Good morning and welcome to Air Products and Chemicals, second quarter earnings release conference call. Just a reminder that you will be in a listen-only mode until the question-and-answer segment of today’s call. In order to accommodate everyone, we ask that each person limit themselves to two questions, plus one follow up question. Also this telephone conference presentation and the comments made on behalf of Air Products are subject to copyright by Air Products and all right are reserved. Air products will be recording this teleconference and may publish all or a portion of the teleconference. No other recording or redistribution of this telephone conference by any other party are permitted without the expressed written permission of Air Products. Your participation indicates your agreement. Beginning today’s call is Mr. Nelson Squares, Director of Investor Relations. Mr. Squares you may begin.

Thank you Treka. Good morning and welcome to Air Products second quarter earnings teleconference, this is Nelson Squares. Today our CFO, Paul Huck and I will review our fiscal Q2 results and provide some thoughts about the rest of the year. We issued our earnings release this morning and it is available on our website, along with the slides for this teleconference. Please go to www.airproducts.com and click on the scrolling red banner to access the materials. Instructions for accessing the replay of this call, beginning at 02:00pm Eastern Time are also available on the website. Please turn to slides two and three. As always today’s teleconference will contain forward-looking statements based on current expectations regarding important risk factors. Please review the safe-harbor language on these slides and at the end of today’s earnings release. Now, I’ll turn the call over to Paul.

Thanks Nelson. With half of our fiscal year 2010 behind us, we are well on our way to delivering on our financial targets. Please turn to slide number four. This slide highlights some of the key financial metrics and the progress that we have made coming out of the recession. Just a bit of history; if you take a look at the left side of this slide, you’ll see the improvements that we have made as an organization, over the five-year period before the recession. We have moved our margin up a couple of 100 basis points, and we improved our return on capital by just short of 400 basis points. The other thing you can see on the right side of this slide is the impact of the global recession on the first half of our fiscal 2009. During that time we took a number of significant actions to position us appropriately coming out of the recession. Our results show the progress we have made since then, and the impact of those actions on our first half results, and the sequential improvement that we are continuing to make as an organization. Sales continued to improve as our underlying sales growth, which turn positive last quarter continued to recover. Year-to-date underlying sales growth is up 6%. Our operating margin in the first half has improved to 16%, and we remain on-track to deliver on our 17% goal in fiscal 2011. Earnings growth remains strong, and as you already seen in our press release this morning, we raised our full year earnings per share guidance again this quarter. We now expect earning per share growth to exceed 20% this fiscal year; and most importantly we continue to drive return on capital, and employ it higher, striving to keep our return on…

Thanks Paul. Please turn to slide seven; Merchant Gases. Merchant Gases posted sales of $922 million, up 6% versus prior year. Underlying sales were flat with volumes up 1% and pricing down 1%. Currency increased sales by 6% versus prior quarter underlying sales were up modestly due to strong performance in Asia, and we are negatively impacted by currency. Merchant Gases operating income of $178 million was up 14% versus prior year, and down 6% sequentially. Segment operating margin of 19.3% was up 140 basis points versus prior year and down 100 basis points sequentially. Year-on-year income and margins benefited from higher volumes and improved cost performance. Sequential operating income and margins were impacted by poor weather conditions in Europe in January, as well as lunar New Year in Asia. Signings at the mid-year point are on track to meet our full year targets in all regions. Let me now provide a few additional comments by region. Please turn to slide eight. In North America sales improved 2% versus prior year. Volumes led by stronger liquid argon and liquid hydrogen sales were up 5% versus prior year. Pricing continued to be impacted by lower surcharge activity, and lower liquid hydrogen pricing as a result of cost pass through of lower natural gas cost. LOXLIN loading remained in the mid-70s. In Europe, sales increased 6% versus the prior year. Underlying sales declined 2%, with volumes down 2% and pricing flat. Currency increased sales by 8%. Sales were impacted by the weak manufacturing environment in Southern Europe, but we are helped by increased health care volumes. LOXLIN loadings also remained in the mid-70s. In Asia, merchant sales were up 24% versus last year. Underlying sales increased 18%, with volumes up 22%, and pricing down 4%. Currency increased sales by 6%. Volumes continued…

