Q4 2023 Chart Industries Inc Earnings Call

Speaker Change: [music].

Operator: www.larryweaver.com Good morning and welcome to Chart Industries. 1, 2, 3, 4th quarter and full year. All lines have been placed on mute to prevent any background noise.

Good morning, and welcome to the chart Industries, Inc.

23 fourth quarter and full year results conference call.

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session.

Operator: Thank you, and Supplemental. Thank you. Thank you, were issued earlier this year. You can access them by visiting Chart's website at www.chartindustries.com. Telephone replay for today's broadcast will be available approximately two hours following the conclusion of today's call until Friday, March 29, 2021.

Accompanies release and supplemental presentation were issued earlier this morning.

If you have not received the release you may access it by visiting <unk> website at tripled.

Industry Dotcom.

A telephone replay for todays webcast will be available approximately two hours. Following the conclusion of the call until Friday March 29, 'twenty 'twenty four.

Operator: The game information is contained in the company's press release. Before we begin, the company would like to remind you that statements made during this call that are not hysterical, in fact, are forward-looking statements. Please refer to the information regarding forward-looking statements and Risk Factors, and the company's earnings and latest, Frowlings with the S-C-A-T-E-N-T-E-N-T-E-N-T-E-N-T-E-N-T-E-N-T-E-N-T-E-N-T-E-N-T-E-N-T-E I would now like to turn the conference over to Jill Evanko, Chart Industries CEO. Thank you, Julie. And good morning, everyone.

The replay information is contained in the company's press 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.

Please refer to the information regarding forward looking statements and risk factors included in the company's earnings release and latest filings with the S. E T.

The company undertakes no obligation to update publicly or revise any forward looking statements.

I would now like to turn the conference over to Jill Evanko chart Industries'.

Jillian C. Evanko: Please go ahead.

Jillian C. Evanko: Thank you Julie and good morning, everyone. Thank you for joining Joe Brakeman, our CFO and me to walk through our record fourth quarter and full year 2023 results. Our results shown are from continuing operations I refer you to our earnings release for our reported results for purposes of our discussion this morning, when referring to the fourth quarter 2022.

Jillian C. Evanko: Thank you for joining Joe Brinkman, our CFO, and me to walk through our record fourth quarter and full year 2023 results. Our results shown are from continuing operations. I refer you to our earnings release for reported results. For purposes of our discussion this morning, when referring to the fourth quarter 2022, full year 2022, or any quarter of 2023 comparative period, all metrics are pro forma for continuing operations of the combined business of Chart and Howden. This includes Howden, excludes Roots, and excludes November and December of 2022 of the divested American fan, COFIMCO, and cryo-diffusion businesses. Information on divestitures completed in 2023 can be found on slide four. Starting on slide six, as a reminder, we closed on the acquisition of Howden on March 17, 2023. As a result, we have exceeded both our original year one commercial and cost synergy targets ahead of the one year mark. Commercial Synergy awards to date of approximately $530 million have also exceeded our Year 3 Commercial Synergy target.

Jillian C. Evanko: Full year 2022, or any quarter of 2023 comparative period, all metrics are pro forma for continuing operations of the combined business of chart and how did this includes howden excludes routes and excludes November and December of 2020 to be divested American fan co pimco and crowd.

Speaker Change: Fusion businesses information on divestitures completed in 2023 can be found on slide four.

Speaker Change: Starting on slide six as a reminder, we closed on the acquisition of Howden on March 17th 2023, we have exceeded both our original year, one commercial and cost synergy targets ahead of the one year Mark.

Speaker Change: Commercial synergy awards to date of approximately 530 million also exceeded our year three commercial synergy target.

Jillian C. Evanko: We have achieved over $181 million of cost synergies to date. The Houghton acquisition has also contributed many other benefits, including less reliance on big LNG projects, more aftermarket service and repair, less cyclicality, broader geographic diversity, and less customer concentration. In 2023, our top 10 customers made up about 25% of our sales, whereas in 2021 and 2022, they comprised 39 and 38% on a chart standalone basis. In the fourth quarter of 2023, we had record orders, backlog, sales, gross profit, gross profit margin, operating income, operating income margin, EBITDA, EBITDA margin, adjusted EPS, and reported and adjusted free cash. Our highest reported gross margin quarter ever, in When adjusting for primarily Howden related integration and deal-related costs, the adjusted EBITDA margin was 24.2%.

Speaker Change: We have achieved over $181 million of cost synergies to date.

Speaker Change: The acquisition has also contributed many other benefits, including less reliance on big LNG projects more aftermarket service and repair less cyclicality broader geographic diversity and less customer concentration in 2023, our top 10 customers made up about 25% of ourselves, whereas in 2021.

Speaker Change: In 2022, they comprised 39% and 38% on a chart standalone basis.

Speaker Change: In the fourth quarter 2023, we had record orders backlog sales gross profit gross profit margin operating income operating income margin EBITDA EBITDA margin adjusted EPS and reported an adjusted free cash flow.

Speaker Change: Our highest reported gross margin quarter ever in the fourth quarter of 32, 9% contributed to our reported Q4 operating margin of 21% and EBITDA margin of 21, 7%.

Speaker Change: When adjusting for primarily housing related integration and deal associated costs adjusted EBITDA margin was 24, 2%.

Jillian C. Evanko: Sales of $1.02 billion was a record quarter as well, the only quarter to date that we have exceeded $1 billion. And in a few minutes, Joe will talk about other throughput activities that we have underway to further drive this. Q4 sales were up sequentially 13% and 12.5% compared to Q4 2022. While we surpassed the $1 billion mark and set numerous profitability records, as I just described, we had anticipated higher revenues related to revenue recognition timing in the. Our year-end net leverage ratio of 3.35 was supported by an increase in cash on hand and debt pay down, totaling approximately $291 million in Q4. As part of our Howden integration, we executed a plan to align our legal entity structure with our integrated operations.

Speaker Change: Sales of $1.02 billion was a record quarter as well the only quarter to date that we have exceeded $1 billion and then a few minutes Joe will talk about other throughput activities that we have underway to further drive this ahead Q.

Speaker Change: Q4 sales were up sequentially, 13% and 12 and a half per cent compared to Q4 2022.

Speaker Change: While we surpassed the $1 billion Mark in set numerous profitability records as I. Just described we had anticipated higher revenues related to revenue recognition timing in the quarter.

Speaker Change: Our year end net leverage ratio of 3.35 was supported by an increase in cash on hand, and debt paydown totaling approximately $291 million in Q4.

Speaker Change: As part of our Howden integration, we executed a plan to align our legal entity structure with our integrated operations. This resulted in a positive impact on our effective tax rate and set us up for future back office synergies efficient and flexible cash management and an anticipated future steadier sustainable tax rate.

Jillian C. Evanko: This resulted in a positive impact on our effective tax rate and set us up for future back-office synergies, efficient and flexible cash management, and an anticipated future steadier sustainable tax rate. Our fourth quarter of 23 results compared to pro forma Q4-22 and sequentially to the third quarter of 23, can be seen on slide 7. The far right-hand column shows the changes in each metric year over year. Orders are up over 28%, reported gross margin increased 540 basis points, adjusted EBITDA increased by 64%, and adjusted EBITDA margin increased by 760 bits. Q4 2023 adjusted earnings per diluted share were $2.25. Fourth quarter free cash flow was $110 million, and adjusted earnings per share was $120.

Speaker Change: Our fourth quarter 'twenty three results compared to pro forma Q4, 'twenty, two and sequentially to the third quarter of 23 can be seen on slide seven.

Speaker Change: The far right hand column shows the changes in each metric year over year.

Speaker Change: Orders are up over 28% reported gross margin increased 540 basis points adjusted EBITDA increased by 64% and adjusted EBITDA margin by 760 bps Q.

Speaker Change: Q4, 2023 adjusted earnings per diluted share were $2.25.

Speaker Change: Fourth quarter free cash flow was $110 million and adjusted was 120, Joe will speak to the details in a moment.

Jillian C. Evanko: Joe will speak to the details in a moment. The middle column on slide seven shows that every metric increased sequentially in the fourth quarter compared to the third quarter of 2023, even when considering that the third quarter included an entire quarter of Cofimco, American Fans, and Cryo Diffusion results, whereas the fourth quarter only included one month of these as they were divested the last week of October 2023. Q4 also contributed to a record full year, as you can see on slide 8, including the Houghton stub period, pro forma full year 23 sales were $3.66 billion. Strong operational margins throughout the year, including all of our Houghton ownership quarters being above 30% reported gross margin, contributed to full year 23 gross margin of 31%.

Joe Brakeman: The middle column on slide seven shows that every metric increased sequentially in the fourth quarter compared to the third quarter of 2023, even when considering the third quarter included an entire quarter of Coke and coal American fans and cryo diffusion results, whereas the fourth quarter only included one month of these as they were divested the last week of October 2012.

Joe Brakeman: Three.

Q4 also contributed to our record full year as you can see on slide eight include.

Joe Brakeman: Including the Howden stub period pro forma full year 'twenty three sales were 3.66 billion strong operational margins throughout the year, including all of our howden ownership quarters being above 30% reporting gross margin contributed to full year 23 gross margin at 31%.

Jillian C. Evanko: As we look to 2024, and we'll have a section on this coming up here, but in summary, we anticipate that each of our segments and each of our regions, which are Americas, Europe, the Middle East, Africa, APAC, India, and China, will each grow sales compared to 2023. Our fourth quarter was our highest-ever order quarter in our pro forma history, with over $1.2 billion of awards received. Slide 9 shows pro forma orders and backlog trends. The fourth quarter was the highest order quarter of the year for both cryo tank solutions and heat transfer systems.

Joe Brakeman: As we look to 'twenty 'twenty four and we'll have a section on this coming up here, but in summary, we anticipate that each of our segments and each of our regions, which are Americas, Europe Middle East Africa, APAC, India, and China will each grow sales compared to 2023.

Joe Brakeman: Our fourth quarter was our highest ever order quarter in our pro forma history with over $1 $2 billion of awards received slide nine shows pro forma orders and backlog trends.

Joe Brakeman: The fourth quarter was the highest order quarter of the year for both cryo tanks solutions and heat transfer systems.

