Good morning and welcome to the Chart Industries, Inc. 2016 Fourth Quarter and Year-End Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question-and-answer session. As a reminder, today's call is being recorded. 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 Thursday, March 2. 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 statements. 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 Relations 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 statements. I would now like to turn the conference call over to Ken Webster, Chart Industries' Vice President and CFO. You may begin your conference.

Thank you, Michelle. Good morning, everyone. I would like to thank all of you for joining us today. I will begin by giving you a brief overview of our fourth quarter results and outlook for 2017. Then, Sam Thomas, Chairman and CEO; and Bill Johnson, President and COO, will provide comments on our facility consolidation efforts, as well as our current market and order trends we see in each of our business segments. Net income for the fourth quarter of 2016 was a loss of $3.3 million or $0.11 per diluted share. This included severance cost and other one-time restructuring expenses from cost reduction initiatives in the quarter of approximately $4.7 million. Excluding these items, fourth quarter 2016 earnings would have been breakeven. This compares with a net loss of $230.1 million or $7.54 per diluted share for the fourth quarter of 2015. Fourth quarter 2015 earnings would have been $0.19 per share, excluding non-cash impairment charges as well as facility shutdown and severance cost recorded in the prior-year quarter. Sales for the quarter were $214.4 million, a decrease of 17.8% from the prior-year quarter. This was largely due to the decline in energy-related sales in our Energy & Chemicals or E&C business, as customers continued to delay projects and competitive pressures remain in this challenging market. Our gross profit for the quarter was $57.1 million or 26.6% of sales, compared with $72.8 million or 27.9% of sales in the prior-year quarter. Overall gross profit was down slightly due to delayed customer capital spending in the energy markets and associated lower volumes. Orders received in the fourth quarter totaled $184 million and were down 8.6% from the third quarter 2016. We have seen an increase in the size of D&S project awards over the last several years, as we win…

Thank you, Ken, and good morning, everyone. As you've seen in our 8-K announcement last night, we have announced a number of succession changes. Bill Johnson will succeed me as CEO effective with the Annual Meeting in May. I'll remain as Executive Chairman through May 2018 and then retire from Chart. As part of our continuing productivity initiatives, we've also decided to relocate our corporate headquarters from Cleveland down to our Canton facility in Georgia. As a result, Ken Webster decided not to relocate and will remain in Cleveland to pursue other opportunities. I'd like to thank Ken for his significant contributions to Chart over the past 10 years. We have hired Jill Evanko to succeed Ken as CFO effective March 1 of this year. We have a new strong team in place to lead Chart to an exciting future. During the month of January, we were pleased to announce the Hetsco acquisition to complement our Lifecycle aftermarket service business within E&C. This addition supplements our current Lifecycle offering but will also add fabrication, construction and project management to our portfolio. Over the years, we've worked very closely with Hetsco on a number of plant installations and emergency repairs. So we are excited to now have their skilled workforce and capabilities as part of Chart. At the end of the year, our cash balance was $282 million, led by record operating cash flow generation during 2016. With no borrowings on our $450 million revolving credit facility and available cash, we intend to invest in the business through acquisition and believe there will be more favorable opportunities for buyers. Let me now turn the call over to Bill Johnson.

Thank you, Sam. And good morning, everyone. As you know, over the past few years, we have taken a hard look at ways to reduce overhead costs through a number of planned facility consolidations. As announced in November, our new Respiratory Center of Excellence will be based in Canton, Georgia where all U.S. respiratory manufacturing, engineering, sales and marketing will be centralized to deliver industry-leading products. The corporate office currently based in Cleveland will be relocated to Canton, Georgia facility as well. This will create a number of synergies and back-office functions across the business, as we leverage resources and adopt a more comprehensive shared services model. We also believe that having the teams together will lead to quicker decision-making and faster execution to further drive improvements across Chart. We are in the process of consolidating our D&S and E&C China facilities into the newly built greenfield facility in Changzhou, China. This move will consolidate three of our locations into one, which will create further operating efficiencies and allow us to leverage support functions across the business. We will continue to have additional capacity and capability on hand in order to support the anticipated LNG growth in Asia. As a result of these facility consolidations, which should be completed by the end of 2017, we estimate that they will drive annualized savings of approximately $10 million going forward. Approximately $4 million of those savings will be recognized during 2017, primarily from the BioMedical consolidation that began in the fourth quarter of last year and will be complete by second quarter of this year. Looking at our SG&A run rate coming out of the fourth quarter, after excluding restructuring and China reserve cost, our annualized SG&A rate is running in the $175 million to $180 million range. This is $20 million…

