Good morning and welcome to the Air Products and Chemicals' Third Quarter Earnings Release Conference Call. Today's call is being recorded at the request of Air Products. Please note that this presentation and the comments made on behalf of Air Products are subject to copyright by Air Products and all rights are reserved. Beginning today's call is Mr. Simon Moore, Vice President of Investor Relations. Simon R. Moore - Air Products & Chemicals, Inc.: Thank you, Cathy. Good morning, everyone. Welcome to Air Products' third quarter 2017 earnings results teleconference. This is Simon Moore, Vice President of Investor Relations. And I'm pleased to be joined today by Seifi Ghasemi, our Chairman, President & CEO; Scott Crocco, our Executive Vice President and Chief Financial Officer; and Corning Painter, Air Products' Executive Vice President, responsible for Industrial Gases. After our comments, we'll be pleased to take your questions. Our earnings release and the slides for this call are available on our website at airproducts.com. Please refer to the forward-looking statement disclosure on page 2 of the slides and in today's earnings release. Now, I'm pleased to turn the call over to Seifi. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you, Simon, and good morning to everyone. Thank you for taking time from your very busy schedule to be on our call today. We do appreciate your interest in Air Products. I am very pleased to report that due to the hard work and commitment of our people at Air Products, we delivered another quarter of very strong performance, with EPS growth of 15% over last year. This is the 13th consecutive quarter that we have reported year-over-year EPS growth. We also delivered excellent safety results and generated over $500 million of distributable cash flow this quarter. Our volumes are up…

Thank you. And we will take our first question from Don Carson with Susquehanna. Please go ahead.

Good morning. This is Emily Wagner on for Don. I just wanted to dial in to the Jazan earnings this quarter a little bit. How much of the guidance raise was due to the timing of Jazan? And I know that earnings stream there is a little lumpy. Is there any way to get some more clarity on the timing or outlook on these earnings? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Emily, first of all, good morning. The increase in our guidance is due to our confidence in the performance of our business in terms of volumes, especially in China. As Corning mentioned, we had a very good performance in Asia, better than we expected, and that is why we are – that's the principal reason we are increasing our guidance.

Okay. And... Seifollah Ghasemi - Air Products & Chemicals, Inc.: Okay?

Yeah. And then in terms of the consolidated volume growth of 8%, is there a way to break that down between the equipment sales and the new project startups? Seifollah Ghasemi - Air Products & Chemicals, Inc.: It is possible, but we don't plan to do it.

Okay. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you.

All right. Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Sure.

We'll take our next question from Robert Koort from Goldman Sachs. Robert Koort - Goldman Sachs & Co. LLC: Thanks very much. Seifi, I wanted to ask, you were quite emphatic that you're more confident now deploying your capital. Can you give us the reason for that increased confidence? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Good morning, Bob. Obviously, if I say that, that means that we are seeing more projects that we can work on. And as time goes by, we see more projects that we can work on. So, I'm sure you'll bear with me to kind of stay general, but we have always said that we see a lot of opportunities, but as we engage with customers and prospective customers, we are becoming more confident that we can actually do these things. Robert Koort - Goldman Sachs & Co. LLC: And Seifi, can I ask, is it conscientious on your part – I mean last quarter, you sounded much more cautious, you noted concerns about economic policy in the U.S., Brexit, geopolitical tension. And now this quarter, it seems like the volumes have popped nicely. The tone just sounds more upbeat. Is there something that's changed from your perspective, that gives you that greater confidence, or is this sort of in the macros, or is this still all idiosyncratic to your own business? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Hi, Bob. That's an excellent question. I have always been very optimistic about the performance of Air Products. The other comments that I made about the general consensus in the economy, I don't need to make any comments about that because now you see that as the headline of the paper. So, I don't want to be stating the obvious about what is going on in the U.S., its policies and the geopolitical condition. So we didn't feel it was necessary for us to stress that. As I said, you see that in the news. Robert Koort - Goldman Sachs & Co. LLC: Got it. Thanks, Seifi. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you.

And we will take our next question from Jim Sheehan with SunTrust.

