assets in the condensed consolidated balance sheets and are being amortized over the five-year term of the SSRCF. At September 30, 2022 and December 31, 2021, unamortized debt issuance costs associated with the SSRCF were $7.4 and $8.7, respectively.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(Dollars and shares in thousands,millions, except per share amounts) – Continued



Foreign


The following table summarizes interest expense and financing costs amortization related to the 2026 Credit Facilities – Chinaand our previous senior secured revolving credit facility and term loan due June 2024:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Interest expense, senior secured revolving credit facility due October 2026$6.4 $— $14.7 $— 
Interest expense, term loan due June 2024— 1.3 — 2.4 
Interest expense, senior secured revolving credit facility due June 2024— 1.6 — 3.6 
Total interest expense$6.4 $2.9 $14.7 $6.0 
Financing costs amortization, senior secured revolving credit facility due October 2026$0.5 $— $1.4 $— 
Financing costs amortization, senior secured revolving credit facility and term loan due June 2024— 1.0 — 2.8 
Total financing costs amortization$0.5 $1.0 $1.4 $2.8 
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”), a joint ventureare 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.
A conversion of the Company, maintain joint banking facilities (the “China Facilities”)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 facilityconversion 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 the 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 50.0 million Chinese yuan (equivalent to $7,534)such a corporate event in borrowing capacity which can be utilized for either revolving loans, bonds/guarantees, or bank draft acceptances. Any borrowings made by CCESC, CCDEC or Chengducertain 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 China Facilities are guaranteed2024 Notes will have a dilutive effect with respect to our common stock. Since our closing common stock price of $184.35 at the end of the period exceeded the conversion price of $58.725, the if-converted value exceeded the principal amount of the 2024 Notes by the Company. Atapproximately $553.5 at September 30, 2022. As described below, we entered into convertible 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
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2022
(Dollars and shares in millions, except per share amounts) – Continued





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 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 scheduled trading day immediately preceding November 15, 2024, holders may convert their 2024 Notes at the option of the holder regardless of the foregoing circumstances.
As of October 1, 2022, the 2024 Notes continue to be convertible at the option of the shareholders. This conversion right, which will remain available until December 31, 2022, 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 September 30, 2022. Since the holders of the 2024 Notes could potentially convert their 2024 Notes at their option during the three month period subsequent to September 30, 2022, the $258.8 principal amount of the 2024 Notes was classified as a current liability in the unaudited condensed consolidated balance sheet at September 30, 2022. As of December 31, 2021, 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.
The following table summarizes 1.0% contractual interest coupon and financing costs amortization associated with the 2024 Notes:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
2024 Notes, 1.0% contractual interest coupon$0.6 $0.6 $1.9 $1.9 
2024 Notes, financing costs amortization (1)
$0.2 $0.2 $0.7 $0.7 
_______________
(1)We amortize debt issuance costs of $6.8 over the term of the 2024 Notes using the effective interest method.
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 parties, 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 were recorded as a reduction to additional paid-in capital in the December 31, 2017 consolidated balance sheet.
We also entered into separate, privately negotiated warrant transactions (the “Warrant Transactions”) with the Option Counterparties to acquire up to 4.41 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 additional paid-in capital in the December 31, 2017 consolidated balance sheet. The strike 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 dilutive effect to our stockholders to the extent that the market price per share of our common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants.
The Note Hedge Transactions and Warrant Transactions effectively increased the conversion price of the 2024 Notes. The net cost of the Note Hedge Transactions and Warrant Transactions was approximately $13.5.
Foreign Facilities
In various markets where we do business, we have local credit facilities to meet local working capital demands, fund letters of credit and 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 USD equivalent $88.9 under certain of our foreign facilities. As of September 30, 2022 and December 31, 2021 there were no borrowings outstanding under these facilities.
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Notes to 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. AtUnaudited Condensed Consolidated Financial Statements – 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 terms2022
(Dollars and shares in millions, except per share amounts) – Continued





Certain 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 $13,052) 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 $8,532) 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 $5,680) and two secured credit facilities with capacity of up to 5.6 million euros (equivalent to $6,585). All threeour 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 $39.1 and $31.2 as of September 30, 2017.2022 and December 31, 2021, respectively.
Letters of Credit
Chart Energy & Chemicals, Inc. (“Chart E&C”),L.A. Turbine, a wholly-owned subsidiary of the Company, has $6,442had $0.0 and $0.2 in deposits in a bank outside of the SSRCF to secure letters of credit.credit as of September 30, 2022 and December 31, 2021, respectively. The deposits are treated as restricted cash and restricted cash equivalents in the unaudited condensed consolidated balance sheets ($5,445sheet at December 31, 2021.
Derivatives and Hedging
We utilize a combination of cross-currency swaps and foreign exchange collars (together the “Foreign Exchange Contracts”) as a net investment hedge of a portion of our investments in other current assetscertain international subsidiaries that use the euro as their functional currency in order to reduce the volatility caused by changes in exchange rates. On April 1, 2022 we entered into a pay-fixed rate, receive-fixed rate cross-currency swap that provided for an exchange of principal on a notional amount of $110.2 swapped to euro 100.0 million on its March 31, 2025 maturity and $997receipt of U.S. dollar interest from our swap counterparties at a fixed rate of 1.8% per annum. We terminated this cross-currency swap on June 7, 2022, and a total settlement of $3.6 cash was received from the counterparties. The settlement amount, which represents the fair value of the contract at the time of termination, was recorded as a reduction in other assets during the second quarter of 2022 and remains classified in accumulated other comprehensive loss on the condensed consolidated balance sheet.
On June 7, 2022, immediately following the termination of the aforementioned cross-currency swap, we entered into a pay-fixed rate, receive-fixed rate cross-currency swap that provides for an exchange of principal on a notional amount of $106.7 swapped to euro 100.0 million on its May 31, 2025 maturity and receipt of U.S. dollar interest from our swap counterparties at a fixed rate of 1.6% per annum. We terminated this cross-currency swap on July 8, 2022, and a total settlement of $4.0 cash was received from the counterparties. The settlement amount, which represents the fair value of the contract at the time of termination, was recorded as a reduction in other assets during the third quarter of 2022 and remains classified in accumulated other comprehensive loss on the condensed consolidated balance sheet.
On July 8, 2022, immediately following the termination of the aforementioned cross-currency swap, we entered into a pay-fixed rate, receive-fixed rate cross-currency swap that provides for an exchange of principal on a notional amount of $101.6 swapped to euro 100.0 million on its June 30, 2025 maturity and receipt of U.S. dollar interest from our swap counterparties at a fixed rate of 1.8% per annum. We terminated this cross-currency swap on September 16, 2022, and a total settlement of $1.8 cash was received from the counterparties. The settlement amount, which represents the fair value of the contract at the time of termination, was recorded as a reduction in other assets during the third quarter of 2022 and remains classified in accumulated other comprehensive loss on the condensed consolidated balance sheet.
On September 16, 2022, immediately following the termination of the aforementioned cross-currency swap, we entered into a pay-fixed rate, receive-fixed rate cross-currency swap that provides for an exchange of principal on a notional amount of $99.8 swapped to euro 100.0 million on its June 30, 2025 maturity and receipt of U.S. dollar interest from our swap counterparties at a fixed rate of 1.6% per annum (the “September 16 Swap”). Concurrent to entering into the September 16 Swap, we also entered into a separate zero cost foreign exchange collar contract (the “Collar Contract”) with the same counterparties, notional amount and expiration date as the September 16 Swap. Under the Collar Contract, we sold a put option with a lower strike price and purchased a call option with an upper strike price to manage final settlement of the September 16 Swap.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2017).2022
(Dollars and shares in millions, except per share amounts) – Continued





Our Foreign Exchange Contracts are measured at fair value with changes in fair value recorded as foreign currency translation adjustments within accumulated other comprehensive loss. Our Foreign Exchange Contracts are entered into with major financial institutions in order to reduce credit risk and risk of nonperformance by third parties. We believe the credit risks with respect to the counterparties, and the foreign currency risks that would not be hedged if the counterparties fail to fulfill their obligations under the contract, are not material in view of our understanding of the financial strength of the counterparties. The Foreign Exchange Contracts are not exchange traded instruments and their fair value is determined using the cash flows of the contracts, discount rates to account for the passage of time, implied volatility, current foreign exchange market data and credit risk, which are all based on inputs readily available in public markets and categorized as Level 2 fair value hierarchy measurements.
The following table represents the fair value of asset and liability derivatives and their respective locations on our condensed consolidated balance sheet as of September 30, 2022:
Asset DerivativesLiability Derivatives
Derivatives designated as net investment hedgeBalance Sheet LocationFair ValueBalance Sheet LocationFair Value
Foreign Exchange Contracts (1)
Other assets$— Other long-term liabilities$0.5 
The following table represents the net effect derivative instruments designated in hedging relationships had on accumulated other comprehensive loss on the condensed consolidated statements of income and comprehensive income:
Unrealized gain recognized in accumulated other comprehensive loss on derivatives, net of taxes
Three Months Ended September 30,Nine Months Ended September 30,
Derivatives designated as net investment hedge20222022
Foreign Exchange Contracts (1) (2)
$2.9 $6.7 
_______________
(1)Our designated derivative instruments are highly effective. As such, there were no gains or losses recognized immediately in income related to hedge ineffectiveness during the three and nine months ended September 30, 2022.
(2)Represents foreign exchange swaps and foreign exchange options.
The following table represents interest income, included within interest expense, net on the condensed consolidated statements of income related to amounts excluded from the assessment of hedge effectiveness for derivative instruments designated as net investment hedges:
Amount of gain recognized in income on derivative (amount excluded from effectiveness testing)
Three Months Ended September 30,Nine Months Ended September 30,
Derivatives designated as net investment hedge20222022
Foreign Exchange Contracts (1) (2)
$0.4 $0.9 
_______________
(1)Represents amount excluded from effectiveness testing. Our Foreign Exchange Contracts are designated with terms based on the spot rate of the euro. Future changes in the components related to the spot change on the notional will be recorded in other comprehensive income and remain there until the hedged subsidiaries are substantially liquidated. All coupon payments are classified in interest expense, net in the condensed consolidated statements of income, and the initial value of excluded components currently recorded in accumulated other comprehensive loss as a foreign currency translation adjustment are amortized to interest expense, net over the remaining term of the Foreign Exchange Contract.
(2)Represents foreign exchange swaps and foreign exchange options.
Fair Value Disclosures
The fair value of the Convertible2024 Notes was approximately 99% of their par value316% and approximately 96%276% of their par value as of September 30, 20172022 and December 31, 2016,2021, 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.
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

inputs.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(Dollars and shares in thousands,millions, 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 69 — 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, 2021$10.5 
Issued – warranty expense2.4 
Warranty usage(6.1)
Balance at September 30, 2022$6.8 
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 710 — Business Combinations
HudsonFronti Fabrications, Inc. Acquisition
On September 20, 2017, the Company and Chart Sully Corporation, a wholly owned subsidiaryMay 31, 2022, we acquired 100% of the Companyequity interests of Fronti Fabrications, Inc. (“Merger Sub”Fronti”), completed for approximately $20.6 in cash (subject to certain customary adjustments) or $20.4 net of $0.2 cash acquired. Fronti is a specialist in engineering, machining and welding for the previously announcedcryogenic and gas industries, and also supplies new build pressure vessels and cold boxes, and performs repairs with certification to American Society of Mechanical Engineers (ASME) code. The preliminary estimated fair value of the total net assets acquired include goodwill, identifiable intangible assets and other net assets at the date of acquisition in the amounts of Hudson pursuant$14.2, $5.3 and $1.1, respectively.
CSC Cryogenic Service Center AB Acquisition
On May 16, 2022, we acquired 100% of the equity interests of CSC Cryogenic Service Center AB (“CSC”) for approximately $3.8 in cash (subject to certain customary adjustments). CSC brings a strong service footprint in the Nordic region with many overlapping customers to Chart, allowing us to broaden our service and repair presence geographically. Additional information related to the termsCSC acquisition has not been presented because the impact on our condensed consolidated statements of income and condensed consolidated balance sheets is not significant.
Earthly Labs Inc. Acquisition
On December 14, 2021, we acquired the Agreement and Planremaining 85% of Merger, as amended (the “Merger Agreement”), by and between Chart, Merger Sub, Hudson and R/C Hudson Holdings, L.P., solelyEarthly Labs, Inc. (“Earthly Labs).” We previously held a 15% equity investment in its capacity as the Initial Holder Representative under the Merger Agreement.Earthly Labs. The acquisition was accomplished bycompleted for cash and stock for a previously disclosed estimated preliminary purchase price of $63.1. During the mergerfirst quarter of Merger Sub with and into Hudson, with Hudson surviving2022, we decreased the merger as a wholly owned subsidiaryvalue of the Company (the “Acquisition”). stock consideration by $1.2 to reflect the December 13, 2021 closing price of Chart common stock of $160.63 per share, which lowered the preliminary estimated purchase price to $61.9 or $58.4 net of $3.5 cash acquired. In connection with the Earthly Labs acquisition, Chart shall pay to the sellers a royalty on sales of a carbon capture unit for residential use launched for sale to the public by Chart, which has not yet been developed. Refer to the “Contingent Consideration” section below for further discussion. Earthly Labs is a leading provider of small-scale carbon capture systems offering an affordable, small footprint technology platform called “CiCi ®” to capture, recycle, reuse, track and sell CO2. Earthly Labs proprietary approach includes hardware, software and services to address half of all existing carbon dioxide emissions from industrial sources while converting molecules to value.
The preliminary estimated fair value of the total net assets acquired include goodwill, identifiable intangible assets and other net liabilities at the date of acquisition in the amounts of $32.2, $42.9 and $5.1, respectively (as previously reported: $47.2, $27.0 and $11.1, respectively). Amounts previously reported were preliminary and based on provisional fair values. During the first nine months of 2022, we received and analyzed new information about certain assets acquired and subsequently adjusted their fair values accordingly. Intangible assets consists of unpatented technology, trade names, customer relationships and backlog.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2022
(Dollars and shares in millions, except per share amounts) – Continued





