Good morning and welcome to the Chart Industries, Inc. 2013 Third Quarter Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. You should have already received the company's earnings release that was issued earlier this morning. If you have not received the release, you may access it by visiting Chart's website at www.chartindustries.com. A telephone replay of today's broadcast will be available following the conclusion of the call until November 8. The replay information is contained in the company's earnings release. Before we begin, the company would like to remind you that statements made during this call that are not historical in fact are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied in the forward-looking statements. For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the information regarding forward-looking statements and risk factors included in the company's earnings release and latest filings with the SEC. The filings are available through the Investor Relations section of the company's website or through the SEC website at www.sec.gov. The company undertakes no obligation to update publicly or revise any forward-looking statements. I would now like to turn the conference call over to Mr. Michael Biehl, Chart Industries' Executive Vice President, CFO and Treasurer. You may begin your conference.

Thank you, Kevin. Good morning, everyone. I'd like to thank you all for joining us today. I'll begin by giving you a brief overview of our third quarter results, then Sam Thomas will provide comments on current market and order trends we see in each of our business segments. And then I'll finish up by commenting on our outlook for the remainder of 2013. We reported net income for the third quarter of 2013 of $24.4 million or $0.74 per diluted share. This included costs of $1 million or $0.02 per diluted share, largely associated with the company's acquisition of AirSep in our BioMedical business. This quarter also includes a $0.06 per diluted share impact associated with additional shares taken into account from our convertible notes. Therefore, earnings per share for the third quarter of 2013 would have been $0.82 per diluted share, excluding this additional dilution in the acquisition-related cost I mentioned. This compares to the third quarter 2012 net income of $18.5 million or $0.61 per diluted share. The prior-year quarter earnings would have been $0.66 per diluted share, excluding $2 billion of acquisition-related costs. I would like to remind you the dilution impact from our convertible notes of additional 2.2 million in shares must be considered dilutive for the third quarter under generally accepted accounting principles because our average market price in the third quarter of $112.45 exceeded the note's conversion price of $69.03 and our warrant strike price of $84.96. As explained in the prior quarter, we purchased a hedge to offset some of this dilution, but is considered anti-dilutive and cannot be considered in our calculations of diluted earnings per share. About 1.3 million of the 2.2 million additional shares are covered by the hedge. The difference of about 900,000 shares represents the dilutive impact…

Thank you, Michael, and good morning, everyone. First, overall comments, as Michael mentioned, we continue to see good overall sales growth, especially in our D&S business. Our book-to-bill ratio continues to remain over 1, which means we are building backlog and growing our business. In fact, we reported another new record for backlog at quarter end, up 12% from the record we set last quarter to $743 million. This is driven by a broad strength in total order activity with third quarter awards of $370 million. Through 9 months, orders of $983 million represented new year-to-date record for Chart. As you know, we have made it a priority to position Chart across the LNG value chain and this quarter, we have received significant awards in virtually every area, including LNG supply, infrastructure and end-user applications. With respect to mid-scale LNG liquefaction and supply in North America, a number of companies are making strong commitments. The third quarter includes the previous announced award from Stabilus, from one of our standard small-scale LNG plants. In the infrastructure area, this quarter also includes the previously announced PetroChina order for LNG fueling equipment in Asia and a new award from a major oil company for 20 LNG fueling stations here in North America. More on this later. And finally, with LNG end-user demand, we are seeing an increase in interest for regasification equipment for oilfield applications and in long-haul trucking. We are seeing significant growth in orders for on-vehicle fuel systems following the introduction of a new natural gas engine choices in North America. Let me comment now on specific highlights for each of our business segments. Our Energy and Chemicals business booked $93 million of orders in the third quarter, up sequentially from $78 million in the second quarter. Last month, it was…

