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What changed in CHART INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CHART INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+295 added−438 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in CHART INDUSTRIES INC's 2024 10-K

295 paragraphs added · 438 removed · 236 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

52 edited+11 added−31 removed37 unchanged
Biggest changeOur Repair, Service & Leasing segment provides installation, service, repair, maintenance, and refurbishment of products globally in addition to providing equipment leasing solutions as well as expanded aftermarket products, services and service locations related to the Howden Acquisition. 3 Further information about these segments is located in Note 4, “Segment and Geographic Information,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
Biggest changeFurther information about these segments is located in Note 4, “Segment and Geographic Information,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. 3 Cryo Tank Solutions Cryo Tank Solutions (15.3% of consolidated sales for the year ended December 31, 2024) designs and manufactures and supplies bulk, microbulk and mobile equipment used in the storage, distribution, vaporization, and application of industrial gases and certain hydrocarbons.
On the Investor Relations page of the website, the public may obtain free copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable following the time that they are filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
On the Investor Relations page of the website, the public may obtain free copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable following the time that they are filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
Our cold boxes are highly engineered systems that incorporate brazed aluminum heat exchangers, pressure vessels, and interconnecting piping used to significantly reduce the temperature of gas mixtures to liquefy component gases so that they can be separated and purified for further use in 4 multiple energy, industrial, scientific, and commercial applications.
Our cold boxes are highly engineered systems that incorporate brazed aluminum heat exchangers, pressure vessels, and interconnecting piping used to significantly reduce the temperature of gas mixtures to liquefy component gases so that they can be separated and purified for further use in multiple energy, industrial, scientific, and commercial applications.
Using sophisticated vacuum insulation technology, our cryogenic storage systems are able to store and transport liquefied industrial gases and hydrocarbon gases at temperatures from 0° Fahrenheit to temperatures nearing absolute zero. Industrial gas applications include any end-use of the major elements of air (nitrogen, oxygen, and argon), including manufacturing, welding, electronics and medical.
Using vacuum insulation technology, our cryogenic storage systems are able to store and transport liquefied industrial gases and hydrocarbon gases at temperatures from 0° Fahrenheit to temperatures nearing absolute zero. Industrial gas applications include any end-use of the major elements of air (nitrogen, oxygen, and argon), including manufacturing, welding, electronics and medical.
For information concerning competition within a specific segment of our business, see the descriptions provided under segment captions in this Annual Report on Form 10-K. Marketing We market our products and services in each of our segments throughout the world primarily through direct sales personnel and independent sales representatives as well as distributors.
For information concerning competition within a specific segment of our business, see the descriptions provided under segment captions in this Annual Report on Form 10-K. 6 Marketing We market our products and services in each of our segments throughout the world primarily through direct sales personnel and independent sales representatives as well as distributors.
Primary products used in these applications include brazed aluminum heat exchangers, cold boxes, pressure vessels, Core-in-Kettle® and air cooled heat exchangers. Our brazed aluminum heat exchangers allow producers to obtain purified hydrocarbon by-products, such as methane, ethane, propane, and ethylene, which are commercially marketable for various industrial or residential uses.
Primary products used in these applications include brazed aluminum heat exchangers, cold boxes, pressure vessels, Core-in-Kettle®, air cooled heat exchangers, and fans. Our brazed aluminum heat exchangers allow producers to obtain purified hydrocarbon by-products, such as methane, ethane, propane, and ethylene, which are commercially marketable for various industrial or residential uses.
We also compete with several suppliers owned by the global industrial gas producers and in some cases they are also our customer. From a technology perspective, we compete with compressed gas alternatives or on-site generated gas supply. LNG Applications We supply cryogenic solutions for the storage, distribution, regasification, and use of LNG.
We also compete with several suppliers owned by the global industrial gas producers and in some cases they are also our customer. From a technology perspective, we compete with compressed gas alternatives or on-site generated gas supply. LNG Applications We supply cryogenic solutions for the storage, distribution, and use of LNG.
With multiple service locations in the Americas, Europe and Asia, we not only service Chart products, we also service numerous other manufacturers including many of our competitors. We provide services for storage vessels, VIP, reconfiguration, relocation, trailers, ISO containers, vaporizers, and other gas to liquid equipment.
With multiple service locations in the Americas, Europe and Asia, we not only service Chart products, but we also service numerous other manufacturers including many of our competitors. We provide services for storage vessels, VIP, reconfiguration, relocation, trailers, ISO containers, vaporizers, and other gas to liquid equipment.
Business THE COMPANY Overview Chart Industries, Inc., a Delaware corporation incorporated in 1992 (the “Company,” “Chart,” “we,” “us,” or “our” as used herein refers to Chart Industries, Inc. and our consolidated subsidiaries, unless the context indicates otherwise), is an independent global leader in the design, engineering, and manufacturing of process technologies and equipment for gas and liquid molecule handling for the Nexus of Clean ™ – clean power, clean water, clean food, and clean industrials, regardless of molecule.
Business THE COMPANY Overview Chart Industries, Inc., a Delaware corporation incorporated in 1992 (the “Company,” “Chart,” “we,” “us,” or “our” as used herein refers to Chart Industries, Inc. and our consolidated subsidiaries, unless the context indicates otherwise), is a global leader in the design, engineering, and manufacturing of process technologies and equipment for gas and liquid molecule handling for the Nexus of Clean™ - clean power, clean water, clean food, and clean industrials, regardless of molecule.
Additionally, we have posted our Code of Ethical Business Conduct and Officer Code of Ethics on our website, which are also available free of charge to any shareholder interested in obtaining a copy. References to our website do not constitute incorporation by reference of the information contained on such website, and such information is not part of this Form 10-K.
Additionally, we have posted our Code of Ethical Business Conduct and Officer Code of Ethics on our website, which are also available free of charge to any stockholder interested in obtaining a copy. References to our website do not constitute incorporation by reference of the information contained on such website, and such information is not part of this Form 10-K.
We are party to one collective bargaining agreement with the International Association of Machinists and Aerospace Workers (“IAM”) covering 350 employees at our La Crosse, Wisconsin heat exchanger facility. Effective February 7, 2021, we entered into a five-year agreement with the IAM which expires on February 6, 2026.
We are party to one collective bargaining agreement with the International Association of Machinists and Aerospace Workers (“IAM”) covering 387 employees at our La Crosse, Wisconsin heat exchanger facility. Effective February 7, 2021, we entered into a five-year agreement with the IAM which expires on February 6, 2026.
Our head of global environmental, health and safety (EHS) coordinates all EHS matters with our sites, regularly updates our executive staff on our 8 EHS matters and coordinates with our Global Safety Council, which meets monthly to discuss accidents, injuries, near misses, trends and lessons learned.
Our head of global environmental, health and safety (“EHS”) coordinates all EHS matters with our sites, regularly updates our executive staff on our EHS matters and coordinates with our Global Safety Council, which meets monthly to discuss accidents, injuries, near misses, trends and lessons learned.
The policy encourages employee involvement, a crucial element of a successful safety program, by requiring each site to create a safety committee and safety suggestion program. Employee Engagement, Development and Training Chart strives to recruit, hire, develop and promote a diverse workforce.
The policy encourages employee involvement, a crucial element of a successful safety program, by requiring each site to create a safety committee and safety suggestion program. Employee Engagement, Development and Training Chart strives to recruit, hire, develop and promote a qualified workforce.
We are a leading supplier to EPC firms where we provide equipment and process technology, providing an integrated and optimized approach to the project. These “Concept-to-Reality” process systems incorporate many of Chart’s core products, including brazed aluminum heat exchangers, Core-in-Kettle® heat exchangers, cold boxes, air cooled heat exchangers, pressure vessels, and pipe work.
We are a leading supplier to EPC firms where we provide equipment and process technology, providing an integrated and optimized approach to the project. These process systems incorporate many of Chart’s core products, including brazed aluminum heat exchangers, Core-in-Kettle® heat exchangers, cold boxes, air cooled heat exchangers, fans, pressure vessels, and pipe work.
Customers for our natural gas processing applications include large companies in the hydrocarbon processing industry, as well as engineering, procurement and construction (“EPC”) contractors. Demand for these applications is primarily driven by the growth in the natural gas liquids (or NGLs) separation and other natural gas segments of the hydrocarbon processing industries, including LNG.
Customers for our natural gas processing applications include large companies in the hydrocarbon processing industry, as well as engineering, procurement and construction (“EPC”) contractors. 4 Demand for these applications is primarily driven by the growth in the natural gas liquids (or “NGLs”) separation and other natural gas segments of the hydrocarbon processing industries, including LNG.
In the future, management believes that continuing efforts by petroleum producing countries to better utilize stranded natural gas and associated gases which historically had been flared, present a promising source of demand. We have several competitors for our heat exchangers and fans, including many smaller fabrication-only facilities around the world.
Management believes that continuing efforts by petroleum producing countries to better utilize stranded natural gas and associated gases which historically had been flared, present a promising source of demand. We have several competitors for our air cooled heat exchangers and fans, including many smaller fabrication-only facilities around the world.
We are not anticipating any material capital expenditures in 2024 relating to our existing business that are directly related to regulatory compliance matters.
We are not anticipating any material capital expenditures in 2025 relating to our existing business that are directly related to regulatory compliance matters.
Commodity components of our raw material (aluminum, stainless steel and carbon steel) could experience additional levels of volatility during 2024 and may have a relational impact on raw material pricing. Subject to certain short-term risks related to our suppliers as discussed under Item 1A.
Commodity components of our raw material (aluminum, stainless steel and carbon steel) could be subject to tariffs or experience additional levels of volatility during 2025 and may have a relational impact on raw material pricing. Subject to certain short-term risks related to our suppliers as discussed under Item 1A.
Specialty Products Specialty Products (24.2% of consolidated sales for the year ended December 31, 2023) supplies highly-engineered equipment and process technologies used in specialty end-market applications for hydrogen, LNG, biofuels, carbon capture, food and beverage, aerospace, space exploration, lasers, helium and water treatment, among others. Leveraging our global manufacturing presence, Specialty Products serves customers globally.
Specialty Products Specialty Products (26.8% of consolidated sales for the year ended December 31, 2024) supplies highly-engineered equipment and process technologies used in specialty end-market applications for hydrogen and helium, LNG, biofuels, carbon capture, food and beverage, metals and mining, aerospace, space exploration, lasers, and water treatment, among others. Leveraging our global manufacturing presence, Specialty Products serves customers globally.
Heat Transfer Systems Heat Transfer Systems (26.4% of consolidated sales for the year ended December 31, 2023) facilitates major natural gas, petrochemical processing, petroleum refining, power generation and industrial gas companies in the production or processing of their products. With primary manufacturing capabilities in the United States and Europe, Heat Transfer Systems serves customers globally.
Heat Transfer Systems Heat Transfer Systems (24.9% of consolidated sales for the year ended December 31, 2024) facilitates natural gas, petrochemical processing, petroleum refining, power generation and industrial gas companies in the production or processing of their products. With primary manufacturing capabilities in the United States and Europe, Heat Transfer Systems serves customers globally.
“Risk Factors,” we foresee no acute shortages of any raw materials that would have a material adverse effect on our operations. Human Capital Resources As of January 31, 2024, we had 11,637 employees, including 3,717 domestic employees and 7,920 international employees.
“Risk Factors,” we foresee no acute shortages of any raw materials that would have a material adverse effect on our operations. Human Capital Resources As of January 31, 2025, we had 11,928 employees, including 3,938 domestic employees and 7,990 international employees.
These regulations impose limitations on the discharge of pollutants into the soil, air, and water and establish standards for their handling, management, use, storage, and disposal. 9 We are involved with environmental compliance, investigation, monitoring, and remediation activities at certain of our owned or formerly owned manufacturing facilities and at one owned facility that is leased to a third party.
These regulations impose limitations on the discharge of pollutants into the soil, air, and water and establish standards for their handling, management, use, storage, and disposal. We are involved with environmental compliance, investigation, monitoring, and remediation activities at certain of our owned or formerly owned manufacturing facilities.
We financed the purchase price for the Howden Acquisition with proceeds from borrowings under our senior secured revolving credit facility and term loans due March 2030, common and preferred stock issuance and a private offering of secured notes and unsecured notes.
The acquisition purchase price was $4.4 billion, which we financed with proceeds from borrowings under our senior secured revolving credit facility and term loans due March 2030, common and preferred stock issuances and a private offering of secured notes and unsecured notes.
Industrial Gas Applications We design and manufacture bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization, and application of industrial gases. Our products span the entire spectrum of industrial gas demand from small customers requiring cryogenic packaged gases to large users requiring custom engineered cryogenic storage systems in both mobile and stationary applications.
Our products span the entire spectrum of industrial gas demand from small customers requiring cryogenic packaged gases to large users requiring custom engineered cryogenic storage systems in both mobile and stationary applications.
We have achieved this competitive position by capitalizing on our technical expertise, broad product and service offering, reputation for a high quality global manufacturing footprint, and by focusing on attractive, growth markets. We have an established sales and customer support presence across the globe with manufacturing operations in the United States, Asia, India, Africa and Europe.
We have achieved this competitive position by capitalizing on our technical expertise, broad product and service offering, reputation for high quality global manufacturing, and by focusing on attractive, growth markets. We have an established sales and customer support presence across the globe.
Additionally, we offer a variety of leasing options on certain types of Chart equipment, providing our customers with the flexibility to quickly respond to seasonal or sudden increases in demand with similar flexibility when existing equipment is 6 being repaired or refurbished.
Additionally, we offer a variety of targeted leasing options on certain types of Chart equipment, providing our customers with the flexibility to quickly respond to seasonal or sudden increases in demand with similar flexibility when existing equipment is being repaired or refurbished. Uptime™ is our digital platform that seamlessly integrates data related to equipment performance.
For the years ended December 31, 2023, 2022 and 2021, we generated sales of $3.4 billion, $1.6 billion, and $1.3 billion, respectively. On March 17, 2023, we completed the acquisition of Howden (“Howden”) from affiliates of KPS Capital Partners (the “Acquisition”). The acquisition purchase price was $4.4 billion.
For the years ended December 31, 2024, 2023 and 2022, we generated sales of $4.2 billion, $3.4 billion, and $1.6 billion, respectively. On March 17, 2023, we completed the acquisition of Howden from affiliates of KPS Capital Partners (the “Howden Acquisition”).
Our key human capital measures include employee safety, turnover, absenteeism, recruitment and productivity. We frequently benchmark our compensation practices and benefits programs against those of comparable industries and in the geographic areas where our facilities are located.
In 2024, we did not experience any significant employee-generated work stoppages or disruptions. Our key human capital measures include employee safety, turnover, absenteeism, recruitment and productivity. We frequently benchmark our compensation practices and benefits programs against those of comparable industries and in the geographic areas where our facilities are located.
Our primary customers are large, multinational producers and distributors of hydrocarbon, hydrogen and industrial gases and their end-users. We sell our products and services to more than 7,000 customers worldwide, having developed long-standing relationships with leading companies in the gas production, distribution and processing industries as well as those involved in liquefied natural gas (LNG), chemicals and industrial gases.
We sell our products and services to more than 10,000 customers worldwide, having developed long-standing relationships with leading companies in the gas production, distribution and processing industries as well as those involved in LNG, chemicals and industrial gases.
The Company’s unique product and solution portfolio across stationary and rotating equipment is used in every phase of the liquid gas supply chain, including engineering, service and repair from installation to preventive maintenance and digital monitoring. Chart is a leading provider of technology, equipment and services related to liquefied natural gas, hydrogen, biogas and carbon capture among other applications.
The Company’s unique product and solution portfolio across stationary and rotating equipment is used in every phase of the liquid gas supply chain, including engineering, service and repair and from installation to preventive maintenance and digital monitoring.
Howden, headquartered in the United Kingdom, is a leading global provider of mission critical air and gas handling products providing service and support to customers around the world in highly diversified end markets and geographies.
Howden is a leading global provider of mission critical air and gas handling products providing service and support to customers around the world in highly diversified end markets and geographies. The combination of Chart and Howden is complementary and furthers our global leadership position in highly engineered process technologies and products serving the Nexus of Clean™.
Environmental Matters We monitor and review our procedures and policies for compliance with environmental laws and regulations. Our management is familiar with these regulations and supports an ongoing program to maintain our adherence to required standards.
Our management is familiar with these regulations and supports an ongoing program to maintain our adherence to required standards.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Customers We sell our products primarily to gas producers, distributors, and end-users across energy, industrial, power, HVAC and refining applications in countries throughout the world. We capture clean power, clean water, clean food and clean industrials as our unique offering for the Nexus of Clean TM .
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Customers We sell our products primarily to gas producers, distributors, and end-users across energy, industrial, power, HVAC and refining applications in countries throughout the world. Sales to our top ten customers accounted for 26% , 25%, and 38% of consolidated sales in 2024, 2023 and 2022, respectively.
Segments, Applications and Products Our reportable segments, which are also our operating segments, are currently as follows: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products and Repair, Service & Leasing.
Segments, Applications and Products Our reportable segments, which are also our operating segments, are as follows: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products and Repair, Service & Leasing. We go to market through One Chart global commercial, engineering, products, operations, and aftermarket organizations.
Demand for LNG for fuel applications is also driven by diesel displacement and continuing efforts by petroleum producing countries to better utilize stranded natural gas and previously flared gases.
Demand for LNG applications is primarily driven by increased use and global trade in natural gas (transported as LNG) since natural gas offers significant cost advantages over other energy sources. Demand for LNG for fuel applications is also driven by diesel displacement and continuing efforts by petroleum producing countries to better utilize stranded natural gas and previously flared gases.
Our Heat Transfer Systems segment, with principal operations in the United States and Europe, also serves geographic regions globally, supplying mission critical engineered equipment and systems used in the separation, liquefaction, and purification of hydrocarbon and industrial gases that span gas-to-liquid applications.