Thanks Nelson. Now if you’ll please turn to slide 12. I’d like to share our thoughts on our outlook. Our guidance for quarter three is for earnings per share of $1.25 to $1.29, based on the following factors. On the positive side we expect to see increased earnings sequentially from the following areas. We expect the manufacturing economy globally to continue it’s gradual recovery. This along with some seasonal boost should result in higher sequential volumes in the merchant gases and the electronics and performance material segments. New plan on-streams and supply contracts, including the full quarter impact of our new hydrogen plant in Corpus Christie, Texas, and our increased supply at Exxon mobile at Bay Town, Texas will contribute to next quarters tonnage results. Partially offsetting these sequential improvements will be; in electronics we expect demand to continue to remain strong. As we’ve discussed with you in the past, we plan to finalize our restructuring efforts in quarter three, which will result in higher cost next quarter. While margins will dip in quarter three, we expect them to rebound in quarter four, and be on-track to meet our 2011 goal of 15%. In equipment and energy, we are forecasting higher energy development spending next quarter and planned maintenance outages at a number of plants. Looking at fiscal 2010 with half of the fiscal year behind us, we are raising our earnings per share guidance for the year. We were at $4.75 to $4.95, and are increasing our guidance to $4.90 to $5.00, anticipating earnings per share growth of 21% to 23% versus the prior year. Overall, our 2010 economic assumptions haven’t changed much. We expect that global manufacturing will still grow about 2% in our fiscal 2010. Regionally Europe remains the weakest and we still expect a 1% decline…

(Operator Instructions) Our first question is from Kevin McCarthy with Banc of America/Merrill Lynch. Kevin McCarthy - Banc of America/Merrill Lynch: Yes, good morning. How are you?

Good morning Kevin. Kevin McCarthy - Banc of America/Merrill Lynch: You’ve had a longstanding operating margin goal of 17%. With the 290 bases point increase year over year you are sneaking up on that now at 16.2. When would you imagine achieving the 17% level at this point given the recovery scenario, and with natural gas near $4, do you see upside to that level as you look into fiscal 2011 and beyond.

Yes Kevin. Our goal is to have the operating margin for all of 2011 to be at the 17% level. If gas is a little lower, and it will help that margin a little bit for us. Kevin McCarthy - Banc of America/Merrill Lynch: Okay, and then a couple of follow-up questions on the merchant business if I may. First on the volume side, I was wondering if could comment on what you are seeing in the month of April. Then on pricing, it sounds like liquid argon is down. Would you comment on how much that is off and if we adjust for that and other elements, what is LOXLIN pricing doing on an underlying basis please. Thanks very much.

Yes Kevin, this is Nelson. Volumes continue strong in the month of April, pretty much across the board, so we are seeing that March was particularly a strong month for the business. It typically is one of the two strongest months in the fiscal year, and so that played out as expected, so volumes continue the momentum into April. From a pricing standpoint, we are essentially flat quarter-on-quarter. The argon was really just the impact of bringing some new capacity on stream, that basically took pricing down a little bit, but if I looked at LOXLIN in pretty much every region its flat to slightly off. We continue to get some pricing in China where we are trying to recover against energy increases, and so we are seeing the most impact again from the liquid argon in Asia. From liquid hydrogen in North America, because natural gas prices are lower and that’s a little bit of a lag on the price, but the underlying pricing story is still holding together pretty well. Kevin McCarthy - Banc of America/Merrill Lynch: Thank you very much.

Kevin just to add to the comment which Nelson had, we did have the $0.09 down in pricing which people saw, which is a quarter to prior year impact. Sequentially our pricing impact was about flat on earnings. Kevin McCarthy - Banc of America/Merrill Lynch: Understood, thank you.

Our next question is from Mike Sison with KeyBanc

Hey guys, nice quarter.

Hi Mike. Mike Sison – KeyBanc: In terms of the tonnage, I was curious in terms of the growth and volume there; how much of that was from a new plant coming on stream, and I’m trying to get a better gauge of how based demand is in the tonnage business and so.