Jillian C. Evanko: Repair service and leasing orders were over $328 million, marking our three full quarters of Houghton ownership, with RSL orders each above $315 million. This reflects the growing adoption of our aftermarket programs to both Howdin and ChartLegacy installed bases and the increasing pull-through of our original equipment customers to aftermarket. In 2023, RSL orders for the full year were up 25%, and our long-term service agreements and framework agreements increased more than 4% year over year. Here are just a few comments about the diversity of our 2023 year-end backlog. Space exploration, carbon capture, hydrogen, and helium, brazed aluminum heat exchangers, and HTS systems all have record backlogs as of the end of the year. Combined, these end markets account for approximately half of our total backlog. RSL accounts for just under 14% of total backlog, and CTS just under 9%. The remaining approximately 27% is comprised of the rest of the specialty products, as well as HTS air coolers and VRV heat exchangers. We have seen a surge in demand for Howden screw compressors driven by food and beverage refrigeration, emissions reduction via flare gas recovery, and the expansion of methane compression.

Joe Brakeman: Repair service and leasing orders were over $328 million, marking our three full quarters of housing ownership, having RSL orders each above $315 million.

Joe Brakeman: This reflects the growing adoption of our aftermarket programs to both Howden and chart legacy installed bases and the increasing pull through of our original equipment customers to aftermarket.

In 2023, RSL orders for the full year were up 25% and our long term service agreements and framework agreements increased more than 4% year over year.

Joe Brakeman: Just a few comments about the diversity of our 2023 year end backlog.

Joe Brakeman: Base exploration carbon capture hydrogen and helium braised aluminum heat exchangers, and HTS systems, all have record backlog as of the end of the year combined these end markets account for approximately half of our total backlog.

RSL, just under 14% of total backlog and C. T S just under 9%.

Joe Brakeman: The remaining approximately 27% is comprised of the rest of the specialty products as well as H T S Air Coolers and V RV heat exchangers.

Joe Brakeman: We have seen a surge in demand for howden screw compressors, driven by food and beverage refrigeration emissions reduction via flare gas recovery and expansion of methane compression.

Jillian C. Evanko: The year-end 2023 backlog for this particular product is two times the prior year, contributing to our higher than historically typical backlog coverage for the year. As we have shared, we have a significantly below 1% cancellation rate for backlog. There's a theme that we're seeing across many of our markets of increasing project size and engineering content. A few comments by NMarkets on what we're seeing for 2024, starting with industrial gas. In EMEA, our pipeline's strong, we had an excellent January of orders, and project sizes are increasing. For industrial gas in the U.S. and the rest of the world, the commercial pipeline remains strong, inclusive of hydrogen opportunities.

Joe Brakeman: Year end 2023 backlog for this particular product is two times prior year contributing to our higher than historically typical backlog coverage for the year.

Joe Brakeman: As we have shared we have a significantly below 1% cancellation rate of backlog.

Joe Brakeman: There was a theme that we're seeing across many of our markets of increasing project size and engineering content.

Joe Brakeman: A few comments by end markets, what we're seeing to start 2024, starting with industrial gas in EMEA. Our pipeline is strong we had an excellent January of orders and project sizes are increasing.

Joe Brakeman: For industrial gas in the U S and the rest of the world. The commercial pipeline remains strong inclusive of hydrogen opportunities.

Jillian C. Evanko: While we expect a quote-unquote strong quarter for CTS orders compared to other first quarters in prior years, Q1 is typically and still expected for this end market to be our lowest quarter of the year. In energy markets, we are seeing moderating North American demand which is offset by increasing international inbounds since the beginning of the year. The global market for LNG continues unabated.

Joe Brakeman: While we expect a quote unquote strong quarter for Cts orders compared to other first quarters in prior years Q1 is typically in still expected for this end market to be our lowest quarter of the year.

In energy markets, we are seeing moderating north American demand, which is offset by increasing international inbound since the beginning of the year the.

Joe Brakeman: The global market for LNG continues unabated as the United States pauses the rest of the world accelerates.

Jillian C. Evanko: As the United States pauses, the rest of the world accelerates. This is evident in our commercial pipelines for big LNG and small scale and floating LNG, which can be seen in the appendix on slide 28. As of now, we have 30 potential big LNG projects in our pipeline, including 15 international opportunities for potential IPSMR usage. Both of these metrics increased from Q3 and year-end 2023. Similarly, since the beginning of this year of 2024, small and floating potential projects in our commercial pipeline increased about four and a half percent, mainly driven by additional international opportunities. In the case of Qatar, we do have potential opportunities to participate, including with cryogenic equipment, compression, de-bottlenecking, and process technology.

This is evident in our commercial pipelines.

Joe Brakeman: For Big LNG in small scale and floating LNG, which can be seen in the appendix on slide 28.

Joe Brakeman: As of now we have 30 potential big LNG projects in our pipeline, including 15 international opportunities for potential Ips and more usage. Both of these metrics increased from Q3 and year end 2023.

Joe Brakeman: Similarly, since the beginning of this year of 2020 for small and floating potential projects in our commercial pipeline increased about four 5%, mainly driven by additional international opportunities.

Joe Brakeman: In the case of Qatar, we do have potential opportunities to participate including with cryogenic equipment compression debottlenecking and process technologies, our near term prospects. We believe are on heat rejection optimization on existing facilities and potential pretreatment heat exchangers for expansion plans.

Jillian C. Evanko: Our near-term prospects, we believe, are on heat rejection optimization on existing facilities and potential pretreatment heat exchangers for expansion. Specialty product demand is consistently strong, and we're also seeing increasing potential project sizes as a theme in many of these end markets as well. Marine has an increasing commercial pipeline, in part due to our upcoming jumbo tank capacity at Teddy 2, as well as multiple howdin air lubrication opportunities. The SpaceX market remains

Joe Brakeman: Specialty products demand is consistently strong and we're also seeing increasing potential project sizes as a theme in many of these end markets as well.

Marine has an increasing commercial pipeline in part due to our upcoming jumbo tank capacity at 32, as well as multiple Howden air lubrication opportunities.

Joe Brakeman: Spacex market remains robust.

Jillian C. Evanko: HLNG over-the-road vehicle tank activity is increasing, albeit not at prior levels, but certainly that looks better than the past two years' actual activity. As of yesterday, Q1 2024, quarter to date, we've booked orders for HL&G vehicle tanks that equate to more than 50% of last year's full year HL&G vehicle tank sales. Mining and metals markets remain very strong, driven by global demand for electrification and a push to reduce carbon footprints using DRI processes, hydrogen, and metals, and other solutions such as our VentSim offering. Our mining and metals pipeline of opportunities identified has increased approximately 10% pro forma year over year.

Joe Brakeman: LNG over the road vehicle tank activity is increasing albeit not at prior levels, but certainly the outlook is better than the past two years actual activity.

Joe Brakeman: As of yesterday, Q1, 2024 quarter to date, we've booked orders for H LNG vehicle tanks that equate to more than 50% of last year's full year H LNG vehicle tank sales.

Joe Brakeman: Mining and metals markets remain very strong driven by global demand for electrification and a push to reduce carbon footprints using DRA processes hydrogen in metals and other solutions such as our vent Sim offering.

Joe Brakeman: Our mining and metals pipeline of opportunities identified has increased approximately 10% pro forma year over year.

Joe Brakeman: C. C. U S activity is also increasing with our small scale earthly labs offering going international and again in this end market projects sizes for potential chart content are getting larger.

Joe Brakeman: Hydrogen pipeline remains active we're paying close attention to U S timing, specifically related to hydrogen hubs and I are a clarifications inner.

Jillian C. Evanko: CCUS activity is also increasing, with our small-scale earthly labs offering going international. And again, in this end market, project sizes for potential chart content are getting larger. The Hydrogen pipeline remains active.

Joe Brakeman: Internationally, there's also increasing traction, including the recent European Commission approval of $6 9 billion euros and state aid for development of the hydrogen value chain.

Jillian C. Evanko: We're paying close attention to U.S. timing, specifically related to hydrogen hubs and IRA clarifications. Internationally, there's also increasing traction, including the recent European Commission approval of 6.9 billion euros in state aid for the development of the hydrogen value chain. We are excited to announce that last week, we were awarded a significant hydrogen compression solution within the renewable hydrogen industry. Using Howden's reciprocating compression technology, this is the largest single compressor award in dollars in Howden's 167-year history.

Joe Brakeman: We are excited to announce that last week, we were awarded a significant hydrogen compression solution within the renewable hydrogen industry.

Joe Brakeman: Using houghton's reciprocating compression technology. This is the largest single compressor award in dollars and how it ends 167 year history. It's also a synergy win as the solution includes chart legacy pressure pressure vessel equipment.

And finally, as we like to see it brings with it the future opportunity for installation and post installation monitoring.

Joe Brakeman: Aftermarket service and repair is off to a consistent start quarter to date with multiple cros customers across end markets in particular in Europe, and the Americas, We entered 2024 with RSL backlog a bit better than normal and quoting activity remains strong.

Jillian C. Evanko: It's also a synergy win, as the solution includes Chart Legacy pressure vessel equipment. And finally, as we like to see, it brings with it the future opportunity for installation and post-installation monitoring. Aftermarket Service and Repair is off to a consistent start quarter to date with multiple customers across end markets, in particular in Europe.

Joe Brakeman: You can see our increasing operational margin metrics, including the sequential increase in reported gross profit margin on the left hand side of slide 10, the same up into the right trend applies for EBITDA and adjusted EBITDA margin on the right hand side reflective of our full solution mix aftermarket service and repair over 30% of our business productivity actions.

Jillian C. Evanko: In the Americas, we entered 2024 with RSL backlog a bit better than normal, including activity remains strong. You can see our increasing operational margin metrics, including the sequential increase in reported gross profit margin on the left-hand side of slide 10. The same up and to the right trend applies for EBITDA and adjusted EBITDA margin on the right-hand side, reflective of our full solution mix, aftermarket service and repair over 30% of our business, productivity actions, cost synergies, and additional volume throughput. Moving to slide 11, this shows sequential segment reported results for sales, gross, and operating margins for Q3 and Q4 of 23. CTS, HTS, and RSL segments all had record sales in the fourth quarter. CTS and RSL sales were up over 29% and 25% sequentially compared to Q3. Specialty sales did decline sequentially, which was driven by the marine end market, which had a full quarter of American fans in Q3 and not in Q4 due to divestiture, as well as from revenue timing for hydrogen metals and space exploration.

Joe Brakeman: Cost synergies and additional volume throughput.

Joe Brakeman: Moving to slide 11. This shows sequential segment reported results for sales gross and operating margins for Q3 and Q4 of 'twenty three.

Joe Brakeman: C T S HTS and RSL segments, all had record sales in the fourth quarter.