AdEdge Acquisition purchase price was $419,394,
On August 27, 2021, we acquired 100% of the equity interests of AdEdge for $37.5 in cash, net of $1.4 of cash acquired including an estimatedand a net working capital settlement of $0.8 finalized during the first quarter of 2022. AdEdge is a water treatment technology and solution provider specializing in the design, development, fabrication and supply of water treatment solutions, specialty medias, legacy and innovative technologies that remove a wide range of contaminants from water. The fair value of the total net assets acquired include goodwill, identifiable intangible assets and other net assets at the date of acquisition in the amounts of $16.4, $19.0 and $3.5, respectively. During the first nine months of 2022, we increased goodwill by $0.5, which mainly included the $0.8 final net working capital adjustment amountmentioned above, a retention bonus adjustment and an adjustment to the trade name. During the third quarter of $5,894,2022 the AdEdge purchase price allocation was finalized.
As discussed in Note 7, “Investments,” we previously held a 50% ownership interest in a joint venture in AdEdge India. On May 4, 2022, we acquired the remaining 50% of the shares for $0.4 in cash (subject to certain customary adjustments) or $0.3 net of $0.1 cash acquired. AdEdge India focuses on water and $3,500 in acquisition-related tax benefits acquired, as definedwastewater treatment and surface water bodies rejuvenation in the Merger Agreement. South Asian markets.
L.A. Turbine Acquisition
On July 1, 2021, we acquired 100% of the equity interests of L.A. Turbine (“LAT”) for approximately $76.6 in cash (subject to certain customary adjustments), net of $1.4 of cash acquired. LAT is a global leader in turboexpander design, engineering, manufacturing, assembly and testing process for new and aftermarket equipment, with significant in-house engineering expertise.
The total purchase price is subjectestimated useful lives of identifiable finite-lived intangible assets range from less than one year to further adjustments. Approximately $300,00015 years. The excess of the purchase price over the fair values is assigned to goodwill. LAT complements our Heat Transfer Systems and Specialty Products segments with the addition of its application-specific, highly engineered turboexpanders which further differentiates Chart’s end market diversity especially in hydrogen and helium liquefaction in addition to industrial gas, natural gas processing, power generation and petrochemical applications. Goodwill was funded through borrowings underestablished due to the Company’s senior secured revolving credit facility,benefits outlined above, as well as the benefits derived from the synergies of LAT integrating with our Heat Transfer Systems, Specialty Products and Repair, Service & Leasing segments. Goodwill recorded for the remainderLAT acquisition is not expected to be deductible for tax purposes. During the third quarter of 2022 the LAT purchase price allocation was finalized.
The following table summarizes the fair value of the assets acquired in the LAT acquisition at the acquisition date:
Net assets acquired:
Identifiable intangible assets$43.7 
Goodwill (1)
42.3 
Other assets (1)
4.2 
Property, plant and equipment2.6 
Cash and cash equivalents1.4 
Liabilities(16.2)
Net assets acquired$78.0 
_______________
(1)As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2021, we reported goodwill, other assets and liabilities of $42.1, $4.6 and $16.4, respectively. During the first nine months of 2022, we recorded purchase price was funded with cash on hand.adjustments that increased goodwill by $0.2, decreased other assets by $0.4 and decreased liabilities by $0.2.
Hudson, which has operations
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2022
(Dollars and shares in millions, except per share amounts) – Continued





Information regarding identifiable intangible assets acquired in the United States, ChinaLAT acquisition is presented below:
Weighted-average Estimated Useful LifeFair Value
Finite-lived intangible assets acquired:
Unpatented technology14.5 years$33.4 
Customer relationships14.5 years1.5 
Backlog2.5 years0.7 
Other identifiable intangible assets (1)
3.4 years0.2 
Total finite-lived intangible assets acquired14.2 years35.8 
Indefinite-lived intangible assets acquired:
Trademarks and trade names7.9 
Total intangible assets acquired$43.7 
_______________
(1)Other identifiable intangible assets is included in “Patents and Italyother” in Note 6, “Goodwill and a joint ventureIntangible Assets.”
Cryogenic Gas Technologies, Inc. Acquisition
On February 16, 2021, we acquired 100% of the equity interests of Cryogenic Gas Technologies, Inc. (“Cryo Technologies”) for approximately $55.0 in Mexico, designs, manufactures, sells and services products used in refining, heating, ventilation and air conditioning (HVAC)cash (subject to certain customary adjustments), petrochemical, natural gas, power generation, industrial and commercial end markets.  Hudsonnet of $0.6 cash acquired. Cryo Technologies is a North American leader in air-cooled heat exchangers and a global leader in axial flow cooling fans. Hudson’s resultscustom engineered process systems to separate, purify, refrigerate, liquefy and distribute high value industrial gases such as hydrogen, helium, argon and hydrocarbons with design capabilities for cold boxes for hydrogen and helium use. The distribution systems Cryo Technologies supplies are located within the helium and hydrogen liquefaction facilities and are inclusive of operations are includedtrailer loading systems, which facilitates the first step in product distribution. The fair value of the Company’s Energy & Chemicals (“E&C”) segment sincetotal net assets acquired include goodwill, identifiable intangible assets and other net assets at the date of acquisition was $34.9, $19.5 and $1.2, respectively. Intangible assets consists of customer relationships, unpatented technology, trademarks and trade names, backlog and non-compete agreements. During the acquisition.first quarter of 2022 the Cryo Technologies purchase price allocation was finalized.
Preliminary Purchase Price Allocations:
The Companypurchase price allocations of Fronti Fabrications, CSC Cryogenic Service Center and Earthly Labs (the “acquisitions”) are preliminary and are based on provisional fair values and subject to revision as we finalize third-party valuations and other analyses. Final determination of the fair values may result in further adjustments to the value of net assets acquired.
As defined in Note 2, “Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2021, we preliminarily allocated the acquisition consideration to tangible and identifiable intangible assets acquired 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 werewas determined based on inputs that are unobservable and significant to the overall fair value measurement. ItThe preliminary fair value is also based on estimates and assumptions made by management at the time of the acquisition. As such, this wasthe acquisitions are classified as Level 3 fair value hierarchy measurements and disclosures.

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Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

The Company estimated the preliminary fair value of acquired 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.
The acquisition consideration allocation below is preliminary, pending completion of the fair value analyses of acquired 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.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed 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.


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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 in 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. The unaudited supplemental pro forma financial information 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.

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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 to $4,139), subject to a working capital adjustment. VCT, located in Gablingen, Germany, services 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 from 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 operations 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. The purchase price allocation reported at March 31, 2017 was preliminary and was based on provisional fair values. During the second quarter, the Company received revised third-party valuations, performed other analyses and recorded $380 in accounts receivable for post-closing adjustments, which resulted in an adjusted net purchase price of $22,782. No adjustments were made during the third quarter of 2017. The post-closing adjustments and revised fair values resulted in the following adjustments to the 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.
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

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Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

the period commencing October 1, 20172022 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. The estimated fair value of contingent consideration related to SES decreased by $0.9 and increased by $0.4 for the three months ended September 30, 2022 and 2021, respectively. The estimated fair value of contingent consideration related to SES decreased by $1.7 and
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increased by $2.4 for the nine months ended September 30, 2022 and 2021, respectively. The estimated fair value of contingent consideration related to BIG decreased by $0.8 and $0.1 for the three months ended September 30, 2022 and 2021, respectively. The estimated fair value of contingent consideration related to BIG decreased by $1.0 and $0.1 for the nine months ended September 30, 2022 and 2021, respectively.
In connection with the Earthly Labs acquisition, Chart will pay to the sellers a royalty on sales of carbon capture units for residential use launched for sale to the public by Chart in an amount equal to 4% of such sales. Potential royalty payments shall be paid to the sellers during the three year period following Chart’s launch of this product. This product has not yet been developed and as such, the fair value of the contingent consideration liability that arises from this arrangement was insignificant as of September 30, 2022 and December 31, 2021.
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, 2021 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:
SESBIGTotal
Balance at December 31, 2021$19.1 $2.1 $21.2 
Decrease in fair value of contingent consideration liabilities(1.7)(1.0)(2.7)
Balance at September 30, 2022$17.4 $1.1 $18.5 
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 811 — Fair Value MeasurementsAccumulated Other Comprehensive Loss
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 levelscomponents of inputs used to measure fair valueaccumulated other comprehensive loss 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.
 
Foreign currency translation adjustments (1)
Pension liability adjustments, net of taxesAccumulated other comprehensive loss
Balance at June 30, 2022$(52.3)$(6.3)$(58.6)
Other comprehensive loss(32.1)— (32.1)
Amounts reclassified from accumulated other comprehensive loss, net of income taxes— 0.1 0.1 
Net current-period other comprehensive (loss) income, net of taxes(32.1)0.1 (32.0)
Balance at September 30, 2022$(84.4)$(6.2)$(90.6)
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:
Foreign currency translation adjustmentsPension liability adjustments, net of taxesAccumulated other comprehensive loss
Balance at June 30, 2021$1.5 $(10.7)$(9.2)
Other comprehensive loss(11.8)— (11.8)
Amounts reclassified from accumulated other comprehensive loss, net of income taxes— 0.3 0.3 
Net current-period other comprehensive (loss) income, net of taxes(11.8)0.3 (11.5)
Balance at September 30, 2021$(10.3)$(10.4)$(20.7)
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 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

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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(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
 $1,923
Foreign currency translation adjustments (1)
Pension liability adjustments, net of taxesAccumulated other comprehensive loss
Balance at December 31, 2021$(15.2)$(6.5)$(21.7)
Other comprehensive loss(69.2)— (69.2)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes— 0.3 0.3 
Net current-period other comprehensive (loss) income, net of taxes(69.2)0.3 (68.9)
Balance at September 30, 2022$(84.4)$(6.2)$(90.6)
Refer to the Derivative Financial Instruments note
 Foreign currency translation adjustmentsPension liability adjustments, net of taxesAccumulated other comprehensive income (loss)
Balance at December 31, 2020$13.8 $(11.4)$2.4 
Other comprehensive loss(24.1)— (24.1)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes— 1.0 1.0 
Net current-period other comprehensive (loss) income, net of taxes(24.1)1.0 (23.1)
Balance at September 30, 2021$(10.3)$(10.4)$(20.7)
_______________
(1)Foreign currency translation adjustments includes translation adjustments and net investment hedge, net of taxes. See Note 8, “Debt and Credit Arrangements,” for further information regarding derivative financial instruments andrelated to the Business Combinations note for further information regarding contingent consideration liabilities.
NOTE 9 — Accumulated Other Comprehensive Loss
The following tables represent changes in accumulated other comprehensive loss by component:net investment hedge.
33
 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)

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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(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 1012 — 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,
2022202120222021
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.$41.2 $14.9 $64.4 $47.0 
Net income attributable to Chart Industries, Inc. per common share:       
Earnings per common share:Earnings per common share:
Basic$0.05
 $0.49
 $0.04
 $1.03
Basic$1.15 $0.42 $1.80 $1.32 
Diluted$0.05
 $0.48
 $0.04
 $1.02
Diluted$0.98 $0.36 $1.56 $1.15 
       
Weighted average number of common shares outstanding — basic30,755
 30,585
 30,726
 30,578
Weighted average number of common shares outstanding – basicWeighted average number of common shares outstanding – basic35.87 35.62 35.85 35.59 
Incremental shares issuable upon assumed conversion and exercise of share-based awards556
 479
 562
 362
Incremental shares issuable upon assumed conversion and exercise of share-based awards0.28 0.35 0.26 0.33 
Weighted average number of common shares outstanding — diluted31,311
 31,064
 31,288
 30,940
Incremental shares issuable due to dilutive effect of convertible notesIncremental shares issuable due to dilutive effect of convertible notes3.01 2.90 2.82 2.71 
Incremental shares issuable due to dilutive effect of warrantsIncremental shares issuable due to dilutive effect of warrants2.70 2.57 2.47 2.33 
Weighted average number of common shares outstanding – dilutedWeighted average number of common shares outstanding – diluted41.86 41.44 41.40 40.96 
Diluted earnings per share does not reflect the following potential common shares as the effect would be anti-dilutive:
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Share-based awards0.03 — 0.07 0.04 
Convertible note hedge and capped call transactions (1)
3.01 2.90 2.82 2.71 
Warrants— — — — 
Total anti-dilutive securities3.04 2.90 2.89 2.75 
 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 8, “Debt and Credit Arrangements.”
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Notes to Unaudited Condensed Consolidated Financial Statements – September 30, 2017
(Dollars and shares in thousands, except per share amounts) – Continued

