Good morning and welcome to the Chart Industries, Inc. 2013 second quarter earnings conference call. (Operator Instructions) You should have already received the company's earnings release that was issued earlier this morning. If you have not received the release, you may access it by visiting Chart's website, at www.chartindustries.com. A telephone replay of today's broadcast will be available following the conclusion of the call until Friday, August 9. The replay information is contained in the company's earnings release. Before we begin, the company would like to remind you that statements made during this call that are not historical in fact are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied in the forward-looking statement. For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the information regarding forward-looking statements and risk factors included in the company's earnings release and latest filings with the SEC. These filings are available through the Investor Relation section of the company's website or through the SEC website, www.sec.gov. The company undertakes no obligation to update publicly or revise any forward-looking statement. I would now like to turn the conference call over to Michael Biehl, Chart Industries' Executive Vice President, CFO and Treasurer. You may begin your conference.

Good morning everyone. I'd like to thank you all for joining us today. I'll begin by giving you a brief overview of our second quarter results. Then Sam Thomas will provide comments on current market and order trends we see in each of our business segments. And I'll finish up by commenting on our outlook for the remainder of 2013. We reported net income for the second quarter of 2013 of $20 million or $0.64 per diluted share. This included costs of $4.8 million or $0.11 per diluted share, largely associated with the company's acquisition of AirSep, in our BioMedical business, and flood damage at our Distribution and Storage or D&S operations in the Czech Republic. This quarter also includes a $0.02 per diluted share impact associated with additional shares taken to account for our convertible notes. Therefore, earnings per share for the second quarter of 2013 would have been $0.77 per diluted share, excluding this additional dilution and the cost that I mentioned above. This compares to second quarter 2012 net income of $17.9 million or $0.59 per diluted share. The prior year quarter earnings would have been $0.57 per diluted share, excluding $1.1 million of favorable acquisition related earn-out adjustments, partially offset by impairment charges and the write-off of deferred financing fees. I'm going to now briefly explain the dilution impact from our convertible notes. The refinancing actions the company underwent in the third quarter of 2011, allowed us to refinance our former 9% and 8% senior subordinated notes due in 2015, with a 2% convertible notes due in 2018. This refinancing has provided us with cash interest savings of $10 million annually, which has improved our liquidity and our ability to invest in growth opportunities. We believe this has contributed to our success, as evidenced by the…

Thank you, Michael, and good morning, everyone. We're very pleased to announce another successful quarter. The growth of LNG infrastructure for liquefaction, transportation and as a diesel fuel substitute continues to gain momentum, driven by the spread between oil and natural gas prices. China has clearly taken a lead, where in addition to cost environmental considerations are driving action by government officials at all levels. Today, we announced another order from PetroChina for self-contained LNG station module. This is the third major work from PetroChina received in the last couple of quarters and will be included in our third quarter orders and backlog. It's notable that this represents a sale through a company within PetroChina, operating in a different geographic region of China, Shandong Province compared with the two earlier orders. Our self-contained LNG station modules represent an innovative development of flexible LNG fueling station for a fast growing and dynamics LNG market. We pioneered this solution in China, and it represents the kind of opportunities that align Chart's culture of innovation, experience and performance with growth prospects to the new LNG economy is opening up around the worlds. We also continue to provide heat exchanger and cold boxes for LNG small and mid-liquefaction plant build-out in China. In North America, essential infrastructure is being build that puts North America on a similar trajectory to China, in providing LNG as a diesel fuel substitute. We are providing heat exchangers and cold boxes for a number of small and mid-scale liquefiers currently under construction in North America. We're able to provide a range of standard LNG plants, designed fully in-house, which will put our customers on a fast-track schedule for earlier commencement of LNG production. We believe these order wins across the company are strong evidence of the market's recognition of…

Thanks Sam. Our second quarter results were solid. We remain optimistic about continued growth through the rest of this year. Therefore, based on year-to-date results, earn-out and backlog and business expectations, the company is reaffirming its previously announced sales guidance, but tightened the range of its earnings guidance. Sales for 2013 are still expected to be in a range of $1.2 billion to $1.3 billion, but diluted earnings per share are now expected to be in a range of $3.10 to $3.40 per diluted share on approximately 30.6 billion weighted average shares outstanding. This excludes the impact of $0.15 per diluted share in anticipated AirSep acquisition cost and any dilution impact resulting from the convertible notes. This compares with previous earnings guidance of $3 to $3.40 per diluted share, which excluded $0.10 per diluted share in anticipated AirSep acquisition cost and any dilution impact resulting from our convertible notes. We'd now like to open it up for questions. Operator, please provide instructions to the participants to be able to ask questions.

