QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol (s) | Name of Each Exchange on Which Registered | ||
(Nasdaq Global Select Market) |
x | Accelerated filer | o | |
Non-accelerated filer | o | Smaller reporting company | |
Emerging growth company |
Page | |
Item 1. | Financial Statements |
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, less allowances of $10.3 and $8.5, respectively | |||||||
Inventories, net | |||||||
Unbilled contract revenue | |||||||
Prepaid expenses | |||||||
Other current assets | |||||||
Total Current Assets | |||||||
Property, plant, and equipment, net | |||||||
Goodwill | |||||||
Identifiable intangible assets, net | |||||||
Other assets | |||||||
TOTAL ASSETS | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | $ | |||||
Customer advances and billings in excess of contract revenue | |||||||
Accrued salaries, wages, and benefits | |||||||
Current portion of warranty reserve | |||||||
Short-term debt and current portion of long-term debt | |||||||
Other current liabilities | |||||||
Total Current Liabilities | |||||||
Long-term debt | |||||||
Long-term deferred tax liabilities | |||||||
Accrued pension liabilities | |||||||
Other long-term liabilities | |||||||
Total Liabilities | |||||||
Equity | |||||||
Common stock, par value $0.01 per share – 150,000,000 shares authorized, 35,782,535 and 31,363,650 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total Chart Industries, Inc. Shareholders’ Equity | |||||||
Noncontrolling interests | |||||||
Total Equity | |||||||
TOTAL LIABILITIES AND EQUITY | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | $ | $ | $ | |||||||||||
Cost of sales | |||||||||||||||
Gross profit | |||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||
Amortization expense | |||||||||||||||
Operating expenses | |||||||||||||||
Operating income | |||||||||||||||
Other expenses: | |||||||||||||||
Interest expense, net | |||||||||||||||
Financing costs amortization | |||||||||||||||
Foreign currency (gain) loss and other | ( | ) | ( | ) | ( | ) | |||||||||
Other expenses, net | |||||||||||||||
Income from continuing operations before income taxes | |||||||||||||||
Income tax expense | |||||||||||||||
Net income from continuing operations | |||||||||||||||
Income from discontinued operations, net of taxes | |||||||||||||||
Net income | |||||||||||||||
Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income from discontinued operations, net of taxes | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Basic earnings per common share attributable to Chart Industries, Inc. | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income from discontinued operations | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Diluted earnings per common share attributable to Chart Industries, Inc. | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income from discontinued operations | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Weighted-average number of common shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted | |||||||||||||||
Comprehensive income (loss), net of taxes | $ | $ | ( | ) | $ | $ | |||||||||
Less: Comprehensive income attributable to noncontrolling interests, net of taxes | |||||||||||||||
Comprehensive income (loss) attributable to Chart Industries, Inc., net of taxes | $ | $ | ( | ) | $ | $ |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | $ | |||||
Less: Income from discontinued operations | |||||||
Income from continuing operations | |||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Interest accretion of convertible notes discount | |||||||
Employee share-based compensation expense | |||||||
Other operating activities | ( | ) | |||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | ( | ) | |||||
Inventories | ( | ) | ( | ) | |||
Unbilled contract revenues and other assets | ( | ) | ( | ) | |||
Accounts payable and other liabilities | ( | ) | ( | ) | |||
Customer advances and billings in excess of contract revenue | ( | ) | |||||
Net Cash (Used In) Provided By Operating Activities | ( | ) | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Acquisition of businesses, net of cash acquired | ( | ) | ( | ) | |||
Government grants | ( | ) | |||||
Net Cash Used In Investing Activities | ( | ) | ( | ) | |||
FINANCING ACTIVITIES | |||||||
Borrowings on revolving credit facilities | |||||||
Repayments on revolving credit facilities | ( | ) | ( | ) | |||
Repayments on term loan | ( | ) | |||||
Payments for debt issuance costs (1) | ( | ) | ( | ) | |||
Proceeds from exercise of stock options | |||||||
Common stock repurchases | ( | ) | ( | ) | |||
Payments for equity issuance costs (1) | ( | ) | |||||
Issuance of shares | |||||||
Dividend distribution to noncontrolling interest | ( | ) | ( | ) | |||
Net Cash Provided By Financing Activities | |||||||
DISCONTINUED OPERATIONS | |||||||
Cash Provided By Operating Activities (2) | |||||||
Cash Used In Investing Activities (3) | ( | ) | |||||
Cash Provided By Discontinued Operations | |||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | |||
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents | |||||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period (4) | |||||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (4) | $ | $ |
(1) | Non-cash financing activities for debt issuance costs and equity issuance costs were $ |
(2) | Includes depreciation expense of $ |
(3) | Includes capital expenditures of $ |
(4) | Includes restricted cash and restricted cash equivalents of $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Non-controlling Interests | |||||||||||||||||||||||
Shares Outstanding | Amount | Retained Earnings | Total Equity | |||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||
Common stock issued from share-based compensation plans | — | — | — | — | ||||||||||||||||||||||
Common stock repurchases | ( | ) | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Balance at March 31, 2019 | ( | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | — | |||||||||||||||||||||
Common stock issuance, net | — | — | — | |||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||
Common stock issued from share-based compensation plans | — | — | — | — | ||||||||||||||||||||||
Common stock repurchases | ( | ) | — | — | — | — | ||||||||||||||||||||
Dividend distribution to noncontrolling interest | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interests | |||||||||||||||||||||||
Shares Outstanding | Amount | Retained Earnings | Total Equity | |||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||
Cumulative effect of accounting change | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||
Common stock issued from share-based compensation plans | — | — | — | — | ||||||||||||||||||||||
Common stock repurchases | ( | ) | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||
Balance as of March 31, 2018 | ||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||
Common stock issued from share-based compensation plans | — | — | — | — | ||||||||||||||||||||||
Common stock repurchases | — | — | ( | ) | — | — | — | ( | ) | |||||||||||||||||
Dividend distribution to noncontrolling interest | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Other | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Balance as of June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||
2019 (1) | $ | $ | |||||
2020 | |||||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
Thereafter (2) | |||||||
Total future minimum lease payments | $ | $ |
(1) | Amount as of June 30, 2019 represents lease payments for the remaining six months, July 2019 through December 2019. |
(2) | As of June 30, 2019, future minimum lease payments for non-cancelable operating leases for period subsequent to 2023 relate to |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | |||||||
Sales | $ | $ | ||||||
Cost of sales | ||||||||
Selling, general and administrative expenses | ||||||||
Amortization expense | ||||||||
Operating income (1) | ||||||||
Other loss, net | ( | ) | ( | ) | ||||
Income before income taxes | ||||||||
Income tax expense | ||||||||
Income from discontinued operations, net of tax | $ | $ |
(1) | Includes depreciation expense of $ |
Three Months Ended June 30, 2019 | |||||||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Corporate | Consolidated | ||||||||||||||||||
Sales to external customers (1) | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Depreciation and amortization expense | |||||||||||||||||||||||
Operating income (loss) (1) (2) (3) | ( | ) | ( | ) | |||||||||||||||||||
Capital expenditures |
Three Months Ended June 30, 2018 | |||||||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Corporate | Consolidated | ||||||||||||||||||
Sales to external customers | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Depreciation and amortization expense | |||||||||||||||||||||||
Operating income (loss) (2) (3) (4) (5) | ( | ) | ( | ) | |||||||||||||||||||
Capital expenditures |
Six Months Ended June 30, 2019 | |||||||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Corporate | Consolidated | ||||||||||||||||||
Sales to external customers (1) | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Depreciation and amortization expense | |||||||||||||||||||||||
Operating income (loss) (1) (2) (3) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Capital expenditures |
Six Months Ended June 30, 2018 | |||||||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Corporate | Consolidated | ||||||||||||||||||
Sales to external customers | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Depreciation and amortization expense | |||||||||||||||||||||||
Operating income (loss) (2) (3) (4) (5) | ( | ) | ( | ) | |||||||||||||||||||
Capital expenditures |
(1) | Includes sales and operating loss for VRV S.r.l and its subsidiaries (“VRV”), included in the E&C and D&S East segment results since the acquisition date, November 15, 2018 as follows: |
• | Sales were $ |
• | Sales were $ |
• | Operating loss was $( |
• | Operating loss was $( |
(2) | Restructuring costs for the: |
• | Three Months Ended June 30, 2019 were $ |
• | Three Months Ended June 30, 2018 were $ |
• | Six Months Ended June 30, 2019 were $ |
• | Six Months Ended June 30, 2018 were $ |
(3) | Corporate includes transaction-related costs of: (transaction-related costs include costs associated with business development and other one-time transactions) |
• | $ |
• | $ |
(4) | Includes an expense of $ |
(5) | Includes net severance costs of $ |
Three Months Ended June 30, 2019 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Natural gas processing (including petrochemical) applications | $ | $ | $ | $ | $ | ||||||||||||||
Liquefied natural gas (LNG) applications | |||||||||||||||||||
Industrial gas applications | |||||||||||||||||||
HVAC, power and refining applications | |||||||||||||||||||
Bulk industrial gas applications | ( | ) | |||||||||||||||||
Packaged gas industrial applications | ( | ) | |||||||||||||||||
Cryobiological storage | ( | ) | |||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Three Months Ended June 30, 2018 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Natural gas processing (including petrochemical) applications | $ | $ | $ | $ | $ | ||||||||||||||
Liquefied natural gas (LNG) applications | ( | ) | |||||||||||||||||
Industrial gas applications | |||||||||||||||||||
HVAC, power and refining applications | |||||||||||||||||||
Bulk industrial gas applications | ( | ) | |||||||||||||||||
Packaged gas industrial applications | ( | ) | |||||||||||||||||
Cryobiological storage | |||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2019 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Natural gas processing (including petrochemical) applications | $ | $ | $ | $ | $ | ||||||||||||||
Liquefied natural gas (LNG) applications | |||||||||||||||||||
Industrial gas applications | |||||||||||||||||||
HVAC, power and refining applications | |||||||||||||||||||
Bulk industrial gas applications | ( | ) | |||||||||||||||||
Packaged gas industrial applications | ( | ) | |||||||||||||||||
Cryobiological storage | ( | ) | |||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2018 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Natural gas processing (including petrochemical) applications | $ | $ | $ | $ | $ | ||||||||||||||
Liquefied natural gas (LNG) applications | ( | ) | |||||||||||||||||
Industrial gas applications | |||||||||||||||||||
HVAC, power and refining applications | |||||||||||||||||||
Bulk industrial gas applications | ( | ) | |||||||||||||||||
Packaged gas industrial applications | ( | ) | |||||||||||||||||
Cryobiological storage | |||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Total Assets | June 30, 2019 | December 31, 2018 | ||||||
Energy & Chemicals | $ | $ | ||||||
D&S West | ||||||||
D&S East | ||||||||
Corporate | ||||||||
Total | $ | $ |
Three Months Ended June 30, 2019 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Point in time | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Over time | |||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Three Months Ended June 30, 2018 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Point in time | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Over time | ( | ) | |||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2019 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Point in time | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Over time | |||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2018 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Intersegment Eliminations | Consolidated | |||||||||||||||
Point in time | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Over time | ( | ) | |||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ |
June 30, 2019 | December 31, 2018 | Year-to-date Change ($) | Year-to-date Change (%) | |||||||||||
Contract assets | ||||||||||||||
Accounts receivable, net of allowances | $ | $ | $ | % | ||||||||||
Unbilled contract revenue | % | |||||||||||||
Contract liabilities | ||||||||||||||
Customer advances and billings in excess of contract revenue | $ | $ | $ | ( | ) | ( | )% | |||||||
Long-term deferred revenue | ( | ) | ( | )% |
June 30, 2019 | December 31, 2018 | ||||||
Raw materials and supplies | $ | $ | |||||
Work in process | |||||||
Finished goods | |||||||
Total inventories, net | $ | $ |
Energy & Chemicals | D&S West | D&S East | Consolidated | ||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | |||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | |||||||||||
Purchase price adjustment (1) | |||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | |||||||||||
Accumulated goodwill impairment loss at June 30, 2019 and December 31, 2018 | $ | $ | $ | $ |
(1) |
June 30, 2019 | December 31, 2018 | ||||||||||||||||
Weighted-average Estimated Useful Life | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Finite-lived intangible assets: | |||||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||
Unpatented technology | ( | ) | ( | ) | |||||||||||||
Land use rights | ( | ) | ( | ) | |||||||||||||
Trademarks and trade names | ( | ) | ( | ) | |||||||||||||
Patents and other | ( | ) | ( | ) | |||||||||||||
Total finite-lived intangible assets | ( | ) | ( | ) | |||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||
Trademarks and trade names | — | — | |||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | $ | ( | ) |
(1) | Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. |
For the Year Ending December 31, | |||
2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 |
June 30, 2019 | December 31, 2018 | ||||||
Current | $ | $ | |||||
Long-term | |||||||
Total China Government Grants | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||
Convertible notes due November 2024: | |||||||
Principal amount | $ | $ | |||||
Unamortized discount | ( | ) | ( | ) | |||
Unamortized debt issuance costs | ( | ) | ( | ) | |||
Convertible notes due November 2024, net of unamortized discount and debt issuance costs | |||||||
Senior secured revolving credit facility (1) | |||||||
Term loan (2) | |||||||
Foreign facilities | |||||||
Total debt, net of unamortized discount and debt issuance costs | |||||||
Less: current maturities | ( | ) | ( | ) | |||
Long-term debt | $ | $ |
(1) | See below for information on the senior secured credit facility which closed in June 2019 and replaced the previous facility. |
(2) | The term loan was drawn subsequent to June 30, 2019 in conjunction with the AXC acquisition. See below for more information. |
Three Months Ended June 30, | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