Thanks, Bill. Although energy markets remain challenging, stabilization in oil pricing and improved LNG export demand forecasts have led to an improved outlook and project pipeline. Current forecast by customers has projections for standard cryogenic gas processing plants up by 5 to 10 more units than prior forecasts. These plants are focused on associated gas and in locations where current gas processing is either limited or non-existent. We have seen an increase in orders for our air cooled heat exchangers as a result in early 2017. In addition, LNG for export continues global development for both onshore and offshore applications. A number of planned projects continue to move forward, trending toward multi-train midscale LNG plants centered on our large core brazed aluminum technology. We are investing organically in the business, as Ken alluded to earlier, with increased capital expenditure guidance this year. Approximately 50% of our CapEx investment during 2017 will be at E&C largely to add capacity at our brazed aluminum heat exchanger facility in La Crosse. This will capitalize on the competitive advantage we have achieved and be prepared for the wave of LNG export facilities that are currently being planned. This will continue to position Chart as the global technology leader and is a reflection of our confidence in the long-term opportunity here. Stable oil prices also support an increase in development of nitrogen rejection unit, or NRU application, tied to associated gas or gas fields with high nitrogen content. At higher oil prices, the associated gas fields can be cost-effective to produce and offset the capital costs of an NRU installation. In addition, as propane to propylene margins recover based on higher oil prices, we are seeing PDH quotation opportunities. In D&S, we continue to see activity in downstream LNG and industrial-related applications from railcars to bunkering and fuel delivery systems over the past months. This includes an $8 million of award received this year to convert asphalt plants to LNG, and an $8.7 million argon railcar award, both of which will be reflected in first quarter 2017 orders. As Ken pointed out, we've seen an increase in the size of D&S project awards over the last several years, which has made order trends more variable quarter-to-quarter in the segment. LNG adoption in Europe is moving forward, leading to strong backlog for our D&S European operation. A number of projects are under evaluation and the project pipeline is promising. LNG orders in China during the fourth quarter were the strongest since the second quarter of 2015, with the majority for oil or soft coal-fired boiler replacement applications. We are encouraged about the outlook for LNG globally. With that, I now open it up for questions. Michelle, please provide instructions to the participants to be able to ask questions.

Our first question comes from Eric Stine of Craig-Hallum. Your line is open.

Morning, everyone.

Morning.

I'm wondering can we just talk about the guidance first, and maybe some of the puts and takes. The backlog is at a level – I guess, the coverage of the forward guide, it hasn't been at this level since the 2010, 2011 timeframe. So, just some details and confidence that you are going to see year-over-year growth. And it sounds like from your commentary that really the majority of this is D&S, because I mean given the length of the project timelines, E&C, that would take a while to flow through.

That's correct, Eric. Perhaps hitting the most promising markets. Distribution & Storage in North America and Europe are seeing good orders and good order pipelines. And they have a fair backlog going into the year. So the vast majority of that will be executed during the current year. And comments from customers are positive. We're seeing good activity for the BioMedical business, particularly in the life sciences. Within E&C, we are at a low point of order intake. But we're starting to see, obviously, more promise in LNG projects going forward, but also we're making steady progress with the Lifecycle business, and we expect the Hetsco acquisition to contribute to that.

Got it. And just staying with E&C, you mentioned expanding capacity in La Crosse. Just to clarify, did you give a number, what type of – I mean, what that does to your capacity? What that expansion is? And is this – I mean, do you foresee or how far out do you think that you might need to start thinking about a fifth furnace for La Crosse?

Well, this expansion does add a furnace.

Okay.

We believe that there is a significant opportunity in LNG export-related projects going forward worldwide from the 2018 through 2024 time period and this is intended to give us the capacity to not give up any work based on constraints.

Got it. And then maybe last one for me, just on Magnolia. I know that you had anticipated that that would start up in mid-2017. So, just I mean, how does Magnolia – I mean, number one, what's your outlook on Magnolia and then how does that factor into the guidance as you have it right now?

Magnolia has publicly announced that they extended their contracts with their EPC supplier through the end of the year, through the end of 2017, on a fixed price basis. They have had some activity and announcements around an off-take agreement with an off-taker in India, which would underpin a train or more than one train. So it's positive, but it's still shifting to the right in terms of time scale.

Okay. I mean, is that something that you have factored? I mean, do you have Magnolia in your guidance right now?

No. Not for 2017 revenue.

Okay. And so you are – I mean, thinking about 2017, I mean given that E&C is going to be quite challenging, you are – overall revenue growth, that's your view for the year. I mean, that really is – potentially is it significant strength in D&S in the back half?

Yes. And also a contribution from E&C with respect to gas processing and some of the petrochemical – or NRU, which would be for gas production and PDH petrochemical applications.

And Hetsco. The Hetsco acquisition too.

Okay. Thanks a lot.

Thank you.