Yes, if you look at it on base demand, and the base demand is about flat for us in the tonnage business if you look at that overall. The bulk of the increase here is going to come from the growth of the projects coming on stream Mike. Mike Sison – KeyBanc: Okay great, and then what about sort of bidding on new projects to fill the pipeline out to 11, 12, and 13 as business there picks up.

Sure and bid activity is still strong. Award activity as we talked about is not been strong; however, we are trying to see some things come to conclusion, and we would expect to see word activity pick up in the second half of the year. Mike Sison – KeyBanc: Right, and last question; to what degree you can offer some help in terms of your comments on Airgas and the focus for not overpaying and the right value, what are you looking at in terms of that, is it to live on a return of capital bases cash flow. I just wanted to get a little of your outlook on that.

Well, return on capital and cash flow are actually the same, because you put cash out and you get cash back with those things. So it is driven by the return in which we are looking, and by the investment in Airgas. We think we create a significant amount of value by buying them, but we are not going to share [Inaudible] We certainly are willing to share our portion of that with the Airgas shareholders, but for right now, we are focused really on the offer that we have out there, and moving that forward, thinking that that represents a very good and value to the Airgas shareholders. Mike Sison – KeyBanc: Great, thanks Paul.

Sure.

Hi, good morning.

Good morning Jeff.

In your comments Paul, you said that you hope to reach 15% electronics margin in 2011. Did you mean that you would touch 15% or that might be your average margin for the year 2011.

The thing what we are trying to do is, we are trying to get it to the average margin for the year.

So, how fast would you have to grow in electronics in 2011 to reach that, or because of your restructuring efforts could you reach that even if there were very little growth.

There would still need to be growth Jeff on the loading of the plant, and the investment which we have out there, so yes I do need growth; but its kind of within what we expect.

Okay and then just lastly, in your various restructuring costs that are passing through the income statement in 2010, which presumably won’t be there in 2011. How much are they in the aggregate, roughly?

The total restructuring cost in this quarter were about $2 million. We expect them to grow fairly substantially.

Okay, thanks very much.

Our next question, Sergey Vasnetsov with Barclays Capital.

Good morning.

Hi Sergey.

You comments for the second quarter was roughly 50% down from year-over-year and yet overall guidance for the year was maintained. Can you talk about what’s plans here and do you expect it to catch it up in the second part of the year.

As far as the CapEx was concerned, if you look at our total CapEx, which is disclosed, we are on track, we are about 699 in the press release this morning. So if you would take that and double it, it would take you to a $1.4 billion, which is in the middle of our range Sergey.

I just want to follow-up on a previous question and answer on how much it would in the lower percent. Did I hear you right that you expect that the bulk of it will come from new projects?

Yes, and the bulk of it comes from new projects. There is some obvious growth. I mean you have to be careful about the impact of volumes and the impact on profits. The impact on profits is going to be larger from a new plant. Some of the volume growth which we see when you go on the volumes, you are going to see like a steel plant. If I’m under them, then I’m going to have the growth in volumes but I’m not going to impact profits by that.

Okay, thank you.

Our next question is from Donald Carson with UBS

Thank you. First just a house keeping item. The gain on the sale of the Airgas shares, did that flow through the income statement?

We did not sell the Airgas shares, and we gained from holding them down. The gain in holding those shares showed in other comprehensive income, its not in the P&L.

Okay, and then on your incremental merchant operating leverage, it seems that operating rates haven’t moved up all that much. When would you expect to see more volume leverage there? The manufacturing outlook seems rather temped for the panels here.

Yes, this is Nelson. As you look into the rest of the year, certainly we see a decent pickup in LOXLIN volumes in North America in the second half of the year, something probably in the neighborhood of 3% or so. We think the trend will begin to improve in Europe, although as we said that previously, we think it still remains pretty weak, and we continue to see pretty solid growth in Asia. We are bringing new capacity on-stream throughout Asia, which of course is planned and is in the sequence of doing that, but we should see volume pick up in the second half of the year; certainly in North America, continuing in Asia, and if anything flat to slightly up in Europe as we go forward.