2024 Notes, interest accretion of convertible notes discount | $ | $ | $ | $ | |||||||||||
2024 Notes, 1.0% contractual interest coupon | |||||||||||||||
2024 Notes, total interest expense | $ | $ | $ | $ | |||||||||||
2024 Notes, financing costs amortization | $ | $ | $ | $ |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||
2018 Notes, interest accretion of convertible notes discount | $ | $ | |||||
2018 Notes, 2.0% contractual interest coupon | |||||||
2018 Notes, total interest expense | $ | $ |
Balance at December 31, 2018 | $ | ||
Issued – warranty expense | |||
Warranty usage | ( | ) | |
Balance at June 30, 2019 | $ |
• | researching and analyzing the differences between Chart accounting policies and those used by VRV, |
• | finalizing the valuation of working capital accounts, |
• | completing our review of VRV’s revenue recognition policies, including assessing estimates utilized for projects using the percentage of completion method, |
• | gathering sufficient information to estimate the fair value of acquired intangible assets, including assessing projections and other assumptions used in our valuation models, and determining whether the intangible assets identified below represent a complete listing of acquired intangible assets, and |
• | evaluating income tax accounting considerations, including income tax effects of the above matters. |
June 30, 2019 | Adjustments | As Previously Reported December 31, 2018 | |||||||||
Net assets acquired: | |||||||||||
Identifiable intangible assets | $ | $ | — | $ | |||||||
Property, plant and equipment | — | ||||||||||
Goodwill | |||||||||||
Other net assets | ( | ) | |||||||||
Debt | ( | ) | — | ( | ) | ||||||
Net assets acquired | $ | $ | $ |
Weighted-average Estimated Useful Life | Preliminary Estimated Asset Fair Value | ||||
Finite-lived intangible assets: | |||||
Customer relationships | $ | ||||
Unpatented technology | |||||
Other identifiable intangible assets (1) | |||||
Trademarks and trade names | |||||
Total finite-lived intangible assets acquired | $ |
(1) | Other identifiable intangible assets is included in “Patents and other” in Note 6, “Goodwill and Intangible Assets”. |
Net assets acquired: | |||
Identifiable intangible assets | $ | ||
Property, plant and equipment | |||
Goodwill | |||
Other assets | |||
Liabilities | ( | ) | |
Net assets acquired | $ |
Weighted-average Estimated useful life | Preliminary Estimated Asset Fair Value | ||||
Finite-lived intangible assets: | |||||
Customer Relationships | $ | ||||
Developed Technology | |||||
Backlog | |||||
Non-compete agreements | |||||
Total finite-lived intangible assets acquired | |||||
Indefinite-lived intangible assets: | |||||
Trademarks | |||||
Total identifiable intangible assets acquired | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Pro forma sales | $ | $ | $ | $ | |||||||||||
Pro forma net income attributable to Chart Industries, Inc. | |||||||||||||||
Pro forma net income attributable to Chart Industries, Inc. per common share, basic | $ | $ | $ | $ | |||||||||||
Pro forma net income attributable to Chart Industries, Inc. per common share, diluted |
Foreign currency translation adjustments | Pension liability adjustments, net of taxes | Accumulated other comprehensive loss | |||||||||
Balance at March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive income | |||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | |||||||||||
Net current-period other comprehensive income, net of taxes | |||||||||||
Balance at June 30, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Foreign currency translation adjustments | Pension liability adjustments, net of taxes | Accumulated other comprehensive loss | |||||||||
Balance at March 31, 2018 | $ | $ | ( | ) | $ | ||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | |||||||||||
Net current-period other comprehensive (loss) income, net of taxes | ( | ) | ( | ) | |||||||
Balance at June 30, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Foreign currency translation adjustments | Pension liability adjustments, net of taxes | Accumulated other comprehensive (loss) income | |||||||||
Balance as of December 31, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive loss | ( | ) | ( | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | |||||||||||
Net current-period other comprehensive (loss) income, net of taxes | ( | ) | ( | ) | |||||||
Balance as of June 30, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Foreign currency translation adjustments | Pension liability adjustments, net of taxes | Accumulated other comprehensive (loss) income | |||||||||
Balance as of December 31, 2017 | $ | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive loss | ( | ) | ( | ) | |||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | |||||||||||
Net current-period other comprehensive (loss) income, net of taxes | ( | ) | ( | ) | |||||||
Balance as of June 30, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income from discontinued operations, net of taxes | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Earnings per common share – basic: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income from discontinued operations | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Earnings per common share – diluted: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income from discontinued operations | |||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | $ | $ | $ | |||||||||||
Weighted average number of common shares outstanding – basic | |||||||||||||||
Incremental shares issuable upon assumed conversion and exercise of share-based awards | |||||||||||||||
Incremental shares issuable due to dilutive effect of convertible notes | |||||||||||||||
Incremental shares issuable due to dilutive effect of warrants | |||||||||||||||
Weighted average number of common shares outstanding – diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Share-based awards | |||||||||||
Convertible note hedge (1) | |||||||||||
Warrants | |||||||||||
Total anti-dilutive securities |
(1) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Severance: | |||||||||||||||
Cost of sales | $ | $ | $ | $ | |||||||||||
Selling, general, and administrative expenses | ( | ) | |||||||||||||
Total severance costs | |||||||||||||||
Other restructuring: | |||||||||||||||
Cost of sales | |||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||
Total other restructuring costs | |||||||||||||||
Total restructuring costs | $ | $ | $ | $ |
Three Months Ended June 30, 2019 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Corporate | Consolidated | |||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||
Restructuring costs | ( | ) | |||||||||||||||||
Property, plant and equipment impairment and disposals | ( | ) | ( | ) | |||||||||||||||
Cash payments and other | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ | $ |
Three Months Ended June 30, 2018 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Corporate | Consolidated | |||||||||||||||
Balance as of March 31, 2018 | $ | $ | $ | $ | $ | ||||||||||||||
Restructuring costs | |||||||||||||||||||
Cash payments and other | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Balance as of June 30, 2018 | $ | $ | $ | $ | $ |
Six Months Ended June 30, 2019 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Corporate | Consolidated | |||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | $ | ||||||||||||||
Restructuring costs | |||||||||||||||||||
Property, plant and equipment impairment and disposals | ( | ) | ( | ) | ( | ) | |||||||||||||
Cash payments and other | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ |
Six Months Ended June 30, 2018 | |||||||||||||||||||
Energy & Chemicals | D&S West | D&S East | Corporate | Consolidated | |||||||||||||||
Balance as of December 31, 2017 | $ | $ | $ | $ | $ | ||||||||||||||
Restructuring costs | |||||||||||||||||||
Cash payments and other | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Balance as of June 30, 2018 | $ | $ | $ | $ | $ |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | Current Quarter vs. Prior Year Quarter | Current Quarter vs. Prior Sequential Quarter | |||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | March 31, 2019 | Variance ($) | Variance (%) | Variance ($) | Variance (%) | |||||||||||||||||||
Sales | |||||||||||||||||||||||||
Energy & Chemicals | $ | 120.2 | $ | 100.8 | $ | 105.6 | $ | 19.4 | 19.2 | % | $ | 14.6 | 13.8 | % | |||||||||||
D&S West | 115.7 | 117.6 | 118.0 | (1.9 | ) | (1.6 | )% | (2.3 | ) | (1.9 | )% | ||||||||||||||
D&S East | 77.7 | 62.4 | 68.7 | 15.3 | 24.5 | % | 9.0 | 13.1 | % | ||||||||||||||||
Intersegment eliminations | (4.0 | ) | (2.9 | ) | (3.0 | ) | (1.1 | ) | 37.9 | % | (1.0 | ) | 33.3 | % | |||||||||||
Consolidated | $ | 309.6 | $ | 277.9 | $ | 289.3 | $ | 31.7 | 11.4 | % | $ | 20.3 | 7.0 | % | |||||||||||
Gross Profit | |||||||||||||||||||||||||
Energy & Chemicals | $ | 30.5 | $ | 21.3 | $ | 19.3 | $ | 9.2 | 43.2 | % | $ | 11.2 | 58.0 | % | |||||||||||
D&S West | 42.6 | 38.2 | 40.0 | 4.4 | 11.5 | % | 2.6 | 6.5 | % | ||||||||||||||||
D&S East | 11.1 | 14.1 | 8.9 | (3.0 | ) | (21.3 | )% | 2.2 | 24.7 | % | |||||||||||||||
Intersegment eliminations | (1.4 | ) | (0.8 | ) | (1.1 | ) | (0.6 | ) | 75.0 | % | (0.3 | ) | 27.3 | % | |||||||||||
Consolidated | $ | 82.8 | $ | 72.8 | $ | 67.1 | $ | 10.0 | 13.7 | % | $ | 15.7 | 23.4 | % | |||||||||||
Gross Profit Margin | |||||||||||||||||||||||||
Energy & Chemicals | 25.4 | % | 21.1 | % | 18.3 | % | |||||||||||||||||||
D&S West | 36.8 | % | 32.5 | % | 33.9 | % | |||||||||||||||||||
D&S East | 14.3 | % | 22.6 | % | 13.0 | % | |||||||||||||||||||
Consolidated | 26.7 | % | 26.2 | % | 23.2 | % | |||||||||||||||||||
SG&A Expenses | |||||||||||||||||||||||||
Energy & Chemicals | $ | 15.6 | $ | 11.7 | $ | 15.8 | $ | 3.9 | 33.3 | % | $ | (0.2 | ) | (1.3 | )% | ||||||||||
D&S West | 12.7 | 13.3 | 13.3 | (0.6 | ) | (4.5 | )% | (0.6 | ) | (4.5 | )% | ||||||||||||||
D&S East | 7.8 | 7.4 | 9.9 | 0.4 | 5.4 | % | (2.1 | ) | (21.2 | )% | |||||||||||||||
Corporate | 14.1 | 15.7 | 16.3 | (1.6 | ) | (10.2 | )% | (2.2 | ) | (13.5 | )% | ||||||||||||||
Consolidated | $ | 50.2 | $ | 48.1 | $ | 55.3 | $ | 2.1 | 4.4 | % | $ | (5.1 | ) | (9.2 | )% | ||||||||||
SG&A Expenses (% of Sales) | |||||||||||||||||||||||||
Energy & Chemicals | 13.0 | % | 11.6 | % | 15.0 | % | |||||||||||||||||||
D&S West | 11.0 | % | 11.3 | % | 11.3 | % | |||||||||||||||||||
D&S East | 10.0 | % | 11.9 | % | 14.4 | % | |||||||||||||||||||
Consolidated | 16.2 | % | 17.3 | % | 19.1 | % | |||||||||||||||||||
Three Months Ended | Current Quarter vs. Prior Year Quarter | Current Quarter vs. Prior Sequential Quarter | |||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | March 31, 2019 | Variance ($) | Variance (%) | Variance ($) | Variance (%) | |||||||||||||||||||
Operating Income (Loss) (1) | |||||||||||||||||||||||||
Energy & Chemicals | $ | 10.2 | $ | 5.9 | $ | (1.3 | ) | $ | 4.3 | 72.9 | % | $ | 11.5 | (884.6 | )% | ||||||||||
D&S West (3) | 28.7 | 23.6 | 25.6 | 5.1 | 21.6 | % | 3.1 | 12.1 | % | ||||||||||||||||
D&S East | 1.9 | 6.5 | (2.3 | ) | (4.6 | ) | (70.8 | )% | 4.2 | (182.6 | )% | ||||||||||||||
Corporate (2) (4) | (14.1 | ) | (15.7 | ) | (16.3 | ) | 1.6 | (10.2 | )% | 2.2 | (13.5 | )% | |||||||||||||
Intersegment eliminations | (1.4 | ) | (0.8 | ) | (1.1 | ) | (0.6 | ) | 75.0 | % | (0.3 | ) | 27.3 | % | |||||||||||
Consolidated | $ | 25.3 | $ | 19.5 | $ | 4.6 | $ | 5.8 | 29.7 | % | $ | 20.7 | 450.0 | % | |||||||||||
Operating Margin (Loss) | |||||||||||||||||||||||||
Energy & Chemicals | 8.5 | % | 5.9 | % | (1.2 | )% | |||||||||||||||||||
D&S West | 24.8 | % | 20.1 | % | 21.7 | % | |||||||||||||||||||
D&S East | 2.4 | % | 10.4 | % | (3.3 | )% | |||||||||||||||||||
Consolidated | 8.2 | % | 7.0 | % | 1.6 | % |
• | June 30, 2019 were $4.4 million ($(1.1) million – E&C, $0.1 million – D&S West, and $5.4 million – D&S East). |
• | June 30, 2018 were $0.6 million ($0.2 million – E&C, $0.3 million – D&S East, and $0.1 million – Corporate). |
• | March 31, 2019 were $7.4 million ($4.5 million – E&C, $0.3 million - D&S West, $2.4 million – D&S East, and $0.2 million – Corporate). |
(2) | Includes transaction-related costs of $1.8 million, $0.8 million and $0.9 million for the three months ended June 30, 2019, June 30, 2018, and March 31, 2019, respectively. |
(3) | Includes an expense of $3.8 million recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the three months ended June 30, 2018. |
(4) | Includes net severance costs of $1.4 million related to the departure of our former Chief Executive Officer (“CEO”) on June 11, 2018, which includes $3.2 million in payroll severance costs partially offset by a $1.8 million credit due to related share-based compensation forfeitures for the three months ended June 30, 2018. |
Six Months Ended | Current Year-to-date vs. Prior Year-to-date Period | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | ||||||||||||||
Energy & Chemicals | $ | 225.8 | $ | 190.7 | $ | 35.1 | 18.4 | % | ||||||
D&S West | 233.7 | 218.2 | 15.5 | 7.1 | % | |||||||||
D&S East | 146.4 | 117.5 | 28.9 | 24.6 | % | |||||||||
Intersegment eliminations | (7.0 | ) | (4.4 | ) | (2.6 | ) | 59.1 | % | ||||||
Consolidated | $ | 598.9 | $ | 522.0 | $ | 76.9 | 14.7 | % | ||||||
Gross Profit | ||||||||||||||
Energy & Chemicals | $ | 49.8 | $ | 40.7 | $ | 9.1 | 22.4 | % | ||||||
D&S West | 82.6 | 74.3 | 8.3 | 11.2 | % | |||||||||
D&S East | 20.0 | 25.9 | (5.9 | ) | (22.8 | )% | ||||||||
Intersegment eliminations | (2.5 | ) | (1.2 | ) | (1.3 | ) | 108.3 | % | ||||||
Consolidated | $ | 149.9 | $ | 139.7 | $ | 10.2 | 7.3 | % | ||||||
Gross Profit Margin | ||||||||||||||
Energy & Chemicals | 22.1 | % | 21.3 | % | ||||||||||
D&S West | 35.3 | % | 34.1 | % | ||||||||||
D&S East | 13.7 | % | 22.0 | % | ||||||||||
Consolidated | 25.0 | % | 26.8 | % | ||||||||||
SG&A Expenses | ||||||||||||||
Energy & Chemicals | $ | 31.4 | $ | 24.4 | $ | 7.0 | 28.7 | % | ||||||
D&S West | 26.0 | 26.0 | — | — | % | |||||||||
D&S East | 17.7 | 15.1 | 2.6 | 17.2 | % | |||||||||
Corporate | 30.4 | 29.2 | 1.2 | 4.1 | % | |||||||||
Consolidated | $ | 105.5 | $ | 94.7 | $ | 10.8 | 11.4 | % | ||||||
SG&A Expenses (% of Sales) | ||||||||||||||
Energy & Chemicals | 13.9 | % | 12.8 | % | ||||||||||
D&S West | 11.1 | % | 11.9 | % | ||||||||||
D&S East | 12.1 | % | 12.9 | % | ||||||||||
Consolidated | 17.6 | % | 18.1 | % | ||||||||||
Operating Income (Loss) (1) | ||||||||||||||
Energy & Chemicals | $ | 8.9 | $ | 8.7 | $ | 0.2 | 2.3 | % | ||||||
D&S West (3) | 54.3 | 45.8 | 8.5 | 18.6 | % | |||||||||
D&S East | (0.4 | ) | 10.2 | (10.6 | ) | (103.9 | )% | |||||||
Corporate (2) (4) | (30.4 | ) | (29.2 | ) | (1.2 | ) | 4.1 | % | ||||||
Intersegment eliminations | (2.5 | ) | (1.2 | ) | (1.3 | ) | 108.3 | % | ||||||
Consolidated | $ | 29.9 | $ | 34.3 | $ | (4.4 | ) | (12.8 | )% | |||||
Operating Margin (Loss) | ||||||||||||||
Energy & Chemicals | 3.9 | % | 4.6 | % | ||||||||||
D&S West | 23.2 | % | 21.0 | % | ||||||||||
D&S East | (0.3 | )% | 8.7 | % | ||||||||||
Consolidated | 5.0 | % | 6.6 | % |
• | June 30, 2019 were $11.8 million ($3.4 million – E&C, $0.4 million – D&S West, $7.8 million – D&S East, and $0.2 million – Corporate). |
• | June 30, 2018 were $1.5 million ($0.4 million – E&C, $0.5 million – D&S East, and $0.6 million – Corporate). |
(2) | Includes transaction-related costs of $2.7 million and $2.1 million for the six months ended June 30, 2019 and June 30, 2018, respectively. |
(3) | Includes an expense of $3.8 million recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the six months ended June 30, 2018. |
(4) | Includes net severance costs of $1.4 million related to the departure of our former CEO on June 11, 2018, which includes $3.2 million in payroll severance costs partially offset by a $1.8 million credit due to related share-based compensation forfeitures for the six months ended June 30, 2018. |
Three Months Ended | Current Quarter vs. Prior Year Quarter | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | $ | 120.2 | $ | 100.8 | $ | 19.4 | 19.2 | % | ||||||
Gross Profit | 30.5 | 21.3 | 9.2 | 43.2 | % | |||||||||
Gross Profit Margin | 25.4 | % | 21.1 | % | ||||||||||
SG&A Expenses | $ | 15.6 | $ | 11.7 | $ | 3.9 | 33.3 | % | ||||||
SG&A Expenses (% of Sales) | 13.0 | % | 11.6 | % | ||||||||||
Operating Income | $ | 10.2 | $ | 5.9 | $ | 4.3 | 72.9 | % | ||||||
Operating Margin | 8.5 | % | 5.9 | % |
Six Months Ended | Current Year-to-date vs. Prior Year-to-date Period | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | $ | 225.8 | $ | 190.7 | $ | 35.1 | 18.4 | % | ||||||