Our next question comes from Rob Norfleet of Alembic Global Advisors. Your line is open.

Hi. Thanks for taking our call this morning – our questions this morning. This is Nick Chen for Rob Norfleet. A few questions. I was hoping you could give a little more color into margins in the E&C segment. Do you see them getting back into the mid-20%-plus range in the next year or so with better fixed cost absorption?

Well, we've taken a lot of cost out of E&C over the last two years, and we continue to see improving margins in the E&C business. I'm not sure that we see this year getting back to 20%, but certainly with the consolidation of the Wuxi facility into the Changzhou facility in 2017, that will the help the overall margins in E&C.

So, a significant improvement back to historical averages for E&C will be nominally six months behind a lift in their backlog, which we're not forecasting until late in 2017.

Okay. Got it. So, that sounds like more of a 2018 event. And then, just digging a little bit deeper into the margin question. Can you discuss margins in your current backlog, especially surrounding recent awards? Are they higher than the legacy business or is price competition hurting margins at the moment?

They are probably comparable to historic margins, particularly in the D&S business. Based on low activity levels, the E&C are probably a bit lower than historic margins. And within BioMed...

Great.

...I would say that they're on par to slightly better.

Okay. Great. And then, just a final question surrounding the Hetsco acquisition. Can you talk about how that melds with the existing Lifecycle business and sort of what synergies and cross-selling opportunities you expect to see?

Sure. Coming out of the blocks, we were able to consolidate some of the existing management structure to get the immediate cost savings. The benefit we get with Hetsco is an extremely talented workforce on aluminum welding and repairs, brazed aluminum heat exchangers, really gives us a lot more opportunities to go out and get more of that business in the future. And I would say, going forward, we continue to look for opportunities to expand our service across all of Chart, not just in the Energy & Chemical, but how we can utilize that workforce in our Distribution & Storage business and their industrial gas application as well.

That's really helpful. Thanks so much.

Perhaps as an example, we've expanded our business in Distribution & Storage to provide small-scale, mid-scale bunkering facilities and re-gas facilities. So we actually have an established offering now and can provide complete installations and maintenance services for those types of facilities.

Our next question comes from Rob Brown of Lake Street Capital. Your line is open.

Good morning. Thanks for taking my call.

Hello, Rob.

Hi, Rob.

On your European LNG business, could you give us some color on what markets are adopting the downstream LNG use?

It goes across three. First, marine, the implementation of the IMO standards has significant both North Sea and river barge adaptation, and that's both for transport, general cargo, ferries, and also ships in harbor power generation. So, cruise ships when they're in the harbor, using LNG to reduce their emissions while they're in harbor, as the examples. Beyond that, we're seeing propane or fuel oil replacement applications with LNG. And we're also seeing growth in over-the-road trucking with truck fleets adopting LNG, several new offerings in particular by Iveco of LNG-powered engines and tractors, with a number of countries both including France, Spain and the Benelux participating.

Okay. Great. Thank you. And just to hit the E&C order or pipeline kind of timeline. It's sort of dead now for the LNG export projects. I guess, maybe give us a sense of how you see that developing as that market becomes tight again and the projects start to kick off. Is that so in case you get orders sometime this year and then start to get revenue next year, or is it more orders next year and then revenue thereafter?

Tough to call. I would say that, over the past six months, there have been more published reports, including from open partners and Morgan Stanley publication and just last week a Shale LNG outlook, that seems to be more bullish on demand growth occurring this past year 2017 and 2018. So the balance in terms of requiring more capacity is pointing towards late 2020, 2021, 2022, as opposed to forecasts that put it out to 2023 or 2024 earlier in the year. And that leads to potential for orders late 2017, early 2018. But we don't see enough off-taker contracts being let to be able to call it closer than that, and obviously it could go out into 2018. But, generally, the people that we are working on projects for are ramping up their spending and feed studies and working as if the projects are ready to launch.

Okay. That's great color. Thank you.

Our next question comes from Matthew Trusz of Gabelli & Company. Your line is open.

Good morning. Thank you for taking my question.

Sure.

I was wondering if you could just talk a little bit about what made you and the board decide that now is the right time for the leadership transition. And do you anticipate or should we anticipate any shifts in strategy going forward as a result?

You mean besides me getting old?

I suppose so. Yes.

Obviously, the board and I have been discussing it for a number of years. We're very fortunate to get Bill Johnson aboard, and very pleased with the progress he's made in that time period. And based on that, this appears to be the right time for an effective transition. We're obviously coming through a significant downturn and preparing the company for a significant lift in business. And there is enormous benefit in our business to be able to respond quickly and ramp up our capacity quickly with a lift in orders. And we wanted to have a new team in place to accomplish that effectively.