A question on North America pricing, it was down year-over-year. You blamed most of that on absence of surcharges. How is the pricing sequentially and how is the pricing on the new business versus the existing growth?

Yes sequentially pricing is probably flat to slightly up, and I’m really referring to LOXLIN when I said that, because obviously liquid hydrogen was impacted by lower net gas costs. Quality and new signings is stable. Its rebounded and off of the bottom that we saw somewhere around four or five quarters ago, and so we are happy with the quality of signings.

Thank you.

Next question is from David Begleiter with Deutsche Bank

Thank you, good morning.

Good morning David.

Hey Paul, just on the merchant prices of North America, shouldn’t it be a price increase that’s given you a little more boost to sequential pricing in that business.

I think a lot of what it did is it held the impact on the surcharges, which have continued to roll off David.

Just on Asia merchant, is that hard to climb due to liquid argon and you mentioned China pricing being better. I was under the impression that China merchant is still under some pressure from a local China competitor amongst others.

As far as China pricing is, our pricing in China still looks pretty good, and it really is pretty much all argon.

Then just on the backlog on the awards of new projects, is pricing getting anymore competitive or is it to seem otherwise before the downturn.

As far as we look at the pricing, most of the jobs in which we are bidding have stayed the same. We did see an award in India recently where the pricing was amazingly low on that, and to a steel company, well, well below what we would have been willing to take as a price and all of our competitors.

Why do you think that was the case?

You will have to ask the person who won that, why they did that so low.

Thank you.

Our next question is from Pj Juvekar with Citi Pj Juvekar – Citi: Yes, hi good morning Paul and Nelson.

Hi Pj. Pj Juvekar – Citi: A question on tonnage; your volumes were up 11%, but earnings were up only 9% and margins were actually down. So the question is why aren’t you seeing more leverage on the operating income line.

Yes Pj, we still have a lot of costs in the [Inaudible] area. In this year, a lot of customer turnarounds for us, and so that’s something in which we are seeing, which pulls our earnings down. Now the maintenance costs are going to come off in quarter three and quarter four, and you will see improvements there. Pj Juvekar – Citi: If you take a step back and look at your onsite business, and look at the last 18 months, how many of the new projects got delayed.

How many got delayed? If you take a look at that, we have had probably three or four of them which have pushed back from what their original timing was for us. As far as the projects which we are bringing onstream this year, we have not seen delays pretty much. The delays have more occurred for projects which have already been permitted to our outlook and stuff like that, for things which were coming on beyond 2010. Pj Juvekar – Citi: Okay. So I guess, let me ask you the same question in another way. Are you adding projects with a backlog at the same grade as you finished them?

Are we bringing in capital spending at the same rate? It is pretty close to that right now. Award activity probably has run down the backlog a little bit for us right now, because award activity has been slow; however, as we look towards jobs which we would expect to sign contracts on in the last half of the year, we would expect that and that we would replace or exceed a little bit the projects which actually come off this year. Pj Juvekar – Citi: So, you will exceed by end of the year.

Yes. Pj Juvekar – Citi: Okay, thank you.

You are welcome.

Next question is from Mike Harrison with First Analysis Security

Hi, good morning.

Hi, good morning.

Hi Mike.

I was wondering what portion of your tonnage customers right now are still taking volumes below the take or pay minimum?

I was wondering what portion of your tonnage customers right now are still taking volumes below the take or pay minimum?

We might have one or two, but I think I’m pretty much out of that area right now.

Right, and I was also hoping that you could comment on the big improvement in the equipment and energy margin. That margin number looks like about the highest you’ve shown in the last four or five years. I know there is choppiness in that business, but I was wondering if you could comment on that and what should we expect going forward.

Right, and I was also hoping that you could comment on the big improvement in the equipment and energy margin. That margin number looks like about the highest you’ve shown in the last four or five years. I know there is choppiness in that business, but I was wondering if you could comment on that and what should we expect going forward.

Yes Mike, the explanation is pretty easy. If you look at sales in 2009 quarter two, we had a lot more in the air separation side and a lot less in the LNG side. This time we have more on the LNG side and less on the air separation side. The LNG profitability is higher because I have a complete value added component to that where I pass through a lot of compression equipment and stuff like that, which I purchase on the air separation side. So its really a mix between the air separation and the LNG, and more LNG this quarter.