(Operator Instructions) Our first question comes from the line Colin Rusch from Northland Capital.

Can you walk us through the decision making process for potential capacity expansions? And what do you need to see from your customers to get comfortable adding capacity?

Orders are the best thing. However, that often times doesn't provide enough time to put capacity in place, if it requires bricks and mortar. So what we look for is a level of quotation activity with customers, what they have to say about their future needs. And it frequently involves going upstream and looking what their customers are saying or understanding what the availability of financing is for that customer to give us confidence to make those choices. Obviously, it's easier when we have multiple customers that are pursuing the same opportunities or pursuing parallel opportunities, so that we're able to sell to multiple customers. It is however challenging thought, because we frequently run into situations, where customers are more optimistic about the timing of their increased needs that actually pans out. Our benefit there is we have a management team, who are fairly well experienced to try engage those trade-offs.

And as you look at the petrochemical opportunities similar to this ethylene plant, I mean how do you think that how sustainable can that opportunity be for the company do you think?

Well, if you look at the announcements of ethylene capacity expansions and propane dehydrogenation for propylene expansions, we have the opportunity to quote on and win a significant percentage of those well over 50%. The challenge is, will they all go ahead, and in particular in the case of ethylene, each new ethylene plant does represent a significant global capacity expansion. And therefore, the speed that those go-forward is constrained by the outlook for future growth of global GDP, which typically ethylene demand worldwide will be driven by. The economics are very favorable for these ethane-based ethylene plants, particularly in the U.S., where you have low cost natural gas liquefied stocks. The constraint is you can't build too many new plants, if demand is falling or stable. So that's the challenge of predicting the speed that the plants will go forward, but we believe with current economics and current forecasts for GDP growth and hence ethylene, indirectly ethylene demand growth, that we'll see another one-to-three plants moving forward within the next 12 months. I guess perhaps seven or eight announced.

And then just a quick housekeeping, the Noble Energy award, was that in the 2Q bookings or that will be considered a 3Q booking?

That's a second quarter booking.

And that's because of a backlog.

And our next question comes from the line of Eric Stine from Craig-Hallum.

Wondering, if we can just start with China, you know there's been a lot of talk of slowing growth environment there. Is it fair to say that you're not seeing that and don't expect to see that?

Well, in our GDP growth or industrial production related growth, portions of our business in China, particularly the industrial gas industry, we've definitely seen a moderation of demand in China. However, that's significantly over shadowed by secular growth of LNG as a transportation fuel. And we think it's largely on to be unaffected by the forecast for GDP growth rate in China, because it's doing two things; first, as the consumer economy grows in China and it's fully encouraged by the Chinese government. It means that sales of automobiles and sales of trucks to fuel this consumer marketplace are going to continue to grow. China is the largest truck market in the world and is also the largest car market in the world, and with that being a favorite development as opposed to the export economy of China. I don't see any moderation there. And secondly, the continuous spread of oil and natural gas prices means that China gets a big win and its balance of payments and the expenditures necessary to meet their growing energy demands for transportation fuel by using LNG, as opposed to diesel, which is refined from oil. And finally and perhaps the strongest driver within China is the air pollution issue and pollution in general, where it's become a focus or perhaps the most important focus of the Chinese government and it's transmitted through all levels, from the central government down to small cities, that improving air quality is the priority. And one of the best ways to do that is using LNG as a transportation fuel, as opposed to relatively high sulfur diesel to minimal pollution control equipment on existing vehicle. So I think that it's fair to say that the demand for our products in China is going to be unaffected by variations in industrial production growth or GDP growth.