Our next question comes from Walter Liptak of Seaport Global. Your line is open.

Hi. Thanks. Good morning, and thanks for taking my question. I wanted to ask just a follow-on to the D&S orders. And just kind of looking at the way the orders trended in 2016 that were kind of first half a little bit stronger, it looks to me like about $150 million per quarter, and then the second half about $120 million. I wonder if you could just address the normal seasonality, if there is that anymore, in D&S and what you're thinking about for that D&S order pipeline, is it first half- or second half-loaded.

We oftentimes scratch our heads ourselves to characterize seasonality. For the industrial gas world, I think it has fairly consistently been the second and third quarters have generally been the strongest for order intake, at the expense of the first and fourth quarters. With LNG-related activity, those average orders tend to be larger and there's no discernible seasonality to them at this point.

Okay. What are you thinking about for this year? You talked positively about the pipeline of jobs and orders. Do you think they'll hit in the first half or in the second half?

I would say, Walt, that again no seasonality impact. We do expect some modest growth in the D&S business in 2017. I think, as Sam pointed out in his comments, we had a couple of nice sizeable orders here in the first quarter that we've gotten to-date. One for an asphalt plant is about $8 million, and another one for an argon railcar order for about $8.7 million. So we've got some pretty good projects coming in here in the first quarter. Wouldn't expect any major trend changes in the order flows throughout 2017.

Okay. Fair enough. And then, wonder if I could ask about SG&A. Your comments were that the run rate now was, I think, $175 million to $180 million. But I don't think that that includes some of the cost reduction, that $6.5 million. What's a good number to use for 2017 for SG&A?

I would say, we expect of the – again, the cost savings that Bill mentioned was an annualized savings from these three consolidation efforts that we have underway to be about $10 million. And that again is going to be something we're going to be implementing throughout 2017. So those $10 million is going to be in savings 2018 and beyond. We expect about $4 million of that $10 million to flow through in 2017, largely due to the BioMedical consolidation, which got a head start, it started earlier in this process. I'd say, from a go-forward SG&A rate, obviously with some of those savings, I think we're going be in that $180 million to $185 million range.

Okay. All right. Great. And then, I wanted to ask just quickly about the Hetsco margins. Is that a better margin business than the full segment or your Lifecycle business?

Yeah. The service-oriented work from Hetsco is certainly a richer margin than what you would see on the average from E&C.

Okay. Great. All right. Thank you.

Our next question comes from Pavel Molchanov of Raymond James. Your line is open. Pavel S. Molchanov - Raymond James & Associates, Inc.: Thanks for taking the question, guys. You clearly sound more open than maybe in the last couple of years in doing acquisition. You have the largest cash balance, I think possibly ever. And I'm curious, are you only considering M&A opportunities in your three existing segments or would you be open to creating a brand new segment outside of your existing ones?

I'd say that a larger part of our focus would be in adjacencies to our existing businesses, particularly if you look at the next 6 to 12 months. However, Bill's experience and a number of the people that have joined us recently have broader-based industrial experience. So I wouldn't rule out potential for new segments, but they would be tied to Chart's core competencies in terms of heat transfer, metal fabrication, welding capability, things where we believe we can add value. Pavel S. Molchanov - Raymond James & Associates, Inc.: Okay. Understood. And then, just a policy question. So we're obviously getting into the new Washington landscape here, some new rules on methane emissions, probably some relevance to your business, as well as LNG permitting. Have you seen anything, any suggestions coming out of the White House or the DOE that gives you any additional confidence perhaps in LNG project approvals or anything along those lines?

Nothing substantive. I would say that we are well-positioned, number one, to benefit from more stringent emission standards around the whole value chain for delivering natural gas from the wellhead, all the through end-use applications. Our expertise is focused on that and we have a number of products and capabilities which handle that well. But we're also extremely well-positioned just for increased use of natural gas. So I would say that our business will benefit from increased use of natural gas and we're prepared to accomplish that in ways that significantly reduce methane emissions. But I would say there is no clear picture of where we're headed as a result of the new administration. Pavel S. Molchanov - Raymond James & Associates, Inc.: All right. Appreciate the color on that. Thanks, guys.

Our next question is a follow-up from Matthew Trusz of Gabelli & Company. Your line is open. If your telephone is muted, please unmute. There are no further questions. I'd like to turn the call back over to Sam Thomas for any closing remarks.

Thank you, Michelle. We've made a significant number of changes, including putting the next-generation leadership team in place over the past year. Our team represents a blend of long-term employees and new blood with broad industrial and energy experience. This is to position ourselves for long-term success, maximize growth and profit through the next business cycle. Our strong cash balance will also allow us to invest in the business both organically and inorganically to provide long-term value. Thank you, everyone, for listening today. Good bye.

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