Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 15, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | CHART INDUSTRIES INC | |
Entity Central Index Key | 892,553 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 31,204,061 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 157.2 | $ 122.6 |
Accounts receivable, less allowances of $9.6 and $9.1 | 177.3 | 196.4 |
Inventories, net | 188.2 | 173.7 |
Unbilled contract revenue | 34.2 | 36.5 |
Prepaid expenses | 10.2 | 14.4 |
Other current assets | 14 | 23.7 |
Current assets of discontinued operations | 86.7 | 66.7 |
Total Current Assets | 667.8 | 634 |
Property, plant, and equipment, net | 288.4 | 285 |
Goodwill | 457.2 | 459.7 |
Identifiable intangible assets, net | 270.3 | 286.4 |
Other assets | 18.1 | 21.4 |
Non-current assets of discontinued operations | 36.7 | 38.2 |
TOTAL ASSETS | 1,738.5 | 1,724.7 |
Current Liabilities | ||
Accounts payable | 94.8 | 105.4 |
Customer advances and billings in excess of contract revenue | 94.5 | 109.6 |
Accrued salaries, wages, and benefits | 34.3 | 46.4 |
Current portion of warranty reserve | 8.6 | 11.5 |
Short-term debt and current portion of long-term debt | 9.7 | 58.9 |
Other current liabilities | 39.5 | 39.9 |
Current liabilities of discontinued operations | 31.4 | 15.9 |
Total Current Liabilities | 312.8 | 387.6 |
Long-term debt | 500.5 | 439.2 |
Long-term deferred tax liabilities | 55.3 | 62.1 |
Accrued pension liabilities | 8.4 | 9.4 |
Other long-term liabilities | 17.1 | 18.6 |
Non-current liabilities of discontinued operations | 3.4 | 2.6 |
Total Liabilities | 897.5 | 919.5 |
Equity | ||
Common stock, par value $0.01 per share – 150,000,000 shares authorized, 31,203,186 and 30,804,832 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0.3 | 0.3 |
Additional paid-in capital | 452.8 | 445.7 |
Retained earnings | 406.9 | 364.3 |
Accumulated other comprehensive loss | (23.2) | (8.1) |
Total Chart Industries, Inc. Shareholders’ Equity | 836.8 | 802.2 |
Noncontrolling interests | 4.2 | 3 |
Total Equity | 841 | 805.2 |
TOTAL LIABILITIES AND EQUITY | $ 1,738.5 | $ 1,724.7 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9.6 | $ 9.1 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (shares) | 31,203,186 | 30,804,832 |
Common stock, shares outstanding (shares) | 31,203,186 | 30,804,832 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 272.2 | $ 202.7 | $ 794.2 | $ 573.5 |
Cost of sales | 189.9 | 144.8 | 572.2 | 415 |
Gross profit | 82.3 | 57.9 | 222 | 158.5 |
Selling, general, and administrative expenses | 45.8 | 48.1 | 140.5 | 133.9 |
Amortization expense | 5 | 2.6 | 15.7 | 7 |
Operating expenses | 50.8 | 50.7 | 156.2 | 140.9 |
Operating Income | 31.5 | 7.2 | 65.8 | 17.6 |
Other expenses: | ||||
Interest expense, net | 5.3 | 4.8 | 17.9 | 13 |
Financing costs amortization | 0.3 | 0.3 | 1 | 1 |
Foreign currency (gain) loss and other | (0.3) | 1.4 | (0.2) | 3.1 |
Other expenses, net | 5.3 | 6.5 | 18.7 | 17.1 |
Income from continuing operations before income taxes | 26.2 | 0.7 | 47.1 | 0.5 |
Income tax expense | 4.2 | 0.7 | 9.7 | 0.6 |
Net income (loss) from continuing operations | 22 | 0 | 37.4 | (0.1) |
Income from discontinued operations, net of tax | 0.7 | 2.1 | 4.7 | 2.6 |
Net Income | 22.7 | 2.1 | 42.1 | 2.5 |
Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | 0.5 | 0.6 | 1.8 | 1.1 |
Net income attributable to Chart Industries, Inc. | 22.2 | 1.5 | 40.3 | 1.4 |
Net income (loss) attributable to Chart Industries, Inc. | ||||
Income (loss) from continuing operations | 21.5 | (0.6) | 35.6 | (1.2) |
Income from discontinued operations, net of tax | 0.7 | 2.1 | 4.7 | 2.6 |
Net income attributable to Chart Industries, Inc. | $ 22.2 | $ 1.5 | $ 40.3 | $ 1.4 |
Basic earnings (loss) per common share attributable to Chart Industries, Inc. | ||||
Income (loss) from continuing operations, basic (usd per share) | $ 0.70 | $ (0.02) | $ 1.15 | $ (0.04) |
Income from discontinued operations, basic (usd per share) | 0.02 | 0.07 | 0.15 | 0.08 |
Net income attributable to Chart Industries, Inc., basic (usd per share) | 0.72 | 0.05 | 1.30 | 0.04 |
Diluted earnings (loss) per common share attributable to Chart Industries, Inc. | ||||
Income (loss) from continuing operations, diluted (usd per share) | 0.65 | (0.02) | 1.11 | (0.04) |
Income from discontinued operations, diluted (usd per share) | 0.02 | 0.07 | 0.14 | 0.08 |
Net income attributable to Chart Industries, Inc., diluted (usd per share) | $ 0.67 | $ 0.05 | $ 1.25 | $ 0.04 |
Weighted-average number of common shares outstanding: | ||||
Basic (shares) | 31,030 | 30,760 | 30,970 | 30,730 |
Diluted (shares) | 32,950 | 31,310 | 32,140 | 31,290 |
Comprehensive income, net of taxes | $ 16.9 | $ 10.4 | $ 26.8 | $ 25.1 |
Less: Comprehensive income attributable to noncontrolling interests, net of taxes | 0.8 | 0.7 | 1.6 | 1.2 |
Comprehensive income attributable to Chart Industries, Inc., net of taxes | $ 16.1 | $ 9.7 | $ 25.2 | $ 23.9 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | ||
OPERATING ACTIVITIES | ||||||
Net Income | $ 22.7 | $ 2.1 | $ 42.1 | $ 2.5 | ||
Less: Income from discontinued operations | 0.7 | 2.1 | 4.7 | 2.6 | ||
Income (loss) from continuing operations | 22 | 0 | 37.4 | (0.1) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 36.9 | 25.2 | ||||
Interest accretion of convertible notes discount | 7.3 | 10 | ||||
Employee share-based compensation expense | 3.5 | 9.1 | ||||
Financing costs amortization | 0.3 | 0.3 | 1 | 1 | ||
Unrealized foreign currency transaction (gain) loss | (1) | 0.2 | ||||
Other non-cash operating activities | 1.3 | 1 | ||||
Changes in assets and liabilities, net of acquisitions: | ||||||
Accounts receivable | $ 19.1 | 23.5 | (5.6) | |||
Inventory | (28.7) | (27.1) | ||||
Unbilled contract revenues and other assets | 8.8 | 10.2 | (18.5) | |||
Accounts payable and other liabilities | (25.7) | 11.7 | ||||
Customer advances and billings in excess of contract revenue | (5.2) | (2.1) | 7.4 | |||
Net Cash Provided By Operating Activities | 63.6 | 14.3 | ||||
INVESTING ACTIVITIES | ||||||
Capital expenditures | (8.4) | (6.4) | (26.4) | (21.8) | ||
Acquisition of businesses, net of cash acquired | (12.5) | (446) | ||||
Proceeds from sale of assets | 0 | 0.9 | ||||
Government grants | 0.8 | 0.4 | ||||
Net Cash Used In Investing Activities | (38.1) | (466.5) | ||||
FINANCING ACTIVITIES | ||||||
Borrowings on revolving credit facilities | 188.3 | 302.2 | ||||
Repayments on revolving credit facilities | (123.3) | (5.1) | ||||
Repurchase of convertible notes | (57.1) | 0 | ||||
Repayments on term loan | (3) | 0 | ||||
Payments for debt issuance costs | (0.2) | 0 | ||||
Proceeds from exercise of stock options | 5.4 | 1.1 | ||||
Common stock repurchases | (2.4) | (2) | ||||
Dividend distribution to noncontrolling interest | (0.4) | 0 | ||||
Net Cash Provided By Financing Activities | 7.3 | 296.2 | ||||
DISCONTINUED OPERATIONS | ||||||
Cash Provided By Operating Activities | [1] | 1.5 | 3.2 | |||
Cash (Used In) Investing Activities | [2] | (0.8) | (1.6) | |||
Cash Provided By Discontinued Operations | 0.7 | 1.6 | ||||
Effect of exchange rate changes on cash and cash equivalents | (6.7) | 4.9 | ||||
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | 26.8 | (149.5) | ||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | [3] | 131.4 | 282.9 | |||
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD | [3] | $ 158.2 | $ 133.4 | $ 158.2 | $ 158.2 | $ 133.4 |
[1] | Includes depreciation expense of $1.3 and $1.2 for the nine months ended September 30, 2018 and 2017, respectively. Includes amortization expense of $1.8 and $2.2 for the nine months ended September 30, 2018 and 2017, respectively. | |||||
[2] | Includes capital expenditures of $0.8 and $1.6 for the nine months ended September 30, 2018 and 2017, respectively. | |||||
[3] | Includes restricted cash and restricted cash equivalents of $1.0 in other assets at September 30, 2018 and $8.7 ($7.7 in other current assets and $1.0 in other assets) at both December 31, 2017 and September 30, 2017. For further information regarding restricted cash and restricted cash equivalents balances, refer to Note 7, “Debt and Credit Arrangements.” |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Capital expenditures, discontinued operations | $ 0.8 | $ 1.6 | |||
Restricted cash | $ 1 | $ 8.7 | 1 | 8.7 | $ 8.7 |
Restricted cash, current | 0 | 7.7 | 0 | 7.7 | 7.7 |
Restricted cash, noncurrent | 1 | 1 | 1 | 1 | $ 1 |
Held-for-sale | |||||
Depreciation expense, discontinued operations | 0.4 | 0.4 | 1.3 | 1.2 | |
Amortization expense | $ 0.6 | $ 0.7 | $ 1.8 | $ 2.2 |
Basis of Preparation
Basis of Preparation | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Preparation | Basis of Preparation The accompanying unaudited condensed consolidated financial statements of Chart Industries, Inc. and its consolidated subsidiaries (herein referred to as the “Company,” “Chart,” “we,” “us,” or “our”) have been prepared in accordance with U.S. generally accepted accounting principles 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 principles for annual financial statements. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 . 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, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . Nature of Operations : We are a leading diversified global manufacturer of highly engineered equipment for the industrial gas, energy, and biomedical industries. Chart’s equipment and engineered systems are primarily used 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). We have domestic operations located across the United States, including principal executive offices located in Georgia, and an international presence in Asia, Australia, Europe, and Latin America. Principles of Consolidation: The unaudited condensed consolidated financial statements include the accounts of Chart Industries, Inc. and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. Reclassifications: Certain reclassifications have been made to prior year financial information in the unaudited condensed consolidated financial statements in order to conform to the discontinued operations presentation as further discussed in Note 2 , “ Discontinued Operations ” and the reportable segments restructuring as further discussed in Note 3 , “ Reportable Segments .” Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. Recently Issued Accounting Standards: In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU adds, modifies and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, “Fair Value Measurement.” This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements.” This ASU makes amendments to multiple codification Topics. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and will be effective upon issuance of this ASU. However, many of the amendments in this ASU do have transition guidance with effective dates for annual periods beginning after December 15, 2018. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This ASU also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The FASB issued this update to provide amended guidance to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” Additionally, under the new guidance an entity will be required to provide certain disclosures regarding stranded tax effects. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and this guidance may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This ASU expands and enhances hedge accounting to become more closely aligned with an entity’s risk management activities through hedging strategies. This ASU provides changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements and creates more transparency and better understandability around how economic results are presented in the financial statements. In addition, the new guidance makes certain targeted improvements to ease the application of accounting guidance relative to hedge effectiveness. This guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The FASB issued this update to require the recognition of lease assets and lease liabilities on the balance sheet of lessees. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements” and ASU 2018-10, “Codification Improvements to Topic 842, Leases.” ASU 2016-02 and the subsequent modifications are identified as “ASC 842.” ASC 842 will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. ASC 842 requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. We expect adoption to increase the assets and liabilities recorded on our unaudited condensed consolidated balance sheet and increase the level of disclosures related to leases. In addition, we are in the process of identifying appropriate changes to our accounting policies, information technology systems, business processes, and related internal controls to support recognition and disclosure requirements under ASC 842. We expect to design any necessary changes to our business processes, controls and systems in the near future and implement the changes over the remainder of 2018. Recently Adopted Accounting Standards: In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” This ASU adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. We have accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. Our accounting for certain income tax effects is incomplete, but we have determined reasonable estimates for those effects and have recorded provisional amounts in our unaudited condensed consolidated financial statements as of September 30, 2018 and December 31, 2017 . In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The FASB issued this guidance to provide clarity as to when modification accounting should be applied when there is a change to the terms or conditions of a share-based payment award in order to prevent diversity in practice. This ASU requires modification accounting to be applied unless all of the following conditions exist: (1) the fair value of the modified award is the same as the fair value of the original award before the original award is modified; if the modification does not affect any of the inputs to the valuation, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award before it was modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award before it was modified. This guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2017. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires companies with sponsored defined benefit pension and/or other postretirement benefit plans to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs. The other components of net periodic benefit cost will be presented separately and not included in operating income. In addition, only service costs are eligible to be capitalized as an asset. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and this guidance will generally be applied retrospectively, whereas the capitalization of the service cost component will be applied prospectively. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU provides guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar assets, the assets acquired (or disposed of) are not considered a business. This guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2017. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. 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 this 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. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and this guidance will generally be applied retrospectively. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. 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 “ASC 606”. ASC 606 replaces existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and provides for expanded disclosure requirements. This 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 Accounting Standards Codification. On January 1, 2018, we adopted ASC 606 using the modified retrospective method. We applied this standard to contracts that were not completed as of the adoption date. We recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be presented according to accounting standards in effect for those periods. As a result of the adoption of ASC 606, we changed our accounting policy for revenue recognition. Refer to Note 4 , “ Revenue ” for further information. Impacts on Financial Statements The following table summarizes the cumulative effect of the changes to our unaudited condensed consolidated balance sheet as of January 1, 2018 from the adoption of ASC 606: Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Assets Inventories, net $ 173.7 $ (11.6 ) $ 162.1 Unbilled contract revenue 36.5 6.5 43.0 Prepaid expenses 14.4 (1.6 ) 12.8 Liabilities Accounts payable $ 105.4 $ 0.2 $ 105.6 Customer advances and billings in excess of contract revenue 109.6 (9.9 ) 99.7 Other current liabilities 39.9 0.1 40.0 Long-term deferred tax liabilities 62.1 0.6 62.7 Equity Retained earnings $ 364.3 $ 2.3 $ 366.6 The following tables summarize the current period impacts of adopting ASC 606 on our unaudited condensed consolidated balance sheet and statement of operations: September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Assets Accounts receivable, net of allowances $ 177.3 $ 176.5 $ 0.8 Inventories, net 188.2 207.7 (19.5 ) Unbilled contract revenue 34.2 25.6 8.6 Liabilities Customer advances and billings in excess of contract revenue $ 94.5 $ 110.2 $ (15.7 ) Other current liabilities 39.5 38.3 1.2 Long-term deferred tax liabilities 55.3 54.3 1.0 Equity Retained earnings $ 406.9 $ 403.5 $ 3.4 For the Three Months Ended September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Sales $ 272.2 $ 275.0 $ (2.8 ) Cost of sales 189.9 192.3 (2.4 ) Selling, general, and administrative expenses 45.8 46.2 (0.4 ) Income tax expense 4.2 4.2 — Net income from continuing operations attributable to Chart Industries, Inc. 21.5 21.6 (0.1 ) Net income from continuing operations attributable to Chart Industries, Inc. per common share: Basic $ 0.70 $ 0.70 $ — Diluted $ 0.65 $ 0.65 $ — For the Nine Months Ended September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Sales $ 794.2 $ 785.8 $ 8.4 Cost of sales 572.2 565.2 7.0 Selling, general, and administrative expenses 140.5 140.7 (0.2 ) Income tax expense 9.7 9.3 0.4 Net income from continuing operations attributable to Chart Industries, Inc. 35.6 34.5 1.1 Net income from continuing operations attributable to Chart Industries, Inc. per common share: Basic $ 1.15 $ 1.11 $ 0.04 Diluted $ 1.11 $ 1.08 $ 0.03 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On September 28, 2018, we signed a definitive agreement to sell all of the equity interests in our oxygen-related products business within our BioMedical segment to NGK Spark Plug Co., Ltd. for $133.5 (the “Divestiture”). The sale is expected to close within the fourth quarter of 2018, following the satisfaction of customary closing conditions, including regulatory requirements. The strategic decision to divest the oxygen-related products business reflects our strategy and capital allocation approach to focus on our core capabilities and offerings. As a result of the Divestiture, the asset group, which includes our respiratory and on-site generation systems businesses, met the criteria to be held for sale. Furthermore, we determined that the assets held for sale qualify for discontinued operations. As such, the financial results of the respiratory therapy and on-site generation systems businesses are reflected in our unaudited condensed consolidated statements of operations and comprehensive income as discontinued operations for all periods presented. Furthermore, current and non-current assets and liabilities of discontinued operations are reflected in the unaudited condensed consolidated balance sheets for both periods presented. Summarized Financial Information of Discontinued Operations The following table represents income from discontinued operations, net of tax: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Sales $ 43.0 $ 37.8 $ 120.6 $ 109.3 Cost of sales 31.3 25.3 87.1 78.5 Selling, general and administrative expenses 6.8 8.6 21.4 25.5 Amortization expense 0.6 0.7 1.8 2.2 Operating income (1) 4.3 3.2 10.3 3.1 Other expenses (income), net 0.4 (0.1 ) 0.6 (1.2 ) Income before income taxes 3.9 3.3 9.7 4.3 Income tax expense (2) 3.2 1.2 5.0 1.7 Income from discontinued operations, net of tax $ 0.7 $ 2.1 $ 4.7 $ 2.6 _______________ (1) Includes depreciation expense of $0.4 for both the three months ended September 30, 2018 and 2017 . Includes depreciation expense of $1.3 and $1.2 for the nine months ended September 30, 2018 and 2017 , respectively. (2) Income tax expense of $3.2 and $1.2 for the three months ended September 30, 2018 and 2017, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 82.1% and 36.4% , respectively. Income tax expense of $5.0 and $1.7 in the nine months ended September 30, 2018 and 2017, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 51.5% and 39.5% , respectively. The effective income tax rate of 82.1% and 51.5% for the three and nine months ended September 30, 2018 differed from the U.S. federal statutory rate of 21% primarily due to the effect of U.S. and foreign tax costs directly related to the Divestiture. The effective income tax rate of 36.4% and 39.5% for the three and nine months ended September 30, 2017 differed from the U.S. federal statutory rate of 35% primarily due to the effect of certain losses recorded in the UK for which no tax benefit is recorded. The following table represents the assets and liabilities from discontinued operations: September 30, December 31, Accounts receivable, net $ 30.4 $ 26.3 Inventories, net 50.5 35.2 Unbilled contract revenue 0.7 0.5 Prepaid expenses 1.2 1.0 Other current assets 3.9 3.7 Current assets of discontinued operations $ 86.7 $ 66.7 Property, plant, and equipment, net $ 13.0 $ 12.6 Goodwill 9.1 9.1 Identifiable intangible assets, net 14.3 16.1 Other assets 0.3 0.4 Non-current assets of discontinued operations $ 36.7 $ 38.2 Accounts payable $ 20.1 $ 8.6 Customer advances and billings in excess of contract revenue 1.6 0.6 Accrued salaries, wages, and benefits 4.6 2.7 Current portion of warranty reserve 2.2 2.6 Other current liabilities 2.9 1.4 Current liabilities of discontinued operations $ 31.4 $ 15.9 Long-term deferred tax liabilities $ 0.4 $ 0.4 Other long-term liabilities 3.0 2.2 Non-current liabilities of discontinued operations $ 3.4 $ 2.6 |
Reportable Segments