Alright and then I have a question on merchant pricing in Asia. You have shown kind of three straight quarters with negative year-over-year pricing. How big of a margin impact have you seen due to that pricing decline over that time, and should be expect to see pricing and margin improvement, given the strong demand that you have seen in Asia.

Alright and then I have a question on merchant pricing in Asia. You have shown kind of three straight quarters with negative year-over-year pricing. How big of a margin impact have you seen due to that pricing decline over that time, and should be expect to see pricing and margin improvement, given the strong demand that you have seen in Asia.

With the pricing coming down, its obviously been a small impact to the margin in the merchant area, but as you can see, overall our margins in that area are up and will continue to go up and we would expect them to return to like a Q1 level in quarter three, but overall for the year we are going to have a good margin in that area, and so that could also be helped as we lap some of the declines in merchant pricing.

Alright, thanks very much.

Alright, thanks very much.

Next question, Rob Koort with Goldman Sachs

Good morning guys.

Hey Bob.

I’m wondering on tonnage, you guys talked a little bit about the new projects providing the growth year-on-year, sequentially a little bit of pick up, but given the base of your business when you put in a project like the one you recently signed for Malaysia, $1.5 million square feet a day, how much would that adds to your base tonnage business?

That is a very small project Bob, its not going to add a lot.

How about something that would be bigger, and something you might put in the Gulf Coast.

Yes, so we take a plant which goes into the Gulf Coast. A well sized plant can probably add 3% or so in sales growth.

To the entire tonnage base.

To the entire segment, yes.

Well okay, and then secondly can you give me some sense on electronics and performance. How long you expect these very strong sequential numbers to continue, and maybe talk a little about the seasonality there.

As far as the electronics and performance materials there is a sequential uptake from quarter two to quarter three, and we would expect to see that, and so I would expect to see good quarter three and a good Q4, and then we will probably see a start of the sequential down in quarter one. You realize that the business here took the highest hit from the recession, and so it’s going to have the strongest bounce back also coming through here.

I want to add Bob; this is Nelson. Certainly the improved automobile production is helping the performance material business, and as I said during the call or during the prepared remarks, one of the things that was very encouraging, that we did take a little bit of a volume hit during lunar New Year, but we were up sequentially. So customer operating rates have continued to improve and key customer rates are over 80% now. So that number we think as Paul said, continues to track upward for the next two quarters.

Right, thank you.

Our next question, Laurence Alexander with Jefferies. Laurence Alexander – Jefferies: Good morning.

Good morning Laurence. Laurence Alexander – Jefferies:

If we take a look at on the hydrogen area, we do see a move outside the US in the place like Asia and the Middle East. For us we currently are actively involved in projects out there, and so we think that the growth for hydrogen is still going to be somewhere around the 8% to 10% range, but the shift is going to be for the bulk of the market outside the US as far as growth is concern, and less growth within North America in the near term. They will still be oil stands which could produce more growth if that gets developed. Laurence Alexander – Jefferies: And do you expect the phase of outsourcing activity to be the same in Asia as in the US?

On the outsourcing in Asia, on the majors we think its going to be doable. I think we are going to see some GAB’s in China to make these things happen also. Laurence Alexander – Jefferies: Separately, could you sort of give a little more detail on demand trends in Europe, particular end markets that might be stronger or recovering earlier, and are you surprised by how week it is.

For us, in the European business the places which we have seen is the largest declines to volume now as package gas. Package gas is the late cycle as far as the business is concerned, and so our bulk market and our bulk volumes have been doing pretty well. In coming back, a lot of business in the food area has been performing well for us. If you look at the geography of it, the east and the north are probably better that the south in Europe. The South is still pretty much in a pretty tough recession at this point in time. Laurence Alexander – Jefferies: Thank you.

Our next question is from Paul Mann of Morgan Stanley.

You mentioned that the [Inaudible] below the take or pay minimum in the quarter. Does that ratio change at all from the first quarter to the second quarter. Did you grow volumes in a lot of the take or pay minimum. What I’m trying to get is whether or not as you go forward, you should see that incremental margin coming through in tonnage, because you got more plants trading above the take or pay minimum, so that makes sense.

