Reportable Segments

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2017, the structure of our internal organization was divided into the following reportable segments, which were also our operating segments: Energy & Chemicals (“E&C”), Distribution & Storage (“D&S”), and BioMedical. During the third quarter of 2018, we executed a strategic realignment of our segment structure and divided our D&S segment into two segments: Distribution & Storage Western Hemisphere (“D&S West”) and Distribution & Storage Eastern Hemisphere (“D&S East”). We believe these changes will facilitate our growth strategies, better align with our customer needs, and provide improved transparency of business results to our shareholders.

As a result of these events and the divestiture of the respiratory therapy and on-site generation systems businesses described below, our reportable and operational segments now include: E&C, D&S West and D&S East. Our reportable segments are business units that are each managed separately. Our E&C segment manufactures, offers, and distributes distinct products with different production processes as compared to both our D&S West and D&S East segments. Furthermore, in conjunction with our strategic realignment, including preparation for the VRV Acquisition discussed in Note 9, “Business Acquisitions”, we have split responsibility for the two segments under different business leaders and associated internal reporting responsibilities. Our D&S West segment has principal operations in the United States and Latin America and primarily serves the Americas geographic region while our D&S East segment has principal operations in Europe and Asia and primarily serves the geographic regions of Europe, Middle East and Asia (including China).

Additionally, in connection with the Divestiture discussed in Note 2, “Discontinued Operations,” the financial results of the respiratory therapy and on-site generation systems businesses are reflected in our unaudited condensed consolidated statements of operations and comprehensive income as discontinued operations for all periods presented. The remaining former BioMedical segment business, cryobiological storage systems, is now part of D&S West because it has similarities in primary customer and manufacturing regions, technology and manufacturing processes with other D&S West product lines, and it is also now led by the same business leadership team and reviewed and managed internally within D&S West. Financial information for cryobiological storage systems is shown in all tables for D&S West.

All of our segments manufacture products used primarily in energy-related and industrial applications, such as the separation, liquefaction, distribution, and storage of hydrocarbon and industrial gases. The D&S West segment also supplies cryogenic and other equipment used in the medical, biological research, and animal breeding industries.

Corporate includes operating expenses for executive management, accounting, tax, treasury, corporate development, human resources, information technology, investor relations, legal, internal audit, and risk management. Corporate support functions are not currently allocated to the segments.

We evaluate performance and allocate resources based on operating income or loss from continuing operations before interest expense, net, financing costs amortization, foreign currency (gain) loss, income tax expense, and income attributable to noncontrolling interests, net of taxes.



	Three Months Ended September 30, 2018
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	98.1	$	119.0	$	56.8	$	(1.7	)	$	—		$	272.2
Depreciation and amortization expense	6.5		2.8		2.5		—			0.3			12.1
Operating income (loss) ^{(1) (2) (4)}	12.1		31.9		3.3		(0.5		)	(15.3		)	31.5
Capital expenditures	3.8		1.3		2.5		—			0.8			8.4



	Three Months Ended September 30, 2017
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	46.6	$	99.6	$	63.2	$	(6.7	)	$	—		$	202.7
Depreciation and amortization expense	3.3		2.6		2.7		—			0.5			9.1
Operating income (loss) ^{(1) (2) (3) (4)}	0.3		23.1		5.6		(1.4		)	(20.4		)	7.2
Capital expenditures	2.8		0.6		1.3		—			1.7			6.4



	Nine Months Ended September 30, 2018
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	288.8	$	337.2	$	174.3	$	(6.1	)	$	—		$	794.2
Depreciation and amortization expense	19.6		8.4		7.9		—			1.0			36.9
Operating income (loss) ^{(1) (2) (3) (4) (5)}	20.8		77.7		13.5		(1.7		)	(44.5		)	65.8
Capital expenditures	11.9		4.7		6.0		—			3.8			26.4



	Nine Months Ended September 30, 2017
	Energy & Chemicals			D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	126.5		$	295.6	$	166.7	$	(15.3	)	$	—		$	573.5
Depreciation and amortization expense	9.0			7.8		6.6		—			1.8			25.2
Operating (loss) income ^{(1) (2) (4)}	(2.4		)	62.3		11.8		(3.6		)	(50.5		)	17.6
Capital expenditures	7.4			3.4		8.7		—			2.3			21.8

_______________


⁽¹⁾	Includes sales and operating income for Hudson, included in the E&C segment results since the acquisition date, September 20, 2017 as follows:


•	Sales were $44.1 and $6.1 for the three months ended September 30, 2018 and 2017, respectively.