Reportable Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2017, the structure of our internal organization was divided into the following reportable segments, which were also our operating segments: Energy & Chemicals (“E&C”), Distribution & Storage (“D&S”), and BioMedical. During the third quarter of 2018, we executed a strategic realignment of our segment structure and divided our D&S segment into two segments: Distribution & Storage Western Hemisphere (“D&S West”) and Distribution & Storage Eastern Hemisphere (“D&S East”). We believe these changes will facilitate our growth strategies, better align with our customer needs, and provide improved transparency of business results to our shareholders. As a result of these events and the divestiture of the respiratory therapy and on-site generation systems businesses described below, our reportable and operational segments now include: E&C, D&S West and D&S East. Our reportable segments are business units that are each managed separately. Our E&C segment manufactures, offers, and distributes distinct products with different production processes as compared to both our D&S West and D&S East segments. Furthermore, in conjunction with our strategic realignment, including preparation for the VRV Acquisition discussed in Note 9, “Business Acquisitions”, we have split responsibility for the two segments under different business leaders and associated internal reporting responsibilities. Our D&S West segment has principal operations in the United States and Latin America and primarily serves the Americas geographic region while our D&S East segment has principal operations in Europe and Asia and primarily serves the geographic regions of Europe, Middle East and Asia (including China). Additionally, in connection with the Divestiture discussed in Note 2 , “ Discontinued Operations ,” the financial results of the respiratory therapy and on-site generation systems businesses are reflected in our unaudited condensed consolidated statements of operations and comprehensive income as discontinued operations for all periods presented. The remaining former BioMedical segment business, cryobiological storage systems, is now part of D&S West because it has similarities in primary customer and manufacturing regions, technology and manufacturing processes with other D&S West product lines, and it is also now led by the same business leadership team and reviewed and managed internally within D&S West. Financial information for cryobiological storage systems is shown in all tables for D&S West. All of our segments manufacture products used primarily in energy-related and industrial applications, such as the separation, liquefaction, distribution, and storage of hydrocarbon and industrial gases. The D&S West segment also supplies cryogenic and other equipment used in the medical, biological research, and animal breeding industries. 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. We evaluate performance and allocate resources based on operating income or loss from continuing operations before interest expense, net, financing costs amortization, foreign currency (gain) loss, income tax expense, and income attributable to noncontrolling interests, net of taxes. Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ — $ 272.2 Depreciation and amortization expense 6.5 2.8 2.5 — 0.3 12.1 Operating income (loss) (1) (2) (4) 12.1 31.9 3.3 (0.5 ) (15.3 ) 31.5 Capital expenditures 3.8 1.3 2.5 — 0.8 8.4 Three Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 46.6 $ 99.6 $ 63.2 $ (6.7 ) $ — $ 202.7 Depreciation and amortization expense 3.3 2.6 2.7 — 0.5 9.1 Operating income (loss) (1) (2) (3) (4) 0.3 23.1 5.6 (1.4 ) (20.4 ) 7.2 Capital expenditures 2.8 0.6 1.3 — 1.7 6.4 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ — $ 794.2 Depreciation and amortization expense 19.6 8.4 7.9 — 1.0 36.9 Operating income (loss) (1) (2) (3) (4) (5) 20.8 77.7 13.5 (1.7 ) (44.5 ) 65.8 Capital expenditures 11.9 4.7 6.0 — 3.8 26.4 Nine Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 126.5 $ 295.6 $ 166.7 $ (15.3 ) $ — $ 573.5 Depreciation and amortization expense 9.0 7.8 6.6 — 1.8 25.2 Operating (loss) income (1) (2) (4) (2.4 ) 62.3 11.8 (3.6 ) (50.5 ) 17.6 Capital expenditures 7.4 3.4 8.7 — 2.3 21.8 _______________ (1) Includes sales and operating income for Hudson, included in the E&C segment results since the acquisition date, September 20, 2017 as follows: • Sales were $44.1 and $6.1 for the three months ended September 30, 2018 and 2017 , respectively. • Sales were $134.9 and $6.1 for the nine months ended September 30, 2018 and 2017 , respectively. • Operating income was $4.3 and $1.2 for the three months ended September 30, 2018 and 2017 , respectively. • Operating income was $14.6 and $1.2 for the nine months ended September 30, 2018 and 2017 , respectively. (2) Includes restructuring costs of: • $2.0 and $2.3 for the three months ended September 30, 2018 and 2017 respectively, and • $3.5 and $8.5 for the nine months ended September 30, 2018 and 2017 respectively. (3) Includes an expense of $3.8 recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the nine months ended September 30, 2018 . (4) Includes transaction-related costs of: • $2.0 and $7.4 for the three months ended September 30, 2018 and 2017 , respectively, and • $4.1 and $8.6 for the nine months ended September 30, 2018 and 2017 , respectively. (5) Includes net severance costs of $0.9 related to headcount reductions associated with the strategic realignment of our segment structure, which includes $1.8 in payroll severance costs partially offset by a $0.9 credit due to related share-based compensation forfeitures for the nine months ended September 30, 2018 . Includes net severance costs of $1.4 related to the departure of our former CEO on June 11, 2018, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation forfeitures for the nine months ended September 30, 2018 . Product Sales Information Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 63.5 $ — $ — $ — $ 63.5 Liquefied natural gas (LNG) applications 12.4 20.5 11.8 (0.4 ) 44.3 Industrial gas applications 3.4 — — — 3.4 HVAC, power and refining applications 18.8 — — — 18.8 Bulk industrial gas applications — 41.1 31.8 (0.4 ) 72.5 Packaged gas industrial applications — 37.2 13.2 (0.9 ) 49.5 Cryobiological storage — 20.2 — — 20.2 Total $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ 272.2 Three Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 27.3 $ — $ — $ — $ 27.3 Liquefied natural gas (LNG) applications 5.5 13.5 26.2 (5.8 ) 39.4 Industrial gas applications 11.6 — — — 11.6 HVAC, power and refining applications 2.2 — — — 2.2 Bulk industrial gas applications — 35.1 26.5 (0.9 ) 60.7 Packaged gas industrial applications — 34.2 10.5 — 44.7 Cryobiological storage — 16.8 — — 16.8 Total $ 46.6 $ 99.6 $ 63.2 $ (6.7 ) $ 202.7 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 191.2 $ — $ — $ — $ 191.2 Liquefied natural gas (LNG) applications 28.5 54.4 48.3 (2.0 ) 129.2 Industrial gas applications 9.8 — — — 9.8 HVAC, power and refining applications 59.3 — — — 59.3 Bulk industrial gas applications — 105.7 85.8 (1.2 ) 190.3 Packaged gas industrial applications — 117.8 40.2 (2.9 ) 155.1 Cryobiological storage — 59.3 — — 59.3 Total $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ 794.2 Nine Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 91.6 $ — $ — $ — $ 91.6 Liquefied natural gas (LNG) applications 16.7 45.0 67.1 (11.6 ) 117.2 Industrial gas applications 16.0 — — — 16.0 HVAC, power and refining applications 2.2 — — — 2.2 Bulk industrial gas applications — 94.2 64.7 (3.5 ) 155.4 Packaged gas industrial applications — 99.4 34.9 (0.2 ) 134.1 Cryobiological storage — 57.0 — — 57.0 Total $ 126.5 $ 295.6 $ 166.7 $ (15.3 ) $ 573.5 Total Assets September 30, December 31, Energy & Chemicals $ 755.4 $ 784.1 D&S West 435.0 415.7 D&S East 321.2 327.3 Corporate 103.5 92.7 Discontinued Operations 123.4 104.9 Total $ 1,738.5 $ 1,724.7 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Significant changes to our accounting policies as a result of adopting ASC 606 are discussed below. Other significant accounting policies are detailed in “Note 2 — Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2017. Revenue Recognition: Revenue is recognized when (or as) we satisfy performance obligations by transferring a promised good or service, an asset, to a customer. An asset is transferred to a customer when, or as, the customer obtains control over that asset. In most contracts, the transaction price includes both fixed and variable consideration. The variable consideration contained within our contracts with customers includes discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. When a contract includes multiple performance obligations, the contract price is allocated among the performance obligations based upon the stand alone selling prices. When the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service is expected, at contract inception, to be one year or less, we do not adjust for the effects of a significant financing component. For brazed aluminum heat exchangers, air cooled heat exchangers, cold boxes, liquefied natural gas fueling stations, engineered tanks, and repair services, most contracts contain language that transfers control to the customer over time. For these contracts, revenue is recognized as we satisfy the performance obligations by an allocation of the transaction price to the accounting period computed using input methods such as costs incurred. Input methods recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. The costs incurred input method measures progress toward the satisfaction of the performance obligation by multiplying the transaction price of the performance obligation by the percentage of incurred costs as of the balance sheet date to the total estimated costs at completion after giving effect to the most current estimates. Timing of amounts billed on contracts varies from contract to contract and could cause significant variation in working capital needs. Revisions to estimated cost to complete that result from inefficiencies in our performance that were not expected in the pricing of the contract are expensed in the period in which these inefficiencies become known. Contract modifications can change a contract’s scope, price, or both. Approved contract modifications are accounted for as either a separate contract or as part of the existing contract depending on the nature of the modification. For standard industrial gas and LNG tanks and some products identified in the prior paragraph with contract language that does not meet the over time recognition requirements, the contract with the customer contains language that transfers control to the customer at a point in time. For these contracts, revenue is recognized when we satisfy our performance obligation to the customer. Timing of amounts billed on contracts varies from contract to contract. The specific point in time when control transfers depends on the contract with the customer, contract terms that provide for a present obligation to pay, physical possession, legal title, risk and rewards of ownership, acceptance of the asset, and bill-and-hold arrangements may impact the point in time when control transfers to the customer. Incremental contract costs are expensed when incurred when the amortization period of the asset that would have been recognized is one year or less; otherwise, incremental contract costs are recognized as an asset and amortized over time as promised goods and services are transferred to a customer. When losses are expected to be incurred on a contract, we recognize the entire anticipated loss in the accounting period when the loss becomes evident. The loss is recognized when the current estimate of the consideration we expect to receive, modified to include unconstrained variable consideration instead of constrained variable consideration, is less than the current estimate of total costs for the contract. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling fee revenues and the related expenses are reported as fulfillment revenues and expenses for all customers because we have adopted the practical expedient contained in ASC 606-10-25-18B. Therefore, all shipping and handling costs associated with outbound freight are accounted for as a fulfillment costs and are included in cost of sales. Contract Balances Accounts receivable, net of allowances: Accounts receivable includes amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Past-due trade receivable balances are written off when our internal collection efforts have been unsuccessful. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less. We do not typically include extended payment terms in our contracts with customers. Unbilled contract revenue: Unbilled contract revenue represents contract assets resulting from revenue recognized over time in excess of the amount billed to the customer and the amount billed to the customer is not just subject to the passage of time. Billing requirements vary by contract but are generally structured around the completion of certain milestones. These contract assets are generally classified as current. Customer advances and billings in excess of contract revenue: Our contract liabilities consist of advance customer payments, billings in excess of revenue recognized and deferred revenue. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. We classify advance customer payments and billings in excess of revenue recognized as current. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. The current portion of deferred revenue is included in customer advances and billings in excess of contract revenue in our unaudited condensed consolidated balance sheets. Long-term deferred revenue is included in other long-term liabilities in our unaudited condensed consolidated balance sheets. The following table represents changes in our contract assets and contract liabilities balances: September 30, 2018 January 1, 2018 Year-to-date Change ($) Year-to-date Change (%) Contract assets Accounts receivable, net of allowances $ 177.3 $ 196.4 (19.1 ) 9.7 % Unbilled contract revenue 34.2 43.0 (8.8 ) 20.5 % Contract liabilities Customer advances and billings in excess of contract revenue $ 94.5 $ 99.7 (5.2 ) 5.2 % Long-term deferred revenue 1.6 1.7 (0.1 ) 5.9 % Revenue recognized for the three and nine months ended September 30, 2018 and 2017 , that was included in the contract liabilities balance at the beginning of each year was $10.3 and $78.0 , and $7.0 , and $50.5 , respectively. The amount of revenue recognized during the three and nine months ended September 30, 2018 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, 2018 , the estimated revenue expected to be recognized in the future related to remaining performance obligations was $501.5 . We expect to recognize revenue on approximately 87.8% of the remaining performance obligations over the next 12 months and 1.6% of the remaining performance obligations over the next 13 to 24 months , with the remaining balance recognized thereafter. Disaggregation of Revenue The following table represents a disaggregation of revenue by product application along with the reportable segment for each category: Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 63.5 $ — $ — $ — $ 63.5 Liquefied natural gas (LNG) applications 12.4 20.5 11.8 (0.4 ) 44.3 Industrial gas applications 3.4 — — — 3.4 HVAC, power and refining applications 18.8 — — — 18.8 Bulk industrial gas applications — 41.1 31.8 (0.4 ) 72.5 Packaged gas industrial applications — 37.2 13.2 (0.9 ) 49.5 Cryobiological storage — 20.2 — — 20.2 Total $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ 272.2 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 191.2 $ — $ — $ — $ 191.2 Liquefied natural gas (LNG) applications 28.5 54.4 48.3 (2.0 ) 129.2 Industrial gas applications 9.8 — — — 9.8 HVAC, power and refining applications 59.3 — — — 59.3 Bulk industrial gas applications — 105.7 85.8 (1.2 ) 190.3 Packaged gas industrial applications — 117.8 40.2 (2.9 ) 155.1 Cryobiological storage — 59.3 — — 59.3 Total $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ 794.2 The following table represents a disaggregation of revenue by timing of revenue along with the reportable segment for each category: Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Point in time $ 18.9 $ 102.8 $ 55.0 $ (1.3 ) $ 175.4 Over time 79.2 16.2 1.8 (0.4 ) 96.8 Total $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ 272.2 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Point in time $ 66.5 $ 299.3 $ 157.0 $ (4.4 ) $ 518.4 Over time 222.3 37.9 17.3 (1.7 ) 275.8 Total $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ 794.2 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The following table summarizes the components of inventory: September 30, December 31, Raw materials and supplies $ 86.7 $ 72.1 Work in process 32.5 37.1 Finished goods 69.0 64.5 Total inventories, net $ 188.2 $ 173.7 The allowance for excess and obsolete inventory balance at September 30, 2018 and December 31, 2017 was $7.5 and $7.1 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table represents the changes in goodwill by segment: Energy & Chemicals D&S West D&S East Consolidated Balance at December 31, 2017 $ 275.1 $ 147.3 $ 37.3 $ 459.7 Foreign currency translation adjustments (1.2 ) (0.7 ) — (1.9 ) Goodwill acquired during the year — 4.7 — 4.7 Purchase price adjustment (1) (5.3 ) — — (5.3 ) Balance at September 30, 2018 $ 268.6 $ 151.3 $ 37.3 $ 457.2 Accumulated goodwill impairment loss at December 31, 2017 $ 64.6 $ 82.5 $ — $ 147.1 Foreign currency translation adjustments — — — — Accumulated goodwill impairment loss at September 30, 2018 $ 64.6 $ 82.5 $ — $ 147.1 (1) For the Nine Months Ended September 30, 2018 , we made a purchase accounting adjustment for $5.3 for the Hudson acquisition. For further information see Note 9. 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) : September 30, 2018 December 31, 2017 Weighted-average Estimated Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Finite-lived intangible assets: Customer relationships 15 years $ 225.9 $ (87.5 ) $ 226.5 $ (74.9 ) Unpatented technology 9 years 23.3 (4.4 ) 22.6 (2.6 ) Land use rights 50 years 12.8 (1.3 ) 13.4 (1.2 ) Trademarks and trade names 15 years 3.3 (1.6 ) 3.4 (1.7 ) Patents and other 5 years 2.5 (1.1 ) 2.6 (0.6 ) Total finite-lived intangible assets 16 years $ 267.8 $ (95.9 ) $ 268.5 $ (81.0 ) Indefinite-lived intangible assets: Trademarks and trade names 98.4 — 98.9 — Total intangible assets $ 366.2 $ (95.9 ) $ 367.4 $ (81.0 ) _______________ (1) Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. Amortization expense for intangible assets subject to amortization was $5.0 and $2.6 for the three months ended September 30, 2018 and 2017 , respectively, and $15.7 and $7.0 for the nine months ended September 30, 2018 and 2017 , respectively. We estimate amortization expense to be recognized during the next five years as follows: For the Year Ending December 31, 2018 $ 21.0 2019 20.8 2020 18.8 2021 14.4 2022 14.3 See Note 9 , “ Business Combinations ” for further information related to intangible assets acquired in the Hudson Products acquisition. Government Grants We received certain government grants related to land use rights for capacity expansion in China (“China Government Grants”). China Government Grants are generally recorded in other current liabilities and other long-term liabilities in the unaudited condensed consolidated balance sheets and generally recognized into income over the useful life of the associated assets ( 10 to 50 years). China Government Grants are presented in our unaudited condensed consolidated balance sheets as follows: September 30, December 31, Current $ 0.5 $ 0.5 Long-term 7.7 8.7 Total China Government Grants $ 8.2 $ 9.2 We also received government grants from certain local jurisdictions within the United States, which are recorded in other assets in the unaudited condensed consolidated balance sheets and were not significant for the periods presented. |
Debt and Credit Arrangements