Thanks, Sam. Based on third quarter results, current order backlog and business expectation, the company is adjusting its previously announced sales guidance in the range of its earnings guidance, due to lower sales volumes related to customer schedule changes and higher-than-anticipated cost for certain large projects and our E&C segment, sales and earnings are running lower than previously expected. Nonetheless, our strong outlook for 2014 and beyond on the global use of natural gas and LNG in particular remains very positive. Sales for 2013 are expected to be in the range of $1.175 billion to $1.225 billion and diluted earnings per share are now expected to be in the range of $2.90 to $3 per diluted share at approximately $30.6 million weighted average shares outstanding. This excludes the impact of $0.19 per diluted share, primarily related due to the anticipated AirSep acquisition cost and any dilution impact resulting from the notes. This compares with previous sales guidance of $1.2 billion to $1.3 billion, earnings guidance of $3.10 to $3.40 per diluted share, which excluded $0.15 per diluted share in anticipated acquisition cost and any dilution impact resulting from our convertible notes. I'd now like to open it up for questions. Kevin, please provide instructions to the participants to be able to ask questions.

[Operator Instructions] Our first question comes from Eric Stine with Craig-Hallum.

Nice orders and backlog in the quarter. Wondering if I can just start with what you're doing in China. Just thoughts on what this does in terms of percentage in both E&C, but then also, what it does for D&S. And is this something that you would expect in the near-term you might have to expand that D&S even more, just given the growth you're seeing?

Yes. The capacity -- the total E&C brazed aluminum heater capacity add is on the order of 10% to 12%. Building capacity to add more than that in the future. In terms of D&S, it probably opens up an additional 10% to 15% capacity capability, particularly for vehicle fuel tanks as we make the transition of the E&C equipment over to the new building. We are still very carefully looking at capacity additions in China for D&S.

Okay. Maybe just sticking with China, just any updated thoughts on the opportunity in PetroChina? In last call, you talked about that you were starting to do kind of that early-stage work with, I think it was 10 or so other operating segments within PetroChina, just where that process stands and how we could see that play out.

I think I would say that it's progressing well. The widely reported government intervention with some senior PetroChina managers has caused probably a bit of eye being taken off the ball in terms of driving LNG growth or vehicle transportation growth. You've also probably seen -- there was a recent Wall Street Journal article reporting that due to pollution issues, particularly in northern China, there is some concern that natural gas shortages will cause more natural gas to be allocated to the heating and power gen market. So there's a bit of uncertainty, but the economic drivers and the environmental benefits are still clear. We're trying to sort out, as are many people within China, including the national oil companies, exactly how fast they can grow the vehicle markets and provide a reliable supply of fuel against the rapidly growing use of natural gas in China for both power gen and winter heating demand.

Okay. That's helpful. Last one for me. Just back to capacity and when you're doing it. Across, just with the fourth furnace coming online, just thoughts on how much of that capacity you've filled and how you're balancing that with keeping some open for quick-turn business?

I guess the clearest statement I can make is that we've progressively reduced our lead times so that they're now in the, roughly, 40-week mark. We believe we're going to continue to drive our lead times down. Our objective is to provide the highest levels of service to our customers. We think that will win us the largest share of business going forward. We're seeing very good opportunities of near-term expected buys to utilize that capacity.

Your next question comes from Igor Levi with Morgan Stanley.

So the order for the 20 fueling stations from a major oil company, which I think we know who that is, are these orders to build the entire station, not just the tanks? And if so, are we talking about that $1 million to $1.5 million revenue opportunity per station?

That's correct.

Okay. So with these finally starting to get built, what do you see as the impact on adoption from this other player entering the market and building out more stations? And when could we see the order for the additional 80 stations that they're planning to build?

That's a moving target with respect to the follow-on stations. Although I would anticipate additional orders in 2014, assuming we perform well. In terms of other participants building stations, I think it's all positive. As we have more infrastructure buildout, it will increase the adoption rate of heavy-duty truck significantly. In addition, as new LNG liquefaction capacity comes online, I think that will also accelerate the adoption of heavy-duty trucks with LNG fueling.

And on the capacity addition in China. Previously, you've kept all your brazed aluminum heat exchanger capacity in the U.S. because of the -- you wanted to maintain the know-how in-house and reduce the risk of imitations of the technology by other players. Has anything changed in your view that you're now expanding the capacity to China and how will you look to maintain the trade secrets within the company?