Maybe just sticking with China, I mean the dynamic of large orders there is fairly recent. Just wondering, now that you're into a different operating segment of PetroChina in a different geography, visibility into more orders with PetroChina, but also with other companies, similar companies in China?

The significant size order we've announced, we have been doing business with cooling energy for a little over a year with smaller orders, exploratory orders, and developing a relationship. We are at that same point now with a number of additional regions within PetroChina or operating companies within PetroChina, and also with several of the other or in particular seen up, where we're providing equipment on smaller orders and developing a relationship with them. So we are optimistic that we'll continue to be able to expand those relationships and the size of orders with multiple companies.

Maybe, this one, last one from me. LNG fueling infrastructure in the U.S., I know late 2012, there was a bit of a pause. Just whether you're seeing that pick up, how you see that playing out going forward?

The interest levels are still high. I would say that we're experiencing much of what we experienced in China of wondering why there weren't more orders, when there was so much quotation activity. But I'm very confident that it's moving forward positively. And that as additional LNG liquid or liquefaction capacity come as online and we start to see more of the 12 liter Cummins engines on Class 8 trucks, that it will move progressively and at accelerate pace in the U.S., much the way we've experienced in China.

And our next question comes from the line of Brian Uhlmer from Global Hunter.

I had a couple of quick ones that I want to walk through real quick on the Noble award. It sounds like you said that it was for their internal uses a second ago. Is that accurate?

Yes. Their plans and their justification from what they conveyed to us was primarily to use it for drill rigs and supporting fracking spreads as well as using it for their own core associates, transportation vehicles going to and from the gas fields.

And it seem like you've been tightlipped on the magnitude of that award, is that for competitive reasons or can you help us out a little bit in terms of magnitude of that?

It is competitively sensitive. There is a lot of activity in this area now.

And that segue into my next question is, with that shift by the E&P companies to use biofuel or natural gas rigs. What does the environment look like right now in terms of active bids out there? And can we see two to three more of these or double digits in the next, call it, 12 months or so?

I would say that in the next 12 months or so it would be at the lower end of your speculation. Ultimately it will be, I believe, at the higher end.

Do you have an update on kind of the conversion away from bunker fuel in the marine transport market and any types of green shoots out there in regards to that market?

There is a lot of activity and interest. We did see a proposed push back of the enforcement of the lower emission regulations, but we view that more as a pragmatic assessment of how quickly the industry can actually change as opposed to any of the players in the industry breathing a sigh of relief and backing off on their plans. We think that the use of LNG from marine application is going to be significant. It's historically has been a relatively slow changing marketplace in terms of the time it takes to see significant changeovers of shift. But we believe that their, based on the interest and the active development by the marine engine manufacturers in providing natural gas engines and the level of activity going on amongst the navel architects in doing design work for new LNG ships and the level of activity going on in establishing bunkering stations to provide those both in Europe, China and the U.S. is such that this is a movement that's going to take several years to play out, but is moving along very, very well.

And speaking the third one, of those topics, to the lowering end of your guidance, I guess on the revenue forecast will suggest that your margins declined slightly from current levels, while the high-end would suggest they're up. What are some of the key elements that would make a 310 number versus 340 number, and what are we doing to try and end up with the higher end of that range?

Well, the upside always comes from executing better and so we have lots of activity to try and do just that. And as you might guess, there is plenty of pressure throughout the organization to improve our execution. The thing that hampers that is that the market opportunities we see are significant and we believe very real. And therefore we are often times making decisions to add engineering depth, to add sales and marketing depth to make sure that we maximize this opportunity for the future, even if the actual orders or completion of projects is delayed because there are bottlenecks either within Chart or more often throughout our customer base and their customers. So it's something that the demands growth is very real and we see it very clearly. The near-term it's very challenging for us to predict exactly how quickly things happen.

And our next question comes from the line of Rob Brown from Lake Street Capital.

In your E&C business here, nice uptick in orders, and I know you said you're taking additional orders now in capacity. But sort of what's the market demand there? Is that still holding in solid and where are you seeing kind of the demand coming from in that segment?