Thanks. On your price and mix performance in Europe, it looks like you are basically doing okay in gaining the underlying price, but you're having some issues with recovering electric power costs. And I'm just wondering, is that something that typically has a lag, historically, or how would you expect that issue to progress going forward? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, I'd like to refer that to Corning to answer. Corning. Corning F. Painter - Air Products & Chemicals, Inc.: Yeah. So, I'd just like to stress that on a real pricing basis, we see positive pricing. So, the mix impact is fairly powerful for us right now and there's two things behind that. So, on a product basis, we're selling a lot of CO2 right now, a year ago we had some production issues. It's the summer season, there's a lot going. CO2 is just a lower priced product and it's going to bring down that number. But the fact that I'm able to sell more is really a good thing for us. The other thing that's playing out in the mix effect is just larger customers taking more product. We can deliver the product to large customers more efficiently, they command and get better pricing. So, that hits as well. In terms of overcoming all that and still hitting the power, I'd say we're about 50% through, recovering what we were aiming for, and I remain confident that we're going to follow on on this and we will get that back.

Great. And on – I realize Seifi, it's a little bit early to talk about 2018, but given your sentiments on the global macro environment and geopolitical issues, do you see any reason to doubt that you could hit the 10% long-term EPS growth target in 2018? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, I said several times during the call that we promised everybody four years ago that we will hit 10% EBITDA growth over the long term. We are still committed to that. And if the geopolitical conditions and the economic conditions become tougher, then we need to take actions in order to deliver the number. The 10% is non-negotiable. We are very committed to that.

Thank you, Seifi. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you.

And we will take our next question from Jeff Zekauskas with JPMorgan.

Thanks very much. I'd like to go back to the price issue. Your pricing on a global basis was flat and I think some of your competitors had prices up 1% to 2%. Is that difficulties in comparability or does it turn out you're not executing as well as you might in getting your prices up right now? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Good morning, Jeff.

Hey, good morning. Seifollah Ghasemi - Air Products & Chemicals, Inc.: When we report numbers for overall Air Products, there is significant amount of noise related to mix in terms of which part of the world, and then the pricing that we include includes our whole company, it's not just the merchant thing. Corning mentioned about different areas. We usually don't like to talk too much about pricing and all of that, but we are – I don't want to characterize it as if we are having difficulty in increasing prices. The prices in the market very much depends on the supply/demand situation and we are part of that. I wouldn't want to characterize it the way you said that we would have any difficultly on that, but Corning, do you want to make any additional comments on that? Corning F. Painter - Air Products & Chemicals, Inc.: Yeah, I think also going to where Seifi was just saying, I think the aggregation, when you do that, you lose a lot of color of what's really happening, especially on a business that is so local. So maybe just to peel back the onion one step further, we showed flat pricing in the Americas. In truth, underlying that, we had actually positive pricing in North America, negative pricing in Latin America and that kind of offset, just to give you a sense of – a little more color.

If I may follow up, in terms of the Jazan project, that's a base case, does the equipment piece conclude by mid 2019? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Something like that.

Great. Thank you so much. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you, sir.

And we will take our next question from P.J. Juvekar with Citi.

Yes. Hi. Good morning. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Good morning, P.J. How are you doing?

Good. So, you had two write-downs in the quarter, can you explain those? The first one was in Latin America, probably in Indura assets, and then second one was in Saudi Arabia. And I know that you're trying to acquire more assets in the Middle East, but you mentioned current challenging conditions in Saudi Arabia. Does that change your strategy towards Middle Eastern acquisitions? Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, P.J., thank you very much for asking the question, but there is a famous saying that the best time to buy is when things are not going well. So actually, the conditions are actually very favorable in buying things in the Middle East right now because of the oil prices being down. So I kind of actually see that as a favorable sign rather than a negative sign.

Okay. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Is that okay?

So you think this is an opportunity to buy in Middle East? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Yes, that is correct.

Okay, okay. And the second question on the backlog. Can you discuss the outlook for hydrogen or HyCO projects? Again, we go back to oil price and volatility there, refining margins are weak. What are you hearing in the HyCO projects? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, the thing is that the HyCO projects that we are focused on are – significant part of that is related to coal gasification, and the outlook for that is very positive. In terms of HyCO projects for other projects, there are not that many new projects, but as you know, we are focused on asset buybacks and we see opportunities there.