The capacity expansion there and manufacturing is a reflection of the fact that for small-scale LNG, and more particularly, air separation applications, something like 70% to 80% of the world demand over the next 10 years will be in China. And particularly for low-pressure exchangers, in order to provide a complete package of the air separation business of both the low pressure and high pressure exchangers, we need to manufacture in China, particularly the low-pressure exchangers. We believe we've put sufficient safeguards in place to appropriately protect our intellectual property, but it continues to be a concern. We worked on that pretty thoroughly.

Our next question comes from Alex Potter with Piper Jaffray. Our next question comes from Rob Brown with Lake Street Capital Markets.

On your on-vehicle LNG tank business, you talked about very strong order flow. Could you give us a sense of sort of what size that business is today and maybe what the order trends you are seeing more recently?

It's probably in the -- will be in the $10 million to $20 million range in 2013 in terms of orders. And we see a significant growth ramp going forward.

Okay. And your capacity in that business, could you give us a sense of how much capacity you have and what scale that could get to?

We anticipate that we have sufficient capacity, currently, to cover us through anticipated orders through the first half of 2014. We have plans in place to make incremental capacity expansions that would take on the order of 3 to 6 months to implement. And we're carefully considering the timing of that, but have to be within 12 months -- or excuse me, have to be within 6 months to move forward on that, that would give us capacity to cover us through anticipated growth in 2015. And have capacity available to meet any market demands and to be able to match the production of the available engines.

Okay. Good. And then could you give us an update on what you're seeing in the kind of the other markets, the rail and marine markets, are they -- I know there's some initial stuff happening, but could you give us a sense of where they're at, what you're seeing in terms of the demand ramp?

There is an enormous amount of quotation activity and some orders in the marine market, both in the U.S., Europe and China. I think the sense is that there will be significant marine usage. A number of the planning processes for liquefaction capacity on the water and fuel bunkering are getting to the point of saying that fuel suppliers are convinced that the marine market is moving forward. It is very challenging to call the timing on ship projects going forward. But they've been -- the number of commitments made to build LNG-fueled or dual-fueled ships has been growing, both from the standpoint of public announcements and also our activity levels. And the standard-setting bodies for safety and reliability are all working earnestly to provide solutions, whether it's European, U.S. or China. The rail market, it is moving forward, with the 2 major locomotive builders and several of the large railroads, all advancing their plans and running trials. They're also considering how to build out the infrastructure. I would say I don't see orders -- significant orders to change over the rail system coming in the next 6 months. But there's a significant level of committed activity and increase in why we believe that this is going to happen amongst the major players we talk to.

Our next question comes from Colin Rusch with Northland Capital.

As you guys are expanding capacity, can you talk a little bit about your expectations for streamlining your existing facilities? Notably, you've got the new facility in New Prague and an existing facility in Owatonna that may make sense to -- to kind of combine those 2 things. What's your thought on that going forward?

It's an open question for us. We have added capacity. We've talked previously about the challenge of timing, the full utilization of that capacity. We've made some bets that were right on the mark, some that demand has slid out a bit it. I'd say it's something that we're watching closely. We do put a fairly high value on having the flexibility to meet customer commitments. One aspect of this market is that we've been consistently growing products for the LNG market and other specialty industrial gas applications. We've benefited by having capacity available. We believe there's a significant opportunity in having that capacity available.

Great. And...

And that we're continuing on continuous improvement activities to get more throughput from all of our facilities, but also view the existing investments we've made in additional factory space to be an opportunity for us.

Okay, perfect. And then on the North American business, with these regional liquefaction facilities, can you talk about pricing trends? Are you seeing things drift up or down as you go through and win some incremental business there?

It's fairly new. I think that it is a competitive environment. It's also competitively sensitive. But we believe that we'll earn a good return at the price levels we are quoting.

Our next question comes from Dan Goldberg with RBC Capital Markets.

You had mentioned in the beginning that the -- some of your adjustments to your revenue guidance was due to customer schedule changes. Now does that mean that orders have been -- you have a feeling whether the orders have been pushed out to further quarters? Has there been any indication of what they plan to do with those -- with their demand?

