Business Combinations (Notes)

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Business Combinations

Wuxi Acquisition

On May 27, 2014, Chart Asia finalized the acquisition of 100% of the equity of Wuxi Zhongbo Gas and Air Equipment Manufacturing Co. Ltd., which changed its name to Chart Energy & Chemicals Wuxi Co., Ltd., for an aggregate cash purchase price of 73.3 million Chinese yuan (equivalent to $11,943), net of cash acquired. The fair value of the net assets acquired and goodwill at the date of acquisition was 15.6 million Chinese yuan and 57.7 million Chinese yuan, respectively. Wuxi, located in Wuxi, Jiangsu Province, China, designs, manufactures and sells low-pressure brazed aluminum heat exchangers. In addition, cold box fabrication operations were relocated from Changzhou, China to the Wuxi facility. Wuxi’s results are included in the Company’s E&C segment as of the date of acquisition.

Xinye Acquisition

On June 8, 2013, Chart Asia acquired 80% of the shares of Nanjing Xinye Electric Engineering Co., Ltd. (“Xinye”) for an aggregate cash purchase price of 18.3 million Chinese yuan (equivalent to $2,965), net of cash acquired. The remaining 20% was retained by one of the original shareholders. The fair value of the net assets acquired and goodwill at the date of acquisition was 16.4 million Chinese yuan and 1.9 million Chinese yuan, respectively. Xinye, located in Nanjing, Jiangsu Province, China, designs, manufactures and sells control systems and dispensers for liquefied natural gas, compressed natural gas, and industrial gas applications. It also engages in the design and production of integrated circuit card systems and remote monitoring systems for natural gas mobile equipment. Xinye provides the Company localized dispensing and control technology and increases the Company’s penetration into the high growth natural gas markets in Asia. Xinye’s results are included in the Company’s D&S segment.

AirSep Acquisition

On August 30, 2012, the Company acquired 100% of the equity interests of AirSep Corporation for an aggregate cash purchase price of $182,450 (including approximately $2,800 in acquisition-related tax benefits acquired and $10,000 of debt which was retired upon completion of the acquisition). AirSep, located in Amherst, New York, designs, manufactures, sells and services stationary, transportable and portable oxygen concentrators and self-contained generators, standard generators, and packaged systems for industrial and medical oxygen generating systems. AirSep’s results are included in the Company’s BioMedical segment.

The fair value of the net assets acquired and goodwill at the date of acquisition was $72,687 and $109,763, respectively. The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed, and the related income tax impact of the acquisition adjustments. The acquisition was made and goodwill was established due to the benefits expected to be derived from the expansion of the oxygen concentrator business in the U.S., Europe and Asia, and the growth potential for the Company’s commercial oxygen generation systems business.

The Company recorded a warranty reserve of $37,033 in purchase accounting, which included a significant estimate of claims associated with one of AirSep’s product lines as described further in the Significant Accounting Policies note. Usage of the acquired warranty reserve occurs as this product line progresses through its warranty period (expected completion in 2016) and as such has exceeded warranty expense since the acquisition.

AirSep’s identifiable intangible assets mainly include customer relationships and technology and are also comprised of product names, trademarks and trade names.

Incremental sales and operating income related to the AirSep acquisition were $71,043 and $3,195, respectively, in the year ended December 31, 2013, the latter of which included $2,638 in cost of goods sold to amortize the remaining portion of the write-up of inventory to fair value, $4,570 of intangible assets amortization expense and $2,726 in management retention expenses and severance costs.

For the period August 31, 2012 through December 31, 2012, AirSep added $40,317 to sales. For the same period, the acquisition of AirSep reduced operating income by $4,026 which included $3,270 recorded in cost of goods sold to amortize a portion of the write-up of inventory to fair value, $2,285 of intangible assets amortization expense and $1,111 in management retention expenses. For the year ended December 31, 2012, the Company recognized $1,164 of AirSep acquisition related costs which are included in the consolidated statements of income in selling, general and administrative expenses.

Pro-forma information related to these acquisitions has not been presented because the impact on the Company’s consolidated results of operations is not material.

Contingent Consideration

The estimated fair value of total contingent consideration relating to a prior acquisition was valued using a discounted cash flow approach, which includes assumptions for the probabilities of achieving gross sales targets and the discount rate applied to the projected payments. The valuation is performed using Level 3 inputs as defined in Note 10. Changes in fair value of contingent consideration are recorded as selling, general and administrative expenses in the consolidated statements of income.

Potential payments may be paid between January 1, 2015 and March 31, 2016 based on the attainment of certain revenue targets. The remaining maximum potential payout related to total contingent consideration is $2,259.

The changes in the Company’s contingent consideration liabilities are summarized below:

	Distribution & Storage			BioMedical			Total
Balance at January 1, 2012	$	841		$	6,226		$	7,067
Increase (decrease) in fair value of contingent consideration liabilities	459			(4,236		)	(3,777		)
Payment of contingent consideration	(1,300		)	—			(1,300		)
Balance at December 31, 2012	—			1,990			1,990
Increase in fair value of contingent consideration liabilities	—			299			299
Balance at December 31, 2013	—			2,289			2,289
Decrease in fair value of contingent consideration liabilities	—			(474		)	(474		)
Payment of contingent consideration	—			(741		)	(741		)
Balance at December 31, 2014	$	—		$	1,074		$	1,074