Gross Profit | 49.8 | 40.7 | 9.1 | 22.4 | % | |||||||||
Gross Profit Margin | 22.1 | % | 21.3 | % | ||||||||||
SG&A Expenses | $ | 31.4 | $ | 24.4 | $ | 7.0 | 28.7 | % | ||||||
SG&A Expenses (% of Sales) | 13.9 | % | 12.8 | % | ||||||||||
Operating Income | $ | 8.9 | $ | 8.7 | $ | 0.2 | 2.3 | % | ||||||
Operating Margin | 3.9 | % | 4.6 | % |
Three Months Ended | Current Quarter vs. Prior Year Quarter | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | $ | 115.7 | $ | 117.6 | $ | (1.9 | ) | (1.6 | )% | |||||
Gross Profit | 42.6 | 38.2 | 4.4 | 11.5 | % | |||||||||
Gross Profit Margin | 36.8 | % | 32.5 | % | ||||||||||
SG&A Expenses | $ | 12.7 | $ | 13.3 | $ | (0.6 | ) | (4.5 | )% | |||||
SG&A Expenses (% of Sales) | 11.0 | % | 11.3 | % | ||||||||||
Operating Income | $ | 28.7 | $ | 23.6 | $ | 5.1 | 21.6 | % | ||||||
Operating Margin | 24.8 | % | 20.1 | % |
Six Months Ended | Current Year-to-date vs. Prior Year-to-date Period | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | $ | 233.7 | $ | 218.2 | $ | 15.5 | 7.1 | % | ||||||
Gross Profit | 82.6 | 74.3 | 8.3 | 11.2 | % | |||||||||
Gross Profit Margin | 35.3 | % | 34.1 | % | ||||||||||
SG&A Expenses | $ | 26.0 | $ | 26.0 | $ | — | — | % | ||||||
SG&A Expenses (% of Sales) | 11.1 | % | 11.9 | % | ||||||||||
Operating Income | $ | 54.3 | $ | 45.8 | $ | 8.5 | 18.6 | % | ||||||
Operating Margin | 23.2 | % | 21.0 | % |
Three Months Ended | Current Quarter vs. Prior Year Quarter | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | $ | 77.7 | $ | 62.4 | $ | 15.3 | 24.5 | % | ||||||
Gross Profit | 11.1 | 14.1 | (3.0 | ) | (21.3 | )% | ||||||||
Gross Profit Margin | 14.3 | % | 22.6 | % | ||||||||||
SG&A Expenses | $ | 7.8 | $ | 7.4 | $ | 0.4 | 5.4 | % | ||||||
SG&A Expenses (% of Sales) | 10.0 | % | 11.9 | % | ||||||||||
Operating Income | $ | 1.9 | $ | 6.5 | $ | (4.6 | ) | (70.8 | )% | |||||
Operating Margin | 2.4 | % | 10.4 | % |
Six Months Ended | Current Year-to-date vs. Prior Year-to-date Period | |||||||||||||
June 30, 2019 | June 30, 2018 | Variance ($) | Variance (%) | |||||||||||
Sales | $ | 146.4 | $ | 117.5 | $ | 28.9 | 24.6 | % | ||||||
Gross Profit | 20.0 | 25.9 | (5.9 | ) | (22.8 | )% | ||||||||
Gross Profit Margin | 13.7 | % | 22.0 | % | ||||||||||
SG&A Expenses | $ | 17.7 | $ | 15.1 | $ | 2.6 | 17.2 | % | ||||||
SG&A Expenses (% of Sales) | 12.1 | % | 12.9 | % | ||||||||||
Operating (Loss) Income | $ | (0.4 | ) | $ | 10.2 | $ | (10.6 | ) | (103.9 | )% | ||||
Operating (Loss) Margin | (0.3 | )% | 8.7 | % |
Three Months Ended | |||||||||||
June 30, 2019 | June 30, 2018 | March 31, 2019 | |||||||||
Orders | |||||||||||
Energy & Chemicals | $ | 127.4 | $ | 122.5 | $ | 263.9 | |||||
D&S West | 115.8 | 127.4 | 114.1 | ||||||||
D&S East | 78.8 | 66.5 | 83.2 | ||||||||
Consolidated | $ | 322.0 | $ | 316.4 | $ | 461.2 |
As of | |||||||||||
June 30, 2019 | June 30, 2018 | March 31, 2019 | |||||||||
Backlog | |||||||||||
Energy & Chemicals | $ | 419.3 | $ | 238.6 | $ | 410.5 | |||||
D&S West | 130.1 | 147.2 | 127.1 | ||||||||
D&S East | 203.4 | 127.1 | 196.2 | ||||||||
Consolidated | $ | 752.8 | $ | 512.9 | $ | 733.8 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Issuer Purchases of Equity Securities | |||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
April 1 – 30, 2019 | 71 | $ | 90.67 | — | $ | — | |||||||
May 1 – 31, 2019 | 141 | 80.52 | — | — | |||||||||
June 1 – 30, 2019 | — | — | — | — | |||||||||
Total | 212 | 83.92 | — | — |
Item 6. | Exhibits |
2.1 |
10.1 |
10.2 |
31.1 |
31.2 |
32.1 |
32.2 |
101.INS | XBRL Instance Document * |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
(x) | Filed herewith. |
(xx) | Furnished herewith. |
* | The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Chart Industries, Inc. |
(Registrant) |
Date: | July 18, 2019 | By: | /s/ Jillian C. Evanko |
Jillian C. Evanko | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) | |||
(Duly Authorized Officer) | |||
By: | /s/ Jeffrey R. Lass | ||
Jeffrey R. Lass | |||
Vice President, Chief Financial Officer and Treasurer | |||
(Principal Financial Officer) | |||
1. | I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jillian C. Evanko | |
Jillian C. Evanko | |
Chief Executive Officer and President |
1. | I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jeffrey R. Lass | |
Jeffrey R. Lass | |
Vice President, Chief Financial Officer and Treasurer |
(a) | The Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(b) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q. |
/s/ Jillian C. Evanko | |
Jillian C. Evanko | |
Chief Executive Officer and President |
(a) | The Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(b) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q. |
/s/ Jeffrey R. Lass | |
Jeffrey R. Lass | |
Vice President, Chief Financial Officer and Treasurer |
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 10.3 | $ 8.5 |
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) | 35,782,535 | 31,363,650 |
Common stock, shares outstanding (shares) | 35,782,535 | 31,363,650 |
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
Noncash portion of paymenets of debt issuance cost | $ 10.9 | |
Noncash portion of paymenets of equity issuance cost | 0.6 | |
Capital expenditures, discontinued operations | $ 0.9 | |
Restricted cash and cash equivalents, noncurrent | $ 1.0 | 1.0 |
Assets disposed of by sales | BioMedical | ||
Depreciation expense, discontinued operations | 0.9 | |
Amortization expense | $ 1.2 |
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Non-controlling Interests |
---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2017 | $ 805.2 | $ 0.3 | $ 445.7 | $ 364.3 | $ (8.1) | $ 3.0 |
Beginning balance (shares) at Dec. 31, 2017 | 30,810,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 6.3 | 5.8 | 0.5 | |||
Other comprehensive (loss) income | 12.4 | 12.4 | ||||
Share-based compensation expense | 3.2 | 3.2 | ||||
Common stock issued from share-based compensation plans | 1.3 | 1.3 | ||||
Common stock issued from share-based compensation plans (shares) | 200,000 | |||||
Common stock repurchases | (2.2) | (2.2) | ||||
Common stock repurchases (shares) | (40,000.00) | |||||
Other | 0.1 | 0.1 | ||||
Ending balance at Mar. 31, 2018 | 828.6 | $ 0.3 | 448.0 | 372.4 | 4.3 | 3.6 |
Ending balance (shares) at Mar. 31, 2018 | 30,970,000 | |||||
Beginning balance at Dec. 31, 2017 | 805.2 | $ 0.3 | 445.7 | 364.3 | (8.1) | 3.0 |
Beginning balance (shares) at Dec. 31, 2017 | 30,810,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 19.4 | |||||
Ending balance at Jun. 30, 2018 | 820.1 | $ 0.3 | 448.4 | 384.7 | (17.1) | 3.8 |
Ending balance (shares) at Jun. 30, 2018 | 31,000,000.00 | |||||
Beginning balance at Mar. 31, 2018 | 828.6 | $ 0.3 | 448.0 | 372.4 | 4.3 | 3.6 |
Beginning balance (shares) at Mar. 31, 2018 | 30,970,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 13.1 | 12.3 | 0.8 | |||
Other comprehensive (loss) income | (21.4) | (21.4) | ||||
Share-based compensation expense | 0.1 | 0.1 | ||||
Common stock issued from share-based compensation plans | 0.4 | 0.4 | ||||
Common stock issued from share-based compensation plans (shares) | 30,000.00 | |||||
Common stock repurchases | (0.1) | (0.1) | ||||
Other | (0.2) | (0.2) | ||||
Dividend distribution to noncontrolling interest | (0.4) | (0.4) | ||||
Ending balance at Jun. 30, 2018 | 820.1 | $ 0.3 | 448.4 | 384.7 | (17.1) | 3.8 |
Ending balance (shares) at Jun. 30, 2018 | 31,000,000.00 | |||||
Beginning balance at Dec. 31, 2018 | $ 889.0 | $ 0.3 | 460.2 | 453.9 | (29.9) | 4.5 |
Beginning balance (shares) at Dec. 31, 2018 | 31,363,650 | 31,360,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | $ 1.0 | 0.9 | 0.1 | |||
Other comprehensive (loss) income | (4.5) | (4.6) | 0.1 | |||
Share-based compensation expense | 2.4 | 2.4 | ||||
Common stock issued from share-based compensation plans | 8.3 | 8.3 | ||||
Common stock issued from share-based compensation plans (shares) | 410,000 | |||||
Common stock repurchases | (2.7) | (2.7) | ||||
Common stock repurchases (shares) | (40,000.00) | |||||
Ending balance at Mar. 31, 2019 | 893.5 | $ 0.3 | 468.2 | 454.8 | (34.5) | 4.7 |
Ending balance (shares) at Mar. 31, 2019 | 31,730,000 | |||||
Beginning balance at Dec. 31, 2018 | $ 889.0 | $ 0.3 | 460.2 | 453.9 | (29.9) | 4.5 |
Beginning balance (shares) at Dec. 31, 2018 | 31,363,650 | 31,360,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | $ 15.6 | |||||
Ending balance at Jun. 30, 2019 | $ 1,198.7 | $ 0.4 | 757.2 | 469.2 | (32.9) | 4.8 |
Ending balance (shares) at Jun. 30, 2019 | 35,782,535 | 35,780,000 | ||||
Beginning balance at Mar. 31, 2019 | $ 893.5 | $ 0.3 | 468.2 | 454.8 | (34.5) | 4.7 |
Beginning balance (shares) at Mar. 31, 2019 | 31,730,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 14.6 | 14.4 | 0.2 | |||
Other comprehensive (loss) income | 1.6 | 1.6 | ||||
Common stock issuance, net | 286.3 | $ 0.1 | 286.2 | |||
Common stock issuance, net (shares) | 4,030,000.00 | |||||
Share-based compensation expense | 1.9 | 1.9 | ||||
Common stock issued from share-based compensation plans | 0.9 | 0.9 | ||||
Common stock issued from share-based compensation plans (shares) | 40,000.00 | |||||
Common stock repurchases | 0.0 | 0.0 | ||||
Common stock repurchases (shares) | (20,000.00) | |||||
Other | 0.3 | 0.3 | ||||
Dividend distribution to noncontrolling interest | (0.4) | (0.4) | ||||
Ending balance at Jun. 30, 2019 | $ 1,198.7 | $ 0.4 | $ 757.2 | $ 469.2 | $ (32.9) | $ 4.8 |
Ending balance (shares) at Jun. 30, 2019 | 35,782,535 | 35,780,000 |
Basis of Preparation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting 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, 2018. 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 six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Nature of Operations: We are a leading independent global manufacturer of highly engineered equipment servicing multiple market applications in Energy and Industrial Gas. Our unique product portfolio is used throughout the liquid gas supply chain in the production, storage, distribution and end-use of atmospheric, hydrocarbon, and industrial gases. Chart has domestic operations located across the United States and an international presence in Asia, Australia, Europe and the Americas. 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. Use of Estimates: The preparation of financial statements in conformity with GAAP 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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequently issued additional guidance that modified ASU 2016-13. ASU 2016-13 and the subsequent modifications are identified as Accounting Standards Codification (“ASC”) 326.” The standard requires an entity to change its accounting approach in determining impairment of certain financial instruments, including trade receivables, from an “incurred loss” to a “current expected credit loss” model. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years. Early adoption is permitted. We are currently assessing the effect that ASC 326 will have on our financial position, results of operations, and disclosures. Recently Adopted Accounting Standards: 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 are based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and were effective upon issuance of this ASU. However, many of the amendments in this ASU had transition guidance with effective dates for annual periods beginning after December 15, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations or 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 the 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 was required to provide certain disclosures regarding stranded tax effects. The guidance was effective for fiscal years beginning after December 15, 2018, including interim periods within those years. We adopted this guidance effective January 1, 2019. The adoption of this guidance did not impact our financial position, results of operations or disclosures. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The ASU expands and enhances hedge accounting to become more closely aligned with an entity’s risk management activities through hedging strategies. The ASU provides changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements and creates more transparency and better understandability around how economic results are presented in the financial statements. In addition, the new guidance makes certain targeted improvements to ease the application of accounting guidance relative to hedge effectiveness. This guidance was applied prospectively for annual periods and interim periods beginning after December 15, 2018. We adopted this guidance effective January 1, 2019. The adoption of this guidance did not impact our financial position, results of operations or disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” and other subsequent amendments collectively identified as ASC 842, related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Effective January 1, 2019, (“the Commencement Date”) we adopted the new lease accounting standard using the modified retrospective transition option of applying the new standard at the adoption date for all leases with terms greater than 12 months. The adoption of the new standard resulted in the recording of ROU assets, primarily consisting of leased facilities and equipment and lease liabilities of $34.8 as of the Commencement Date. The adoption did not have a material impact on our unaudited condensed consolidated statement of income and comprehensive income or cash flows related to existing leases as of the Commencement Date. As a result, there was no cumulative-effect adjustment. We elected certain practical expedients and as such did not reassess the following: 1) whether any expired or existing contracts are or contain leases, 2) lease classification for any expired or existing leases, 3) initial direct costs for any expired or existing leases and 4) whether existing or expired land easements are or contain leases. However, we will evaluate new or modified land easements under the new guidance after the Commencement Date. We also elected the practical expedient to not separate lease and non-lease components. In addition, we implemented internal controls and key system functionality to enable the preparation of financial information on adoption. At lease inception, we determine if an arrangement is a lease and if it includes options to extend or terminate the lease if it is reasonably certain that the options will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating leases are recognized as ROU assets and are included within property, plant and equipment, net and lease liabilities are included in other current liabilities and other liabilities in our unaudited condensed consolidated balance sheet as of the Commencement Date and at June 30, 2019. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the Commencement Date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we used our incremental borrowing rate based on the information available on the Commencement Date in determining the present value of lease payments. As of June 30, 2019, ROU assets and lease liabilities were $29.0 and $29.0 ($6.4 of which was current), respectively. The weighted-average remaining term for lease contracts was 6.9 years at June 30, 2019, with maturity dates ranging from July 2019 to August 2027. The weighted-average discount rate was 4.7% at June 30, 2019. Certain leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the minimum lease term. We incurred $2.1 and $2.2 of rental expense under operating leases for the three months ended June 30, 2019 and 2018, respectively. Rental expense under operating leases for the six months ended June 30, 2019 and 2018 was $4.1 and $4.2, respectively. Adjustments for straight-line rental expense for the respective periods was not material and as such, the majority of expense recognized was reflected in cash used in operating activities for the respective periods. This expense consisted primarily of payments for base rent on building and equipment leases. Payments related to short-term lease costs and taxes and variable service charges on leased properties were immaterial. In addition, we have the right, but no obligation, to renew certain leases for various renewal terms. The following table summarizes future minimum lease payments for non-cancelable operating leases as of June 30, 2019 and December 31, 2018:
_______________
(2) As of June 30, 2019, future minimum lease payments for non-cancelable operating leases for period subsequent to 2023 relate to 11 leased facilities.