We mentioned respect of large baseload LNG projects at E&C. The delays, which have led to a shortfall in our expected sale guidance for 2013 and also on EPS guidance anywhere from 1/3 to -- or 30% of our shortfall are moving out into 2014, and that's due to delays on-site in the installation of those projects.

So they're not orders, they're projects that we currently have, the large base load projects that we're working on, which we recognize under percentage of completion. And if the customer makes a change in the project and -- or delays the schedule, they could shift it from -- to a future order and that's what happened here. In part of the drop off in sales and earnings per share for this year. So we're not -- we haven't lost in order, it's not an order that we're waiting to get in. It's already here, a project that we're working on.

Right. It's essentially pushed out.

Yes, correct.

Our next question comes from Edward Okine with Basso. Our next question comes from Greg McKinley with Dougherty. Gregory J. McKinley - Dougherty & Company LLC, Research Division: Michael, with all the capacity expansion plans underway, just, can you remind us please how we should think of your capital expenditure requirements this year and next year?

Capital expenditures this year should still be in the $80 million to $90 million range. Some of the timing has pushed it more into the fourth quarter than we had anticipated. But we still expect to be in that range this year. Depending upon whether we do expand in China within the next 6 months, we'd expect it to be in a similar range for next year. Gregory J. McKinley - Dougherty & Company LLC, Research Division: Okay. And then, Sam, I wonder if you could comment at all to the degree that -- do you feel like the North American transport fuel opportunity is evolving the way you or others in the industry might have foreseen in terms of long-haul applications, choosing LNG versus CNG. I and others, we continue to read about the opportunities for maybe CNG to stretch the range a little bit versus what maybe people had thought of in the past. I don't know, is there any change to your thoughts on that?

No, not significantly. Certainly, the availability of CNG, because of the U.S. high-pressure pipeline distribution system, gives CNG a significant leg up for early adopters. And we have seen quite a bit of activity in providing more storage capacity with CNG that has gotten into bigger Class A trucks. I think the consensus from talking to the fleets and the vehicle manufacturers is that ultimately, LNG will be in the 50% to 70% range of penetration for those heavy-duty vehicles. But we are constrained in these early innings by the availability of LNG liquid. So it's particularly important that the LNG liquefiers go forward for the U.S. market. Gregory J. McKinley - Dougherty & Company LLC, Research Division: Okay. And on that topic, what are your thoughts around -- so you guys have a big advantage in terms of, I think, being sort of the sole domestic manufacturer of brazed aluminum heat exchangers today. It seems like the market is potentially growing very quickly here. Are others -- do you have a sense that others are going to be able to bring that capacity domestically as well? Or do you feel like maybe you've got a couple of year’s opportunity here before others can really bring significant pricing competition to the market by having a domestic presence?

I can't speak to our competitors’ plans, Greg.

Our next question comes from Chase Jacobson with William Blair. Chase Jacobson - William Blair & Company L.L.C., Research Division: Just given the issues in the E&C segment, on the margin, I've seen a couple of quarters I know you did have a recovery last quarter. I was just wondering if you could give any color on what's being done to mitigate these type of risks going forward, as you execute on more of the -- some of these larger mid-scale orders in ethylene or just other chemical projects. Any comments there?

Yes. The -- first, the gross margin available for projects outside of large-scale base load LNG where we've had direct competitors and very sophisticated buyers, which have led to lower quoted prices and lower quoted margins on those products, versus all of the other projects we have in backlog or floating. We have also had an element of quotation error of not properly sizing the product projects in 1 or 2 instances, and then ramp-up issues, where we're running 4 very large cold boxes through our new Iberia facility and we're ramping up at a time when both engineering and wealth and labor was constrained. There's been significant cost inflation, both for our direct labor and for outside services, that were above the levels we'd anticipated when we quoted those jobs in the 2010, 2011 timeframe. So we think we've addressed those appropriately. We're making steady progress of ramping up our welding productivity. We've made a number of changes to operating management in the businesses, in locations that were affected so that we have closure control and improvements going on. Chase Jacobson - William Blair & Company L.L.C., Research Division: Okay. That's helpful. And then on the guidance, you mentioned that, I think, about 1/3 of the reduction had to do with the pushout in the large base load LNG projects. Can you maybe give us a breakdown of the other part of the reduction? Is it BioMed? Or is it D&S? Any color you give would be great.