Our Heat Transfer Systems segment supplies mission critical engineered equipment and systems used in the recovery, separation, liquefaction, and purification of hydrocarbons, LNG and industrial gases that span gas-to-liquid applications.
Competition is based primarily on performance and the ability to provide the design, engineering, and manufacturing capabilities required in a timely and cost-efficient manner. Contracts are usually awarded on a competitive bid basis. Quality, technical expertise, and timeliness of delivery are the principal competitive factors within the industries we serve. Price and terms of sale are also important competitive factors.
Competition We believe we can compete effectively around the world and that we are a leading competitor in the industries we serve. Competition is based primarily on performance and the ability to provide the design, engineering, and manufacturing capabilities required in a timely and cost-efficient manner. Contracts are usually awarded on a competitive bid basis.
Chart prioritizes several measures and objectives in managing its human capital assets, including, among others, employee safety and wellness, talent acquisition and retention, employee engagement, development, and training, diversity and inclusion, and compensation and pay equity. In 2023, we did not experience any employee-generated work stoppages or disruptions.
Therefore, investing, developing, and maintaining human capital is critical to our success. Chart prioritizes several measures and objectives in managing its human capital assets, including, among others, employee safety and wellness, talent acquisition and retention, employee engagement, development, 7 and training, diversity and inclusion, and compensation and pay equity.
All reports of inappropriate behavior are promptly investigated with appropriate action taken to stop such behavior. Chart investigates alleged incidents and communicates the resolution to the person who reported it. We prohibit retaliation and threats of retaliation against anyone who reports a possible violation or misconduct in good faith and protect employees with our Whistleblower Policy.
All reports of inappropriate behavior are promptly investigated with action taken to stop such behavior. Chart investigates alleged incidents and communicates the resolution to the person who reported it.
Cryo Tank Solutions Cryo Tank Solutions (19.0% of consolidated sales for the year ended December 31, 2023) designs and manufactures cryogenic solutions for the storage and delivery of cryogenic liquids used in industrial gas and LNG applications. With operations in the United States, Latin America, Europe and Asia, our Cryo Tank Solutions segment serves customers globally.
With operations in the United States, Latin America, Europe and Asia, our Cryo Tank Solutions segment serves customers globally. Industrial Gas Applications We design and manufacture bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization, and application of industrial gases.
Demand for LNG applications is driven by diesel displacement initiatives, environmental and energy security considerations, and the associated cost of equipment. Our competitors tend to be regionally focused or product-specific, while we supply a broad range of solutions required by LNG applications.
Additionally, we supply large vacuum insulated storage tanks as equipment for purchasers of standard liquefaction plants sold by our Heat Transfer Systems segment. Demand for LNG applications is driven by the increasing global need for energy. Our competitors tend to be regionally focused or product-specific, while we supply a broad range of solutions required by LNG applications.
Engineering and Product Development Our engineering and product development activities are focused primarily on developing new and improved technologies, solutions and equipment for the users of molecules, hydrocarbons and industrial gases across all industries served. Our engineering, technical, and commercial employees actively assist customers in specifying their needs and in determining appropriate products to meet those needs.
Our competitors tend to be regionally focused while we supply a broader array of services on a worldwide basis. Engineering and Product Development Our engineering and product development activities are focused primarily on developing new and improved technologies, solutions and equipment for the users of molecules, hydrocarbons and industrial gases across all industries served.
Chart is committed to excellence in environmental, social and corporate governance (“ESG”) issues both for its company as well as its customers. With 64 global manufacturing locations and over 50 service centers from the United States to Asia, Australia, India, Europe and South America, we maintain accountability and transparency to our team members, suppliers, customers and communities.
With 64 global manufacturing locations and over 50 service centers from the United States to Asia, Australia, India, Europe and South America, we maintain accountability and transparency to our team members, suppliers, customers and communities. Our primary customers are large, multinational producers and distributors of hydrocarbon, hydrogen and industrial gases and their end-users.
Repair, Service & Leasing Our Repair, Service & Leasing segment (30.4% of consolidated sales for the year ended December 31, 2023) provides installation, service, repair, maintenance, and refurbishment of our products globally in addition to providing equipment leasing solutions. With primary operations in the United States and Europe, our Repair, Service & Leasing segment serves customers globally.
While we have competitors in a portion of these applications, many of our specialty product markets have limited competition. 5 Repair, Service & Leasing Our Repair, Service & Leasing segment (33.0% of consolidated sales for the year ended December 31, 2024) provides installation, retrofitting & refurbishment, spares, service, repair and maintenance of our products globally in addition to providing equipment leasing solutions to customers globally.
When the data is analyzed, it provides a unique foundation for maintaining and enhancing operational excellence. Demand for services provided by this segment is being driven by our substantial existing and growing install base, exceptional reputation for high-quality service, breadth of services offered and expanded geographic footprint.
Demand for services provided by this segment is being driven by our substantial existing and growing install base, exceptional reputation for high-quality service, breadth of services offered and expanded geographic footprint. Additionally, this segment is benefiting from new long-term agreements being executed that incorporate parts, repair and aftermarket service components not included in prior agreements.
Demand for HVAC is driven by growing construction activities and demand for energy efficient devices, and there is also positive impact from growing industrial production. Refining demand continues to be driven by United States shale production, benefiting from low cost shale oil, natural gas liquids and gas resulting in high utilization and increased investment.
Refining demand continues to be driven by United States shale production, benefiting from low cost shale oil, natural gas liquids and gas resulting in high utilization and increased investment. Our air cooled heat exchangers are used in each phase of the refining process to condense and cool gases and fluids.
Our Cryo Tank Solutions segment, which has principal operations in the United States, Europe and Asia, serves geographic regions around the globe, supplying bulk, microbulk and mobile equipment used in the storage, distribution, vaporization, and application of industrial gases and certain hydrocarbons.
Further, our engineered solutions are utilized across a molecule’s value chain from production to distribution and storage to consumption. Our Cryo Tank Solutions segment supplies bulk, microbulk and mobile equipment used in the storage, distribution, vaporization, and application of industrial gases and certain hydrocarbons.
Portions of our engineering expenditures typically are charged to customers, either as separate items or as components of product cost. Competition We believe we can compete effectively around the world and that we are a leading competitor in the industries we serve.
Our engineering, technical, and commercial employees actively assist customers in specifying their needs and in determining appropriate products to meet those needs. Portions of our engineering expenditures typically are charged to customers, either as separate items or as components of product cost.
We perform plant services on equipment, including brazed aluminum heat exchangers, cold boxes, etc. We also install, service, maintain and refurbish bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization, and application of industrial gases.
Aftermarket services include extended warranties, plant start-up, parts, 24/7 support, monitoring and process optimization, as well as repair, maintenance, spares, and upgrades. We install, service, and maintain compressors and other rotating equipment, as well as refurbish bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization, and application of industrial gases.
Our expanded solution set effectively addresses a wide range of organic and inorganic contaminants including arsenic and per- and polyfluorinated alkylated substances (PFAS), often referred to as “forever chemicals.” Other equipment and technology offered through Specialty Products have applications in carbon capture and space industries.
Our solution set can also address a wide range of organic and inorganic contaminants including arsenic and per- and polyfluorinated alkylated substances (“PFAS”), often referred to as “forever chemicals.” Demand for many of our specialty applications are driven by an increasing focus on energy security, energy access, and energy/grid stability in addition to customer demand and government support for decarbonization.
We also manufacture various types of heat exchangers for hydrogen applications including brazed aluminum, air cooled and shell & tube varieties. Howden Ventsim™ DESIGN is the world's bestselling mine ventilation software, used and trusted by over 2,500 mines, universities, consultants, government and research organizations.
We also manufacture various types of compressors and heat exchangers for hydrogen applications including brazed aluminum, air cooled, and shell & tube varieties in addition to mobile equipment and fueling stations.
To support the products and solutions we sell, our Repair, Service & Leasing segment offers services through the entire lifecycle of our products, which is unique and unparalleled in the markets we serve.
We have made a number of organic and inorganic investments over the years to expand our global footprint to include over 50 service centers. To support the products and solutions we sell, our Repair, Service & Leasing segment offers services through the entire lifecycle of our products, focusing on the optimized performance and lifespan of Chart proprietary equipment.
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Our well-established relationships extend to truck manufacturers in addition to those in other clean energy industries such as biofuels, hydrogen, water and carbon capture. Our customers include: Linde, Air Liquide, Air Products, ExxonMobil, Baker Hughes, Wison, Kathairos, Chick-fil-A, Samsung, United Launch Alliance, and Blue Origin, some of whom have been purchasing our products for over 30 years.
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Chart is a leading provider of technology, equipment and services related to liquefied natural gas (“LNG”), hydrogen, biogas and CO2 capture among other applications. Chart is committed to excellence in environmental, social and corporate governance (“ESG”) issues both for its company as well as its customers.
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The combination of Chart and Howden is complementary and furthers our global leadership position in highly engineered process technologies and products serving the Nexus of Clean TM – clean power, clean water, clean food and clean industrials.
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Our Specialty Products segment supplies products used in specialty end-market applications including engineered liquefaction, storage and compression equipment for hydrogen and helium, LNG for over-the-highway vehicles, biofuels, carbon capture, food and beverage, aerospace, nuclear, marine, metals and mining, lasers, gas by rail, energy recovery, infrastructure and water treatment end markets.
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Operating globally, our Specialty Products segment supplies products used in specialty end-market applications including hydrogen, LNG, biofuels, carbon capture, food and beverage, aerospace, lasers and water treatment, among others. Our Heat Transfer Systems, Specialty Products and Cryo Tank Solutions segments also include products from the Howden Acquisition such as compressors, blowers and fans, rotary heaters and steam turbines.
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Our Repair, Service & Leasing segment provides installation, retrofitting and refurbishment, services and repairs, preventative and contractual maintenance, and digital solutions globally in addition to providing targeted equipment leasing solutions.
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We sell LNG applications around the world from various Eastern and Western Hemisphere facilities to numerous end-users, energy companies, and gas distributors. Additionally, we supply large vacuum insulated storage tanks as equipment for purchasers of standard liquefaction plants sold by our Heat Transfer Systems segment.
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HVAC, Power and Refining Applications Our air cooled heat exchangers and axial cooling fans are used in heating, ventilation and air conditioning (“HVAC”), data center, power and refining applications. Demand for HVAC is driven by growing construction activities and demand for energy efficient devices, and there is also positive impact from growing industrial production.
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Demand for LNG applications is primarily driven by increased use and global trade in natural gas (transported as LNG) since natural gas offers significant cost and environmental advantages over other fossil fuels.
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We deliver diverse hydrogen solutions which serve both gas and liquid hydrogen across the entire value chain including production (liquefaction), transportation, storage and usage. Further, we have approximately 160 years of experience working with hydrogen-related equipment, and our installed base can be found across the globe.
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We have several competitors for these applications, including leading industrial gas companies, other brazed aluminum heat exchanger manufacturers, and other equipment fabricators to whom we also act as a supplier of equipment, including heat exchangers and cold boxes. HVAC, Power and Refining Applications Our air cooled heat exchangers and axial cooling fans are used in HVAC, power and refining applications.
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In carbon capture, utilization, and storage (“CCUS”) markets we provide full solutions, equipment, aftermarket services, and software for applications ranging from cryogenic carbon capture (“CCC”) to direct air capture (“DAC”). These solutions target a number of end markets including brewing, winery, dry ice capture, biogas, and industrial.
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Our air cooled heat exchangers are used in each phase of the refining process to condense and cool gases and fluids. Worldwide power use is projected to grow 50% through 2050. This growth is focused in regions where strong economic growth is driving demand, particularly in Asia.
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Our technology can be used across a variety of applications since we can capture from both high and low purity carbon streams. Our water treatment technology is also reflected in the Specialty Products segment. Serving both municipal and industrial end markets globally, our water treatment solutions serve both clean and wastewater applications.
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We have made a number of acquisitions over the past three years to capitalize on clean power, clean industrials, clean water and clean food, beverages and agriculture market opportunities within this segment. These include the acquisitions of Howden, BlueInGreen, LLC, Sustainable Energy Solutions, Inc., Cryogenic Gas Technologies, Inc., L.A. Turbine, AdEdge Holdings, LLC and Earthly Labs Inc.
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Additionally, clean water scarcity, increasing demand for energy from applications such as artificial intelligence and data centers, population growth, and aging infrastructure, all drive demand for our specialty applications.
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We supply a wide range of solutions used in the production, storage, distribution and end-use of hydrogen, including liquefaction technology and equipment and compression equipment. We also provide highly-specialized mobility and transportation equipment for use with both hydrogen and LNG, including onboard vehicle tanks and fueling stations.
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The system combines active inputs, such as temperature, pressure and vibration, with reference parameters from manuals, specifications and maintenance reports. When the data is analyzed, it provides a unique foundation for maintaining and enhancing operational excellence. Ventsim™ DESIGN is our proprietary mine ventilation software that is used and trusted by over 2,500 mines, universities, consultants, government and research organizations.
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More specifically, our horizontal LNG vehicle tanks are widely used onboard heavy-duty trucks and buses while our recently-released liquid hydrogen vehicle tank enjoys many of the same characteristics. Chart also manufactures specialized cryogenic railcars used to transport not only LNG, but a number of other gaseous and liquid molecules.
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Quality, technical expertise, and timeliness of delivery are the principal competitive factors within the industries we serve. Price and terms of sale are also important competitive factors.
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Additionally, we design and manufacture nitrogen dosing products and other equipment used in packaging as well as the food and beverage industry. These applications include processing, preservation and beverage carbonation. 5 Our water treatment technology is also offered through the Specialty Products segment.
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We prohibit retaliation and threats of retaliation against anyone who reports a possible violation or misconduct in good faith and protect employees with our Whistleblower Policy. 8 Environmental Matters We monitor and review our procedures and policies for compliance with environmental laws and regulations.
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Serving both municipal and industrial end markets globally, our water treatment process technology utilizes Chart’s cryogenic storage and vaporization equipment to efficiently deliver dissolved oxygen, carbon dioxide and ozone into water. Our technology is used for oxygenation, pH adjustment, oxidation and odor control with modular and mobile solution options.
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Additional water treatment capabilities include but are not limited to adsorption, filtration, ion exchange, reverse osmosis and flow reversal processes, to name a few.
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We also offer cryogenic components, including turboexpanders, vacuum insulated pipe (“VIP”), specialty liquid nitrogen, or LN2, end-use equipment and cryogenic flow meters. We design and manufacture solutions for the liquefaction, storage, distribution, regasification and use of hydrogen as both a liquid and a gas. We have over 57 years of experience in manufacturing hydrogen-related equipment.
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There are a number of commercial uses for hydrogen including applications in the chemical, refining and space industries. More recently, hydrogen is increasingly being used as an alternative fuel for the power transportation sectors, with both onshore and marine applications.
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Given the global movement towards a lower carbon footprint, there are also a number of other potential uses for hydrogen on the horizon including power generation. To help enable this transition, we supply ISO containers and transport trailers for both gaseous and liquid hydrogen, in addition to fuel stations and other fueling solutions.
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Ventsim™ CONTROL utilizes intelligent software connected to hardware devices to remotely monitor, control and automate airflow, heating and cooling to deliver safer, more productive and lower cost ventilation for mines.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+4 added−22 removed77 unchanged
Biggest changeSuch a strategy involves the potential risks inherent in assessing the value, strengths, weaknesses, contingent or other liabilities, and potential profitability of acquisition candidates and in integrating the operations of acquired companies. In addition, any acquisitions of businesses with foreign operations or sales may increase our exposure to risks inherent in doing business outside the United States.
Biggest changeAn important component of our recent business strategy has been the acquisition of businesses that complement our existing products and services. Such a strategy involves the potential risks inherent in assessing the value, strengths, weaknesses, contingent or other liabilities, and potential profitability of acquisition candidates and in integrating the operations of acquired companies.
Such restrictions affect or will affect, and in various circumstances limit or prohibit, among other things, our ability and the ability of our subsidiaries to: • incur or guarantee additional indebtedness; • create liens; • pay dividends based on our leverage ratio and make other distributions in respect of our capital stock; • redeem or buy back our capital stock based on our leverage ratio; • make certain investments or certain other restricted payments; • enter into a new line of business; • sell or transfer certain kinds of assets; • enter into certain types of transactions with affiliates; and • effect mergers or consolidations.
Such restrictions affect or will affect, and in various circumstances limit or prohibit, among other things, our ability and the ability of our subsidiaries to: • incur or guarantee additional indebtedness; • create liens; • pay dividends based on our leverage ratio and make other distributions in respect of our capital stock; • redeem or buy back our capital stock based on our leverage ratio; • make certain investments or certain other restricted payments; 17 • enter into a new line of business; • sell or transfer certain kinds of assets; • enter into certain types of transactions with affiliates; and • effect mergers or consolidations.
Dividends will accumulate from the initial issue date and, to the extent that we are legally permitted to pay dividends and our board of directors, or an authorized committee thereof, declares a dividend payable with respect to the Mandatory Convertible Preferred Stock, we will pay such dividends in cash, or subject to certain limitations, by delivery of shares of our common stock or through any combination of cash and shares of our common stock, as determined by our board of directors in its sole discretion.
Dividends will accumulate from the initial issue date and, to the extent that we are legally permitted to pay dividends and our board of directors, or an authorized committee thereof, declares a dividend payable with respect to the Mandatory Convertible Preferred Stock, we will pay such dividends in cash, or 16 subject to certain limitations, by delivery of shares of our common stock or through any combination of cash and shares of our common stock, as determined by our board of directors in its sole discretion.