As we've talked about, the biggest near-term potential is small and mid-scale LNG for growth. The equipment for gas processing continues at a good pace. Although, we believe it will take some completion of some of the petrochemical plants to increase demand on ethane and completion of some more propane export capacity from the U.S. to drive demand for natural gas liquids, and to come back to the peak we saw in 2010, 2011 of natural gas processing demand. We've seen some good orders for air separation equipment, particularly in China, and we believe that going forward that will continue and as economic activity picks up it will continue. For global scale LNG, we think that we'll see additional opportunities, long-term over the next 10 years, with additional works to Chart possible, say in the second half of 2014, 2015. On petrochemicals, there are a lot of active projects, as I mentioned for ethylene and propane dehydrogenation or propylene production. We have seen one plant go forward. There are at least two additional plants that are close to going forward, when I say close to, we think within the next 12 months. But the speed that those go forward is going to be dependent somewhat on the macroeconomic environment of GDP growth rates. Because as I talked about earlier, when growth forecasts are lower, it decreases the ability to sell new capacity into that market unless you see that forward growth. So clarity in global GDP growth rates will accelerate a number of ethylene plants and petrochemical plants go forward. The economics for producing those petrochemicals from natural gas liquids at U.S. prices are very compelling, but it doesn't do much good if there is too much ideal capacity globally. So basically all of our markets look very positive. We're a little fuzzy on the timing of how big each one gets over the next 18 months, but there is enough positives that we can continue to grow, based on that.

And then, I think you also mentioned in your D&S business that you're seeing increased quoting in Southeast Asia. I guess, could you give some color there? Are you seeing sort of what China is doing expand in other Asian countries, so what's the dynamic there and what's the opportunity for you?

What we're seeing is a number of opportunities for LNG liquefaction or LNG receiving terminals that are small and mid-scale, which would utilize our storage equipments. We're seeing increased interest in using natural gas or LNG as a diesel fuel replacement. And the quality and pace of those inquires, and the progress they're making locally in terms of permitting, leads us to believe that we'll see that as a good growth potential. We've added some resources in Southeast Asia on the sales and marketing side and ensuring backup side, because we see it as a very attractive developing market. And those discussions have included projects in Indonesia, Singapore, Vietnam and Thailand.

And our next question comes from the line of Greg McKinley from Dougherty.

Guys, I'm wondering, if you could talk a little bit about the acquisition environment, and for competitive reasons, I thought you'll get too specific. But when you look at your equipment capabilities today, are there any holes in your offering that you feel would give you an opportunity to fill out your offering to customers? And is that still a significant opportunity for Chart?

It is. It's difficult to be more specific than that. I would say that we see significant organic growth opportunities for our business, and that's taking more of our focus and attention at the moment. But there are also a number of areas that we think are attractive growth opportunities that either with bolt-on acquisitions or even making slightly larger acquisitions in adjacent spaces could be attractive. The timing of that is even more challenging to call than when customers' orders will go forward.

How are you feeling about capacity right now? It's seems that just as soon as you complete a capacity expansion with the momentum in your business, it's always difficult to sort of get out in front of where we think demand is coming from. How do you feel about where you'll be position I guess more from a D&S standpoint over the next year or so?

It's a challenge, but it's a good problem to have. I think that in general, in the U.S. and Europe, we are very well-positioned, although there are some areas, some pieces of equipment, where we're operating at fairly high levels of capacity utilization, particularly on very large storage tanks that are typically used for LNG liquefaction plants or LNG receiving stations. And we have some current projects that we're working on that would expand that. In China, we're currently capacity strapped, because it's been full 12 months, since we completed our vast capacity expansion. And so we're looking at significant capacity expansion in China within the next 12 months.

And then, what are your thoughts on the opportunity for Europe to emerge as a market, where LNG transport fuel activity starts picking up. Or do you see that being dwarfed in the near-term by what's going on in North America?

I would say yes to both questions. I think that the marine market in Europe, because of the strong technology lead that Europe has traditionally had in shipping. We see that moving forward very actively and probably being a market whose size develops on pace with North America, perhaps ahead of North America, and comparable to China. Although, the sheer size of China, means it's hard for anybody, any other region of world to be comparable to China, when it really gets down to doing things. So the marine market, I see Europe is being a very attractive opportunity over the next few years. We are seen progress in the heavy-duty trucking market with each of the engine manufacturer is putting more effort into developing comprehensive solutions and having comprehensive offerings. So ultimately that will come. We are also working on a number of fuel station applications in Europe that I think will continue to grow. So that for heavy-duty transportation, the infrastructure build-out is still a couple of years behind the U.S., but they will have the capability to catch up fairly quickly.