Very roughly. Perhaps 1/3 was lower productivity in executing the large baseload projects within E&C. And the balance was sales shortfalls, sales and order shortfalls, in BioMed and D&S, a combination of both industrial gas and LNG.

Our next question comes from Jeff Osborne with Stifel. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: Just a couple of quick ones here. On the E&C cost overruns and kind of delays and inspections, just with a multitude of new contracts that you have under your belt, I guess I'm thinking why wouldn't this be the new normal? How can you mitigate kind of unexpected things that you haven't seen in the past, that I guess have now popped up and why wouldn't they occur in the future if they're a bit out of your control?

It's something we work very hard at. Things don't always go as planned, but we drive ourselves fairly hard to anticipate those and not repeat the same mistakes a second time. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then on the D&S side, just as you look at the backlog mix, looking at the margin degradation that you've had over the recent quarters, would you expect a similar trajectory in 2014, Michael, as you look at China being a big piece of that and some of the competitive dynamics here in North America, more in the mid- to high-20s? Or how should we think about the trends on that side of the house?

Well, it's still expected to be in the high 20s. So as we go forward, I mean, you're going to get more of a mix of U.S. LNG in there as we go forward, even though China continues to ramp up. And a lot of China is dependent upon the mix. If they somewhat [indiscernible] IMCs, it drives the mix to a richer margin. And we saw that drop off a little bit in this quarter. So going forward, I would expect that sort of high-20 range. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: Good to hear. Two other quick ones here. On the Wuxi acquisition side. Was there anything from a technology perspective that they offered you. And why buy versus build your own greenfield facility there?

It was a capable management team already building low-pressure brazed aluminum heat exchangers that we felt that we could ramp up more effectively with an acquisition of them. It's a group that we've been working with for a little over a year. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: I heard you say accretive right away as it closes. Is the margin profile there in China, with Chinese manufacturing, I assume, selling both mostly into China? Is it similar to your E&C margins?

Yes, we believe so. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then the last question for Michael. Just how should we think about -- as you look at the current backlog mix in orders that you've signed, what's your thoughts on tax rate for next year?

Within this year, around a 26% rate. Next year, I would expect it to be a little bit higher, in the sort of, probably, in the 28% range.

Our next question comes from Pavel Molchanov with Raymond James. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: On the last call you talked about LNG fuel opportunities in Asia outside China. So I think you referenced Malaysia, Singapore. Any progress in any of those geographies?

They are progressing. I wouldn't report -- we don't have any significant orders to report. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: Okay. And then I guess follow-up would be on the domestic market, in terms of large-scale LNG terminals. Since the last call, we've seen a few other DOE permits get handed out. Any changes in your thinking on the LNG export opportunity?

I believe that terminals have been approved. They are about the level we've talked about, which is sort of roughly 10%, coming up to close to 10% of total U.S. natural gas consumption. The locations that have been given full DOE export licenses, we don't anticipate any orders for base load LNG from those projects. There are other planned terminals which have not yet been granted permits that we are involved in the quotation process for.

Our next question comes from Chapman Deng with JPMorgan. Z.W. Deng - JP Morgan Chase & Co, Research Division: I have 2 questions. The first question is, you mentioned that the LNG trucks demand slowed down after the gas price hike in China. But do you notice any slowdown in the LNG infrastructure, i.e. LNG refilling station equipment? And then based on your estimate, how many LNG stations will be added in China this year and the outlook for FY '14 and FY '15 as well. That's my first question. The second question is I remember you mentioned in the last quarter conference call that you expect a 50% to 100% revenue growth every day in China in medium term. And is there any change on this guidance after the gas price hike?