NOTE 1113 — Income Taxes
The Company recorded incomeIncome tax expense of $1,907$(1.6) and $1,764 in$5.5 for the three months ended September 30, 20172022 and 2016,2021, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of (4.0)% and 25.9%, respectively. The Company recorded incomeIncome tax expense of $2,346$4.0 and $12,829 in$9.9 for the nine months ended September 30, 20172022 and 2016, respectively. The2021, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 47.5%5.8% and 48.6%17.0%, respectively.
The effective income tax rates of (4.0)% and 5.8% for the three and nine months ended September 30, 20172022 differed from the U.S. federal statutory rate of 35%21% 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 our certain foreign entities being taxed at higher rates than the U.S. federal statutory rates more than offset by the release of a valuation allowance on certain foreign entities, excess tax benefits associated with share-based compensation, and global R&D tax credits. The release of the Company’s international entities operatingvaluation allowance is due to continued improvement of on-going results in lower taxed jurisdictions. The third quarter 2017 effective incomecertain foreign jurisdictions over the prior three years and the current year resulting in the recognition of deferred tax rate was also impacted by transaction costs incurred withassets (and the acquisition of Hudson, a portion of whichrelated deferred tax benefit) that were non-deductible for U.S. federal income tax purposes. generated in prior years and year to date that had not been previously recognized.
The effective income tax rate of 11.4% and 31.0%25.9% for the three and nine months ended September 30, 20162021 differed from the U.S. federal statutory rate of 35%21% primarily due to an insurance settlementincome earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rate combined with a reduction of our foreign-derived intangible income deduction (FDII) as a result of lower forecasted taxable income in the U.S.
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2022
(Dollars and shares in millions, except per share amounts) – Continued





The effective income tax rate of 17.0% for breachesthe nine months ended September 30, 2021 differed from the U.S. federal statutory rate of representations21% primarily due to excess tax benefits associated with share-based compensation and warranties that resulted in an adjustment to our purchase price of Airsep shares for tax purposes and offset by lossesincome incurred by certain of our foreign operations with a full valuation allowance, partially offset by income earned by our certain foreign entities being taxed at higher rates than the Company’s Chinese operations for which no benefit was recorded.U.S. federal statutory rate.
As of both September 30, 2017 and December 31, 2016, the Company has a liability for gross unrecognized tax benefits of $710. This amount includes $535 of unrecognized tax benefits as of September 30, 2017, which, if ultimately recognized, would reduce the Company’s annual effective income tax rate. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company accrued approximately $89 and $86 for the payment of interest and penalties as of September 30, 2017 and December 31, 2016, respectively.
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 1314 — Share-based Compensation
During the nine months ended September 30, 2017, the Company2022, we granted 3240.03 stock options, 1530.05 restricted stock units 7 shares of restricted stock, and 220.01 performance units. The total fair value of awards granted to employees during the nine months ended September 30, 20172022 was $13,246.$12.6. In addition, our non-employee directors received 13 stock awards with a total fair value of $487.$0.6. During the nine months ended September 30, 2017,2022, participants in the Company’sour stock option plans exercised options to purchase 430.03 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 nine months ended September 30, 2017, 129 shares of2022, 0.06 restricted stock and restricted stock units vested while 25 restricted stock units were forfeited. Also, during the nine months ended September 30, 2017, 22and 0.02 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$2.3 and $1,826$2.3 for the three months ended September 30, 20172022 and 2016, respectively. Share-based compensation expense was $9,5552021, respectively and $9,014$7.9 and $8.1 for the nine months ended September 30, 20172022 and 2016,2021, respectively. Share-based compensation expense is included in selling, general, and administrative expenses in the unaudited condensed

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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, 2017,2022, total share-based compensation of $7,298$14.1 is expected to be recognized over the weighted-average period of approximately 2.2 years.
NOTE 15 — 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 September 30, 2022 and December 31, 2021, we had undiscounted accrued environmental reserves of $0.4 and $0.2, respectively.
Legal Proceedings
Stainless Steel Cryobiological Tank Legal Proceedings
In connection with the October 1, 2020 divestiture of our cryobiological products business, Chart retained certain potential liabilities, including claims in connection with our following litigation. During the second quarter of 2018, 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. In May and June of 2021, the first five of the federal lawsuits went to trial, and on June 10, 2021, the jury reached a verdict against Chart in favor of the plaintiffs in those lawsuits in the amount of $14.9, of which 90% ($13.5) is attributable to Chart. On May 25, 2017,August 13, 2021, judgment was entered, and on September 10, 2021, we filed two post-trial motions: a motion for a new trial and a renewed motion for judgment as a matter of law. The motion for new trial or, in the alternative, request for remittitur, sought, among other relief, to have the court grant a new trial because of erroneous evidentiary rulings, a factually unsupported negligence claim, plaintiffs’ attorney misconduct, allocation of fault that was not supported by the record, and excessive noneconomic damages. The renewed motion for judgment as a matter of law sought to have the court direct judgment for Chart on the negligent failure to recall claim because of our contention that plaintiffs failed to present sufficient evidence to prove each element of that claim. On November 5, 2021, the court denied these post-trial motions. Chart filed its notice of appeal on December 1, 2021. On December 7, 2021, the court stayed the remaining federal lawsuits pending resolution of Chart’s appeal.
In the second quarter 2021, we recorded a loss contingency accrual and corresponding charge to net income for $13.5 in the amount of the jury verdict attributable to Chart. The loss contingency accrual is included in other current liabilities in our
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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 2022
(Dollars and shares in millions, except per share amounts) – Continued





unaudited condensed consolidated balance sheet at September 30, 2022. Chart expects that any potential loss associated with the verdict will be covered by existing product liability insurance, subject to previously issued reservations of rights by the insurance carriers. Accordingly, we have recorded an offsetting $13.5 loss recovery receivable with a corresponding credit to net income. The loss recovery receivable is included in other current assets in our unaudited condensed consolidated balance sheet at September 30, 2022. Although we continue to vigorously contest the result in this case, we continue to recognize the loss contingency accrual and related loss recovery receivable in our unaudited condensed consolidated balance sheet at September 30, 2022.
Currently there are 164 individual cases (excluding the first five cases from the May/June 2021 trial) with respect to the Pacific Fertility Center incident on the docket in the U.S. District Court for the Northern District of California. In addition to the cases filed in the U.S. District Court for the Northern District of California, Chart is currently a defendant in 53 individual cases in the San Francisco Superior Court.
We have asserted various defenses against the claims in the lawsuits, which remain in various stages of development, 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 continue to evaluate the merits of such claims for each specific case in light of the information available to date regarding use, maintenance and operation of the tank that was sold to the Pacific Fertility Center. The Company previously initiated negotiations with certain representatives of the plaintiffs to ascertain whether a preliminary settlement framework, acceptable to all constituent parties, for these fertility clinic cases could be reached. Based on the status of these discussions, there remains substantial uncertainty with respect to the potential for a settlement. As such, we have not reached a conclusion that losses in these cases are currently probable. Based on the status of the settlement negotiations, the ongoing status of the various lawsuits, and the consideration of insurance coverage, including the existence of a dispute with one of our insurance providers regarding coverage limits as described below, a current estimate of reasonably possible losses in these cases cannot be made.
On June 13, 2022, Starr Indemnity & Liability Company (“Starr”) filed a complaint for declaratory relief and reimbursement in the U.S. District Court for the Northern District of California seeking a determination of what obligation, if any, Starr has to indemnify Chart in connection with the Pacific Fertility Center actions. On June 14, 2022, Chart filed its own declaratory judgment action against Starr in the U.S. District Court for the Northern District of Georgia seeking a determination that Starr has a duty to indemnify the Company held its annual meeting of stockholders. Atin connection with the annual meeting, the Company’s stockholders approved the Chart Industries, Inc. 2017 Omnibus Equity Plan (the “2017 Omnibus Equity Plan”). As described in the Company’s definitive proxy statement for the annual meeting, the Company’s directors, officers and employees (including its principal executive officer, principal financial officerPacific Fertility Center actions.
We are occasionally subject to various legal claims related to performance under contracts, product liability, taxes, employment matters, environmental matters, intellectual property, and other “named executive officers”) are eligiblematters 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, including the Pacific Fertility Center cases described above, will not have a material adverse effect on our financial position, liquidity, cash flows, or results of operations, except that our results of operations for any particular reporting period may be granted awards under the 2017 Omnibus Equity Plan.adversely affected by any potential or actual loss that is accrued in such period. Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect.
NOTE 1416 — Restructuring Activities
The Company has implemented a numberRestructuring credits of cost reduction or avoidance actions, including headcount reductions$1.4 and facility closures and relocations primarily relating to the consolidation of certain of our facilities in China, the Buffalo BioMedical respiratory consolidation, and 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 expected 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,$1.1 for the three months and nine months ended September 30, 20172022 were primarily related to reversal of prior restructuring accruals for employee retention at our Houston, Texas facility, and 2016:offset restructuring related costs in the segment in 2022. Restructuring costs of $1.9 and $2.9 for the three and nine months ended September 30, 2021, respectively, were primarily related to moving and employee severance costs relative to restructuring at our Beasley, Texas, Houston, Texas and Tulsa, Oklahoma facilities. This project was a cost reduction measure within our Heat Transfer Systems segment to continue to structure the business for profitable growth and capacity efficiency.
 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 isWe are closely monitoring itsour end markets and order rates and will continue to take appropriate and timely actions as necessary. The Company currently expects additional restructuring costs in the remaining three months of 2017 to be approximately $1,530 ($1,000 - D&S, $310 - BioMedical, and $220 - Corporate), but further actions may be required based on future business conditions.
The following tables summarize the Company’s restructuring activities for the three and nine months ended September 30, 2017 and 2016:
36
 Three Months Ended September 30, 2017
 Energy & Chemicals Distribution & Storage BioMedical Corporate Total
Balance as of June 30, 2017$—
 $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

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Notes to the Unaudited Condensed Consolidated Financial Statements – September 30, 20172022
(Dollars and shares in thousands,millions, except per share amounts) – Continued






The following table summarizes severance and other restructuring costs, which includes employee-related costs, facility rent and exit costs, relocation, recruiting, travel and other:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Severance:
Cost of sales$(0.2)$0.4 $— $0.4 
Selling, general, and administrative expenses0.1 — — 0.3 
Total severance costs(0.1)0.4 — 0.7 
Other restructuring:
Cost of sales(1.2)1.5 (1.1)2.2 
Selling, general, and administrative expenses(0.1)— — — 
Total other restructuring costs(1.3)1.5 (1.1)2.2 
Total restructuring costs$(1.4)$1.9 $(1.1)$2.9 
The following tables summarize our restructuring activities:
Three Months Ended September 30, 2022
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingCorporateConsolidated
Balance at June 30, 2022$— $— $— $1.4 $— $1.4 
Restructuring charges— — (0.1)(1.3)— (1.4)
Cash payments and other— — 0.3 — — 0.3 
Balance at September 30, 2022$— $— $0.2 $0.1 $— $0.3 

Three Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingCorporateConsolidated
Balance at June 30, 2021$0.3 $(0.1)$— $— $— $0.2 
Restructuring charges— 0.5 — 1.4 — 1.9 
Cash payments and other— (0.3)— 0.1 — (0.2)
Balance at September 30, 2021$0.3 $0.1 $— $1.5 $— $1.9 

Nine Months Ended September 30, 2022
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingCorporateConsolidated
Balance at December 31, 2021$0.4 $0.5 $— $1.4 $— $2.3 
Restructuring charges0.1 0.1 — (1.3)— (1.1)
Cash payments and other(0.5)(0.6)0.2 — — (0.9)
Balance at September 30, 2022$— $— $0.2 $0.1 $— $0.3 

37
 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

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(Dollars and shares in thousands,millions, 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:
Nine Months Ended September 30, 2021
Cryo Tank SolutionsHeat Transfer SystemsSpecialty ProductsRepair, Service & LeasingCorporateConsolidated
Balance at December 31, 2020$0.5 $0.2 $— $— $0.1 $0.8 
Restructuring charges0.3 1.2 — 1.4 — 2.9 
Cash payments and other(0.5)(1.3)— 0.1 (0.1)(1.8)
Balance at September 30, 2021$0.3 $0.1 $— $1.5 $— $1.9 
38
 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.