Joe Brakeman: Cts and RSL sales were up over 29% and 25% sequentially compared to Q3.

Joe Brakeman: Specialty sales did decline sequentially, which was driven by the marine end market, which had a full quarter of American fans in Q3 and not in Q4 due to the divestiture as well as for from revenue timing for hydrogen metals in space exploration.

Joe Brakeman: We expect all of these to be strong contributors to 2024 sales as we had full year record orders in hydrogen metals in space.

Joe Brakeman: Each segment did have its highest reported gross margin quarter of the year in the fourth quarter 2023.

And finally, we're focused on cost control with the strength in gross margin dropping through to operating margin results in each segment.

Joe Brakeman: Slide 12 shows our cash generated from operations in the fourth quarter 2023 of $130 million netted with $20 million of Capex. Our adjusted Q4 free cash flow was 12% of sales our priority has been and continues to be debt paydown and leverage reduction our net leverage ratio went from four point.

Jillian C. Evanko: We expect all of these to be strong contributors to 2024 sales, as we had full year record orders for hydrogen metals in space. Additionally, each segment did have its highest reported gross margin quarter of the year in the fourth quarter of 2023. And finally, we're focused on cost control with the strength and gross margin dropping through to operating margin results in each segment. Slide 12 shows our cash generated from operations in the fourth quarter, 2023 of $130 million netted with $20 million of CapEx. Our adjusted Q4 free cashflow is 12% of sales.

Joe Brakeman: Zero eight in Q1 of 2023 to $3 three 5% as we exited the year a meaningful step towards our anticipated and reiterated mid 2024 target of two 5% to $2 nine an overall target net leverage ratio range of two to 2.5.

Joe Brakeman: There were specific outflows of cash in the fourth quarter 2023 that we did not adjust shown on the right hand side of Slide 13. We ended ended the year with $814 million of liquidity. In addition to paying down over $150 million of our term loan b in a year or.

Jillian C. Evanko: Our priority has been and continues to be debt pay-down and leverage reduction. Our net leverage ratio went from 4.08 in Q1 of 2023 to 3.35 as we exited the year. A meaningful step towards our anticipated and reiterated mid 2024 target of 2.5 to 2.9 and overall target net leverage ratio range of 2 to 2.5. However, there were specific outflows of cash in the fourth quarter of 2023 that we did not adjust, shown on the right-hand side of slide 13. We ended the year with $814 million of liquidity, in addition to paying down over $150 million of our term loan B during the year. Our weighted average interest rate of 7.8% was down approximately 25 basis points from the end of Q3.

Joe Brakeman: Our weighted average interest rate of seven 8% was down approximately 25 basis points from the end of Q3.

Joe Brakeman: In addition to operational cash focus from our entire organization on our cash culture. We continue to work additional cash generation activities, whether evaluating potential minority investment exits sale of underutilized real estate and cash repatriation.

Joe Brakeman: To reiterate our financial policy and commitment to debt pay down as shown on the bottom right hand side of slide 13.

Joe Brakeman: Slide 15 shows our main material cost input trends they remain stable and in some cases are trending down looking at the lower right hand free chart. The trend has been up the past few months, yes, we have seen pricing leveling in recent weeks and in many of our customer agreements, we passed the freight costs through to them.

Joe Brakeman: We are carefully monitoring the red sea situation as of now we have not seen any major impacts on material availability into the plants. We are experiencing though approximately two to three week delay on certain routes.

Joe Brakeman: We have three main categories of pricing.

Jillian C. Evanko: In addition to operational cash focus from our entire organization on our cash culture, we continue to work additional cash generation activities, whether evaluating potential minority investment exits, sale of underutilized real estate, and cash repatriation. We reiterate our financial policy and commitment to debt paydown, as shown on the bottom right-hand side of slide 13. Slide 15 shows our main material cost input trends. They remain stable and, in some cases, are trending down. Looking at the lower right-hand freight chart, the trend has been upwards for the past few months, yet we have seen pricing leveling in recent weeks, and in many of our customer agreements, we passed the freight costs through to them. We are carefully monitoring the Red Sea situation.

Joe Brakeman: Project pricing price lists for component sales and price mechanisms and long term agreements over the past three years, we have incorporated price increases to adapt to the increasing cost environment and we have held this pricing.

Joe Brakeman: We continue as part of our business is ongoing new certifications customer site approvals productivity automation and what we call chart business excellence or <unk>. This year is no different and includes our lean six Sigma training program for our internal team members as well as approximately 115 to 125 million.

Joe Brakeman: Dollars dollars of capital spend expected in 2024.

Joe Brakeman: The Capex spend includes capacity expansions as shown on the top of slide 16.

Joe Brakeman: We actively manage our cost structure and see further synergies ahead. This year inclusive of in sourcing and localization for compressor and fan products.

Jillian C. Evanko: As of now, we have not seen any major impacts on material availability into the plant. We are experiencing, though, approximately two to three weeks of delay on certain routes. We have three main categories of prices: Project Pricing, Price Lists for Component Sales, and Price Mechanisms and Long-Term Agreements. Over the past three years, we have incorporated price increases to adapt to the increasing cost environment, and we have held this price.

Joe Brakeman: Over the next few slides starting on slide 18, we will walk through the elements of our 2024 outlook range. We anticipate our full 2020 for full year 2024 sales to be in the range of $4 $7 billion to $5 billion with forecasted full year 2024, adjusted EBITDA in the range of 1.1 dollars 75.

Joe Brakeman: <unk> to $1 3 billion free cash flow guidance of $575 million to $625 million is defined as operating cash flow less capital expenditures.

Joe Brakeman: Slide 19 shows the sales bridge from 2023 to 2024, the main drivers of the anticipated increase our incremental big LNG Teddy to backlog converting to sales stronger than typical backlog coverage as we entered the year and commercial synergies flowing through our shops bookings.

Jillian C. Evanko: The continuous part of our business is ongoing new certifications, customer site approvals, productivity, automation, and what we call Chart Business Excellence, or CBE. This year is no different and includes our Lean Six Sigma training program for our internal team members, as well as approximately $115 to $125 million of capital spend expected in 2024. The CapEx spend includes capacity expansions as shown on the top of slide 16. We actively manage our cost structure and see further synergies ahead this year, inclusive of insourcing and localization for compressor and fan products. Over the next few slides, starting on slide 18, we will walk through the elements of our 2024 Outlook range. We anticipate our full year 2024 sales to be in the range of 4.7 to $5 billion with forecasted full year 2024 adjusted EBITDA in the range of 1.175 to 1.3 billion. Pre-cash flow guidance of $575 to $625 million is defined as operating cash flow less capital expenditure.

Book and ship represents approximately 40% of our 2024 outlook lower than normal due to the strong backlog coverage, which brings us to our three main potential drivers to the higher end of our range.

Joe Brakeman: Book and ship activity throughout the year large project awards in the first half that begin to generate revenue in the second half and more achievement of additional backlog conversion yes.

Joe Brakeman: The adjusted EBITA Bridge as shown on slide 20.

Joe Brakeman: The elements of our EPS outlook for 2024 of 12 to $14 per diluted share are shown on slide 27 of the appendix, we anticipate our tax rate to be approximately 20% and a diluted share count of $47 million to $48 million.

Slide 21 is intended to give you our perspective towards each of our segments and market activity.

Joe Brakeman: The transfer system had strong order years in both 2022 and 2023 in the base business as well as with Big LNG activity, we had approximately $385 million of Big LNG related awards in 2023 contributing to year end HTS record backlog.

Joe Brakeman: U S bite and administration department of energy moratorium on LNG export approvals announced in January 2024 has big numerous questions. Let me reiterate a few things.

Jillian C. Evanko: Slide 19 shows the sales bridge from 2023 to 2024. The main drivers of the anticipated increase are incremental big LNG, Teddy II backlog converting to sales, stronger than typical backlog coverage as we entered the year, and commercial synergies flowing through our shop. Book and ship represents approximately 40% of our 2024 outlook, lower than normal due to the strong backlog coverage, which brings us to our three main potential drivers to the higher end of our range. Higher book and ship activity throughout the year, large project awards in the first half that begin to generate revenue in the second half, and more achievement of additional backlog conversion. The adjusted Ebitda bridge is shown on slide 20. The elements of our EPS outlook for 2024 of $12 to $14 per diluted share are shown on slide 27 of the appendix. We anticipate our tax rate to be approximately 20% and a diluted share count of $47 to $48 million.

Joe Brakeman: We are molecule agnostic and our technology and equipment service multiple end markets, including traditional energy LNG hydrogen and other new energies.

Joe Brakeman: Earlier in the presentation, we discussed international macro activity in global energy, So I won't reiterate that here, although I will remind you about our Ips EMR process and associated equipment being chosen for a large IOC International LNG project. This award is not yet in our backlog and we anticipate the booking to be later this year or in the first.

Joe Brakeman: Part of 2025.

Joe Brakeman: Ips Tomorrow International margins are extremely similar to North American margins as a clarifying point.

Joe Brakeman: Cryo tanks solutions, not only has 31 and two additional capacity coming online in the near term Cts also ended 2023 with its highest order and sales quarter of the year.

Joe Brakeman: Engineering projects and service opportunities with our main Cts customers have been picking up since the beginning of the year and some of our industrial gas customers have shared with us that they're looking at their 2024 standard equipment forecast more optimistically than they were last summer.

Joe Brakeman: Specialty products end markets have momentum from macro tailwind as well as charts specific activities. Examples of this include our recent growing interest in deploying hydrogen at much larger scale than we have seen in the past few years, we are now.

Jillian C. Evanko: Slide 21 is intended to give you our perspective on each of our segments and market activity. The transfer system had strong order years in both 2022 and 2023 in the base business as well as with big LNG activity. We had approximately $385 million of big LNG-related awards in 2023, contributing to year-end HTS record backlog. The US Biden administration Department of Energy moratorium on LNG export approvals announced in January of 2024 has begged numerous questions. Let me reiterate a few things. We are molecule agnostic, and our technology and equipment serve multiple end markets, including traditional energy, LNG, hydrogen, and other new energies. Earlier in the presentation, we discussed international macroactivity and global energy, so I won't reiterate that here, although I will remind you about our IPSMR process and associated equipment being chosen for a large IOC's international LNG project. This award is not yet in our backlog, and we anticipate the booking to be later this year or in the first part of 2025.

Now speaking with Japanese middle Eastern European companies looking to build larger production facilities and ever discussed before for hydrogen inclusive of potentially 300 tonne per day liquefaction.