Your first question, regarding the number of fuel stations we anticipate to be built this year and next year, I don't have those numbers off the top of my head. If you'd like to arrange later to speak about it, we can get you those numbers, or they do show in a number of published reports. In terms of our experience, we've seen mixed results in fuel stations going to some parts of the country. We've seen deliveries as originally scheduled or request to move deliveries forward for other locations where there are concerns about LNG for vehicles and being able to supply the LNG to it. Based on the growth of natural gas usage for heating and power gen, there's been some spread out of schedules on a 2- to 3-month basis going forward. So I guess the answer is I don't know. There's mixed results. Z.W. Deng - JP Morgan Chase & Co, Research Division: Okay. Just one quick follow-up. So you mentioned that the key concern on the gas supplier is not because of gas price hike? Is that correct?

Well, I think you'll find that gas price hikes and the regulation of gas price will be used to regulate demand and allocate where gas goes. Z.W. Deng - JP Morgan Chase & Co, Research Division: Okay.

That is the primary mechanism that the Chinese government has to affect behavior.

Our next question comes from Alex Potter with Piper Jaffray.

I guess, first of all is, you've commented in the past how the margin profile of some of the E&C projects, as you roll off some of these lower margin projects that you're working through right now, you should be working on higher-margin E&C projects going forward. Is that still the case? Is the margin in backlog in the E&C meaningfully higher than the projects you're working on now? And if so, would you expect then gross margin in E&C to be higher next year as a result?

The new projects that are coming in are higher margins. We would expect a slight improvement in E&C margins next year because we'll still have some of these large scale LNG boxes in the mix that are rolling through. So as we work through that, and ultimately, I think the last one ships in 2015, you should see, again, an incremental improvement in 2015.

Okay, that's helpful. And then, I hate to come back to this, but I was just wondering if you could put kind of, in layman's terms, what were the bidding errors and what are some of, I guess, kind of the specific reasons why you think they won't repeat?

Yes. It relates to a specific processed cold box that our quotation was effectively based on a Chart process responsibility. In this case, we didn't have process responsibility, and it turned out that the complexity in the box affecting the labor productivity and how many hours we had to put into the box was a significant miss. We've corrected that on future orders.

So, basically, you didn't think you'd have to spend as much time working on it as you actually did?

Correct.

Yes.

Okay. Good. And then, I guess, last question here, revenue guidance, obviously, for the year has come down, but if you look at it on a sequential basis, it still implies a decent jump, I guess, in revenue versus Q3. I was just wondering which of the segments you expect that sequential ramp in revenue to come from.

A little bit will of it will come from Energy and Chemicals and also from D&S. We would expect BioMed to be fairly level, maybe up a little bit, but the other 2, we would expect both of those to be up in the quarter.

Our next question comes from Greg McKinley with Dougherty. Gregory J. McKinley - Dougherty & Company LLC, Research Division: Just a quick follow-up. On your China acquisition, can you help us understand how low-pressure exchangers are used differently than high-pressure exchangers in a liquefaction plant? And does this maybe differentiate you from others out there? Are you able to become more of a sole source vendor for cryogenic equipment for these plants now that you have both capabilities under one roof? Just appreciate to hear your thoughts on that.

It's actually matching the low pressure capabilities. There are both domestic Chinese manufacturers, as well as a couple of global competitors of brazed aluminum heat exchanger who are manufacturing low pressure exchangers. And I believe that's 150 bar or less. I'm not sure of that cutoff line. But I believe that's where the Chinese standard is allowed domestic manufacture. So we're matching the capability, and we feel that it gives us an advantage of being able to -- positioning us to win both the higher share of our customer's pocketbook, but particularly help enhance the sale of our high-pressure exchangers. Gregory J. McKinley - Dougherty & Company LLC, Research Division: Okay. And then, are those exchangers actually used to liquefy the gas? Are they for other cooling purposes in the plant itself? I'm not quite sure of the difference between the 2.

They are used in the same cold box or air separation unit. There's a combination of both low pressure and high-pressure exchangers. Oftentimes, in modern air separation plants, in terms of cubic footage or cubic meters of heat exchanger capacity, you can have up to a 50/50 balance of high-pressure versus low-pressure exchangers.

Our next question comes from Ran South [ph] with Electron Capital [ph].

Could you quantify the impact of China slowing down on the R&D traffic you mentioned earlier?

