Good day, ladies and gentlemen, and welcome to the Ashland Global Holdings First Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this call maybe recorded. I would like to introduce your host for today's conference, Mr. Seth Mrozek, Director of Investor Relations. Please go ahead, sir.

Thank you, Christi. Good morning, everyone, and welcome to Ashland's first quarter fiscal 2017 earnings conference call and webcast. My name is Seth Mrozek, Director, Ashland Investor Relations. Joining me on the call today are Bill Wulfsohn, Ashland's Chairman and Chief Executive Officer; Kevin Willis, Senior Vice President and Chief Financial Officer; and Luis Fernandez-Moreno, Senior Vice President of Ashland and President of the Chemicals Group, which includes Ashland Specialty Ingredients and Ashland Performance Materials. We released preliminary results for the quarter ended December 31, 2016 at approximately 5:00 PM Eastern Time yesterday, January 26. Additionally, we posted slides and prepared remarks to our website, ashland.com, under the Investor Relations section and have furnished each of these documents to the SEC in a Form 8-K. As a reminder, some of the matters discussed today and included in our presentations may include forward-looking statements as such term is defined under U.S. Securities law. We believe any such statements are based on reasonable assumptions, but cannot assure that such expectations will be achieved. Please also note that we will be discussing adjusted results during this call. We believe this enhances the understanding of our performance by more accurately reflecting our ongoing business. With that, I will turn the call over to Bill. Bill?

Thank you, Seth, and good morning, everyone. This is really an exciting for us as the final and full separation of Valvoline is just a few months away. We remain on track and we expect the distribution to Ashland shareholders of the Ashland-owned shares of Valvoline to occur following the release of our March quarter earnings. This action represents the culmination of a tremendous amount of work and team work by the respective Ashland and Valvoline teams over the last 16 months. Most importantly it paves the way for the two great companies both the new Ashland and Valvoline to reach their full potential by pursuing the shareholder value creation, financial and operating strategies that fit their distinct business and investor profiles. For the new Ashland that means we will be expanding our operating focus and disciple to achieve the full potential as the premier Specialty Chemicals company. Later in the call, I will speak to our objectives and actions that we are taking to achieve this aspiration. However, before then I would like to turn the focus of the call to our fiscal year 2017 Q1 financial results. As explained on our last quarterly earnings call, our fiscal 2017 business plan targeted a return to mid-single-digit revenue and EBITDA growth within ASI. To that end, in Q1 ASI is off to a solid start. Led by the industrial team, ASI delivered sales volume and adjusted EBITDA growth. While we like many others encountered some inflationary raw material and also FX dynamics in the quarter, the ASI team took actions to offset and deliver results which were consistent with the outlook we presented in November. Moving to APM, their adjusted earnings while down from the prior year exceed our expectations. This result was led by strong composites volume growth. I&S while down year-over-year, took important steps to stabilize margins by pushing through price increases, which are beginning to take effect this quarter. Based upon these trends and the trends we have seen in the market, combined with the actions we are taking, we are confident to reaffirm our previously communicated outlook for ASI and APM for the remainder of fiscal year 2017. Luis will speak more specifically to the results of the Chemicals business in a few minutes. As for Valvoline, while we won’t speak much of their results on this call, but instead encourage you to reference their release materials. The Valvoline team delivered another strong quarter and is off to a great start to their first fiscal year as an independent public company. As I mentioned, later in the call I will speak to additional actions we are taking to accelerate growth, margins and cash conversion and also share some comments regarding our focus capital allocation strategy to enhance investor returns, but I would first like to turn the call over to Kevin and Luis to discuss Ashland’s overall results for the first quarter. Kevin?

Thank you, Bill, and good morning, everyone. In the quarter, we reported a GAAP loss from continuing operations attributable to Ashland of $0.01 per diluted share. When adjusted for key items, earnings per share were $1.16 and adjusted EBITDA was $215 million. While these amounts are below the prior year, they do not include the Valvoline net income attributable to Ashland’s non-controlling 17% interest, which equaled $0.17 per year ago diluted share and $21 million of adjusted EBITDA. As Bill just mentioned, ASI delivered sales, volume and adjusted EBTIDA growth. And overall, APM results exceeded our expectations as the Composites team delivered strong volume growth. In addition, Valvoline segment income grew year-over-year in what was another strong quarter. In total, the results in Q1 represent a solid start to the year. Luis will spend more time discussing the Chemicals segment results in a few minutes. Turning to the balance sheet, we continue to pay down debt during the quarter through a number of actions including a cash tender offer and open market transactions, Ashland excluding Valvoline reduced book debt by an additional $309 million. As a result, we are reducing our expectations for Ashland only net interest expense in fiscal 2017 to $120 million to $130 million. Ashland’s liquidity remains strong. As of December 31, we had cash and borrowing capacity of nearly $1.3 billion. Overall, we have made good progress on the balance sheet over the past few months consistent with the objectives we laid out as part of the Valvoline separation. Our effective tax rate adjusted for key items in the December quarter was 30%. This rate was higher than we expected and reflects regional sales mix. We continue to expect that Ashland’s tax rate excluding Valvoline will be in the range of 10% to 15% in fiscal…