Paul, for the people operating above the take or pays, we probably have some of that. The place which is going to impact us, and the most rare price is still on the hydrogen area for us, and that’s the bulk of our business in the tonnage area. So we really didn’t see our castors go to the mins in that area. Our customers have still continued to operate. Our volumes year-over-year in that area are about flat with those things, if I take out the new plants when you look at it. We have seen on the steel onsite, we have seen increases in the volumes. We realize that for a lot of our customers in steal, it is the take or pay contract, it’s a BFC type contract, and I get paid for the plant, and then he pays for our product charge. I typically make all of my money on the payment for the plant and not on the product charge that pass through the energy. So I don’t have a lot of volatility in the business introduced by the steal aspect of it.

If your growing your volumes from Q1 into Q2, only to bring them up to the take or pay minimum, you’re not really going to see a revenue and margin impact, and if you start to grow volumes going into Q3, I’m assuming we’ll start to see a better revenue in margin impact.

What happens Paul, is actually when a person operates at the mins, he doesn’t pay the product chare which is just a pass-through. So actually as the sales dollars come down, the profits tend not to come down, right. Therefore what happens is, that the margins as the loading starts to occur up to the take or pay and above it, margins tend to decline a little bit with that. The bulk of the profit in this business is earned by installing the plant, and having the plant ready to operate for the customer, and that’s where we operate at.

Second question, I’m just looking forward to sort of 2011. Based on our backlog at the moment and the orders your bidding for, would you expect CapEx to increase in 2011 or decrease or stay up to the same?

Right now I would expect that my CapEx probably would be the same to up in 2011. A lot of that is going to depend on award activity here in the last six months.

Okay, thank you.

Our next question is from David Manthey with Robert W. Baird.

Hi, good morning. I was wondering if you can or will estimate the volume impact from new tonnage contracts in the third quarter.

If we take a look at the contracts which have come on stream in Q2 and Q3, we basically have the Exxon job and cooperate electricity plan coming on stream, and they will have a small growth here. Probably they had a penny or so in earnings.

Okay and in terms of volumes, just a couple of percent?

Okay.

Okay, and then second in terms of your cost reduction efforts, can you talk about where you stand today, maybe sort of on a run rate verses what’s left over the next 12 months or so.

We will be talking those efforts and wrapping them up at the end of quarter three, so we are pretty well done. The bulk of the efforts really occurred in the last half of 2009. We’ve had some continued efforts especially in Europe as we’ve been restricted at to how many people we can let go going forward here. So we are probably about 90% complete or so right now. David Manthey – Robert W. Baird: Okay, but may be a little bit more than that in terms of the shift.

And that’s true Dave. I think one of the things that you should understand is we are going to continue on this cost effort going forward. So we had the program, but we always have an effort on cost. So cost in this drive for us to be low cost is going to continue. We measure ourselves against our competitors. Our competitors are good, they are working on the same thing we are. We intend to beat them on this thing and be the best investor gas company to drive the cost and the position which we have. So we are very serious about that and we will continue to take actions on cost thought our future. David Manthey – Robert W. Baird: Thank you.

Our next question is from Edward Yang with Oppenheimer.

Hi thank you, good morning. Just would like to understand your thinking on accusations in generally. I saw that you made a small French accusation, and what was the rational for that? I know you were valuating other transactions outside of Airgas.

The opportunity which we had there Ed was, there was an opportunity in France. It fit extremely well with our current business in the area, so it’s a great opportunity. Its something which we have done in the past in the business in Europe, and it’s helped our business in Europe grow and increase the profitability and scale the business, so that was the design there. If those opportunities come up again in future, we will continue to peruse there. Right now, as far as accusation activity, we continue to evaluate some. There is nothing really hot beyond Airgas, on buying a company. The other thing which you should know is, we continue to look at buying plants which we have sold or other people have sold in the past, and bringing them in as sales gas from the sales of equipment of a captive job, and we continue to make progress in that. The type of projects which we look for in that area are ones which are going to lead to grow up in the future. We bought the Corpus Christi plant in Texas is the reason why we were able to get a good deal on the plant, but then we also see more products being required in the further, so an opportunity to invest and build a franchise there. On the Xingtai Steel, we bought some plants but we also got an order for that to build a franchise in that area for us, and so its those type or opportunities which we look at. We probably have a two or three around the world in which we are perusing right, which are looking good for us in the future.