Joe Brakeman: Specific to US we have received multiple multiple certifications for our products and specialty applications, giving us first mover and only approved supplier advantages in some cases, such as with our liquid hydrogen trailer certification in South Korea. Additionally.

Joe Brakeman: Additionally, easier our howden integration, where we're taking existing products into new geographies, including just recently executing our first Mou for earthly labs small scale carbon capture in with U K based C O two hub.

Joe Brakeman: We're also taking our existing products into new applications, including a recent win where we re engineered and industrial refrigeration compressor for vapor recovery application to reduce emissions associated with upstream onshore oil and gas.

And we shared information earlier about aftermarket we've.

Joe Brakeman: We've already discussed with shown on slide 22 throughout our remarks today and we've worked to have balance these considerations in our 2020 for outlook.

Joe Brakeman: If you considerations for our first quarter of 2024 on slide 23, given that it is the first first quarter of the combined business.

Joe Brakeman: Similar to prior years in both the chart and Howden businesses as we move from the last quarter here. The first quarter, we anticipate our general trend of seasonality.

Jillian C. Evanko: IPSMR international margins are extremely similar to North American IPSMR margins, as a clarifying point. Cryo Tank Solutions not only has Teddy 1 and 2 additional capacity coming online in the near term, but CPS also ended 2023 with its highest order and sales quarter of the year. Engineering projects and service opportunities with our main CTS customers have been picking up since the beginning of the year, and some of our industrial gas customers have shared with us that they are looking at their 2024 standard equipment forecast more optimistically than they were last summer. Specialty products and markets have momentum from macro tailwinds, as well as chart-specific activities. Examples of this include a recent growing interest in deploying hydrogen at a much larger scale than we have seen in the past few years.

Joe Brakeman: This expectation is further by the timing capacity productivity activities that Joe talked about earlier.

Joe Brakeman: We have our semiannual interest payments for our long term debt in the first and third quarter of 2024, and this is estimated to be approximately $73 million in the first quarter.

Joe Brakeman: Q1 has other specific cash uses including Capex related to the completion of <unk>, two timing of bonus and tax payments as well as our annual insurance premium payments.

Joe Brakeman: We are reiterating our medium term financial targets on slide 24, as a reminder, our outlook in the medium term does not include any additional big LNG projects that were not included in our September 32023 backlog, nor awards related to the USD <unk> $7 billion of hydrogen hub investment that lies ahead.

Jillian C. Evanko: We are now speaking with Japanese, Middle East, and European companies looking to build larger production facilities than ever discussed before for hydrogen, inclusive of potentially 300 ton per day liquefaction. Specific to us, we have received multiple certifications for our products and specialty applications, giving us first mover and only approved supplier advantages in some cases, such as with our liquid hydrogen trailer certification in South Korea.

Joe Brakeman: To conclude on slide 25, we spent less time today than in the past on new customers first of a kind and other chart differentiators. Yet these metrics are as strong as ever including booking orders with 322, new customers in 2023, receiving 54 patents and.

Joe Brakeman: 106, new first of a kind and booking orders with over 67% of our partners that we executed Mou with in 2022 and 2023 we.

Jillian C. Evanko: Additionally, via our Howden integration, we are taking existing products into new geographies, including just recently executing our first MOU for Earthly Labs small-scale carbon capture with UK-based CO2 hubs. We're also taking our existing products into new applications, including a recent win where we reengineered an industrial refrigeration compressor for a vapor recovery application to reduce emissions associated with upstream, onshore oil and gas, and we shared information earlier We've already discussed what's shown on slide 22 throughout our remarks today, and we've worked to have balanced these considerations in our 2024. A few considerations for our first quarter of 2024 are on slide 23, given that it is the first first quarter of the combined business. Similar to prior years in both the Chardon and Houghton businesses, as we move from the last quarter of the year to the first quarter, we anticipate our general trend of seasonality. This expectation is furthered by the timing of the capacity productivity activities that Joe talked about earlier. We have our semi-annual interest payments for our long-term debt in the first and third quarters of 2024, and this is estimated to be approximately $73 million in the first quarter.

Joe Brakeman: We continue to partner via New Mou's and one such in Q4 was with Coca Cola to improve their ESG goals by evaluating our carbon capture technology at their bottling facilities.

Joe Brakeman: We have exceeded our own greenhouse gas emission reduction target. This past year and have received numerous new certifications for our products and facilities.

Joe Brakeman: None of this would have been accomplished without the may focused and positive efforts of our one chart global team members. So thank you to each of you.

Joe Brakeman: And now Julie please open it up for Q&A.

Julie: Thank you ladies and gentlemen.

Julie: I have a question. Please press star followed by the number one on your Touchtone phone if you'd like to withdraw your question. Please press the star followed by the two if you're using a speaker phone. Please lift the handset before pressing any keys one moment. Please for your first question.

Julie: Your first question comes from Rob Brown from White to Street capital markets. Please go ahead.

Julie: Okay.

Rob Brown: Hi, Joe Joe.

Rob Brown: Hey, Rob.

Rob Brown: First question is on the commercial synergies you've seen some pretty strong momentum there.

Rob Brown: How much sort of can you see that momentum continue I assume it can add.

Rob Brown: And other segments, but just how much more room is there any commercial synergies.

Jillian C. Evanko: Q1 has other specific cash uses, including CapEx related to the completion of TEDI 2, the timing of bonus and tax payments, as well as our annual insurance premium payment. We're reiterating our medium-term financial targets on slide 24. As a reminder, our outlook for the medium-term does not include any additional big LNG projects that were not included in our September 30, 2023 backlog, nor awards related to the USDOE's $7 billion hydrogen hub investment that lies ahead. To conclude on slide 25, we spent less time today than in the past on new customers, first-of-a-kinds, and other chart differentiators, yet these metrics are as strong as ever, including booking orders with 322 new customers in 2023, receiving 54 patents, logging 106 new first-of-a-kinds, and booking orders with over 67 percent of our partners that we executed MOUs with in 2022 and 2023.

Speaker Change: Yeah. Thanks for the question, Rob I would say first of all we've been.

Speaker Change: Very pleasantly surprised at which they continued momentum the commercial synergies has occurred across the last 11 months.

Speaker Change: Earlier and more often than what we had originally anticipated which is shown in the fact that we exceeded our year three original commercial synergy target.

Speaker Change: The nice part of the commercial synergies is that they're coming from multiple different avenues. So that ranges from chart legacy customer relationships, where we're pulling through howden equipment, vice versa, and some of the things that I described on taking existing products into new geographies and applications just to name a few I think theres a lot of runway ahead.

Speaker Change: For us and we're seeing that pipeline.

Speaker Change: Remain above a $1 billion of potential commercial synergy awards here in the coming few years.

Jillian C. Evanko: We continued to partner via new MOUs, and one such in Q4 was with Coca-Cola to improve their ESG goals by evaluating our carbon capture technology at their bottling facilities. We have exceeded our own greenhouse gas emission reduction target this past year and have received numerous new certifications for our products and facilities. None of this would have been accomplished without the mighty focused and positive efforts of our OneChart global team members. So, thank you to each of you.

Speaker Change: And so I think that combined with the fact that we're seeing larger engineering and project sizes as a whole.

Speaker Change: And having this full solution of all of our mission critical equipment under our own umbrella.

Speaker Change: Really stands to serve us well here in the coming years as well as the coming decades.

Speaker Change: Okay.

Speaker Change: Okay, Great and then.

Speaker Change: Do you have a carbon capture capture.

Speaker Change: There's some momentum there.

Speaker Change: Are you sort of are you seeing larger activity there or is it still relatively small and when do you see that sort of expanding.

Operator: And now, Julie, please open it up for Q&A. Thank you. Ladies and gentlemen, should you have a question, please press star followed by the number one on your touchtone.

Speaker Change: Yeah, what I would say on that is we're seeing increasing size of.

Speaker Change: The awards that we're getting for our small scale carbon capture so that sounds a little bit paradoxical when you say that but we're getting more content in some of the smaller scale is going into more facilities or a little bit larger in size. Our original earth at Ccs offering was the oak, which was a very small scale and now.

Operator: If you'd like to withdraw your question, please press the star followed by the. Using a speakerphone, please lift the handset before pressing any. One moment, please, for your first question. The first question comes from Rob Brown from White Street Capital Markets. Please go ahead. Thank you for listening. Be safe. Be well. Be well. Be safe. How's it going, Joe?

Speaker Change: We have the elm, so we're kind of moving up.

Speaker Change: And trying to meet our CCC Ses technology somewhere in the middle between the large scale in the small small scale.

Rob Brown: Hey Rob. Hey Rob. The first question is on commercial synergies. You've seen some pretty strong momentum there. How much can you see that momentum continue? and other segments, but just how much more?

Speaker Change: On the larger scale, which I think is really what your question is around the <unk>.

Speaker Change: Technology for larger industrial applications, I would say that we're seeing an increasing pipeline of opportunities and an increasing number of pre feed and feed studies.

Jillian C. Evanko: Thanks for the question, Rob. I would say, first of all, we've been very pleasantly surprised at the continued momentum of commercial synergies has occurred across the last 11 months, certainly earlier and more often than we had originally anticipated, which is shown in the fact that we exceeded our original year three commercial synergies target. The nice part of the commercial synergies is that they're coming from multiple different avenues.

Speaker Change: Yet we haven't yet seen a full level of kind of commercialization and consistent activity in that larger scale industrial a lot of conversations happening in that realm, whether that's ranging from the Mou I just described with Coca Cola.

Speaker Change: Or through to a quite a bit of commercial pipe on the larger end and in the middle east areas in Saudi so.

Jillian C. Evanko: So that ranges from your chart legacy customer relationships, where we're pulling through how to an equipment, vice versa, and some of the things that I described about taking existing products into new geographies and applications, just to name a few. I think there's a lot of runway ahead for us, and we're seeing that pipeline remain above a billion dollars of potential commercial synergy awards here in the coming few years. And so I think that combined with the fact that we're seeing larger engineering and project sizes as a whole and having this full solution of all of our mission critical equipment under our own umbrella really stands to serve us well here in the coming years as well as the coming decades. A great event. Just a little bit of detail on carbon capture.

Speaker Change: Opportunities, but definitely not on the large scale seeing that consistently falling into the order book yet.

Speaker Change: Okay.

Speaker Change: Okay, great. Thank you I'll turn it over.

Speaker Change: Your next question comes from Marc Bianchi from TD Cowen. Please go ahead.