Debt and Credit Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Credit Arrangements | Debt and Credit Arrangements Summary of Outstanding Borrowings The following table represents the components of our borrowings: September 30, December 31, Convertible notes due November 2024: Principal amount $ 258.8 $ 258.8 Unamortized discount (52.2 ) (57.6 ) Unamortized debt issuance costs (4.6 ) (5.1 ) Convertible notes due November 2024, net of unamortized discount and debt issuance costs 202.0 196.1 Convertible notes due August 2018: Principal amount — 57.1 Unamortized discount — (1.9 ) Unamortized debt issuance costs — (0.1 ) Convertible notes due August 2018, net of unamortized discount and debt issuance costs — 55.1 Senior secured revolving credit facility due November 2022 298.5 239.0 Foreign facilities 9.7 7.9 Total debt, net of unamortized discount and debt issuance costs 510.2 498.1 Less: current maturities (1) (9.7 ) (58.9 ) Long-term debt $ 500.5 $ 439.2 _______________ (1) Current maturities at December 31, 2017 includes $55.1 of Convertible notes due August 2018, net of unamortized discount and debt issuance costs. 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”). The 2024 Notes bear interest at an annual rate of 1.00% , payable 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 Chart and are not guaranteed by any of our subsidiaries. The 2024 Notes are senior in right of payment to our future subordinated debt, equal in right of payment with our 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 2024 Notes may be settled in cash, shares of our common stock or a combination of cash and shares of our common stock, at our election (subject to, and in accordance with, the settlement provisions of the Indenture). 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 is equal to an initial conversion price of approximately $58.725 per share, representing a conversion 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 such a corporate event in certain circumstances. For purposes of calculating earnings per share, if the average market price of our common stock exceeds the applicable conversion price during the periods reported, shares contingently issuable under the 2024 Notes will have a dilutive effect with respect to our common stock. Since our closing common stock price of $78.33 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 approximately $86.4 at September 30, 2018 . 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 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. Upon conversion, we may settle the conversion by paying or delivering either shares of our common stock, solely cash, or a combination of cash and shares of our common stock, at our election. It is our intention to settle the principal amount of the 2024 Notes in cash and excess conversion value in shares of our common stock. We reassess the convertibility of the 2024 Notes and the related balance sheet classification on a quarterly basis. As of September 30, 2018 , events for early conversion were not met, and thus the 2024 Notes were not convertible as of and for the fiscal quarter beginning October 1, 2018 . There have been no conversions as of the date of this filing. We allocated the gross proceeds of the 2024 Notes between the liability and equity components of the 2024 Notes. The initial liability component of $200.1 , which was recorded as long-term debt, represents the fair value of similar debt instruments that have no conversion rights. The initial equity component of $58.7 , which was recorded as additional paid-in capital, represents the debt discount and was calculated as the difference between the fair value of the liability component and gross proceeds of the 2024 Notes. The liability component was recognized at the present value of its associated cash flows using a 4.8% straight-debt rate and is being accreted to interest expense over the term of the 2024 Notes. We recorded $5.3 in deferred debt issuance costs associated with the 2024 Notes, which are being amortized over the term of the 2024 Notes using the effective interest method. We also recorded $1.5 in equity issuance costs, which was recorded as a reduction to additional paid-in capital in the December 31, 2017 consolidated balance sheet. The following table summarizes interest accretion of the 2024 Notes discount, 1.0% contractual interest coupon and financing costs amortization associated with the 2024 Notes: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 2024 Notes, interest accretion of convertible notes discount $ 1.9 $ 5.4 2024 Notes, 1.0% contractual interest coupon 0.6 1.9 2024 Notes, total interest expense $ 2.5 $ 7.3 2024 Notes, financing costs amortization $ 0.2 $ 0.5 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 . 2018 Convertible Notes On August 1, 2018, our 2.00% Convertible Senior Subordinated Notes due August 2018 (the “2018 Notes”) matured. The aggregate outstanding principal was $57.1 at August 1, 2018. During the nine months ended September 30, 2018, we settled upon maturity the 2018 Notes for total cash consideration of $57.1 . Additionally, $0.6 of interest, which had previously been accrued, was paid at settlement. The following table summarizes interest accretion of the 2018 Notes discount, 2.0% contractual interest coupon, and financing costs amortization associated with the 2018 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 2018 Notes, interest accretion of convertible notes discount $ 0.4 $ 3.4 $ 1.9 $ 10.0 2018 Notes, 2.0% contractual interest coupon 0.1 1.3 1.0 3.8 2018 Notes, total interest expense $ 0.5 $ 4.7 $ 2.9 $ 13.8 2018 Notes, financing costs amortization $ — $ 0.2 $ 0.1 $ 0.6 Convertible Note Hedge, Capped Call and Warrant Transactions Associated with the 2018 Notes The convertible note hedge and capped call transactions associated with the 2018 Notes expired in August, with immaterial exercises. The separate warrants associated with the 2018 Notes remain outstanding with a strike price of $84.96 per share (subject to adjustment). These warrants are exercisable only during an 80-trading day period commencing on October 30, 2018. No warrants have been exercised as of the date of the filing. Senior Secured Revolving Credit Facility We have a five -year $450.0 senior secured revolving credit facility (the “SSRCF”), which matures on November 3, 2022. The SSRCF includes a $25.0 sub-limit for the issuance of swingline loans and a $100.0 base sub-limit along with a $100.0 discretionary sub-limit to be used for letters of credit. There is a foreign currency limit of $100.0 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 made by our 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 us to add up to an aggregate $225.0 in term loans or revolving credit commitments from its lenders. Revolving loans under the SSRCF bear interest, at the applicable Borrower’s election, at a rate per annum equal to either (i) the greatest of (a) the Prime Rate (as defined in the SSRCF) in effect on such day, (b) the NYFRB Rate (as defined in the SSRCF) in effect on such day plus 1/2 of 1.0% and (c) the Adjusted LIBOR (as defined in the SSRCF) for a one-month interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1.0% (the “Adjusted Base Rate”), plus a margin that varies with our leverage ratio, or (ii) the Adjusted LIBOR (as defined in the SSRCF) for the relevant interest period in effect for such day, plus a margin that varies with our leverage ratio. In addition, we are required to pay a commitment fee of between 0.20% and 0.375% 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 (as defined in the SSRCF, ranging from 1.5% to 2.5% , depending on the leverage ratio calculated at each fiscal quarter end). 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 to the principal amount of the 2018 Notes outstanding six months prior to the maturity date of the 2018 Notes and when holders of the 2018 Notes have the option to require us to repurchase the 2018 Notes, a maximum leverage 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 $100.0 or greater. The SSRCF contains a number of other customary covenants including, but not limited to, restrictions on our 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. At September 30, 2018 , we were in compliance with all covenants. We recorded $2.5 in deferred debt issuance costs associated with the SSRCF, which are being amortized over the five -year term of the SSRCF. At September 30, 2018 , unamortized debt issuance costs associated with the SSRCF were $2.0 . For both the three months ended September 30, 2018 and 2017 , deferred financing fees amortization was $0.1 . For both the nine months ended September 30, 2018 and 2017 , deferred financing fees amortization was $0.4 . As of September 30, 2018 , there was $298.5 in borrowings outstanding under the SSRCF (“SSRCF Borrowings”) bearing interest at 4.25% and $31.6 in letters of credit issued and bank guarantees supported by the SSRCF. At September 30, 2018 , the SSRCF had availability of $119.9 . For the three and nine months ended September 30, 2018 , interest expense related to the SSRCF Borrowings and swingline loans outstanding was $2.9 and $8.0 , respectively. For both the three and nine months ended September 30, 2017, interest expense related to SSRCF borrowings outstanding was $0.3 . The obligations under the SSRCF are guaranteed by the Company and substantially all of its U.S. subsidiaries and secured by substantially all of the assets of Chart and our U.S. subsidiaries and 65% of the capital stock of our material non-U.S. subsidiaries (as defined by the SSRCF) that are owned by U.S. 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 $7.3 ) 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, 2018 , there was 40.0 million Chinese yuan (equivalent to $5.8 ) outstanding under this facility, bearing interest at 5.00% . CCESC and CCDEC, together, had a combined total of 5.0 million Chinese yuan (equivalent to $0.7 ), in bank guarantees at September 30, 2018 . Chart Cryogenic Distribution Equipment (Changzhou) Company Limited (“CCDEC”), a joint venture of the Company, maintained an unsecured credit facility whereby CCDEC was able to borrow up to 75.0 million Chinese yuan (equivalent to $10.9 ) for working capital purposes. This facility was effective until August 6, 2018. There were no borrowings under this facility during its term. CCESC has a term loan that is secured by certain CCESC land use rights and allows for up to 86.6 million Chinese yuan (equivalent to $12.6 ) 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, 2018 , there was 26.6 million Chinese yuan (equivalent to $3.9 ) 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 $5.6 ) and two secured credit facilities with capacity of up to 6.5 million euros (equivalent to $7.5 ). All three facilities (the “Ferox Credit 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. At September 30, 2018 there were bank guarantees of 196.6 million Czech koruna (equivalent to $8.8 ) supported by the Ferox Credit Facilities. Chart Luxembourg maintains an overdraft facility with $5.0 in borrowing capacity. There were no borrowings under the Chart Luxembourg facility as of September 30, 2018 . Letters of Credit Chart Energy & Chemicals, Inc. (“Chart E&C”), a wholly-owned subsidiary of the Company, had $1.0 in deposits in a bank outside of the SSRCF to secure letters of credit. The deposits are treated as restricted cash and restricted cash equivalents in the unaudited condensed consolidated balance sheets ( $1.0 in other assets at September 30, 2018 and $5.4 in other current assets and $1.0 in other assets at December 31, 2017 ). Fair Value Disclosures The fair value of the 2024 Notes was approximately 140% and 105% of their par value as of September 30, 2018 and December 31, 2017 , respectively. The fair value of the 2018 Notes was approximately 99% of their par value as of December 31, 2017 . The 2024 Notes and 2018 Notes are actively quoted instruments and, accordingly, the fair values of the 2024 Notes and 2018 Notes were determined using Level 1 inputs as defined in Note 10 , “ Fair Value Measurements .” |
Product Warranties
Product Warranties | 9 Months Ended |
Sep. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties We provide product warranties with varying terms and durations for the majority of our products. We 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 our typical experience. We record warranty expense in cost of sales in the unaudited condensed consolidated statements of operations and comprehensive income. Product warranty claims not expected to occur within one year are included as part of other long-term liabilities in the unaudited condensed consolidated balance sheets. The following table represents changes in our consolidated warranty reserve: Balance at December 31, 2017 $ 11.6 Issued – warranty expense 3.3 Change in estimates (1.4 ) Warranty usage (4.7 ) Balance at September 30, 2018 $ 8.8 During the second quarter of 2018, we established a reserve for $3.8 related to a recall notice issued for certain aluminum cryobiological tanks in our D&S West segment manufactured in our New Prague, Minnesota facility during a limited time period. See Note 15 , “ Commitments and Contingencies ” for additional information. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations VRV Acquisition On September 26, 2018, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with the shareholders of VRV s.p.a., a company incorporated under the laws of the Italian Republic and having its registered office in Milan, Italy (VRV s.p.a., together with its affiliates, “VRV”). The Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Purchase Agreement, we will acquire all of the issued and outstanding shares of VRV (the “VRV Acquisition”). VRV is a diversified multinational corporation engaged in the design and manufacture of pressure equipment serving the cryogenic, as well as the energy and petrochemical end markets. The VRV Acquisition purchase price is euro 125 million (equivalent to $144.7 based on the exchange rate at September 30, 2018) in cash, subject to a working capital adjustment, and we will also assume the outstanding indebtedness of VRV (approximately euro 70 million , equivalent to $81.0 based on the exchange rate at September 30, 2018), subject to an indebtedness adjustment. We have sufficient liquidity to fund the VRV Acquisition and it is anticipated that the VRV Acquisition will be funded by some combination of our available cash on hand, debt under our SSRCF, or other financing alternatives. The Purchase Agreement provides for customary representations, warranties, covenants and agreements, including, among others, that each of the parties to the Purchase Agreement will use commercially reasonable efforts to complete the VRV Acquisition, that VRV will conduct its business in the ordinary course consistent with past practice during the period between the execution of the Purchase Agreement and consummation of the VRV Acquisition, and that VRV will not engage in certain kinds of transactions during such period. The Purchase Agreement also contains customary termination provisions, including a provision that the Purchase Agreement may be terminated by either Chart or VRV if the Acquisition has not been completed by December 31, 2018 (subject to a limited extension with respect to certain governmental proceedings); provided, however, that such right to terminate the Purchase Agreement is not available to any party whose breach of any provision of the Purchase Agreement results in the failure of the VRV Acquisition to be completed. The completion of the VRV Acquisition is subject to the satisfaction of certain customary closing conditions. The VRV Acquisition is expected to be completed in the fourth quarter of 2018. Skaff Acquisition On January 2, 2018, we acquired 100% of the equity interests of Skaff Cryogenics and Cryo-Lease, LLC (together “Skaff”) for an approximate purchase price of $12.5 , net of cash acquired. Skaff provides quality repair service and re-manufacturing of cryogenic and liquefied natural gas storage tanks and trailers and also maintains a portfolio of cryogenic storage equipment that is leased to customers for temporary and permanent needs. Skaff is headquartered in Brentwood, New Hampshire and provides services and equipment to customers in North America. Skaff’s results are included in the D&S West operating segment. Additional information related to the Skaff acquisition has not been presented because the impact on our consolidated results of operations and financial position is not material. Hudson Acquisition On September 20, 2017, we completed the acquisition of Hudson Products Corporation (“Hudson”). The acquisition purchase price was $419.5 , net of cash acquired. Approximately $300.0 of the purchase price was funded through borrowings under our senior secured revolving credit facility, and the remainder of the purchase price was funded with cash on hand. Hudson, which has operations in the United States, China and Italy and a joint venture in Mexico, designs, manufactures, sells and services products used in refining, heating, ventilation and air conditioning (HVAC), petrochemical, natural gas, power generation, industrial and commercial end markets. Hudson is a North American leader in air-cooled heat exchangers and a global leader in axial flow cooling fans. Hudson’s results of operations are included in our E&C segment. We allocated the acquisition consideration to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The fair value of the acquired tangible and identifiable intangible assets were determined based on inputs that are unobservable and significant to the overall fair value measurement. It is also based on estimates and assumptions made by management at the time of the acquisition. As such, this was classified as Level 3 fair value hierarchy measurements and disclosures. We estimated the fair value of acquired unpatented technology and trademarks and trade names using the relief from royalty method. The 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 2 to 15 years . Hudson complements our 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 our customers. Management anticipates the combination of strong engineering cultures will continue to further develop full service solutions for our customers. The 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 excess of the acquisition consideration over the estimated fair values of the acquired assets and assumed liabilities is assigned to goodwill. The purchase price allocation reported at June 30, 2018 was preliminary and was based on provisional fair values. During the third quarter, and prior to September 20, 2018, we received and analyzed new information about certain assets and liabilities, primarily related to taxes, as of the September 30, 2017 acquisition date and subsequently decreased other assets by $0.2 , decreased deferred tax liabilities by $7.6 , increased other current liabilities by $0.6 and increased other long-term liabilities by $1.5 for post-closing adjustments, based on this information. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the Hudson acquisition, including the post-closing adjustments: September 30, 2018 Adjustments As previously reported June 30, 2018 Net assets acquired: Goodwill $ 233.0 $ (5.3 ) $ 238.3 Identifiable intangible assets 211.0 — 211.0 Accounts receivable 34.6 — 34.6 Property, plant and equipment 29.4 — 29.4 Inventories 26.5 — 26.5 Other current assets 8.1 — 8.1 Unbilled contract revenue 4.9 — 4.9 Other assets 2.7 (0.2 ) 2.9 Prepaid expenses 0.9 — 0.9 Deferred tax liabilities (80.0 ) 7.6 (87.6 ) Accounts payable (21.2 ) — (21.2 ) Customer advances and billings in excess of contract revenue (17.4 ) — (17.4 ) Accrued salaries, wages and benefits (4.4 ) — (4.4 ) Other current liabilities (4.4 ) (0.6 ) (3.8 ) Other long-term liabilities (3.4 ) (1.5 ) (1.9 ) Current portion of warranty reserve (0.8 ) — (0.8 ) Net assets acquired $ 419.5 f $ — $ 419.5 Information regarding identifiable intangible assets acquired in the Hudson acquisition is presented below: Weighted-average Estimated Useful Life Estimated Asset Fair Value Finite-lived intangible assets: Customer relationships 13 years $ 122.1 Unpatented technology 10 years 18.3 Customer backlog 2 years 1.3 Total finite-lived intangible assets acquired 12 years 141.7 Indefinite-lived intangible assets: Trademarks and trade names 69.3 Total identifiable intangible assets acquired $ 211.0 During the three and nine months ended September 30, 2018 , net sales attributed to the acquired Hudson operations was $44.1 and $134.9 , respectively. For the three and nine months ended September 30, 2018 , Hudson contributed $4.3 and $14.6 to operating income, which included $3.0 and $9.0 of intangible asset amortization expense, respectively. For the period September 20, 2017 to September 30, 2017, net sales attributed to the acquired Hudson operations was $6.1 . For the same period, Hudson contributed $1.2 to operating income which included $0.4 of intangible asset amortization expense. During the three and nine months ended September 30, 2017, the Company incurred $7.3 and $8.1 , respectively, in acquisition related costs related to the Hudson acquisition which were recorded in selling, general and administrative expenses in the unaudited condensed consolidated statement of operations. Supplemental Pro Forma Information The following supplemental pro forma financial information is based on our historical consolidated financial statements and Hudson’s historical consolidated financial statements as adjusted to give effect to the September 20, 2017 acquisition of Hudson. The supplemental pro forma financial information for the periods presented assumes that we owned Hudson for the full 2017 fiscal year. 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, and • step-up depreciation of acquired property, plant and equipment This 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 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. The following table presents pro forma sales, net income attributable to the Company, and net income attributable to the Company per common share data assuming Hudson was acquired before the beginning of the 2017 fiscal year, and assuming effective tax rates of 35%: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Pro forma sales $ 244.6 $ 714.8 Pro forma net income attributable to Chart Industries, Inc. 3.6 4.5 Pro forma net income attributable to Chart Industries, Inc. per common share, basic $ 0.12 $ 0.15 Pro forma net income attributable to Chart Industries, Inc. per common share, diluted $ 0.11 $ 0.14 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 a total purchase price of 3.6 million euros (equivalent to $4.2 ). 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 our D&S East segment. Additional information related to the VCT acquisition has not been presented because the impact on our consolidated results of operations and financial position is not material. Hetsco, Inc. Acquisition On January 13, 2017, we acquired 100% of the equity interests in Hetsco, Inc. from Global Power Equipment Group, Inc. for a total purchase price of $22.8 . 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 our E&C segment since the date of acquisition. Additional information related to the Hetsco, Inc. acquisition has not been presented because the impact on our consolidated results of operations and financial position is not material. Contingent Consideration The estimated fair value of contingent consideration relating to the 2015 Thermax acquisition of our D&S West segment, was $1.8 at the date of acquisition and was valued according to a discounted cash flow approach, which includes assumptions regarding the probability of achieving certain earnings targets and a discount rate applied to the potential payments. Potential payments may be paid before July 1, 2019 based on the attainment of certain earnings targets. The potential payments related to Thermax contingent consideration are between $0.0 and $11.3 . Valuations are performed using Level 3 inputs as defined in Note 10 , “ Fair Value Measurements ” 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 unaudited condensed consolidated balance sheets. Changes in fair value of contingent consideration, including accretion, are recorded as selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive income. The fair value of contingent consideration liabilities was insignificant at both September 30, 2018 and December 31, 2017 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We measure our financial assets and liabilities at fair value on a recurring basis using a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies. The three levels of inputs used to measure fair value are as follows: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Valuations based on unobservable inputs reflecting our own 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 our unaudited condensed consolidated balance sheets were not significant for the periods presented. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following tables represent changes in accumulated other comprehensive loss by component: Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at June 30, 2018 $ (7.2 ) $ (9.9 ) $ (17.1 ) Other comprehensive loss (6.3 ) — (6.3 ) Amounts reclassified from accumulated other comprehensive loss, net of income taxes — 0.2 0.2 Net current-period other comprehensive (loss) income, net of taxes (6.3 ) 0.2 (6.1 ) Balance at September 30, 2018 $ (13.5 ) $ (9.7 ) $ (23.2 ) Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at June 30, 2017 $ (10.8 ) $ (10.1 ) $ (20.9 ) Other comprehensive income 6.7 — 6.7 Amounts reclassified from accumulated other comprehensive loss, net of income taxes 1.3 0.2 1.5 Net current-period other comprehensive income, net of taxes 8.0 0.2 8.2 Balance at September 30, 2017 $ (2.8 ) $ (9.9 ) $ (12.7 ) Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at December 31, 2017 $ 2.2 $ (10.3 ) $ (8.1 ) Other comprehensive loss (15.7 ) — (15.7 ) Amounts reclassified from accumulated other comprehensive loss, net of income taxes — 0.6 0.6 Net current-period other comprehensive (loss) income, net of taxes (15.7 ) 0.6 (15.1 ) Balance at September 30, 2018 $ (13.5 ) $ (9.7 ) $ (23.2 ) Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at December 31, 2016 $ (24.7 ) $ (10.5 ) $ (35.2 ) Other comprehensive income 20.6 — 20.6 Amounts reclassified from accumulated other comprehensive loss, net of income taxes 1.3 0.6 1.9 Net current-period other comprehensive income, net of taxes 21.9 0.6 22.5 Balance at September 30, 2017 $ (2.8 ) $ (9.9 ) $ (12.7 ) |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents calculations of net earnings (loss) per share of common stock: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income (loss) attributable to Chart Industries, Inc. Income (loss) from continuing operations $ 21.5 $ (0.6 ) $ 35.6 $ (1.2 ) Income from discontinued operations, net of tax 0.7 2.1 4.7 2.6 Net income attributable to Chart Industries, Inc. $ 22.2 $ 1.5 $ 40.3 $ 1.4 Earnings (loss) per common share – basic: Income (loss) from continuing operations $ 0.70 $ (0.02 ) $ 1.15 $ (0.04 ) Income from discontinued operations 0.02 0.07 0.15 0.08 Net income attributable to Chart Industries, Inc. $ 0.72 $ 0.05 $ 1.30 $ 0.04 Earnings (loss) per common share – diluted: Income (loss) from continuing operations (1) $ 0.65 $ (0.02 ) $ 1.11 $ (0.04 ) Income from discontinued operations 0.02 0.07 0.14 0.08 Net income attributable to Chart Industries, Inc. $ 0.67 $ 0.05 $ 1.25 $ 0.04 Weighted average number of common shares outstanding – basic 31.03 30.76 30.97 30.73 Incremental shares issuable upon assumed conversion and exercise of share-based awards 0.85 0.55 0.83 0.56 Incremental shares issuable due to dilutive effect of convertible notes 0.93 — 0.34 — Incremental shares issuable due to dilutive effect of warrants 0.14 — — — Weighted average number of common shares outstanding – diluted 32.95 31.31 32.14 31.29 _______________ (1) Zero incremental shares from share-based awards are included in the computation of diluted net loss per share for periods in which a net loss occurs because to do so would be anti-dilutive. 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, 2018 2017 2018 2017 Share-based awards 0.06 0.63 0.26 0.67 Convertible note hedge (1) 0.93 — 0.34 — Warrants 0.77 3.37 5.17 3.37 Total anti-dilutive securities 1.76 4.00 5.77 4.04 _______________ (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 7 , “ Debt and Credit Arrangements .” |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, requires a current inclusion in U.S. federal taxable income of certain earnings of foreign corporations, and creates a new limitation on deductible interest expense. Consequently, we recorded a provisional $22.5 net favorable tax benefit during the fourth quarter of 2017 related to the Tax Act. This benefit mainly consisted of a one-time, provisional benefit of $26.9 related to the remeasurement of certain of our deferred tax liabilities using the lower U.S. federal corporate tax rate of 21%. This was partially offset by (i) a one-time, provisional charge of $8.7 related to the deemed repatriation transition tax, which is a tax on previously untaxed accumulated earnings and profits of certain of our foreign subsidiaries, and (ii) a one-time tax provisional expense and tax benefit of $4.5 and $8.7 , respectively, related to our intent to amend pre-acquisition Hudson U.S. federal tax returns before the end of 2018. As we complete our analysis of the Tax Act, further collect and analyze data, interpret any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes in the period in which the adjustments are made. As of September 30, 2018 , we have not completed our accounting for the income tax effects of certain elements of the Tax Act. If we were able to make reasonable estimates of the effects of elements for which our analysis is not yet complete, we recorded provisional adjustments. If we were not yet able to make reasonable estimates of the impact of certain elements, we have not recorded any adjustments related to those elements and have continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act. Our accounting for the following elements of the Tax Act is incomplete. However, we were able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments as follows: Reduction of U.S. federal corporate tax rate: The Tax Act reduces the U.S. federal corporate tax rate to 21% effective January 1, 2018. For certain of our deferred tax liabilities, we have recorded a provisional decrease of $26.9 , with a corresponding adjustment to deferred income tax benefit of $26.9 for the year ended December 31, 2017. During the three and nine months ended September 30, 2018 we recorded an increase to certain of our deferred tax liabilities, with a corresponding adjustment to deferred income tax expense of $0.6 , as a result of new information pertaining to certain taxable temporary differences. While we are able to make a reasonable estimate of the impact of the reduction in the U.S. federal corporate tax rate, it may be affected by other analyses related to the Tax Act, including, but not limited to, our calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences. Deemed Repatriation Transition Tax: The Deemed Repatriation Transition Tax (“Transition Tax”) is a tax on total post-1986 earnings and profits (E&P) of certain of our foreign subsidiaries. At December 31, 2017 we were able to provisionally estimate our Transition Tax and recorded (i) a one-time, provisional charge of $8.7 related to the deemed repatriation transition tax, and (ii) a one-time provisional tax expense and tax benefit of $4.5 and $8.7 , respectively, related to our intent to amend pre-acquisition Hudson U.S. federal tax returns before the end of 2018. As of September 30, 2018, we have not yet finalized our calculation of the total post-1986 E&P for these foreign subsidiaries. The Transition Tax is based on the amount of that E&P associated with cash and other specified assets in certain of our foreign subsidiaries. During the three months ended September 30, 2018 , we revised our estimate of our Transition Tax based on the preparation of our 2017 U.S. federal income tax return. As a result, we have recorded an additional tax expense of $1.5 related to our Transition Tax offset by an additional tax benefit of $1.4 associated with our intent to amend the pre-acquisition Hudson U.S. federal tax returns. We will continue to refine our estimate of our Transition Tax through December 31, 2018 which will include the interim period in which we will file our U.S. federal and Hudson amended income tax returns. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the Transition Tax, or any additional outside basis difference inherent in these entities since these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the Transition Tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time Transition Tax) is not practicable. Global Intangible Low Taxed Income (GILTI), Foreign Derived Intangible Income (FDII), Base Erosion and Anti-Abuse Tax (BEAT), and IRC Section 163(j) interest limitation (Interest Limitation) : For our calendar year beginning in 2018, we are subject to several provisions of the Tax Act including computations under GILTI, FDII, BEAT and the Interest Limitation rules. We were able to make a reasonable estimate of the impact of each provision of the Tax Act on our effective tax rate for the three and nine months ended September 30, 2018 . For the GILTI and FDII computations, we recorded a provisional estimate in our effective tax rate for the three and nine months ended September 30, 2018 . For the BEAT and Interest Limitation computations, we have not recorded a provisional estimate in our effective tax rate for the three and nine months ended September 30, 2018 because we currently estimate that these provisions of the Tax Act will not apply in 2018. We will continue to refine our provisional estimates for our computations of the GILTI, FDII, BEAT and Interest Limitation rules as we gather additional information. Valuation allowances: We must assess whether our valuation allowance analyses are affected by various aspects of the Tax Act (e.g., deemed repatriation of deferred foreign income, GILTI inclusions, new categories of foreign tax credits). The GILTI provisions require us in our U.S. income tax return, to include foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. We are evaluating if we will be subject to incremental U.S. tax on GILTI income in 2018, due to expense allocations required by the U.S. foreign tax credit rules. We have provisionally elected to account for GILTI tax in the period in which it is incurred, and therefore, we have not provided any provisional deferred tax impacts of GILTI in our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2018 . Since, as discussed herein, we have recorded provisional amounts related to certain portions of the Tax Act, any corresponding determination of the need for or change in a valuation allowance is also provisional. Income tax expense of $4.2 and $0.7 for the three months ended September 30, 2018 and 2017 , respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 16.0% and 100.0% , respectively. Income tax expense of $9.7 and $0.6 in the nine months ended September 30, 2018 and 2017 , respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 20.6% and 120.0% , respectively. The effective income tax rate of 16.0% and 20.6% for the three and nine months ended September 30, 2018 differed from the U.S. federal statutory rate of 21% primarily due to tax benefits related to certain share-based compensation, partially offset by the effect of income earned by certain of our foreign entities being taxed at higher rates than the federal statutory rate as well as losses incurred by certain of our Chinese operations for which no benefit was recorded. The effective income tax rate of 100.0% and 120.0% for the three and nine months ended September 30, 2017 , respectively, differed from 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. 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. As of September 30, 2018 and December 31, 2017 , we had a liability for gross unrecognized tax benefits of $1.7 and $0.8 , respectively. This amount includes $0.8 and $0.6 of unrecognized tax benefits as of September 30, 2018 and December 31, 2017 , respectively, which, if ultimately recognized, would reduce our annual effective income tax rate. We recognize interest and penalties related to uncertain tax positions in income tax expense. We accrued approximately $0.2 and $0.1 for the payment of interest and penalties as of September 30, 2018 and December 31, 2017 , respectively. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | Share-based Compensation During the nine months ended September 30, 2018 , we granted 0.19 stock options and 0.10 restricted stock units, 0.02 shares of restricted stock, and 0.02 performance units. The total fair value of awards granted to employees during the nine months ended September 30, 2018 was $12.5 . In addition, non-employee directors received stock awards with a fair value of $0.5 . During the nine months ended September 30, 2018 , participants in our stock option plans exercised options to purchase 0.26 shares of our common stock, while 0.20 stock options were forfeited. Stock options generally have 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 attainment of certain pre-determined performance condition targets. During the nine months ended September 30, 2018 , 0.14 shares of restricted stock and restricted stock units vested while 0.07 restricted stock units and 0.03 performance units were forfeited. Share-based compensation expense was $0.5 and $1.4 for the three months ended September 30, 2018 and 2017 , respectively. Share-based compensation expense was $3.5 and $9.1 for the nine months ended September 30, 2018 and 2017 , respectively. Share-based compensation expense for the quarter and year includes a $0.9 million credit due to forfeitures related to headcount reductions associated with the strategic realignment of our segment structure. Furthermore, share-based compensation expense for the year includes a $1.8 credit due to forfeitures related to the departure of our former CEO on June 11, 2018. Share-based compensation expense is included in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive income. As of September 30, 2018 , total share-based compensation of $6.2 is expected to be recognized over the weighted-average period of approximately 2.3 years . |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Aluminum Cryobiological Tank Recall In April 2018, we received several customer inquiries regarding the performance of certain aluminum cryobiological tanks (in the D&S West segment) manufactured at our New Prague, Minnesota facility. An investigation has determined that certain aluminum tanks manufactured at the facility during a limited certain period should be repaired or replaced. As such, on April 23, 2018, we issued a recall notice for the impacted product lines. Our D&S West segment recorded an expense of $3.8 to cost of goods sold during the second quarter of 2018 related to the estimated costs of the recall. The remaining liability is included in other current liabilities in the September 30, 2018 unaudited condensed consolidated balance sheet. This estimated reserve is subject to adjustment to the extent additional developments arise in connection with this matter. The following table represents the establishment of and changes in the aluminum cryobiological tank recall reserve: Recall reserve - established April 2018 $ 3.8 Reserve usage (3.2 ) Balance at September 30, 2018 $ 0.6 Stainless Steel Cryobiological Tank Legal Proceedings During the second quarter of 2018, Chart was named in lawsuits (including a class action lawsuit 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. No monetary damages related to the alleged failure have been specified or communicated to Chart at this point, and we are evaluating the merits of such claims in light of the limited information available to date regarding use, maintenance and operation of the tank which has been out of our custody for the past six years when it was sold to the Pacific Fertility Center through an independent distributor. Accordingly, an accrual related to any damages that may result from the lawsuits has not been recorded because a potential loss is not currently probable or estimable. We plan to assert various defenses against the claims in the lawsuits, including a defense that since manufacture, we were not in any way involved with the installation, ongoing maintenance or monitoring of the tank or related fertility center cryogenic systems at any time since the initial delivery of the tank. Aluminum Cryobiological Tank Legal Proceeding Chart has been named in purported class action lawsuits filed in the Ontario Superior Court of Justice against the Company and other defendants with respect to the alleged failure of an aluminum cryobiological storage tank (model FNL XC 47/11-6 W/11) at The Toronto Institute for Reproductive Medicine in Etobicoke, Ontario. We have confirmed that the tank in question was part of the aluminum cryobiological tank recall commenced on April 23, 2018. We are currently evaluating the merits of the claims and plan to assert various defenses against the claims in the lawsuits. Accordingly, an accrual related to any damages that may result from the lawsuit has not been recorded because a potential loss is not currently probable or estimable. |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities We implemented certain cost reduction or avoidance actions, primarily related to departmental restructuring, including headcount reductions resulting in associated severance costs. As described in Note 3 , “ Reportable Segments ,” we executed a strategic realignment of our segment structure, which resulted in severance charges during the third quarter 2018. We currently do not expect any significant severance or restructuring charges during the remainder of 2018, although, we are closely monitoring our end markets and order rates and will continue to take appropriate and timely actions as necessary. During 2017, we implemented a number of cost reduction or avoidance actions, including headcount reductions and facility closures and relocations primarily relating to the consolidation of certain of our facilities in China and relocation of the corporate headquarters. The E&C Wuxi, China facility consolidation was completed during the second quarter of 2017, and the China facility consolidation in our D&S East segment was substantially completed during the fourth quarter of 2017. Our corporate headquarters move from Garfield Heights, Ohio to Ball Ground, Georgia (which was officially effective October 26, 2017) was substantially completed at the end of 2017, and our Garfield Heights lease commitment ended on December 31, 2017. The following table is a summary of the severance and other restructuring costs, which included employee-related costs, facility rent and exit costs, relocation, recruiting, travel and other, for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Severance: Cost of sales $ — $ — $ 0.2 $ 0.4 Selling, general, and administrative expenses 1.9 0.8 2.6 2.3 Total severance costs 1.9 0.8 2.8 2.7 Other restructuring: Cost of sales — 0.3 0.5 1.9 Selling, general, and administrative expenses 0.1 1.2 0.2 3.9 Total other restructuring costs 0.1 1.5 0.7 5.8 Total restructuring costs $ 2.0 $ 2.3 $ 3.5 $ 8.5 The following tables summarize our restructuring activities for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of June 30, 2018 $ — $ 0.2 $ — $ — $ 0.2 Restructuring costs 0.1 — 0.1 1.8 2.0 Cash payments (0.1 ) (0.1 ) — — (0.2 ) Balance as of September 30, 2018 $ — $ 0.1 $ 0.1 $ 1.8 $ 2.0 Three Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of June 30, 2017 $ — $ 0.5 $ — $ 1.5 $ 2.0 Restructuring costs 0.2 0.2 0.5 1.4 2.3 Cash payments — (0.6 ) (0.5 ) (1.5 ) (2.6 ) Balance as of September 30, 2017 $ 0.2 $ 0.1 $ — $ 1.4 $ 1.7 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of December 31, 2017 $ 0.2 $ 1.2 $ 0.2 $ 1.1 $ 2.7 Restructuring costs 0.5 — 0.6 2.4 3.5 Cash payments (0.7 ) (0.4 ) (0.7 ) (1.7 ) (3.5 ) Change in estimates — (0.7 ) — — (0.7 ) Balance as of September 30, 2018 $ — $ 0.1 $ 0.1 $ 1.8 $ 2.0 Nine Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of December 31, 2016 $ 0.1 $ 3.2 $ — $ 3.0 $ 6.3 Restructuring charges 2.3 0.9 0.8 4.5 8.5 Cash payments and other (2.2 ) (4.0 ) (0.8 ) (6.1 ) (13.1 ) Balance as of September 30, 2017 $ 0.2 $ 0.1 $ — $ 1.4 $ 1.7 |
Basis of Preparation (Policies)
Basis of Preparation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The unaudited condensed consolidated financial statements include the accounts of Chart Industries, Inc. and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. |
Reclassifications | Reclassifications: Certain reclassifications have been made to prior year financial information in the unaudited condensed consolidated financial statements in order to conform to the discontinued operations presentation |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. |