Thank you, Kevin, and good morning, everyone. This morning I’d like to start with specialty ingredients results during the quarter. We are pleased with the continued progress towards profitable growth. Sales were up 1% to $428 million and volumes rose 6% when compared to the prior year. Furthermore, adjusted EBITDA grew by 1% to $95 million. These results were driven by strong execution by our Industrial Specialists team, which drove growth across all industrial end-markets. Coatings, adhesives, performance specialties, construction and energy all showed positive gains. In total, industrial sales grew by 6% and volumes grew by 9% compared to the prior year. Our Consumer Specialties also drove growth in a number of our key end-markets including oral care and hair care. Results with our pharma customers were consistent with a strong year-ago period. These gains were offset by lower sales into the skincare market where we continue to proactively manage our exposure to lower margin sunscreens. In total consumer volumes declined by 2% compared to the prior year. Sale declined 3% largely due to mix within the product portfolio, pricing and the impact of foreign currency fluctuations. On the topic of foreign currency, we did see some FX movement during the quarter after the November earnings release, especially in the euro and the Chinese RMB. However, due to the impact of our overall commercial excellence initiatives, we were able to deliver EBITDA growth consistent with our expectations. During the quarter, we began to see the beginnings of a new inflationary raw material environment particularly for crude driven raw materials. We always work actively to offset the impact of rising raw material costs and this quarter was no different. To this end, as you may recall over the past several months, we have announced price increases across many of our…

Thank you, Luis. With the planned final separation of Valvoline just a few months away, the entire new Ashland organization is squarely focused on delivering against our 2017 plan and positioning the company for more profitable growth as a pure-play specialty chemical company. While as I mentioned at the beginning of the call, in addition to completing the Valvoline separation, Ashland has two core priorities for the year ahead. The first will be to deliver on this plan and that includes mid-single-digit EBITDA growth within ASI, stabilizing prices within I&S and also taking aggressive actions to reduce year-over-year SG&A through the previously announced cost savings initiatives. Also, as you’ve heard, we are off to a solid start for fiscal year 2017 and with that our outlook remains unchanged for the fiscal year. Our second core investor priority for fiscal year 2017 is to pivot Ashland to become the leading premier specialty chemical company. Crucial to achieving this objective is to achieve top quartile EBITDA margins and growth in excess of GDP. In the quarter, ASI took an important first step in its return to profitable growth, but to accelerate our progress, our formula here is straight forward, customer intimacy and innovation is essential to our success. And to that end, we’ve launched a multi-functional engage team and that team is tasked with increasing ASI sales from new products by expanding the size of our innovation pipeline and accelerating the rate at which we are commercializing those new technologies. Another core element is to capture the value we bring to our customer and extend our journey to true commercial excellence. We continue with internal efforts with a focused price value initiative, which is led by our new commercial leaders and is leveraging new approaches from external experts and we are beginning…

Thank you. [Operator Instructions] Our first question is from the line John Roberts of UBS. Your line is open.

Thank you. Excluding the catalyst change in the first quarter, can you give us some guidance on what the normal seasonality is for the new Ashland ex-Valvoline?

Yeah, this is Luis. What we have is, overall new Ashland, about 23% of our sales come in the first quarter, so we have definitely lower number of sales in the quarter and as such we see lower profitability. This is consistent with the previous years. And because of the high level of precision that we have in our plants, that has an impact on EPS. As we expect to see moving forward, Q2 is strong, Q3s are strongest quarter and then Q4 is similar to Q2.

Bill, last quarter, Bill, you mentioned a renewed emphasis on an assessment of the role BDO in Ashland’s portfolio. I didn’t see anything in the prepared remarks on that. Could you give us an update?