Marc Bianchi: Hey, thanks.

Marc Bianchi: I wanted to see if we could get any more precision on the expectation for first quarter.

Marc Bianchi: If I look back at the pro forma decline EBITA was down about 7% in the first quarter of 'twenty three.

Marc Bianchi: Is that the right range and then similarly with free cash flow you called out a couple of incremental headwinds that are unique to the first quarter would you expect free cash flow to still be positive in the first quarter.

Jillian C. Evanko: You mentioned some momentum there. Are you seeing larger activity there, or is it still relatively small? Yeah, what I would say on that is we're seeing the size of the award that we're getting for our small scale carbon capture. So that sounds a little bit paradoxical when you say that, but we're getting more content, and some of the smaller scale is going into more facilities or a little bit larger in size. Our original Earth to the Lab CCUS offering was the Oak, which was a very small scale, and now we have the Elm, so we're kind of moving up and trying to meet our CCC SES technology somewhere in the middle between the large scale and the small scale. On the larger scale, which I think is really what your question is around the technology for larger industrial applications, I would say that we're seeing an increasing pipeline of opportunities and an increasing number of pre-feed and feed studies, yet we haven't yet seen a full level of the kind of commercialization and consistent activity in that larger scale industry.

Speaker Change: Hey, Mark Good morning, So let me take the back end of your question first we specifically called those out because we certainly got feedback and I think it was summer of last year that people were surprised at the timing of the semiannual interest rates interest notes and.

Speaker Change: Things like that where it was kind of a first time, we were going through year, one related to these particular timing of cash outflows. So we wanted to give specificity there.

Speaker Change: We're not going to give a specific number but what we would say is there's plenty of items that we called out that are in Q1 that won't repeat in Q2.

Speaker Change: And going forward as well as I think your point on the first part of your question kind of normal seasonality I think normal seasonality is a bit moderated now given the over 30% of our aftermarket service repair being part of the business, So Howard and kind of has mitigated it but it hasn't eliminated it.

Speaker Change: Got it.

Howard: Well, thanks, I'll leave it there.

Rob Brown: A lot of conversations are happening in that realm, whether that's ranging from the MOU I just described with Coca-Cola or through to quite a bit of commercial pipe on the larger end in the Middle East areas in Saudi Arabia. So opportunities, but definitely not on the large scale, seeing that consistently flowing into the order book yet. Okay, great, thank you. Your next question comes from Mark Bianchi from TD Cohen. Please go ahead. Hey, thanks.

Howard: Mark.

Roger Read: Your next question comes from Roger read from Wells Fargo. Please go ahead.

Roger Read: Yes, Thank you and good morning.

Roger Read: Good morning, Roger.

Roger Read: I think what I'd like to dig into just a little bit you went through some of the details of it on the 24 outlook in terms of the revenue. So if we look at the.

Roger Read: The 5 billion sort of expectation for revenue, we'd be looking at backlog covering a little over 50% depending on kind of the range of $4 75.

Mark Bianchi: I wanted to see if we could get any more precision on the expectation for the first quarter. If I look back at the pro forma decline, EBITDA was down about 7% in the first quarter of 23. Is that the right range?

Roger Read: You mentioned half one 'twenty four orders could help and greater backlog conversion I'm just curious.

Mark Bianchi: And then similarly, with free cash flow, you called out, you know, a couple of incremental headwinds that are unique to the first quarter. Would you expect free cash flow to still be positive in the first? Hey, Mark. Good morning.

Roger Read: And ship as well, but of those three like which of the three is most likely to help you out and at what point do you think you have enough visibility on.

Jillian C. Evanko: So, let me take the back end of your question first. We specifically called those out because we certainly got feedback in, I think it was the summer of last year, that people were surprised at the timing of the semiannual interest rates, interest notes, and things like that, where it was kind of the first time we were going through year one related to these particular timings of cash outflows. So, we wanted to give specificity there. We're not going to give a specific number, but what we would say is there are plenty of items that we called out that are in Q1 that won't repeat in Q2 and going forward, as well as, I think, your point on the first part of your question, kind of normal seasonality. I would say normal seasonality is a bit moderated now, given the over 30% of our aftermarket service repair business being part of the business. So, Howden kind of has mitigated it, but it hasn't eliminated it. God.

Roger Read: Bids that are out there right now to feel good about that half one 'twenty four orders potentially helping you out on the higher side.

Speaker Change: Oh, Roger gave me a tough one there so I'm going to pick it up right now.

Speaker Change: Question, there's a lot of pieces in it so I'll leave it there afterwards.

Speaker Change: Alright so.

Speaker Change: Let me answer part one of the question around kind of which of those three do I see as the most likely to help toward the higher end of the range and what I'd say is it's always easy to answer the what in our kind of in our backlog today, so existing backlog converting.

Speaker Change: Through the shops.

Speaker Change: The other part.

So that would be my number one answer my number two answer would be around the larger projects that we could book in the first half, especially as we see more engineering content.

Mark Bianchi: Okay. Well, thanks. I'll leave it there.

Roger Reed: Thank you, Mark. Your next question comes from Roger Reed from Wells Fargo; please go ahead. Yeah, thank you. Good morning.

Speaker Change: On that and so that would be my number two and then my number three would be more book and ship just because it's harder to have visibility until it actually comes in the door.

Jillian C. Evanko: Good morning, Roger. I think what I'd like to dig into just a little bit. You went through some of the details of it on the 24 outlook in terms of revenue. So if we look at the $5 billion sort of expectation for revenue, we'd be looking at backlog covering a little over 50%, depending on kind of the range of 4.7 to 5. You mentioned half one, 24 orders could help and greater backlog conversion. I'm just curious about booking and shipping as well. But of those three, like which of those three is most likely to help you out?

Speaker Change: So.

Speaker Change: The positive there and why we called it out specifically was we.

Speaker Change: Built the walk you know certainly high growth in that range, but we've built the work with lower book and ship than typical but that's really because we've got so much backlog going through our shops so theirs.

Speaker Change: There is a balance there and a trade there.

Speaker Change: And then to answer the question on visibility to kind of this first half category two questions that could convert in the second half.

Speaker Change: So given the larger and increasing project size in our pipeline of commercial identified opportunities.

Roger Reed: And at what point do you think you have enough visibility on bids that are out there right now to feel good about that half one, 24 orders, potentially, you know, helping you out on the higher side? Roger gave me a tough one there. So I'm going to pick it apart a little bit. And I'm not going to ask that question because there are a lot of pieces to it. So I'll leave it there afterwards. Okay. All right. So, let me answer part one of the question around which of those three do I see as the most likely to help toward the higher end of the range.

Speaker Change: It's hard to say, we're going to definitely get this <unk>.

Speaker Change: <unk> $75 million order within the next two weeks, although the commercial teams should be listening and they have a target in a bogey with that said I think it will have pretty good visibility to that.

Speaker Change: By the time, we report our first quarter earnings kind of what we're seeing there.

Speaker Change: In those types of projects, so and at the end of April.

Speaker Change: Okay.

Speaker Change: Go ahead. Thank you one more one more piece of your question Roger that.

Jillian C. Evanko: And what I would say is it's always easy to answer what's in our backlog today, so existing backlog converted through the shops. The other part, so that would be my number one answer.

Speaker Change: Kind of coverage going forward needed on.

Speaker Change: Bookings and.

Speaker Change: We've shared before but I think it's worth noting again that on average across the year, we expect to be above one on book to Bill.

Jillian C. Evanko: My number two answer would be around the larger projects that we could book in the first half, especially as we see more engineering content on that. And so that would be my number two. And then my number three would be more book and ship, just because it's harder to have visibility until it actually comes in the door. So the positive there and why we called it out specifically was that we've built the walk, certainly high growth in that range, but we've built the walk with lower book and ship than typical, but that's really because we've got so much backlog going through our shops. So there's a balance there and a trade there. And then to answer the question on visibility to kind of those first half category two questions that could change in the second half.

Speaker Change: Okay. Yeah, that's helpful and my apologies to putting a target on the back of the commercial guys there.

Speaker Change: Hey, nice work I appreciate yeah.

Speaker Change: Thank you.

Speaker Change: Thanks Roger.

Iran: Your next question comes from Iran.

Speaker Change: Robert from.

Robert: J P. Morgan. Please go ahead.

Robert: Yes, good morning Jill.

Robert: I wanted to focus on slide eight.

Robert: US think about.

The.

Speaker Change: Different trends between pro forma orders and backlog.

Speaker Change: No formal orders were down two 8% backlog grew.

Speaker Change: 24%, which gives you more visibility on 2024 help us think about the dynamics of what the delta between those two trends so to speak.

Speaker Change: Yeah. Thanks for your question. So I'd point you also on the slide.

Speaker Change: To row, two of orders ex big LNG year over year pro forma that grew in the low single digits. So that's one of the dynamics there where in 2022 I think we had about $620 million of big LNG related orders in 23 was 385.

Jillian C. Evanko: So given the larger and increasing project size in our pipeline of commercial identified opportunities, it's hard to say we're going to definitely get this, you know, 50, 75 million dollar order within the next two weeks, although the commercial team should be listening, and they have a target and a bogeyman. With that said, I think we'll have pretty good visibility on that by the time we report our first quarter earnings, kind of what we're seeing there in those types of projects. So the end of the end of the.

Speaker Change: Ish in that range.

Speaker Change: So that's one dynamic contributing there the other is around and as these projects sizes into backlog get larger and with more engineering content that gives us more visibility, but yet. It also has the dynamics of kind of the timing of when things go through the shops. After engineering releases occur if there's design.

Roger Reed: Okay, I appreciate that. I think you have one more piece of your question, Roger, about the kind of coverage going forward needed for bookings. And we've shared before, but I think it's worth noting again that, on average, you know, across the year, we expect to be above one on bookings. Okay, yeah, that's helpful. And my apologies for putting a target on the back.

Speaker Change: Changes in that engineering phase that really kind of contributes to the timing of the flow through and we've attempted here today in the bridges and in the framework that we've included in the deck to give you the elements of the walk to the low and high end of the range and we also have worked really as I said.

Jillian C. Evanko: Hey, nice work. I appreciate you. Thank you. Thanks, Roger. Your next question comes from our J.P. Morgan, please go ahead. Yeah, good morning, Jill.

Speaker Change: On balance to incorporate those 2024 considerations that are shown later in the deck.

Speaker Change: In particular as we have had revenue move between quarters and years. So we're really working to kind of give that visibility. So everybody can make really educated decisions on how they want to model. This.