We are subject to numerous environmental, health and safety laws and regulations that impose various environmental controls on us or otherwise relate to environmental protection and various health and safety matters, including the discharge of 15 pollutants in the air and water, the handling, use, treatment, storage and clean-up of solid and hazardous materials and wastes, the investigation and remediation of soil and groundwater affected by hazardous substances and the requirement to obtain and maintain permits and licenses.
We are subject to numerous environmental, health and safety laws and regulations that impose various environmental controls on us or otherwise relate to environmental protection and various health and safety matters, including the discharge of pollutants in the air and water, the handling, use, treatment, storage and clean-up of solid and hazardous materials and wastes, the investigation and remediation of soil and groundwater affected by hazardous substances and the requirement to obtain and maintain permits and licenses.
We will continue to monitor developments and impacts to our provision for income taxes. Our effective tax rate could also be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses arising from share-based compensation, the valuation of deferred 17 tax assets and liabilities and changes in accounting principles.
We will continue to monitor developments and impacts to our provision for income taxes. Our effective tax rate could also be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses arising from share-based compensation, the valuation of deferred tax assets and liabilities and changes in accounting principles.
Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding-up of our affairs, no distribution of our assets may be made to holders of our common stock until we have paid to holders of the Mandatory Convertible Preferred Stock a liquidation preference equal to $1,000 per share plus accumulated and unpaid dividends. Item 1B.
Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding-up of our affairs, 18 no distribution of our assets may be made to holders of our common stock until we have paid to holders of the Mandatory Convertible Preferred Stock a liquidation preference equal to $1,000 per share plus accumulated and unpaid dividends. Item 1B.
Fluctuations in currency exchange rates have had and will continue to have an impact on our financial condition, operating results, and cash flow. While we monitor and manage our foreign currency exposure with use of derivative financial instruments to mitigate these exposures, fluctuations in currency exchange rates may materially impact our financial and operational results.
Fluctuations in currency exchange rates have had and will continue to have an impact on our financial condition, operating 12 results, and cash flow. While we monitor and manage our foreign currency exposure with use of derivative financial instruments to mitigate these exposures, fluctuations in currency exchange rates may materially impact our financial and operational results.
There can be no assurances that these acquisitions, including Howden, will be successful or that we will realize the expected benefits currently anticipated. For example, we may not be able to maintain the levels of revenue, earnings or operating efficiency that we and Howden have achieved or might have achieved separately.
There can be no assurances that these acquisitions, including Howden, will realize the expected benefits currently anticipated. For example, we may not be able to maintain the levels of revenue, earnings or operating efficiency that we and Howden have achieved or might have achieved separately.
Moreover, even if the applications are approved, third parties may seek to oppose or otherwise challenge them. A failure to obtain registrations in the United States or elsewhere could limit our ability to protect our trademarks and technologies and could impede our business.
Moreover, even if the applications are approved, third parties may seek to oppose or otherwise challenge them. A failure to obtain registrations in the United States or elsewhere could limit our ability to protect our trademarks and 13 technologies and could impede our business.
Our internal policies mandate compliance with these anti-corruption laws. We operate in many parts of the world that have 16 experienced corruption to some degree, and in certain circumstances, strict compliance with anti-corruption laws may conflict with local customs and practices.
Our internal policies mandate compliance with these anti-corruption laws. We operate in many parts of the world that have experienced corruption to some degree, and in certain circumstances, strict compliance with anti-corruption laws may conflict with local customs and practices.
“Management’s Discussion and Analysis of Financial 18 Condition and Results of Operations — Liquidity and Capital Resources — Debt Instruments and Related Covenants.” If new debt is added to our current debt levels, the related risks that we now face could intensify.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Debt Instruments and Related Covenants.” If new debt is added to our current debt levels, the related risks that we now face could intensify.
While our sales to particular customers fluctuate from period to period, sales to large customers, including the global producers, distributors and users of energy and industrial gases and their suppliers, tend to be a consistently large source of our sales.
While our sales to particular customers fluctuate from period to 9 period, sales to large customers, including the global producers, distributors and users of energy and industrial gases and their suppliers, tend to be a consistently large source of our sales.
Severe weather may cause production or delivery delays as a result of the physical damage to the facilities, the unavailability of employees and temporary workers, the shortage of or delay in receiving certain raw materials or manufacturing supplies and the diminished availability or delay of transportation for customer shipments, any of which may have an adverse effect on our sales and profitability.
Severe weather and related changes may cause production or delivery delays as a result of the physical damage to the facilities, the unavailability of employees and temporary workers, the shortage of or delay in receiving certain raw materials or manufacturing supplies and the diminished availability or delay of transportation for customer shipments, any of which may have an adverse effect on our sales and profitability.
Cancellations of purchase orders, indications that the customers will not perform or reductions of product quantities in existing contracts could substantially and materially reduce our backlog and, consequently, our future sales. Our failure to replace canceled orders could negatively impact our sales and results of operations. We did not have any significant cancellations in 2023, 2022 and 2021.
Cancellations of purchase orders, indications that the customers will not perform or reductions of product quantities in existing contracts could substantially and materially reduce our backlog and, consequently, our future sales. Our failure to replace canceled orders could negatively impact our sales and results of operations. We did not have any significant cancellations in 2024, 2023 or 2022.
If our vendors for these m aterials and components are unable to meet our requirements, fail to make shipments in a timely manner, or ship defective materials or components, we could experience a shortage or delay in supply or fail to meet our contractual requirements, which would adversely affect our results of operations and negatively impact our cash flow and profitability.
If our vendors for these materials and components are unable to meet our requirements, fail to make shipments in a timely manner, or ship defective materials or components, we could experience a shortage or delay in supply or fail to meet our contractual requirements, which would adversely affect our results of operations and negatively impact our cash flow and profitability.
A significant public health crisis could cause disruptions to our operations similar to the effects of the Covid-19 pandemic. It affected our business due to the impact on the global economy, including its effects on transportation networks, raw material availability, production efforts and customer demand for our products.
A significant public health crisis could cause disruptions to our operations similar to the effects of the Covid-19 pandemic. Covid-19 affected our business primarily due to the impact on the global economy, including its effects on transportation networks, raw material availability, production efforts and customer demand for our products.
However, there can be no assurance that we will have sufficient funds at the time of the fundamental change or change in control to purchase all of the convertible notes, secured notes or unsecured notes delivered for purchase, and we may not be able to arrange necessary financing on acceptable terms, if at all.
However, there can be no assurance that we will have sufficient funds at the time of the change in control to purchase all of the secured notes or unsecured notes delivered for purchase, and we may not be able to arrange necessary financing on acceptable terms, if at all.
Our future results could be harmed by a variety of factors, including: • changes in foreign currency exchange rates; • exchange controls and currency restrictions; • changes in a specific country’s or region’s political, social or economic conditions, particularly in emerging markets; 13 • civil unrest, the threat of or actual military conflict between nations, other turmoil or outbreak of disease or illness, such as Covid-19, in any of the countries in which we sell our products or in which we or our suppliers operate; • tariffs, other trade protection measures, as discussed in more detail below, and import or export licensing requirements; • potential adverse changes in trade agreements between the United States and foreign countries, including the recently enacted United States-Mexico-Canada Agreement (USMCA), among the United States, Canada and Mexico; • potentially negative consequences from changes in U.S. and international tax laws; • difficulty in staffing and managing geographically widespread operations; • differing labor regulations; • requirements relating to withholding taxes on remittances and other payments by subsidiaries; • different regulatory regimes controlling the protection of our intellectual property; • restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions; • restrictions on our ability to repatriate dividends from our foreign subsidiaries; • difficulty in enforcement of contractual obligations under non-U.S. law; • transportation delays or interruptions; • changes in regulatory requirements; and • the burden of complying with multiple and potentially conflicting laws.
Our future results could be harmed by a variety of factors, including: • changes in foreign currency exchange rates; • exchange controls and currency restrictions; • changes in a specific country’s or region’s political, social or economic conditions, particularly in emerging markets; • civil unrest, the threat of or actual military conflict between nations, other turmoil or outbreak of disease or illness, such as Covid-19, in any of the countries in which we sell our products or in which we or our suppliers operate; • tariffs, other trade protection measures, as discussed in more detail above, and import or export licensing requirements; • potential adverse changes in trade agreements between the United States and foreign countries, including the United States-Mexico-Canada Agreement (“USMCA”), among the United States, Canada and Mexico; • potentially negative consequences from changes in U.S. and international tax laws; • difficulty in staffing and managing geographically widespread operations; • differing labor regulations; • requirements relating to withholding taxes on remittances and other payments by subsidiaries; • different regulatory regimes controlling the protection of our intellectual property; • restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions; • restrictions on our ability to repatriate dividends from our foreign subsidiaries; • difficulty in enforcement of contractual obligations under non-U.S. law; • transportation delays or interruptions; • changes in regulatory requirements; and • the burden of complying with multiple and potentially conflicting laws.
Further, the protection of our intellectual property may require expensive investment in protracted litigation and the investment of substantial management time and there is no assurance we ultimately would prevail or that a successful outcome would lead to a n economic benefit that is greater than the investment in the litigation.
Further, the protection of our intellectual property may require expensive investment in protracted litigation and the investment of substantial management time, and there is no assurance we ultimately would prevail or that a successful outcome would lead to an economic benefit that is greater than the investment in the litigation.
In addition, unless earlier converted, each share of the Mandatory Convertible Preferred Stock will automatically convert on or around December 15, 2025 into between 7.0520 and 8.4620 shares of our common stock, subject to customary anti-dilution adjustments.
Unless earlier converted, each share of the Mandatory Convertible Preferred Stock will automatically convert on or around December 15, 2025 into between 7.0520 and 8.4620 shares of our common stock, subject to customary anti-dilution adjustments.
Gulf Coast, are located in geographic regions and physical locations that are susceptible to physical damage and longer-term economic disruption from severe weather. We also could make significant future capital expenditures in hurricane-susceptible or other severe weather locations from time to time.
Gulf Coast, are located in geographic regions and physical locations that are susceptible to physical damage and longer-term economic disruption from severe weather and changes in weather patterns. We also could make significant future capital expenditures in hurricane-susceptible or other severe weather locations from time to time.
In addition, upon the occurrence of certain kinds of change of control, we will be required to offer to repurchase all of the outstanding secured notes and unsecured notes at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.
Upon the occurrence of certain kinds of change of control, we will be required to offer to repurchase all of the outstanding secured notes and unsecured notes at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.
Our backlog can be significantly affected by the timing of orders for large projects, and the amount of our backlog at December 31, 2023 is not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as sales.
Our backlog can be significantly affected by the timing of orders for large projects, and the amount of our backlog at December 31, 2024 is not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as sales.
If the performance of the assets in our Chart pension plan, the Howden pension plans or the multi-employer plan does not meet expectations or if other actuarial assumptions are modified, our required pension contributions for future years could be higher than we expect, which may negatively impact our results of operations, cash flows and financial condition.
If the performance of the assets in our defined benefit plans or the multi-employer plan does not meet expectations or if other actuarial assumptions are modified, our required pension contributions for future years could be higher than we expect, which may negatively impact our results of operations, cash flows and financial condition.
The materials and components we use to manufacture our products are sometimes custom made and may be avail able only from a few suppliers, and the lead times required to obtain these materials and components can often be significant.
The materials and components we use to manufacture our products are sometimes custom made and may be available only from a few suppliers, and the lead times required to obtain these materials and components can often be significant.
If we were unable to repay or otherwise refinance this indebtedness when due, our lenders could sell the collateral securing the senior secured revolving credit facility due October 2026 and the secured notes, which constitutes substantially all of our domestic wholly-owned subsidiaries’ assets.
If we were unable to repay or otherwise refinance this indebtedness when due, our lenders could sell the collateral securing the senior secured revolving credit facility due April 2029 and the secured notes, which constitutes substantially all of our domestic wholly-owned subsidiaries’ assets.
The senior secured revolving credit facility due October 2026 also requires us to achieve certain financial and operating results and maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control.
The senior secured revolving credit facility due April 2029 also requires us to achieve certain financial and operating results and maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control.
We may be required to make expenditures in order to comply with environmental, health and safety laws and climate change regulations, or incur additional liabilities under these laws and regulations.
We may be required to make expenditures in order to comply with environmental, health and safety laws and emissions regulations, or incur additional liabilities under these laws and regulations.
Although our Chart pension plan was fully funded as of December 31, 2023, the performance of assets in the plan and other related factors beyond our control have the potential to adversely affect the funding status of our pension plan in the future.
Although our Chart defined benefit pension plan was fully funded as of December 31, 2024, the performance of assets in the plan and other related factors beyond our control have the potential to adversely affect the funding status of our pension plan in the future.
Stricter environmental, safety and health laws, regulations or enforcement policies could result in substantial costs and liabilities to us and could subject us to more rigorous scrutiny. Consequently, compliance with these laws could result in significant expenditures, as well as other costs and liabilities that could decrease our liquidity and profitability and increase our liabilities.
Stricter environmental, emissions of greenhouse gases, safety and health laws, regulations or enforcement policies could result in substantial costs and liabilities to us and could subject us to more rigorous scrutiny. Consequently, compliance with these laws 14 could result in significant expenditures, as well as other costs and liabilities that could decrease our liquidity and profitability and increase our liabilities.
If we are unable to successfully control our costs and efficiently manage our operations, it may lead to increased costs and reduced profitability. We have implemented cost savings initiatives to align our business with current and expected economic conditions.
If we are unable to successfully control our costs and efficiently manage our operations, it may lead to increased costs and reduced profitability. We have implemented a program of continuous cost savings initiatives to align our business with the current and expected economic conditions.
Risks Related to Our Leverage Our leverage and future debt service obligations could adversely affect our business, financial condition, and results of operations and our ability to meet our payment obligations under our debt. We are leveraged and have future debt service obligations. As of December 31, 2023, our total indebtedness was $3,963.9 million.
Risks Related to Our Leverage Our leverage and future debt service obligations could adversely affect our business, financial condition, and results of operations and our ability to meet our payment obligations under our debt. We are leveraged and have future debt service obligations. As of December 31, 2024, our total indebtedness was $3,757.5 million.
We may not succeed in developing and implementing policies and strategies to counter the foregoing factors effectively in each location where we do business and the foregoing factors may cause a reduction in our sales, profitability or cash flows, or cause an increase in our liabilities. Data privacy and data security considerations could impact our business.
We may not succeed in developing and implementing policies and strategies to counter the foregoing factors effectively in each location where we do business, and the foregoing factors may cause a reduction in our sales, profitability or cash flows, or cause an increase in our liabilities.
Demand for our products depends to a significant extent upon the level of capital and maintenance expenditures by many of our customers and end-users, in particular those customers in the global hydrocarbon and industrial gas markets. These customers’ expenditures historically have been cyclical in nature and vulnerable to economic downturns.
Demand for our products, particularly in our new equipment business, depends to an extent upon the level of capital and maintenance expenditures by many of our customers and end-users, in particular those customers in the global hydrocarbon and industrial gas markets. These customers’ expenditures historically have been cyclical in nature and vulnerable to economic downturns.
Changes in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories or countries where we currently sell our products or conduct our business, as well as any negative sentiment toward the United States as a result of such changes, could adversely affect our business.
Changes in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories or countries where we currently sell our products or conduct our business, as well as any negative sentiment toward the United States as a result of such changes, could adversely affect our business. 10 U.S. government policy changes and proposals may result in greater restrictions and economic disincentives on international trade.
Even after a public health crisis subsides, there may be long-term effects on our business practices and customers in economies in which we operate that could severely disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows and financial condition.
Even after a public health crisis subsides, there may be long-term effects on our business practices and customers in economies in which we operate that could severely disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows and financial condition. We are subject to regulations governing the export of our products.
Among other risks associated with multi-employer plans, contributions and unfunded obligations of the multi-employer plan are shared by the plan participants and we may inherit unfunded obligations if other plan participants withdraw from the plan or cease to participate.
We are also a participant in a multi-employer plan, which is underfunded. Among other risks associated with multi-employer plans, contributions and unfunded obligations of the multi-employer plan are shared by the plan participants and we may inherit unfunded obligations if other plan participants withdraw from the plan or cease to participate.
Our senior secured revolving credit facility provides commitments of up to $1,000.0 million, approximately $625.2 million of which would have been available for future borrowings (after giving effect to letters of credit and bank guarantees outstanding) as of December 31, 2023. See Item 7.
Our senior secured revolving credit facility provides commitments of up to $1,250.0 million, $767.5 million of which would have been available for future borrowings (after giving effect to letters of credit and bank guarantees outstanding) as of December 31, 2024. See Item 7.
The loss of, or significant reduction or delay in, purchases by our largest customers could reduce our sales and profitability. While we sell to more than 7,000 customers, sales to our top ten customers accounted for 25%, 38%, and 39% of consolidated sales in 2023, 2022 and 2021, respectively.
The loss of, or significant reduction or delay in, purchases by our largest customers could reduce our sales and profitability. While we sell to mor e than 10,000 customers, sales to our top ten customers accounted for 26% , 25%, and 38% of consolidated sales in 2024, 2023 and 2022, respectively.
Risks Related to the Trading Market for Our Preferred and Common Stock The issuance of common stock upon conversion of our 1.00% Convertible Senior Subordinated Notes due November 2024 or 6.75% Series B Mandatory Convertible Preferred Stock could cause dilution to the interests of our existing stockholders.
Risks Related to the Trading Market for Our Preferred and Common Stock The issuance of common stock upon conversion of 6.75% Series B Mandatory Convertible Preferred Stock could cause dilution to the interests of our existing stockholders.
The failure to achieve the anticipated cost savings or commercial synergies of our recent significant acquisitions or recognize the anticipated market opportunities or integration from our acquisitions could have a material adverse effect on our business, financial condition, and results of operations.