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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 cryogenic equipment forservicing multiple applications in the industrial gas and clean energy markets. Our unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and biomedical industries. Ourrepair. Being at the forefront of the clean energy transition, Chart is a leading provider of technology, equipment and engineered systemsservices related to liquefied natural gas, hydrogen, biogas, CO2 Capture and water treatment, among 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 manufacturing locations from the United States to Asia, India and cryogenic applications utilizingEurope, 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 Quarter and Year-to-date 2017 HighlightsMacroeconomic Impacts
Our consolidated results for the third quarter 2017 were highlighted by sales of $240.5 million, and operating income of $10.4 million, inclusive of the in quarter acquisitions.  Gross profit forDuring the third quarter of 2017 was $70.4 million, or 29.3% of2022, we had record backlog, record sales, which was unfavorably impactedrecord gross profit and record operating income as certain supply chain, labor and logistics issues driven by $0.3 million of restructuring costs.  Energy & Chemicals (“E&C”) gross margin improved sequentially from 13.3%macroeconomic conditions began to level out. The current conflict between Russia and Ukraine and the related sanctions imposed by countries against Russia are creating uncertainty in the second quarterglobal economy. While we do not have operations in Russia or Ukraine, we are unable to predict the impact these actions will have on the global economy or on our business, financial condition and results of 2017operations. Furthermore, uncertainty associated with the coronavirus (Covid-19) pandemic remains. These events did not have a material adverse effect on our reported results for the three months ended September 30, 2022, however we will continue to 18.6%actively monitor in terms of their potential impact on our results of operations beyond the third quarter of 2017, which includes 260 basis points from2022.
Foreign currency rate fluctuations, as determined by comparing current period revenue in USD to current period revenue in local currency converted to USD using the inclusionsame foreign exchange rates as the third quarter of 2021, had a negative impact on consolidated sales of $17.3 million for the three months ended September 30, 2022, primarily due to the U.S. dollar appreciating versus the euro and the Indian rupee (third quarter 2022 compared to third quarter 2021).
Environmental, Social, Governance
Chart is proud to be at the forefront 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 quarter gross marginclean energy transition as a percentleading provider of salestechnology, equipment and services related to liquefied natural gas, hydrogen, biogas, carbon capture and water treatment, among other applications. We also captured as our unique offering for the Nexus of 29.1% sequentially increased 340 basis points overClean TM clean power, clean water, clean food and clean industrials. This leadership position is possible not only because we have the second quarterbroadest offering of 2017.  Continued improvement in D&S cost structure from reductions in force taken this year combined with D&S European operational improvements contributedclean innovative solutions for the various end markets we serve, but also because we are committed 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 second quarter of 2017.  This reflects the reduced cost structure from the completionglobal responsibility. Reporting our ESG performance is one of the Buffalo, New York respiratory facility consolidation. ways we demonstrate accountability and transparency to our team members, suppliers, customers, shareholders and communities. Below are some highlights of our ESG efforts, and further information can be found in our third Annual Sustainability report with scorecard which was released in April 2022.
Market•We reported a 0.80 Total Recordable Incident Rate (TRIR), with emphasis on safety as our #1 priority and order activity continuesfocus on all team members being empowered and authorized to increase year to date, with $258.0 million in orders received in the quarter, inclusive of $3.8 million of orders from Hudson in the ten day Chart ownership period.  This is the fourth consecutive quarter of sequential order growth for Chart.  E&C orders in both the third and second quarters of 2017 were above $60 million, and BioMedical orders were up 7.3% sequentially over the second quarter of 2017 driven by continued demand for oxygen concentrators.  Backlog excluding third quarter acquisitions increased to $390.6 million from $367.2 million atstop work if they see an unsafe or potentially unsafe situation. At the end of September 2022, we were 0.01 from our record 12-month rolling TRIR set in June of 2022.
•We measure progress through Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) indices, as well as contributing to the second quarterGlobal Reporting Initiative (GRI) and United Nations Sustainable Development Goals (SDGs).
•We utilize Riskmethods analytics to proactively monitor our supply chain for proper governance in our supplier network including their climate targets and other ESG activities.
•We have a Global ESG Committee, Global Safety Council, and Global Diversity & Inclusion Committee, all comprised of 2017.  team member volunteers and engagement from our global locations.
•Our Global ESG Committee has five sub-committees focused on energy management, zero waste, electrification, renewable energy and water management.
•We anticipatehave recently entered into a sustainability-linked banking agreement with covenants tied to our Green House Gas (“GHG”) emission reductions’ actual performance.
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•We have set a target to reduce our carbon intensity 30% by 2030 and have specific initiatives in place to help us meet this sequentialgoal. In 2021, we made progress towards achieving our target by reducing GHG Intensity by almost 14% year-over-year.
•In terms of lowering our own emissions, we made plant improvements including energy efficient upgrades for various equipment, replacing diesel powered equipment with electric and installing LED lighting in office spaces. In 2021, Chart reduced Scope 2 emissions by 9.7%.
•We are our helping customers to achieve their own sustainability targets in a number of different ways whether that’s through reducing the amount of plastic used in packaging to lowering greenhouse gas emissions by enabling the transition towards cleaner fuels.
•We have an independent Board of Directors that is comprised of seven directors (four of our seven directors are female and four of our seven are diverse) and governed with a separate independent Chairwoman and CEO.
•We hold quarterly reviews on ESG with our Board of Directors.
•We link our executives and their direct reports short-term incentive payout (25% of the strategic and operational goals) to a metric driven, percentage-reduction ESG metric, and have done this for two years.
•Our team volunteers in their communities with a focus on supporting children and families, ending hunger and improving health. We offer every team member worldwide one paid day off each year to volunteer in our communities, and we donated over $120,000 to charities in the communities we work in during the 2021 year. In 2021, Chart started matching employee donations up to $250 per employee per year to charitable organizations.
•We have an employee relief fund for our own team members that need assistance.
•Our team members raised over $30,000 in 2021 and $25,000 in 2022 to support women through Dress For Success.
•In 2021, we received the following ESG-oriented recognition:
◦World LNG Award for Energy Transition 2021 Finalist
◦Gastech 2021 Emission Reduction Champion – Organization of the Year Award Winner
◦Gastech 2021 Organisation Championing Diversity & Inclusion Finalist
◦Gastech 2021 Engineering Partnership of the Year Finalist
◦S&P Global Platts Energy Awards Excellence in LNG Finalist (2021)
◦S&P Global Platts Energy Awards Corporate Social Responsibility (Diversified) Award Finalist (2021)
•In 2022, we received the following ESG-oriented recognition:
◦S&P Global Platts Energy Awards 2022 “Energy Transition– LNG” Finalist
◦S&P Global Platts Energy Awards 2022 “Deal of the Year – Strategic” Finalist
◦2022 Frost & Sullivan Institute Enlightened Growth Leadership Award
◦goBeyondProfit’s 2022 “In Good Company Report – One of the Most Generous Companies in Georgia (USA)”
Third Quarter 2022 Highlights
Strong order trend willactivity contributed to record ending total backlog of $2,254.1 million as of September 30, 2022 compared to $1,102.2 million as of September 30, 2021 and $1,953.3 million as of June 30, 2022, representing increases of $1,151.9 million or 104.5% and $300.8 million or 15.4%, respectively, which reflects the broad-based demand we continue to see year-over-year and quarter-over-quarter across our product categories. The increase through year end, with specific projectin backlog was largely driven by strong order activity for the three months ended September 30, 2022 of $729.4 million compared to $350.2 million as of September 30, 2021 representing an increase of $379.2 million or 108.3%. Strong order intake in our Heat Transfer Systems segment of $357.7 million for the three months ended September 30, 2022 compared to $41.1 million for the three months ended September 30, 2021, was mainly driven by increased LNG orders expectedincluding big and mid-scale LNG, liquefaction systems and cold box projects during the three months ended September 30, 2022. Strong order intake in our Specialty Products segment of $202.9 million for the three months ended September 30, 2022 compared to $131.3 million for the three months ended September 30, 2021, was mainly driven by an order for a large liquefaction system during the three months ended September 30, 2022. Record orders in our Repair, Service & Leasing segment for the three months ended September 30, 2022 of $61.7 million were mainly driven by record order intake in our leasing business. Heat Transfer Systems segment backlog was $1,225.4 million as of September 30, 2022, a record, as compared to $335.1 million and $1,003.8 million as of September 30, 2021 and June 30, 2022, respectively. Specialty Products segment backlog was $666.1 million as of September 30, 2022, also a record, as compared to $381.2 million and $570.4 million as of September 30, 2021 and June 30, 2022, respectively.
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Consolidated sales increased to a record $412.1 million in the E&C businessthree months ended September 30, 2022 from $328.3 million in the three months ended September 30, 2021 and $404.8 million in D&S Asiathe three months ended June 30, 2022, representing increases of $83.8 million or 25.5% (26.2% organically) and $7.3 million or 1.8% (3.6% organically), respectively, mainly driven by our Heat Transfer Systems segment with record sales in process systems related to big and small-scale LNG vehicle tanks. 
On September 20, 2017, we closed on the acquisition of Hudson. The estimated purchase price is $419.4 millionliquefactions and Hudson’s results of operations are includedfavorable sales in air coolers. Sales in our E&CCryo Tank Solutions segment since that date.   On August 31, 2017 we closedincreased by $14.7 million as compared to the acquisitionsame quarter in 2021 driven by favorable sales in storage equipment and record sales in mobile equipment. The consolidated sales increase was bolstered by sales from acquisitions. Consolidated gross profit increased to a record $104.6 million during the three months ended September 30, 2022, compared to $74.9 million for the three months ended September 30, 2021 and $94.8 million for the three months ended June 30, 2022, representing increases of VCT Vogel (“VCT”).  The estimated purchase price is $4.1$29.7 million or 39.7% and VCT’s results are included$9.8 million or 10.3%, respectively. Gross profit margin for the three months ended September 30, 2022 of 25.4% increased from 22.8% and 23.4% for the three months ended September 30, 2021 and June 30, 2022, respectively, demonstrating our progress in quarterly improvement in our D&S segment since that date. margin profile as we continued to take further pricing and cost reduction actions.
Consolidated SG&A expenses as a percentage of consolidated sales for the three months ended September 30, 2022 decreased by 2.8% as compared to the three months ended September 30, 2021 primarily driven by the effect of cost reduction actions we took in 2021 and 2022.
Outlook
Our 2017 full year outlook reflects continued tempered energy prices relatedfor 2022 for sales is in the range of $1.65 billion to core LNG E&C business, year-to-date order growth$1.70 billion. The change to our prior sales guidance of $1.725 billion to $1.80 billion is driven by currency headwinds and timing of specific project revenue recognition, which is typical in our segments and the impact of current year acquisitions (Hetsco, Inc., Hudson, and VCT).  We continue to anticipate that 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 majority 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 technology as well as our brazed aluminum heat exchanger and cold boxes as the main liquefaction heat exchanger technology.
business. We continue to invest in our automation, process improvement, and productivity activities across the Company,Chart, with total anticipated 20172022 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 $62.0 million to $67.0 million.
Our outlook for 2023 for sales is in a range of $2.10 billion to $2.20 billion and is driven by increased confidence due to record backlog, multiple global tailwinds and customers’ forecasts. Our 2023 outlook includes only Big LNG projects that are in backlog as of September 30, 2022. Note that this outlook does not include any new or additional mid-size or large projects that could come into the order book between now and the end of the first half 2023 which approximately $15 million is included in our anticipated 2017 full year capital spend.
We expect full year restructuring costs to total $13.9 million of which $12.4 million has been incurredwe would anticipate having sales associated with them in the nine months ended September 30, 2017.  The remaining restructuring costs relate toyear. If one or more mid or large-size project comes into the corporate office relocation from Garfield Heights, Ohio to Ball Ground, Georgiaorder book between now and consolidationthe end of certain facilities in China.  We expect the 2017 restructuring actions to provide annualized run rate savings of $15 million beginning with the first quarter 2023, we would anticipate recognizing between $50 to $75 million dollars more of revenue into the full year of savings in 2018.year.