J.P. Morgan: I want to focus on slide eight and help us think about the different trends between proforma orders and backlog. Your proforma orders were down 2.8%, but backlog grew a lot by 24%, which gives you more visibility on 2024. Help us think about the dynamics of the delta between those two trends.

Speaker Change: Great My.

Speaker Change: And my follow up is on the bridge you expect $230 million revenue uplift from Big LNG in the 32 facility can you help us think about because I don't think tended to be operational until two two from that mistaken.

Jillian C. Evanko: Yeah, thanks everyone for your questions. So I'd point you also on the slide to row two of orders ex-Big L&G year-over-year pro forma that grew in the low single digits. So that's one of the dynamics there, where in 2022, I think we had about $620 million of Big L&G-related orders in 2016, ish in that range. So that's one dynamic contributing there.

Speaker Change: Can you help us think about the revenue potential from those two because just trying to think about the trajectory of revenue growth of 32 comes online I think it's <unk>.

Speaker Change: Yeah, Joe <unk> Who's coming online early Q2 early Q2.

Speaker Change: Certificate of occupancy.

Speaker Change: Imminently.

Joe Brakeman: We'll be operating early.

Joe Brakeman: Very early Q2, and we have good backlog coverage there for 2024 already.

Jillian C. Evanko: The other is around as these project sizes into backlog get larger and with more engineering content, you know, that gives us more visibility, but yet it also has the dynamic of kind of the timing of when things go through the shops, after engineering releases occur, if there's design changes in that engineering phase, that really kind of contributes to the timing of the flow through and, uh, we've attempted here today in the bridges and in the frameworks that we've included in the deck to give you the elements of the walk to the low and high end of the range. And, uh, we also have worked really, as I said, on balance to incorporate those 2024 considerations that are shown later in the deck, um, in particular, as we have had revenue move between quarters and years. So we're, we're really working to kind of give that visibility so everybody can make really educated decisions on how they want to model. Great.

Speaker Change: The other couple of points.

Speaker Change: That are incorporated in that figure are around.

Speaker Change: No I don't think we called it out as Teddy one, but Teddy one got certified by one of our major customers to do bolt tanks.

Speaker Change: And cogeco railcars, as well and Thats in backlog and backlog and then lastly, the big LNG.

Speaker Change: We didn't give a specific year end backlog, but this is just a.

Speaker Change: Just a portion of our year end 2023, big LNG backlog that we expect to flow through in 2024, I do think that you don't want to.

Speaker Change: Your one of your colleagues questions earlier that.

Speaker Change: Yeah. This is an area that if we can get more throughput through the shops.

Speaker Change: As you know certainly the availability of backlog too.

J.P. Morgan: My follow-up is on the bridge. You expect a $230 million revenue uplift from big L&G and the Teddy 2 facility. Can you help us think about this because I don't think Teddy 2 will be operational until 2Q, if I'm not mistaken. Can you help us think about the revenue potential from those two? Because just trying to think about the trajectory of revenue growth as Teddy 2 comes online, I think in 2Q. Yeah, Joe, Teddy 2 is coming online early in Q2.

Speaker Change: Benefit 2024.

Speaker Change: And maybe the heart of your question is that how do we think about the year unfolding from.

From Q1 to Q4.

Speaker Change: We don't give quarterly guidance, we certainly expect that Q.

Speaker Change: Q1 will be the lowest quarter of the year and sequentially rolling out as the year goes on with the brunt of heading to revenue rec in the second half of this year, whereas big LNG is a little more balanced.

Speaker Change: Now till the end of the year.

Jillian C. Evanko: Yeah, early Q2, Certificate of Occupancy imminent. But yeah, we'll be operating early, very, very early Q2. And we have good backlog coverage there for 2024 already. I don't think we called it out as Teddy One, but Teddy One got certified by one of our major customers to do bulk tanks. Yeah. And cryogenic rail cars as well.

Speaker Change: Thanks, Jeff I appreciate it thank.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Craig Shere from Tuohy. Please go ahead.

Craig K. Shere: Hi, Thanks for taking the questions.

Craig K. Shere: So first of all.

Craig K. Shere: The fourth quarter was very strong on the margin side and while revenues into this year are softer than originally guided margin or the margin percent was stronger.

Craig K. Shere: Free cash flow was effectively unchanged.

Craig K. Shere: Can you provide more color around the margin and cash flow strength.

Jillian C. Evanko: And that's in the backlog. And then lastly, the big LNG, you know, we didn't give a specific year-end backlog, but this is just a portion of our year-end 2023 big LNG backlog that we expect to flow through in twenty twenty four. I do think that, you know, to one of your colleagues' questions earlier that this is an area that if we can get more throughput through the shops has certainly the availability of backlog to benefit twenty twenty four And maybe the heart of your question is that how do we think about the year unfolding? from Q1 to Q4, and while we don't give quarterly guidance, we certainly expect that Q1 will be the lowest quarter of the year, and sequentially rolling out as the year goes on, with the brunt of Teddy 2 revenue wrecking in the second half of this year, whereas big L&G is a little more balanced, now till the end of the year. Thanks Jill, I appreciate it.

Speaker Change: Yes, thanks for the questions Craig.

Speaker Change: I would say is that.

Speaker Change: We definitely expected higher revenue rec in Q4, yet we're pretty pleased with 13% sequential growth Q3 to Q4, the first time that pro forma business being over $1 billion actually it's the first time, the pro forma business being over I think 910 million or something like that.

Speaker Change: So all in all we attempted to in the range for 2024 account for the fact that we do have.

Speaker Change: Pending shifts between quarters, especially as these projects get larger and larger.

Speaker Change: In terms of the margin strength, you know very very pleased with the performance that's really reflective of in no particular order our repair service and leasing business.

Speaker Change: Not only the profile of the gross margin, but also the consistency of it being.

J.P. Morgan: Thank you. Our next question comes from... This is Jillian Evanko.

Speaker Change: Grower in the business that was something that originally there were it was just.

Jillian C. Evanko: Thank you. Hi, thanks for taking the questions. So first, you know, the fourth quarter was very strong on the margin side. And while revenues into this year are softer than originally guided, the margin or the margin percent is much stronger, and free cash flow is effectively unchanged. Can you provide more color around this margin cash flow strength?

Speaker Change: Skepticism there was skepticism around whether that business could grow 10% and given the year over year pro forma order growth in ourselves, 25% plus we have good visibility to that kind of margin profile continuing in 2020 for the.

Speaker Change: The other elements of the margin profile contributions are really around the larger project mix and we see that continuing to be consistent.

Craig K. Shere: Yeah, thanks for the questions, Craig. What I would say is that, you know, we definitely expected higher revenue rack in Q4, yet we're pretty pleased with 13% sequential growth from Q3 to Q4, the first time the pro forma business was over a billion dollars. Actually, it's the first time the pro forma business was over, I think, 910 million or something like that.

Speaker Change: And more and more of the annualized cost synergies that have been achieved to date flowing through the actuals in their reported.

Speaker Change: And then your question about free cash flow.

Speaker Change: And I'd point, you to the starting point of the EBITDA.

Speaker Change: Look that we provided and then we are in the appendix have a slide that walks you through the elements of.

Jillian C. Evanko: So, all in all, we've attempted to account for the fact that we do have timing shifts between quarters, especially as these projects get larger and larger. In terms of the margin strength, we are very pleased with the performance. That's really reflective of, in no particular order, our repair service and leasing business, not only the profile of the gross margin but also the consistency of it being a grower in the business. That was something that, originally, there was skepticism around whether that business could grow 10%, and given the year-over-year pro forma order growth in RSL of 25% plus, we have good visibility to that kind of margin profile continuing in 2024. The other elements of the margin profile contributions are really around the larger project mix, and we see that continuing to be consistent, with more and more of the annualized cost synergies that have been achieved to date flowing through the actuals and the reported.

Speaker Change: Our framework for the other pieces and parts that walk down to to the free cash flow inclusive of the 115 $225 million of anticipated Capex.

Speaker Change: Great. Thanks, and my second question was around LNG.

Speaker Change: On slide 28 are you basically.

Speaker Change: King.

Speaker Change: There is a bit of a fall off.

Speaker Change: Message opportunities as long as this pause a sustained but international is more than filling in for that so you're kind of pulling in on.

Speaker Change: What you anticipated this opportunities in the U S, but globally, you're stronger stronger than before.

Speaker Change: And.

Speaker Change: Finally in that.

Speaker Change: Anything in your Big LNG Order book, maybe a one off order.

Speaker Change: Still exposed to any final regulatory certification export authorization and if you do have a straggler like that can you describe any kind of order cancellation protection.

Jillian C. Evanko: And then your question about free cash flow, I would point you to the starting point of the EBITDA outlook that we provided. And then we, in the appendix, have a slide that walks you through the elements of our framework for the other pieces and parts that walk down to free cash flow, inclusive of the $115 million to $125 million event. My second question is about LNG.

Speaker Change: Alright, let me unpack that one so what I would say is that since the announcement of the LNG export moratorium that we have.

Speaker Change: Seen a meaningful increase in international inbound.

Craig K. Shere: On slide 28, are you basically saying that there is a bit of a fall off in domestic opportunities as long as pause and sustain, but international is more than filling in for that. So you're kind of pulling in on, you know, what you anticipate as opportunities in the U.S. But globally, you're as strong or stronger than before.

Speaker Change: I would say that that didn't actually mitigate anything on the domestic side, although we're saying yes.

Speaker Change: Demand moderating because of the uncertainty around the timing of of the pause in the analysis. So when let me address the international piece, let me talk about the domestic piece of the pipeline there.

Jillian C. Evanko: And finally, in that, is anything in your big LNG order book, maybe a one-off order, still exposed to any final regulatory certification, export authorization, and if you do have a straggler like that, can you describe any kind of order cancellation protection you'd have? All right, let me unpack that one.

Speaker Change: First of all you've heard.

Speaker Change: The extension of Koreans permit to 2029.

Speaker Change: Last week discussed that they didn't anticipate train data <unk> impacted by the the LNG moratorium and then you go into the international side, where Woodside, just recently said they expect a 53% increase in global LNG demand in the next decade shell just put their LNG outlook out with continuing growth.

Jillian C. Evanko: So what I would say is that since the announcement of the LNG export moratorium, we have seen a meaningful increase in international inbounds. But I would say that that didn't actually mitigate anything on the domestic side, although we're saying demand moderating because of the uncertainty around the timing of the pause in the analysis. I've addressed the international piece. Now, let me talk about the domestic piece of the pipeline there. First of all, you've heard the extension of Tolerian's permit to 2029. Chenier last week discussed that they didn't anticipate trained eight and nine would be impacted by the LNG moratorium.