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Discontinued Operations |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On December 20, 2018, we closed the sale of our oxygen-related products business to NGK SPARK PLUG CO., LTD. (the “Divestiture”). As a result of the Divestiture, the asset group, which included our respiratory and on-site generation systems businesses, qualified for discontinued operations for the three and six months ended June 30, 2018. As such, the financial results of the respiratory therapy and on-site generation systems businesses are reflected in our unaudited condensed consolidated statements of income and comprehensive income as discontinued operations for the prior-year periods presented. Summarized Financial Information of Discontinued Operations The following table represents income from discontinued operations, net of tax:
_______________ (1) Includes depreciation expense of $0.5 and $0.9 for the three and six months ended June 30, 2018, respectively.
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Reportable Segments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments As reported in our Annual Report on Form 10-K for the year ended December 31, 2018, the structure of our internal organization is divided into the following reportable segments, which are also our operating segments: Energy & Chemicals (“E&C”), Distribution and Storage Western Hemisphere (“D&S West”) and Distribution and Storage Eastern Hemisphere (“D&S East”). 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. In connection with our acquisition of Harsco Corporation’s Industrial Air-X-Changers (“AXC”) business on July 1, 2019 (see Note 9 for more information), we expect a change in our reportable segments from three segments to four segments: (i) D&S East, (ii) D&S West, (iii) Energy & Chemicals Cryogenics (“E&C Cryogenics”), and (iv) Energy & Chemicals FinFans (“E&C FinFans”). The following table represents information for our reportable segments and our corporate function:
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Product Sales Information
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Revenue |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Disaggregation of Revenue The following table represents a disaggregation of revenue by timing of revenue along with the reportable segment for each category:
Refer to Note 3, “Reportable Segments,” for a table of revenue disaggregated by product application along with the reportable segment for each category. Contract Balances The following table represents changes in our contract assets and contract liabilities balances:
Revenue recognized for the three and six months ended June 30, 2019 and 2018, that was included in the contract liabilities balance at the beginning of each year was $29.6, and $66.7 and $28.4 and $67.3, respectively. The amount of revenue recognized during the three and six months ended June 30, 2019 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 June 30, 2019, the estimated revenue expected to be recognized in the future related to remaining performance obligations was $752.8. We expect to recognize revenue on approximately 69.5% of the remaining performance obligations over the next 12 months and with the remaining over the next few years thereafter.
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Inventories |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The following table summarizes the components of inventory:
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Goodwill and Intangible Assets |
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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:
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Intangible Assets The following table displays the gross carrying amount and accumulated amortization for finite-lived intangible assets and indefinite-lived intangible assets (exclusive of goodwill) (1):
Amortization expense for intangible assets subject to amortization was $7.3 and $5.2 for the three months ended June 30, 2019 and 2018, respectively, and $14.5 and $10.7 for the six months ended June 30, 2019 and 2018, respectively. We estimate amortization expense to be recognized during the next five years as follows:
See Note 9, “Business Combinations” for further information related to intangible assets acquired during 2018. 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 our 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:
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.
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Debt and Credit Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Arrangements | Debt and Credit Arrangements Summary of Outstanding Borrowings The following table represents the components of our borrowings:
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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 the Company 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 the Company’s future senior subordinated debt, and are subordinated in right of payment to our existing and future senior indebtedness, including indebtedness under our existing credit agreement. A conversion of the 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 $76.88 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 $80.0 at June 30, 2019. 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 June 30, 2019, events for early conversion were not met, and thus the 2024 Notes were not convertible as of and for the fiscal quarter beginning July 1, 2019. 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. 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:
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, 2.00% contractual interest coupon, and financing costs amortization associated with the 2018 Notes:
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 2018, with immaterial exercises. Approximately 90% of the separate warrants associated with the 2018 Notes expired without exercise. Prior to the expiration date of February 26, 2019, a portion of the separate warrants were exercised. These exercises were not material. Senior Secured Revolving Credit Facility and Term Loan On June 14, 2019, we entered into the Fourth Amended and Restated Credit Agreement, which includes a senior secured revolving credit facility (the “SSRCF”) with a borrowing capacity of $550.0 and a $450.0 term loan (together, the “2019 Credit Facilities”). The 2019 Credit Facilities replace our previous $550.0 SSRCF, which was scheduled to mature on November 3, 2022. The 2019 Credit Facilities mature on June 14, 2024. The 2019 Credit Facilities bear interest at a base rate plus a margin determined on a leveraged-based scale which ranges from 25 to 125 basis points for alternative base rate loans and 125 to 225 basis points for LIBOR loans. Interest and fees are payable on a quarterly basis (or if earlier, at the end of each interest period for LIBOR loans). Significant financial covenants for the 2019 Credit Facilities include financial maintenance covenants that, as of the last day of any fiscal quarter ending on and after June 30, 2019, (i) require the ratio of the amount of Chart and its subsidiaries’ consolidated total net indebtedness to consolidated EBITDA to be less than specified maximum ratio levels and (ii) require the ratio of the amount of Chart and its subsidiaries’ consolidated EBITDA to consolidated cash interest expense to be greater than a specified minimum ratio level. The 2019 Credit Facilities include 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 June 30, 2019, we were in compliance with all covenants. The 2019 Credit Facilities also contains customary events of default. If such an event of default occurs, the lenders thereunder would be entitled to take various actions, including the acceleration of amounts due and all actions permitted to be taken by a secured creditor. The 2019 Credit Facilities 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 Credit Agreement) that are owned by U.S. subsidiaries The SSRCF includes a $100.0 sub-limit for letters of credit, a $250.0 sub-limit for discretionary letters of credit and a $50.0 sub-limit for swingline loans. We are required to pay a commitment fee on the SSRCF which ranges from 20 to 35 basis points of the respective unused balances. The letter of credit participation fee equals the daily aggregate letter of credit exposure at the rate per annum equal to the Applicable Margin for Eurocurrency Revolving Facility Borrowings (as defined, ranging from 1.25% to 2.25%, based on the calculated leverage ratio). 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. We recorded $10.0 in deferred debt issuance costs, which is included in other assets in the condensed consolidated balance sheet, associated with the SSRCF, which are being amortized over the five-year term of the SSRCF. At June 30, 2019, unamortized debt issuance costs associated with the SSRCF were $9.9. For the three months ended June 30, 2019 and 2018, deferred financing fees amortization was $0.2 for both periods. For the six months ended June 30, 2019 and 2018, deferred financing fees amortization was $0.4 and $0.3 for as of June 30, 2019 and 2018, respectively. In conjunction with the amendment of the credit facilities, we wrote off $0.2 in unamortized deferred debt issuance costs which related to the former SSRCF. As of June 30, 2019, there was $96.7 in borrowings outstanding under the SSRCF bearing a weighted-average interest rate of 2.25% and $51.4 in letters of credit and bank guarantees outstanding supported by the SSRCF. At June 30, 2019, the SSRCF had availability of $401.8. For the three and six months ended June 30, 2019, interest expense related to the SSRCF and swingline loans outstanding was $2.6 and $5.8, respectively. The term loan was a delayed draw loan and was not drawn until July 1, 2019 and has a defined amortization schedule, as defined by the credit agreement. A ticking fee is required on the term loan, which ranges from 20 to 35 basis points of the unused balances which went into effect in July 2019 when drawn. We recorded $6.1 in deferred debt issuance costs, which is included in other assets in the condensed consolidated balance sheet, associated with the term loan, which will be amortized over its five-year term beginning in July 2019. Foreign Facilities In various markets where we do business, we have local credit facilities to meet local working capital demands, fund letters of credit and bank guarantees, and support other short-term cash requirements. The facilities generally have variable interest rates and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. As of June 30, 2019, and December 31, 2018, respectively, we had USD equivalent $4.5 and $11.2 borrowing outstanding under these facilitates, with additional capacity of USD equivalent $31.8 and $65.6, respectively. The Company has foreign letters of credit and bank guarantees totaling USD equivalent $19.3 and $17.1 as of June 30, 2019 and December 31, 2018, respectively. The weighted-average interest rate on these borrowings was 3.3% and 4.8% as of June 30, 2019, and December 31, 2018, respectively. 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 June 30, 2019 and $1.0 in other assets at December 31, 2018). Fair Value Disclosures The fair value of the 2024 Notes was approximately 143% and 124% of their par value as of June 30, 2019 and December 31, 2018, respectively. The 2024 Notes are actively quoted instruments and, accordingly, the fair value of the 2024 Notes was determined using Level 1 inputs.
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Product Warranties |
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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 income and comprehensive income (loss). 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:
During the second quarter of 2018, we established a reserve 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 period. See Note 14, “Commitments and Contingencies” for additional information.
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Business Combinations |
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Business Combinations | Business Combinations VRV Acquisition On November 15, 2018, Chart completed the acquisition of VRV pursuant to the terms of the Amended and Restated Share Purchase Agreement (the “Amendment”) with the original parties as well as VRV that replaced in full the original Purchase Agreement. Immediately thereafter, we assigned all of our rights and obligations under the Amendment to VRV Holdings S.r.l. (“Holdings”), a newly formed Italian subsidiary of Chart. The Amendment provided a revised transaction structure pursuant to which Holdings acquired VRV Technoservice S.r.l. (“VRV Technoservice”), a newly formed Italian company wholly owned by VRV (the “Acquisition”). Prior to the Acquisition, as contemplated in the Amendment, VRV contributed substantially all of its business to VRV Technoservice. VRV Technoservice changed its name to VRV S.r.l. following the Acquisition. The Acquisition purchase price was 191.1 million euros (equivalent to $216.1), net of cash assumed of 1.3 million euros (equivalent to $1.4), is inclusive of the base purchase price of 125.0 million euros (equivalent to $141.3) paid in cash, assumed indebtedness of VRV, which was paid off immediately at closing or shortly thereafter, of 63.7 million euros (equivalent to $72.0), and net working capital and other agreed-upon purchase price adjustments finalized during the first half of 2019 of 3.7 million euros (equivalent to $4.2) which was settled early in the second quarter of 2019. Additional indebtedness of VRV of 4.4 million euros (equivalent to $4.9) was assumed at the acquisition date and paid off during the first and second quarters of 2019. All U.S. dollar equivalent dollar amounts are based on the exchange rate as of the acquisition date. We funded the Acquisition, including the subsequent payoff of assumed indebtedness, with borrowings of 140.0 million euros (equivalent to $160.3) from our senior secured revolving credit facility and the remainder with cash on hand. VRV, which has operations in Italy, France and India, is a diversified multinational corporation with highly automated, purpose-built facilities for the design and manufacture of pressure equipment serving the cryogenic and energy & petrochemical end markets. VRV’s results are included in our E&C and D&S East segments from the date of Acquisition. As defined in our significant accounting policy for business combinations in Note 2, of our Annual Report on Form 10-K for the year ended December 31, 2018, we preliminarily allocated the Acquisition consideration to tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values as of the Acquisition date. The preliminary fair value of the acquired tangible and identifiable intangible assets 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. The Acquisition consideration allocation below is preliminary, pending completion of the fair value analyses of acquired assets and liabilities as well as certain other analyses. Given the acquisition closed late in the fourth quarter of 2018, we expect significant adjustments in the purchase price allocation. Those areas that are subject to change, include the following:
Where we are still in process of completing our analysis, we used our best estimate based on currently available information. The preliminary estimated useful lives of identifiable finite-lived intangible assets range from 2 to 12 years. The excess of the purchase price over the estimated fair values is assigned to goodwill. The preliminary estimated goodwill was established due to benefits including the combination of strong engineering and manufacturing cultures which will continue to further develop full service solutions for our worldwide customer base, as well as the benefits derived from the anticipated synergies of VRV integrating with Chart’s E&C and D&S East segments. Goodwill recorded for the VRV acquisition is not expected to be deductible for tax purposes. As additional information becomes available, we will further revise the preliminary Acquisition consideration allocation during the remainder of the measurement period, which shall not exceed twelve months from the closing of the Acquisition, and we believe such revisions or changes may be material. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in the VRV acquisition as of the acquisition date:
During the first half of 2019, net assets acquired included adjustments to other net assets and goodwill based on U.S. GAAP purchase accounting primarily due to inventory valuation and balance sheet accounts related to revenue recognition. Net assets acquired, including goodwill, was also adjusted to reflect the net working capital and other agreed-upon purchase price adjustments of $4.2 negotiated during the first half of 2019. Information regarding preliminary identifiable intangible assets acquired in the VRV acquisition is presented below:
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The following unaudited supplemental pro forma sales are based on our historical consolidated financial statements and VRV’s historical consolidated financial statements as adjusted to give effect to the November 15, 2018 acquisition of VRV. The unaudited supplemental pro forma sales information for the periods presented gives effect to the Acquisition as if it had occurred on January 1, 2018. The unaudited supplemental pro forma sales for the three and six months ended June 30, 2018 for the Company including VRV would have been approximately $302.9 and $581.1. It is impracticable to disclose the pro forma net income and pro forma net income per share information because of significant differences between Chart accounting policies following U.S. GAAP and those followed by VRV. The unaudited pro forma sales 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 period presented. In addition, the unaudited pro forma sales 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. 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. During the first quarter of 2019, the Skaff purchase price allocation was finalized, which resulted in an adjustment to the opening balance sheet increasing long-term deferred tax liabilities and goodwill each by $0.8. 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. Harsco Corporation’s Air-X-Changers Acquisition (Subsequent Event) On July 1, 2019, we completed the acquisition of AXC pursuant to the previously disclosed Asset Purchase Agreement dated as of May 8, 2019. The purchase price for AXC was approximately $592, which is subject to a post-closing purchase price adjustment with respect to working capital. The Company incurred $1.2 in transaction related costs during the second quarter of 2019 related to the acquisition which are recorded in selling, general and administrative expenses on the condensed consolidated statement of income. We financed the purchase price for the Acquisition with proceeds from the common stock offering and borrowings under the Fourth Amended and Restated Credit Agreement, dated June 14, 2019. See Note 7 and Note 10 for more information. AXC is a leading supplier of custom engineered and manufactured air cooled heat exchangers (“ACHX”) for the natural gas compression and processing industry and refining and petrochemical industry in the United States. The ACHX offered by AXC is used in conditioning natural gas during recovery, compression and transportation from underground reserves through major pipeline distribution channels. In addition to natural gas compression and processing, AXC’s products are also used in the turbine lube oil cooling, landfill gas compression and liquids cooling industries. AXC’s end markets include process industries, power generation and refineries. In connection with this acquisition, we expect a change in our reportable segments from three segments to four segments: (i) D&S East, (ii) D&S West, (iii) Energy & Chemicals Cryogenics (“E&C Cryogenics”), and (iv) Energy & Chemicals FinFans (“E&C FinFans”). AXC will be combined with Chart’s Hudson products business and Cooler Services businesses from the existing E&C segment to create a new segment called E&C FinFans. The E&C FinFans segment will focus on our unique and broad product offering and capabilities in ACHX and fans. The Company preliminarily allocated the acquisition consideration to tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. The preliminary fair value of the acquired tangible and identifiable intangible assets 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. The Company estimated the preliminary fair value of acquired developed technology and trademarks using the relief from royalty method. The preliminary fair values of acquired customer backlog and customer relationships were estimated using the multi-period excess earnings method. Under both the relief from royalty and multi-period excess earnings methods, the fair value models incorporate estimates of future cash flows, estimates of allocations of certain assets and cash flows, estimates of future growth rates, and management’s judgment regarding the applicable discount rates to use to discount such estimates of cash flows. The estimated useful lives of identifiable finite-lived intangible assets range from one to 12 years. The acquisition consideration allocation below is preliminary, pending completion of the fair value analysis of acquired assets and liabilities as well as certain other analysis. This purchase price allocation is presented below for disclosure purposes and is not reflected in our condensed consolidated balance sheet at June 30, 2019. The excess of the purchase price over the estimated fair values is assigned to goodwill. As additional information becomes available, the Company may further revise the preliminary acquisition consideration allocation during the remainder of the measurement period, which shall not exceed twelve months from the closing of the acquisition. Any such revisions or changes may be material. The following table summarizes the estimated fair values of the assets and liabilities assumed in the AXC acquisition:
Information regarding identifiable intangible assets acquired in the AXC acquisition is presented below:
Supplemental Pro Forma Information The following unaudited supplemental pro forma financial information is based on our historical condensed consolidated financial statements and AXC’s historical condensed consolidated financial statements as adjusted to give effect to the July 1, 2019 acquisition of AXC’s. The unaudited supplemental pro forma financial information for the periods presented gives effect to the acquisition as if it had occurred on January 1, 2018. The following adjustments are reflected in the pro forma financial table below: •Adjustment for depreciation related to the step-up in basis of the acquired property, plant and equipment and change in estimated useful lives. •Adjustment for amortization of acquired intangible assets. •Adjustment for the change from Last In First Out to weighted average cost for the acquired inventory and the associated reduction of Cost of sales. •Adjustment to reflect increase in interest expense resulting from interest on the new term debt to finance the Harsco acquisition and amortization of related debt issuance costs. •Adjustment to reflect the change in the estimated income tax rate for federal and state. •Adjustment to reflect the increase in weighted average shares in connection with the equity issuance. This unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the periods presented. In addition, the unaudited pro forma results are not intended to be a projection of future results and do not reflect any operating efficiencies or cost savings that might be achievable. The following table presents pro forma sales, net income attributable to Chart Industries, Inc., and net income attributable to Chart Industries, Inc. per common share data assuming AXC was acquired at the beginning of the 2018 fiscal year:
Contingent Consideration The estimated fair value of contingent consideration related 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 included assumptions regarding the probability of achieving certain earnings targets and a discount rate applied to the potential payments. Potential payments were due to be paid before July 1, 2019 based on the attainment of certain earnings targets. The earnings targets for Thermax were below the minimum threshold so no contingent consideration was paid for the final year of the four year earn-out period.