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Consolidated Results for the Three Months Ended September 30, 20172022 and 2016,2021, and June 30, 20172022
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, 20172022 and 20162021 and June 30, 2017.2022 (dollars in millions). Financial data for the three months ended June 30, 20172022 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
September 30, 2022September 30, 2021June 30, 2022Variance
 ($)		Variance
(%)		Variance
 ($)		Variance
(%)
Sales
Cryo Tank Solutions$126.9 $112.2 $132.9 $14.7 13.1 %$(6.0)(4.5)%
Heat Transfer Systems132.1 56.4 102.9 75.7 134.2 %29.2 28.4 %
Specialty Products108.1 116.9 115.3 (8.8)(7.5)%(7.2)(6.2)%
Repair, Service & Leasing49.7 46.3 55.4 3.4 7.3 %(5.7)(10.3)%
Intersegment eliminations(4.7)(3.5)(1.7)(1.2)34.3 %(3.0)176.5 %
Consolidated$412.1 $328.3 $404.8 $83.8 25.5 %$7.3 1.8 %
Gross Profit
Cryo Tank Solutions$22.8 $22.6 $21.6 $0.2 0.9 %$1.2 5.6 %
Heat Transfer Systems28.5 2.2 14.8 26.3 1,195.5 %13.7 92.6 %
Specialty Products34.2 40.7 39.4 (6.5)(16.0)%(5.2)(13.2)%
Repair, Service & Leasing19.1 9.4 19.0 9.7 103.2 %0.1 0.5 %
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 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 %        
Consolidated$104.6 $74.9 $94.8 $29.7 39.7 %$9.8 10.3 %
Gross Profit Margin
Cryo Tank Solutions18.0 %20.1 %16.3 %
Heat Transfer Systems21.6 %3.9 %14.4 %
Specialty Products31.6 %34.8 %34.2 %
Repair, Service & Leasing38.4 %20.3 %34.3 %
Consolidated25.4 %22.8 %23.4 %
Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter		Current Quarter vs.
Prior Sequential Quarter
September 30, 2022September 30, 2021June 30, 2022Variance
 ($)		Variance
(%)		Variance
 ($)		Variance
(%)
SG&A Expenses
Cryo Tank Solutions$9.8 $9.1 $11.0 $0.7 7.7 %$(1.2)(10.9)%
Heat Transfer Systems6.5 7.4 5.3 (0.9)(12.2)%1.2 22.6 %
Specialty Products14.7 11.8 14.8 2.9 24.6 %(0.1)(0.7)%
Repair, Service & Leasing3.9 4.9 3.6 (1.0)(20.4)%0.3 8.3 %
Corporate17.4 17.8 18.8 (0.4)(2.2)%(1.4)(7.4)%
Consolidated$52.3 $51.0 $53.5 $1.3 2.5 %$(1.2)(2.2)%
SG&A Expenses (% of Sales)
Cryo Tank Solutions7.7 %8.1 %8.3 %
Heat Transfer Systems4.9 %13.1 %5.2 %
Specialty Products13.6 %10.1 %12.8 %
Repair, Service & Leasing7.8 %10.6 %6.5 %
Consolidated12.7 %15.5 %13.2 %
Operating Income (Loss) (1)
Cryo Tank Solutions
$12.2 $13.0 $9.9 $(0.8)(6.2)%$2.3 23.2 %
Heat Transfer Systems
18.3 (10.0)5.7 28.3 100.0 %12.6 221.1 %
Specialty Products (2)
16.7 26.4 20.8 (9.7)(36.7)%(4.1)(19.7)%
Repair, Service & Leasing12.0 2.2 12.0 9.8 445.5 %— — %
Corporate (3)
(17.5)(17.8)(18.8)0.3 (1.7)%1.3 (6.9)%
Consolidated$41.7 $13.8 $29.6 $27.9 202.2 %$12.1 40.9 %
Operating Margin
Cryo Tank Solutions9.6 %11.6 %7.4 %
Heat Transfer Systems13.9 %(17.7)%5.5 %
Specialty Products15.4 %22.6 %18.0 %
Repair, Service & Leasing24.1 %4.8 %21.7 %
Consolidated10.1 %4.2 %7.3 %
_______________
(1)Restructuring (credits)/costs for the three months ended:
•September 30, 20172022 were $2.7 million$(1.4) ($0.2 million(1.3) - E&C, $0.6 millionRepair, Service & Leasing and $(0.1) - D&S, $0.5 million BioMedical,Specialty Products).
•September 30, 2021 were $1.9 ($0.5 - Heat Transfer Systems and $1.4 million - Corporate)Repair, Service & Leasing).

•June 30, 2022 were $0.2 ($0.1 - Cryo Tank Solutions and $0.1 - Specialty Products).
(2)Acquisition-related contingent consideration adjustments in our Specialty Products segment for the three months ended:
•September 30, 2022 were a decrease in fair value of $1.7.
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•September 30, 20162021 were $0.3 million ($0.2 million - E&C and $0.1 million - D&S)an increase in fair value of $0.3.
•June 30, 20172022 were $5.0 million ($1.6 million - E&C, $0.3 million - D&S, $1.4 million - BioMedical,a decrease in fair value of $0.2.
(3)Includes deal-related 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.

integration costs of $6.7 and $5.1 for the three months ended September 30, 2022 and June 30, 2022, respectively.
Results of Operations for the Three Months Ended September 30, 20172022 and 2016,2021, and June 30, 20172022
Sales infor the third quarter of 20172022 compared to the same quarter in 20162021 increased $36.6by $83.8 million ($81.9 million organically), from $328.3 million to $412.1 million, or 25.5%. This increase was primarily driven by growth in our Heat Transfer Systems segment on record sales in process systems related to big and small-scale LNG liquefactions and favorable sales in air coolers, as well as gains within our Cryo Tank Solutions segment on favorable sales in storage equipment in the U.S. and record sales in mobile equipment and within our Repair, Service & Leasing segment on favorable sales in parts, repairs, and services, aftermarket fans, aftermarket air cooled heat exchangers and in our lifecycle business.
Gross profit for the third quarter of 2022 compared to the same quarter in 2021 increased by $29.7 million from $203.9$74.9 million to $240.5$104.6 million, or 17.9%, with increases across39.7%. Gross profit margin of 25.4% for the third quarter of 2022 increased from 22.8% in the third quarter of 2021. The increase in gross profit margin in the current quarter over third quarter of 2021 was primarily driven by product mix and pricing and cost reduction actions we took for all segments. The largest increasessegments overall. Restructuring (credits)/costs recorded to cost of sales were in E&C, $22.9$(1.4) million or 96.5%, and D&S, $12.6$1.9 million or 10.0%. E&C’s Lifecycle business, which includes results from the Hetsco acquisition, added $11.4 million in incremental sales to E&C duringfor the three months ended September 30, 2017,2022 and E&C’s Hudson acquisition added $6.12021, respectively.
Consolidated SG&A expenses increased by $1.3 million in incremental sales to E&Cor 2.5% during the periodthird quarter of ownership from September 20, 2017 through September 30, 2017. D&S saw improvement2022 compared to the same quarter in all regions during2021 driven by higher employee-related costs while consolidated SG&A expenses as a percentage of consolidated sales for the three months ended September 30, 20172022 decreased by 2.8% as compared to the same quarter in 2016, with the largest increase in China, driven by stronger LNG-related product sales. Sequentially over the second quarter of 2017, the overall sales increase of $2.3 million was largely driven 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 isthree months ended September 30, 2021 primarily due to gross profit added from the Hetsco and Hudson acquisitions in our E&C segment. Gross profit further increased 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 mainly driven by the E&C segment’s incremental margin from the Hudson acquisitioneffect of cost reduction actions we took in 2021 and the D&S segment, where favorable product mix drove margins higher.
SG&A expenses increased by $11.3 million, or 24.8%, during the third quarter of 2017 compared to the third quarter of 2016. During the third quarter of 2017, Corporate incurred $7.3 million of expenses associated with the Hudson acquisition. Sequentially over the second quarter of 2017, the 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 in the third quarter 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).2022.
Interest Expense, Net and Financing Costs Amortization
Net interestInterest expense, net for the three months ended September 30, 20172022 and 20162021 was $4.8$5.7 million and $4.3$3.2 million, respectively.respectively, representing an increase of $2.5 million. The increase in interest expense, net, is primarily due to higher borrowings outstanding and higher average interest rates during the third quarter of 2022 on our senior secured revolving credit facility due October 2026, as compared to borrowings outstanding and average interest rates on our previous senior secured revolving credit facility and term loan due June 2024 during the third quarter of 2021, partially offset by interest income of $0.4 million from our cross-currency swaps entered into on July 8, 2022 and September 16, 2022 and by capitalization of interest related to property, plant and equipment. Interest expense, net for both the three months ended September 30, 2022 and 2021 included $0.6 million of 1.0% cash interest expense related to our convertible notes due November 2024 and $6.4 million and $2.9 million, respectively, in interest related to borrowings on our current senior secured revolving credit facility due 2026 and previous senior secured revolving credit facility and term loan due 2024. Financing costs amortization was $0.7 million and $1.2 million for the three months ended September 30, 2017 included2022 and 2021, respectively. The decrease of $0.5 million was primarily due to the amendment of our credit facilities during the fourth quarter in October 2021, which lowered deferred debt issuance costs.
Unrealized (Gain) Loss On Investments In Equity Securities
During the third quarter of 2022, we recognized an unrealized gain on investments in equity securities of $1.3 million, which was driven by an unrealized loss of 2.0% cash interest, $3.4$4.1 million on the mark-to-market adjustment of non-cash interest accretion expense related toour investment in McPhy and a $5.4 million unrealized gain on the carrying valuemark-to-market adjustment of our investment in Stabilis. During third quarter of 2021, we recognized an unrealized gain of $10.4 million, which was driven by an unrealized gain of $20.7 million upon remeasurement of the Convertible Notes,initial HTEC investment due to an observable price change in an orderly transaction for similar instruments of the same issuer, partially offset by a $6.0 million unrealized loss on the mark-to-market adjustment of our investment in McPhy and $0.3a $4.3 million unrealized loss on the mark-to-market adjustment of our investment in interest related to borrowings on our senior secured revolving credit facility for the Hudson acquisition. Stabilis.
Foreign Currency (Gain) Loss
For each of the three months ended September 30, 20172022, foreign currency gain was $2.5 million and 2016, financing costs amortizationfor the three months ended September 30, 2021 foreign currency gain was $0.3$0.8 million.

The variance between periods was primarily driven by fluctuations in the U.S dollar as compared to the euro and Chinese yuan.
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Income Tax Expense
Income tax expense of $1.9$(1.6) million and $1.8$5.5 million for the three months ended September 30, 20172022 and 2016,2021, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 47.5%(4.0)% and 11.4%25.9%, respectively. The effective income tax rate of 47.5% for the third quarter of 2017 was higher than the U.S. federal statutory rate of 35% primarily due to losses incurred by certain of our Chinese operations for which no tax benefit was recorded, partially offset by the effect of income earned by certain of our international entities operating in lower 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%(4.0)% for the three months ended September 30, 20162022 differed from the U.S. federal statutory rate of 35%21% primarily due to income earned by our certain foreign entities being taxed at higher rates than 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 wasU.S. federal statutory rates more than offset by losses incurredthe release of a valuation allowance on certain foreign entities, excess tax benefits associated with share-based compensation and global R&D tax credits. The release of the valuation allowance is due to continued improvement of on-going results in certain foreign jurisdictions over the prior three years and the current year resulting in the recognition of deferred tax assets (and the related deferred tax benefit) that were generated in prior years and year to date that had not been previously recognized.
The effective income tax rate of 25.9% for the three months ended September 30, 2021 differed from the U.S. federal statutory rate of 21% primarily due to income earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rate combined with a reduction of our Chinese operations for which no benefit was recorded.foreign-derived intangible income deduction (FDII) as a result of lower forecasted taxable income in the U.S.
Net Income Attributable to Chart Industries, Inc.
As a result of the foregoing, net income attributable to the CompanyChart Industries, Inc. for the three months ended September 30, 20172022 and 20162021 was $1.5$41.2 million and $15.0$14.9 million, respectively.

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Consolidated Results for the Nine Months Ended September 30, 20172022 and 20162021
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 nine months ended September 30, 20172022 and 20162021 (dollars in thousands)millions):
Selected Financial Information
Nine Months EndedCurrent Year-to-date vs. Prior Year-to-date Period
September 30, 2022September 30, 2021Variance ($)Variance (%)
Sales
Cryo Tank Solutions$377.9 $313.9 $64.0 20.4 %
Heat Transfer Systems314.3 190.8 123.5 64.7 %
Specialty Products330.9 301.0 29.9 9.9 %
Repair, Service & Leasing154.4 142.3 12.1 8.5 %
Intersegment eliminations(6.5)(9.2)2.7 (29.3)%
Consolidated$1,171.0 $938.8 $232.2 24.7 %
Gross Profit
Cryo Tank Solutions$69.8 $71.0 $(1.2)(1.7)%
Heat Transfer Systems53.4 29.2 24.2 82.9 %
Specialty Products106.2 105.6 0.6 0.6 %
Repair, Service & Leasing53.7 36.2 17.5 48.3 %
Consolidated$283.1 $242.0 $41.1 17.0 %
Gross Profit Margin
Cryo Tank Solutions18.5 %22.6 %
Heat Transfer Systems17.0 %15.3 %
Specialty Products32.1 %35.1 %
Repair, Service & Leasing34.8 %25.4 %
Consolidated24.2 %25.8 %
SG&A Expenses
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 Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
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%    
Cryo Tank Solutions$31.5 $27.1 $4.4 16.2 %
Heat Transfer Systems18.3 21.1 (2.8)(13.3)%
Specialty Products43.5 32.5 11.0 33.8 %
Repair, Service & Leasing11.5 13.7 (2.2)(16.1)%
Corporate54.5 51.0 3.5 6.9 %
Consolidated$159.3 $145.4 $13.9 9.6 %
Nine Months EndedCurrent Year-to-date vs. Prior Year-to-date Period
September 30, 2022September 30, 2021Variance ($)Variance (%)
SG&A Expenses % of Sales
Cryo Tank Solutions8.3 %8.6 %
Heat Transfer Systems5.8 %11.1 %
Specialty Products13.1 %10.8 %
Repair, Service & Leasing7.4 %9.6 %
Consolidated13.6 %15.5 %
Operating Income (Loss) (1)
Cryo Tank Solutions$36.2 $42.0 $(5.8)(13.8)%
Heat Transfer Systems23.8 (6.7)30.5 100.0 %
Specialty Products (2)
53.7 67.7 (14.0)(20.7)%
Repair, Service & Leasing32.3 16.1 16.2 100.6 %
Corporate (3)
(54.6)(51.0)(3.6)7.1 %
Consolidated$91.4 $68.1 $23.3 34.2 %
Operating Margin
Cryo Tank Solutions9.6 %13.4 %
Heat Transfer Systems7.6 %(3.5)%
Specialty Products16.2 %22.5 %
Repair, Service & Leasing20.9 %11.3 %
Consolidated7.8 %7.3 %
_______________
(1)Restructuring (credits)/costs for the nine months ended:
•September 30, 20172022 were $12.4 million,$(1.1) ($2.2 million(1.3) - E&C, $1.1 millionRepair, Service & Leasing, $0.1 - D&S, $4.5 million BioMedical,Cryo Tank Solutions and $4.6 million$0.1 - Corporate)Heat Transfer Systems).
•September 30, 20162021 were $6.3 million$2.9 ($0.8 million0.3 - E&C, $3.9 millionCryo Tank Solutions, $1.2 - D&S, $0.5 million BioMedical,Heat Transfer Systems and $1.1 million$1.4 - Corporate)Repair, Service & Leasing).