These acquisitions included new businesses that are complementary to our existing LNG and gas technologies. The failure to achieve the anticipated cost savings or commercial synergies of our recent significant acquisitions or recognize the anticipated market opportunities or integration from our acquisitions could have a material adverse effect on our business, financial condition, and results of operations.
Tax rules are subject to change, and unanticipated changes in our effective tax rate could adversely affect our future results. Our future results of operations could be affected by changes in the effective tax rate as a result of changes in tax laws, regulations and judicial rulings.
Our future results of operations could be affected by changes in the effective tax rate as a result of changes in tax laws, regulations and judicial rulings.
The unauthorized use of our know-how by third parties could reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our business or increase our expenses as we attempt to enforce our rights.
The unauthorized use of our know-how by third parties could reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our business or increase our expenses as we attempt to enforce our rights. Data privacy and data security considerations could impact our business. The interpretation and application of data protection laws are evolving.
The patents in our patent portfolio are scheduled to expire from 2024 to 2042.
The patents in our patent portfolio are scheduled to expire from 2025 to 2044.
Our 1.00% Convertible Senior Subordinated Notes due November 2024 have certain fundamental change and conditional conversion features and our Senior Secured Notes due 2030 and our Senior Unsecured Notes due 2031 have certain change in control features which, if triggered, may adversely affect our financial condition.
Our Senior Secured Notes due 2030 and our Senior Unsecured Notes due 2031 have certain change in control features which, if triggered, may adversely affect our financial condition.
The business and financial performance of us and Howden are subject to certain risks and uncertainties, including the risk of the loss of, or changes to, our and its relationships with customers. We may be unable to achieve the same growth, revenues and profitability that we and Howden have achieved in the past.
The business and financial performance of us and Howden are subject to certain risks and uncertainties. We may be unable to consistently achieve the same growth, revenues and profitability that we and Howden have achieved in the past.
Furthermore, the prices we are able to charge for our products and services are affected by a number of other factors, including: • general economic and political conditions; • our customers’ desire to reduce their costs; • the competitive environment; • our ability to accurately estimate our costs, including our ability to estimate the impact of inflation on our costs over long-term contracts; and • the procurement practices of our customers. 11 Our inability to pass increased prices along to our customers in a timely manner could have a material adverse effect on our business, financial condition or results of operations.
Furthermore, the prices we are able to charge for our products and services are affected by a number of other factors, including: • general economic and political conditions; • our customers’ desire to reduce their costs; • the competitive environment; • our ability to accurately estimate our costs, including our ability to estimate the impact of inflation on our costs over long-term contracts; and • the procurement practices of our customers.
U.S. government policy changes and proposals may result in greater restrictions and economic disincentives on international trade. The implementation of new tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries, and certain foreign governments have instituted or have been considering imposing trade sanctions on certain U.S. goods.
To the extent enacted, the implementation of new tariffs and other changes in U.S. trade policy could trigger retaliatory actions by these and any other affected countries, and certain foreign governments have instituted or have been considering imposing trade sanctions on certain U.S. goods.
Complying with these various laws is 14 difficult and could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.
It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data security practices. Complying with these various laws is difficult and could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.
Failure to protect our intellectual property and know-how could reduce or eliminate any competitive advantage and reduce our sales and profitability, and the cost of protecting our intellectual property may be significant.
Any acquisition may or may not occur and, if an acquisition does occur, it may not be successful in enhancing our business. Failure to protect our intellectual property and know-how could reduce or eliminate any competitive advantage and reduce our sales and profitability, and the cost of protecting our intellectual property may be significant.
Our backlog is subject to modification, termination or reduction of orders, which could negatively impact our sales. Our backlog is comprised of the portion of firm signed purchase orders or other written contractual commitments received from customers that we have not recognized as sales. The dollar amount of backlog as of December 31, 2023 was $4,278.8 million.
Our backlog is comprised of the portion of firm signed purchase orders or other written contractual commitments received from customers that we have not recognized as sales. The dollar amount of backlog as of December 31, 2024 was $4,845.1 million.
We believe we are in compliance with these regulations and maintain robust programs intended to maintain compliance. However, unintentional lapses in our compliance or uncertainties associated with changing regulatory requirements could result in future violations (or alleged violations) of these regulations.
Our export activities are subject to regulation, including the U.S. Treasury Department’s Office of Foreign Assets Control’s regulations. We believe we are in compliance with these regulations and maintain robust programs intended to maintain compliance. However, unintentional lapses in our compliance or uncertainties associated with changing regulatory requirements could result in future violations (or alleged violations) of these regulations.
In addition, at that date, under our senior secured revolving credit facility, we had $272.0 million of letters of credit and bank guarantees outstanding and borrowing capacity of approximately $625.2 million. Through separate facilities, our subsidiaries had $134.3 million of letters of credit and bank guarantees outstanding at December 31, 2023.
In addition, at that date, under our senior secured revolving credit facility, we had $277.5 million of letters of credit and bank guarantees outstanding and borrowing capacity of $767.5 million. Through separate facilities, our subsidiaries had $173.8 million of letters of credit and bank guarantees outstanding at December 31, 2024.
Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually in the fourth quarter or more often if events or changes in circumstances indicate a potential impairment may exist.
As of December 31, 2024, we had goodwill and indefinite-lived intangible assets of $3,517.3 million, which represented 38.6% of our total assets. Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually in the fourth quarter or more often if events or changes in circumstances indicate a potential impairment may exist.
In addition, we are exposed to changes in interest rates. While our senior secured and senior unsecured notes have a fixed cash coupon, other instruments, primarily borrowings under our senior secured revolving credit facility due October 2026 are exposed to variable interest rates.
In addition, we are exposed to changes in interest rates. While our senior secured and senior unsecured notes have a fixed cash coupon, other instruments, primarily borrowings under our senior secured revolving credit facility due April 2029 are exposed to variable interest rates. Our mandatory convertible preferred stock contains cumulative dividends that can be paid in cash or equity shares.
Due to the high pressures and low temperatures at which many of our products are used, the inherent risks associated with concentrated industrial and hydrocarbon gases, and the fact that some of our products are relied upon by our customers or end users in their facilities or operations or are manufactured for relatively broad industrial, transportation, or consumer use, we face an inherent risk of exposure to claims (which we have been subject to from time to time and some of which were substantial including the cryobiological storage tank lawsuits as discussed in Item 3.
Due to the high pressures and low temperatures at which many of our products are used, the inherent risks associated with concentrated industrial and hydrocarbon gases, and the fact that some of our products are relied upon by our customers or end- users in their facilities or operations or are manufactured for relatively broad industrial, transportation, or consumer use, we face an inherent risk of exposure to claims in the event that the failure, use, or misuse of our products results, or is alleged to result, in death, bodily injury, property damage, or economic loss.
As part of the Howden Acquisition, we assumed responsibility for ten additional defined benefit plans outside of the United States, which are predominantly in Germany, covering certain employees of Howden.
We have responsibility for ten defined benefit plans outside of the United States, which are predominantly in Germany.
Our convertible notes contain cumulative dividends that can be paid in cash or equity shares, in certain circumstances. The impact of a 100 basis point increase in interest rates to our senior secured revolving credit facility is discussed in the “Quantitative and Qualitative Disclosures About Market Risk” section of this Annual Report.
The impact of a 100 basis point increase in interest rates to our senior secured revolving credit facility is discussed in the “Quantitative and Qualitative Disclosures About Market Risk” section of this Annual Report. We may fail to successfully integrate companies that provide complementary products or technologies.
The loss of any of our major customers, consolidation of our customers, or a decrease or delay in orders or anticipated spending by such customers could materially reduce our sales and profitability.
The loss of any of our major customers, consolidation of our customers, or a decrease or delay in orders or anticipated spending by such customers could materially reduce our sales and profitability. Although order activity in 2024 increased year over year, we continued to experience energy price volatility and our customers’ adjusted project timing.
If we determine at a future time that an impairment exists, it may result in a significant non-cash charge to earnings and lower stockholders’ equity. A public health crisis could cause disruptions to our operations which could adversely affect our business in the future.
If we determine at a future time that an impairment exists, it may result in a significant non-cash charge to earnings and lower stockholders’ equity. Our backlog is subject to modification, termination or reduction of orders, which could negatively impact our sales.
In addition, unstable political conditions or civil unrest, including political instability or threatened military actions could negatively impact our order levels and sales in a region or our ability to collect receivables from customers or operate or execute projects in a region.
In addition, unstable political conditions or civil unrest, including political instability or threatened military actions could negatively impact our order levels and sales in a region or our ability to collect receivables from customers or operate or execute projects in a region. 11 We carry goodwill and indefinite-lived intangible assets on our balance sheet, which are subject to impairment testing and could subject us to significant non-cash charges to earnings in the future if impairment occurs.
The Organisation for Economic Co-operation and Development (OECD)’s base erosion and profit shifting (BEPS) project is an area we continue to monitor due to its global reach. The OECD, which represents a coalition of member countries, has issued recommendations that, in some cases, would make substantial changes to numerous long-standing tax positions and principles.
The OECD, which represents a coalition of member countries, has issued recommendations that, in some cases, would make substantial changes to numerous long-standing tax positions and principles.
We also have increased interest rate exposure with respect to certain indebtedness incurred in connection with the Howden Acquisition. As a global business, we are exposed to economic, political, and other risks in different countries which could materially reduce our sales, profitability or cash flows, or materially increase our liabilities.
As a global business, we are exposed to economic, political, and other risks in different countries which could materially reduce our sales, profitability or cash flows, or materially increase our liabilities. Since we manufacture and sell our products worldwide, our business is subject to risks associated with doing business internationally.
For example, a violation of specific laws and regulations could result in the imposition of fines and penalties or the termination of our contracts or debarment from bidding on contracts. In some instances, these laws and regulations impose terms or rights that are more favorable to the government than those typically available to commercial parties in negotiated transactions.
For example, a violation of specific laws and regulations could result in the imposition of fines and penalties or the termination of our contracts or debarment from bidding on contracts.
Changes in U.S. trade policy, tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operations. Our international operations and transactions also depend upon favorable trade relations between the United States and the foreign countries in which our customers and suppliers have operations.
Our international operations and transactions also depend upon favorable trade relations between the United States and the foreign countries in which our customers and suppliers have operations.
These potential physical effects may adversely impact the cost, production, sales and financial performance of our operations. We could be obligated to make significant contributions to our pension plans, some of which are underfunded, and we contribute to a multi-employer plan for collective bargaining U.S. employees, which is underfunded.
We could be obligated to make significant contributions to our pension plans, some of which are underfunded, and we contribute to a multi-employer plan for collective bargaining U.S. employees, which is underfunded. Certain U.S. hourly and salaried employees are covered by our Chart defined benefit pension plan. The defined benefit pension plan has been frozen since February 2006.
It is difficult, if not impossible, to predict what changes in energy policy might occur in the future and the timing of potential changes and their impact on our business. Our exposure to fixed pricing on certain long-term customer contracts and performance guarantees, could negatively impact our financial results.
As energy policy continues to evolve, the existing rules and incentives that impact the energy-related segments of our business may change. It is difficult, if not impossible, to predict what changes in energy policy might occur in the future and the timing of potential changes and their impact on our business.
Additionally, such insurance may become difficult to obtain or be unobtainable in the future on terms acceptable to us. We had net out-of-pocket exposure with respect to the March 2023 settlement related to the Cryobiological business in the amount of $73.0 million.
Additionally, such insurance may become difficult to obtain or be unobtainable in the future on terms acceptable to us.
We anticipate that energy policy will continue to be an important regulatory priority globally, as well as on a national, state, and local level. As energy policy continues to evolve, the existing rules and incentives that impact the energy-related segments of our business may change.
We anticipate that energy policy will continue to be an important regulatory priority globally, as well as on a national, state, and local level. In particular, the new administration has signaled potential changes to U.S. energy policy, the potential impact on us which cannot presently be determined.
As of December 31, 2023, the aggregate projected benefit obligation of the Howden pension plans was $43.0 million, and the aggregate value of the assets of the Howden pension plans was $41.8 million, resulting in the Howden pension plans being underfunded by $1.2 million in the aggregate. We are also a participant in a multi-employer plan, which is underfunded.
As of December 31, 2024, the aggregate projected benefit obligation of these pension plans was $39.2 million, and the aggregate value of the assets of these pension plans was $42.4 million, resulting in these pension plans being overfunded by $3.2 million in the aggregate. However, certain of these plans are in an underfunded status as of December 31, 2024.
Although we maintain insurance subject to certain deductibles, which may cover some of our losses, that insurance may become unavailable or prove to be inadequate. We are subject to regulations governing the export of our products. Our export activities are subject to regulation, including the U.S. Treasury Department’s Office of Foreign Assets Control’s regulations.
Although we maintain insurance subject to certain deductibles, which may cover some of our losses, that insurance may become unavailable or prove to be inadequate. A public health crisis could cause disruptions to our operations which could adversely affect our business in the future.
As part of this acquisition strategy, we have closed on several acquisitions in the past three years including the Howden Acquisition. These acquisitions included new businesses that are complementary to our existing LNG and gas technologies.
In addition, any acquisitions of businesses with foreign operations or sales may increase our exposure to risks inherent in doing business outside the United States. As part of this acquisition strategy, we have closed on several acquisitions in the past three years including the Howden Acquisition.
Since we manufacture and sell our products worldwide, our business is subject to risks associated with doing business internationally. In 2023, 2022 and 2021, 59%, 42%, and 56%, respectively, of our sales occurred in international markets.
In 2024, 2023 and 2022, 60%, 59%, and 42%, respectively, of our sales occurred in international markets.
Potential acquisition opportunities become available to us from time to time, and we periodically engage in discussions or negotiations relating to potential acquisitions, including acquisitions that may be material in size or scope to our business. Any acquisition may or may not occur and, if an acquisition does occur, it may not be successful in enhancing our business.
Potential acquisition opportunities become available to us from time to time, and in line with our financial policy of no material cash acquisitions until we are below 2.5 times net leverage, we periodically engage in discussions or negotiations relating to potential acquisitions.
Certain U.S. hourly and salaried employees are covered by our Chart defined benefit pension plan. The defined benefit pension plan has been frozen since February 2006. As of December 31, 2023, the projected benefit obligation under our pension plan was $48.1 million, and the value of the assets of the plan was $54.0 million.
In May 2024, our Board of Directors approved a resolution to terminate the Chart defined benefit pension plan and notified plan participants of the termination and the distribution alternatives. As of December 31, 2024, the projected benefit obligation under our Chart defined benefit pension plan was $39.5 million, and the value of the assets of the plan was $43.1 million.
Removed
Although order activity in 2023 increased year over year, we continued to experience energy price volatility and our customers’ adjusted project timing. 10 We may fail to successfully integrate companies that provide complementary products or technologies. An important component of our recent business strategy has been the acquisition of businesses that complement our existing products and services.
Added
Our inability to pass increased prices along to our customers in a timely manner could have a material adverse effect on our business, financial condition or results of operations. Changes in U.S. trade policy, tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operations.
Removed
We carry goodwill and indefinite-lived intangible assets on our balance sheet, which are subject to impairment testing and could subject us to significant non-cash charges to earnings in the future if impairment occurs. As of December 31, 2023, we had goodwill and indefinite-lived intangible assets of $3,516.9 million, which represented approximately 38.6% of our total assets.
Added
The new administration has implemented substantial tariffs on China and has threatened tariffs on certain products and other countries.
Removed
“Legal Proceedings” relating to our since divested 12 Cryobiological business, but for which we retained and settled certain liabilities) in the event that the failure, use, or misuse of our products results, or is alleged to result, in death, bodily injury, property damage, or economic loss.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs. 21 Our cybersecurity risk management and strategy processes are overseen by leaders from our information security, compliance and legal teams.
Biggest changeOur cybersecurity risk management and strategy processes are overseen by leaders from our information security, compliance and legal teams.
In addition, we strive to have the appropriate cybersecurity clauses in our agreements and where necessary we have Data Processing Agreements (DPAs) put in place for privacy of data.
In addition, we strive to have the appropriate cybersecurity clauses in our agreements and where necessary we have Data Processing Agreements (“DPAs”) put in place for privacy of data.
In past years, our Information Security Management System has continued to work a Plan of Action and Milestones (POAM) tied to the United States Cybersecurity Maturity Model Certification (CMMC) program, formerly the National Institute of Standards and Technology (NIST) Cybersecurity Framework, while looking for synergies across other standards, such as the Information Assurance Technical Framework (IATF), or as required for specific product lines or customers.
In past years, our Information Security Management System has continued to work a Plan of Action and Milestones (“POAM”) tied to the United States Cybersecurity Maturity Model Certification (“CMMC”) program, formerly the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, while looking for synergies across other standards, such as the Information Assurance Technical Framework (“IATF”), or as required for specific product lines or customers.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ Data privacy and data security considerations could impact our business ” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ Data privacy and data security considerations could impact our business ” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K. 19 Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management.
Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. The Board receives updates on a regular basis from senior management, including leaders from our information security, compliance and legal teams regarding matters of cybersecurity.
Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. The Board receives updates on a regular basis from senior management, including leaders from our information security, compliance and legal teams regarding matters of cybersecurity.
We have implemented preparation for incident response, incident response and breach management processes which have four stages: 1) preparation for cybersecurity incidents, 2) detection and analysis of cybersecurity incidents, 3) containment, eradication and recovery, and 4) post-incident analysis. Such incident responses are overseen by leaders from our information security, compliance and legal teams.
We have incident response and breach management processes which occur in stages starting with preparation for cybersecurity incidents followed by detection and analysis of cybersecurity incidents, containment, eradication and recovery, and post-incident analysis. Such incident responses are overseen by leaders from our information security, compliance and legal teams.
Such individuals have an average of over 15 years of prior work experience in various roles involving information technology, including security, auditing, compliance, systems and programming.