Recently Issued and Adopted Accounting Standards | Recently Issued Accounting Standards: In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU adds, modifies and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, “Fair Value Measurement.” This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements.” This ASU makes amendments to multiple codification Topics. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and will be effective upon issuance of this ASU. However, many of the amendments in this ASU do have transition guidance with effective dates for annual periods beginning after December 15, 2018. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This ASU also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The FASB issued this update to provide amended guidance to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” Additionally, under the new guidance an entity will be required to provide certain disclosures regarding stranded tax effects. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and this guidance may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This ASU expands and enhances hedge accounting to become more closely aligned with an entity’s risk management activities through hedging strategies. This ASU provides changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements and creates more transparency and better understandability around how economic results are presented in the financial statements. In addition, the new guidance makes certain targeted improvements to ease the application of accounting guidance relative to hedge effectiveness. This guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the effect that this ASU will have on our financial position, results of operations, and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The FASB issued this update to require the recognition of lease assets and lease liabilities on the balance sheet of lessees. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements” and ASU 2018-10, “Codification Improvements to Topic 842, Leases.” ASU 2016-02 and the subsequent modifications are identified as “ASC 842.” ASC 842 will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. ASC 842 requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. We expect adoption to increase the assets and liabilities recorded on our unaudited condensed consolidated balance sheet and increase the level of disclosures related to leases. In addition, we are in the process of identifying appropriate changes to our accounting policies, information technology systems, business processes, and related internal controls to support recognition and disclosure requirements under ASC 842. We expect to design any necessary changes to our business processes, controls and systems in the near future and implement the changes over the remainder of 2018. Recently Adopted Accounting Standards: In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” This ASU adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. We have accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. Our accounting for certain income tax effects is incomplete, but we have determined reasonable estimates for those effects and have recorded provisional amounts in our unaudited condensed consolidated financial statements as of September 30, 2018 and December 31, 2017 . In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The FASB issued this guidance to provide clarity as to when modification accounting should be applied when there is a change to the terms or conditions of a share-based payment award in order to prevent diversity in practice. This ASU requires modification accounting to be applied unless all of the following conditions exist: (1) the fair value of the modified award is the same as the fair value of the original award before the original award is modified; if the modification does not affect any of the inputs to the valuation, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award before it was modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award before it was modified. This guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2017. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires companies with sponsored defined benefit pension and/or other postretirement benefit plans to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs. The other components of net periodic benefit cost will be presented separately and not included in operating income. In addition, only service costs are eligible to be capitalized as an asset. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and this guidance will generally be applied retrospectively, whereas the capitalization of the service cost component will be applied prospectively. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU provides guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar assets, the assets acquired (or disposed of) are not considered a business. This guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2017. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. 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 this 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. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and this guidance will generally be applied retrospectively. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. 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 “ASC 606”. ASC 606 replaces existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and provides for expanded disclosure requirements. This 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 Accounting Standards Codification. On January 1, 2018, we adopted ASC 606 using the modified retrospective method. We applied this standard to contracts that were not completed as of the adoption date. We recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be presented according to accounting standards in effect for those periods. As a result of the adoption of ASC 606, we changed our accounting policy for revenue recognition. Refer to Note 4 , “ Revenue ” for further information. Impacts on Financial Statements The following table summarizes the cumulative effect of the changes to our unaudited condensed consolidated balance sheet as of January 1, 2018 from the adoption of ASC 606: Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Assets Inventories, net $ 173.7 $ (11.6 ) $ 162.1 Unbilled contract revenue 36.5 6.5 43.0 Prepaid expenses 14.4 (1.6 ) 12.8 Liabilities Accounts payable $ 105.4 $ 0.2 $ 105.6 Customer advances and billings in excess of contract revenue 109.6 (9.9 ) 99.7 Other current liabilities 39.9 0.1 40.0 Long-term deferred tax liabilities 62.1 0.6 62.7 Equity Retained earnings $ 364.3 $ 2.3 $ 366.6 The following tables summarize the current period impacts of adopting ASC 606 on our unaudited condensed consolidated balance sheet and statement of operations: September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Assets Accounts receivable, net of allowances $ 177.3 $ 176.5 $ 0.8 Inventories, net 188.2 207.7 (19.5 ) Unbilled contract revenue 34.2 25.6 8.6 Liabilities Customer advances and billings in excess of contract revenue $ 94.5 $ 110.2 $ (15.7 ) Other current liabilities 39.5 38.3 1.2 Long-term deferred tax liabilities 55.3 54.3 1.0 Equity Retained earnings $ 406.9 $ 403.5 $ 3.4 For the Three Months Ended September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Sales $ 272.2 $ 275.0 $ (2.8 ) Cost of sales 189.9 192.3 (2.4 ) Selling, general, and administrative expenses 45.8 46.2 (0.4 ) Income tax expense 4.2 4.2 — Net income from continuing operations attributable to Chart Industries, Inc. 21.5 21.6 (0.1 ) Net income from continuing operations attributable to Chart Industries, Inc. per common share: Basic $ 0.70 $ 0.70 $ — Diluted $ 0.65 $ 0.65 $ — For the Nine Months Ended September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Sales $ 794.2 $ 785.8 $ 8.4 Cost of sales 572.2 565.2 7.0 Selling, general, and administrative expenses 140.5 140.7 (0.2 ) Income tax expense 9.7 9.3 0.4 Net income from continuing operations attributable to Chart Industries, Inc. 35.6 34.5 1.1 Net income from continuing operations attributable to Chart Industries, Inc. per common share: Basic $ 1.15 $ 1.11 $ 0.04 Diluted $ 1.11 $ 1.08 $ 0.03 |
Revenue Recognition | Revenue Recognition: Revenue is recognized when (or as) we satisfy performance obligations by transferring a promised good or service, an asset, to a customer. An asset is transferred to a customer when, or as, the customer obtains control over that asset. In most contracts, the transaction price includes both fixed and variable consideration. The variable consideration contained within our contracts with customers includes discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. When a contract includes multiple performance obligations, the contract price is allocated among the performance obligations based upon the stand alone selling prices. When the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service is expected, at contract inception, to be one year or less, we do not adjust for the effects of a significant financing component. For brazed aluminum heat exchangers, air cooled heat exchangers, cold boxes, liquefied natural gas fueling stations, engineered tanks, and repair services, most contracts contain language that transfers control to the customer over time. For these contracts, revenue is recognized as we satisfy the performance obligations by an allocation of the transaction price to the accounting period computed using input methods such as costs incurred. Input methods recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. The costs incurred input method measures progress toward the satisfaction of the performance obligation by multiplying the transaction price of the performance obligation by the percentage of incurred costs as of the balance sheet date to the total estimated costs at completion after giving effect to the most current estimates. Timing of amounts billed on contracts varies from contract to contract and could cause significant variation in working capital needs. Revisions to estimated cost to complete that result from inefficiencies in our performance that were not expected in the pricing of the contract are expensed in the period in which these inefficiencies become known. Contract modifications can change a contract’s scope, price, or both. Approved contract modifications are accounted for as either a separate contract or as part of the existing contract depending on the nature of the modification. For standard industrial gas and LNG tanks and some products identified in the prior paragraph with contract language that does not meet the over time recognition requirements, the contract with the customer contains language that transfers control to the customer at a point in time. For these contracts, revenue is recognized when we satisfy our performance obligation to the customer. Timing of amounts billed on contracts varies from contract to contract. The specific point in time when control transfers depends on the contract with the customer, contract terms that provide for a present obligation to pay, physical possession, legal title, risk and rewards of ownership, acceptance of the asset, and bill-and-hold arrangements may impact the point in time when control transfers to the customer. Incremental contract costs are expensed when incurred when the amortization period of the asset that would have been recognized is one year or less; otherwise, incremental contract costs are recognized as an asset and amortized over time as promised goods and services are transferred to a customer. When losses are expected to be incurred on a contract, we recognize the entire anticipated loss in the accounting period when the loss becomes evident. The loss is recognized when the current estimate of the consideration we expect to receive, modified to include unconstrained variable consideration instead of constrained variable consideration, is less than the current estimate of total costs for the contract. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling fee revenues and the related expenses are reported as fulfillment revenues and expenses for all customers because we have adopted the practical expedient contained in ASC 606-10-25-18B. Therefore, all shipping and handling costs associated with outbound freight are accounted for as a fulfillment costs and are included in cost of sales. Contract Balances Accounts receivable, net of allowances: Accounts receivable includes amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Past-due trade receivable balances are written off when our internal collection efforts have been unsuccessful. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less. We do not typically include extended payment terms in our contracts with customers. Unbilled contract revenue: Unbilled contract revenue represents contract assets resulting from revenue recognized over time in excess of the amount billed to the customer and the amount billed to the customer is not just subject to the passage of time. Billing requirements vary by contract but are generally structured around the completion of certain milestones. These contract assets are generally classified as current. Customer advances and billings in excess of contract revenue: Our contract liabilities consist of advance customer payments, billings in excess of revenue recognized and deferred revenue. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. We classify advance customer payments and billings in excess of revenue recognized as current. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. The current portion of deferred revenue is included in customer advances and billings in excess of contract revenue in our unaudited condensed consolidated balance sheets. Long-term deferred revenue is included in other long-term liabilities in our unaudited condensed consolidated balance sheets. |
Basis of Preparation (Tables)
Basis of Preparation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Current Period Impacts of Adopting ASC 606 | The following table summarizes the cumulative effect of the changes to our unaudited condensed consolidated balance sheet as of January 1, 2018 from the adoption of ASC 606: Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Assets Inventories, net $ 173.7 $ (11.6 ) $ 162.1 Unbilled contract revenue 36.5 6.5 43.0 Prepaid expenses 14.4 (1.6 ) 12.8 Liabilities Accounts payable $ 105.4 $ 0.2 $ 105.6 Customer advances and billings in excess of contract revenue 109.6 (9.9 ) 99.7 Other current liabilities 39.9 0.1 40.0 Long-term deferred tax liabilities 62.1 0.6 62.7 Equity Retained earnings $ 364.3 $ 2.3 $ 366.6 The following tables summarize the current period impacts of adopting ASC 606 on our unaudited condensed consolidated balance sheet and statement of operations: September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Assets Accounts receivable, net of allowances $ 177.3 $ 176.5 $ 0.8 Inventories, net 188.2 207.7 (19.5 ) Unbilled contract revenue 34.2 25.6 8.6 Liabilities Customer advances and billings in excess of contract revenue $ 94.5 $ 110.2 $ (15.7 ) Other current liabilities 39.5 38.3 1.2 Long-term deferred tax liabilities 55.3 54.3 1.0 Equity Retained earnings $ 406.9 $ 403.5 $ 3.4 For the Three Months Ended September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Sales $ 272.2 $ 275.0 $ (2.8 ) Cost of sales 189.9 192.3 (2.4 ) Selling, general, and administrative expenses 45.8 46.2 (0.4 ) Income tax expense 4.2 4.2 — Net income from continuing operations attributable to Chart Industries, Inc. 21.5 21.6 (0.1 ) Net income from continuing operations attributable to Chart Industries, Inc. per common share: Basic $ 0.70 $ 0.70 $ — Diluted $ 0.65 $ 0.65 $ — For the Nine Months Ended September 30, 2018 As Reported Balances without adoption of ASC 606 Effect of adoption Higher (Lower) Sales $ 794.2 $ 785.8 $ 8.4 Cost of sales 572.2 565.2 7.0 Selling, general, and administrative expenses 140.5 140.7 (0.2 ) Income tax expense 9.7 9.3 0.4 Net income from continuing operations attributable to Chart Industries, Inc. 35.6 34.5 1.1 Net income from continuing operations attributable to Chart Industries, Inc. per common share: Basic $ 1.15 $ 1.11 $ 0.04 Diluted $ 1.11 $ 1.08 $ 0.03 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summarized Financial Information of Discontinued Operations | The following table represents income from discontinued operations, net of tax: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Sales $ 43.0 $ 37.8 $ 120.6 $ 109.3 Cost of sales 31.3 25.3 87.1 78.5 Selling, general and administrative expenses 6.8 8.6 21.4 25.5 Amortization expense 0.6 0.7 1.8 2.2 Operating income (1) 4.3 3.2 10.3 3.1 Other expenses (income), net 0.4 (0.1 ) 0.6 (1.2 ) Income before income taxes 3.9 3.3 9.7 4.3 Income tax expense (2) 3.2 1.2 5.0 1.7 Income from discontinued operations, net of tax $ 0.7 $ 2.1 $ 4.7 $ 2.6 _______________ (1) Includes depreciation expense of $0.4 for both the three months ended September 30, 2018 and 2017 . Includes depreciation expense of $1.3 and $1.2 for the nine months ended September 30, 2018 and 2017 , respectively. (2) Income tax expense of $3.2 and $1.2 for the three months ended September 30, 2018 and 2017, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 82.1% and 36.4% , respectively. Income tax expense of $5.0 and $1.7 in the nine months ended September 30, 2018 and 2017, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 51.5% and 39.5% , respectively. The effective income tax rate of 82.1% and 51.5% for the three and nine months ended September 30, 2018 differed from the U.S. federal statutory rate of 21% primarily due to the effect of U.S. and foreign tax costs directly related to the Divestiture. The effective income tax rate of 36.4% and 39.5% for the three and nine months ended September 30, 2017 differed from the U.S. federal statutory rate of 35% primarily due to the effect of certain losses recorded in the UK for which no tax benefit is recorded. The following table represents the assets and liabilities from discontinued operations: September 30, December 31, Accounts receivable, net $ 30.4 $ 26.3 Inventories, net 50.5 35.2 Unbilled contract revenue 0.7 0.5 Prepaid expenses 1.2 1.0 Other current assets 3.9 3.7 Current assets of discontinued operations $ 86.7 $ 66.7 Property, plant, and equipment, net $ 13.0 $ 12.6 Goodwill 9.1 9.1 Identifiable intangible assets, net 14.3 16.1 Other assets 0.3 0.4 Non-current assets of discontinued operations $ 36.7 $ 38.2 Accounts payable $ 20.1 $ 8.6 Customer advances and billings in excess of contract revenue 1.6 0.6 Accrued salaries, wages, and benefits 4.6 2.7 Current portion of warranty reserve 2.2 2.6 Other current liabilities 2.9 1.4 Current liabilities of discontinued operations $ 31.4 $ 15.9 Long-term deferred tax liabilities $ 0.4 $ 0.4 Other long-term liabilities 3.0 2.2 Non-current liabilities of discontinued operations $ 3.4 $ 2.6 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Reportable and Product Sales Information Segments | Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ — $ 272.2 Depreciation and amortization expense 6.5 2.8 2.5 — 0.3 12.1 Operating income (loss) (1) (2) (4) 12.1 31.9 3.3 (0.5 ) (15.3 ) 31.5 Capital expenditures 3.8 1.3 2.5 — 0.8 8.4 Three Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 46.6 $ 99.6 $ 63.2 $ (6.7 ) $ — $ 202.7 Depreciation and amortization expense 3.3 2.6 2.7 — 0.5 9.1 Operating income (loss) (1) (2) (3) (4) 0.3 23.1 5.6 (1.4 ) (20.4 ) 7.2 Capital expenditures 2.8 0.6 1.3 — 1.7 6.4 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ — $ 794.2 Depreciation and amortization expense 19.6 8.4 7.9 — 1.0 36.9 Operating income (loss) (1) (2) (3) (4) (5) 20.8 77.7 13.5 (1.7 ) (44.5 ) 65.8 Capital expenditures 11.9 4.7 6.0 — 3.8 26.4 Nine Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Corporate Consolidated Sales to external customers $ 126.5 $ 295.6 $ 166.7 $ (15.3 ) $ — $ 573.5 Depreciation and amortization expense 9.0 7.8 6.6 — 1.8 25.2 Operating (loss) income (1) (2) (4) (2.4 ) 62.3 11.8 (3.6 ) (50.5 ) 17.6 Capital expenditures 7.4 3.4 8.7 — 2.3 21.8 _______________ (1) Includes sales and operating income for Hudson, included in the E&C segment results since the acquisition date, September 20, 2017 as follows: • Sales were $44.1 and $6.1 for the three months ended September 30, 2018 and 2017 , respectively. • Sales were $134.9 and $6.1 for the nine months ended September 30, 2018 and 2017 , respectively. • Operating income was $4.3 and $1.2 for the three months ended September 30, 2018 and 2017 , respectively. • Operating income was $14.6 and $1.2 for the nine months ended September 30, 2018 and 2017 , respectively. (2) Includes restructuring costs of: • $2.0 and $2.3 for the three months ended September 30, 2018 and 2017 respectively, and • $3.5 and $8.5 for the nine months ended September 30, 2018 and 2017 respectively. (3) Includes an expense of $3.8 recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the nine months ended September 30, 2018 . (4) Includes transaction-related costs of: • $2.0 and $7.4 for the three months ended September 30, 2018 and 2017 , respectively, and • $4.1 and $8.6 for the nine months ended September 30, 2018 and 2017 , respectively. (5) Includes net severance costs of $0.9 related to headcount reductions associated with the strategic realignment of our segment structure, which includes $1.8 in payroll severance costs partially offset by a $0.9 credit due to related share-based compensation forfeitures for the nine months ended September 30, 2018 . Includes net severance costs of $1.4 related to the departure of our former CEO on June 11, 2018, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation forfeitures for the nine months ended September 30, 2018 . Product Sales Information Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 63.5 $ — $ — $ — $ 63.5 Liquefied natural gas (LNG) applications 12.4 20.5 11.8 (0.4 ) 44.3 Industrial gas applications 3.4 — — — 3.4 HVAC, power and refining applications 18.8 — — — 18.8 Bulk industrial gas applications — 41.1 31.8 (0.4 ) 72.5 Packaged gas industrial applications — 37.2 13.2 (0.9 ) 49.5 Cryobiological storage — 20.2 — — 20.2 Total $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ 272.2 Three Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 27.3 $ — $ — $ — $ 27.3 Liquefied natural gas (LNG) applications 5.5 13.5 26.2 (5.8 ) 39.4 Industrial gas applications 11.6 — — — 11.6 HVAC, power and refining applications 2.2 — — — 2.2 Bulk industrial gas applications — 35.1 26.5 (0.9 ) 60.7 Packaged gas industrial applications — 34.2 10.5 — 44.7 Cryobiological storage — 16.8 — — 16.8 Total $ 46.6 $ 99.6 $ 63.2 $ (6.7 ) $ 202.7 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 191.2 $ — $ — $ — $ 191.2 Liquefied natural gas (LNG) applications 28.5 54.4 48.3 (2.0 ) 129.2 Industrial gas applications 9.8 — — — 9.8 HVAC, power and refining applications 59.3 — — — 59.3 Bulk industrial gas applications — 105.7 85.8 (1.2 ) 190.3 Packaged gas industrial applications — 117.8 40.2 (2.9 ) 155.1 Cryobiological storage — 59.3 — — 59.3 Total $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ 794.2 Nine Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 91.6 $ — $ — $ — $ 91.6 Liquefied natural gas (LNG) applications 16.7 45.0 67.1 (11.6 ) 117.2 Industrial gas applications 16.0 — — — 16.0 HVAC, power and refining applications 2.2 — — — 2.2 Bulk industrial gas applications — 94.2 64.7 (3.5 ) 155.4 Packaged gas industrial applications — 99.4 34.9 (0.2 ) 134.1 Cryobiological storage — 57.0 — — 57.0 Total $ 126.5 $ 295.6 $ 166.7 $ (15.3 ) $ 573.5 |
Segment Assets | Total Assets September 30, December 31, Energy & Chemicals $ 755.4 $ 784.1 D&S West 435.0 415.7 D&S East 321.2 327.3 Corporate 103.5 92.7 Discontinued Operations 123.4 104.9 Total $ 1,738.5 $ 1,724.7 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Changes in Contract Assets and Contract Liabilities Balances | The following table represents changes in our contract assets and contract liabilities balances: September 30, 2018 January 1, 2018 Year-to-date Change ($) Year-to-date Change (%) Contract assets Accounts receivable, net of allowances $ 177.3 $ 196.4 (19.1 ) 9.7 % Unbilled contract revenue 34.2 43.0 (8.8 ) 20.5 % Contract liabilities Customer advances and billings in excess of contract revenue $ 94.5 $ 99.7 (5.2 ) 5.2 % Long-term deferred revenue 1.6 1.7 (0.1 ) 5.9 % |
