Segment and Geographic Information

12 Months Ended

Dec. 31, 2019

Segment and Geographic Information

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018, the structure of our internal organization was divided into the following reportable segments, which were also our operating segments: D&S East, D&S West and Energy & Chemicals (“E&C”).

Upon closing of our acquisition of AXC (see Note 13, “Business Combinations” for more information), effective July 1, 2019, we changed our reportable segments from three segments to four segments: D&S East, D&S West, E&C Cryogenics, and E&C FinFans. AXC was combined with our Hudson Products and Chart Cooler Service businesses from the prior E&C segment to create a new segment called E&C FinFans.

Our D&S East segment has principal operations in Europe and Asia and primarily serves the geographic regions of Europe,

Middle East and Asia. Our D&S West segment has principal operations in the United States and Latin America and primarily serves the Americas geographic region. Our D&S West segment also includes cryobiological storage manufacturing and distribution operations in the U.S., Europe and Asia, which serve customers around the world. E&C Cryogenics supplies mission critical engineered equipment and systems used in the separation, liquefaction, and purification of hydrocarbon and industrial gases that span gas-to-liquid applications. The E&C FinFans segment is focused on our unique and broad product offering and capabilities in air cooled heat exchangers (“ACHX”) and fans. Corporate includes operating expenses for executive management, accounting, tax, treasury, corporate development, human resources, information technology, investor relations, legal, internal audit, and risk management. Corporate support functions are not currently allocated to the segments. All prior period amounts presented in the tables below have been reclassified based on our current reportable segments.

We evaluate performance and allocate resources based on operating income as determined in our consolidated statements of income.

Segment Financial Information



	Year Ended December 31, 2019
	D&S East		D&S West		E&C Cryogenics		E&C FinFans		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	293.4	$	461.7	$	190.2	$	361.7	$	(7.9	)	$	—		$	1,299.1
Depreciation and amortization expense	16.6		11.6		14.5		34.5		—			1.6			78.8
Operating income (loss) ^{(1) (2)}	6.9		104.5		1.6		40.6		(2.3		)	(70.4		)	80.9
Capital expenditures	14.8		8.7		4.5		3.1		—			5.1			36.2



	Year Ended December 31, 2018
	D&S East		D&S West		E&C Cryogenics		E&C FinFans		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	246.3	$	455.5	$	136.9	$	253.6	$	(8.0	)	$	—		$	1,084.3
Depreciation and amortization expense	11.1		11.2		10.9		16.1		—			1.5			50.8
Operating income (loss) ^{(1) (3) (4) (5)}	19.3		101.2		1.8		23.7		(2.5		)	(51.4		)	92.1
Capital expenditures	10.4		6.0		12.1		3.4		—			3.7			35.6



	Year Ended December 31, 2017
	D&S East		D&S West		E&C Cryogenics			E&C FinFans		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	232.3	$	400.6	$	125.5		$	100.1	$	(15.6	)	$	—		$	842.9
Depreciation and amortization expense	9.5		10.6		10.3			5.0		—			2.2			37.6
Operating income (loss) ^{(1) (3) (5)}	14.2		85.2		(2.1		)	7.2		(3.6		)	(62.4		)	38.5
Capital expenditures	11.1		4.1		14.1			1.4		—			2.3			33.0

_______________


⁽¹⁾	Restructuring costs for the years ended:


•	December 31, 2019 were $15.6 ($8.5 - D&S East, $0.9 - D&S West, $2.5 - E&C Cryogenics, $3.5 - E&C FinFans, and $0.2 - Corporate);


•	December 31, 2018 were $4.4 ($1.4 - D&S East, $0.6 - E&C Cryogenics, $0.1 - E&C FinFans, and $2.3 - Corporate); and


•	December 31, 2017 were $11.2 ($1.7 - D&S East, $1.1 - D&S West, $2.1 - E&C Cryogenics, $0.3 - E&C FinFans, and $6.0 - Corporate).


⁽²⁾	Includes transaction-related costs of $5.4 recorded in Corporate for the year ended December 31, 2019, which were mainly related to the AXC acquisition. Includes integration costs of $1.6 recorded in Corporate related to the AXC acquisition for the year ended December 31, 2019.


⁽³⁾	Includes an expense of $4.0 recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the year ended December 31, 2018.

⁽⁴⁾

During the year ended December 31, 2018, we recorded net severance costs of $2.3 in Corporate primarily 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 2018. Includes net severance costs of $1.4 related to the departure of our former CEO, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation forfeitures for 2018.