Individuals that oversee cybersecurity risk management have an average of over 20 years of prior work experience in various roles involving information technology, including security, auditing, compliance, systems and programming.
This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity, and data privacy incidents (if any) and status of key information security initiatives.
This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity, and data privacy incidents (if any) and status of key information security initiatives. Our Board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
Added
During 2024, we realized our objective of having no material cybersecurity incidents. Furthermore, we have not experienced any material information security breaches and have not incurred material expenses from cybersecurity incidents, including those arising at third parties, during any of the last three years.
Added
The Board of Directors and Chart senior management recognize cybersecurity as a company-wide risk, and the chief information officer/chief information security officer (“CIO/CISO”), as a member of the Chart senior management, works to organize these functional teams given the individual’s experience and background of over 25 years within various IT roles, including the build out of the cybersecurity capability within Chart and at prior companies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We occupy 186 facilities throughout the world totaling approximately 13.0 million square feet with the majority devoted to manufacturing, assembly, and storage, none of which are individually material. Of these facilities, approximately 8.6 million square feet are owned, and 4.4 million square feet are occupied under operating leases.
Biggest changeItem 2. Properties We occupy 159 facilities throughout the world totaling approximately 13.0 million square feet with the majority devoted to manufacturing, assembly, and storage, none of which are individually material. Of these facilities, approximately 8.9 million square feet are owned, and approximately 4.1 million square feet are occupied under operating leases.
We do not believe that these regulatory requirements have had a material effect on our capital expenditures, earnings, or competitive position. We are not anticipating any material capital expenditures in 2024 that are directly related to regulatory compliance matters.
We do not believe that these regulatory requirements have had a material effect on our capital expenditures, earnings, or competitive position. We are not anticipating any material capital expenditures in 2025 that are directly related to regulatory compliance matters.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company does not intend to report on this lawsuit quarterly, absent developments that would impact the materiality of the claim. We are occasionally subject to various legal claims related to performance under contracts, product liability, taxes, employment matters, environmental matters, intellectual property, and other matters incidental to the normal course of our business.
Biggest changeItem 3. Legal Proceedings We are occasionally subject to various legal claims related to performance under contracts, product liability, taxes, employment matters, environmental matters, intellectual property, and other matters incidental to the normal course of our business.
Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect. Item 4. Mine Safety Disclosures Not applicable. 22 PART II
Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect. Item 4. Mine Safety Disclosures Not applicable. 20 PART II
Based on our historical experience in litigating these claims, as well as our current assessment of the underlying merits of the claims and applicable insurance, if any, management believes that the final resolution of these matters, including the sole remaining Pacific Fertility Center case described above, will not have a material adverse effect on our financial position, liquidity, cash flows, or results of operations, except that our results of operations for any particular reporting period may be adversely affected by any potential or actual loss that is accrued in such period.
Based on our historical experience in litigating these claims, as well as our current assessment of the underlying merits of the claims and applicable insurance, if any, management believes that the final resolution of these matters will not have a material adverse effect on our financial position, liquidity, cash flows, or results of operations, except that our results of operations for any particular reporting period may be adversely affected by any potential or actual loss that is accrued in such period.
Removed
Item 3. Legal Proceedings In connection with our divestiture of our cryobiological products business on October 1, 2020, Chart retained certain potential liabilities, including claims in connection with lawsuits filed in the U.S.
Removed
District Court for the Northern District of California and the San Francisco Superior Court during the second quarter of 2018 against Chart and other defendants with respect to the alleged failure of a stainless steel cryobiological storage tank at the Pacific Fertility Center in San Francisco, California.
Removed
As previously disclosed, the Company reached a settlement in late January 2023 to resolve these cases. In the fourth quarter of 2022, the Company recorded a loss contingency accrual of $305.6 and a related loss receivable of $231.9 from insurance proceeds from these combined cases, which were recognized in our consolidated balance sheet as of December 31, 2022.
Removed
The net loss of approximately $73.0 was recognized in discontinued operations and represented the expected out-of-pocket payments in connection with these settlements. The settlement was finalized and funded on March 20, 2023; therefore the previously disclosed loss contingency accrual and related loss receivable are no longer recorded as of December 31, 2023.
Removed
This settlement and the net out-of-pocket payments do not reflect third-party recoveries which the Company is pursuing with respect to the underlying facts in these cases, and which the Company currently anticipates will result in recoveries approximating one-quarter or more of the Company’s out-of-pocket, net payments.
Removed
We continue to evaluate the merits of the sole remaining lawsuit that was not included in the settlement in light of the information available. Based on the status of that lawsuit, a current estimate of reasonably possible losses in that case cannot be made; however, the Company does not anticipate the potential exposure to be material.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (1) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 — 31, 2023 — $ — — $ — November 1 — 30, 2023 13 127.28 — — December 1 — 31, 2023 51 130.16 — — Total 64 $ 129.58 — $ — _______________ (1) Includes shares of common stock surrendered to us during the fourth quarter of 2023 by participants under our share-based compensation plans to satisfy tax withholding obligations relating to the vesting or payment of equity awards for an aggregate purchase price of approximately $8,300.
Biggest changeThe Peer Group Index is comprised of Air Products and Chemicals, Inc., Atlas Copco AB, Baker Hughes Company, Barnes Group Inc., Burckhardt Compression Holding AG, ChampionX Corporation, Cheniere Energy, Inc., CIMC Enric Holdings Limited, CNH Industrial N.V., EnPro Inc., ESCO Technologies Inc., Franklin Electric Co., Inc., IDEX Corporation, ITT Inc., New Fortress Energy LLC, NIKKISO CO., LTD., Plug Power Inc., SPX Corporation and Worthington Enterprises, Inc. 21 Purchases of Equity Securities by the Issuer and Affiliated Purchasers Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (1) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2024 14 $ 126.01 — $ — November 1 - 30, 2024 1,088 179.96 — — December 1 - 31, 2024 51 202.35 — — Total 1,153 $ 180.30 — $ — _______________ (1) Includes shares of common stock surrendered to us during the fourth quarter of 2024 by participants under our share-based compensation plans to satisfy tax withholding obligations relating to the vesting or payment of equity awards for an aggregate purchase price of approximately $207,900.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Chart’s common stock is traded on the New York Stock Exchange under the symbol “GTLS.” As of January 31, 2024, there were 203 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Chart’s common stock is traded on the New York Stock Exchange under the symbol “GTLS.” As of January 31, 2025, there were 269 holders of record of our common stock.
Cumulative Total Return Comparison Set forth below is a line graph comparing the cumulative total return of a hypothetical investment in the shares of common stock of Chart with the cumulative return of a hypothetical investment in each of the S&P MidCap 400 Index, S&P SmallCap 600 Index and our current and previous Peer Group Indexes based on the respective market prices of each such investment on the dates shown below, assuming an initial investment of $100 on December 31, 2018, including reinvestment of dividends, if any.
Cumulative Total Return Comparison Set forth below is a line graph comparing the cumulative total return of a hypothetical investment in the shares of common stock of Chart with the cumulative return of a hypothetical investment in each of the S&P MidCap 400 Index and our Peer Group Index based on the respective market prices of each such investment on the dates shown below, assuming an initial investment of $100 on December 31, 2019, including reinvestment of dividends, if any.
The total number of shares repurchased represents the net shares issued to satisfy tax withholding. All such repurchased shares were subsequently retired during the three months ended December 31, 2023. Item 6. [Reserved] 24
The total number of shares repurchased represents the net shares issued to satisfy tax withholding. All such repurchased shares were subsequently retired during the three months ended December 31, 2024.
Apart from the dividend requirements associated with the Series B Mandatory Convertible Preferred Stock that we issued to fund a portion of the Acquisition, we do not currently intend to pay any cash dividends on our common stock, and instead intend to retain earnings, if any, for debt reduction, organic capital expenditures for productivity and capacity and potential acquisitions.
Apart from the dividend requirements associated with our 6.75% Series B Mandatory Convertible Preferred Stock, we do not currently intend to pay any cash dividends on our common stock, and instead intend to retain earnings, if any, for debt reduction, organic capital expenditures for productivity and capacity and, in line with our financial policy of no material cash acquisitions until we are below 2.5 times net leverage, potential acquisitions.
During 2023, we transitioned from the S&P SmallCap 600 Index to the S&P MidCap 400 Index, which better aligns to the performance of our peers. 23 We select the peer companies that comprise the Peer Group Index solely on the basis of objective criteria. These criteria result in an index composed of oil field equipment/service and other comparable industrial companies.
These criteria result in an index composed of oil field equipment/service and other comparable industrial companies.
Removed
December 31, 2018 2019 2020 2021 2022 2023 Chart Industries, Inc. $ 100.00 $ 103.78 $ 181.13 $ 245.26 $ 177.20 $ 209.64 S&P MidCap 400 Index 100.00 126.17 143.39 178.85 155.42 180.90 S&P SmallCap 600 Index 100.00 122.74 136.53 173.04 145.10 168.23 Peer Group Index - Current 100.00 132.76 158.82 182.55 189.89 193.52 Peer Group Index - Previous 100.00 138.62 166.22 191.85 200.96 203.79 The cumulative total return comparison presents both the S&P MidCap 400 Index and S&P SmallCap 600 Index.
Added
December 31, 2019 2020 2021 2022 2023 2024 Chart Industries, Inc. $ 100.00 $ 174.53 $ 236.32 $ 170.74 $ 202.00 $ 282.77 S&P MidCap 400 Index 100.00 113.65 141.76 123.19 143.38 163.30 Peer Group Index 100.00 119.63 137.50 143.03 145.77 184.64 We select the peer companies that comprise the Peer Group Index solely on the basis of objective criteria.
Removed
During 2023, we modified our peer group to include certain competitors of Howden. The cumulative total return comparison presents both the current and previous Peer Group Index.
Added
(2) On December 11, 2024, our Board of Directors authorized a share repurchase program for up to $250.0 million of the Company’s common stock through various means, including open market transactions, block purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
Removed
The current Peer Group Index is comprised of Air Products and Chemicals, Inc., Atlas Copco AB, Baker Hughes Company, Barnes Group Inc., Burckhardt Compression Holding AG, ChampionX Corporation, Cheniere Energy, Inc., CIMC Enric Holdings Limited, CNH Industrial N.V., EnPro Inc., ESCO Technologies Inc., Franklin Electric Co., Inc., IDEX Corporation, ITT Inc., New Fortress Energy LLC, NIKKISO CO., LTD., Plug Power Inc., SPX Corporation and Worthington Enterprises, Inc.
Added
The program may be modified, discontinued or suspended at any time without prior notice. We reiterate our financial policy of no share repurchases until we are below 2.5 times net leverage. Item 6. [Reserved] 22
Removed
The previous Peer Group Index is comprised of Air Products and Chemicals, Inc., Baker Hughes Company, Barnes Group Inc., ChampionX Corporation, Cheniere Energy, Inc., CIMC Enric Holdings Limited, CNH Industrial N.V., EnPro Inc., ESCO Technologies Inc., Franklin Electric Co., Inc., Harsco Corporation, IDEX Corporation, ITT Inc., New Fortress Energy LLC, NIKKISO CO., LTD., Plug Power Inc., SPX Corporation and Worthington Enterprises, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

81 edited+38 added−133 removed37 unchanged
Biggest changeSelected Segment Financial Information Year Ended December 31, 2023 2022 2021 Sales Cryo Tank Solutions $ 640.8 $ 504.3 $ 447.4 Heat Transfer Systems 891.2 462.7 262.7 Specialty Products 819.9 448.3 432.9 Repair, Service & Leasing 1,029.2 209.6 187.0 Intersegment eliminations (28.6) (12.5) (12.3) Consolidated $ 3,352.5 $ 1,612.4 $ 1,317.7 Gross Profit Cryo Tank Solutions $ 132.0 $ 98.7 $ 93.5 Heat Transfer Systems 246.8 90.6 35.6 Specialty Products 221.4 138.6 145.5 Repair, Service & Leasing 440.2 79.5 49.6 Consolidated $ 1,040.4 $ 407.4 $ 324.2 Gross Profit Margin Cryo Tank Solutions 20.6 % 19.6 % 20.9 % Heat Transfer Systems 27.7 % 19.6 % 13.6 % Specialty Products 27.0 % 30.9 % 33.6 % Repair, Service & Leasing 42.8 % 37.9 % 26.5 % Consolidated 31.0 % 25.3 % 24.6 % SG&A Expenses Cryo Tank Solutions $ 70.9 $ 41.8 $ 38.1 Heat Transfer Systems 54.1 24.0 28.1 Specialty Products 82.6 55.6 43.3 Repair, Service & Leasing 116.1 15.2 17.8 Corporate 162.6 77.9 69.5 Consolidated $ 486.3 $ 214.5 $ 196.8 SG&A Expenses (% of Sales) Cryo Tank Solutions 11.1 % 8.3 % 8.5 % Heat Transfer Systems 6.1 % 5.2 % 10.7 % Specialty Products 10.1 % 12.4 % 10.0 % Repair, Service & Leasing 11.3 % 7.3 % 9.5 % Consolidated 14.5 % 13.3 % 14.9 % Operating Income (Loss) (1) Cryo Tank Solutions $ 54.5 $ 54.0 $ 52.9 Heat Transfer Systems (2) 175.8 51.7 (12.3) Specialty Products 119.7 72.9 94.1 Repair, Service & Leasing 203.3 51.0 23.3 Corporate (162.6) (78.1) (69.5) Consolidated $ 390.7 $ 151.5 $ 88.5 29 Operating Margin Cryo Tank Solutions 8.5 % 10.7 % 11.8 % Heat Transfer Systems 19.7 % 11.2 % (4.7) % Specialty Products 14.6 % 16.3 % 21.7 % Repair, Service & Leasing 19.8 % 24.3 % 12.5 % Consolidated 11.7 % 9.4 % 6.7 % _______________ (1) Restructuring charges/(credits) for the years ended: • December 31, 2023 were $13.5 ($5.2 - Corporate, $4.0 - Repair, Service & Leasing, $1.8 – Specialty Products, $1.6 – Cryo Tank Solutions and $0.9 – Heat Transfer Systems); • December 31, 2022 were $(1.0) ($(1.4) – Repair, Service & Leasing, $0.3 – Heat Transfer Systems and $0.1 – Cryo Tank Solutions); and • December 31, 2021 were $3.5 ($1.7 – Heat Transfer Systems, $1.5 – Repair, Service & Leasing, $0.3 – Cryo Tank Solutions).
Biggest changeSelected Segment Financial Information Year Ended December 31, 2024 2023 Sales Cryo Tank Solutions $ 637.9 $ 640.8 Heat Transfer Systems 1,035.3 891.2 Specialty Products 1,114.3 819.9 Repair, Service & Leasing 1,372.7 1,029.2 Intersegment eliminations 0.1 (28.6) Consolidated $ 4,160.3 $ 3,352.5 Gross Profit Cryo Tank Solutions $ 143.5 $ 132.0 Heat Transfer Systems 299.0 246.8 Specialty Products 301.1 221.4 Repair, Service & Leasing 645.2 440.2 Consolidated $ 1,388.8 $ 1,040.4 Gross Profit Margin Cryo Tank Solutions 22.5 % 20.6 % Heat Transfer Systems 28.9 % 27.7 % Specialty Products 27.0 % 27.0 % Repair, Service & Leasing 47.0 % 42.8 % Consolidated 33.4 % 31.0 % SG&A Expenses Cryo Tank Solutions $ 61.2 $ 70.9 Heat Transfer Systems 45.6 54.1 Specialty Products 106.6 82.6 Repair, Service & Leasing 150.0 116.1 Corporate 184.0 162.6 Consolidated $ 547.4 $ 486.3 SG&A Expenses (% of Sales) Cryo Tank Solutions 9.6 % 11.1 % Heat Transfer Systems 4.4 % 6.1 % Specialty Products 9.6 % 10.1 % Repair, Service & Leasing 10.9 % 11.3 % Consolidated 13.2 % 14.5 % Operating Income (Loss) Cryo Tank Solutions $ 74.6 $ 54.5 Heat Transfer Systems 233.3 175.8 Specialty Products 173.1 119.7 Repair, Service & Leasing 350.5 203.3 Corporate (184.0) (162.6) Consolidated $ 647.5 $ 390.7 25 Operating Margin Cryo Tank Solutions 11.7 % 8.5 % Heat Transfer Systems 22.5 % 19.7 % Specialty Products 15.5 % 14.6 % Repair, Service & Leasing 25.5 % 19.8 % Consolidated 15.6 % 11.7 % Results of Operations for the Years Ended December 31, 2024 and 2023 Sales in 2024 increased by $807.8 million from $3,352.5 million to $4,160.3 million, or 24.1%.
Forward-looking statements contained herein (including future cash contractual obligations, liquidity, cash flow, orders, results of operations, projected revenues, margins, capital expenditures, industry and business, trends, clean energy and other new market or expansion opportunities, cost and commercial synergies and savings objectives, and government initiatives among other matters) or in other statements made by us are made based on management’s expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by forward-looking statements.
Forward-looking statements contained herein (including future cash contractual obligations, liquidity, debt repayment, cash flow, orders, results of operations, projected revenues, margins, capital expenditures, industry and business, trends, clean energy and other new market or expansion opportunities, cost and commercial synergies and savings objectives, and government initiatives among other matters) or in other statements made by us are made based on management’s expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by forward-looking statements.
Purchase obligations arising from purchases of inventory and services are entered into with vendors in the normal course of business and are within our expected requirements for resource planning. We occasionally enter into firm purchase commitments to procure raw materials such as stainless steel, carbon steel and aluminum. As of December 31, 2023, firm purchase commitments were not material.