And lastly, can you just talk about the chemical opportunity on the U.S. Gulf Coast? Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, in the U.S. Gulf Coast, there was a lot of excitement about a lot of new projects, but then the oil prices came down, although gas prices are down, a lot of those projects they're put on hold. And you know that better than anybody else. I mean you're very knowledgeable about what everybody was trying to do. So we are in the Gulf Coast, we will participate. Obviously, you saw that project that we just announced in Geismar and there are other projects that we are working on, but I'm not as optimistic there as I am in other parts of the world.

Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you, P.J.

And we will take our next question from John Roberts with UBS.

Thank you. On slide 16, on maintenance capital versus growth CapEx, Praxair this quarter started reporting something related to this, CapEx towards secured contracts versus non-contracted CapEx. So, congrats in the first place on driving this change here; I was skeptical at first. But my question is how comparable are the two presentations? They indicated merchant tanks and cylinders were a large part of their growth CapEx. But since you do larger projects and you don't have a U.S. cylinder business, is the majority of your growth – or the vast majority of growth CapEx your large projects? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, John, first of all, thank you for your comment. I do appreciate that. We have always thought very strongly that looking at distributable cash is the right way to look at the valuation of industrial gases, and we are very pleased to see that others are following that. In terms of how they present their numbers and how we present, I quite honestly don't want to be making comments about what our competitors' financials are; I don't think that would be appropriate. We are very committed to the way we present the numbers and our numbers are very clear, detailed analysis and reflective of what we need to do to maintain our current EBITDA. That is the definition of maintenance CapEx that we have. That if everything stops, how much money do we need to invest in order to replace the assets that we have in order to maintain our current EBITDA. And that is our definition of maintenance CapEx.

Okay. Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you very much, John.

And we'll take our next question from David Begleiter with Deutsche Bank.

Thank you. Good morning. Seifi, good volumes... Seifollah Ghasemi - Air Products & Chemicals, Inc.: Good morning, David. How are you doing?

Good. Thank you, very good. So very good volumes in North America, you mentioned refining, but overall, is there any acceleration in your business that you're seeing or just, again, refining and plus other is driving that very good volume growth in your business? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, I don't want to characterize it as a significant acceleration of the business, but I think that we have our act together and we are trying to provide the service that our customers need in order to make sure that we get our fair share of – Corning, do you have any other comments? Corning F. Painter - Air Products & Chemicals, Inc.: I'm sorry, is your question mainly at North America or globally?

North America. Are you seeing any acceleration, North American activity? Corning F. Painter - Air Products & Chemicals, Inc.: Yeah. I would say North America was broad based for us and, by definition, being broad based, not like one particular thing or another. I'd say just hard work in sales activity across the board.

Very good. And, Corning, also on the maintenance costs in Q3, can you quantify the impact and what that tailwind might be heading to Q4? Corning F. Painter - Air Products & Chemicals, Inc.: Yeah, so I think we're not going for specific details on it, I'd say maybe just give a little bit of color for what we experienced in this quarter. There's a little bit more around some large air separation units that we worked on and they tend to have, in some ways, a broader impact, because there's product dislocation and making up the argon and that sort of thing. But that was the nature of a certain amount of the costs for North America this quarter.

Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you, David.

And we'll take our next question from Chris Parkinson with Credit Suisse. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Thank you. As a large shareholder yourself, how do you believe the Air Products story will continue to evolve from here outside of the solid op execution? Just in terms of where we stand, right here, right now, can you just talk about the various views on project backlog growth versus a year ago, what you're seeing in the merchant business and then the capital deployment opportunities? Just any color on what you believe the key two to three drivers of your story are right now. Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Chris, that's an excellent question. And thanks for asking the question to give me the opportunity to talk about that. We have delivered on what we promised three years ago. So, obviously, the question from the investors is, okay, I've enjoyed the past, what are you going to do for me in the future? The key thing is that now, Air Products has margins of about 33% to 35%, the best in the industry. We have our act together, therefore, we will benefit as much as anybody else on any kind of economic activity and so on going forward. But then in addition to that, the key thing is that we do have $8 billion to $10 billion of firing capacity and we do see opportunities to deploy that. Therefore, the story of Air Products for the future is deploying that capital. And if we do that, we will generate significant value for our shareholders. So that is what we are promising the investors and that is three years from now, hopefully, we will look back and say, yeah, we said we have…

We'll take our next question from the line of Stephen Byrne from Bank of America.