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Equity and Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Accumulated Other Comprehensive Loss | Equity and Accumulated Other Comprehensive Loss Public Stock Offering On June 14, 2019, we completed a public offering (the “2019 Equity Offering”), through which the Company issued and sold 4.025 shares of common stock, $0.01 par value per share, which included the full exercise of the underwriters’ option to purchase additional shares, at a price of $73.50 per share, before underwriting discounts and commissions. We received proceeds of $295.8 from the issuance of shares and incurred $9.5 of equity issuance costs. A portion of the proceeds from the 2019 Equity Offering was used to retire existing debt. Accumulated Other Comprehensive Loss The following tables represent changes in accumulated other comprehensive (loss) income by component:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table presents calculations of net earnings per share of common stock:
Diluted earnings per share does not reflect the following potential common shares as the effect would be anti-dilutive:
_______________ (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.”
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Income Taxes |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense from continuing operations of $2.9 and $5.5 in the six months ended June 30, 2019 and 2018, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 15.7% and 26.3%, respectively. Income tax expense from continuing operations of $4.9 and $3.9 for the three months ended June 30, 2019 and 2018, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 25.1% and 26.7%, respectively. The effective income tax rate of 25.1% and 15.7% for the three and six months ended June 30, 2019 differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits associated with stock compensation and the effect of income earned by certain of our foreign entities being taxed at higher rates than the U.S. federal statutory rate, partially offset by losses incurred by certain of our Chinese operations for which no benefit was recorded. We expect our 2019 full year effective income tax rate to be approximately 21%. The effective income tax rate from continuing operations of 26.7% and 26.3% for the three and six months ended June 30, 2018, differed from the U.S. federal statutory rate of 21% primarily due to the effect of income earned by certain of the Company’s foreign entities being taxed at higher rates than the U.S. federal statutory rate as well as losses incurred by certain of our Chinese operations for which no benefit was recorded. As of June 30, 2019 and December 31, 2018, we had a liability for gross unrecognized tax benefits from continuing operations of $2.1 and $2.3, respectively. This amount includes $1.6 and $0.1 of unrecognized tax benefits from continuing operations as of June 30, 2019 and December 31, 2018, 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. These amounts were not significant for the periods presented.
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Share-based Compensation |
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Jun. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-based Compensation | Share-based Compensation During the six months ended June 30, 2019, we granted 0.10 stock options and 0.07 restricted stock units, and 0.03 performance units. The total fair value of awards granted to employees during the six months ended June 30, 2019 was $10.3. In addition, our non-employee directors received stock awards with a total fair value of $0.3. During the six months ended June 30, 2019, participants in our stock option plans exercised options to purchase 0.28 shares of our common stock, while 0.02 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 six months ended June 30, 2019, 0.11 restricted stock units and 0.02 performance units vested while 0.01 restricted stock units were forfeited. Share-based compensation expense was $1.9 and $0.1 for the three months ended June 30, 2019 and 2018, respectively. Share-based compensation expense was $4.3 and $3.0 for the six months ended June 30, 2019 and 2018, respectively. Share-based compensation expense for the three and six months ended June 30, 2018 includes a $1.8 credit due to forfeitures related to the departure of our former Chief Executive Officer (“CEO”) on June 11, 2018. Share-based compensation expense is included in selling, general, and administrative expenses in the unaudited condensed consolidated statements of income and comprehensive income. As of June 30, 2019, total share-based compensation of $13.0 is expected to be recognized over the weighted-average period of approximately 2.4 years.
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Commitment and Contingencies |
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Jun. 30, 2019 | |
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 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 sales for the three and six months ended June 30, 2018 related to the estimated costs of the recall. As of June 30, 2019, there was no remaining liability related to the tank recall. 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. We continue to evaluate 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 have asserted various defenses against the claims in the lawsuits, including a defense that since manufacture, we were not in any way involved with the installation, ongoing maintenance or monitoring of the tank or related fertility center cryogenic systems at any time since the initial delivery of the tank. 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 have asserted various defenses against the claims in the lawsuits and are in the early stages of litigation. 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.
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Restructuring Activities |
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Restructuring Activities | Restructuring Activities During the first half of 2019, we implemented certain cost reduction or avoidance actions, including facility consolidations in E&C and D&S West and a streamlining of the commercial activities surrounding our Lifecycle business in E&C, geographic realignment of our manufacturing capacity and a facility closure in D&S East, as well as departmental restructuring, including headcount reductions. These actions resulted in a total charge of $4.4 and $11.8 for the three and six months ended June 30, 2019, respectively, consisting of employee severance costs, disposals of property, plant and equipment and other costs. During the second quarter of 2019, E&C recorded a $1.6 credit to restructuring costs to reflect the successful negotiation of a lease termination for the Lifecycle facility. We expect to incur additional restructuring charges with E&C and D&S West of $0.4 and $0.4, respectively, related to these actions during 2019 for severance and facility exit related activities that are recognized when the specific costs are incurred. We expect this restructuring will be substantially completed by the end of the year. Restructuring charges in the first half of 2018, were related to the timing of recognizing certain severance and disposal related activities associated with a 2017 restructuring plan which was substantially completed at the end of 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 six months ended June 30, 2019 and 2018:
The following tables summarize our restructuring activities for the three and six months ended June 30, 2019 and 2018:
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Basis of Preparation (Policies) |
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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.
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Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with GAAP 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.
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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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequently issued additional guidance that modified ASU 2016-13. ASU 2016-13 and the subsequent modifications are identified as Accounting Standards Codification (“ASC”) 326.” The standard requires an entity to change its accounting approach in determining impairment of certain financial instruments, including trade receivables, from an “incurred loss” to a “current expected credit loss” model. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years. Early adoption is permitted. We are currently assessing the effect that ASC 326 will have on our financial position, results of operations, and disclosures. Recently Adopted Accounting Standards: 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 are based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and were effective upon issuance of this ASU. However, many of the amendments in this ASU had transition guidance with effective dates for annual periods beginning after December 15, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations or 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 the 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 was required to provide certain disclosures regarding stranded tax effects. The guidance was effective for fiscal years beginning after December 15, 2018, including interim periods within those years. We adopted this guidance effective January 1, 2019. The adoption of this guidance did not impact our financial position, results of operations or disclosures. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The ASU expands and enhances hedge accounting to become more closely aligned with an entity’s risk management activities through hedging strategies. The ASU provides changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements and creates more transparency and better understandability around how economic results are presented in the financial statements. In addition, the new guidance makes certain targeted improvements to ease the application of accounting guidance relative to hedge effectiveness. This guidance was applied prospectively for annual periods and interim periods beginning after December 15, 2018. We adopted this guidance effective January 1, 2019. The adoption of this guidance did not impact our financial position, results of operations or disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” and other subsequent amendments collectively identified as ASC 842, related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Effective January 1, 2019, (“the Commencement Date”) we adopted the new lease accounting standard using the modified retrospective transition option of applying the new standard at the adoption date for all leases with terms greater than 12 months. The adoption of the new standard resulted in the recording of ROU assets, primarily consisting of leased facilities and equipment and lease liabilities of $34.8 as of the Commencement Date. The adoption did not have a material impact on our unaudited condensed consolidated statement of income and comprehensive income or cash flows related to existing leases as of the Commencement Date. As a result, there was no cumulative-effect adjustment. We elected certain practical expedients and as such did not reassess the following: 1) whether any expired or existing contracts are or contain leases, 2) lease classification for any expired or existing leases, 3) initial direct costs for any expired or existing leases and 4) whether existing or expired land easements are or contain leases. However, we will evaluate new or modified land easements under the new guidance after the Commencement Date. We also elected the practical expedient to not separate lease and non-lease components. In addition, we implemented internal controls and key system functionality to enable the preparation of financial information on adoption. At lease inception, we determine if an arrangement is a lease and if it includes options to extend or terminate the lease if it is reasonably certain that the options will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating leases are recognized as ROU assets and are included within property, plant and equipment, net and lease liabilities are included in other current liabilities and other liabilities in our unaudited condensed consolidated balance sheet as of the Commencement Date and at June 30, 2019. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the Commencement Date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we used our incremental borrowing rate based on the information available on the Commencement Date in determining the present value of lease payments. As of June 30, 2019, ROU assets and lease liabilities were $29.0 and $29.0 ($6.4 of which was current), respectively. The weighted-average remaining term for lease contracts was 6.9 years at June 30, 2019, with maturity dates ranging from July 2019 to August 2027. The weighted-average discount rate was 4.7% at June 30, 2019. Certain leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the minimum lease term. We incurred $2.1 and $2.2 of rental expense under operating leases for the three months ended June 30, 2019 and 2018, respectively. Rental expense under operating leases for the six months ended June 30, 2019 and 2018 was $4.1 and $4.2, respectively. Adjustments for straight-line rental expense for the respective periods was not material and as such, the majority of expense recognized was reflected in cash used in operating activities for the respective periods. This expense consisted primarily of payments for base rent on building and equipment leases. Payments related to short-term lease costs and taxes and variable service charges on leased properties were immaterial. In addition, we have the right, but no obligation, to renew certain leases for various renewal terms. The following table summarizes future minimum lease payments for non-cancelable operating leases as of June 30, 2019 and December 31, 2018:
_______________
(2) As of June 30, 2019, future minimum lease payments for non-cancelable operating leases for period subsequent to 2023 relate to 11 leased facilities.
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Basis of Preparation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Future Minimum Lease Payments | The following table summarizes future minimum lease payments for non-cancelable operating leases as of June 30, 2019 and December 31, 2018:
_______________
(2) As of June 30, 2019, future minimum lease payments for non-cancelable operating leases for period subsequent to 2023 relate to 11 leased facilities.
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Discontinued Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information of Discontinued Operations | The following table represents income from discontinued operations, net of tax:
_______________ (1) Includes depreciation expense of $0.5 and $0.9 for the three and six months ended June 30, 2018, respectively.
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Reportable Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reportable and Product Sales Information Segments | The following table represents information for our reportable segments and our corporate function:
_______________
Product Sales Information
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Segment Assets |
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Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Changes in Contract Assets and Contract Liabilities Balances | The following table represents changes in our contract assets and contract liabilities balances:
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Components of Inventory | The following table summarizes the components of inventory:
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Goodwill and Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Segment | The following table represents the changes in goodwill by segment:
_______________ (1) For the six months ended June 30, 2019, we adjusted the preliminary purchase price allocation of $21.7 ($9.8 in E&C and $11.9 in D&S East) for the VRV acquisition and $0.8 for the Skaff acquisition. See Note 9, “Business Combinations”.
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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):
(1) Amounts include the impact of foreign currency translation. Fully amortized amounts are written off.
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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):
(1) Amounts include the impact of foreign currency translation. Fully amortized amounts are written off.
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Schedule of Estimated Future Amortization | We estimate amortization expense to be recognized during the next five years as follows:
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Schedule of Government Grants | China Government Grants are presented in our unaudited condensed consolidated balance sheets as follows:
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Debt and Credit Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Borrowings | The following table represents the components of our borrowings:
_______________
(2) The term loan was drawn subsequent to June 30, 2019 in conjunction with the AXC acquisition. See below for more information.
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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:
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Convertible Notes, Due 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Accretion | The following table summarizes interest accretion of the 2018 Notes discount, 2.00% contractual interest coupon, and financing costs amortization associated with the 2018 Notes:
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Product Warranties (Tables) |
6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||
Rollforward of Consolidated Warranty Reserve | The following table represents changes in our consolidated warranty reserve:
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Business Combinations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired In Business Combination | The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in the VRV acquisition as of the acquisition date:
The following table summarizes the estimated fair values of the assets and liabilities assumed in the AXC acquisition:
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Identifiable Intangible Assets Acquired | Information regarding identifiable intangible assets acquired in the AXC acquisition is presented below:
Information regarding preliminary identifiable intangible assets acquired in the VRV acquisition is presented below:
_______________ (1) Other identifiable intangible assets is included in “Patents and other” in Note 6, “Goodwill and Intangible Assets”.