Purchase obligations arising from purchases of inventory and services are entered into with vendors in the normal course of business and are within our expected requirements for resource planning. We occasionally enter into firm purchase commitments to procure raw materials such as stainless steel, carbon steel and aluminum. As of December 31, 2024, firm purchase commitments were not material.
Contractual Obligations Our material cash requirements from known contractual obligations include those related to debt and leases, refer to Note 10, “Debt and Credit Arrangements” and Note 20, “Leases”, respectively, within Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for payments due by period.
Contractual Obligations Our material cash requirements from known contractual obligations include those related to debt and leases, refer to Note 10, “Debt and Credit Arrangements” and Note 19, “Leases”, respectively, within Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for payments due by period.
Actual results could differ materially from those estimates. There were no material changes to estimates or methodologies used to develop those estimates in 2023. Management believes the following are the more critical judgmental areas in the application of its accounting policies that affect its financial position and results of operations.
Actual results could differ materially from those estimates. There were no material changes to estimates or methodologies used to develop those estimates in 2024. Management believes the following are the more critical judgmental areas in the application of its accounting policies that affect its financial position and results of operations.
Under the first step (“Step 1”), we estimate the fair value of our reporting units by considering income and market approaches to develop fair value estimates, which are weighted to arrive at a fair value estimate for each reporting unit. With respect to the income approach, a model has been developed to estimate the fair value of each reporting unit.
Under the first step, we estimate the fair value of our reporting units by considering income and market approaches to develop fair value estimates, which are weighted to arrive at a fair value estimate for each reporting unit. With respect to the income approach, a model has been developed to estimate the fair value of each reporting unit.
The effective income tax rate of 5.2% for the year ended December 31, 2023 differed from the U.S. federal statutory rate of 21% due primarily to tax benefits associated with the Howden integration, release of previously booked valuation allowances, research and development credits and share-based compensation offset by the effect of income earned by certain of our foreign entities being taxed at higher rates than the federal statutory rate.
The effective income tax rate of 5.2% for the year ended December 31, 2023 differed from the U.S. federal statutory rate of 21% primarily due to tax benefits associated with the Howden integration, release of previously booked valuation allowances, research and developments credits and share-based compensation offset of income earned by certain of our foreign entities being taxed at higher rates than the federal statutory rate.
This Annual Report includes “forward-looking statements.” These forward-looking statements include statements relating to our business, including statements regarding completed acquisitions and investments and related accretion or statements with respect to the use of proceeds or redeployment of capital from recent divestitures, as well statements regarding revenues, cost and commercial synergies and efficiency savings, objectives, future orders, margins, segment sales mix, earnings or performance, liquidity and cash flow, inventory levels, capital expenditures, supply chain challenges, inflationary pressures including materials costs and pricing increases, business trends, clean energy market opportunities including addressable market and projected industry-wide investments, carbon and GHG emission targets, governmental initiatives, including executive orders and other information that is not historical in nature.
This Annual Report includes “forward-looking statements.” These forward-looking statements include statements relating to our business, including statements regarding completed acquisitions and investments and related accretion or statements with respect to the use of proceeds or redeployment of capital from recent divestitures, as well statements regarding sales outlooks, revenues, cost and commercial synergies and efficiency savings, objectives, future orders, margins, segment sales mix, earnings or performance, liquidity and cash flow, repayment or settlement of maturing debt, inventory levels, capital expenditures, supply chain challenges, inflationary pressures including materials costs and pricing increases, business trends, clean energy market opportunities including addressable market and projected industry-wide investments, carbon and GHG emission targets, governmental initiatives, including changes in governmental policies, executive orders and other information that is not historical in nature.
Discontinued Operations The financial results of the Roots business are reflected in our consolidated financial statements as discontinued operations for the years ended December 31, 2023.
Discontinued Operations The financial results of the Roots business are reflected in our consolidated financial statements as discontinued operations for the years ended December 31, 2024 and 2023.
In some cases, forward-looking 44 statements may be identified by terminology such as “may,” “will”, “should,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “outlook,” “guidance,” “target,” “continue” or the negative of such terms or comparable terminology.
In some cases, forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “outlook,” “guidance,” “target,” “continue” or the negative of such terms or comparable terminology.
We believe that our existing cash and cash equivalents, funds available under our senior secured revolving credit facility due October 2026 or other financing alternatives, and cash provided by operations will be sufficient to meet our normal working capital needs, capital expenditures and investments for the foreseeable future.
We believe that our existing cash and cash equivalents, funds available under our senior secured revolving credit facility due April 2029 or other financing alternatives, and cash provided by operations will be sufficient to meet our normal working capital needs, capital expenditures, debt repayments and investments for the foreseeable future.
Our unique product and solution portfolio across stationary and rotating equipment is used in every phase of the liquid gas supply chain, including engineering, service and repair from installation to preventive maintenance and digital monitoring. Chart is a leading provider of technology, equipment and services related to liquefied natural gas, hydrogen, biogas and carbon capture among other applications.
The Company’s unique product and solution portfolio across stationary and rotating equipment is used in every phase of the liquid gas supply chain, including engineering, service and repair and from installation to preventive maintenance and digital monitoring. Chart is a leading provider of technology, equipment and services related to LNG, hydrogen, biogas and CO2 capture among other applications.
As of October 1, 2023, 2022 and 2021 (“annual reporting unit assessment dates”) we elected to bypass the Step 0 test and based on our Step 1 test, we determined that the fair value of each of our reporting units was greater than its respective carrying value at each annual reporting unit assessment date, and therefore, no further action was necessary.
As of October 1, 2024, 2023 and 2022 (“annual reporting unit assessment dates”) we elected to bypass the Step 0 test and based on our Step 1 test, we determined that the fair value of each of our reporting units was greater than its respective carrying value at each annual reporting unit assessment date.
A description of these and our other debt instruments and related covenants are described in Note 10, “Debt and Credit Arrangements,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
Liquidity and Capital Resources Our debt instruments and related covenants are described in Note 10, “Debt and Credit Arrangements,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
Based on our historical experience in litigating these claims, as well as our current assessment of the underlying merits of the claims and applicable insurance, if any, we believe the resolution of these legal claims will not have a material adverse effect on our financial position, liquidity, cash flows or results of operations.
Based on our historical experience in litigating these claims, as well as our current assessment of the underlying merits of the claims and applicable insurance, if any, we believe the resolution of these legal claims will not have a material adverse effect on our financial position, liquidity, cash flows or results of operations. 32 Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect.
Net Income Attributable to Chart Industries, Inc. From Continuing Operations As a result of the foregoing, net income attributable to Chart Industries, Inc. from continuing operations was $47.9 million and $81.6 million for 2023 and 2022, respectively.
Net Income Attributable to Chart Industries, Inc. From Continuing Operations As a result of the foregoing, net income attributable to Chart Industries, Inc. from continuing operations was $222.0 million and $47.9 million for 2024 and 2023, respectively.
We are committed to excellence in environmental, social and corporate governance (ESG) issues both for our company as well as our customers. With 64 global manufacturing locations and over 50 service centers from the United States to Asia, Australia, India, Europe and South America, we maintain accountability and transparency to our team members, suppliers, customers and communities.
Chart is committed to excellence in ESG issues both for its company as well as its customers. With 64 global manufacturing locations and over 50 service centers from the United States to Asia, Australia, India, Europe the Middle East, Africa and South America, we maintain accountability and transparency to our team members, suppliers, customers and communities.
We are involved with environmental compliance, investigation, monitoring, and remediation activities at certain of our owned and formerly owned manufacturing facilities and at one owned facility that is leased to a third party, and, except for these continuing remediation efforts, believe we are currently in substantial compliance with all known environmental regulations.
We are involved with environmental compliance, investigation, monitoring, and remediation activities at certain of our owned and formerly owned manufacturing facilities, and, except for these continuing remediation efforts, believe we are currently in substantial compliance with all known environmental regulations.
Management anticipates we will be able to satisfy cash requirements for our ongoing business for the foreseeable future with cash generated by operations, existing cash balances and available borrowings under our credit facilities. We expect capital expenditures for 2024 to be in the rang e of $115.0 million to $125.0 million.
Management anticipates we will be able to satisfy cash requirements for our ongoing business for the foreseeable future with cash generated by operations, existing cash balances and available borrowings under our credit facilities. We expect capital expenditures for 2025 to be approximately $110.0 million.
Overview We are a leading independent global leader in the design, engineering, and manufacturing of process technologies and equipment for gas and liquid molecule handling for the Nexus of Clean™ – clean power, clean water, clean food, and clean industrials, regardless of molecule.
Overview Chart Industries, Inc. is a global leader in the design, engineering, and manufacturing of process technologies and equipment for gas and liquid molecule handling for the Nexus of Clean™ - clean power, clean water, clean food, and clean industrials, regardless of molecule.
Backlog is comprised of the portion of firm signed purchase orders or other written contractual commitments from customers for which work has not been performed, or is partially completed, that we have not recognized as revenue and excludes unexercised contract options and potential orders.
Backlog is comprised of the portion of firm signed purchase orders or other written contractual commitments from customers for which work has not been performed, or is partially completed, that we have not recognized as revenue and excludes unexercised contract options and potential orders. Our backlog as of December 31, 2024, and 2023 was $4,845.1 million and $4,278.8 million.
Macroeconomic Impacts The current conflict between Russia and Ukraine and the related sanctions imposed by countries against Russia, along with the heightened tensions between the United States and China and recent unrest in the Middle East continue to create uncertainty in the global economy.
Macroeconomic Impacts Geopolitical instability continues to create uncertainty in the global economy, including the current conflict between Russia and Ukraine and the related sanctions imposed by countries against Russia, along with the heightened tensions between the United States and China.
Income Tax Expense Income tax expense of $3.0 million and $15.9 million for the years ended December 31, 2023 and 2022, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 5.2% and 16.1%, respectively.
Income Tax Expense Income tax expense of $78.6 million and $3.0 million for the years ended December 31, 2024 and 2023, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 24.7% and 5.2%, respectively.
The increase in Heat Transfer Systems segment gross profit was primarily due to volume, and the increase in the related margin was mainly due to overall product and project volume mix. Heat Transfer Systems segment SG&A expenses increased by $30.1 million during 2023 as compared to 2022, and SG&A expenses as a percentage of sales increased by 90 basis points.
The increase in Heat Transfer Systems segment gross profit was primarily due to volume, and the increase in the related margin was mainly due to overall product and project volume mix. 28 Heat Transfer Systems segment SG&A expenses decreased by $8.5 million during 2024 as compared to 2023, and SG&A expenses as a percentage of sales improved by 170 basis points.
We also have contractual coupon interest related to our 1.00% convertible notes due November 2024, 7.500% senior secured notes due 2030 and 9.500% senior unsecured notes due 2031, which, as of December 31, 2023 totals $160.5 million for the next twelve months and $917.2 million thereafter.
We also have contractual coupon interest related to our 7.500% senior secured notes due 2030 and 9.500% senior unsecured notes due 2031, which, as of December 31, 2024 totals $157.7 million for the next twelve months and $679.4 million thereafter.
The following tables include key metrics used to evaluate our business and measure our performance and represents selected financial data for our operating segments for the years ended December 31, 2023, 2022 and 2021 (dollar amounts in millions): Cryo Tank Solutions—Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 vs. 2022 2023 2022 Variance ($) Variance (%) Sales $ 640.8 $ 504.3 $ 136.5 27.1 % Gross Profit 132.0 98.7 33.3 33.7 % Gross Profit Margin 20.6 % 19.6 % SG&A Expenses $ 70.9 $ 41.8 $ 29.1 69.6 % SG&A Expenses (% of Sales) 11.1 % 8.3 % Operating Income $ 54.5 $ 54.0 $ 0.5 0.9 % Operating Margin 8.5 % 10.7 % Cryo Tank Solutions segment sales increased by $136.5 million during 2023 as compared to 2022 to $640.8 million.
The following tables include key metrics used to evaluate our business and measure our performance and represents selected financial data for our operating segments for the years ended December 31, 2024 and 2023 (dollar amounts in millions): Cryo Tank Solutions—Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, 2024 vs. 2023 2024 2023 Variance ($) Variance (%) Sales $ 637.9 $ 640.8 $ (2.9) (0.5) % Gross Profit 143.5 132.0 11.5 8.7 % Gross Profit Margin 22.5 % 20.6 % SG&A Expenses $ 61.2 $ 70.9 $ (9.7) (13.7) % SG&A Expenses (% of Sales) 9.6 % 11.1 % Operating Income $ 74.6 $ 54.5 $ 20.1 36.9 % Operating Margin 11.7 % 8.5 % Cryo Tank Solutions segment sales decreased by $2.9 million during 2024 as compared to 2023 to $637.9 million.
As of October 1, 2023, we elected to bypass the Step 0 test and based on our Step 1 test, we determined that the fair value of each of our indefinite-lived intangible assets was greater than its respective carrying value, and therefore, no further action was necessary.
As of October 1, 2024 and 2023, we elected to bypass the Step 0 test and based on our Step 1 test, we determined that the fair value of each of our indefinite-lived intangible assets was greater than its respective carrying value. We continue to monitor for any potential indicators of impairment.
Acquisition Related Finance Fees Acquisition related finance fees for the year ended December 31, 2023 were $26.1 million related to bridge loan financing for our acquisition of Howden. Acquisition related finance fees for the year ended December 31, 2022 were $37.0 million related to financing for the acquisition of Howden .
Acquisition Related Finance Fees Acquisition related finance fees for the year ended December 31, 2023 were $26.1 million related to bridge loan financing for our acquisition of Howden, which did not recur in 2024.
Unrealized Loss (Gain) On Investments In Equity Securities During 2023, we recognized an unrealized loss on investments in equity securities of $14.4 million, which was driven by an unrealized loss of $12.7 million on the mark-to-market adjustment of our investment in McPhy (Euronext Paris: MCPHY – ISIN; FR0011742329) (“McPhy”) and a $1.7 million unrealized loss on the mark-to-market adjustment of our investment in Stabilis Energy, Inc.
D uring 2023, we recognized an unrealized loss on investments in equity securities of $14.4 million , which was primarily driven by an unrealized loss of $12.7 million on the mark-to-market adjustment of our investment in M cPhy (Euronext Paris: MCPHY - ISIN; FR0011742329).
Results of operations include results of Howden from the date of acquisition and exclude Roots™ (“Roots”) business financial results for our entire ownership period of March 17, 2023 through the divestiture date, August 18, 2023.
Results from continuing operations include results of Howden from the date of acquisition and exclude Roots™ (“Roots”) business financial results for our entire ownership period of March 17, 2023 through the divestiture date, August 18, 2023. The financial information presented and discussion of results that follows is presented on a continuing operations basis unless stated otherwise.
Heat Transfer Systems segment backlog totaled a record $1,716.5 million as of December 31, 2023 compared to $1,300.1 million as of December 31, 2022, an increase of $416.4 million. Specialty Products segment orders for 2023 were $1,341.6 million compared to $665.5 million for 2022, an increase of $676.1 million.
Heat Transfer Systems segment backlog totaled a $2,097.4 million as of December 31, 2024 compared to $1,716.5 million as of December 31, 2023, an increase of $380.9 million. Specialty Products segment orders for 2024 were $1,562.0 million compared to $1,341.6 million for 2023, an increase of $220.4 million.
Environmental, Social, Governance Chart is proud to be at the forefront of the clean energy transition as a leading provider of technology, equipment and services related to liquefied natural gas (LNG), hydrogen, biogas, carbon capture and water treatment, among other applications.
We continue to actively monitor the impact of these macroeconomic developments on our results of operations beyond 2024. Environmental, Social, Governance Chart is proud to be at the forefront of the energy transition as a leading provider of technology, equipment and services related to LNG, hydrogen & helium, biogas, carbon capture and water treatment, among other applications.
Variable consideration estimates are updated at each reporting date. 43 In certain contracts, we are engaged to engineer and build highly-customized products and systems. In these circumstances, we produce an asset with no alternative use and have a right to payment for performance completed to date.
An asset is transferred to a customer when, or as, the customer obtains control over that asset. In certain contracts, we are engaged to engineer and build highly-customized products and systems. In these circumstances, we produce an asset with no alternative use and have a right to payment for performance completed to date.
Refer to Note 14, “Business Combinations” within Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information. 40 Our commercial commitments as of December 31, 2023, which include standby letters of credit and bank guarantees, represent potential cash requirements resulting from contingent events that require performance by us or our subsidiaries pursuant to funding commitments, and are as follows (dollar amounts in millions): Total Expiring in 2024 Expiring in 2025 and beyond Standby letters of credit $ 272.1 $ 165.8 $ 106.3 Bank guarantees 134.3 85.3 49.0 Total commercial commitments $ 406.4 $ 251.1 $ 155.3 Contingencies We are subject to federal, state, local, and foreign environmental laws and regulations concerning, among other matters, waste water effluents, air emissions, and handling and disposal of hazardous materials, such as cleaning fluids.
Our commercial commitments as of December 31, 2024, which include standby letters of credit and bank guarantees, represent potential cash requirements resulting from contingent events that require performance by us or our subsidiaries pursuant to funding commitments, and are as follows (dollar amounts in millions): Total Expiring in 2025 Expiring in 2026 and beyond Standby letters of credit $ 277.5 $ 113.1 $ 164.4 Bank guarantees 173.8 102.3 71.5 Total commercial commitments $ 451.3 $ 215.4 $ 235.9 Contingencies We are subject to federal, state, local, and foreign environmental laws and regulations concerning, among other matters, waste water effluents, air emissions, and handling and disposal of hazardous materials, such as cleaning fluids.
During 2023, we borrowed $1,895.1 million from revolving credit facilities and raised $11.7 million in proceeds for the issuance of common stock, primarily to fund the Howden Acquisition a nd repaid $1,901.2 million in borrowings on credit facilities. A portion of debt repayments was funded with the proceeds from the previously mentioned divestitures.