Speaker Change: Into the 'twenty forties with with the specificity that that was expected in APAC.

Speaker Change: So I think on balance the U S pause timing uncertainty doesn't necessarily change.

Speaker Change: Our outlook for domestic in the medium term, but the international.

Speaker Change: Inbound since late January have given us confidence that that pipeline is going to continue the way we had seen it prior to the pause.

Speaker Change: In terms of the.

Jillian C. Evanko: And then you go onto the international side, where Woodside just recently said they expect a 53% increase in global LNG demand. Shell just put out their LNG Outlook out with continuing growth into the 2040s, with the specificity that was expected in APAC. So I think, you know, on balance, the U.S. pause timing uncertainty doesn't necessarily change our outlook for domestic in the medium term, but the international inbounds since late January have given us confidence that that pipeline is going to continue the way we had seen it prior to the pause. In terms of the...

Speaker Change: The big LNG.

Speaker Change: Backlog so.

Speaker Change: Let me reiterate my thanks to Craig for hosting hosting a call with us on January 28th or ninth. After this pause was announced because it allowed us to really discuss the composition of our backlog in a.

Speaker Change: I'm going to I'm in a way it on my memory on.

Speaker Change: From Q1 2019 to Q3 of 2023, we had announced a $1 billion and 55 in big LNG related orders and.

Speaker Change: We were privileged to be able to announced all but one of those in terms of the project itself and so.

Jillian C. Evanko: The Big LNG, backlog. So let me reiterate my thanks to Craig for hosting hosting a call with us on January 28th or 29th after this pause was announced because it allowed us to really discuss the composition of our backlog and I'm going to I'm going to wing it on my memory on from Q1 2019 to Q3 of 2023 we had announced a billion 55 in big LNG related orders and we were privileged to be able to announce all but one of those in terms of the project itself and so the only one that we hadn't given a specific project to was the second quarter of 2023 and we haven't commented on on its permitting but it's all of those projects including that one we have received our full and final notice to proceed from our custom And then lastly, there are in the big LNG contract specifically, I don't want to answer like the total backlog, because you got to get into specific customers and projects and all that. But to the big LNG backlog, there are specific cancellation charges, in particular, as again, we have our FNTPs with all of, as of September 30th, which I think was, Your next question comes from Graham Price from Raymond James, please go ahead. Hi. Good morning.

Speaker Change: The only one that we haven't given a specific project two was the second quarter of 2023, and we haven't commented on on permitting but it's all of those projects, including that one we have received our full and final notice to proceed from our customer.

Speaker Change: And then lastly, there are.

Speaker Change: In the big LNG contracts, specifically I don't want to answer like the total backlog because you've got to get into specific customers and projects and all of that but to the big LNG backlog. There are specific cancellation charges in particular as again, we have our F N T PS with all of them.

Speaker Change: As a as of September 30th, which I think was the question.

Speaker Change: Thank you.

Speaker Change: And your next question comes from Graham price from Raymond James. Please go ahead.

Graham Price: Hi, good morning, Thanks for taking the call.

Graham Price: This one's from Brian.

Graham Price: Okay.

Speaker Change: A follow up.

Graham Price: Josh.

Brian: Just thinking about the project delays that were visible in 2023, and then how are you.

Graham Price: The 2024.

Josh: Of those that you foresee or are they all encompassed in the $200 million customer timing and supply chain.

Graham Price: Number that you quoted in the bridge and just how should we think about kind of error bands around that.

Graham Price: Thanks for taking the call. Just one from my end, a follow-up to our question. Just thinking about the project delays that were visible in 2023 and then heading into 2024, of those that you foresee, are they all encompassed in the $200 million Customer Timing and Supply Chain number that you quote in the bridge, and just how should we think about the kind of error bands around it? Yeah, so again, looking back at history and taking all of the considerations on balance, we felt like we should put the low end of the range where it is The first being, and these are in no particular order, but they're fairly equally weighted.

Speaker Change: Yeah. So we again looking looking back at history and in taking all of the considerations on balance we felt like we should put the low end of the range, where it is at the $4 7 billion, which specific.

Graham Price: Specific project timing is theres, a few different components that go into the reasons for those timing shifts.

Graham Price: First being and these are in no particular order, but they're fairly equally weighted the first being customer timing or change orders, where a design change comes in and so then you can't release it to the shop floor, because you've got to incorporate the design change typically those actually result in change orders for us. It's just timing of the Rev wrap associated with it.

Graham Price: The second category, which we've experienced and yeah I would say are learning to incorporate.

Jillian C. Evanko: The first being customer timing or change orders where a design change comes in. And so then you can't release it to the shop floor because you have to incorporate the design change. You know, typically those actually result in change orders for us. It's just the timing of the revision rep associated with it. The second category, which we've experienced and I would say we are learning to incorporate into this outlook, is around quarter-end vendor progress. As we have, the business has shifted to that more full solution business model. So we have more percent of completion revenue, which relies on vendor progress as well. And then the third is around how we think about the timing of new orders coming in and the engineering-related work associated with that. So as the projects get larger, there's more engineering.

Graham Price: Into this outlook is around quarter end vendor progress as we have the business has shifted to that more full solution business model. So we have more percentage of completion revenue rec, which relies on vendor progress as well and then the third is around how do we think about timing of new orders coming in.

Graham Price: Engineering related work associated with that.

Graham Price: So as the projects get larger there's more engineering.

Graham Price: And that's what I would say the three that encompass what we mean, when we say timing of revenue recognition on and we've.

Graham Price: We've attempted to incorporate that in that 200 million bar.

Graham Price: It's hard to kind of risk adjust that and say like Oh, okay, plus or minus to put a band around it that's what we've attempted to do with this range.

Jillian C. Evanko: And that's what I would say are the three that encompass what we mean when we say timing of revenue recognition. And we've attempted to incorporate that in that 200 million bar. But it's hard to kind of risk adjust that and say, like, okay, plus or minus, you know, to put a band around it.

Speaker Change: Okay understood.

Graham Price: If we think about that range is there a particular quarter during the year that would be more more susceptible.

Graham Price: <unk> seen those noise.

Graham Price: Okay.

Graham Price: That's what we've attempted to do with this project. Okay, understood. If we think about that range, is there a particular quarter during the year that is more susceptible to seeing those delays?

Speaker Change: Not specifically.

Speaker Change: Pacific to this item this topic I would just reiterate the.

Graham Price: Consideration of our normal seasonality from the fourth quarter to the first quarter, but that's that's less attributed to this and it is just the normal business model and our customers' behaviors.

Jillian C. Evanko: Not specific to this item, this topic. I would just reiterate the consideration of our normal seasonality from the fourth quarter to the first quarter, but that's less attributed to this than it is just the normal business model and our customers' behavior. Okay, got it. Thank you. That's that's it for me.

Speaker Change: Okay got it thank you.

Speaker Change: It for me I'll jump back in the queue. Thanks.

Speaker Change: Thanks Graham.

Speaker Change: Your next question comes from Eric Stine from Craig Hallum. Please go ahead.

Eric Stine: I'll jump back in the, Thanks, Graham. Your next question comes from Eric. Hey, Jill, I'm just jumping on late here.

Eric Stine: Hey, Joel just jumping on late here I'm sure I'm going to ask a question that's already been asked but.

Eric Stine: Good Erik policies alright.

Eric Stine: Apologies in advance but.

Jillian C. Evanko: I'm sure I'm going to ask a question that's already been asked, but apologies. All right. Apologies in advance, but I'm just curious about the orders. I mean, obviously, another great number specialty for 1 kind of stands out, you know. Just curious.

Eric Stine: So just curious on the orders I mean, obviously another great number.

Eric Stine: Specialty for one kind of stands out.

Joel: Just curious I mean is that a is that a number that you would see as sustainable is that a number of bad.

Eric Stine: I mean, is that a number that you would see as sustainable? Is that a number that there may be something at year end that drove that? And conversely, I mean, is that a number that actually has been limited potential by some uncertainty around the IRA?

Eric Stine: There maybe it was something to year end that drove that and Conversely, I mean is that a number that actually has been limited potential by some uncertainty around the IRA.

Speaker Change: Yeah. Thanks for the question, Eric and it's not a repeat.

Jillian C. Evanko: Yeah, thanks for the question, Eric, and it's not a repeat. So when you look at it, we were very pleased with our fourth quarter order activity, and you didn't ask this part of the question, but I will point out that on the 28th of December 2023, we put out a release about LNG-related awards. And so that was a nice contributor, in particular the international aspects of those. And then in specialty itself, you know, from kind of Q3 to Q4, we saw a nice steadyness in the hydrogen and helium end markets, and that one did have one larger project in it in the fourth quarter, so that could be something that is a timing thing between quarters that you don't see that happen, but there's more and more of these larger- I think we're in the 25 plus range now in hydrogen.

Eric Stine: When you look at it.

Speaker Change: We were very pleased with our fourth quarter order activity and.

Speaker Change: You didn't ask this part of the question, but I will point out on the 20th of December 2023, we put out a release about LNG related awards and so that was a nice contributor in particular, the international aspects of those and then in.

Speaker Change: In specialty itself from if you look at kind of Q3 to Q4.

Speaker Change: We saw a nice.

Speaker Change: Steadiness in the hydrogen helium and markets.

Speaker Change: And that one did have one larger project in it in the fourth quarter. So that could be something that is a timing thing between quarters that you don't see that happen, but there is more and more of these larger sized projects in the pipeline in a diverse set of geographies. So we like that ability to start to play and more and more.

Speaker Change: <unk> countries I think we're in 25, plus now and hydrogen.

Speaker Change: We also saw from Q3 to Q4.

Jillian C. Evanko: We also saw from Q3 to Q4 an uptick in orders for marine specifically, so while we saw a sequential decline in marine sales, we saw an uptick in marine order activity, and I do think we're going to continue to see opportunities in that end market, whether it's around, there are discussions. You've got Carnival Cruise Line doing LNG cruise ships, you've got other cruise operators doing first hydrogen vessels, but what I really like about Yeah, we're seeing a lot of interest, as Jill noted, with the cruise lines and some ferry ships, both on the LNG and hydrogen side. As Jill noted, with Teddy 2, we really have the capability of building the size tanks that these guys want for the space that they have allocated on their ships. They tend to be really large in diameter but shorter in length than you would traditionally have, and just for gas storage.