Sure, sure. That is an important part of our forward orientation. We know that to be the premier specialty chemical company we envisioned, you have to have a true specialty chemical type portfolio where you can really differentiate through innovation and adding value to customers. And we know that the intermediates business has more of a commodity dynamic, we do try to add value to our customers with the quality and services we provide, but it’s clear that it is more of a commodity dynamic. And so, we do continue to look at that and are active in our thinking on the topic. As you can imagine, it’s a challenge in an important assessment to make because first of all BDO supply and consistency and quality of that, cost competitiveness of that is important for the ASI business. Also, as you hear from the results, this is a business that cyclical as it is has been going through a downward cycle and ultimately we believe is that the bottom of that cycle and so making sure that we are making the right disciplined decisions about how we, if you will, remove the commodity dynamic from our earnings whether that’d be through any sort of specific actions related to contracts or other activities that we could take. We want to make sure that we are balanced, that we are – we are driving towards ultimately reducing our exposure to that commodity dynamic, but also recognizing that being at the lowest part of the cycle, you want to be very balanced with your approach and timing as to how to complete that.

Thank you.

Thank you. Our next question is from the line Mike Harrison of Seaport Global Securities. Your line is open.

Hi, good morning.

Good morning, Mike.

Good morning.

Good morning.

Luis, you mentioned this sort of inflection that’s happened in the raw material dynamics within the ASI business, can you talk about what you are seeing specifically on the cellulosic side of the business? And then on the legacy ISP business, can you just remind us as BDO prices are going up, how does that role through the P&L and how does that impact ASI margin?

Sure. Sure, Mike. Let me start with your first question. We started to see definitely some inflation on cellulosic specifically on one of the raw materials that is related to cotton, but the impact of raw materials in I would say most of the ASI businesses is more muted. The area where we have more of an impact is adhesives and composites just because they are a much more significant portion of the cost and those are very much related to oil. And I’m confident that we can always recover the increase and in fact there is always margin opportunities when that happens, but there is always a lag which in the case of composites it’s about 90-days. In terms of your second quarter on BDO, we are – fundamentally we see the inputs for us into ASI and we transfer that cost. That’s one of the benefits of having the integration of this product in our portfolio. So, the only impact that we see is that, the impact of raw materials impacting the manufacturing of BDO, not the impact of prices going up on the market place.

Understood. And then I was also hope that you could give a little more detail on the skincare market. You referenced that you were intentionally walking away from some of the lower margin sunscreen business. Can you just give us some detail on kind of how the sunscreen business is structured, how much of it’s higher margin and worth keeping, how much of it is lower margin and something you are going to walk away from? And what are your longer term strategic plans for that product line?

So, there is two elements to it. We have a very strong position in a specific molecule that is one of the most advanced molecules in sunscreens and that business continues to important and significant for us. But in the past, we have chosen to complete that product with other materials where we haven’t been at competitive advantage, but where we had an ability to still command the right value for those technologies in the marketplace. And what has happened is that there has been more of a price competition in those areas, so at this time, it just – we’re just not getting the value for those. So two elements: one, technology, we are very good at and will continue to be the case, there is a portion of the sunscreen market where at this time we are not getting the value for the products as we expect. And that’s the fundamentals. It’s a portion of our skincare business. We have other elements of our skincare business that are doing well and we continue to do well and it’s masking some of the growth that we have in innovation. So, that’s sort of in summary what’s happening with the skincare market.

All right. Thank you very much.

Thank you. Our next question is from the line of Christopher Parkinson of Credit Suisse. Your line is open.

Just over the last three months you’ve been instituting some broad based price increase on various areas of your portfolio, I guess most recently one in HEC. Can you just comment a little more about these initiatives initial success rates and how we should think about these in terms of quarterly cadence and what’s actually embedded in your guidance? Thank you.

Yeah, I mean, clearly, we are expecting success on those price increases and they are in our expectations for the quarter and the year. From a cadence perspective, we started announcing last quarter and we started to see the impact of that in the first quarter, but that was very muted because it just takes time because of contractual obligations and negotiations. So we will see more of those flowing through the income statement in Q2 and the key for us is to maintain very close attentions to the evolution of raw materials and driving our price to value initiatives to continue to show those for the P&L. But in summary, Q1, a very small impact; by Q2, we should start seeing more of them and continue on in Q3 and Q4.