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Pro Forma Information | The following table presents pro forma sales, net income attributable to Chart Industries, Inc., and net income attributable to Chart Industries, Inc. per common share data assuming AXC was acquired at the beginning of the 2018 fiscal year:
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Equity and Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss | The following tables represent changes in accumulated other comprehensive (loss) income by component:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Net Income Per Share | The following table presents calculations of net earnings per share of common stock:
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Schedule of Antidilutive Securities | Diluted earnings per share does not reflect the following potential common shares as the effect would be anti-dilutive:
_______________ (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.”
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Restructuring Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 six months ended June 30, 2019 and 2018:
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Rollforward of Restructuring Cost | The following tables summarize our restructuring activities for the three and six months ended June 30, 2019 and 2018:
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Basis of Preparation - Narratives (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
facility
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
facility
|
Jun. 30, 2018
USD ($)
|
Jan. 01, 2019
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle | |||||
Right of use assets | $ 29.0 | $ 29.0 | |||
Operating lease liability | 29.0 | 29.0 | |||
Operating lease liability, current | $ 6.4 | $ 6.4 | |||
Weighted average lease term | 6 years 10 months 24 days | 6 years 10 months 24 days | |||
Operating lease weighted average discount rate (percent) | 4.70% | 4.70% | |||
Operating lease rental expense | $ 2.1 | $ 2.2 | $ 4.1 | $ 4.2 | |
Number of leased facilities (facility) | facility | 11 | 11 | |||
ASU 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Right of use assets | $ 34.8 | ||||
Operating lease liability | $ 34.8 |
Basis of Preparation - Operating Lease Future Payments (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Future minimum lease payments | ||
2019 | $ 3.5 | |
2020 | 6.3 | |
2021 | 5.6 | |
2022 | 5.3 | |
2023 | 4.6 | |
Thereafter | 9.2 | |
Total future minimum lease payments | $ 34.5 | |
Future minimum lease payments | ||
2019 | $ 7.9 | |
2020 | 6.9 | |
2021 | 5.7 | |
2022 | 5.3 | |
2023 | 4.6 | |
Thereafter | 9.2 | |
Total future minimum lease payments | $ 39.6 |
Discontinued Operations - Income from Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Summarized Financial Information of Discontinued Operations | ||||
Income from discontinued operations, net of tax | $ 0.0 | $ 2.4 | $ 0.0 | $ 4.0 |
Disposed of by Sale | BioMedical | ||||
Summarized Financial Information of Discontinued Operations | ||||
Sales | 42.0 | 77.6 | ||
Cost of sales | 30.4 | 55.8 | ||
Selling, general and administrative expenses | 7.1 | 14.6 | ||
Amortization expense | 0.6 | 1.2 | ||
Operating income | 3.9 | 6.0 | ||
Other loss, net | (0.4) | (0.2) | ||
Income before income taxes | 3.5 | 5.8 | ||
Income tax expense | 1.1 | 1.8 | ||
Income from discontinued operations, net of tax | 2.4 | 4.0 | ||
Depreciation expense, discontinued operations | $ 0.5 | $ 0.9 |
Reportable Segments - Narratives (Details) - segments |
1 Months Ended | 6 Months Ended |
---|---|---|
Jul. 18, 2019 |
Jun. 30, 2019 |
|
Segment Reporting Information | ||
Number of reportable segments | 3 | |
Subsequent Event | ||
Segment Reporting Information | ||
Number of reportable segments | 4 |
Reportable Segments - Segment Income (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 11, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting Information | |||||
Sales to external customers | $ 309.6 | $ 277.9 | $ 598.9 | $ 522.0 | |
Depreciation and amortization expense | 16.0 | 12.1 | 32.0 | 24.8 | |
Operating income (income) | 25.3 | 19.5 | 29.9 | 34.3 | |
Capital expenditures | 9.2 | 12.0 | 15.1 | 18.2 | |
Restructuring costs | 4.4 | 0.6 | 11.8 | 1.5 | |
Severance costs | 0.4 | 0.2 | 1.9 | 0.8 | |
Share-based compensation expense adjustment | (1.9) | 0.1 | 4.3 | 3.0 | |
Employee severance | |||||
Segment Reporting Information | |||||
Share-based compensation expense adjustment | (1.8) | (1.8) | |||
Employee severance | CEO | |||||
Segment Reporting Information | |||||
Severance costs | $ 1.4 | ||||
Terminiation benefits | |||||
Segment Reporting Information | |||||
Severance costs | 3.2 | ||||
Terminiation benefits | CEO | |||||
Segment Reporting Information | |||||
Severance costs | 3.2 | ||||
Cryobiological storage | |||||
Segment Reporting Information | |||||
Sales to external customers | 22.5 | 20.0 | 42.8 | 39.1 | |
Product warranty expense | 3.8 | 3.8 | |||
VRV | |||||
Segment Reporting Information | |||||
Sales of acquiree | 28.9 | 51.0 | |||
Operating loss of acquiree | (1.1) | (9.2) | |||
Inventory step up adjustment | 1.7 | ||||
Operating Segments | Energy & Chemicals | |||||
Segment Reporting Information | |||||
Sales to external customers | 120.2 | 100.8 | 225.8 | 190.7 | |
Depreciation and amortization expense | 8.7 | 6.5 | 17.3 | 13.1 | |
Operating income (income) | 10.2 | 5.9 | 8.9 | 8.7 | |
Capital expenditures | 0.8 | 6.1 | 4.0 | 8.1 | |
Restructuring costs | (1.1) | 0.2 | 3.4 | 0.4 | |
Operating Segments | Energy & Chemicals | Cryobiological storage | |||||
Segment Reporting Information | |||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 | |
Operating Segments | Energy & Chemicals | VRV | |||||
Segment Reporting Information | |||||
Sales of acquiree | 12.9 | 21.5 | |||
Operating loss of acquiree | (2.8) | (5.6) | |||
Operating Segments | D&S West | |||||
Segment Reporting Information | |||||
Sales to external customers | 115.7 | 117.6 | 233.7 | 218.2 | |
Depreciation and amortization expense | 2.9 | 2.7 | 5.8 | 5.6 | |
Operating income (income) | 28.7 | 23.6 | 54.3 | 45.8 | |
Capital expenditures | 2.6 | 2.1 | 3.8 | 3.2 | |
Restructuring costs | 0.1 | 0.0 | 0.4 | 0.0 | |
Operating Segments | D&S West | Cryobiological storage | |||||
Segment Reporting Information | |||||
Sales to external customers | 24.7 | 20.0 | 46.7 | 39.1 | |
Product warranty expense | 3.8 | 3.8 | |||
Operating Segments | D&S East | |||||
Segment Reporting Information | |||||
Sales to external customers | 77.7 | 62.4 | 146.4 | 117.5 | |
Depreciation and amortization expense | 4.0 | 2.5 | 8.2 | 5.4 | |
Operating income (income) | 1.9 | 6.5 | (0.4) | 10.2 | |
Capital expenditures | 4.9 | 2.0 | 5.9 | 3.9 | |
Restructuring costs | 5.4 | 0.3 | 7.8 | 0.5 | |
Operating Segments | D&S East | Cryobiological storage | |||||
Segment Reporting Information | |||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 | |
Operating Segments | D&S East | VRV | |||||
Segment Reporting Information | |||||
Sales of acquiree | 16.0 | 29.5 | |||
Operating loss of acquiree | 1.7 | (3.6) | |||
Intersegment Eliminations | |||||
Segment Reporting Information | |||||
Sales to external customers | (4.0) | (2.9) | (7.0) | (4.4) | |
Depreciation and amortization expense | 0.0 | 0.0 | 0.0 | 0.0 | |
Operating income (income) | (1.4) | (0.8) | (2.5) | (1.2) | |
Capital expenditures | 0.0 | 0.0 | 0.0 | 0.0 | |
Intersegment Eliminations | Cryobiological storage | |||||
Segment Reporting Information | |||||
Sales to external customers | (2.2) | 0.0 | (3.9) | 0.0 | |
Corporate | |||||
Segment Reporting Information | |||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 | |
Depreciation and amortization expense | 0.4 | 0.4 | 0.7 | 0.7 | |
Operating income (income) | (14.1) | (15.7) | (30.4) | (29.2) | |
Capital expenditures | 0.9 | 1.8 | 1.4 | 3.0 | |
Restructuring costs | 0.0 | 0.1 | 0.2 | 0.6 | |
Acquisition related costs | $ 1.8 | $ 0.8 | $ 2.7 | $ 2.1 |
Reportable Segments - Product Sales Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting Information | ||||
Sales to external customers | $ 309.6 | $ 277.9 | $ 598.9 | $ 522.0 |
Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 81.4 | 69.0 | 151.7 | 127.7 |
Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 52.0 | 42.7 | 100.8 | 84.9 |
Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 3.6 | 3.0 | 10.7 | 6.4 |
HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 19.4 | 21.7 | 33.0 | 40.5 |
Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 83.1 | 64.8 | 160.8 | 117.8 |
Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 47.6 | 56.7 | 99.1 | 105.6 |
Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales to external customers | 22.5 | 20.0 | 42.8 | 39.1 |
Operating Segments | Energy & Chemicals | ||||
Segment Reporting Information | ||||
Sales to external customers | 120.2 | 100.8 | 225.8 | 190.7 |
Operating Segments | Energy & Chemicals | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 81.4 | 69.0 | 151.7 | 127.7 |
Operating Segments | Energy & Chemicals | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 15.8 | 7.1 | 30.4 | 16.1 |
Operating Segments | Energy & Chemicals | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 3.6 | 3.0 | 10.7 | 6.4 |
Operating Segments | Energy & Chemicals | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 19.4 | 21.7 | 33.0 | 40.5 |
Operating Segments | Energy & Chemicals | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | Energy & Chemicals | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | Energy & Chemicals | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S West | ||||
Segment Reporting Information | ||||
Sales to external customers | 115.7 | 117.6 | 233.7 | 218.2 |
Operating Segments | D&S West | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S West | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 19.9 | 20.9 | 42.0 | 33.9 |
Operating Segments | D&S West | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S West | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S West | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 35.7 | 36.0 | 73.5 | 64.6 |
Operating Segments | D&S West | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 35.4 | 40.7 | 71.5 | 80.6 |
Operating Segments | D&S West | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales to external customers | 24.7 | 20.0 | 46.7 | 39.1 |
Operating Segments | D&S East | ||||
Segment Reporting Information | ||||
Sales to external customers | 77.7 | 62.4 | 146.4 | 117.5 |
Operating Segments | D&S East | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S East | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 16.3 | 16.1 | 28.4 | 36.5 |
Operating Segments | D&S East | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S East | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | D&S East | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 47.9 | 29.2 | 88.1 | 54.0 |
Operating Segments | D&S East | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 13.5 | 17.1 | 29.9 | 27.0 |
Operating Segments | D&S East | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Intersegment Eliminations | ||||
Segment Reporting Information | ||||
Sales to external customers | (4.0) | (2.9) | (7.0) | (4.4) |
Intersegment Eliminations | Natural gas processing (including petrochemical) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Intersegment Eliminations | Liquefied natural gas (LNG) applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | (1.4) | 0.0 | (1.6) |
Intersegment Eliminations | Industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Intersegment Eliminations | HVAC, power and refining applications | ||||
Segment Reporting Information | ||||
Sales to external customers | 0.0 | 0.0 | 0.0 | 0.0 |
Intersegment Eliminations | Bulk industrial gas applications | ||||
Segment Reporting Information | ||||
Sales to external customers | (0.5) | (0.4) | (0.8) | (0.8) |
Intersegment Eliminations | Packaged gas industrial applications | ||||
Segment Reporting Information | ||||
Sales to external customers | (1.3) | (1.1) | (2.3) | (2.0) |
Intersegment Eliminations | Cryobiological storage | ||||
Segment Reporting Information | ||||
Sales to external customers | $ (2.2) | $ 0.0 | $ (3.9) | $ 0.0 |
Reportable Segments - Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets | ||
Assets | $ 1,983.9 | $ 1,897.7 |
Operating Segments | Continuing Operations | Energy & Chemicals | ||
Assets | ||
Assets | 924.5 | 889.2 |
Operating Segments | Continuing Operations | D&S West | ||
Assets | ||
Assets | 433.2 | 420.3 |
Operating Segments | Continuing Operations | D&S East | ||
Assets | ||
Assets | 483.8 | 496.1 |
Corporate | Continuing Operations | ||
Assets | ||
Assets | $ 142.4 | $ 92.1 |
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue | ||||
Sales | $ 309.6 | $ 277.9 | $ 598.9 | $ 522.0 |
Point in time | ||||
Disaggregation of Revenue | ||||
Sales | 252.8 | 178.8 | 495.2 | 343.0 |
Over time | ||||
Disaggregation of Revenue | ||||
Sales | 56.8 | 99.1 | 103.7 | 179.0 |
Operating Segments | Energy & Chemicals | ||||
Disaggregation of Revenue | ||||
Sales | 120.2 | 100.8 | 225.8 | 190.7 |
Operating Segments | Energy & Chemicals | Point in time | ||||
Disaggregation of Revenue | ||||
Sales | 76.1 | 23.7 | 150.2 | 47.6 |
Operating Segments | Energy & Chemicals | Over time | ||||
Disaggregation of Revenue | ||||
Sales | 44.1 | 77.1 | 75.6 | 143.1 |
Operating Segments | D&S West | ||||
Disaggregation of Revenue | ||||
Sales | 115.7 | 117.6 | 233.7 | 218.2 |
Operating Segments | D&S West | Point in time | ||||
Disaggregation of Revenue | ||||
Sales | 105.7 | 105.2 | 213.1 | 196.5 |
Operating Segments | D&S West | Over time | ||||
Disaggregation of Revenue | ||||
Sales | 10.0 | 12.4 | 20.6 | 21.7 |
Operating Segments | D&S East | ||||
Disaggregation of Revenue | ||||
Sales | 77.7 | 62.4 | 146.4 | 117.5 |
Operating Segments | D&S East | Point in time | ||||
Disaggregation of Revenue | ||||
Sales | 75.0 | 51.5 | 138.9 | 102.0 |
Operating Segments | D&S East | Over time | ||||
Disaggregation of Revenue | ||||
Sales | 2.7 | 10.9 | 7.5 | 15.5 |
Intersegment Eliminations | ||||
Disaggregation of Revenue | ||||
Sales | (4.0) | (2.9) | (7.0) | (4.4) |
Intersegment Eliminations | Point in time | ||||
Disaggregation of Revenue | ||||
Sales | (4.0) | (1.6) | (7.0) | (3.1) |
Intersegment Eliminations | Over time | ||||
Disaggregation of Revenue | ||||
Sales | $ 0.0 | $ (1.3) | $ 0.0 | $ (1.3) |
Revenue - Change in Contract Assets and Liabilities (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Contract assets | |
Beginning accounts receivable, net of allowances | $ 194.8 |
Change in accounts receivable | 9.6 |
Ending accounts receivable, net of allowances | 204.4 |
Beginning unbilled contract revenue | 54.5 |
Change in unbilled contract revenue | 16.1 |
Ending unbilled contract revenue | $ 70.6 |
Change in accounts receivable (as a percentage) | 4.90% |
Change in unbilled contract revenue (as a percentage) | 29.50% |
Contract liabilities | |
Begining balance customer advances and billings in excess of contract revenue | $ 130.0 |
Change in customer advances and billings in excess of contract revenue | (1.7) |
Ending balance customer advances and billings in excess of contract revenue | 128.3 |
Beginning long-term deferred revenue | 1.4 |
Change in long-term deferred revenue | (0.8) |