•	Sales were $134.9 and $6.1 for the nine months ended September 30, 2018 and 2017, respectively.


•	Operating income was $4.3 and $1.2 for the three months ended September 30, 2018 and 2017, respectively.


•	Operating income was $14.6 and $1.2 for the nine months ended September 30, 2018 and 2017, respectively.


⁽²⁾	Includes restructuring costs of:


•	$2.0 and $2.3 for the three months ended September 30, 2018 and 2017 respectively, and


•	$3.5 and $8.5 for the nine months ended September 30, 2018 and 2017 respectively.


⁽³⁾	Includes an expense of $3.8 recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the nine months ended September 30, 2018.


⁽⁴⁾	Includes transaction-related costs of:


•	$2.0 and $7.4 for the three months ended September 30, 2018 and 2017, respectively, and


•	$4.1 and $8.6 for the nine months ended September 30, 2018 and 2017, respectively.

⁽⁵⁾

Includesnet severance costs of $0.9 related to headcount reductions associated with the strategic realignment of our segment structure, which includes $1.8 in payroll severance costs partially offset by a $0.9 credit due to related share-based compensation forfeitures for the nine months ended September 30, 2018. Includes net severance costs of $1.4 related to the departure of our former CEO on June 11, 2018, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation forfeitures for the nine months ended September 30, 2018.

Product Sales Information



	Three Months Ended September 30, 2018
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	63.5	$	—	$	—	$	—		$	63.5
Liquefied natural gas (LNG) applications	12.4		20.5		11.8		(0.4		)	44.3
Industrial gas applications	3.4		—		—		—			3.4
HVAC, power and refining applications	18.8		—		—		—			18.8
Bulk industrial gas applications	—		41.1		31.8		(0.4		)	72.5
Packaged gas industrial applications	—		37.2		13.2		(0.9		)	49.5
Cryobiological storage	—		20.2		—		—			20.2
Total	$	98.1	$	119.0	$	56.8	$	(1.7	)	$	272.2



	Three Months Ended September 30, 2017
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	27.3	$	—	$	—	$	—		$	27.3
Liquefied natural gas (LNG) applications	5.5		13.5		26.2		(5.8		)	39.4
Industrial gas applications	11.6		—		—		—			11.6
HVAC, power and refining applications	2.2		—		—		—			2.2
Bulk industrial gas applications	—		35.1		26.5		(0.9		)	60.7
Packaged gas industrial applications	—		34.2		10.5		—			44.7
Cryobiological storage	—		16.8		—		—			16.8
Total	$	46.6	$	99.6	$	63.2	$	(6.7	)	$	202.7



	Nine Months Ended September 30, 2018
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	191.2	$	—	$	—	$	—		$	191.2
Liquefied natural gas (LNG) applications	28.5		54.4		48.3		(2.0		)	129.2
Industrial gas applications	9.8		—		—		—			9.8
HVAC, power and refining applications	59.3		—		—		—			59.3
Bulk industrial gas applications	—		105.7		85.8		(1.2		)	190.3
Packaged gas industrial applications	—		117.8		40.2		(2.9		)	155.1
Cryobiological storage	—		59.3		—		—			59.3
Total	$	288.8	$	337.2	$	174.3	$	(6.1	)	$	794.2



	Nine Months Ended September 30, 2017
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	91.6	$	—	$	—	$	—		$	91.6
Liquefied natural gas (LNG) applications	16.7		45.0		67.1		(11.6		)	117.2
Industrial gas applications	16.0		—		—		—			16.0
HVAC, power and refining applications	2.2		—		—		—			2.2
Bulk industrial gas applications	—		94.2		64.7		(3.5		)	155.4
Packaged gas industrial applications	—		99.4		34.9		(0.2		)	134.1
Cryobiological storage	—		57.0		—		—			57.0
Total	$	126.5	$	295.6	$	166.7	$	(15.3	)	$	573.5



Total Assets	September 30, 2018		December 31, 2017
Energy & Chemicals	$	755.4	$	784.1
D&S West	435.0		415.7
D&S East	321.2		327.3
Corporate	103.5		92.7
Discontinued Operations	123.4		104.9
Total	$	1,738.5	$	1,724.7