(2)Includes acquisition-related contingent consideration (credits)/charges of $(2.7) and $2.3 in our Specialty Products segment for the nine months ended September 30, 2022 and 2021, respectively.
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Table(3)Includes deal-related and integration costs of Contents$16.0 for the nine months ended September 30, 2022.


(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, 20172022 and 20162021
Sales for the first nine months of 2022 compared to the same period in 2021 increased by $232.2 million ($196.3 million organically), from $938.8 million to $1,171.0 million, or 24.7%. Similar to the comments in the nineresults of operations for the three 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%,2022 and 2021 section above, this increase was primarily driven by strongergrowth in our Heat Transfer Systems segment on favorable sales in D&S as a result of increasedprocess systems related to big and small-scale LNG liquefactions and air coolers, along with gains within our Cryo Tank Solutions segment on favorable sales in bulkstorage equipment 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&Cmobile equipment, within our Specialty Products segment on favorable sales in 2016 included several short-lead time replacement equipmenthydrogen and helium applications, water treatment, space applications, food & beverage applications and carbon capture and within our Repair, Service & Leasing segment on
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favorable sales in parts, repairs, and contract expiration fees.services, aftermarket fans, aftermarket air cooled heat exchangers and in our lifecycle business.
Gross profit decreased $20.0 million, and the related margin decreased from 32.5% to 27.7%increased during the first nine months of 20172022 compared to the first nine months of 2016. The prior year included several high2021 by $41.1 million or 17.0%, while gross profit margin short-lead time replacement equipment salesof 24.2% for the first nine months of 2022 decreased from 25.8% in the first nine months of 2021. Similar to the comments in the results of operations for the three months ended September 30, 2022 and contract expiration fees2021 section above, the increase in gross profit for the first nine months of 2022 compared to the same period in 2021 was primarily driven by continued pricing and cost reduction actions we took for all segments overall.
Consolidated SG&A expenses increased by $13.9 million or 9.6% during the first nine months of 2022 compared to the same period in 2021 primarily driven by higher employee-related costs, a ramp up in our E&CSpecialty Products business which drove higher SG&A expenses in the segment that did not recur in 2017 as well as the BioMedical insurance recovery for breaches of representations and warrantiesSG&A expenses related to warrantyrecent acquisitions, partially offset by no restructuring costs recorded to consolidated SG&A expenses 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 20172022, 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$0.3 million for the first nine months of 2017 were recordedsame period 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).2021.
Interest Expense, Net and Financing Costs Amortization
Net interestInterest expense, net for the nine months ended September 30, 20172022 and 20162021 was $13.0$13.3 million and $12.6$7.4 million, respectively.respectively, representing an increase of $5.9 million. The increase in interest expense, net, is primarily due to higher borrowings outstanding and higher average interest rates during the first nine months of 2022 on our senior secured revolving credit facility due October 2026, as compared to borrowings outstanding and average interest rates on our previous senior secured revolving credit facility and term loan due June 2024 during the first nine months of 2021, partially offset by interest income of $0.9 million from our cross-currency swaps entered into during the first nine months of 2022 and by capitalization of interest related to property, plant and equipment. Interest expense, net for both the nine months ended September 30, 2022 and 2021 included $1.9 million of 1.0% cash interest expense related to our convertible notes due November 2024 and $14.7 million and $6.0 million, respectively, in interest related to borrowings on our current senior secured revolving credit facility due 2026 and previous senior secured revolving credit facility and term loan due 2024. Financing costs amortization was $2.1 million for the nine months ended September 30, 2017 included $3.82022 as compared to $3.5 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, 20172021. The decrease of $1.4 million was primarily due to the amendment of our credit facilities during the fourth quarter in October 2021, which lowered deferred debt issuance costs.
Unrealized (Gain) Loss On Investments In Equity Securities
During the first nine months of 2022, we recognized an unrealized loss on investments in equity securities of $10.9 million, which was driven by an unrealized loss of $16.1 million on the mark-to-market adjustment of our investment in McPhy and 2016, financing costs amortizationa $5.2 million unrealized gain on the mark-to-market adjustment of our investment in Stabilis. During the first nine months of 2021, we recognized an unrealized gain on investments in equity securities of $1.2 million, which was $1.0driven by an unrealized gain of $20.7 million upon remeasurement of the initial HTEC investment due to an observable price change in an orderly transaction for similar instruments of the same issuer and a $6.3 million unrealized gain on the mark-to-market adjustment of our investment in Stabilis, partially offset by a $25.8 million unrealized loss on the mark-to-market adjustment of our investment in McPhy.
Foreign Currency (Gain) Loss
For the nine months ended September 30, 2022, foreign currency gain was $2.6 million and for the nine months ended September 30, 2021 foreign currency loss was $0.1 million.
Income Tax Expense
Income tax expense of $2.3$4.0 million and $12.8$9.9 million for the nine months ended September 30, 20172022 and 2016,2021, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 48.6%5.8% and 31.0%17.0%, respectively. The effective income tax rate of 48.6%5.8% 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, 20162022 differed from the U.S. federal statutory rate of 35%21% primarily due to income earned by our certain foreign entities being taxed at higher rates than the insurance settlement for breaches of representations and warranties that resulted in an adjustment to our purchase price of Airsep shares for tax purposes andU.S. federal statutory rate offset by lossesthe release of a valuation allowance on certain foreign entities, excess tax benefits associated with share-based compensation and global R&D tax credits. The release of the valuation allowance is due to continued improvement of on-going results in certain foreign jurisdictions over the prior three years and the current year resulting in the recognition of deferred tax assets (and the related deferred tax benefit) that were generated in prior years and year to date that had not been previously recognized.
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The effective income tax rate of 17.0% for the nine months ended September 30, 2021 differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits associated with share-based compensation and income incurred by certain of our Chineseforeign operations for which no benefit was recorded.with a full valuation allowance, partially offset by income earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rate.
Net Income Attributable to Chart Industries, Inc.
As a result of the foregoing, net income attributable to the CompanyChart Industries, Inc. for the nine months ended September 30, 20172022 and 20162021 was $1.4$64.4 million and $31.5$47.0 million, respectively.

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Segment Results
The structure of the Company’s internal organization is divided into the followingOur reportable and operating segments which are also the Company’s operating segments: E&C, D&S,include: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products 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 2, “Reportable Segments” 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 representsrepresent selected financial data for our operating segments for the three and nine months ended September 30, 20172022 and 20162021 (dollars in thousands)millions):
Energy & Chemicals
Cryo Tank Solutions — Results of Operations for the Three Months Ended September 30, 20172022 and 20162021
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
(%)
September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$46,588
 $23,711
 $22,877
 96.5 %Sales$126.9 $112.2 $14.7 13.1 %
Gross Profit8,682
 1,803
 6,879
 381.5 %Gross Profit22.8 22.6 0.2 0.9 %
Gross Profit Margin18.6% 7.6 %    Gross Profit Margin18.0 %20.1 %
SG&A Expenses$7,394
 $7,050
 $344
 4.9 %SG&A Expenses$9.8 $9.1 $0.7 7.7 %
SG&A Expenses (% of Sales)15.9% 29.7 %    SG&A Expenses (% of Sales)7.7 %8.1 %
Operating (Loss) Income$329
 $(5,736) $6,065
 (105.7)%
Operating (Loss) Margin0.7% (24.2)%    
Operating IncomeOperating Income$12.2 $13.0 $(0.8)(6.2)%
Operating MarginOperating Margin9.6 %11.6 %
For the third quarter of 2017, E&C segment2022, Cryo Tank Solutions sales increased by $14.7 million as compared to the same quarter in 2016. E&C’s Lifecycle business, which includes results from the Hetsco acquisition, added $11.4 million in incremental sales to E&C during the three months ended September 30, 2017, and E&C’s Hudson acquisition added $6.1 million in incremental 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 activity2021. As mentioned in the Natural Gas Liquids (“NGL”)consolidated results above, this increase was mainly driven by favorable sales in storage equipment in the U.S. and Petrochemical applications, while lower energy prices continued to have an impact on LNG related opportunities within the E&C segment.record sales in mobile equipment.
ForDuring the third quarter of 2017, E&C2022, Cryo Tank Solutions segment gross profit and the related margin increased by $0.2 million as compared to the same quarter in 2016 primarily2021, while gross profit margin decreased by 210 basis points. The decrease in gross profit margin was mainly driven by higher material prices and higher labor costs due to an increase in high margin short lead-time replacement equipment projects and improved productivity driven by the volume increase in the NGL and Petrochemical applications.macroeconomic conditions.
E&CCryo Tank Solutions segment SG&A expenses increased slightlyby $0.7 million during the third quarter of 20172022 while SG&A expenses as a percentage of sales improved by 40 basis points. The increase in SG&A expenses was mainly due to higher employee-related costs.
Cryo Tank Solutions — Results of Operations for the Nine Months Ended September 30, 2022 and 2021
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Nine Months EndedCurrent Year-to-date vs. Prior Year-to-date Period
September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$377.9 $313.9 $64.0 20.4 %
Gross Profit69.8 71.0 (1.2)(1.7)%
Gross Profit Margin18.5 %22.6 %
SG&A Expenses$31.5 $27.1 $4.4 16.2 %
SG&A Expenses (% of Sales)8.3 %8.6 %
Operating Income$36.2 $42.0 $(5.8)(13.8)%
Operating Margin9.6 %13.4 %
For the first nine months of 2022, Cryo Tank Solutions sales increased by $64.0 million as compared to the same period in 2021. As mentioned in the results of operations for the three months ended September 30, 2022 and 2021 comments above, this increase was mainly driven by favorable sales in storage equipment in the U.S. and Europe and mobile equipment in the U.S.
During the first nine months of 2022, Cryo Tank Solutions segment gross profit decreased by $1.2 million as compared to the same period in 2021. The decrease in gross profit and the related margin was mainly driven by higher material prices and higher labor costs due to macroeconomic conditions.
Cryo Tank Solutions segment SG&A expenses increased by $4.4 million during the first nine months of 2022 as compared to the same period in 2021 while SG&A expenses as a percentage of sales improved by 30 basis points. The increase in SG&A expenses was mainly due to higher employee-related costs.
Heat Transfer Systems — Results of Operations for the Three Months Ended September 30, 2022 and 2021
Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$132.1 $56.4 $75.7 134.2 %
Gross Profit28.5 2.2 26.3 1,195.5 %
Gross Profit Margin21.6 %3.9 %
SG&A Expenses$6.5 $7.4 $(0.9)(12.2)%
SG&A Expenses (% of Sales)4.9 %13.1 %
Operating Income (Loss)$18.3 $(10.0)$28.3 100.0 %
Operating Margin13.9 %(17.7)%
For the third quarter of 2022, Heat Transfer Systems segment sales increased by $75.7 million as compared to the same quarter in 20162021. As discussed in the consolidated results sections above, the increase was primarily driven by incrementalrecord sales in process systems related to big and small-scale LNG liquefactions and favorable sales in air coolers.
During the third quarter of 2022, Heat Transfer Systems segment gross profit increased by $26.3 million as compared to the same quarter in 2021 primarily due to higher volume, and gross profit margin increased by 1,770 basis points. The increase in Heat Transfer Systems segment gross profit margin was primarily due to overall product and project mix.
Heat Transfer Systems segment SG&A expenses fromdecreased during the Hetscothird quarter of 2022 as compared to the same quarter in 2021 and Hudson acquisitions.SG&A expenses as a percentage of sales improved by 820 basis points. The decrease in SG&A expenses was mainly due to lower employee-related costs.
Heat Transfer Systems — Results of Operations for the Nine Months Ended September 30, 20172022 and 20162021
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Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period		Nine Months EndedCurrent Year-to-date vs. Prior Year-to-date Period
September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$126,473
 $122,865
 $3,608
 2.9 %Sales$314.3 $190.8 $123.5 64.7 %
Gross Profit22,434
 39,147
 (16,713) (42.7)%Gross Profit53.4 29.2 24.2 82.9 %
Gross Profit Margin17.7 % 31.9%    Gross Profit Margin17.0 %15.3 %
SG&A Expenses$22,610
 $23,295
 $(685) (2.9)%SG&A Expenses$18.3 $21.1 $(2.8)(13.3)%
SG&A Expenses (% of Sales)17.9 % 19.0%    SG&A Expenses (% of Sales)5.8 %11.1 %
Operating (Loss) Income$(2,420) $14,190
 $(16,610) (117.1)%
Operating (Loss) Margin(1.9)% 11.5%    
Operating Income (Loss)Operating Income (Loss)$23.8 $(6.7)$30.5 100.0 %
Operating MarginOperating Margin7.6 %(3.5)%
For the first nine months of 2017, E&C2022, Heat Transfer Systems segment sales increased by $123.5 million as compared to the same period in 2016.2021. The increase was primarily driven by our Lifecycle business, which includes the Hetsco acquisition, which contributed $39.8 millionsales in sales duringprocess systems related to big and small-scale LNG liquefactions and air coolers.
During the first nine months of 2017 compared to $2.2 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