Yes, thank you. Wanted to ask you about your sale of equipment business. Is that, as a fraction of your project backlog, likely to remain relatively stable, or could you see it going up as you pursue projects in regions that are more geopolitically challenged? Or could it possibly go down over time if there's little less aggressive offering of these services by your competitor in Germany? How do you see the outlook for that? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Yeah. Steve, our sale of equipment is not included in our backlog. We do not put that in our backlog. Our backlog is only sale of gas that would generate revenues for the longer term. Sale of equipment is a one-time thing, we don't consider that backlog. So...

Pardon me... Seifollah Ghasemi - Air Products & Chemicals, Inc.: ...Those things are not included in our backlog, sir.

Okay. I'm sorry, I didn't mean to imply the roster of projects. I meant as a business opportunity to pursue an opportunity where you sell the equipment versus build to own. That option that you have, is that driven primarily by customer demand, your preference or customer preference? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Our preference for sure, 100%, is sale of gas. We are not an equipment company to make money on sale of equipment. But considering the capabilities that we have, in order to maintain a relationship with the customer, if they insist on a sale of equipment, we do once in a while do that. But our focus and our preference has always been sale of gas, because that is our business.

And if there was less bidding activity on sale of equipment down the road, would you view that as constructive, maybe a greater opportunity for build to own? Seifollah Ghasemi - Air Products & Chemicals, Inc.: That is correct. That would be the case, yes.

And then just lastly on the Glenmont, New York facility, is that region in your merchant business tightening up, that would justify building a bigger liquid plant in that region? And why pursue that as a JV with Linde instead of go it alone? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, there was a tightening of the market and there is additional capacity required, and what made sense was that rather than us building another 300 or 400 ton-a-day plant to meet the requirements, it made sense to build a 1,200 ton-a-day plant, which is a lot more efficient, and at the end of the day, it's good for the customers because our cost base for both companies is lower and, therefore, the customers benefit. So that is actually a good thing for our customers and it also creates opportunity to produce the gas at a lower cost.

Okay. Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you.

We'll take our next question from Kevin McCarthy with Vertical Research Partners.

Hi, this is Matthew on for Kevin. I don't want to kind of beat the equipment sales dead horse here, but kind of just trying to track it down a little bit. Would it be fair to say the equipment sales in Asia were about $45 million year-over-year? And kind of what does the EBIT margin look like on that business? I'm guessing it'd be higher than the segment average. And maybe you touched on this a little bit, but what should we expect in 4Q 2018 as far as new equipment sale order book? Seifollah Ghasemi - Air Products & Chemicals, Inc.: As I've told you, we are not focused on equipment sales, we don't consider that to be a significant part of our business, and I don't think you should expect too much on that. That is not what drives our business, that's not what we are focused. We are not like some other industrial gases business, where half of their business is equipment sale. That is not – that has never been our focus and it will not be. We are – that's not a big deal for us.

I get that. I'm just trying to kind of effectively strip it out of the numbers to maybe to get a better sense of what ongoing profitability will look like in the Asia segment. Just trying to make apples-to-apples basically. Seifollah Ghasemi - Air Products & Chemicals, Inc.: We have tried to make sure that we do give you that visibility, because when we report Gases Americas or Gases Europe or Gases Asia, it doesn't have equipment sales in it because that is – it's all in Global Gases. Corning F. Painter - Air Products & Chemicals, Inc.: So, maybe just one clarification to that. When we have, in this case, some gas handling equipment that is in the Asia segment, I don't think we're going to go into the exact quantification because it's a small group of customers and so forth. I will say it was a positive impact on our margins. But the nature of this was not something that's going to repeat every day. As Seifi says, I wouldn't be expecting that going forward. Seifollah Ghasemi - Air Products & Chemicals, Inc.: But there is a difference that we need to kind of make sure that the investors understand. One thing is sale of equipment in terms of selling an air separation unit. The other thing is that when we deal with, specifically, with our electronic customers. The electronic customer sometimes require equipment which is related to the delivery of gas and purifying of the gas. That we do do for our customers, we do that for our electronic customers, and that specific area did contribute some to our Asian results. But your question was equipment sales on the major air separation units, and I said we are not focused on that. But for some of our electronic customers, as a matter of necessity, when we build them a nitrogen generator – high-purity nitrogen generator, there are equipment related to the delivery of that to the customer, we do provide those equipment, and those are in the category of equipment sale, but they are not air separation units.