Ending long-term deferred revenue | $ 0.6 |
Change in customer advances and billings in excess of contract revenue (as a percentage) | (1.30%) |
Change in long-term deferred revenue (as a percentage) | (57.10%) |
Revenue - Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||||
Contract revenue recognized | $ 29.6 | $ 28.4 | $ 66.7 | $ 67.3 |
Remaining performance obligation | $ 752.8 | $ 752.8 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | ||||
Disaggregation of Revenue | ||||
Revenue, remaining performance obligation | 69.50% | 69.50% | ||
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year |
Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 106.4 | $ 97.7 |
Work in process | 45.2 | 53.0 |
Finished goods | 77.2 | 82.4 |
Total inventories, net | 228.8 | 233.1 |
Inventory valuation reserve | $ 10.3 | $ 9.0 |
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Mar. 31, 2019 |
Jun. 30, 2019 |
|
Goodwill | ||
Beginning Balance, Goodwill | $ 520.7 | $ 520.7 |
Foreign currency translation adjustments | (0.6) | |
Goodwill purchase price adjustment | 22.5 | |
Ending Balance, Goodwill | 542.6 | |
Beginning Balance, Accumulated goodwill impairment loss | 147.1 | 147.1 |
Ending Balance, Accumulated goodwill impairment loss | 147.1 | |
VRV | ||
Goodwill | ||
Beginning Balance, Goodwill | 63.2 | 63.2 |
Goodwill purchase price adjustment | 21.7 | |
Ending Balance, Goodwill | 84.9 | |
Skaff | ||
Goodwill | ||
Goodwill purchase price adjustment | 0.8 | 0.8 |
Energy & Chemicals | ||
Goodwill | ||
Beginning Balance, Goodwill | 295.8 | 295.8 |
Foreign currency translation adjustments | 0.2 | |
Ending Balance, Goodwill | 305.8 | |
Beginning Balance, Accumulated goodwill impairment loss | 64.6 | 64.6 |
Ending Balance, Accumulated goodwill impairment loss | 64.6 | |
Energy & Chemicals | VRV | ||
Goodwill | ||
Goodwill purchase price adjustment | 9.8 | |
D&S West | ||
Goodwill | ||
Beginning Balance, Goodwill | 151.3 | 151.3 |
Foreign currency translation adjustments | 0.0 | |
Goodwill purchase price adjustment | 0.8 | |
Ending Balance, Goodwill | 152.1 | |
Beginning Balance, Accumulated goodwill impairment loss | 82.5 | 82.5 |
Ending Balance, Accumulated goodwill impairment loss | 82.5 | |
D&S East | ||
Goodwill | ||
Beginning Balance, Goodwill | 73.6 | 73.6 |
Foreign currency translation adjustments | (0.8) | |
Ending Balance, Goodwill | 84.7 | |
Beginning Balance, Accumulated goodwill impairment loss | $ 0.0 | 0.0 |
Ending Balance, Accumulated goodwill impairment loss | 0.0 | |
D&S East | VRV | ||
Goodwill | ||
Goodwill purchase price adjustment | $ 11.9 |
Goodwill and Intangible Assets - Intangible Assets (Excluding Goodwill) (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 14 years | |
Gross Carrying Amount | $ 328.0 | $ 333.1 |
Accumulated Amortization | (109.9) | (101.0) |
Total intangible assets | 426.3 | 431.4 |
Trademarks and trade names | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets | $ 98.3 | 98.3 |
Customer relationships | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 14 years | |
Gross Carrying Amount | $ 252.4 | 254.0 |
Accumulated Amortization | $ (100.1) | (92.0) |
Unpatented technology | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 12 years | |
Gross Carrying Amount | $ 38.6 | 39.4 |
Accumulated Amortization | $ (5.9) | (5.1) |
Land use rights | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 50 years | |
Gross Carrying Amount | $ 12.1 | 12.2 |
Accumulated Amortization | $ (1.4) | (1.3) |
Trademarks and trade names | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 14 years | |
Gross Carrying Amount | $ 13.0 | 13.5 |
Accumulated Amortization | $ (1.1) | (1.1) |
Patents and other | ||
Schedule of Finite-lived and Indefinite-lived Intangible Assets | ||
Weighted-average Estimated Useful Life | 7 years | |
Gross Carrying Amount | $ 11.9 | 14.0 |
Accumulated Amortization | $ (1.4) | $ (1.5) |
Goodwill and Intangible Assets - Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Finite-Lived Intangible Assets | ||||
Amortization expense | $ 7.3 | $ 5.2 | $ 14.5 | $ 10.7 |
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 Assets - Future Amortization Expense (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Estimated Amortization Expense for Intangible Assets | |
2019 | $ 14.6 |
2020 | 27.5 |
2021 | 20.1 |
2022 | 19.9 |
2023 | $ 19.8 |
Goodwill and Intangible Assets - Government Grants (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 328.0 | $ 333.1 |
Government grants | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 8.0 | 8.2 |
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 | $ 7.5 | $ 7.7 |
Debt and Credit Arrangements - Summary of Outstanding Borrowings (Details) - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
Nov. 06, 2017 |
---|---|---|---|
Debt Instrument | |||
Total debt, net of unamortized discount and debt issuance costs | $ 309,200,000 | $ 544,400,000 | |
Less: current maturities | (4,500,000) | (11,200,000) | |
Long-term debt | 304,700,000 | 533,200,000 | |
Foreign facilities | |||
Debt Instrument | |||
Long term debt | 4,500,000 | 11,200,000 | |
Revolving Credit Facility | Senior secured revolving credit facility | |||
Debt Instrument | |||
Unamortized debt issuance costs | (9,900,000) | ||
Long term debt | 96,700,000 | ||
Revolving Credit Facility | Senior secured revolving credit facility due 2022 | |||
Debt Instrument | |||
Long term debt | 329,300,000 | ||
Revolving Credit Facility | Term loan | |||
Debt Instrument | |||
Long term debt | 0 | 0 | |
Convertible Debt | Convertible Notes, due 2024 | |||
Debt Instrument | |||
Principal amount | 258,800,000 | 258,800,000 | $ 258,800,000 |
Unamortized discount | (46,600,000) | (50,400,000) | |
Unamortized debt issuance costs | (4,200,000) | (4,500,000) | |
Convertible Debt | $ 208,000,000.0 | $ 203,900,000 |
Debt and Credit Arrangements - 2024 Notes Narratives (Details) $ / shares in Units, shares in Thousands |
1 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Nov. 06, 2017
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
$ / shares
shares
|
Jun. 30, 2019
USD ($)
day
$ / shares
|
Dec. 31, 2018
USD ($)
|
Oct. 31, 2017
$ / shares
|
|
Common Stock | |||||
Debt Instrument | |||||
Share price (usd per share) | $ / shares | $ 76.88 | ||||
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 | $ 80,000,000.0 | ||||
Debt instrument, threshold for consecutive trading days | day | 20 | ||||
Debt instrument, threshold for consecutive trading days | day | 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 | $ 46,000,000.0 | ||||
Percentage above previous sales price | 65.00% | ||||
Net cost of convertible note hedge and warrant | $ 13,500,000 | ||||
Convertible Debt | Convertible Notes, due 2024 | Maximum | |||||
Debt Instrument | |||||
Debt instrument, conversion price (usd per share) | $ / shares | $ 71.775 | ||||
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 - 2018 Notes (Details) - Convertible Notes, Due 2018 - Convertible Debt - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2019 |
Aug. 01, 2018 |
|
Debt Instrument | |||
Debt instrument stated interest rate (percent) | 2.00% | ||
Debt instrument face amount | $ 57,100,000 | ||
Repayment of debt | $ 57,100,000 | ||
Interest paid | $ 600,000 | ||
Percentage of expired warrants (percent) | 90.00% |
Debt and Credit Arrangements - Notes Interest Accretion Schedule (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Debt Instrument | ||||
Interest accretion of convertible notes discount | $ 3.7 | $ 5.0 | ||
Financing costs amortization | $ 0.6 | $ 0.4 | 1.0 | 0.7 |
Convertible Debt | Convertible Notes, due 2024 | ||||
Debt Instrument | ||||
Interest accretion of convertible notes discount | 1.9 | 1.8 | 3.7 | 3.5 |
Debt instrument, interest expense | 0.7 | 0.7 | 1.3 | 1.3 |
Interest expense | 2.6 | 2.5 | 5.0 | 4.8 |
Financing costs amortization | $ 0.1 | 0.1 | $ 0.3 | 0.3 |
Convertible Debt | Convertible Notes, Due 2018 | ||||
Debt Instrument | ||||
Interest accretion of convertible notes discount | 0.7 | 1.5 | ||
Debt instrument, interest expense | 0.3 | 0.9 | ||
Interest expense | $ 1.0 | $ 2.4 |
Debt and Credit Arrangements - Senior Secured Revolving Credit Facility and Term Loan (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 14, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Debt Instrument | ||||||
Financing costs amortization | $ 600,000 | $ 400,000 | $ 1,000,000.0 | $ 700,000 | ||
Revolving Credit Facility | ||||||
Debt Instrument | ||||||
Financing costs amortization | $ 200,000 | 200,000 | $ 400,000 | 300,000 | ||
Revolving Credit Facility | Credit Facilities 2019 | ||||||
Debt Instrument | ||||||
Maximum percentage of capital stock guaranteed by company | 65.00% | 65.00% | ||||
Revolving Credit Facility | Credit Facilities 2019 | Adjusted Base Rate | Minimum | ||||||
Debt Instrument | ||||||
Debt instrument variable interest rate (percent) | 0.25% | |||||
Revolving Credit Facility | Credit Facilities 2019 | Adjusted Base Rate | Maximum | ||||||
Debt Instrument | ||||||
Debt instrument variable interest rate (percent) | 1.25% | |||||
Revolving Credit Facility | Credit Facilities 2019 | LIBOR | Minimum | ||||||
Debt Instrument | ||||||
Debt instrument variable interest rate (percent) | 1.25% | |||||
Revolving Credit Facility | Credit Facilities 2019 | LIBOR | Maximum | ||||||
Debt Instrument | ||||||
Debt instrument variable interest rate (percent) | 2.25% | |||||
Revolving Credit Facility | Senior secured revolving credit facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 550,000,000.0 | |||||
Line of credit fronting fee (as a percentage) | 0.125% | 0.125% | ||||
Debt issuance costs | $ 10,000,000.0 | $ 10,000,000.0 | ||||
Debt instrument, term | 5 years | |||||
Unamortized debt issuance costs | 9,900,000 | $ 9,900,000 | ||||
Long term debt | $ 96,700,000 | $ 96,700,000 | ||||
Weighted average interest rate (percent) | 2.25% | 2.25% | ||||
Letters of credit outstanding | $ 51,400,000 | $ 51,400,000 | ||||
Line of credit remaining borrowing amount | 401,800,000 | 401,800,000 | ||||
Interest expense | 2,600,000 | $ 2,500,000 | ||||
Revolving Credit Facility | Senior secured revolving credit facility | Minimum | ||||||
Debt Instrument | ||||||
Line of credit commitment fee (as a percentage) | 0.25% | |||||
Line of credit participation fee (as a percentage) | 1.25% | |||||
Revolving Credit Facility | Senior secured revolving credit facility | Maximum | ||||||
Debt Instrument | ||||||
Line of credit commitment fee (as a percentage) | 0.35% | |||||
Line of credit participation fee (as a percentage) | 2.25% | |||||
Revolving Credit Facility | Term Loan 2019 Credit Facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 450,000,000.0 | |||||
Debt issuance costs | 6,100,000 | $ 6,100,000 | ||||
Debt instrument, term | 5 years | |||||
Long term debt | 0 | $ 0 | $ 0 | |||
Revolving Credit Facility | Term Loan 2019 Credit Facility | Minimum | ||||||
Debt Instrument | ||||||
Line of credit commitment fee (as a percentage) | 0.20% | |||||
Revolving Credit Facility | Term Loan 2019 Credit Facility | Maximum | ||||||
Debt Instrument | ||||||
Line of credit commitment fee (as a percentage) | 0.35% | |||||
Revolving Credit Facility | Senior secured revolving credit facility due 2022 | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 550,000,000.0 | |||||
Financing costs amortization | 200,000 | |||||
Long term debt | $ 329,300,000 | |||||
Interest expense | 2,500,000 | 2,500,000 | ||||
Revolving Credit Facility Sub-limit - Letters of Credit | Senior secured revolving credit facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 100,000,000.0 | |||||
Revolving Credit Facility Sub-limit - Discretionary Letters of Credit | Senior secured revolving credit facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 250,000,000.0 | |||||
Revolving Credit Facility Sub-limit - Swingline | Senior secured revolving credit facility | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 50,000,000.0 | |||||
Interest expense | $ 5,800,000 | $ 5,700,000 | ||||
Revolving Credit Facility Sub-limit - Swingline | Senior secured revolving credit facility due 2022 | ||||||
Debt Instrument | ||||||
Interest expense | $ 5,700,000 | $ 5,700,000 |
Debt and Credit Arrangements - Foreign Facilities (Details) - Revolving Credit Facility - Foreign facilities - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument | ||
Line of credit outstanding | $ 4.5 | $ 11.2 |
Line of credit remaining borrowing amount | 31.8 | 65.6 |
Letters of credit outstanding | $ 19.3 | $ 17.1 |
Weighted average interest rate (percent) | 3.30% | 4.80% |
Debt and Credit Arrangements - Letters of Credit (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
---|---|---|---|
Debt Disclosure [Abstract] | |||
Restricted cash | $ 1.0 | $ 1.0 | |
Restricted cash, noncurrent | $ 1.0 | $ 1.0 | $ 1.0 |
Debt and Credit Arrangements - Fair Value Disclosures about Debt (Details) |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Convertible Debt | Convertible Notes, due 2024 | ||
Debt Instrument | ||
Debt instrument percentage over par value | 143.00% | 124.00% |
Product Warranties (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Movement in Standard Product Warranty Accrual | |
Beginning balance standard product warranty accrual | $ 8.9 |
Issued – warranty expense | 3.3 |
Warranty usage | (1.5) |
Ending balance standard product warranty accrual | $ 10.7 |
Business Combinations - VRV Narratives (Details) € in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Nov. 15, 2018
USD ($)
|
Nov. 15, 2018
EUR (€)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
EUR (€)
|
Jun. 30, 2019
USD ($)
segments
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
Nov. 15, 2018
EUR (€)
|
|
Business Acquisition | ||||||||
Payment for acquisition of businesses, net of cash acquired | $ 4.2 | $ 12.5 | ||||||
Borrowings on revolving credit facilities | $ 160.3 | € 140.0 | $ 52.0 | $ 65.0 | ||||
Useful lives of identifiable finite-lived intangible assets | 14 years | |||||||
Number of reportable segments | segments | 3 | |||||||
VRV | ||||||||
Business Acquisition | ||||||||
Consideration transferred | 216.1 | 191.1 | ||||||
Cash acquired | 1.4 | € 1.3 | ||||||
Payment for acquisition of businesses, net of cash acquired | 141.3 | 125.0 | ||||||
Payment of outstanding debt | 72.0 | € 63.7 | ||||||
Adjustments | $ 4.2 | € 3.7 | $ 4.2 | |||||
Debt assumed | $ 4.9 | 4.9 | 4.9 | $ 4.9 | € 4.4 | |||
Useful lives of identifiable finite-lived intangible assets | 9 years | 9 years | ||||||
Pro forma sales | $ 302.9 | $ 581.1 | ||||||
VRV | Minimum | ||||||||
Business Acquisition | ||||||||
Useful lives of identifiable finite-lived intangible assets | 2 years | 2 years | ||||||
VRV | Maximum | ||||||||
Business Acquisition | ||||||||
Useful lives of identifiable finite-lived intangible assets | 12 years | 12 years |
Business Combinations - Net Asset Acquired (Details) € in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
EUR (€)
|
Jun. 30, 2019
USD ($)
|
Jul. 01, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Nov. 15, 2018
USD ($)
|
Nov. 15, 2018
EUR (€)
|
|
Net assets acquired: | |||||||
Goodwill | $ 542.6 | $ 542.6 | $ 520.7 | ||||
Adjustments | |||||||
Goodwill | 22.5 | ||||||
Harsco Corporation’s Air-X-Changers | Subsequent Event | |||||||
Net assets acquired: | |||||||
Identifiable intangible assets | $ 310.0 | ||||||