On December 4, 2023, we voluntarily prepaid a portion of our term loans due March 2030 in the amount of $150.0 million. During 2023, we borrowed $1,895.1 million from revolving credit facilities and raised $11.7 million in proceeds for the issuance of common stock, primarily to fund the Howden Acquisition and repaid $1,901.2 million in borrowings on revolving credit facilities.
Heat Transfer Systems—Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 vs. 2022 2023 2022 Variance ($) Variance (%) Sales $ 891.2 $ 462.7 $ 428.5 92.6 % Gross Profit 246.8 90.6 156.2 172.4 % Gross Profit Margin 27.7 % 19.6 % SG&A Expenses $ 54.1 $ 24.0 $ 30.1 125.4 % SG&A Expenses (% of Sales) 6.1 % 5.2 % Operating Income (Loss) $ 175.8 $ 51.7 $ 124.1 240.0 % Operating Margin 19.7 % 11.2 % Heat Transfer Systems segment sales increased by $428.5 million during 2023 as compared to 2022 to a record $891.2 million.
Heat Transfer Systems—Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, 2024 vs. 2023 2024 2023 Variance ($) Variance (%) Sales $ 1,035.3 $ 891.2 $ 144.1 16.2 % Gross Profit 299.0 246.8 52.2 21.2 % Gross Profit Margin 28.9 % 27.7 % SG&A Expenses $ 45.6 $ 54.1 $ (8.5) (15.7) % SG&A Expenses (% of Sales) 4.4 % 6.1 % Operating Income (Loss) $ 233.3 $ 175.8 $ 57.5 32.7 % Operating Margin 22.5 % 19.7 % Heat Transfer Systems segment sales increased by $144.1 million to $1,035.3 million during 2024 as compared to 2023.
In connection with the Howden Acquisition, we borrowed incremental term loans in the aggregate principal amount of $1,534.8 million and borrowed incremental term loans in the aggregate principal amount of $250.0 million for general corporate purposes during 2023. On December 4, 2023, we voluntarily prepaid a portion of our term loans due March 2030 in the amount of $150.0 million.
We additionally paid $27.2 million of dividends on our mandatory convertible preferred stock. In 2023, in connection with the Howden Acquisition, we borrowed incremental term loans in the aggregate principal amount of $1,534.8 million and borrowed incremental term loans in the aggregate principal amount of $250.0 million for general corporate purposes during 2023.
The tables below represent orders received and backlog by segment for the periods indicated (dollar amounts in millions): Year Ended December 31, 2023 2022 2021 Orders Cryo Tank Solutions $ 608.8 $ 508.4 $ 555.4 Heat Transfer Systems 1,114.2 1,417.6 312.0 Specialty Products 1,341.6 665.5 648.6 Repair, Service & Leasing 1,100.8 218.9 180.6 Intersegment eliminations (25.2) (30.5) (20.5) Consolidated $ 4,140.2 $ 2,779.9 $ 1,676.1 As of December 31, 2023 2022 2021 Backlog Cryo Tank Solutions $ 361.9 $ 371.0 $ 346.8 Heat Transfer Systems 1,716.5 1,300.1 370.4 Specialty Products 1,631.1 645.9 438.2 Repair, Service & Leasing 587.9 57.0 56.5 Intersegment eliminations (18.6) (35.9) (21.8) Consolidated $ 4,278.8 $ 2,338.1 $ 1,190.1 Orders and Backlog for the Year Ended and As of December 31, 2023 Compared to the Year Ended and As of December 31, 2022 Cryo Tank Solutions segment orders for 2023 were $608.8 million, as compared to $508.4 million for 2022, an increase of $100.4 million.
The tables below represent orders received and backlog by segment for the periods indicated (dollar amounts in millions): Year Ended December 31, 2024 2023 Orders Cryo Tank Solutions $ 582.9 $ 608.8 Heat Transfer Systems 1,467.7 1,114.2 Specialty Products 1,562.0 1,341.6 Repair, Service & Leasing 1,393.3 1,100.8 Intersegment eliminations 0.9 (25.2) Consolidated $ 5,006.8 $ 4,140.2 As of December 31, 2024 2023 Backlog Cryo Tank Solutions $ 290.3 $ 361.9 Heat Transfer Systems 2,097.4 1,716.5 Specialty Products 1,888.1 1,631.1 Repair, Service & Leasing 577.1 587.9 Intersegment eliminations (7.8) (18.6) Consolidated $ 4,845.1 $ 4,278.8 Orders and Backlog for the Year Ended and As of December 31, 2024 Compared to the Year Ended and As of December 31, 2023 Cryo Tank Solutions segment orders for 2024 were $582.9 million, as compared to $608.8 million for 2023, a decrease of $25.9 million.
For further information, refer to Note 4, “Segment and Geographic Information” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
Corporate includes certain unallocated operating expenses for executive management, accounting, tax, treasury, corporate development, human resources, information technology, investor relations, legal, internal audit, and risk management. For further information, refer to Note 4, “Segment and Geographic Information” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
As additional information becomes available, we 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.
As additional information becomes available, we 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. Revenue Recognition: Revenue is recognized when (or as) we satisfy performance obligations by transferring a promised good or service, an asset, to a customer.
In 2023 we also received proceeds, net of cash divested, of $474.8 million from the sale of our Roots, Cofimco, American Fan, and Cryo Diffusion businesses .
During 2023 we used $4,322.3 million of cash for the Howden Acquisition, $135.6 million for capital expenditures, and $11.6 million for investments, primarily Avina and Hylium Industri es. In 2023 we also received proceeds, net of cash divested, of $474.8 million from the sale of our Roots, Cofimco, American Fan, and Cryo Diffusion businesses .
We also have a 44.1 million euros investment commitment for the Clean H2 Infra Fund as mentioned in Note 6, “Investments” within Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
We have a 35.8 million euro investment commitment for the Clean H2 Infra Fund as mentioned in Note 6, “Investments” within Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. Funding is required when the fund manager issues a capital call, which shall not exceed 30% of our capital commitment in any rolling 12-month period.
Certain factors can impact these estimates including, but not limited to, the potential for incentives or penalties on performance, schedule delays, labor productivity, the complexity of work performed and the cost and availability of materials.
Accounting for contracts using the costs incurred input method requires management judgment relative to assessing risks and their impact on the estimates of revenue and costs. Certain factors can impact these estimates including, but not limited to, schedule delays, labor productivity, the complexity of work performed and the cost and availability of materials.
Consolidated SG&A expenses as a percentage of consolidated sales for 2023 increased by 1.2% as compared to 2022 primarily due to integration related costs incurred in 2023. 27 Operating Results The following table sets forth the percentage relationship that each line item in our consolidated statements of income represents to sales for the years ended December 31, 2023, 2022, and 2021: 2023 2022 2021 Sales 100.0 % 100.0 % 100.0 % Cost of sales (1) 69.0 74.7 75.4 Gross profit 31.0 25.3 24.6 Selling, general and administrative expenses (2)-(4) 14.5 13.3 14.9 Amortization expense 4.9 2.6 3.0 Operating income 11.7 9.4 6.7 Acquisition related finance fees 0.8 2.3 — Interest expense, net 8.1 1.8 0.8 Financing costs amortization (5) 0.5 0.2 0.6 Loss on extinguishment of debt 0.2 — — Unrealized loss (gain) on investment in equity securities 0.4 (0.8) (0.2) Realized gain on investment in equity securities — — (0.2) Foreign currency (gain) loss (0.1) — 0.1 Other (income) expense, net — (0.1) — Income tax expense, net 0.1 1.0 1.0 Net income from continuing operations 1.7 5.1 4.6 Loss from discontinued operations, net of tax — (3.6) — Net income 1.7 1.6 4.6 Less: Income attributable to noncontrolling interests of continuing operations, net of taxes 0.3 0.1 0.1 Net income attributable to Chart Industries 1.4 1.5 4.5 _______________ (1) Cost of sales includes restructuring costs/(credits) of $0.5, $(1.0) and $2.6 for the years ended December 31, 2023, 2022 and 2021, respectively.
Operating Results The following table sets forth the percentage relationship that each line item in our consolidated statements of income represents to sales for the years ended December 31, 2024 and 2023: 2024 2023 Sales 100.0 % 100.0 % Cost of sales 66.6 69.0 Gross profit 33.4 31.0 Selling, general and administrative expenses (1) 13.2 14.5 Amortization expense 4.7 4.9 Operating income 15.6 11.7 Acquisition related finance fees — 0.8 Interest expense, net 7.9 8.6 Other expense (income), net — 0.5 Income tax expense, net 1.9 0.1 Net income from continuing operations 5.7 1.7 Loss from discontinued operations, net of tax (0.1) — Net income 5.6 1.7 Less: Income attributable to noncontrolling interests of continuing operations, net of taxes 0.3 0.3 Net income attributable to Chart Industries, Inc. 5.3 1.4 _______________ (1) Includes share-based compensation expense of $18.9 million and $12.6 million , representing 0.5% and 0.4% of sales, for the years ended December 31, 2024 and 2023. 24 Consolidated Results for the Years Ended December 31, 2024 and 2023 The following table includes key metrics used to evaluate our business and measure our performance and represents selected financial data for our operating segments for the years ended December 31, 2024 and 2023 (dollar amounts in millions).
Corporate SG&A expenses increased by $8.4 million during 2022 as compared to 2021 mainly due to higher employee-related costs. 37 Orders and Backlog We consider orders to be those for which we have received a firm signed purchase order or other written contractual commitment from the customer.
Orders and Backlog We consider orders to be those for which we have received a firm signed purchase order or other written contractual commitment from the customer.
Heat Transfer Systems segment SG&A expenses decreased by $4.1 million during 2022 as compared to 2021 mainly due to lower restructuring costs and lower employee-related costs. 35 Specialty Products—Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 vs. 2022 2023 2022 Variance ($) Variance (%) Sales $ 819.9 $ 448.3 $ 371.6 82.9 % Gross Profit 221.4 138.6 82.8 59.7 % Gross Profit Margin 27.0 % 30.9 % SG&A Expenses 82.6 $ 55.6 $ 27.0 48.6 % SG&A Expenses (% of Sales) 10.1 % 12.4 % Operating Income 119.7 $ 72.9 $ 46.8 64.2 % Operating Margin 14.6 % 16.3 % Specialty Products segment sales increased by $371.6 million during 2023 as compared to 2022 to a record $819.9 million.
Specialty Products—Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, 2024 vs. 2023 2024 2023 Variance ($) Variance (%) Sales $ 1,114.3 $ 819.9 $ 294.4 35.9 % Gross Profit 301.1 221.4 79.7 36.0 % Gross Profit Margin 27.0 % 27.0 % SG&A Expenses 106.6 $ 82.6 $ 24.0 29.1 % SG&A Expenses (% of Sales) 9.6 % 10.1 % Operating Income 173.1 $ 119.7 $ 53.4 44.6 % Operating Margin 15.5 % 14.6 % Specialty Products segment sales increased by $294.4 million to $1,114.3 million during 2024 as compared to 2023.
The increase in gross profit and the related margin was driven by volumes from the Howden Acquisition and early synergies achieved. Repair, Service & Leasing segment SG&A expenses increased by $100.9 million during 2023 as compared to 2022. SG&A expenses as a percentage of sales increased by 400 basis points.
The gross profit margin was impacted by synergies achieved as well as field service work that took place during the second and third quarters of 2024. Repair, Service & Leasing segment SG&A expenses increased by $33.9 million during 2024 as compared to 2023. SG&A expenses as a percentage of sales improved by 40 basis points.
Specialty Products segment SG&A expenses increased by $12.3 million during 2022 as compared to 2021 primarily driven by ramp up in the business and acquisition additions. 36 Repair, Service & Leasing—Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 vs. 2022 2023 2022 Variance ($) Variance (%) Sales $ 1,029.2 $ 209.6 $ 819.6 391.0 % Gross Profit 440.2 79.5 360.7 453.7 % Gross Profit Margin 42.8 % 37.9 % SG&A Expenses $ 116.1 $ 15.2 $ 100.9 663.8 % SG&A Expenses (% of Sales) 11.3 % 7.3 % Operating Income $ 203.3 $ 51.0 $ 152.3 298.6 % Operating Margin 19.8 % 24.3 % Repair, Service & Leasing segment sales increased by $819.6 million during 2023 as compared to 2022 to a record $1,029.2 million.
Repair, Service & Leasing—Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, 2024 vs. 2023 2024 2023 Variance ($) Variance (%) Sales $ 1,372.7 $ 1,029.2 $ 343.5 33.4 % Gross Profit 645.2 440.2 205.0 46.6 % Gross Profit Margin 47.0 % 42.8 % SG&A Expenses $ 150.0 $ 116.1 $ 33.9 29.2 % SG&A Expenses (% of Sales) 10.9 % 11.3 % Operating Income $ 350.5 $ 203.3 $ 147.2 72.4 % Operating Margin 25.5 % 19.8 % Repair, Service & Leasing segment sales increased by $343.5 million to $1,372.7 million during 2024 as compared to 2023.
The increase in interest expense, net was partially offset by interest income of $21.5 million earned primarily from deposits of proceeds from the senior secured notes due 2030, senior unsecured notes due 2031, common stock and preferred stock offerings held until the consummation of the Howden Acquisition, interest income on sales-type leases of $3.3 million, and $1.6 million interest income from our cross-currency swaps entered into on September 16, 2022.
Furthermore, interest expense, net for 2023, included $21.5 million in interest income earned from deposits of proceeds from the senior secured notes due 2030, senior unsecured notes due 2031, common stock and preferred stock offerings into interest bearing accounts until the consummation of the Howden Acquisition.
Management must make assumptions, judgments and estimates to determine our deferred tax assets and liabilities, current provision for income taxes and valuation allowances. In making such assumptions we consider all available evidence including past operating results, estimates of future taxable income and the feasibility of tax planning strategies.
Management must make assumptions, judgments and estimates to determine our deferred tax assets and liabilities, current provision for income taxes and valuation allowances.
We are unable to predict the impact these actions will have on the global economy or on our business, financial condition and results of operations.
Additionally, geopolitical uncertainty regarding energy policies may affect the timing of certain projects. We are unable to predict the impact these actions will have on the global economy or on our business, financial condition and results of operations. These events did not have a material adverse effect on our reported results for 2024.
For further information, refer to Note 3, “Discontinued Operations and Other Businesses Sold” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. 31 Results of Operations for the Years Ended December 31, 2022 and 2021 Sales in 2022 increased by $294.7 million from $1,317.7 million to $1,612.4 million, or 22.4%.
For further information, refer to Note 3, “Discontinued Operations and Other Businesses Sold” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. 27 Segment Results for the Years Ended December 31, 2024 and 2023 Our reportable and operating segments include: Cryo Tank Solutions, Heat Transfer Systems, Specialty Products and Repair, Service & Leasing.
The effective income tax rate of 16.1% for the year ended December 31, 2022 differed from the U.S. federal statutory rate of 21% primarily due to tax benefits associated with share-based compensation and the release of previously booked valuation allowances offset by the effect of income earned by certain of our foreign entities being taxed at higher rates than the federal statutory rate as well as increases in our state taxes due to expansion in new jurisdictions.
The effective income tax rate of 24.7% for the year ended December 31, 2024 differed from the U.S. federal statutory rate of 21% due primarily to the effect of income earned by certain of our foreign entities being taxes at higher rates than the federal statutory rate and the build of valuation allowances against specific deferred tax assets offset by the benefits of U.S. taxation of international operations optimization, research and development tax credit benefits and favorable provision to return adjustments.
Future developments may, however, result in resolution of these legal claims in a way that could have a material adverse effect. See Item 1A. “Risk Factors” and Item 3, “Legal Proceedings” for further information. Foreign Operations Our foreign operations accounted for approximately 58.6% of 2023 consolidated sales and 57.4% of total property, plant and equipment at December 31, 2023.
See Item 1A. “Risk Factors” and Item 3, “Legal Proceedings” for further information. Foreign Operations Our foreign operations accounted for 60.1% of 2024 consolidated sales and 51.3% of total property, plant and equipment at December 31, 2024.
The increase in the sales was largely attributed to the Howden Acquisition. Repair, Service & Leasing segment gross profit increased by $360.7 million during 2023 as compared to 2022 to a record $440.2 million, and gross profit margin increased by 490 basis points to 42.8%.
Repair, Service & Leasing segment gross profit increased by $205.0 million to $645.2 million during 2024 as compared to 29 2023, and gross profit margin increased by 420 basis points to 47.0%. The increase in gross profit was largely driven by Howden results impacting the entire 2024 year versus part of 2023.
See below for discussion regarding the composition of cash provided by investing activities during 2022. 39 Cash provided by financing activities during 2023 was $1,412.5 million compared to cash provided by financing activities of $2,504.2 million during 2022.
Cash used in financing activities during 2024 was $243.7 million compared to cash provided by financing activities of $1,412.5 million during 2023.
Years Ended December 31, 2022 and 2021 Cash provided by operating activities during 2022 was $80.8 million, an increase of $102.1 million from 2021, primarily due to an increase in operating cash provided by working capital, particularly within accounts payable and inventory.
Years Ended December 31, 2024 and 2023 Cash provided by operating activities during 2024 was $503.0 million, an increase of $335.8 million from 2023, primarily due to operating performance and cash management. This was partially offset by higher interest payments in 2024.
Also during 2022, we received $675.1 million net proceeds from the issuance of common stock and $388.1 million net proceeds from the issuance of preferred stock, both related to the Howden Acquisition. Cash Requirements We do not currently anticipate any unusual cash requirements for working capital needs for the year ending December 31, 2024 relating to our existing business.
We also paid $12.2 million in dividend distributions to noncontrolling interest owners during 2023. 31 Cash Requirements We do not currently anticipate any unusual cash requirements for working capital needs for the year ending December 31, 2025 relating to our existing business.