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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&C2022, Heat Transfer Systems segment gross profit and the related margin decreased during the first nine months of 2017increased by $24.2 million as compared to the same period in 2016. Included in 2016 were several short lead-time replacement equipment sales2021, and contract expiration fees which contributed approximately $31 million of gross profit during 2016.margin increased by 170 basis points. The increase in Heat Transfer Systems segment gross profit was primarily due to overall product and project volume mix.
E&CHeat Transfer Systems segment SG&A expenses decreased during the first nine months of 20172022 as compared to the same period in 2021 mainly due to lower employee-related costs, short-term variable compensation incentives, bad debt expense and headcount reductions were partially offset by incremental SG&A expenses added by the Hetsco and Hudson acquisitions.costs.
Distribution & Storage
Specialty Products — Results of Operations for the Three Months Ended September 30, 20172022 and 20162021
Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
 September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$108.1 $116.9 $(8.8)(7.5)%
Gross Profit34.2 40.7 (6.5)(16.0)%
Gross Profit Margin31.6 %34.8 %
SG&A Expenses$14.7 $11.8 $2.9 24.6 %
SG&A Expenses (% of Sales)13.6 %10.1 %
Operating Income$16.7 $26.4 $(9.7)(36.7)%
Operating Margin15.4 %22.6 %
 Three Months Ended Current Quarter vs.
Prior Year Quarter
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
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&SSpecialty Products segment sales increaseddecreased by $8.8 million during the third quarter of 20172022 as compared to the same quarter in 2016 primarily2021. The decrease in Specialty Products sales was due to a $7.8 million increase inproject timing shifts, lower HLNG vehicle tank sales for liquefieddriven by higher natural gas prices and our customers’ availability of semiconductors due to macroeconomic conditions, partially offset by favorable sales in hydrogen and helium applications, a $2.2 million increaserecord sales in packaged gas industrialspace applications and a $2.6 million increasefavorable sales in bulk industrial gas applications.
D&S segment gross profit increasedwater treatment, each of which had double digit growth during the third quarter of 20172022 as compared to the same quarter in 2016 mainly driven2021.
Specialty Products segment gross profit decreased by higher volume across all regions, and the related margin increased primarily due to favorable product mix.
D&S segment SG&A expenses increased$6.5 million during the third quarter of 20172022 as compared to the same quarter in 20162021, and gross profit margin decreased by 320 basis points. The decrease in gross profit and the related margin was mainly duedriven by overall product and project volume mix.
Specialty Products segment SG&A expenses increased by $2.9 million during the third quarter of 2022 as compared to higher employee-related coststhe same quarter in 2021 primarily driven by ramp up in the business and restructuring expense.acquisition additions.
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Specialty Products — Results of Operations for the Nine Months Ended September 30, 20172022 and 20162021
Nine Months EndedCurrent Year-to-date vs. Prior Year-to-date Period
September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$330.9 $301.0 $29.9 9.9 %
Gross Profit106.2 105.6 0.6 0.6 %
Gross Profit Margin32.1 %35.1 %
SG&A Expenses$43.5 $32.5 $11.0 33.8 %
SG&A Expenses (% of Sales)13.1 %10.8 %
Operating Income$53.7 $67.7 $(14.0)(20.7)%
Operating Margin16.2 %22.5 %
 Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period
 September 30, 2017 September 30, 2016 
Variance
 ($)
 
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&SSpecialty Products segment sales increased by $29.9 million ($3.5 million organically) during the first nine months of 20172022 as compared to the same period in 2016 mainly due to $22.8 million2021. The increase in Specialty Products sales for liquefied natural gaswas primarily driven by favorable sales in hydrogen and helium applications, water treatment, space applications, food & beverage 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 increasedcarbon capture, each of which had double digit growth during the first nine months of 20172022 as compared to the same period in 2016 mainly2021. The sales increase was partially offset by lower HLNG vehicle tank sales driven by higher volume across all regions,natural gas prices and the related margin increased, especially in Asia, primarilyour customers’ availability of semiconductors due to improved execution.macroeconomic conditions.
D&SSpecialty Products segment SG&A expensesgross profit increased by $0.6 million during the first nine months of 20172022 as compared to the same period in 20162021. The increase in gross profit was mainly due to higher employee-related costsdriven by overall product and were partially offsetproject volume mix.
Specialty Products segment SG&A expenses increased by the impact of a reduction in a contingent consideration

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liability associated with a prior acquisition, which was recorded$11.0 million during the first nine months ended September 30, 2017,of 2022 as compared to the same period in 2021 primarily driven by ramp up in the business and lower restructuring costs.acquisition additions.
BioMedical
Repair, Service & Leasing — Results of Operations for the Three Months Ended September 30, 20172022 and 20162021
Three Months Ended Current Quarter vs.
Prior Year Quarter		Three Months EndedCurrent Quarter vs.
Prior Year Same Quarter
September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
 September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$54,662
 $53,573
 $1,089
 2.0 %Sales$49.7 $46.3 $3.4 7.3 %
Gross Profit21,178
 34,391
 (13,213) (38.4)%Gross Profit19.1 9.4 9.7 103.2 %
Gross Profit Margin38.7% 64.2%    Gross Profit Margin38.4 %20.3 %
SG&A Expenses$10,918
 $12,601
 $(1,683) (13.4)%SG&A Expenses$3.9 $4.9 $(1.0)(20.4)%
SG&A Expenses (% of Sales)20.0% 23.5%    SG&A Expenses (% of Sales)7.8 %10.6 %
Operating Income$9,539
 $20,916
 $(11,377) (54.4)%Operating Income$12.0 $2.2 $9.8 445.5 %
Operating Margin17.5% 39.0%    Operating Margin24.1 %4.8 %
For the third quarter of 2017, the BioMedical2022, Repair, Service & Leasing segment sales increase was primarily drivenincreased by respiratory therapy equipment applications$3.4 million as compared to the same quarter in 2016.2021. Similar to the comments previously mentioned in the consolidated results section, the increase was mainly driven by favorable sales in parts, repairs, and services, aftermarket fans, aftermarket air cooled heat exchangers and in our lifecycle business, partially offset by a decrease in our leasing business.
During the third quarter of 2017, BioMedical2022, Repair, Service & Leasing segment gross profit decreasedincreased by $9.7 million as compared to the same quarter in 2016. The third quarter of 2016 included the impact of an insurance recovery for breaches of representations2021, 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, gross profit margin increased by $1.9 million1,810 basis points. The increase in gross profit and the relatedgross profit margin increased 2.8 percentage points primarily due to volume and favorable mix associated with military-based respiratory therapy applications.
BioMedical segment SG&A expenseswas driven by more high margin, short-lead time replacement equipment sales during the third quarter of 2017, decreased2022 as compared to the same quarter in 2016 primarily2021. Furthermore, during the third quarter of 2021 we incurred unfavorable material costs relative to our leasing business which we did not incur during the third quarter of 2022.
Repair, Service & Leasing segment SG&A expenses decreased by $1.0 million during the third quarter of 2022, and SG&A expenses as a percentage of sales improved by 280 basis points mainly due to lower employee-related costs associated with the operations and engineering transition from our Buffalo BioMedical respiratory facilities to our Ball Ground, Georgia facilities along with the divestiturecosts.
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Repair, Service & Leasing — Results of Operations for the Nine Months Ended September 30, 20172022 and 20162021
Nine Months Ended Current Year-to-date vs.
Prior Year-to-date Period		Nine Months EndedCurrent Year-to-date vs. Prior Year-to-date Period
September 30, 2017 September 30, 2016 
Variance
 ($)
 
Variance
(%)
September 30, 2022September 30, 2021Variance
($)		Variance
(%)
Sales$166,309
 $158,174
 $8,135
 5.1 %Sales$154.4 $142.3 $12.1 8.5 %
Gross Profit60,426
 74,054
 (13,628) (18.4)%Gross Profit53.7 36.2 17.5 48.3 %
Gross Profit Margin36.3% 46.8%    Gross Profit Margin34.8 %25.4 %
SG&A Expenses$33,609
 $33,288
 $321
 1.0 %SG&A Expenses$11.5 $13.7 $(2.2)(16.1)%
SG&A Expenses (% of Sales)20.2% 21.0%    SG&A Expenses (% of Sales)7.4 %9.6 %
Operating Income$24,387
 $38,120
 $(13,733) (36.0)%Operating Income$32.3 $16.1 $16.2 100.6 %
Operating Margin14.7% 24.1%    Operating Margin20.9 %11.3 %
For the first nine months of 2017, the increase in BioMedical2022, Repair, Service & Leasing segment sales increased by $12.1 million as compared to the same period in 20162021. This increase was primarilymainly driven military-based respiratory therapy equipmentby favorable sales stainless freezer sales withinin parts, repairs, and services, aftermarket fans, aftermarket air cooled heat exchangers and aftermarket L.A. Turbine, partially offset by a decrease in our life sciences applications, particularly in Asia, and an increase in projects within commercial oxygen generation systems applications.leasing business.
During the first nine months of 2017, BioMedical2022, Repair, Service & Leasing segment gross profit and the related margin decreasedincreased by $17.5 million as compared to the same period in 2016. The third quarter2021, and gross profit margin increased by 930 basis points. Similar to the comments in results of 2016 includedoperations for 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 ninethree months ended September 30, 2016, this reduced BioMedical’s cost of sales by $15.1 million2022 and added 9.6% to2021 above, the year-to-date margin. Excluding this impact,increase in gross profit increasedand gross profit margin was driven by $1.5 million mainly on increased volume.
BioMedical segment SG&A expenses, which included $2.0 million of restructuring costsmore high margin, short-lead time replacement equipment sales during the first nine months of 2017, increased2022 as compared to the first nine months of 2021. Furthermore, during the first nine months of 2021 we incurred unfavorable material costs relative to our leasing business which we did not incur during first nine months of 2022.
Repair, Service & Leasing segment SG&A expenses decreased by $2.2 million during the first nine months of 2022 as compared to the same period in 2016 primarily2021, and SG&A expenses as a percentage of sales improved by 210 basis points mainly 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

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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.lower employee-related costs.
Corporate
Corporate SG&A expenses increaseddecreased by $10.0$0.4 million during the third quarter of 20172022 as compared to the same quarter in 2016, primarily2021 mainly due to $7.4 million in acquisition-related costs, of which $7.3 millionlower legal fees and acquisition related to the Hudson acquisition.expenses. Corporate SG&A expenses increased by $15.1$3.5 million duringin the first nine months of 20172022 as compared to the same period in 20162021 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.higher employee-related costs.
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 8, “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$89.5 million at September 30, 2017,2022, a decrease of $157.3$32.7 million from the balance at December 31, 2016 primarily driven by the Hudson acquisition.2021. Our foreign subsidiaries held cash of approximately $83.3$69.2 million and $72.9$91.2 million, at September 30, 2017,2022, and December 31, 2016,2021, 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 October 2026 or other financing alternatives, and cash provided by operations will be sufficient to financemeet our normal working capital needs, acquisitions,capital expenditures, and investments in properties, facilities, and equipment 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$50.3 million for the nine months ended September 30, 2017, a decrease2022, an increase of $129.1$91.9 million from the nine months ended September 30, 2016, primarily duecompared to lower net income and working capital increases within accounts receivable and inventory. Cash provided bycash used in operating activities was $146.6of $41.6 million for the nine months ended September 30, 2016 largely2021 primarily due to improvementsan increase in operating cash provided by working capital, including greater cash collectionsparticularly within accounts payable and inventory, during the first halfnine months ended September 30, 2022.
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Cash used in investing activities was $468.1$70.3 million and $13.7$308.4 million for the nine months ended September 30, 20172022 and 2016,2021, respectively. During the nine months ended September 30, 2017,2022, we used $419.4approximately $25.8 million for the acquisitions of cashFronti Fabrications, CSC Cryogenic Service Center, 100% of a joint venture in AdEdge India and a working capital settlement related to the Hudsonour 2021 acquisition $23.2of AdEdge, $4.9 million of cash related to the Hetsco acquisition, $3.4for investments in Hy24 and Gold Hydrogen LLC, partially offset by $9.4 million cash related to the VCT acquisitionreceived from settlement of our April 1, June 7 and $23.4 million for capital expenditures.July 8, 2022 cross-currency swaps. During the nine months ended September 30, 2016,2021, we used $13.4approximately $169.1 million for the acquisitions of Cryo Technologies, Inc., L.A. Turbine and AdEdge Holdings LLC. We used $103.2 million for investments in Svante Inc., Transform Materials LLC, Cryomotive GmbH, Earthly Labs Inc. and an additional investment in HTEC Hydrogen Technology & Energy Corporation (“HTEC”). During the nine months ended September 30, 2022, we paid approximately $48.2 million for capital expenditures.
Cash provided by financing activities was $296.2 million and $8.8expenditures as compared to $36.5 million for the nine months ended September 30, 20172021.
Cash used in financing activities was $9.4 million for the nine months ended September 30, 2022 and 2016, respectively.cash provided by financing activities was $326.3 million for the nine months ended September 30, 2021. During the nine months ended September 30, 2017,2022, we borrowed $300.0$503.3 million on our SSRCFcredit facilities and repaid $511.2 million in borrowings on credit facilities, primarily driven by debt positioning related to the rate swap agreements mentioned in Note 8, Debt and Credit Arrangements, to pay down outstanding debt, to fund the Hudson acquisition. We also borrowed 15.0 million Chinese yuan (equivalent to $2.2 million)acquisitions of Fronti Fabrications, CSC Cryogenic Service Center, and repaid 35.0 million Chinese yuan (equivalent to $5.1 million) on our China Facilities. We received $1.1 million100% of a joint venture in proceeds from stock option exercisesAdEdge India and used $2.0 million for the purchase of common stock which was surrendered to cover tax withholding elections during the nine months ended September 30, 2017.investments in Hy24 and Gold Hydrogen LLC. During the nine months ended September 30, 2016,2021, we borrowed 111.6$644.1 million Chinese yuan (equivalent to $17.0 million)on credit facilities and repaid 50.0$321.6 million Chinese yuan (equivalentin borrowings on credit facilities primarily to $7.6 million) on our China Facilities.