And maybe just to add that the pricing actions – the kind of structural pricing actions have largely been related to, if you will, raw material dynamics and demand dynamics in the market space, those are to a great part embedded in our forward outlook. The price to value initiatives that we see, those are – what we believe are upside over time to really realizing the fully value of what we are bringing to our customers.

Okay, great. And just a quick follow-up on personal care. Just from an end-market basis, it still seems – hair is still solid, oral is improving, I guess off of the destock last year, skin is challenging. Just based on your longer term vitality index, can you also just give us some quick updates on new product growth contribution over the next few quarter and whether or not there are any updates on trends in emerging markets?

So, let me start with emerging markets, overall, we are seeing a slight improvement on the mantle on those specifically in Brazil where we are seeing more of a return to the normal consumption over there both after the new government has been in place, but also as the real has recovered giving more purchasing power to Brazil. China continues to be improving or continues to improve, so in fact we had a good quarter for us in China, so that’s been a success area. When it comes to our innovation efforts in our vitality index, I feel still very comfortable to our product portfolio and how it’s growing. There is a lot going on in terms of innovation. What I would ask is that – we have a full presentation in the May 1 timeframe where we can talk about all those going in on the innovation side. The one thing I can tell you, I was – at the beginning of this week in a tradeshow with many of our customers and I was very pleased because many of them in the next three, four, five months have product launches all including those technologies and that was a home personal care type of show. So I feel confident that our initiatives are going to pan out in the next two, three quarters.

Thank you for the detail.

Thank you. Our next question is from Dmitry Silversteyn of Longbow Research. Your line is open.

Good morning. Thank you for taking my call. A couple of follow-ups if I may. A question regarding the skincare product. It sounded – you called it out as sort of the only bad in ASI, your consumer revenues or volumes were down 2%. So is skincare that big a portion of consumer that it’s offsetting the growth of the skincare and all the others, the pharmaceuticals and the other things that are growing for you? Or is the decline there still great? I’m just trying to sort of reconcile how this one product category can be so impactful on the whole consumer portion of the ASI.

That’s a very good question, Dmitry. When it comes to volumes, the one thing that I always said qualify that we have to be careful, there might be products that are in [indiscernible] there may be disproportionate amount of the volume, but that necessarily a disproportionate – disproportionate amount of sales. And that’s the case with some of the mixed issues that we mentioned on skincare. So they might reflect the higher volume, but they are not as impactful when it comes to sales. In terms of the sales decline in personal care, really it’s a combination of that decision with mix and FX. So there’s a variety of factors that got us to that 3% decline. Pharma was again – was consistent with last year and that is after a very strong last year. So I’m still confident on our growth potential in pharma. Hopefully that explains the dynamic.

Okay, yeah. Thanks, Luis. And then second question on – sort of ASI volume where revenue guidance overall I think it’s at $530 million to $540 million, if I’m not mistaken, that’s basically maybe 1% to 2% volume growth, 1% to 2% sales growth year-over-year. Given that the industrial segment seems to have come back nicely as they have, why are you not more optimistic on the top line performance of ASI?

Well, we definitely are confident on the growth potential of the business, but we are counting on the impact of the current strength of the dollar and that would – that will guide into the expectations.

Okay. So basically it’s – the foreign exchange [indiscernible]…

Yeah.

…sequentially? Okay, all right. Got it. And then final question on the performance material side of the story. This is not the first quarter you’ve mentioned the growth in composites and it’s encouraging to hear that that business is growing for your guys. Are there a couple of end-markets or a couple of geographies that are sort of responsible for the good commentary that we’ve been hearing from composites because frankly looking at the [indiscernible] some other people out there in related businesses, they don’t seem to be as bullish as you guys and certainly aren’t delivering results as you guys do?

Yeah, there is a couple of things going on. Our composites business has proven to be very resilient. And part of the reason is that we have introduced new products into new industries. We continue to grow in segments like the construction industry and really developing areas where composites were not used. So the way I see it why we’ve been resilient is because we’ve been able to introduce products in areas where composites were not used. So bringing value to our customers and that puts us in a position where we can grown in a market that, you are right, is very muted. And we see that in some portions of our business, but the benefit is that these new product introductions are giving us the ability to grow in a muted environment.

Is there – like I said, is there one or two markets or geographies that were – that are driving more sort of strength to 2016?

Yeah, the ones that I highlight is construction applications that are actually not fiberglass, they are other types of composites and both North America and Europe, which is where we have most of our business.