Disaggregation of Revenue by Product Application | The following table represents a disaggregation of revenue by product application along with the reportable segment for each category: Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 63.5 $ — $ — $ — $ 63.5 Liquefied natural gas (LNG) applications 12.4 20.5 11.8 (0.4 ) 44.3 Industrial gas applications 3.4 — — — 3.4 HVAC, power and refining applications 18.8 — — — 18.8 Bulk industrial gas applications — 41.1 31.8 (0.4 ) 72.5 Packaged gas industrial applications — 37.2 13.2 (0.9 ) 49.5 Cryobiological storage — 20.2 — — 20.2 Total $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ 272.2 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Natural gas processing (including petrochemical) applications $ 191.2 $ — $ — $ — $ 191.2 Liquefied natural gas (LNG) applications 28.5 54.4 48.3 (2.0 ) 129.2 Industrial gas applications 9.8 — — — 9.8 HVAC, power and refining applications 59.3 — — — 59.3 Bulk industrial gas applications — 105.7 85.8 (1.2 ) 190.3 Packaged gas industrial applications — 117.8 40.2 (2.9 ) 155.1 Cryobiological storage — 59.3 — — 59.3 Total $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ 794.2 |
Disaggregation of Revenue by Timing | The following table represents a disaggregation of revenue by timing of revenue along with the reportable segment for each category: Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Point in time $ 18.9 $ 102.8 $ 55.0 $ (1.3 ) $ 175.4 Over time 79.2 16.2 1.8 (0.4 ) 96.8 Total $ 98.1 $ 119.0 $ 56.8 $ (1.7 ) $ 272.2 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Intersegment Eliminations Consolidated Point in time $ 66.5 $ 299.3 $ 157.0 $ (4.4 ) $ 518.4 Over time 222.3 37.9 17.3 (1.7 ) 275.8 Total $ 288.8 $ 337.2 $ 174.3 $ (6.1 ) $ 794.2 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Summarized Components of Inventory | The following table summarizes the components of inventory: September 30, December 31, Raw materials and supplies $ 86.7 $ 72.1 Work in process 32.5 37.1 Finished goods 69.0 64.5 Total inventories, net $ 188.2 $ 173.7 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Segment | The following table represents the changes in goodwill by segment: Energy & Chemicals D&S West D&S East Consolidated Balance at December 31, 2017 $ 275.1 $ 147.3 $ 37.3 $ 459.7 Foreign currency translation adjustments (1.2 ) (0.7 ) — (1.9 ) Goodwill acquired during the year — 4.7 — 4.7 Purchase price adjustment (1) (5.3 ) — — (5.3 ) Balance at September 30, 2018 $ 268.6 $ 151.3 $ 37.3 $ 457.2 Accumulated goodwill impairment loss at December 31, 2017 $ 64.6 $ 82.5 $ — $ 147.1 Foreign currency translation adjustments — — — — Accumulated goodwill impairment loss at September 30, 2018 $ 64.6 $ 82.5 $ — $ 147.1 (1) For the Nine Months Ended September 30, 2018 , we made a purchase accounting adjustment for $5.3 for the Hudson acquisition. |
Schedule of Finite-Lived 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) : September 30, 2018 December 31, 2017 Weighted-average Estimated Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Finite-lived intangible assets: Customer relationships 15 years $ 225.9 $ (87.5 ) $ 226.5 $ (74.9 ) Unpatented technology 9 years 23.3 (4.4 ) 22.6 (2.6 ) Land use rights 50 years 12.8 (1.3 ) 13.4 (1.2 ) Trademarks and trade names 15 years 3.3 (1.6 ) 3.4 (1.7 ) Patents and other 5 years 2.5 (1.1 ) 2.6 (0.6 ) Total finite-lived intangible assets 16 years $ 267.8 $ (95.9 ) $ 268.5 $ (81.0 ) Indefinite-lived intangible assets: Trademarks and trade names 98.4 — 98.9 — Total intangible assets $ 366.2 $ (95.9 ) $ 367.4 $ (81.0 ) _______________ (1) Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. |
Schedule of Indefinite-Lived 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) : September 30, 2018 December 31, 2017 Weighted-average Estimated Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Finite-lived intangible assets: Customer relationships 15 years $ 225.9 $ (87.5 ) $ 226.5 $ (74.9 ) Unpatented technology 9 years 23.3 (4.4 ) 22.6 (2.6 ) Land use rights 50 years 12.8 (1.3 ) 13.4 (1.2 ) Trademarks and trade names 15 years 3.3 (1.6 ) 3.4 (1.7 ) Patents and other 5 years 2.5 (1.1 ) 2.6 (0.6 ) Total finite-lived intangible assets 16 years $ 267.8 $ (95.9 ) $ 268.5 $ (81.0 ) Indefinite-lived intangible assets: Trademarks and trade names 98.4 — 98.9 — Total intangible assets $ 366.2 $ (95.9 ) $ 367.4 $ (81.0 ) _______________ (1) Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. |
Schedule of Estimated Future Amortization | We estimate amortization expense to be recognized during the next five years as follows: For the Year Ending December 31, 2018 $ 21.0 2019 20.8 2020 18.8 2021 14.4 2022 14.3 |
Schedule of Government Grants | China Government Grants are presented in our unaudited condensed consolidated balance sheets as follows: September 30, December 31, Current $ 0.5 $ 0.5 Long-term 7.7 8.7 Total China Government Grants $ 8.2 $ 9.2 |
Debt and Credit Arrangements (T
Debt and Credit Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Instrument | |
Summary of Outstanding Borrowings | The following table represents the components of our borrowings: September 30, December 31, Convertible notes due November 2024: Principal amount $ 258.8 $ 258.8 Unamortized discount (52.2 ) (57.6 ) Unamortized debt issuance costs (4.6 ) (5.1 ) Convertible notes due November 2024, net of unamortized discount and debt issuance costs 202.0 196.1 Convertible notes due August 2018: Principal amount — 57.1 Unamortized discount — (1.9 ) Unamortized debt issuance costs — (0.1 ) Convertible notes due August 2018, net of unamortized discount and debt issuance costs — 55.1 Senior secured revolving credit facility due November 2022 298.5 239.0 Foreign facilities 9.7 7.9 Total debt, net of unamortized discount and debt issuance costs 510.2 498.1 Less: current maturities (1) (9.7 ) (58.9 ) Long-term debt $ 500.5 $ 439.2 _______________ (1) Current maturities at December 31, 2017 includes $55.1 of Convertible notes due August 2018, net of unamortized discount and debt issuance costs. |
Convertible Notes, due 2024 | |
Debt Instrument | |
Schedule of Interest Accretion | The following table summarizes interest accretion of the 2024 Notes discount, 1.0% contractual interest coupon and financing costs amortization associated with the 2024 Notes: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 2024 Notes, interest accretion of convertible notes discount $ 1.9 $ 5.4 2024 Notes, 1.0% contractual interest coupon 0.6 1.9 2024 Notes, total interest expense $ 2.5 $ 7.3 2024 Notes, financing costs amortization $ 0.2 $ 0.5 |
Convertible Notes, Due 2018 | |
Debt Instrument | |
Schedule of Interest Accretion | The following table summarizes interest accretion of the 2018 Notes discount, 2.0% contractual interest coupon, and financing costs amortization associated with the 2018 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 2018 Notes, interest accretion of convertible notes discount $ 0.4 $ 3.4 $ 1.9 $ 10.0 2018 Notes, 2.0% contractual interest coupon 0.1 1.3 1.0 3.8 2018 Notes, total interest expense $ 0.5 $ 4.7 $ 2.9 $ 13.8 2018 Notes, financing costs amortization $ — $ 0.2 $ 0.1 $ 0.6 |
Product Warranties (Tables)
Product Warranties (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Rollforward of Consolidated Warranty Reserve | The following table represents changes in our consolidated warranty reserve: Balance at December 31, 2017 $ 11.6 Issued – warranty expense 3.3 Change in estimates (1.4 ) Warranty usage (4.7 ) Balance at September 30, 2018 $ 8.8 The following table represents the establishment of and changes in the aluminum cryobiological tank recall reserve: Recall reserve - established April 2018 $ 3.8 Reserve usage (3.2 ) Balance at September 30, 2018 $ 0.6 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired In Business Combination | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the Hudson acquisition, including the post-closing adjustments: September 30, 2018 Adjustments As previously reported June 30, 2018 Net assets acquired: Goodwill $ 233.0 $ (5.3 ) $ 238.3 Identifiable intangible assets 211.0 — 211.0 Accounts receivable 34.6 — 34.6 Property, plant and equipment 29.4 — 29.4 Inventories 26.5 — 26.5 Other current assets 8.1 — 8.1 Unbilled contract revenue 4.9 — 4.9 Other assets 2.7 (0.2 ) 2.9 Prepaid expenses 0.9 — 0.9 Deferred tax liabilities (80.0 ) 7.6 (87.6 ) Accounts payable (21.2 ) — (21.2 ) Customer advances and billings in excess of contract revenue (17.4 ) — (17.4 ) Accrued salaries, wages and benefits (4.4 ) — (4.4 ) Other current liabilities (4.4 ) (0.6 ) (3.8 ) Other long-term liabilities (3.4 ) (1.5 ) (1.9 ) Current portion of warranty reserve (0.8 ) — (0.8 ) Net assets acquired $ 419.5 f $ — $ 419.5 |
Identifiable Intangible Assets Acquired | Information regarding identifiable intangible assets acquired in the Hudson acquisition is presented below: Weighted-average Estimated Useful Life Estimated Asset Fair Value Finite-lived intangible assets: Customer relationships 13 years $ 122.1 Unpatented technology 10 years 18.3 Customer backlog 2 years 1.3 Total finite-lived intangible assets acquired 12 years 141.7 Indefinite-lived intangible assets: Trademarks and trade names 69.3 Total identifiable intangible assets acquired $ 211.0 |
Pro Forma Disclosures | The following table presents pro forma sales, net income attributable to the Company, and net income attributable to the Company per common share data assuming Hudson was acquired before the beginning of the 2017 fiscal year, and assuming effective tax rates of 35%: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Pro forma sales $ 244.6 $ 714.8 Pro forma net income attributable to Chart Industries, Inc. 3.6 4.5 Pro forma net income attributable to Chart Industries, Inc. per common share, basic $ 0.12 $ 0.15 Pro forma net income attributable to Chart Industries, Inc. per common share, diluted $ 0.11 $ 0.14 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | The following tables represent changes in accumulated other comprehensive loss by component: Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at June 30, 2018 $ (7.2 ) $ (9.9 ) $ (17.1 ) Other comprehensive loss (6.3 ) — (6.3 ) Amounts reclassified from accumulated other comprehensive loss, net of income taxes — 0.2 0.2 Net current-period other comprehensive (loss) income, net of taxes (6.3 ) 0.2 (6.1 ) Balance at September 30, 2018 $ (13.5 ) $ (9.7 ) $ (23.2 ) Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at June 30, 2017 $ (10.8 ) $ (10.1 ) $ (20.9 ) Other comprehensive income 6.7 — 6.7 Amounts reclassified from accumulated other comprehensive loss, net of income taxes 1.3 0.2 1.5 Net current-period other comprehensive income, net of taxes 8.0 0.2 8.2 Balance at September 30, 2017 $ (2.8 ) $ (9.9 ) $ (12.7 ) Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at December 31, 2017 $ 2.2 $ (10.3 ) $ (8.1 ) Other comprehensive loss (15.7 ) — (15.7 ) Amounts reclassified from accumulated other comprehensive loss, net of income taxes — 0.6 0.6 Net current-period other comprehensive (loss) income, net of taxes (15.7 ) 0.6 (15.1 ) Balance at September 30, 2018 $ (13.5 ) $ (9.7 ) $ (23.2 ) Foreign currency translation adjustments Pension liability adjustments, net of taxes Accumulated other comprehensive loss Balance at December 31, 2016 $ (24.7 ) $ (10.5 ) $ (35.2 ) Other comprehensive income 20.6 — 20.6 Amounts reclassified from accumulated other comprehensive loss, net of income taxes 1.3 0.6 1.9 Net current-period other comprehensive income, net of taxes 21.9 0.6 22.5 Balance at September 30, 2017 $ (2.8 ) $ (9.9 ) $ (12.7 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of Net Income Per Share | The following table presents calculations of net earnings (loss) per share of common stock: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income (loss) attributable to Chart Industries, Inc. Income (loss) from continuing operations $ 21.5 $ (0.6 ) $ 35.6 $ (1.2 ) Income from discontinued operations, net of tax 0.7 2.1 4.7 2.6 Net income attributable to Chart Industries, Inc. $ 22.2 $ 1.5 $ 40.3 $ 1.4 Earnings (loss) per common share – basic: Income (loss) from continuing operations $ 0.70 $ (0.02 ) $ 1.15 $ (0.04 ) Income from discontinued operations 0.02 0.07 0.15 0.08 Net income attributable to Chart Industries, Inc. $ 0.72 $ 0.05 $ 1.30 $ 0.04 Earnings (loss) per common share – diluted: Income (loss) from continuing operations (1) $ 0.65 $ (0.02 ) $ 1.11 $ (0.04 ) Income from discontinued operations 0.02 0.07 0.14 0.08 Net income attributable to Chart Industries, Inc. $ 0.67 $ 0.05 $ 1.25 $ 0.04 Weighted average number of common shares outstanding – basic 31.03 30.76 30.97 30.73 Incremental shares issuable upon assumed conversion and exercise of share-based awards 0.85 0.55 0.83 0.56 Incremental shares issuable due to dilutive effect of convertible notes 0.93 — 0.34 — Incremental shares issuable due to dilutive effect of warrants 0.14 — — — Weighted average number of common shares outstanding – diluted 32.95 31.31 32.14 31.29 _______________ (1) Zero incremental shares from share-based awards are included in the computation of diluted net loss per share for periods in which a net loss occurs because to do so would be anti-dilutive. |
Schedule of Antidilutive Securities | 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, 2018 2017 2018 2017 Share-based awards 0.06 0.63 0.26 0.67 Convertible note hedge (1) 0.93 — 0.34 — Warrants 0.77 3.37 5.17 3.37 Total anti-dilutive securities 1.76 4.00 5.77 4.04 _______________ (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 7 , “ Debt and Credit Arrangements .” |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Rollforward of Tank Recalll Reserve | The following table represents changes in our consolidated warranty reserve: Balance at December 31, 2017 $ 11.6 Issued – warranty expense 3.3 Change in estimates (1.4 ) Warranty usage (4.7 ) Balance at September 30, 2018 $ 8.8 The following table represents the establishment of and changes in the aluminum cryobiological tank recall reserve: Recall reserve - established April 2018 $ 3.8 Reserve usage (3.2 ) Balance at September 30, 2018 $ 0.6 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of Severance and Other Restructuring Costs | The following table is a summary of the severance and other restructuring costs, which included employee-related costs, facility rent and exit costs, relocation, recruiting, travel and other, for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Severance: Cost of sales $ — $ — $ 0.2 $ 0.4 Selling, general, and administrative expenses 1.9 0.8 2.6 2.3 Total severance costs 1.9 0.8 2.8 2.7 Other restructuring: Cost of sales — 0.3 0.5 1.9 Selling, general, and administrative expenses 0.1 1.2 0.2 3.9 Total other restructuring costs 0.1 1.5 0.7 5.8 Total restructuring costs $ 2.0 $ 2.3 $ 3.5 $ 8.5 |
Rollforward of Restructuring Cost | The following tables summarize our restructuring activities for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of June 30, 2018 $ — $ 0.2 $ — $ — $ 0.2 Restructuring costs 0.1 — 0.1 1.8 2.0 Cash payments (0.1 ) (0.1 ) — — (0.2 ) Balance as of September 30, 2018 $ — $ 0.1 $ 0.1 $ 1.8 $ 2.0 Three Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of June 30, 2017 $ — $ 0.5 $ — $ 1.5 $ 2.0 Restructuring costs 0.2 0.2 0.5 1.4 2.3 Cash payments — (0.6 ) (0.5 ) (1.5 ) (2.6 ) Balance as of September 30, 2017 $ 0.2 $ 0.1 $ — $ 1.4 $ 1.7 Nine Months Ended September 30, 2018 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of December 31, 2017 $ 0.2 $ 1.2 $ 0.2 $ 1.1 $ 2.7 Restructuring costs 0.5 — 0.6 2.4 3.5 Cash payments (0.7 ) (0.4 ) (0.7 ) (1.7 ) (3.5 ) Change in estimates — (0.7 ) — — (0.7 ) Balance as of September 30, 2018 $ — $ 0.1 $ 0.1 $ 1.8 $ 2.0 Nine Months Ended September 30, 2017 Energy & Chemicals D&S West D&S East Corporate Consolidated Balance as of December 31, 2016 $ 0.1 $ 3.2 $ — $ 3.0 $ 6.3 Restructuring charges 2.3 0.9 0.8 4.5 8.5 Cash payments and other (2.2 ) (4.0 ) (0.8 ) (6.1 ) (13.1 ) Balance as of September 30, 2017 $ 0.2 $ 0.1 $ — $ 1.4 $ 1.7 |
Basis of Preparation - Balance
Basis of Preparation - Balance Sheet Impact (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Accounts receivable, net of allowances | $ 177.3 | $ 196.4 | $ 196.4 |
Inventories, net | 188.2 | 162.1 | 173.7 |
Unbilled contract revenue | 34.2 | 43 | 36.5 |
Prepaid expenses | 10.2 | 12.8 | 14.4 |
Liabilities | |||
Accounts payable | 94.8 | 105.6 | 105.4 |
Customer advances and billings in excess of contract revenue | 94.5 | 99.7 | 109.6 |
Other current liabilities | 39.5 | 40 | 39.9 |
Long-term deferred tax liabilities | 55.3 | 62.7 | 62.1 |
Equity | |||
Retained earnings | 406.9 | 366.6 | 364.3 |
Balances without adoption of ASC 606 | |||
Assets | |||
Accounts receivable, net of allowances | 176.5 | ||
Inventories, net | 207.7 | 173.7 | |
Unbilled contract revenue | 25.6 | 36.5 | |
Prepaid expenses | 14.4 | ||
Liabilities | |||
Accounts payable | 105.4 | ||
Customer advances and billings in excess of contract revenue | 110.2 | 109.6 | |
Other current liabilities | 38.3 | 39.9 | |
Long-term deferred tax liabilities | 54.3 | 62.1 | |
Equity | |||
Retained earnings | 403.5 | $ 364.3 | |
Adjustments due to ASC 606 | ASU 2014-09 | |||
Assets | |||
Accounts receivable, net of allowances | 0.8 | ||
Inventories, net | (19.5) | (11.6) | |
Unbilled contract revenue | 8.6 | 6.5 | |
Prepaid expenses | (1.6) | ||
Liabilities | |||
Accounts payable | 0.2 | ||
Customer advances and billings in excess of contract revenue | (15.7) | (9.9) | |
Other current liabilities | 1.2 | 0.1 | |
Long-term deferred tax liabilities | 1 | 0.6 | |
Equity | |||
Retained earnings | $ 3.4 | $ 2.3 |
Basis of Preparation - Income S
Basis of Preparation - Income Statement Impact (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Sales | $ 272.2 | $ 202.7 | $ 794.2 | $ 573.5 |
Cost of sales | 189.9 | 144.8 | 572.2 | 415 |
Selling, general, and administrative expenses | 45.8 | 48.1 | 140.5 | 133.9 |
Income tax expense | 4.2 | 0.7 | 9.7 | 0.6 |
Net income from continuing operations attributable to Chart Industries, Inc. | $ 21.5 | $ (0.6) | $ 35.6 | $ (1.2) |
Net income from continuing operations attributable to Chart Industries, Inc. per common share: | ||||
Basic (usd per share) | $ 0.70 | $ (0.02) | $ 1.15 | $ (0.04) |
Diluted (usd per share) | $ 0.65 | $ (0.02) | $ 1.11 | $ (0.04) |
Balances without adoption of ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Sales | $ 275 | $ 785.8 | ||
Cost of sales | 192.3 | 565.2 | ||
Selling, general, and administrative expenses | 46.2 | 140.7 | ||
Income tax expense | 4.2 | 9.3 | ||
Net income from continuing operations attributable to Chart Industries, Inc. | $ 21.6 | $ 34.5 | ||
Net income from continuing operations attributable to Chart Industries, Inc. per common share: | ||||
Basic (usd per share) | $ 0.70 | $ 1.11 | ||
Diluted (usd per share) | $ 0.65 | $ 1.08 | ||
Effect of adoption Higher (Lower) | ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Sales | $ (2.8) | $ 8.4 | ||
Cost of sales | (2.4) | 7 | ||
Selling, general, and administrative expenses | (0.4) | (0.2) | ||
Income tax expense | 0 | 0.4 | ||
Net income from continuing operations attributable to Chart Industries, Inc. | $ (0.1) | $ 1.1 | ||
Net income from continuing operations attributable to Chart Industries, Inc. per common share: | ||||
Basic (usd per share) | $ 0 | $ 0.04 | ||
Diluted (usd per share) | $ 0 | $ 0.03 |
Discontinued Operations - Narra
Discontinued Operations - Narratives (Details) $ in Millions | Dec. 31, 2018USD ($) |
Assets disposed of by sales | BioMedical | Forecasted | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Asset sale price | $ 133.5 |
Discontinued Operations - Incom
Discontinued Operations - Income from Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summarized Financial Information of Discontinued Operations | ||||
Income from discontinued operations, net of tax | $ 0.7 | $ 2.1 | $ 4.7 | $ 2.6 |
Effective income tax rate (percent) | 16.00% | 100.00% | 20.60% | 120.00% |
Held-for-sale | ||||
Summarized Financial Information of Discontinued Operations | ||||
Sales | $ 43 | $ 37.8 | $ 120.6 | $ 109.3 |
Cost of sales | 31.3 | 25.3 | 87.1 | 78.5 |
Selling, general and administrative expenses | 6.8 | 8.6 | 21.4 | 25.5 |
Amortization expense | 0.6 | 0.7 | 1.8 | 2.2 |
Operating income | 4.3 | 3.2 | 10.3 | 3.1 |
Other expense | 0.4 | 0.6 | ||
Other (income) | (0.1) | (1.2) | ||
Income before income taxes | 3.9 | 3.3 | 9.7 | 4.3 |
Income tax expense | 3.2 | 1.2 | 5 | 1.7 |
Income from discontinued operations, net of tax | 0.7 | 2.1 | 4.7 | 2.6 |
Depreciation expense, discontinued operations | $ 0.4 | $ 0.4 | $ 1.3 | $ 1.2 |
Effective income tax rate (percent) | 82.10% | 36.40% | 51.50% | 39.50% |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities from Discontinued Operations (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||
Current assets of discontinued operations | $ 86.7 | $ 66.7 |
Non-current assets of discontinued operations | 36.7 | 38.2 |
Current liabilities of discontinued operations | 31.4 | 15.9 |
Non-current liabilities of discontinued operations | 3.4 | 2.6 |
Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||
Accounts receivable, net | 30.4 | 26.3 |
Inventories, net | 50.5 | 35.2 |
Unbilled contract revenue | 0.7 | 0.5 |
Prepaid expenses | 1.2 | 1 |
Other current assets | 3.9 | 3.7 |
Current assets of discontinued operations | 86.7 | 66.7 |
Property, plant, and equipment, net | 13 | 12.6 |
Goodwill | 9.1 | 9.1 |
Identifiable intangible assets, net | 14.3 | 16.1 |
Other assets | 0.3 | 0.4 |
Non-current assets of discontinued operations | 36.7 | 38.2 |
Accounts payable | 20.1 | 8.6 |
Customer advances and billings in excess of contract revenue | 1.6 | 0.6 |
Accrued salaries, wages, and benefits | 4.6 | 2.7 |
Current portion of warranty reserve | 2.2 | 2.6 |
Other current liabilities | 2.9 | 1.4 |
Current liabilities of discontinued operations | 31.4 | 15.9 |
Long-term deferred tax liabilities | 0.4 | 0.4 |
Other long-term liabilities | 3 | 2.2 |
Non-current liabilities of discontinued operations | $ 3.4 | $ 2.6 |
Reportable Segments - Segment I
Reportable Segments - Segment Income (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Segment Reporting Information | |||||
Sales to external customers | $ 272.2 | $ 202.7 | $ 794.2 | $ 573.5 | |
Depreciation and amortization expense | 12.1 | 9.1 | 36.9 | 25.2 | |
Operating income (loss) | 31.5 | 7.2 | 65.8 | 17.6 | |
Capital expenditures | 8.4 | 6.4 | 26.4 | 21.8 | |
Restructuring costs | 2 | 2.3 | 3.5 | 8.5 | |
Warranty expense | 3.3 | ||||
Acquisition related costs | 2 | 7.4 | 4.1 | 8.6 | |
Severance costs | 1.9 | 0.8 | 2.8 | 2.7 | |
Product warranties | |||||
Segment Reporting Information | |||||
Warranty expense | 3.8 | ||||
Hudson | |||||
Segment Reporting Information | |||||
Operating income (loss) | $ 1.2 | ||||
Net sales | $ 6.1 | ||||
Acquisition related costs | 7.3 | 8.1 | |||
Intersegment Eliminations | |||||
Segment Reporting Information | |||||