But seeing within the US in terms of package gas, half of the market in the US is still 50% owned by independence. If you do decide to go in another direction from Airgas, it seems like you’re very commented to air gas. Would you look to replicate an Airgas type of accusation strategy? Would you be interested in buying independent package gas distributors with the knowledge in mind that it would take a considerable amount of time to get the scale in that market?

If the air gas transaction does not go forward, we will continue to work to make sure that we serve the distribution segment of the market. Weather we did that via accusations or we did that via contracts with those people or did something else, would be something which we would disclose in that point in time.

Okay and finally, what’s your FX assumption in your 2010 guidance, and if you look forward to 2011 what kind of your exchange rate would you be using.

I don’t try to go out and predict the exchange rates. At the close of the quarter we were looking at for quarter three and four, for the Euro to be around $1.35 or so. When you get that for the year, that probably takes us close $1.40 or so.

Okay, thank you Paul.

Our next question is from John Roberts with Buckingham Research.

Hi John.

The European package gas weak volumes, is that a leading business or a lagging business relative to the economy, and I ask that because at least in North America I think it used to be a leading business for Airgas, and its kind of lagging this cycle because of the credit issues for small customer and so forth. What can we tell from your European package gas business?

John, package gasses has always been a lag, it has never been a lead in any of the areas, and the reason why is, because a quarter of the volumes go into investment type of activities, construction type markets. Construction always lags coming out of the recession, and so you always see that happening. But the other thing that’s happened, if you charged on the cylinders, the customers return them late. They bring them back and then your revenues drop towards the end of the recession and then it takes a while for those revenues to come back up and build back up, but package gases in the market has always been a lag business. It lags in the European economy also.

Thank you.

Our next question is from Peter Butler with GlenHill Investments.

Hello good morning.

Good morning Peter.

Probably I’m a bit confused here. I though the goal with acquisition and with the stock in general was to increase the earnings per share, boost the ROC and return more cash to the owners. This air gas transaction looks like it does none of these things, and I was around when you guys unloaded this business, the package gas business, and you said good reddens and you had a lot of good reasons to say good bye that still look valid. I am wondering what’s going on. Airgas shareholders get the cash and the air product share holders get shift, they deal with the stock down.

Okay Peter, I will tell you that the air product shareholders are not going to get shifted by this deal. There is a lot of concerns over how much air products is going to pay, and the uncertainty of the transaction, and that’s what has temporarily taken our stock price down. We have a very good plan to go out and achieve the cost savings which we have put out there. We also have a good understanding of the business and how it has improved since the time at which we sold it. We think there are a lot of good opportunities for us going forward here, and we didn’t think the package gases was a bad business. The business, which we sold did not have scale. This deal creates value. We are going to be disciplined on price, you will continue to see that; and we will make this pay off for the air products share holders.

When you sold that you said good-bye, with good reddens to a mature North American centered business with slow growth, and it was recognized as being a low quality business that would command a low quality price earnings ratio, and all that looks still valid. I am wondering what the hell do we need this thing for.

Peter if you till look at the dynamics of the business at that point in time, it was largely unconsolidated at that point of time. Since that time period there has been a lot of consolidation by Airgas and a lot a consolidation by product in that, and the business has improved substantially. We see the opportunity here to improve the margins within the business and maintain those margins and continue to grow. We also see the opportunity to take that model and take it into the Asia market, and with the air gas transaction, that will help us do that.

Okay, I am still scratching my head, sorry.

And that concludes today’s question-and-answer session. Mr. Squares I would like to turn the conference back to you for closing remarks.

Thanks Treka. Please go to our website to access a replay of this call beginning at 02:00pm today. Thanks for joining us and have a nice day.

That concludes today’s conference call. We thank you for your participation.