⁽⁵⁾	Includes transaction-related costs of $2.1 and $10.1 recorded in Corporate for the years ended December 31, 2018 and 2017, respectively.

Product Sales Information



	Year Ended December 31, 2019
	D&S East		D&S West		E&C Cryogenics		E&C FinFans		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	—	$	—	$	80.9	$	263.6	$	(0.2	)	$	344.3
Liquefied natural gas (LNG) applications	72.7		73.1		53.4		42.1		(0.9		)	240.4
Industrial gas production applications	—		—		25.2		—		—			25.2
HVAC, power and refining applications	—		—		30.7		56.0		(0.9		)	85.8
Bulk industrial gas applications	168.7		156.0		—		—		(2.3		)	322.4
Packaged gas industrial applications	52.0		149.0		—		—		(3.5		)	197.5
Cryobiological storage	—		83.6		—		—		(0.1		)	83.5
Total	$	293.4	$	461.7	$	190.2	$	361.7	$	(7.9	)	$	1,299.1



	Year Ended December 31, 2018
	D&S East		D&S West		E&C Cryogenics		E&C FinFans		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	—	$	—	$	79.5	$	182.6	$	—		$	262.1
Liquefied natural gas (LNG) applications	65.3		71.7		15.2		25.4		(2.0		)	175.6
Industrial gas production applications	—		—		13.6		—		—			13.6
HVAC, power and refining applications	—		—		28.6		45.6		—			74.2
Bulk industrial gas applications	126.1		148.5		—		—		(1.0		)	273.6
Packaged gas industrial applications	54.9		153.4		—		—		(3.5		)	204.8
Cryobiological storage	—		81.9		—		—		(1.5		)	80.4
Total	$	246.3	$	455.5	$	136.9	$	253.6	$	(8.0	)	$	1,084.3



	Year Ended December 31, 2017
	D&S East		D&S West		E&C Cryogenics		E&C FinFans		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	—	$	—	$	75.5	$	77.4	$	—		$	152.9
Liquefied natural gas (LNG) applications	80.2		58.0		18.8		10.7		(0.2		)	167.5
Industrial gas production applications	—		—		22.4		—		—			22.4
HVAC, power and refining applications	—		—		8.8		12.0		—			20.8
Bulk industrial gas applications	93.4		129.6		—		—		(0.5		)	222.5
Packaged gas industrial applications	58.7		136.0		—		—		(14.9		)	179.8
Cryobiological storage	—		77.0		—		—		—			77.0
Total	$	232.3	$	400.6	$	125.5	$	100.1	$	(15.6	)	$	842.9

In both 2019 and 2017, no single customer accounted for more than 10% of consolidated sales. Sales to Praxair and Linde, which combined in 2018, exceeded 10% of consolidated sales in 2018 on a combined basis and represented approximately $121.6 or 11.2% of consolidated sales in 2018 (attributable to all of our segments).



	Total Assets as of December 31,
	2019		2018
D&S East	$	528.6	$	496.1
D&S West	414.9		420.3
E&C Cryogenics	430.3		455.0
E&C FinFans ⁽¹⁾	1,028.0		434.2
Corporate	79.6		92.1
Consolidated	$	2,481.4	$	1,897.7


⁽¹⁾	Total assets at December 31, 2019 includes $593.8 related to AXC of which $287.5 and $256.4 represented acquired goodwill and identifiable intangible assets, net, respectively. See Note 13, “Business Combinations,” for further information related to the AXC acquisition.

Geographic Information

Net sales by geographic area are reported by the destination of sales. Net property, plant and equipment by geographic area are reported by country of domicile.



	Sales for the Year Ended December 31,
	2019		2018		2017
United States	$	688.6	$	604.8	$	475.0
Foreign
China	89.7		115.1		101.3
Other foreign countries	520.8		364.4		266.6
Total Foreign	610.5		479.5		367.9
Total	$	1,299.1	$	1,084.3	$	842.9



	Property, plant and equipment, net as of December 31,
	2019		2018
United States	$	224.8	$	176.8
Foreign
Italy	56.4		52.9
China	67.8		77.2
Czech Republic	25.8		21.5
Germany	15.6		12.9
India	13.7		19.8
Other foreign countries	0.5		—
Total Foreign	179.8		184.3
Total	$	404.6	$	361.1