Property, plant and equipment | 34.4 | ||||||
Goodwill | 239.3 | ||||||
Other net assets | 42.5 | ||||||
Debt | (34.2) | ||||||
Net assets acquired | $ 592.0 | ||||||
VRV | |||||||
Net assets acquired: | |||||||
Identifiable intangible assets | 66.6 | 66.6 | 66.6 | ||||
Property, plant and equipment | 70.5 | 70.5 | 70.5 | ||||
Goodwill | 84.9 | 84.9 | 63.2 | ||||
Other net assets | 0.4 | 0.4 | 17.9 | ||||
Debt | (4.9) | (4.9) | (4.9) | $ (4.9) | € (4.4) | ||
Net assets acquired | 217.5 | 217.5 | $ 213.3 | ||||
Adjustments | |||||||
Goodwill | 21.7 | ||||||
Other net assets | (17.5) | ||||||
Net assets acquired | $ 4.2 | € 3.7 | $ 4.2 |
Business Combinations - Intangible Assets Acquired (Details) - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jul. 01, 2019 |
Nov. 15, 2018 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 14 years | |||
Customer relationships | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 14 years | |||
Unpatented technology | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 12 years | |||
Trademarks and trade names | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 14 years | |||
VRV | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 9 years | |||
Finite lived intangible assets acquired | $ 66.6 | |||
Indefinite-lived intangible assets: | ||||
Total identifiable intangible assets acquired | $ 66.6 | $ 66.6 | ||
VRV | Customer relationships | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 12 years | |||
Finite lived intangible assets acquired | $ 28.1 | |||
VRV | Unpatented technology | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 12 years | |||
Finite lived intangible assets acquired | $ 15.9 | |||
VRV | Other Identifiable intangible assets | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 4 years | |||
Finite lived intangible assets acquired | $ 11.8 | |||
VRV | Trademarks and trade names | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 14 years | |||
Finite lived intangible assets acquired | $ 10.8 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 11 years | |||
Finite lived intangible assets acquired | $ 254.5 | |||
Indefinite-lived intangible assets: | ||||
Trademarks | 55.5 | |||
Total identifiable intangible assets acquired | $ 310.0 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | Customer relationships | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 12 years | |||
Finite lived intangible assets acquired | $ 179.1 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | Developed Technology | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 10 years | |||
Finite lived intangible assets acquired | $ 47.0 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | Backlog | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 1 year | |||
Finite lived intangible assets acquired | $ 27.3 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | Non-compete agreements | ||||
Acquired Finite-Lived Intangible Assets | ||||
Weighted-average Estimated Useful Life | 4 years | |||
Finite lived intangible assets acquired | $ 1.1 |
Business Combinations - Skaff Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jan. 02, 2018 |
Mar. 31, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition | ||||
Payment for acquisition of businesses, net of cash acquired | $ 4.2 | $ 12.5 | ||
Goodwill purchase price adjustment | 22.5 | |||
Skaff | ||||
Business Acquisition | ||||
Voting percentage acquired | 100.00% | |||
Payment for acquisition of businesses, net of cash acquired | $ 12.5 | |||
Long-term deferred tax liabilities | $ 0.8 | |||
Goodwill purchase price adjustment | $ 0.8 | $ 0.8 |
Business Combinations - Harsco Corporation’s Air-X-Changers Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition | ||||
Payment for acquisition of businesses, net of cash acquired | $ 4.2 | $ 12.5 | ||
Harsco Corporation’s Air-X-Changers | ||||
Business Acquisition | ||||
Transaction related costs | $ 1.2 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | ||||
Business Acquisition | ||||
Payment for acquisition of businesses, net of cash acquired | $ 592.0 | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | Minimum | ||||
Business Acquisition | ||||
Finite lived intangible assets useful life | 1 year | |||
Harsco Corporation’s Air-X-Changers | Subsequent Event | Maximum | ||||
Business Acquisition | ||||
Finite lived intangible assets useful life | 12 years |
Business Combinations - Pro Forma Information (Details) - Harsco Corporation’s Air-X-Changers - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition, Pro Forma Information | ||||
Pro forma sales | $ 382.1 | $ 326.5 | $ 747.7 | $ 614.8 |
Pro forma net income attributable to Chart Industries, Inc. | $ 19.4 | $ 8.0 | $ 25.2 | $ 9.3 |
Pro forma net income attributable to Chart Industries, Inc. per common share, basic (usd per share) | $ 0.54 | $ 0.23 | $ 0.71 | $ 0.27 |
Pro forma net income attributable to Chart Industries, Inc. per common share, diluted (usd per share) | $ 0.51 | $ 0.22 | $ 0.66 | $ 0.26 |
Business Combinations - Contingent Consideration (Details) - Thermax $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Business Acquisition | |
Contingent consideration | $ 1.8 |
Earn out period | 4 years |
Equity and Accumulated Other Comprehensive Loss - Public Stock Offering (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 14, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Subsidiary, Sale of Stock | |||||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Proceeds form issuance of shares | $ 295.8 | $ 0.0 | |||
Common Stock | |||||
Subsidiary, Sale of Stock | |||||
New shares issued (shares) | 4,030 | ||||
Public Offering | Common Stock | |||||
Subsidiary, Sale of Stock | |||||
New shares issued (shares) | 4,025 | ||||
Common stock, par value (usd per share) | $ 0.01 | ||||
Stock price (usd per share) | $ 73.50 | ||||
Proceeds form issuance of shares | $ 295.8 | ||||
Equity issuance cost | $ 9.5 |
Equity and Accumulated Other Comprehensive Loss - Accumulated Other Comprehensive Loss Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Accumulated Other Comprehensive Loss | ||||
Beginning balance | $ 893.5 | $ 828.6 | $ 889.0 | $ 805.2 |
Ending balance | 1,198.7 | 820.1 | 1,198.7 | 820.1 |
Accumulated other comprehensive loss | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (34.5) | 4.3 | (29.9) | (8.1) |
Other comprehensive (loss) income | 1.3 | (21.5) | (3.6) | (9.4) |
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | 0.3 | 0.1 | 0.6 | 0.4 |
Net current-period other comprehensive income, net of taxes | 1.6 | (21.4) | (3.0) | (9.0) |
Ending balance | (32.9) | (17.1) | (32.9) | (17.1) |
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (22.4) | 14.3 | (17.5) | 2.2 |
Other comprehensive (loss) income | 1.3 | (21.5) | (3.6) | (9.4) |
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | 0.0 | 0.0 | 0.0 | 0.0 |
Net current-period other comprehensive income, net of taxes | 1.3 | (21.5) | (3.6) | (9.4) |
Ending balance | (21.1) | (7.2) | (21.1) | (7.2) |
Pension liability adjustments, net of taxes | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (12.1) | (10.0) | (12.4) | (10.3) |
Other comprehensive (loss) income | 0.0 | 0.0 | 0.0 | 0.0 |
Amounts reclassified from accumulated other comprehensive loss, net of income taxes | 0.3 | 0.1 | 0.6 | 0.4 |
Net current-period other comprehensive income, net of taxes | 0.3 | 0.1 | 0.6 | 0.4 |
Ending balance | $ (11.8) | $ (9.9) | $ (11.8) | $ (9.9) |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Net income attributable to Chart Industries, Inc. | ||||
Income from continuing operations | $ 14.4 | $ 9.9 | $ 15.3 | $ 14.1 |
Income from discontinued operations, net of taxes | 0.0 | 2.4 | 0.0 | 4.0 |
Net income attributable to Chart Industries, Inc. | $ 14.4 | $ 12.3 | $ 15.3 | $ 18.1 |
Earnings per common share – basic: | ||||
Income from continuing operations, basic (usd per share) | $ 0.44 | $ 0.32 | $ 0.48 | $ 0.46 |
Income from discontinued operations, basic (usd per share) | 0 | 0.08 | 0 | 0.13 |
Net income attributable to Chart Industries, Inc. (usd per share) | 0.44 | 0.40 | 0.48 | 0.59 |
Earnings per common share – diluted: | ||||
Income from continuing operations (usd per share) | 0.41 | 0.31 | 0.45 | 0.44 |
Income from discontinued operations, diluted (usd per share) | 0 | 0.07 | 0 | 0.13 |
Net income attributable to Chart Industries, Inc. (usd per share) | $ 0.41 | $ 0.38 | $ 0.45 | $ 0.57 |
Weighted average number of common shares outstanding — basic (shares) | 32,470 | 30,950 | 32,020 | 30,930 |
Incremental shares issuable upon assumed conversion and exercise of share-based awards (shares) | 440 | 840 | 480 | 810 |
Incremental shares issuable due to dilutive effect of convertible (shares) | 1,250 | 290 | 1,230 | 0 |
Incremental shares issuable due to dilutive effect of warrants (shares) | 560 | 0 | 520 | 0 |
Weighted average number of common shares outstanding – diluted (shares) | 34,720 | 32,080 | 34,250 | 31,740 |
Earnings Per Share - Antidilutive Securities (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 1,390 | 5,730 | 1,370 | 5,450 |
Share-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 140 | 260 | 140 | 270 |
Convertible note hedge | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 1,250 | 290 | 1,230 | 0 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total anti-dilutive securities | 0 | 5,180 | 0 | 5,180 |
Earnings Per Share - Narratives (Details) - Convertible Notes, due 2024 - Convertible Debt - $ / shares |
Dec. 31, 2017 |
Nov. 06, 2017 |
---|---|---|
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Debt instrument, conversion price (usd per share) | $ 58.725 | |
Maximum | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Debt instrument, conversion price (usd per share) | $ 71.775 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Contingency [Line Items] | ||||||
Income tax expense | $ 4.9 | $ 3.9 | $ 2.9 | $ 5.5 | ||
Effective income tax rate (percent) | 25.10% | 26.70% | 15.70% | 26.30% | ||
Liability for gross unrecognized tax benefits | $ 2.1 | $ 2.1 | $ 2.3 | |||
Unrecognized tax benefit that would impact effective tax rate | $ 1.6 | $ 1.6 | $ 0.1 | |||
Forecast | ||||||
Income Tax Contingency [Line Items] | ||||||
Effective income tax rate (percent) | 21.00% |
Share-based Compensation (Details) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Allocated share-based compensation expense | $ (1.9) | $ 0.1 | $ 4.3 | $ 3.0 |
Share based compensation expense not yet recognized | $ 13.0 | $ 13.0 | ||
Period in which unrecognized share based compensation will be recognized | 2 years 4 months 24 days | |||
Management | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based compensation, fair value of awards granted | $ 10.3 | |||
Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based compensation, fair value of restricted shares granted | $ 0.3 | |||
CEO | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Credits to share-based compensation related to forfeitures | $ (1.8) | $ (1.8) | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based compensation, shares granted (shares) | 100 | |||
Share-based compensation, shares exercised (shares) | 280 | |||
Share-based compensation, stock option forfeited (shares) | 20 | |||
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) | 70 | |||
Share-based compensation, vesting period | 3 years | |||
Share-based compensation, shares forfeited other than options (shares) | 10 | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based compensation, shares vested other than options (shares) | 110 | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based compensation, restricted shares granted (shares) | 30 | |||
Share-based compensation, vesting period | 3 years | |||
Share-based compensation, shares forfeited other than options (shares) | 20 |
Commitment and Contingencies - Narratives (Details) - Cryobiological storage - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Contingencies | ||
Warranty accrual | $ 3.8 | $ 3.8 |
Operating Segments | D&S West | ||
Contingencies | ||
Warranty accrual | $ 3.8 | $ 3.8 |
Restructuring Activities - Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Restructuring Cost and Reserve | ||||
Restructuring costs | $ 4.4 | $ 0.6 | $ 11.8 | $ 1.5 |
Property, plant and equipment impairment and disposals | (0.7) | (5.6) | ||
Operating Segments | Energy & Chemicals | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | (1.1) | 0.2 | 3.4 | 0.4 |
Property, plant and equipment impairment and disposals | 1.6 | (1.6) | ||
Expected restructuring charges | 0.4 | 0.4 | ||
Operating Segments | D&S East | ||||
Restructuring Cost and Reserve | ||||
Restructuring costs | 5.4 | $ 0.3 | 7.8 | $ 0.5 |
Property, plant and equipment impairment and disposals | (2.3) | (4.0) | ||
Expected restructuring charges | $ 0.4 | $ 0.4 |
Restructuring Activities - Restructuring Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Restructuring Cost and Reserve | ||||
Severance costs | $ 0.4 | $ 0.2 | $ 1.9 | $ 0.8 |
Other restructuring costs | 4.0 | 0.4 | 9.9 | 0.7 |
Restructuring costs | 4.4 | 0.6 | 11.8 | 1.5 |
Cost of sales | ||||
Restructuring Cost and Reserve | ||||
Severance costs | 0.5 | 0.0 | 1.0 | 0.1 |
Other restructuring costs | 3.5 | 0.4 | 8.5 | 0.6 |
Selling, general, and administrative expenses | ||||
Restructuring Cost and Reserve | ||||
Severance costs | (0.1) | 0.2 | 0.9 | 0.7 |
Other restructuring costs | $ 0.5 | $ 0.0 | $ 1.4 | $ 0.1 |
Restructuring Activities - Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | $ 1.9 | $ 1.6 | $ 0.9 | $ 2.7 |
Restructuring costs | 4.4 | 0.6 | 11.8 | 1.5 |
Property, plant and equipment impairment and disposals | (0.7) | (5.6) | ||
Cash payments and other | (4.3) | (1.9) | (5.8) | (3.9) |
Ending balance, restructuring accrual | 1.3 | 0.3 | 1.3 | 0.3 |
Operating Segments | Energy & Chemicals | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0.7 | 0.2 | 0.0 | 0.2 |
Restructuring costs | (1.1) | 0.2 | 3.4 | 0.4 |
Property, plant and equipment impairment and disposals | 1.6 | (1.6) | ||
Cash payments and other | (0.6) | (0.4) | (1.2) | (0.6) |
Ending balance, restructuring accrual | 0.6 | 0.0 | 0.6 | 0.0 |
Operating Segments | D&S West | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0.3 | 0.0 | 0.0 | 1.2 |
Restructuring costs | 0.1 | 0.0 | 0.4 | 0.0 |
Property, plant and equipment impairment and disposals | 0.0 | 0.0 | ||
Cash payments and other | (0.4) | 0.2 | (0.4) | (1.0) |
Ending balance, restructuring accrual | 0.0 | 0.2 | 0.0 | 0.2 |
Operating Segments | D&S East | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0.8 | 0.0 | 0.8 | 0.2 |
Restructuring costs | 5.4 | 0.3 | 7.8 | 0.5 |
Property, plant and equipment impairment and disposals | (2.3) | (4.0) | ||
Cash payments and other | (3.2) | (0.2) | (3.9) | (0.6) |
Ending balance, restructuring accrual | 0.7 | 0.1 | 0.7 | 0.1 |
Corporate | ||||
Restructuring Reserve | ||||
Beginning balance, restructuring accrual | 0.1 | 1.4 | 0.1 | 1.1 |
Restructuring costs | 0.0 | 0.1 | 0.2 | 0.6 |
Property, plant and equipment impairment and disposals | 0.0 | 0.0 | ||
Cash payments and other | (0.1) | (1.5) | (0.3) | (1.7) |
Ending balance, restructuring accrual | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,300,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,300,000 |
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