Okay. Thanks. Nice quarter.

We'll take our next question from Vincent Andrews from Morgan Stanley. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Thanks. I just wanted to ask on the LNG weakness, you said $0.30 for 2017 and despite the, I guess, the new plants that was in line. Should we be done with this headwind moving into 2018 or do you think there's still a little bit of a drag from it? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, obviously in that business, which was such a lumpy business, it's difficult to predict, but right now, if you wanted to be pessimistic, there might be another $0.04 or $0.05 hit to us in 2018 because of LNG. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay, thanks. If I could just ask one... Seifollah Ghasemi - Air Products & Chemicals, Inc.: That's the way it looks right now. Yeah. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay. And was there any way we could get you to break out the organic volume versus the new projects and everything else? Seifollah Ghasemi - Air Products & Chemicals, Inc.: For where, for... Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Well, regionally or globally, however you'd be willing to do it. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, organic volumes, most of the volumes that we reported was organic except in Asia, where we said that half of the 20% was equipment. So, Corning? Corning F. Painter - Air Products & Chemicals, Inc.: Yeah, I think we said... Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Well, also, I guess, I'm trying to break out just sort of base business versus new project startups versus equipment sale, just the base business. Corning F. Painter - Air Products & Chemicals, Inc.: Understood, understood. So I think the main energy is around Asia, that's where we had the biggest impact on it. And if you're looking at that 20% we had, about half of that was the equipment, the other half was on our gas side, and I'd say roughly 50/50 on that in terms of volume between new projects and just organic merchant growth. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Thank you very much. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Yeah, I mentioned that in my opening remarks, in the other question that out of that, as Corning said, about 10% is equipment that we do for electronic customers, the other 10%, half of it is new project startups and half of it is organic growth. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay. Seifollah Ghasemi - Air Products & Chemicals, Inc.: So we had 5% organic growth. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay. Thank you very much. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Thank you, Vincent.

We'll take our next question from Laurence Alexander from Jefferies.

Good morning. I have just two quick ones. First, do you expect over the next two, three years to get back to the pattern of EBITDA growth in each region, outpacing organic growth? And I think you've been pretty clear about the dynamics that have caused this quarter to have its characteristics. So just want to see if you expect those trends to reverse. And secondly, just eyeballing the backlog, is it fair to put roughly $1 billion to $1.2 billion worth of gases startups in terms of capital that's going to be ramping up in 2018 and a tailwind into 2019? Is that roughly a good bogey? Seifollah Ghasemi - Air Products & Chemicals, Inc.: Well, first of all, with respect to the growth thing, I think we have always said that when you are looking at different regions of the world, in mature economies, our EBITDA will grow with economic development, and our volumes will grow with GDP. In emerging markets it is – if industrial production is 2%, usually, gases grow more than that, about 1.2, 1.3 times that. So I expect our EBITDA growth in the growth markets like China and India would be better than that. With respect to the other question that you had, Simon, do you want to make some comments on that? Simon R. Moore - Air Products & Chemicals, Inc.: Sure. I think, Laurence was asking about the amount of the backlog we expect to come on in 2018. I think, Laurence, as usual, it's hard to know exactly when these projects are going to come onstream, so I think we'll give you more clarity on 2018 when we get to October.

Yeah. Thank you. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Then we do our forecast for the year. Seifollah Ghasemi - Air Products & Chemicals, Inc.: Okay. At this time, then, I would like to – since there are no other questions, I would like to thank everybody for being on the call. Thank you for taking time from your busy schedule to listen to our presentation. We appreciate your interest and we look forward to discussing our results with you again next quarter. Have a very nice day and those of you who are in the Northern Hemisphere, have a great summer. Take care. Thank you.

Ladies and gentlemen, this does conclude today's call. Thank you for your participation and you may now disconnect.