Sales to external customers | (1.7) | (6.7) | (6.1) | (15.3) | |
Depreciation and amortization expense | 0 | 0 | 0 | 0 | |
Operating income (loss) | (0.5) | (1.4) | (1.7) | (3.6) | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Corporate | |||||
Segment Reporting Information | |||||
Sales to external customers | 0 | 0 | 0 | 0 | |
Depreciation and amortization expense | 0.3 | 0.5 | 1 | 1.8 | |
Operating income (loss) | (15.3) | (20.4) | (44.5) | (50.5) | |
Capital expenditures | 0.8 | 1.7 | 3.8 | 2.3 | |
Restructuring costs | 1.8 | 1.4 | 2.4 | 4.5 | |
Severance costs | 0.9 | 1.4 | |||
Payroll cost | 1.8 | 3.2 | |||
Adjustment to share-based compensation | (0.9) | (1.8) | |||
Energy & Chemicals | |||||
Segment Reporting Information | |||||
Sales to external customers | 98.1 | 46.6 | 288.8 | 126.5 | |
Depreciation and amortization expense | 6.5 | 3.3 | 19.6 | 9 | |
Operating income (loss) | 12.1 | 0.3 | 20.8 | (2.4) | |
Capital expenditures | 3.8 | 2.8 | 11.9 | 7.4 | |
Energy & Chemicals | Hudson | |||||
Segment Reporting Information | |||||
Operating income (loss) | 4.3 | 1.2 | 14.6 | 1.2 | |
Net sales | 44.1 | 6.1 | 134.9 | 6.1 | |
D&S West | |||||
Segment Reporting Information | |||||
Sales to external customers | 119 | 99.6 | 337.2 | 295.6 | |
Depreciation and amortization expense | 2.8 | 2.6 | 8.4 | 7.8 | |
Operating income (loss) | 31.9 | 23.1 | 77.7 | 62.3 | |
Capital expenditures | 1.3 | 0.6 | 4.7 | 3.4 | |
D&S East | |||||
Segment Reporting Information | |||||
Sales to external customers | 56.8 | 63.2 | 174.3 | 166.7 | |
Depreciation and amortization expense | 2.5 | 2.7 | 7.9 | 6.6 | |
Operating income (loss) | 3.3 | 5.6 | 13.5 | 11.8 | |
Capital expenditures | $ 2.5 | $ 1.3 | $ 6 | $ 8.7 |
Reportable Segments - Product S
Reportable Segments - Product Sales Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information | ||||
Sales | $ 272.2 | $ 202.7 | $ 794.2 | $ 573.5 |
Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales | 63.5 | 27.3 | 191.2 | 91.6 |
Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales | 44.3 | 39.4 | 129.2 | 117.2 |
Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 3.4 | 11.6 | 9.8 | 16 |
HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales | 18.8 | 2.2 | 59.3 | 2.2 |
Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 72.5 | 60.7 | 190.3 | 155.4 |
Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales | 49.5 | 44.7 | 155.1 | 134.1 |
Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales | 20.2 | 16.8 | 59.3 | 57 |
Energy & Chemicals | ||||
Segment Reporting Information | ||||
Sales | 98.1 | 46.6 | 288.8 | 126.5 |
D&S West | ||||
Segment Reporting Information | ||||
Sales | 119 | 99.6 | 337.2 | 295.6 |
D&S East | ||||
Segment Reporting Information | ||||
Sales | 56.8 | 63.2 | 174.3 | 166.7 |
Operating Segments | Energy & Chemicals | ||||
Segment Reporting Information | ||||
Sales | 98.1 | 46.6 | 288.8 | 126.5 |
Operating Segments | Energy & Chemicals | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales | 63.5 | 27.3 | 191.2 | 91.6 |
Operating Segments | Energy & Chemicals | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales | 12.4 | 5.5 | 28.5 | 16.7 |
Operating Segments | Energy & Chemicals | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 3.4 | 11.6 | 9.8 | 16 |
Operating Segments | Energy & Chemicals | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales | 18.8 | 2.2 | 59.3 | 2.2 |
Operating Segments | Energy & Chemicals | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | Energy & Chemicals | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | Energy & Chemicals | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | ||||
Segment Reporting Information | ||||
Sales | 119 | 99.6 | 337.2 | 295.6 |
Operating Segments | D&S West | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales | 20.5 | 13.5 | 54.4 | 45 |
Operating Segments | D&S West | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 41.1 | 35.1 | 105.7 | 94.2 |
Operating Segments | D&S West | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales | 37.2 | 34.2 | 117.8 | 99.4 |
Operating Segments | D&S West | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales | 20.2 | 16.8 | 59.3 | 57 |
Operating Segments | D&S East | ||||
Segment Reporting Information | ||||
Sales | 56.8 | 63.2 | 174.3 | 166.7 |
Operating Segments | D&S East | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S East | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales | 11.8 | 26.2 | 48.3 | 67.1 |
Operating Segments | D&S East | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S East | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Operating Segments | D&S East | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 31.8 | 26.5 | 85.8 | 64.7 |
Operating Segments | D&S East | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales | 13.2 | 10.5 | 40.2 | 34.9 |
Operating Segments | D&S East | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Intersegment Eliminations | ||||
Segment Reporting Information | ||||
Sales | (1.7) | (6.7) | (6.1) | (15.3) |
Intersegment Eliminations | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales | (0.4) | (5.8) | (2) | (11.6) |
Intersegment Eliminations | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Intersegment Eliminations | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales | (0.4) | (0.9) | (1.2) | (3.5) |
Intersegment Eliminations | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales | (0.9) | 0 | (2.9) | (0.2) |
Intersegment Eliminations | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Reportable Segments - Assets (D
Reportable Segments - Assets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Assets | $ 1,738.5 | $ 1,724.7 |
Discontinued Operations | ||
Assets | ||
Assets | 123.4 | 104.9 |
Operating Segments | Continuing Operations | Energy & Chemicals | ||
Assets | ||
Assets | 755.4 | 784.1 |
Operating Segments | Continuing Operations | D&S West | ||
Assets | ||
Assets | 435 | 415.7 |
Operating Segments | Continuing Operations | D&S East | ||
Assets | ||
Assets | 321.2 | 327.3 |
Corporate | Continuing Operations | ||
Assets | ||
Assets | $ 103.5 | $ 92.7 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Contract assets | |||
Beginning accounts receivable, net of allowances | $ 196.4 | $ 196.4 | |
Change in accounts receivable | (19.1) | (23.5) | $ 5.6 |
Ending accounts receivable, net of allowances | 177.3 | 177.3 | |
Beginning unbilled contract revenue | 43 | 36.5 | |
Change in unbilled contract revenue | (8.8) | (10.2) | 18.5 |
Ending unbilled contract revenue | $ 34.2 | 34.2 | |
Change in accounts receivable (as a percentage) | 9.70% | ||
Change in unbilled contract revenue (as a percentage) | 20.50% | ||
Contract liabilities | |||
Beginning customer advances and billings in excess of contract revenue | $ 99.7 | 109.6 | |
Change in customer advances and billings in excess of contract revenue | (5.2) | (2.1) | $ 7.4 |
Ending customer advances and billings in excess of contract revenue | 94.5 | 94.5 | |
Beginning long-term deferred revenue | 1.7 | ||
Change in long-term deferred revenue | (0.1) | ||
Ending long-term deferred revenue | $ 1.6 | $ 1.6 | |
Change in customer advances and billings in excess of contract revenue (as a percentage) | 5.20% | ||
Change in long-term deferred revenue (as a percentage) | 5.90% |
Revenue - Narratives (Details)
Revenue - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract revenue recognized | $ 10.3 | $ 7 | $ 78 | $ 50.5 |
Remaining performance obligation | $ 501.5 | $ 501.5 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | ||||
Disaggregation of Revenue | ||||
Revenue, remaining performance obligation | 87.80% | 87.80% | ||
Performance obligations expected to be satisfied, expected timing | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | ||||
Disaggregation of Revenue | ||||
Revenue, remaining performance obligation | 1.60% | 1.60% | ||
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | ||||
Sales to external customers | $ 272.2 | $ 202.7 | $ 794.2 | $ 573.5 |
Point in time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 175.4 | 518.4 | ||
Over time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 96.8 | 275.8 | ||
Natural gas processing (including petrochemical) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 63.5 | 27.3 | 191.2 | 91.6 |
Liquefied natural gas (LNG) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 44.3 | 39.4 | 129.2 | 117.2 |
Industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 3.4 | 11.6 | 9.8 | 16 |
HVAC, power and refining applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 18.8 | 2.2 | 59.3 | 2.2 |
Bulk industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 72.5 | 60.7 | 190.3 | 155.4 |
Packaged gas industrial applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 49.5 | 44.7 | 155.1 | 134.1 |
Cryobiological storage | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 20.2 | 16.8 | 59.3 | 57 |
Energy & Chemicals | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 98.1 | 46.6 | 288.8 | 126.5 |
D&S West | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 119 | 99.6 | 337.2 | 295.6 |
D&S East | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 56.8 | 63.2 | 174.3 | 166.7 |
Operating Segments | Energy & Chemicals | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 98.1 | 46.6 | 288.8 | 126.5 |
Operating Segments | Energy & Chemicals | Point in time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 18.9 | 66.5 | ||
Operating Segments | Energy & Chemicals | Over time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 79.2 | 222.3 | ||
Operating Segments | Energy & Chemicals | Natural gas processing (including petrochemical) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 63.5 | 27.3 | 191.2 | 91.6 |
Operating Segments | Energy & Chemicals | Liquefied natural gas (LNG) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 12.4 | 5.5 | 28.5 | 16.7 |
Operating Segments | Energy & Chemicals | Industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 3.4 | 11.6 | 9.8 | 16 |
Operating Segments | Energy & Chemicals | HVAC, power and refining applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 18.8 | 2.2 | 59.3 | 2.2 |
Operating Segments | Energy & Chemicals | Bulk industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | Energy & Chemicals | Packaged gas industrial applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | Energy & Chemicals | Cryobiological storage | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 119 | 99.6 | 337.2 | 295.6 |
Operating Segments | D&S West | Point in time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 102.8 | 299.3 | ||
Operating Segments | D&S West | Over time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 16.2 | 37.9 | ||
Operating Segments | D&S West | Natural gas processing (including petrochemical) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | Liquefied natural gas (LNG) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 20.5 | 13.5 | 54.4 | 45 |
Operating Segments | D&S West | Industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | HVAC, power and refining applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S West | Bulk industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 41.1 | 35.1 | 105.7 | 94.2 |
Operating Segments | D&S West | Packaged gas industrial applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 37.2 | 34.2 | 117.8 | 99.4 |
Operating Segments | D&S West | Cryobiological storage | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 20.2 | 16.8 | 59.3 | 57 |
Operating Segments | D&S East | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 56.8 | 63.2 | 174.3 | 166.7 |
Operating Segments | D&S East | Point in time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 55 | 157 | ||
Operating Segments | D&S East | Over time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 1.8 | 17.3 | ||
Operating Segments | D&S East | Natural gas processing (including petrochemical) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S East | Liquefied natural gas (LNG) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 11.8 | 26.2 | 48.3 | 67.1 |
Operating Segments | D&S East | Industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S East | HVAC, power and refining applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Operating Segments | D&S East | Bulk industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 31.8 | 26.5 | 85.8 | 64.7 |
Operating Segments | D&S East | Packaged gas industrial applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 13.2 | 10.5 | 40.2 | 34.9 |
Operating Segments | D&S East | Cryobiological storage | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Intersegment Eliminations | ||||
Disaggregation of Revenue | ||||
Sales to external customers | (1.7) | (6.7) | (6.1) | (15.3) |
Intersegment Eliminations | Point in time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | (1.3) | (4.4) | ||
Intersegment Eliminations | Over time | ||||
Disaggregation of Revenue | ||||
Sales to external customers | (0.4) | (1.7) | ||
Intersegment Eliminations | Natural gas processing (including petrochemical) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Liquefied natural gas (LNG) applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | (0.4) | (5.8) | (2) | (11.6) |
Intersegment Eliminations | Industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Intersegment Eliminations | HVAC, power and refining applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Bulk industrial gas applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | (0.4) | (0.9) | (1.2) | (3.5) |
Intersegment Eliminations | Packaged gas industrial applications | ||||
Disaggregation of Revenue | ||||
Sales to external customers | (0.9) | 0 | (2.9) | (0.2) |
Intersegment Eliminations | Cryobiological storage | ||||
Disaggregation of Revenue | ||||
Sales to external customers | $ 0 | $ 0 | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Raw materials and supplies | $ 86.7 | $ 72.1 | |
Work in process | 32.5 | 37.1 | |
Finished goods | 69 | 64.5 | |
Total inventories, net | 188.2 | $ 162.1 | 173.7 |
Inventory valuation reserve | $ 7.5 | $ 7.1 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill | |
Beginning Balance, Goodwill | $ 459.7 |
Foreign currency translation adjustments | (1.9) |
Goodwill acquired during the year | 4.7 |
Purchase price adjustment | (5.3) |
Ending Balance, Goodwill | 457.2 |
Beginning Balance, Accumulated goodwill impairment loss | 147.1 |
Foreign currency translation adjustments | 0 |
Ending Balance, Accumulated goodwill impairment loss | 147.1 |
Hudson | |
Goodwill | |
Purchase price adjustment | (5.3) |
Ending Balance, Goodwill | 233 |
Energy & Chemicals | |
Goodwill | |
Beginning Balance, Goodwill | 275.1 |
Foreign currency translation adjustments | (1.2) |
Goodwill acquired during the year | 0 |
Purchase price adjustment | (5.3) |
Ending Balance, Goodwill | 268.6 |
Beginning Balance, Accumulated goodwill impairment loss | 64.6 |
Foreign currency translation adjustments | 0 |
Ending Balance, Accumulated goodwill impairment loss | 64.6 |
D&S West | |
Goodwill | |
Beginning Balance, Goodwill | 147.3 |
Foreign currency translation adjustments | (0.7) |
Goodwill acquired during the year | 4.7 |
Purchase price adjustment | 0 |
Ending Balance, Goodwill | 151.3 |
Beginning Balance, Accumulated goodwill impairment loss | 82.5 |
Foreign currency translation adjustments | 0 |
Ending Balance, Accumulated goodwill impairment loss | 82.5 |
D&S East | |
Goodwill | |
Beginning Balance, Goodwill | 37.3 |
Foreign currency translation adjustments | 0 |
Goodwill acquired during the year | 0 |
Purchase price adjustment | 0 |
Ending Balance, Goodwill | 37.3 |
Beginning Balance, Accumulated goodwill impairment loss | 0 |
Foreign currency translation adjustments | 0 |
Ending Balance, Accumulated goodwill impairment loss | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Excluding Goodwill) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 16 years | |
Gross Carrying Amount | $ 267.8 | $ 268.5 |
Accumulated Amortization | (95.9) | (81) |
Total intangible assets | 366.2 | 367.4 |
Trademarks and trade names | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | $ 98.4 | 98.9 |
Customer relationships | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 15 years | |
Gross Carrying Amount | $ 225.9 | 226.5 |
Accumulated Amortization | $ (87.5) | (74.9) |
Unpatented technology | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 9 years | |
Gross Carrying Amount | $ 23.3 | 22.6 |
Accumulated Amortization | $ (4.4) | (2.6) |
Land use rights | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 50 years | |
Gross Carrying Amount | $ 12.8 | 13.4 |
Accumulated Amortization | $ (1.3) | (1.2) |
Trademarks and trade names | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 15 years | |
Gross Carrying Amount | $ 3.3 | 3.4 |
Accumulated Amortization | $ (1.6) | (1.7) |
Patents and other | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 5 years | |
Gross Carrying Amount | $ 2.5 | 2.6 |
Accumulated Amortization | $ (1.1) | $ (0.6) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets | ||||
Amortization expense | $ 5 | $ 2.6 | $ 15.7 | $ 7 |
Government grants | Minimum | ||||
Finite-Lived Intangible Assets | ||||
Finite lived intangible assets useful life | 10 years | |||
Government grants | Maximum | ||||
Finite-Lived Intangible Assets | ||||
Finite lived intangible assets useful life | 50 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Millions | Sep. 30, 2018USD ($) |
Estimated Amortization Expense for Intangible Assets | |
2,018 | $ 21 |
2,019 | 20.8 |
2,020 | 18.8 |
2,021 | 14.4 |
2,022 | $ 14.3 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Government Grants (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 267.8 | $ 268.5 |
Government grants | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 8.2 | 9.2 |
Government grants | Current | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 0.5 | 0.5 |
Government grants | Long-term | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 7.7 | $ 8.7 |
Debt and Credit Arrangements -
Debt and Credit Arrangements - Summary of Outstanding Borrowings (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Aug. 01, 2018 | Dec. 31, 2017 | Nov. 06, 2017 | |
Debt Instrument | ||||
Document Period End Date | Sep. 30, 2018 | |||
Total debt, net of unamortized discount and debt issuance costs | $ 510,200,000 | $ 498,100,000 | ||
Less: current maturities | (9,700,000) | (58,900,000) | ||
Long-term debt | 500,500,000 | 439,200,000 | ||
Foreign facilities | ||||
Debt Instrument | ||||
Long term debt | 9,700,000 | 7,900,000 | ||
Revolving Credit Facility | Senior secured revolving credit facility due November 2022 | ||||
Debt Instrument | ||||
Unamortized debt issuance costs | (2,000,000) | |||
Long term debt | 298,500,000 | 239,000,000 | ||
Convertible Debt | Convertible Notes, due 2024 | ||||
Debt Instrument | ||||
Principal amount | 258,800,000 | 258,800,000 | $ 258,800,000 | |
Unamortized discount | (52,200,000) | (57,600,000) | ||
Unamortized debt issuance costs | (4,600,000) | (5,100,000) | ||
Convertible Debt | 202,000,000 | 196,100,000 | ||
Convertible Debt | Convertible Notes, Due 2018 | ||||
Debt Instrument | ||||
Principal amount | 0 | $ 57,100,000 | 57,100,000 | |
Unamortized discount | 0 | (1,900,000) | ||
Unamortized debt issuance costs | 0 | (100,000) | ||
Convertible Debt | $ 0 | 55,100,000 | ||
Convertible debt, current | $ 55,100,000 |
Debt and Credit Arrangements _2
Debt and Credit Arrangements - 2024 Notes Narratives (Details) $ / shares in Units, shares in Thousands | Nov. 06, 2017USD ($)$ / shares | Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / shares | Oct. 31, 2017$ / shares |
Common stock | ||||
Debt Instrument | ||||
Share price (usd per share) | $ / shares | $ 78.33 | |||
Convertible Debt | Convertible Notes, due 2024 | ||||
Debt Instrument | ||||
Debt instrument stated interest rate (percent) | 1.00% | |||
Debt instrument face amount | $ 258,800,000 | $ 258,800,000 | $ 258,800,000 | |
Share conversion rate | 0.0170285 | |||
Debt instrument, conversion price (usd per share) | $ / shares | $ 58.725 | |||
Debt instrument, conversion premium | 35.00% | |||
Share price (usd per share) | $ / shares | $ 43.50 | |||
Debt instrument, excess over fair value if converted | $ 86,400,000 | |||
Debt instrument, threshold for consecutive trading days | 20 | |||
Debt instrument, threshold for consecutive trading days | 30 | |||
Applicable conversion price threshold (as percentage) | 130.00% | |||
Maximum days after five trading days | 5 days | |||
Applicable conversion price, less than (as percentage) | 97.00% | |||
Debt instrument effective interest rate | 4.80% | |||
Non cash payment for derivative instrument | $ 59,500,000 | |||
Number of shares underlying warrant | shares | 4,410 | |||
Proceeds from issuances of warrants | $ 46,000,000 | |||
Warrant exercise price (usd per share) | $ / shares | $ 71.775 | |||
Percentage above previous sales price | 65.00% | |||
Net cost of convertible note hedge and warrant | $ 13,500,000 | |||
Convertible Debt | Convertible Notes, due 2024 | Liability Component | ||||
Debt Instrument | ||||
Debt instrument face amount | $ 200,100,000 | |||
Debt issuance costs | 5,300,000 | |||
Convertible Debt | Convertible Notes, due 2024 | Equity Component | ||||
Debt Instrument | ||||
Debt instrument face amount | 58,700,000 | |||
Debt issuance costs | $ 1,500,000 |
Debt and Credit Arrangements _3
Debt and Credit Arrangements - 2018 Notes (Details) - Convertible Notes, Due 2018 - Convertible Debt - USD ($) $ / shares in Units, $ in Millions | Aug. 01, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument | |||
Debt instrument stated interest rate (percent) | 2.00% | ||
Debt instrument face amount | $ 57.1 | $ 0 | $ 57.1 |
Repayment of debt | 57.1 | ||
Interest paid | $ 0.6 | ||
Debt instrument strike price (per share) | $ 84.96 |
Debt and Credit Arrangements _4
Debt and Credit Arrangements - Notes Interest Accretion Schedule (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument | ||||
Interest accretion of convertible notes discount | $ 7.3 | $ 10 | ||
Financing costs amortization | $ 0.3 | $ 0.3 | 1 | 1 |
Convertible Debt | Convertible Notes, due 2024 | ||||
Debt Instrument | ||||
Interest accretion of convertible notes discount | 1.9 | 5.4 | ||
Debt instrument, interest expense | 0.6 | 1.9 | ||
Interest expense | 2.5 | 7.3 | ||
Financing costs amortization | 0.2 | 0.5 | ||
Convertible Debt | Convertible Notes, Due 2018 | ||||
Debt Instrument | ||||