And then just last question, we've talked about small-scale LNG liquefiers domestically as well as in China, can you share any thoughts on how significant those two regions will be compared to each other in terms of your business opportunities over the next 12 to 36 months? Are we seeing the U.S. ramps so quickly that it could become meaningful in relation to what you've been doing in China the last couple of years or how do you guide us to think about that?

I think that the pace of orders and the pace of market growth in China will continue to outstrip the U.S. for the next, probably 18 months to two years. U.S. activity levels will ramp up quickly from late 2014. But while, I think we'll get after 2014, I think you'll see the market share of LNG as opposed to diesel grow rapidly in North America. You have to keep in mind that the Chinese market for diesel fuel when you get out to 2015, 2016 is going to be four-to-five times the size of the U.S. market. So with that as a caveat, it's tough for the U.S. to actually catch up the China in terms of sheer numbers.

Our next question comes from the line of Robert Norfleet from BB&T Capital Markets. John Allison - BB&T Capital Markets: This is actually John Allison on for Rob. First off, I guess, to add just talk about to the capacity questions. I want to know would you consider outsourcing work to third parties to gain some additional flexibility there.

We both consider it and do it. But we limit the amount of outsourcing on critical bits of knowledge or skills from the standpoint of not wanting to encourage more competition than necessary. John Allison - BB&T Capital Markets: In regards to pricing, with capacity as tight as it is in E&C, could you discuss your strategy on raising prices on new orders going forward?

Our strategy is to maximize the profit generated over the medium term and that means that this is a very fluid and dynamic situation, which is competitively sensitive, but Chart is in the position of having a very sound balance sheet with very big future prospects. So there is often times a conscious decision made to not push price as hard as you might for the short-term to have a better market position in the future. John Allison - BB&T Capital Markets: So I guess, when we look at the potential margin expansion in E&C over the next several years, while a portion of this is from new capacity leading to higher utilization rates and fixed price absorption, are you basically saying that, I mean price is a factor, but not necessarily the largest one?

Correct. In the markets we're selling to and at this stage of market development, ability to deliver products quickly is very important and ability to insure our customers that they will have no untoward surprises in placing orders with us, is what we think are the most important criteria for winning orders and growing. It's also worthwhile to point out that historically in our business, one of the drivers, the largest driver for us raising prices, is associated with commodity pricing of the raw materials we use, because they are a significant part of our total sale price. And currently, while we are in a strong growth position, generally the markets for our chief raw materials are fairly soft. So that our material price is, is very little upward pressure on those. So that tends to create a stable price environment on the sale prices of our products.

Our next question comes from the line of Tom Hayes from Thompson Research Group.

Michael, I guess my first question is for you. Last quarter, you indicated on the SG&A line, you felt comfortable, kind of, at a $195 million to $200 million for the full year. Is that still kind of a working assumption?

It will be a little bit, sort of, between $200 million and $210 million range. Couple of reasons, one is related to our continued LNG build or as Sam mentioned we continue to add people and infrastructure for future opportunities to position ourselves well to take advantage of those opportunities as they come forward. And they are not going to generate revenues likely this year. So that's the primary reason. Also other is that we have some stock compensation expense in there, the rise of our share price that increases net expense. And that's captured in the SG&A line.

Then kind of two-part question, I guess for you, Sam, on the growth in the D&S order side. I'm assuming that most that's coming from LNG applications versus industrial gas applications. Could you just kind of confirm that? And then as far as the big growth in the market, the growth, within your order business, is that coming from new applications coming online or are you guys taking share or a combination of both?