Speaker Change: Uptake uptick in orders in marine specifically, so while we saw a sequential decline in marine sales, we saw an uptick in marine order activity and I do think we're going to continue to see opportunities in that end market, whether it's around yeah. There's there's discussions you got carnival cruise line due in <unk>.

Speaker Change: LNG cruise ships, you've got other cruise operators doing first hydrogen vessels, but what I really like about that end market is we missed a lot of opportunities over the last five years without having this the large enough jumbo cryogenic tank capacity. So in that end market. Joe maybe you can talk a little bit about marine for <unk>.

Speaker Change: <unk>.

Speaker Change: Yes.

Joe Brakeman: We're seeing a lot of.

Joe Brakeman: Interest as Jill noted with our with the cruise lines and some very ships.

Joe Brakeman: Both on the LNG and hydrogen side.

Joe Brakeman: As Jill noted.

Joe Brakeman: Two we really have the capability of building the besides staying so these guys won for the space that they have allocated on the ships.

Joe Brakeman: They tend to be really large diameter, but but shorter in length and you would traditionally have.

Joe Brakeman: And just gas storage, so 22 really helps us.

Jillian C. Evanko: So Cutty2 really helps us capture that business that we really haven't had the capability of achieving in the past. I would say, Eric, on average over time, I think it's a sustainable order level. It's hard to say every quarter is going to be consistently at what Q3 or Q4 was for specialty.

Joe Brakeman: Capture that business that we really havent had the capability of of of achieving in the past so.

Joe Brakeman: I would say Eric on an average over time I think it's a sustainable order level. It's hard to say every quarter is going to be consistently at what Q3 or Q4 was for specialty.

Eric Stine: But again, what I look at is the increasing number of customers and potential customers in that pipeline. And I did comment, as you might not have heard because it was early in my comments, about, Quarter-to-date Q1 2024, and this is a small number, but it's just one of those little indicators to me that HLNG vehicle tank orders in your quarter-to-date have been pretty strong, and I'm not going to get over my skis on that, so we've built a fairly low growth for that in 24 Okay, thank you. Thank you. Your next question comes from Alexa Patrick from Goldman Sachs. Hi, good morning team. When we look at the 2024 guide and then look at where street consensus is, there's a delta. What do you think the streets miscalibrating and any color you can give around that would be helpful?

Eric Stine: But again you know what.

Eric Stine: What I look at is the increasing number of customers and potential customers in that pipeline for specialty and I did comment as you might not have heard because it's early in my comments about.

Eric Stine: Quarter to date Q1, 2024, and this is a small number but its just one of those little indicators to me that H LNG vehicle tank orders.

Eric Stine: Your quarter to date have been pretty strong and I'm not going to get over my skis on that so we've built a fairly low growth for that in 'twenty four compared to 23, but I think theres a couple potential that if one doesn't happen in a given quarter or six months period Theres other end markets and that really is what.

Eric Stine: I like about the diversity of the composition of both the backlog and the commercial pipe.

Speaker Change: Okay. Thank you.

Speaker Change: Right.

Speaker Change: Your next question comes from Alex from Goldman Sachs. Please go ahead.

Alex: Hi, Good morning team when we look at 2024 guide and then look at where street consensus is there's a delta what do you think the street's Ms Calibrating and any color you can give around that would be helpful. Thanks.

Alexa Patrick: Well, we've provided what we believe to be an achievable range given all the input that I think we feel like we clearly laid out in our walks on the deck, so I don't think I can speculate on other people's models.

Alex: Yes.

Alex: Well, we've provided what we believe to be an achievable range given all of the inputs that I think we feel like we clearly laid out in our walks in the deck. So I don't think I can speculate on.

Speaker Change: Other People's models.

Jillian C. Evanko: Okay, thanks. I'll turn it over to you. Thanks, Alexis. Ladies and gentlemen, as a reminder, should you have a question... All questions come from Barry Haimes. SAG Asset Management, Good morning. Thanks so much for taking the time to answer my question. I had a question on the one LNG order you referenced, Jill, where you've got the notice to proceed, but maybe not all the final permitting was in before the moratorium hit. Was that pulled out of this year's guide, or were there any changes to the guide?

Speaker Change: Okay. Thanks, I'll turn it over.

Speaker Change: Thanks Alexia.

Speaker Change: Ladies and gentlemen, as a reminder, should you have a question. Please press star one.

Speaker Change: Your next question comes from Barry Haimes.

Barry George Haimes: Sag asset management. Please go ahead.

Barry George Haimes: Good morning, Thanks, so much for taking my question.

Barry George Haimes: I had a question on the the one LNG order you referenced Joe where you've got the notice to proceed.

Barry George Haimes: But maybe not all the final permitting listen before the moratorium.

Barry George Haimes: Was that pulled out of this year's guide or were there any changes to the guidance and if not could you just talk about the change between the.

Barry George Haimes: And if not, could you just talk about the change between the 12 to 14 you have today, which is still great, compared with the 14 plus, I think, that you had on Analyst Day? So, the moratorium or something else that led to that shift. Thanks for the questions, Barry. Okay, so let me talk about the first part of the big LNG. Recall that we sized that Q2 project I was referencing at approximately 200 million-ish, and then we also announced at the end of December and multiple LNG-related awards that we didn't size, but you can kind of add them up, the pieces and parts, based on what we've said previously.

Barry George Haimes: The 12 to 14.

Barry George Haimes: Today, which is still great.

Barry George Haimes: Compared with the 14, plus I think that you had an analyst day so.

Barry George Haimes: It's just fine tuning and being more conservative or were there some changes in the either in that water or.

Alex: The moratorium or something else that led to that shift.

Alex: Thanks for the questions Barry Okay. So let me talk to the first part on the Big LNG.

Barry George Haimes: Recall that we sized that Q2 project that was referencing an approximately 200 million ish and then we also announced at the end of December multiple LNG related awards.

Barry George Haimes: That we didn't size, but you can kind of add them up the pieces and parts based on what we've said previously so we feel like we're entering the year in a very good place compared to where we were before on the big LNG backlog I would also add that those projects you know again with FMT piece to us they don't they sometimes don't come from the op.

Jillian C. Evanko: So we feel like we're entering the year in a very good place compared to where we were before on the big LNG backlog. I would also add that those projects, you know, again, with FNTPs to us, they sometimes don't come from the operator themselves. They'll go through an EPC or something like that. Where our relationship is, the cancellations associated with that are usually pretty favorable. But it's not even about that. In my mind, none of our operators in the U.S. have said that they see anything different. They really view this as a nuisance, in particular, I would say, for 2024. But that particular project also does have certain permits.

Alex: Greater themselves will go through an EPC or something like that so we're our relationship is in the cancellations associated with that are usually pretty favorable, but it's not even about that in my mind and not none of our operators in the U S have said that they see any anything different they really view this as.

Alex: Yeah. It a nuisance in particular I would say for 2024, but that particular project also.

Alex: It does have certain permitting so I think you got a lot of positive momentum even even on that particular, one but if not if you wanted to handicap. It then and handicap it with what we announced in the fourth quarter.

Jillian C. Evanko: So I think you have a lot of positive momentum even on that particular one. But if not, if you wanted to handicap it, then handicap it with what we announced in the fourth quarter. Then I would say around the kind of what's different.

Alex: And I would say around the kind of what what's different.

Jillian C. Evanko: We, again, have laid out all these, a lot of detail in the frameworks in the deck. And in the last four months since we reported, there have been lots of different macro situations, and I'm not sure everybody can account for what's going to happen in an hour from now, whether that's around the Red Sea or whether that's around the supply chain or any such thing.

Alex: We again have laid out all these a lot of detail on the frameworks in the deck and.

Alex: In the last four months since we reported last year.

Alex: Lots of different macro situations and I'm not sure everybody can account for what's going to happen in an hour from now whether that's around the red sea or whether that's around.

Alex: The supply chain or any such thing, but what we've tried to do is give you.

Barry George Haimes: But what we've tried to do is give you very transparent clarity on how we see getting from the 23 Proforma to the Outlook. And again, I think what we want to convey is that we've got a really good, diverse composition of our backlog. We've got a lot of self-help productivity and throughput activities, and these are going to come online throughout the year. We've got a lot of benefits from the Howden integration, but we also have experience where we see timing shifts. And so we're really trying to give this low to high end based on those elements.

Alex: Very transparent clarity on how we see getting from the 23 pro forma to the outlook.

Alex: And then again, yes, I think what we what we want to convey is.

Alex: Got really good diverse composition of our backlog, we've got a lot of self help productivity throughput activities and these are because then it could come online throughout the year, we've got a lot of benefits from the having integration, but we also have experience, where we see timing shifts and so we're really trying to.

Alex: Give this low to high and based on those elements.

Jillian C. Evanko: Got it. Thanks so much. Great report and rundown. Thanks, Jill. Thanks, Barry. Take care. And there are no further questions at this time. I will turn the call back over to Jill Evanko for closing remarks. Just a quick thank you again to our Global One Chart team members for all of your efforts. Thank you. Thanks, everybody. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you. Title Microsoft Office Word 97-2003 Document MSWordDoc Word Document.8, John Walsh

Alex: Okay.

Speaker Change: Got it thanks, so much great important rundown thanks, Joe.

Barry George Haimes: Thanks, Barry take care.

Alex: There are no further questions at this time I will turn the call back over to Jill Evanko for closing remarks.

Speaker Change: Just a quick thank you again to our global one chart team members for all of your efforts. Thank.

Alex: Thanks.

Jillian C. Evanko: Thanks, everybody.

Jillian C. Evanko: Ladies and gentlemen, this concludes your conference call for today, we thank you for joining and you may now disconnect your lines. Thank you.

Jillian C. Evanko: Yes.

Jillian C. Evanko: Yes.

Jillian C. Evanko: Yeah.

Craig Shere: Okay.

Jillian Evanko: Yeah.

Jillian C. Evanko: Hmm.

Jillian Evanko: Yeah.

Alex: Mhm.

Jillian C. Evanko:

Jillian C. Evanko: Hmm.

Jillian Evanko: Hum.

Alex: Hum.

Jillian C. Evanko: Hum.

Alex: Hum.

Jillian C. Evanko: Hum.

Jillian C. Evanko: Yeah.

Jillian C. Evanko: Yes.

Alex: Uh huh.

Jillian C. Evanko: Hum.

Jillian C. Evanko: Yes.

Jillian C. Evanko: Yeah.