Well, in the -- in our anticipated fourth quarter result, it would be a couple of percent, less than $10 million in terms of our forecast for the fourth quarter. We're still trying to assess what impact it will have, if any, in the first quarter of 2014. And I think the largest uncertainty is what the shortfall of natural gas for heating and power gen applications are, particularly in the north of China. But we're still working that issue to try and understand it.

Okay. And I just want to clarify, on your capacity expansion plan in China, so I guess, I remember you mentioned to double the capacity, D&S before, so I just want to see after this slowing down, you're still maintaining your target capacity plan or there's no change here?

Our belief is still strong that the capacity addition is warranted. The urgency of that capacity expansion may have slipped a couple of months.

Our next question comes from Randy Bhatia with Capital One.

Can you talk about the margin profile of the fueling stations in the U.S. versus those of China? Is it similar?

It runs the gamut. In general, I would say that the margins in China are comparable to slightly lower.

Okay. And just on the E&C projects that have been called out, can you quantify what percentage of E&C revenues those projects account for and at what point will both of them be completed?

They probably account for, in the second half of this year and next year, something on the order of 30% to 40% off the top of my head of E&C revenue in the remaining part of this year and through the -- through 2014. Although, I would expect as we move forward, that the margin of those large base load projects would be better than we're forecasting or experienced in the third quarter and in the fourth quarter because under POC, we reflect our updated guidance immediately.

Okay. That make sense. And just one last one for me, kind of high level. You spoke about the constraints on the CNG versus LNG, and talking about the supply constraints of not enough LNG liquid in the U.S. Would you guys ever consider JV-ing or own operating some liquefaction capacity, in order to kind of get that supply side of the equation moving in your favor?

We are actively considering a whole range of solutions to help facilitate LNG liquefaction availability.

[Operator Instructions] Our next question comes from Rob Ammann with RK Capital.

I think the SG&A guidance you gave at the end of Q2 implied a reasonable step-up in SG&A spending and the step up in Q3 was quite modest. I was just wondering if there's any change you're thinking there, if we have some catch up in spending to do here in Q4?

We would expect it to be a little bit higher, more in the 16%, low 16% range. So there is some adjustments that were made in the third quarter, we always adjust our incentive comp based upon where our results are. So it will be a catch up result. We had some of that in the third quarter, then lowered it. But, overall, in terms of SG&A, we expect it to be in the low, sort of $50 million range for the fourth quarter.

Our next question comes from Edward Okine with Basso.

Just going back -- just back to the differences in the new guidance given. I believe that on the revenue line, I mean, the difference at the midpoint is about $50 million and then we have about $0.30 on the EPS line. And then on the revenue side, you said you divided it to about 1/3 is a pushout and then 1/3 is lower productivity issue and then sales and order for the rest. I'm just trying to figure out, I mean, can you do the same thing for the EPS line, also? Is it general to...

Generally similar, yes.

Generally similar. Okay. All right. And then, I mean, if you look at it, the pushout, is -- I mean, are you going to recover all of that in 2014? Or is it...

Perhaps 75%.

75% of that. And then the lower productivity issues, I mean, how -- I mean, would it be able to recover totally from that next year also? Or that will be a much more longer-term issue?

The lower productivity is not recoverable except to the extent that we improve productivity going forward. We've made some improvements in productivity, but our forecast for 2014 -- excuse me, for 2013, is based on POC accounting. So that's where we expect it to be.

I'm not showing any further questions at this time. I'd like to turn the conference back over to Sam Thomas for closing comments.

Thank you. This quarter, we saw several important milestones in the development of domestic LNG fueling market for heavy-duty trucking in North America similar to what we have seen in China over the last few years. LNG supply is coming online, the station buildout continues and new engine options are in production. New commitments are still required in key areas and this will take time to develop, but we remain optimistic and continue to position the company with a flexible platform dedicated to serving our customers with innovative solutions. We'll continue to closely focus on capacity planning, project execution and operational excellence over the coming years so that we can remain the industry leader in all of our major product areas, including LNG solutions and technology. Thank you, everyone, for listening today. Goodbye.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.