First, with respect to LNG versus industrial gas applications, I think that our order intake for industrial gas applications is nominally flat on last year. And fairly well mirror is the comment that you have seen from the industrial gas makers as they've reported over the last couple of weeks of flat to slightly down on volumes. So for the more traditional industrial gas applications, we're seeing down. We're seeing some increase in demand for some of our end-market solutions or differentiated solutions. So for instance, the sale of bulk tanks is relatively soft. The sale of MicroBulk, which affords producers and distributors of lower cost, a method of distribution are up slightly. The second part of your question as to new application versus taking market share, in industrial gas the growth is in newer products, newer applications. There are new competitors coming into the business. Most of that attention is focused on LNG. I think that we're holding our own or doing a bit better than the market overall in winning our fair share of LNG-related orders. And we find that happening both with new customers coming into the market and also more established customers who come back to Chart or give us orders because of our overall value proposition.

Our next question comes from the line of Pavel Molchanov from Raymond James.

Most of my questions have been answered, but just a conceptual one for you. So there is now something like 30 pending or under some sort of permitting process, LNG projects between the U.S. and Canada. And I am just curious what outreach or marketing effort you guys are engaging in with respect to all of those potential project developers domestically?

We've got a group that spends all their time calling out all our potential customers. We exhibit at all of the major tradeshows. We talk daily, weekly, monthly with most of those companies, either the project developers, the energy companies who are the end-users, proposing to go-forward with those and the EPC contractors who are hoping to build those plants.

This maybe a little bit academic, I suppose, but any sense of when the next permit might be handed out by the DOE above and beyond Sabine Pass?

No. I've talked at length about my forecasting capabilities being limited when it comes to predicting DOE or government action. I claim no capability whatsoever.

Our next question comes from the line of Chase Jacobson from William Blair.

I don't want to be a party pooper here at the end of the call, but you mentioned that you are strapped for capacity in China and that you're going to be looking for significant capacity expansions in the next 12 months. Once you decide on that, how long do those capacity expansions take to build? And what does this mean for revenue and order growth, as we kind of look here in the medium term over the next several quarters?

Well, we've demonstrated over the last couple of years that we have the capability to grow our business in China between 50% and 100% in the year. I don't think we've lost that capability.

And I think a similar question on the E&C business. The revenue growth came down quite a bit this quarter, is that because of the low and awards in the second part of 2012 or is that because of capacity? And when we think about the ethylene orders or the order that you had this quarter, should we think of that the timing of that as similar to the large LNG orders that you've had in the past?

Well, that's more timing in this quarter, Chase. We have right now the large scale LNG projects coming through out of backlog into revenue this year. So lot of it is timing. The customer is depending upon their schedule and when we can move it out of revenue into backlogs and move it forward, so that's what's rolling through now. It's always hard to predict when it's going to come true and we try and do that, but we're not always on target. So it can go up or down each quarter, in this year particular, because some of those large scale projects are rolling through for the Wheatstone and specific APLNG that we are currently in the process of building out. And some of the smaller scale orders move certainly through out of backlog and direct revenues much quicker.

Our next question comes from the line of Jeff Osborne from Stifel.

Most of the things have been answered, but just two quick ones here. On PetroChina, obviously, a nice string of orders here, is their plan for them to give you kind of a rolling six month forecast because you've now had three or four quarters in a row of consistent orders or what would be the rationale of not doing like some, kind of, broader framework agreement and having a longer-term deal in place?

There is lots of possibilities under discussions. I would view it as there are 13 operating oilfields or operating divisions within PetroChina. We've had larger words from or significant sales to three of those operating division. We're doing our best to become a favorite supplier as the other operating divisions commenced their rollout of LNG infrastructure.

And I assume what PetroChina had no issue on in terms of credit availability for them. They are using a broader credit impact in China with either PetroChina or any other potential customer?

I think if you look at the balance sheet of PetroChina and the PRC, there is not a lot to worry about.

Last question for you. How do we think about the margin trajectory in 2014, in particular as the La Crosse capacity comes on with the E&C division in particular? Is there any kind of teething pains that we should consider in that the first half of the year or throughout the year?

There is always an issue that we worry about a lot internally. I think that some, from the 20,000 foot level, it may cause small variance in the gross margin. But we've done this before. I think we've got a very good plan for ramping that capacity up. So I feel confident we'll do a good job.