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Accounts Receivablefund the acquisitions 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 receivablesinvestments mentioned in China in light of the economic environment and collection challenges in China.paragraph above.
Cash Requirements
We do not currently anticipate any unusual cash requirements for working capital needs for the year ending December 31, 2017.2022. 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 three months of 20172022 is expected to be $12.0in the range of $15.0 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.$20.0 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, 20172022 was $480.7a record $2,254.1 million, compared to $384.4$1,102.2 million as of September 30, 20162021 and $367.2$1,953.3 million as of June 30, 2017. The Hudson acquisition added $90.2 million to our backlog at September 30, 2017.2022.
The tabletables below representsrepresent orders received and backlog by segment for the periods indicated (dollar amounts(dollars in thousands)millions):
 Three Months Ended
 September 30,
2022		September 30,
2021		June 30,
2022
Orders
Cryo Tank Solutions$120.2 $133.3 $106.1 
Heat Transfer Systems357.7 41.1 470.1 
Specialty Products202.9 131.3 265.7 
Repair, Service & Leasing61.7 52.9 47.4 
Intersegment eliminations(13.1)(8.4)(1.5)
Consolidated$729.4 $350.2 $887.8 
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 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
September 30,
2022		September 30,
2021		June 30,
2022
Backlog
Cryo Tank Solutions$355.2 $345.3 $331.9 
Heat Transfer Systems1,225.4 335.1 1,003.8 
Specialty Products666.1 381.2 570.4 
Repair, Service & Leasing41.6 54.4 48.5 
Intersegment eliminations(34.2)(13.8)(1.3)
Consolidated$2,254.1 $1,102.2 $1,953.3 
 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, 20172022 were $65.9$120.2 million compared to $27.9$133.3 million for the three months ended September 30, 20162021 and $64.6$106.1 million for the three months ended June 30, 2017. Low energy prices continue2022. The decrease in Cryo Tank Solutions segment orders during the three months ended September 30, 2022 when compared to

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delay LNG-related opportunities. However, natural gas demand, from Petrochemical the same quarter last year and LNG export projects, is driving new gas transmission pipelines creating further opportunityincrease when compared to the prior quarter was primarily driven by order intake for Chart’s products. E&Cmobile equipment. Cryo Tank Solutions segment backlog at September 30, 2022 totaled $234.6$355.2 million compared to $345.3 million as of September 30, 2017, compared to $113.5 million as of September 30, 20162021 and $122.7$331.9 million as of June 30, 2017. The increase in backlog as compared to the balance as of September 30, 2016 was primarily driven by petrochemical and natural gas processing applications and inclusion of Hudson’s backlog which added $90.2 million to our backlog as of September 30, 2017. Order flow in the E&C2022.
Heat Transfer Systems segment is historically volatile due to project size and it is not unusual to see order intake change significantly year over year. Included in the E&C backlog is approximately $40 million related to the previously announced Magnolia LNG order where production release is delayed into at least late-2018.
D&S orders for the three months ended September 30, 20172022 were $134.1$357.7 million compared to $121.0$41.1 million for the three months ended September 30, 20162021 and $134.0$470.1 million for the three months ended June 30, 2017.2022. The slight increase in D&S orders from the second 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 orders during the three months ended September 30, 2022 when compared to the prior quarter was mainly due to higher order intake for big LNG applications and a $5.0 million decrease in packaged gas industrial applications.during the prior quarter. The increase in D&S orders during the third quarter of 2017three months ended September 30, 2022 when compared to the same quarter last year was mainly attributable to U.S.driven by higher order intake for LNG including big and Asia bulk industrial gas applications. D&Smid-scale LNG, liquefaction systems and cold box projects. Heat Transfer Systems segment backlog totaled $223.0 million at September 30, 2017 compared to $246.22022 totaled a record $1,225.4 million, asup 265.7% over the third quarter of September 30, 20162021 and $225.0 million asup 22.1% over the second quarter of June 30, 2017.2022.
BioMedicalSpecialty Products segment orders for the three months ended September 30, 20172022 were $57.9$202.9 million compared to $52.3$131.3 million for the three months ended September 30, 20162021 and $53.9$265.7 million for the three months ended June 30, 2017. The increase from the second quarter of 2017 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 BioMedical orders2022. Comparatively, during the three months ended September 30, 2017 when compared to2022, we recorded hydrogen orders of $102.4 million that included one liquefaction system whereas during the same quarter last year was mainly attributable to the addition of projects within commercial oxygen generations systems applications. BioMedical backlog atthree months ended September 30, 20172021, we recorded hydrogen equipment-only orders of $43.6 million that included no large hydrogen or helium liquefaction orders, and during the three months ended June 30, 2022, we recorded hydrogen orders of $151.3 million that included multiple hydrogen liquefaction orders. We continue to see lower order intake for HLNG vehicle tanks due to higher natural gas prices. Specialty Products segment backlog totaled $23.2 million compared to $24.8a record $666.1 million as of September 30, 20162022, compared to $381.2 million as of September 30, 2021 and $19.4$570.4 million as of June 30, 2017.2022.
Repair, Service & Leasing segment orders for the three months ended September 30, 2022 were a record $61.7 million compared to $52.9 million for the three months ended September 30, 2021 and $47.4 million for the three months ended June 30, 2022. The increase in orders was mainly driven by record order intake in our leasing business. Repair, Service & Leasing segment backlog totaled $41.6 million as of September 30, 2022, compared to $54.4 million as of September 30, 2021 and $48.5 million as of June 30, 2022.
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.GAAP. 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, 2016.2021. 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, 2016.2021.
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, divestitures and investments, cost synergies and efficiency savings, objectives, future orders, revenues, margins, segment sales mix, earnings or performance, liquidity and cash flow, inventory levels, capital expenditures, supply chain challenges, inflationary pressures including materials costs and pricing increases, business trends, clean energy market
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opportunities including addressable markets and projected industry-wide investments, carbon and GHG emission targets, 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 markets to economic downturns;
the lossFinancial Condition and Results of or a significant reduction or delay in purchases by, our largest customers;
our ability to control our costs and successfully manage our operations;
fluctuations in energy prices;
competition in our markets;
the potential for negative developments in the natural gas industry related to hydraulic fracturing;

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the impairmentOperations” of our goodwill or other intangible assets;
degradation of our backlog as a result of modification or termination of orders;
ourAnnual Report on Form 10-K for the year ended December 31, 2021, which should be reviewed carefully; risks relating to the outbreak and continued uncertainty associated with the coronavirus (Covid-19) and the conflict between Russia and Ukraine, including potential energy shortages in Europe and elsewhere; risks relating to derivative instruments and hedging programs; Chart’s ability to successfully acquire or integrate companies, such asrecent acquisitions, and achieve 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 downturnsanticipated revenue, earnings, accretion 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, businessother benefits from these acquisitions; slower than anticipated growth and market risks associated with our global operations,acceptance of new clean energy product offerings; inability to achieve expected pricing increases or continued supply chain challenges including collection issues related to receivablesvolatility in China;
our warranty reservesraw materials cost and supply; estimated segment revenues, future revenue, earnings, cash flows and margin targets and run rates. These factors should not be construed as exhaustive and there 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, 2016,2021, 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.

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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’sOur primary interest rate risk exposure results from the SSRCF’s various floating rate pricing mechanisms.mechanisms contained in our senior secured revolving credit facility due October 2026. If interest rates were to increase 200100 basis points (2(1 percent) from the weighted-average interest rate of 4.00%3.1% at September 30, 2017,2022, and assuming no changes in the $300.0$580.8 million of borrowings outstanding under the SSRCFsenior secured revolving credit facility due October 2026 at September 30, 2017,2022, our additional annual expense would be approximately $6.0$5.8 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, 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 third quarter of 2017,2022, the euro and Chinese yuanU.S. dollar strengthened in relation to the U.S. dollareuro by 3%7%, the Chinese yuan by 6% and 2%, respectively, while the Japanese yen remained relatively unchanged versus the U.S. dollar.Czech koruna by 6%. At September 30, 2017,2022, a hypothetical further 10% weakening of the U.S. dollar would not materially affect the Company’sour financial statements.
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Transaction Gains and Losses: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 (gain) loss. The Company enters
Derivative Instruments: We enter into foreign exchange forward contracts to hedge anticipated and firmly committed foreign currency transactions. Chart doesAt September 30, 2022, a hypothetical 10% weakening of the U.S. dollar would not materially affect our outstanding foreign exchange forward contracts. We enter into a combination of cross-currency swaps and foreign exchange collars as a net investment hedge of our investments in certain international subsidiaries that use the euro as their functional currency in order to reduce the volatility caused by changes in exchange rates. As disclosed in Note 8, “Debt and Credit Arrangements,” we purchased an out-of-the-money protective call while writing a put option with a strike price at which the premium received is equal to the premium of the protective call purchased, which involved no initial capital outlay. The call was structured with a strike price higher than our cost basis in such investments, thereby limiting any foreign exchange losses to approximately $11.4 million on a pre-tax basis.We do not use derivative financial instruments for speculative or trading purposes. The terms of the contracts are generally one year or less. Atto three years.
EUR Revolver Borrowings: Additionally, assuming no changes in the euro $88.0 million in EUR Revolver Borrowings outstanding under the senior secured revolving credit facility due October 2026 and an additional 100 basis points (1 percent) strengthening in the U.S dollar in relation to the euro as of the beginning of 2022, during the three months ended September 30, 2017,2022, our additional unrealized foreign currency gain would be approximately $0.8 million on a hypothetical 10% weakening of the U.S. dollar would not materially affect the Company’s outstanding foreign exchange forward contracts.pre-tax basis.
Market Price Sensitive Instruments
In connection with the issuancepricing of the 1.00% Convertible Senior Subordinated Notes the Companydue November 2024 (the “2024 Notes”), we 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 8, “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, 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”). as of September 30, 2022. Based upon that evaluation, such officersour Chief Executive Officer and Chief Financial Officer have concluded that the Company’sas of September 30, 2022, our disclosure controls and procedures arewere 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

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including the 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, the Company’sour internal control over financial reporting except that on September 20, 2017 the Company acquired RCHPH Holdings, Inc. (“Hudson”). As a result, the Company is currently integrating Hudson’s operations into its overall system of internal control over financial reporting. Under the guidelines established by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of acquisition. Accordingly, we expect to exclude Hudson from the assessment of internal control over financial reporting for 2017.

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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As disclosed in Note 15, “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 15, Commitments and Contingencies – Stainless Steel Cryobiological Tank Legal Proceedings.”
We are occasionally subject to various other 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, 2016.2021 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.
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		Approximate Dollar
Value of Shares
that May Yet Be
Purchased Under
the Plans or
Programs
July 1 - 31, 202234 $148.51 — $— 
Aug 1 – 31, 2022— — — — 
Sept 1 – 30, 2022— — — — 
Total34 148.51 — $— 
During_______________
(1)Includes shares of common stock surrendered to us during the third quarter of 2017, 2,855 shares of common stock were surrendered to us2022 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.$5,049. 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, 2017.2022.
Item 4. Mine Safety Disclosures
Not applicable.

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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 and Chief Financial Officer (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 and Chief Financial Officer (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.
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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:October 28, 2022By:/s/ Jillian C. Evanko
Jillian C. Evanko
Chief Executive Officer and President
(Principal Executive Officer)
Date:October 26, 201728, 2022By:/s/ Jillian C. EvankoJoseph R. Brinkman
Jillian C. EvankoJoseph R. Brinkman
Vice President and Chief Financial Officer Chief Accounting Officer and Treasurer
(Principal Financial Officer)
(Duly Authorized Officer)


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