Got it. Okay, Luis. And then one final question on – again on performance material, your sales guidance on year-over-year looks sort of flattish depending on where in that range you fall, would be your pricing going up sequentially and I’m assuming they are going to be up year-over-year as well. Again, is it foreign exchange that sort of holding you back and being more bullish on the top line?

Yeah, let me – on the BDO side, let me just be very clear, we are starting to see improvement sequentially, but we are still seeing significant year-on-year reductions. The reduction last year was very significant and it happened Q1, Q2, Q3 and as much as we see price increasing, we don’t see that trend changing until Q4. What we do see is that trend starting to abide. So the impact is going to be less in Q2, less in Q3, but at this time we are still not seeing an improvement versus last year, but we are seeing definitely sequential improvements.

Okay, okay. Got it. All right, Luis, thank you very much.

Sure.

Thank you. Our next question is from the line Jeff Zekauskas of JPMorgan. Your line is open.

Can you remind us why your ongoing tax rate is as low as it is and for what period of time that will continue in the future?

This is Kevin. The tax rate is largely due to expected regional income mix in a post-Valvoline world where a large portion of our pretax income will be generated in much lower taxed jurisdictions and – something we have outlined pretty thoroughly in our 10-K, go take a peek, our Swiss principal structure, which is a driver of that, and we would expect that to be the structural tax rate going forward, obviously, the caveat there would be tax reform and other actions that could occur from a U.S. or a non-U.S. perspective could certainly impact that. But based on everything that we know today and can predict today, we would expect that to be standalone Ashland’s tax rate going forward.

And your cash tax rate and your book tax rate are similar?

I would expect the cash tax rate to be somewhat higher just because of some of the anomalies that will ultimately run through the numbers. We will get more specific about that over the course of time. We are obviously still in a situation where we are not separate and we will have to see how all that plays out, but we will provide more clarity on that as we can.

Is it as meaningful difference or it’s a small difference?

Too early to tell at this point. Like I said, we will provide more detail on that as we go forward.

Okay, great. Thank you so much.

Sure.

Thank you. Our next question is from Laurence Alexander of Jefferies. Your line is open.

Good morning. It’s actually Dan Rizzo for Laurence. How are you?

Good morning, Dan.

Good morning.

Good morning.

Good. Just a quick clarification for your guidance for next quarter for the operating income, so the $46 million in operating income that includes already the $13 million from pension?

Yeah, that’s correct, Dan. It’s roughly $17 million estimated from a pension and postretirement benefit income standpoint. That $46 million range does include that number. That’s correct.

Okay. And then just looking at the back half of the year in terms of what you are giving for segment guidance for ASI and APM, am I wrong, you’re expecting kind of a big ramp given the FX and raw material headwinds that are probably developing, are you expecting them to kind of lessen or just what’s the thought process there?

Yeah, the way I would characterize it is, we would expect normal seasonality in terms of business performance. As Luis indicated, Q1 is and has always been our weakest quarter due to seasonality. FX and that sort of thing will certainly continue to provide context around that. As we indicated team did a nice job in Q1 of overcoming those hurdles year-over-year if you will. As you well know, the dollar versus significant other currencies is continuing to move around a fair bit, we are obviously paying close attention to that. And like I said, we will provide the appropriate context around that. But it is our expectation that whatever currencies do, the team will manage through that to ultimately produce the results that we have projected. We have a lot of confidence and faith in the projection for both of those businesses where we sit today.

Thank you very much.

Sure.

Thank you. Our next question is from the line of James Sheehan of SunTrust. Your line is open.

Good morning. Just wondering if you could comment on some of the structural reforms and policy changes you see coming in Washington and how they might affect you, specifically I’d like to know about your sunscreen formulation that’s kind of been held up at the FDA for UVA and UVB protection, I think that’s been stalled for some time, do you see any hope that some movement on that front is close?

Sure. So this is Bill here. And the changes that are taking place in Washington, I think, we all know are unfolding and a little bit difficult to predict in terms of the full direction and impact. In particular though, it’s been unfortunate that there hasn’t been further progress in moving the sunscreen protection act and the related testing and approvals through the FDA and quite obviously given the lack of progress to date, any changes that occur in that front would most likely have a beneficial effect. So we are optimistic that this change or these changes will be to our advantage if you will and to the advantage of the public, this is a product that’s good for people and we believe should be out there helping to protect people. So that’s one of the positive effects we see. Certainly, as you see a more robust environment for construction whether that’d be infrastructure or it ultimately relates to other commercial and residential construction that will be good for our composites business. And so there are a number of area that feel like they could be positive since we are a significant exporter of materials, we don’t have a lot of materials that we produce, for example, in Mexico that we import into the U.S., we don’t feel like we are going to be impacted by that type of dynamic or trend. So it’s really difficult to call what will play out in Washington, but we don’t see indications that are problematic on the surface where we are sitting at this point in time. Anything, the opposite, hopefully, they will be beneficial.