Interest accretion of convertible notes discount | 0.4 | 3.4 | 1.9 | 10 |
Debt instrument, interest expense | 0.1 | 1.3 | 1 | 3.8 |
Interest expense | 0.5 | 4.7 | 2.9 | 13.8 |
Financing costs amortization | $ 0 | $ 0.2 | $ 0.1 | $ 0.6 |
Debt and Credit Arrangements _5
Debt and Credit Arrangements - Senior Secured Revolving Credit Facility (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Aug. 01, 2018 | |
Debt Instrument | ||||||
Financing costs amortization | $ 300,000 | $ 300,000 | $ 1,000,000 | $ 1,000,000 | ||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Debt instrument, term | 5 years | |||||
Maximum borrowing capacity | $ 450,000,000 | $ 450,000,000 | ||||
Debt instrument stated interest rate (percent) | 1.00% | 1.00% | ||||
Line of credit fronting fee (as a percentage) | 0.125% | 0.125% | ||||
Maximum percentage of capital stock guaranteed by company | 65.00% | 65.00% | ||||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | Adjusted Base Rate | ||||||
Debt Instrument | ||||||
Debt instrument variable interest rate ( percent) | 1.00% | |||||
Senior secured revolving credit facility due November 2022 | Swing line loan | ||||||
Debt Instrument | ||||||
Interest expense | 300,000 | $ 8,000,000 | 300,000 | |||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Line of credit fronting fee (as a percentage) | 0.125% | 0.125% | ||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Debt instrument, term | 5 years | |||||
Debt instrument stated interest rate (percent) | 4.25% | 4.25% | ||||
Debt issuance costs | $ 2,500,000 | $ 2,500,000 | ||||
Unamortized debt issuance costs | 2,000,000 | 2,000,000 | ||||
Financing costs amortization | 100,000 | 100,000 | 400,000 | 400,000 | ||
Long term debt | 298,500,000 | 298,500,000 | $ 239,000,000 | |||
Line of credit outstanding | 31,600,000 | 31,600,000 | ||||
Line of credit remaining borrowing amount | 119,900,000 | $ 119,900,000 | ||||
Interest expense | 2,900,000 | |||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility | Minimum | ||||||
Debt Instrument | ||||||
Line of credit commitment fee (as a percentage) | 0.20% | |||||
Line of credit participation fee (as a percentage) | 1.50% | |||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility | Maximum | ||||||
Debt Instrument | ||||||
Line of credit commitment fee (as a percentage) | 0.375% | |||||
Line of credit participation fee (as a percentage) | 2.50% | |||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility Sub-limit - Swingline | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 25,000,000 | $ 25,000,000 | ||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility Sub-limit - Letters of Credit | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | ||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility Sub-limit - Foreign Currency | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | ||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility Sub-limit - Foreign Borrower | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | ||||
Senior secured revolving credit facility due November 2022 | Revolving Credit Facility Sub-limit - Expansion Option | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 225,000,000 | $ 225,000,000 | ||||
Convertible Notes, Due 2018 | Convertible Debt | ||||||
Debt Instrument | ||||||
Debt instrument stated interest rate (percent) | 2.00% | |||||
Leverage ratio | 3.25 | 3.25 | ||||
Unamortized debt issuance costs | $ 0 | $ 0 | $ 100,000 | |||
Financing costs amortization | 0 | 200,000 | 100,000 | 600,000 | ||
Interest expense | $ 500,000 | $ 4,700,000 | $ 2,900,000 | $ 13,800,000 | ||
Convertible Notes, Due 2018 | Convertible Debt | Minimum | ||||||
Debt Instrument | ||||||
Interest to EBITDA | 3 | 3 | ||||
Convertible Notes, Due 2018 | Convertible Debt | Maximum | ||||||
Debt Instrument | ||||||
Leverage ratio | 3.75 | 3.75 |
Debt and Credit Arrangements _6
Debt and Credit Arrangements - Foreign Facilities (Details) - 9 months ended Sep. 30, 2018 | CNY (¥) | USD ($)creditfacilities | CNY (¥)creditfacilities | CZK (Kč)creditfacilities | EUR (€)creditfacilities |
Revolving Credit Facility | China Facilities | |||||
Debt Instrument | |||||
Maximum borrowing capacity | $ 7,300,000 | ¥ 50,000,000 | |||
Line of credit outstanding | $ 5,800,000 | ¥ 40,000,000 | |||
Debt instrument stated interest rate (percent) | 5.00% | 5.00% | 5.00% | 5.00% | |
Revolving Credit Facility | China Facilities | Chart Cryogenic Engineering Systems Co., Ltd. | |||||
Debt Instrument | |||||
Bank guarantees | $ 700,000 | ¥ 5,000,000 | |||
Line of Credit - Working Capital | CCDEC Facility | |||||
Debt Instrument | |||||
Maximum borrowing capacity | 10,900,000 | 75,000,000 | |||
Long-term Debt | CCESC Term Loan Maturing May 26, 2024 | |||||
Debt Instrument | |||||
Debt instrument face amount | 12,600,000 | 86,600,000 | |||
Debt instrument, term | 8 years | ||||
Debt instrument periodic payments | ¥ | ¥ 10,000,000 | ||||
Long-term debt | $ 3,900,000 | ¥ 26,600,000 | |||
Fixed interest rate | 5.39% | 5.39% | 5.39% | 5.39% | |
Secured Debt | Ferox Secured Facility A1 Facility | |||||
Debt Instrument | |||||
Maximum borrowing capacity | $ 5,600,000 | Kč 125,000,000 | |||
Secured Debt | Ferox Secured Facility A1 Facility | Maximum | |||||
Debt Instrument | |||||
Percentage of face amount up to maturity | 0.50% | 0.50% | 0.50% | 0.50% | |
Secured Debt | Ferox Secured Facility B2facilities | |||||
Debt Instrument | |||||
Maximum borrowing capacity | $ 7,500,000 | € 6,500,000 | |||
Number of credit facilities | creditfacilities | 2 | 2 | 2 | 2 | |
Secured Debt | Ferox Secured Facility B2facilities | Maximum | |||||
Debt Instrument | |||||
Percentage of face amount up to maturity | 0.70% | 0.70% | 0.70% | 0.70% | |
Secured Debt | Ferox Secured Facilities A and B Member | |||||
Debt Instrument | |||||
Bank guarantees | $ 8,800,000 | Kč 196,600,000 | |||
Overdraft Facility | Chart Luxembourg Facility | |||||
Debt Instrument | |||||
Maximum borrowing capacity | 5,000,000 | ||||
Line of credit outstanding | $ 0 |
Debt and Credit Arrangements _7
Debt and Credit Arrangements - Letters of Credit (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Debt Instrument | |||
Restricted cash | $ 1 | $ 8.7 | $ 8.7 |
Restricted cash, noncurrent | 1 | 1 | 1 |
Restricted cash, current | 0 | 7.7 | $ 7.7 |
Energy & Chemicals | |||
Debt Instrument | |||
Restricted cash, noncurrent | $ 5.4 | $ 1 |
Debt and Credit Arrangements _8
Debt and Credit Arrangements - Fair Value Disclosures about Debt (Details) - Convertible Debt | Sep. 30, 2018 | Dec. 31, 2017 |
Convertible Notes, due 2024 | ||
Debt Instrument | ||
Debt instrument percentage over par value | 140.00% | 105.00% |
Convertible Notes, Due 2018 | ||
Debt Instrument | ||
Debt instrument percentage over par value | 99.00% |
Product Warranties (Details)
Product Warranties (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Movement in Standard Product Warranty Accrual | |
Beginning balance standard product warrantyaccrual | $ 11.6 |
Issued – warranty expense | 3.3 |
Change in estimates | (1.4) |
Warranty usage | (4.7) |
Ending balance standard product warranty accrual | $ 8.8 |
Product Warranties - Narratives
Product Warranties - Narratives (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Apr. 23, 2018 |
Product warranties | |||
Guarantor Obligations | |||
Warranty accrual | $ 0.6 | $ 3.8 | $ 3.8 |
Business Combinations - VRV (De
Business Combinations - VRV (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2018EUR (€) | |
Business Acquisition | |||||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 | $ 446 | |||
VRV | Forecasted | |||||
Business Acquisition | |||||
Payment for acquisition of businesses, net of cash acquired | $ 144.7 | € 125 | |||
Outstanding indebtedness acquired | $ 81 | € 70 |
Business Combinations - Skaff N
Business Combinations - Skaff Narratives (Details) - USD ($) $ in Millions | Jan. 02, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Business Acquisition | |||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 | $ 446 | |
Skaff | |||
Business Acquisition | |||
Voting percentage acquired | 100.00% | ||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 |
Business Combinations - Hudson
Business Combinations - Hudson Narratives (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Sep. 20, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Business Acquisition | ||||||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 | $ 446 | ||||
Borrowings on revolving credit facilities | 188.3 | 302.2 | ||||
Operating income | $ 31.5 | $ 7.2 | 65.8 | 17.6 | ||
Amortization expense | 5 | 2.6 | 15.7 | 7 | ||
Acquisition related costs | 2 | 7.4 | 4.1 | 8.6 | ||
Energy & Chemicals | ||||||
Business Acquisition | ||||||
Operating income | 12.1 | 0.3 | 20.8 | (2.4) | ||
Hudson | ||||||
Business Acquisition | ||||||
Payment for acquisition of businesses, net of cash acquired | $ 419.5 | |||||
Borrowings on revolving credit facilities | $ 300 | |||||
Net sales | $ 6.1 | |||||
Operating income | 1.2 | |||||
Amortization expense | $ 0.4 | 3 | 9 | |||
Acquisition related costs | 7.3 | 8.1 | ||||
Hudson | Minimum | ||||||
Business Acquisition | ||||||
Finite lived intangible assets useful life | 2 years | |||||
Hudson | Maximum | ||||||
Business Acquisition | ||||||
Finite lived intangible assets useful life | 15 years | |||||
Hudson | Energy & Chemicals | ||||||
Business Acquisition | ||||||
Net sales | 44.1 | 6.1 | 134.9 | 6.1 | ||
Operating income | $ 4.3 | $ 1.2 | $ 14.6 | $ 1.2 |
Business Combinations - Schedul
Business Combinations - Schedule of Net Assets Acquired (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 20, 2017 | |
Net assets acquired: | ||||
Goodwill | $ 457.2 | $ 459.7 | ||
Hudson | ||||
Net assets acquired: | ||||
Goodwill | 233 | $ 238.3 | ||
Identifiable intangible assets | 211 | 211 | $ 211 | |
Accounts receivable | 34.6 | 34.6 | ||
Property, plant and equipment | 29.4 | 29.4 | ||
Inventories | 26.5 | 26.5 | ||
Other current assets | 8.1 | 8.1 | ||
Unbilled contract revenue | 4.9 | 4.9 | ||
Other assets | 2.7 | 2.9 | ||
Prepaid expenses | 0.9 | 0.9 | ||
Deferred tax liabilities | (80) | (87.6) | ||
Accounts payable | (21.2) | (21.2) | ||
Customer advances and billings in excess of contract revenue | (17.4) | (17.4) | ||
Accrued salaries, wages and benefits | (4.4) | (4.4) | ||
Other current liabilities | (4.4) | (3.8) | ||
Other long-term liabilities | (3.4) | (1.9) | ||
Current portion of warranty reserve | (0.8) | (0.8) | ||
Net assets acquired | 419.5 | $ 419.5 | ||
Adjustments | ||||
Goodwill | (5.3) | |||
Other assets | (0.2) | |||
Deferred tax liabilities | 7.6 | |||
Other current liabilities | (0.6) | |||
Other long-term liabilities | (1.5) | |||
Net assets acquired | $ 0 |
Business Combinations - Hudso_2
Business Combinations - Hudson Intangible Assets Acquired (Details) - USD ($) $ in Millions | Sep. 20, 2017 | Sep. 30, 2018 | Jun. 30, 2018 |
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 16 years | ||
Customer relationships | |||
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 15 years | ||
Unpatented technology | |||
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 9 years | ||
Hudson | |||
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 12 years | ||
Finite lived intangible assets acquired | $ 141.7 | ||
Identifiable intangible assets | 211 | $ 211 | $ 211 |
Hudson | Trademarks and trade names | |||
Acquired Finite-Lived Intangible Assets | |||
Indefinite-lived intangible assets acquired | $ 69.3 | ||
Hudson | Customer relationships | |||
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 13 years | ||
Finite lived intangible assets acquired | $ 122.1 | ||
Hudson | Unpatented technology | |||
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 10 years | ||
Finite lived intangible assets acquired | $ 18.3 | ||
Hudson | Customer backlog | |||
Acquired Finite-Lived Intangible Assets | |||
Weighted-average Estimated Useful Life | 2 years | ||
Finite lived intangible assets acquired | $ 1.3 |
Business Combinations - Hudso_3
Business Combinations - Hudson Supplemental Pro Forma Information (Details) - Hudson - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Business Acquisition | ||
Pro forma sales | $ 244.6 | $ 714.8 |
Pro forma net income attributable to Chart Industries, Inc. | $ 3.6 | $ 4.5 |
Pro forma net loss attributable to Chart Industries, Inc. per common share, basic (usd per share) | $ 0.12 | $ 0.15 |
Pro forma net loss attributable to Chart Industries, Inc. per common share, diluted (usd per share) | $ 0.11 | $ 0.14 |
Business Combinations - VCT Vog
Business Combinations - VCT Vogel GmbH (Details) € in Millions, $ in Millions | Aug. 31, 2017USD ($) | Aug. 31, 2017EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Business Acquisition | ||||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 | $ 446 | ||
VCT Vogel GmbH | ||||
Business Acquisition | ||||
Voting percentage acquired | 100.00% | 100.00% | ||
Payment for acquisition of businesses, net of cash acquired | $ 4.2 | € 3.6 |
Business Combinations - Hetsco
Business Combinations - Hetsco Acquisition (Details) - USD ($) $ in Millions | Jan. 13, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Business Acquisition | |||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 | $ 446 | |
Hetsco | |||
Business Acquisition | |||
Voting percentage acquired | 100.00% | ||
Payment for acquisition of businesses, net of cash acquired | $ 22.8 |
Business Combinations - Conting
Business Combinations - Contingent Consideration (Details) - Thermax - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2018 | |
Business Acquisition | ||
Contingent consideration | $ 1.8 | |
Contingent consideration, potential cash payments, low end | $ 0 | |
Contingent consideration, potential cash payments, high end | $ 11.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Loss | ||||
Beginning balance | $ 802.2 | |||
Other comprehensive (loss) income | $ (6.3) | $ 6.7 | (15.7) | $ 20.6 |
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | 0.2 | 1.5 | 0.6 | 1.9 |
Net current-period other comprehensive (loss) income, net of taxes | (6.1) | 8.2 | (15.1) | 22.5 |
Ending balance | 836.8 | 836.8 | ||
Accumulated other comprehensive loss | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (17.1) | (20.9) | (8.1) | (35.2) |
Ending balance | (23.2) | (12.7) | (23.2) | (12.7) |
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (7.2) | (10.8) | 2.2 | (24.7) |
Other comprehensive (loss) income | (6.3) | 6.7 | (15.7) | 20.6 |
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | 0 | 1.3 | 0 | 1.3 |
Net current-period other comprehensive (loss) income, net of taxes | (6.3) | 8 | (15.7) | 21.9 |
Ending balance | (13.5) | (2.8) | (13.5) | (2.8) |
Pension liability adjustments, net of taxes | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (9.9) | (10.1) | (10.3) | (10.5) |
Other comprehensive (loss) income | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | 0.2 | 0.2 | 0.6 | 0.6 |
Net current-period other comprehensive (loss) income, net of taxes | 0.2 | 0.2 | 0.6 | 0.6 |
Ending balance | $ (9.7) | $ (9.9) | $ (9.7) | $ (9.9) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income (loss) attributable to Chart Industries, Inc. | ||||
Income (loss) from continuing operations | $ 21.5 | $ (0.6) | $ 35.6 | $ (1.2) |
Income from discontinued operations, net of tax | 0.7 | 2.1 | 4.7 | 2.6 |
Net income attributable to Chart Industries, Inc. | $ 22.2 | $ 1.5 | $ 40.3 | $ 1.4 |
Earnings (loss) per share - basic: | ||||
Income (loss) from continuing operations, basic (usd per share) | $ 0.70 | $ (0.02) | $ 1.15 | $ (0.04) |
Income from discontinued operations, basic (usd per share) | 0.02 | 0.07 | 0.15 | 0.08 |
Net income attributable to Chart Industries, Inc., basic (usd per share) | 0.72 | 0.05 | 1.30 | 0.04 |
Earnings (loss) per share - diluted: | ||||
Income (loss) from continuing operations, diluted (usd per share) | 0.65 | (0.02) | 1.11 | (0.04) |
Income from discontinued operations, diluted (usd per share) | 0.02 | 0.07 | 0.14 | 0.08 |
Net income attributable to Chart Industries, Inc., diluted (usd per share) | $ 0.67 | $ 0.05 | $ 1.25 | $ 0.04 |
Weighted average number of common shares outstanding — basic (shares) | 31,030 | 30,760 | 30,970 | 30,730 |
Incremental shares issuable upon assumed conversion and exercise of share-based awards (shares) | 850 | 550 | 830 | 560 |
Incremental shares issuable due to dilutive effect of convertible (shares) | 930 | 0 | 340 | 0 |
Incremental shares issuable due to dilutive effect of warrants (shares) | 140 | 0 | 0 | 0 |
Weighted average number of common shares outstanding – diluted (shares) | 32,950 | 31,310 | 32,140 | 31,290 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 1,760 | 4,000 | 5,770 | 4,040 |
Share-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 60 | 630 | 260 | 670 |
Convertible note hedge | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 930 | 0 | 340 | 0 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 770 | 3,370 | 5,170 | 3,370 |
Earnings Per Share - Narratives
Earnings Per Share - Narratives (Details) | Dec. 31, 2017$ / shares |
Convertible Notes, due 2024 | Convertible Debt | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |
Warrant exercise price (usd per share) | $ 71.775 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Operating Loss Carryforwards | ||||||
Tax benefit from changes in enacted taxes | $ 22.5 | |||||
Provisional decrease of deferred tax liabilities | 26.9 | |||||
Provisional deemed repatriation transition tax | 8.7 | $ 8.7 | ||||
One-time provisional tax benefit | 26.9 | |||||
Deferred foreign income tax adjustment | $ (0.6) | $ (0.6) | ||||
Income tax expense | $ 4.2 | $ 0.7 | $ 9.7 | $ 0.6 | ||
Effective income tax rate (percent) | 16.00% | 100.00% | 20.60% | 120.00% | ||
Effective federal statutory rate (percent) | 21.00% | 35.00% | 21.00% | |||
Liability for gross unrecognized tax benefits | $ 1.7 | 0.8 | $ 1.7 | 0.8 | ||
Unrecognized tax benefit that would impact effective tax rate | 0.8 | 0.6 | 0.8 | 0.6 | ||
Accrual for interest and penalties | 0.2 | 0.1 | $ 0.2 | 0.1 | ||
Hudson | ||||||
Operating Loss Carryforwards | ||||||
Provisional deemed repatriation transition tax | (1.4) | 8.7 | $ 8.7 | |||
Additional taxes related to proposed merger | $ 1.5 | $ 4.5 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) shares in Thousands, $ in Millions | Jun. 11, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Allocated share-based compensation expense | $ 0.5 | $ 1.4 | $ 3.5 | $ 9.1 | |
Credits to share-based compensation related to forfeitures | $ 1.8 | ||||
Share based compensation expense not yet recognized | 6.2 | $ 6.2 | |||
Period in which unrecognized share based compensation will be recognized | 2 years 3 months 16 days | ||||
Corporate | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Adjustment to share-based compensation | $ (0.9) | $ (1.8) | |||
Management | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation, fair value of awards granted | 12.5 | ||||
Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation, fair value of restricted shares granted | $ 0.5 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation, shares granted (shares) | 190 | ||||
Share-based compensation, shares exercised (shares) | 260 | ||||
Share-based compensation, stock option forfeited (shares) | 200 | ||||
Share-based compensation, vesting period | 4 years | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation, restricted shares granted (shares) | 100 | ||||
Share-based compensation, vesting period | 3 years | ||||
Share-based compensation, shares forfeited other than options (shares) | 70 | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation, restricted shares granted (shares) | 20 | ||||
Share-based compensation, shares vested other than options (shares) | 140 | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation, restricted shares granted (shares) | 20 | ||||
Share-based compensation, vesting period | 3 years | ||||
Share-based compensation, shares forfeited other than options (shares) | 30 |
Commitment and Contingencies -
Commitment and Contingencies - Rollforward (Details) $ in Millions | 5 Months Ended |
Sep. 30, 2018USD ($) | |
Movement in Standard Product Warranty Accrual | |
Ending balance standard product warranty accrual | $ 8.8 |
Product warranties | |
Movement in Standard Product Warranty Accrual | |
Beginning balance standard product warrantyaccrual | 3.8 |
Reserve usage | $ (3.2) |
Restructuring Activities - Rest
Restructuring Activities - Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve | ||||
Severance costs | $ 1.9 | $ 0.8 | $ 2.8 | $ 2.7 |
Other restructuring costs | 0.1 | 1.5 | 0.7 | 5.8 |
Restructuring costs | 2 | 2.3 | 3.5 | 8.5 |
Cost of sales | ||||
Restructuring Cost and Reserve | ||||
Severance costs | 0 | 0 | 0.2 | 0.4 |
Other restructuring costs | 0 | 0.3 | 0.5 | 1.9 |
Selling, general, and administrative expenses | ||||
Restructuring Cost and Reserve | ||||
Severance costs | 1.9 | 0.8 | 2.6 | 2.3 |
Other restructuring costs | $ 0.1 | $ 1.2 | $ 0.2 | $ 3.9 |
Restructuring Activities - Roll
Restructuring Activities - Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | $ 0.2 | $ 2 | $ 2.7 | $ 6.3 |
Restructuring costs | 2 | 2.3 | 3.5 | 8.5 |
Cash payments and other | (0.2) | (2.6) | (3.5) | (13.1) |
Change in estimates | (0.7) | |||
Ending balance, restructuring accrual | 2 | 1.7 | 2 | 1.7 |
Operating Segments | Energy & Chemicals | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0 | 0 | 0.2 | 0.1 |
Restructuring costs | 0.1 | 0.2 | 0.5 | 2.3 |
Cash payments and other | (0.1) | 0 | (0.7) | (2.2) |
Change in estimates | 0 | |||
Ending balance, restructuring accrual | 0 | 0.2 | 0 | 0.2 |
Operating Segments | D&S West | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0.2 | 0.5 | 1.2 | 3.2 |
Restructuring costs | 0 | 0.2 | 0 | 0.9 |
Cash payments and other | (0.1) | (0.6) | (0.4) | (4) |
Change in estimates | (0.7) | |||
Ending balance, restructuring accrual | 0.1 | 0.1 | 0.1 | 0.1 |
Operating Segments | D&S East | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0 | 0 | 0.2 | 0 |
Restructuring costs | 0.1 | 0.5 | 0.6 | 0.8 |
Cash payments and other | 0 | (0.5) | (0.7) | (0.8) |
Change in estimates | 0 | |||
Ending balance, restructuring accrual | 0.1 | 0 | 0.1 | 0 |
Corporate | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0 | 1.5 | 1.1 | 3 |
Restructuring costs | 1.8 | 1.4 | 2.4 | 4.5 |
Cash payments and other | 0 | (1.5) | (1.7) | (6.1) |
Change in estimates | 0 | |||
Ending balance, restructuring accrual | $ 1.8 | $ 1.4 | $ 1.8 | $ 1.4 |