The increase was primarily driven by LNG products that utilized brazed aluminum heat exchangers and air coolers and systems servicing big LNG, floating LNG and small scale LNG applications as well as traditional energy applications. Heat Transfer Systems segment gross profit increased by $156.2 million during 2023 as compared to 2022, and gross profit margin increased by 810 basis points.
Heat Transfer Systems sales were negatively impacted by foreign currency impacts of about $2.4 million. The increase in sales was driven primarily by increased sales in traditional energy and LNG. Heat Transfer Systems segment gross profit increased by $52.2 million during 2024 as compared to 2023, and gross profit margin increased by 120 basis points.
Specialty Products segment backlog totaled $645.9 million as of December 31, 2022, compared to $438.2 million as of December 31, 2021, an increase of $207.7 million. Repair, Service & Leasing segment orders for 2022 were $218.9 million compared to $180.6 million for 2021, an increase of $38.3 million.
Specialty Products segment backlog totaled a $1,888.1 million as of December 31, 2024, compared to $1,631.1 million as of December 31, 2023, an increase of $257.0 million. Repair, Service & Leasing segment orders for 2024 were $1,393.3 million compared to $1,100.8 million in 2023, an increase of $292.5 million.
Funding is required when the fund manager issues a capital call, which shall not exceed 30% of our capital commitment in any rolling 12-month period. We also have contingent consideration arrangements from prior acquisitions with a potential payout range of $0.0 million to $12.5 million.
We also have contingent consideration arrangements from prior acquisitions with a potential payout range of zero to $12.5 million.
In 2023, we received the following ESG-oriented recognition: • S&P Global Platts Energy Awards Corporate Impact – Comprehensive Portfolio finalist (2023) • Hydrogen Technology of the Year finalist in the 2023 Hydrogen Future Awards • Named to Newsweek’s America’s Most Responsible Companies 2024 list, demonstrating our commitment to corporate social responsibility, sustainability, and giving back to our communities. 2023 Highlights On March 17, 2023, we completed the acquisition of Howden (the “Howden Acquisition”), a leading global provider of mission critical air and gas handling products and services, from affiliates of KPS Capital Partners, LP.
On March 17, 2023, we completed the acquisition of Howden (the “Howden Acquisition”), a leading global provider of mission critical air and gas handling products and services, from affiliates of KPS Capital Partners, LP.
During 2023 we paid $136.2 million in debt issuance costs and paid $27.3 million of dividends on our mandatory convertible preferred stock. We also paid $12.2 million in dividend distributions to noncontrolling interest owners during 2023. See below for discussion regarding the composition of cash provided by financing activities during 2022.
A portion of debt repayments was funded with the proceeds from the previously mentioned divestitures. During 2023 we paid $136.2 million in debt issuance costs and paid $27.3 million of dividends on our mandatory convertible preferred stock.
He at Transfer Systems segment backlog totaled $1,300.1 million as of December 31, 2022 compared to $370.4 million as of December 31, 2021, an increase of $929.7 million. Specialty Products segment orders for 2022 were $665.5 million compared to $648.6 million for 2021, an increase of $16.9 million.
Cryo Tank Solutions segment backlog totaled $290.3 million as of December 31, 2024, compared to $361.9 million as of December 31, 2023, a decrease of $71.6 million. 30 Heat Transfer Systems segment orders for 2024 were $1,467.7 million compared to $1,114.2 million for 2023, an increase of $353.5 million .
Specialty Products segment SG&A expenses increased by $27.0 million during 2023 as compared to 2022 primarily driven by inclusion of the Howden business, along with employee and integration related costs driven by the Howden Acquisition.
Specialty Products segment SG&A expenses increased by $24.0 million during 2024 as com pared to 2023 primarily driven by ownership of Howden for the entire period of 2024 versus a partial period in 2023 as well as increased sales.
Similar to the comments previously mentioned in the results of operations section, the increase in Specialty Products sales was primarily driven by favorable sales in hydrogen and helium applications, water treatment, space applications, food & beverage applications and carbon capture.
The increase in Specialty Products sales was driven by Howden results impacting the entire first quarter of 2024 versus a partial period in the first quarter of 2023 as well as the conversion of backlog related to hydrogen, mining, space, carbon capture and water treatment applications.
Alternatively, we may also bypass the Step 0 Test and proceed directly to the first step of the goodwill impairment test.
The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill. We have elected to bypass the qualitative Step 0 Test and proceed directly to the first step (“Step 1”) of the goodwill impairment test.
An increase or decrease of one percentage point in our effective tax rate would have affected our 2023 net income by $0.6 million. Recent Accounting Standards For disclosures regarding recent accounting standards, refer to Note 2, “Significant Accounting Policies,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.
In making such assumptions we consider all available evidence including past operating results, estimates of future taxable income and the feasibility of tax planning strategies Recent Accounting Standards For disclosures regarding recent accounting standards, refer to Note 2, “Significant Accounting Policies,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. 34 Forward-Looking Statements We are making this statement in order to satisfy the “safe harbor” provisions contained in the Private Securities Litigation Reform Act of 1995.
Our foreign subsidiaries held cash of approximately $170.1 million and $66.7 million at December 31, 2023 and 2022, respectively, to meet their liquidity needs. No material restrictions exist to accessing cash held by our foreign subsidiaries.
No material restrictions exist to accessing cash held by our foreign subsidiaries.
Record order intake in our Repair, Service & Leasing segment of $1,100.8 million in 2023 compared to $218.9 million in 2022, was mainly driven by the inclusion of the Howden aftermarket business and LNG retrofit.
The increase was driven by the impacts of a full year of the Howden in 2024 versus a partial year in 2023 and growth in aftermarket repair and services. Repair, Service & Leasing segment backlog totaled $577.1 million as of December 31, 2024, compared to $587.9 million as of December 31, 2023, a decrease of $10.8 million.
Reporting our ESG performance is one of the ways we demonstrate accountability and transparency to our team members, suppliers, customers, shareholders and communities. Below are some highlights of our ESG efforts, and further information can be found in our fourth Annual Sustainability report with scorecard which was released in April 2023.
We also have a unique offering for the Nexus of Clean™ – clean power, clean water, clean food and clean industrials. Reporting our ESG performance is one of the ways we demonstrate accountability and transparency to our team members, suppliers, customers, shareholders and communities.
Sources and Uses of Cash Our cash and cash equivalents totaled $201.1 million, which includes $12.8 million of restricted cash as of December 31, 2023, a decrease of $2,404.2 from the balance at December 31, 2022, which included borrowings in connection with the Howden Acquisition.
Sources and Uses of Cash Our cash and cash equivalents totaled $308.6 million as of December 31, 2024, which represents an increase of $120.3 million from the balance at December 31, 2023. Our foreign subsidiaries held cash of $281.6 million and $170.1 million at December 31, 2024 and 2023, respectively.
Gross profit in 2022 increased by $83.2 million from $324.2 million to $407.4 million or 25.7% compared to 2021. Gross profit margin of 25.3% in 2022 increased from 24.6% in 2021. The increase in gross profit margin for 2022 compared to 2021 was primarily driven by product mix and pricing and cost reduction actions we took for all segments overall.
Gross profit margin of 33.4% in 2024 increased from 31.0% in 2023. The increase in gross profit margin for 2024 compared to 2023 was primarily driven by a higher mix of aftermarket service & repair work and achievement of both cost and commercial synergies across all segments.
Consolidated SG&A expenses increased by $271.8 million or 126.7% during 2023 compared to the same period in 2022 primarily driven by the inclusion of Howden SG&A expenses, including higher employee-related costs, while consolidated SG&A expenses as a percentage of consolidated sales for 2023 increased by 1.2% as compared to 2022 primarily due to activities related to the integration of the Howden Acquisition.
Consolidated SG&A expenses increased by $61.1 million or 12.6% during 2024 compared to 2023 largely driven by Howden results impacting the entire first quarter of 2024 versus a partial period in the first quarter of 2023 as well as higher information technology related integration costs. Restructuring costs recorded to SG&A were $12.5 million and $13.0 million.
Interest expense, net for the year ended December 31, 2022 related to borrowings on our senior secured notes due 2030 and senior unsecured notes due 2031 was $3.0 million and $1.3 million , respectively. Interest expense, net for the year ended December 31, 2023 included $2.4 million of 1.0% cash interest expense related to our convertible notes due November 2024.
During the year ended December 31, 2024, we borrowed $3,735.1 million and repaid $3,627.2 million on our revolving credit facility, we paid $258.7 million in cash to settle the outstanding principal amount of the convertible notes due November 2024 and repaid $50.0 million in term loans due March 2030.
Gross profit in 2023 increased by $633.0 million from $407.4 million to $1,040.4 million or 155.4% compared to 2022. The increase in gross profit was primarily driven by the contribution from the Howden Acquisition. Gross profit margin of 31.0% in 2023 increased from 25.3% in 2022.
Gross profit in 2024 increased by $348.4 million from $1,040.4 million to $1,388.8 million or 33.5% compared to 2023. The increase in gross profit was primarily driven by higher sales and improved margins, which were largely attributed to a higher mix of Repair, Service & Leasing sales along with improved productivity.
During 2022, we recognized an unrealized gain on investments in equity securities of $13.1 million, which was driven by an unrealized gain of $23.3 million upon remeasurement of the Svante investment due to an observable price change in an orderly transaction for similar instruments of the same issuer and a $1.6 million unrealized gain on the mark-to-market adjustment of our investment in Stabilis, partially offset by a $11.8 million unrealized loss on the mark-to-market adjustment of our investment in McPhy.
During 2024, we recognized an unrealized gain on investments of $10.7 million, which was mainly driven by a fair value adjustment (an unrealized gain) based on an observable price change relative to our investment in Avina Clean Hydrogen Inc. of $11.2 million .
Cryo Tank Solutions SG&A expenses increased during 2023 as compared to 2022 while SG&A expenses as a percentage of sales increased by 280 basis points. The increase in SG&A expenses was mainly due to employee and integration related costs driven by the Howden Acquisition.
Cryo Tank Solutions SG&A expenses decreased during 2024 as compared to 2023, and SG&A expenses as a percentage of sales improved by 150 basis p oints. The decrease in SG&A expenses in both absolute dollars and as a percentage of sales is due to improved resource utilization and realized synergies in both our cost structure and commercial activities.
Legal Proceedings. Cash used in investing activities during 2023 was $3,990.1 million, as compared to cash used in investing activities of $101.6 million during 2022. During 2023 we used $4,322.3 million of cash for the acquisition of Howden, $135.6 million for capital expenditures, and $11.6 million for investments, primarily Avina and Hylium Industri es.
Additionally, 2023 operating cash flows was impacted by the settlement of claims related to the Pacific Fertility Clinic lawsuits in the amount of $73.0 million. Cash used in investing activities during 2024 and 2023 was $141.3 million and $3,990.1 million, respectively. During 2024 we used $120.8 million for capital expenditures and $13.1 million for investments, primarily Hy24.
Otherwise, we would determine the fair value of indefinite-lived intangible assets and perform a quantitative impairment assessment by comparing the indefinite-lived intangible asset’s fair value to its carrying amount. We may bypass such a qualitative assessment and proceed directly to the quantitative assessment. We estimate the fair value of our indefinite-lived assets using the income approach.
We continue to monitor for any potential indicators of impairment. 33 With respect to indefinite-lived intangible assets, we estimate the fair value of our indefinite-lived assets using the income approach.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeEUR Revolver Borrowings: Additionally, assuming no changes in the euro 88.5 million in EUR Revolver Borrowings outstanding under the senior secured revolving credit facility due October 2026 and an additional 100 basis points (1 percent) strengthening in the U.S. dollar in relation to the euro as of the beginning of 2023, during the year ended December 31, 2023, our additional unrealized foreign currency gain would be approximately $1.0 million on a pre-tax basis.
Biggest changeA hypothetical further 10% strengthening of the U.S. dollar versus the euro or Chinese yuan would lower our operating income for the year ended December 31, 2024 by approximately $14.3 million or $13.1 million, respectively. 35 EUR Revolver Borrowings: Additionally, assuming no changes in the euro 78.0 million in EUR Revolver Borrowings outstanding under the senior secured revolving credit facility due April 2029 and an additional 100 basis points (1 percent) strengthening in the U.S. dollar in relation to the euro as of the beginning of 2024, during the year ended December 31, 2024, our additional unrealized foreign currency gain would be approximately $0.8 million on a pre-tax basis.
The call was structured with a strike price higher than our cost basis in such investments, thereby limiting any foreign exchange losses to approximately $11.4 million on a pre-tax basis. We do not use derivative financial instruments for speculative or trading purposes. The terms of the contracts are generally one to three years.
The call was structured with a strike price higher than our cost basis in such investments, thereby limiting any foreign exchange losses to approximately $11.4 million on a pre-tax basis. We do not use derivative financial instruments for speculative or trading purposes. The terms of the contracts are generally one to three years. 36
The financial statements of foreign subsidiaries are translated into their U.S. dollar equivalents at end-of-period exchange rates for assets and liabilities, while income and expenses are translated at average monthly exchange rates. Translation gains and losses are components of other comprehensive income as reported in the consolidated statements of income and comprehensive income.
The financial statements of foreign subsidiaries are translated into their U.S. dollar equivalents at end-of-period exchange rates for assets and liabilities, while income and expenses are translated at average monthly exchange rates. Translation gains and losses are components of other comprehensive (loss) income as reported in the consolidated statements of income and comprehensive income (loss).
If interest rates were to increase 100 basis points (1 percent) from the interest rate for our term loan of 8.7% at December 31, 2023, and assuming no changes in the $1,631.0 million of borrowings outstanding under the term loan at December 31, 2023, our additional annual expense would be approximately $16.3 million on a pre-tax basis.
If interest rates were to increase 100 basis points (1 percent) from the interest rate for our term loan of 7.1% at December 31, 2024, and assuming no changes in the $1,581.0 million of borrowings outstanding under the term loan at December 31, 2024, our additional annual expense would be approximately $15.8 million on a pre-tax basis.
Interest Rate Risk: Our primary interest rate risk exposure results from various floating rate pricing mechanisms contained in our senior secured revolving credit facility due October 2026 and term loans due March 2030.
Interest Rate Risk: Our primary interest rate risk exposure results from various floating rate pricing mechanisms contained in our senior secured revolving credit facility due April 2029 and term loans due March 2030.
If interest rates were to increase 100 basis points (1 percent) from the weighted-average interest rate of 6.2% at December 31, 2023, and assuming no changes in the $102.8 million of borrowings outstanding under the senior secured revolving credit facility due October 2026 at December 31, 2023, our additional annual expense would be approximately $1.0 million on a pre-tax basis.
If interest rates were to increase 100 basis points (1 percent) from the weighted-average interest rate of 7.0% at December 31, 2024, and assuming no changes in the $205.0 million of borrowings outstanding under the senior secured revolving credit facility due April 2029 at December 31, 2024, our additional annual expense would be approximately $2.1 million on a pre-tax basis.
Translation exposure is primarily with the euro, the Czech koruna, the Chinese yuan, the South African rand, the British pound and the Indian rupee. During 2023, the U.S. dollar strengthened in relation to the South African rand by 9% and Chinese yuan by 2%, and weakened in relation to the British pound by 5% and the euro by 3%.
During 2024, the U.S. dollar strengthened in relation to the Czech koruna by 8%, the euro by 6%, the Indian rupee by 3%, the South African rand by 3%, the Chinese yuan by 2%, and British pound by 1%.
Transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in the consolidated statements of income and comprehensive income as a component of foreign currency gain. 45 Derivative Instruments: We enter into foreign currency contracts not designated as hedging instruments to mitigate foreign currency risk for anticipated and firmly committed foreign currency transactions.
Transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in the consolidated statements of income and comprehensive income (loss) as a component of foreign currency gain.
At December 31, 2023, a hypothetical 10% weakening of the U.S. dollar would not materially affect our outstanding foreign exchange forward contracts.
Derivative Instruments: We enter into foreign currency contracts not designated as hedging instruments to mitigate foreign currency risk for anticipated and firmly committed foreign currency transactions. At December 31, 2024, a hypothetical 10% weakening of the U.S. dollar would not materially affect our outstanding foreign exchange forward contracts.
Removed
There was no notable movement between the U.S. dollar and the Indian rupee or Czech koruna. At December 31, 2023, a hypothetical further 10% strengthening of the U.S. dollar would not materially affect our financial statements.
Added
Translation exposure is primarily with the euro, the Czech koruna, the Chinese yuan, the South African rand, the British pound and the Indian rupee.
Removed
Market Price Sensitive Instruments In connection with the pricing of the 2024 Notes, we entered into privately negotiated convertible note hedge transactions (the “Note Hedge Transactions”) with certain parties, including affiliates of the initial purchasers of the 2024 Notes (the “Option Counterparties”) which relate to 4.41 million shares of our common stock and represents the number of shares of our common stock underlying the 2024 Notes.
Removed
These Note Hedge Transactions are expected to reduce the potential dilution upon any future conversion of the 2024 Notes to the extent that the market price per share of our common stock exceeds the conversion price of $58.725 per share.
Removed
We also entered into separate, privately negotiated warrant transactions with the Option Counterparties to acquire up to 4.41 million shares of our common stock.
Removed
The warrant transactions will have a dilutive effect with respect to our common stock to the extent that the price per share of our common stock exceeds the strike price of the warrants unless we elect, subject to certain conditions, to settle the warrants in cash.
Removed
The strike price of the warrant transactions related to the 2024 Notes was initially $71.775 per share. Further information is located in Note 10, “Debt and Credit Arrangements,” of our consolidated financial statements included under Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. 46

Other GTLS 10-K year-over-year comparisons