Our next question comes from the line of Martin Malloy from Johnson Rice.

Could you talk a little bit maybe about the product lines that you have, that you feel most confident about in terms of your competitive position, whether from a technology standpoint or relationships with customers?

I think that we put extraordinary effort across all of our product lines into continuing to differentiate them. And for anyone who has followed Chart, you will see that the current product in favor or market in favor changes fairly dynamically overtime. And I think that the focus of everyone here at Chart is continuing to improve our product offering, our service to customers across the full range of our products. And the reason we've been able to grow the business successfully is that when the opportunities come up, Chart gets the call and Chart wins the order, because we're continually doing that. So I don't think there are any products, in particular, which I would single out as being the ones that drive our results. And we've been working across a broad front. And when we see a market that we think is going to be attractive, we work very hard to have lots of product variants that can service the needs of that market.

Our next question comes from the line of Chapman Deng from JPMorgan.

I have got a couple of questions. First is actually to chat on the China growth outlook. You mentioned that you expect 50% to 100% growth in China revenue. May I confirm, is it for 2013 target or is that a medium-term target? That's the first question. The second question is actually regarding the capacity in China. May I know your LNG refilling station capacity as well as LNG tanks, fuel tanks capacity, manufacturing capacity in China right now? And the follow-up question is actually on your capacity addition plans in China.

In terms of that forecast, whether it was 2013 or medium-term, it's certainly what we will experience in 2013, and it's also what I would expect to achieve in the medium-term. In terms of what we're going to add in the way of capacity, those plans are still under discussion. They haven't been announced, but I would anticipate us moving forward to effectively double our capacity or increase our capacity by at least a 100% in China. In terms of specific capacity for our products, virtually all of our products aimed at the LNG market, while slightly different in terms of timing, are undergoing capacity expansions that enable us to meet that forecast of 50% to 100% growth per year over the medium-term. And I think we've demonstrated that we can do that.

Our next question comes from the line of Tom Nowak from Advent Capital.

Just regarding LNG into the drilling and fracking market, can you may be share a little bit more about what you're seeing and how big this market could be? And specifically is there capacity constraint right now in terms of available rigs and fracs spreads that can actually utilize LNG? Is that what the bottleneck is?

I don't know that I would term it the bottleneck. There has been equipments certainly for drilling. There has been equipment converted and there has opportunities to convert more. That market has seen lots of change going on, so it's a matter where do they allocate their resources to make the changes. That's challenging for us to forecast exactly the pace in which that goes forward. In the case of fracking rigs, there is a higher consumption associated with fracking and there is some equipment development going on, both on our part and on the part of E&P companies and the service providers to come up with the most effective and reliable means of making all that fuel available.

Is it competing against field gas, is that part of the issue?

There is the trade-off with field gas. We have some understanding and it's not clear to everyone, us included, what percentage you run rigs and frac spreads on field gas as opposed to LNG. That the range of estimates that I've seen, I've talked about field gas being anywhere from 25% of the market to 70% of the market, with the balance taken up by LNG. It's going to be very much field specific as to whether you can use field gas or field gas economics versus LNG, also going to determined by the availability of liquid.

So it sounds like the industry is still trying to figure out both the technology and the economics. Is that fair?

Yes. And I would say in terms of technology, it's the normal trial and error process that gets used in it as to what works most effectively.

I mean, are the frac spreads and rigs that can utilize LNG? And are they somewhat first generation or they basically being modified existing rigs?

Both.

Thank you. And at this time, I'm not showing any further questions. I would now like to turn the call back over to Sam Thomas.

Okay. Thanks very much everybody. As you can sense from the questions and the responses to the question, we've got a pretty exciting growth opportunity. As we see acceleration of LNG infrastructure opportunities in Asia, followed closely by North America and increasingly other areas of the world. We're also benefiting from increased use of natural gas and natural gas liquids at every step of the value chain on a global basis. We will continue to invest in our people, organization and physical capacity to be well positioned to execute of what we consider to being an exceptional opportunity. Chart has a bright future. And we're all excited to be part of building the company that will deliver on that future. Thanks very much for listening today. Goodbye.

Ladies and gentlemen, thank you for participating on today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day.