Great. And in terms of your price – you are lacking getting pricing versus raw material cost escalation. I think you mentioned what it was in composites. What specifically would that lag be in ASI?

So in composites and adhesives, as I said, it tends to be about 60-day to 90-day timeframe. In the case of ASI, again, the impact first and foremost is much more muted just because of the impact of raw materials and the overall cost. There is a lot of value added on what do we put, so raw materials have a much lesser impact into them. And I think that the key for us is to continue to drive our commercial excellence initiatives and price to value. I think the part of the reason we were able to compensate for that is because even before the materials were going up, we were implementing some of those commercial excellence initiatives. And again the dynamic is slightly different. If there was a huge impact, it also takes us between 60-days to 90-days, but again it’s much more muted in the rest of the portfolio with adhesives and composites being the ones that are highly impacted.

Thank you.

Thank you. Our next question is from David Begleiter of Deutsche Bank. Your line is open.

Thank you. Luis, on performance materials, again, is it – the fact that earnings were down sequentially Q1 to Q2 adjusted for the Lima, Ohio catalyst outage change, that’s just due to the lag in recapturing raw materials or is it something else driving that sequential lag or decline?

Yeah, again, sequentially speaking, we do expect to see some improvement in terms of BDO pricing [indiscernible] we expect to see some level of raw material increases and the impact of FX. The only other thing that I would mention is that as we did the calculations, we are seeing much more muted impact on the BDO derivatives, things that are not quite BDO, but are still intermediate that we are – we are not seeing yet the price increase. So those are some of the elements. And again quarter-to-quarter, we also have certain shutdowns that impact the business. The one issue on Q1 is that was one of those shutdowns that only happens four to five years, but that doesn’t mean that we don’t have some level of [indiscernible] that it’s normal let me put it this way in Q2.

Understood. And just ASI, nice guidance for Q2 on the margins, would you expect those – that margin in the back half of the year or is potential to even go above 25% do you think for ASI in the back half of the year on EBITDA margin basis?

Well, I mean, we traditionally have much stronger margins in Q2, Q3 is our strongest margin, Q3 and Q4 are strongest margin in the year and that again has to do with both demand as well as maintenance activities in our plant. So I – we expect to see the same seasonal pattern that we’ve seen in previous years in order for us to get to the average of 23% obviously the Q2, Q3, Q4 have to have strong margins in the 24% to 25% range.

Thank you very much.

Thank you. Our next question is from Mike Sison of KeyBanc. Your line is open.

Hi, guys, nice quarter there.

Thanks, Mike. Thank you.

Thanks, Mike.

Thanks, Mike.

When you think about ASI, I’m encouraged that your outlook at least near-term is still on track, when you think about the industrial specialties business and the volume growth recovery, lot of folks in the space haven’t really seen much of recovery or looking for recovery. So it sounds like a lot of that’s within your control. Do you expect volumes to remain fairly good for the next couple of quarter?

Yeah, obviously, we are happy to see what happened in Q1, so we are optimistic about the future quarters and we see that. I think that there’s three elements that are impacting our industrial business. Number one, innovation is faster to implement in industrial businesses than in regulated business just because of the nature of regulations. So we are seeing the benefit of some innovative products being implemented by our customers a little bit faster. We are seeing faster also results from our pipeline. We said about six months ago that we were improving our pipeline opportunities and we can see those panning out. But I would tell you there are industries where we see improvements in demand and the coatings industry is one that I think that U.S. is doing better overall, so is the demand in China. So the combination of better demands in some of our downstream markets together with innovation and pipeline management is what’s driving the results and I think that most of those trends are still solid for this quarter.

And this is Bill here, I would just add in that when we talk about driving and moving towards more focused operating company with this transition, there is a real change in terms of how we are managing the company, the metrics that we are looking at, the cadence of review, we’ve talked about some changes in leadership that have occurred and I wouldn’t underestimate it because we have always felt as I think you have that – the potential for real growth whether it would be the revenue growth or margins is there and while the team has done a great job over time by being able to focus really a substantial part of our daily to reaching that peak performance. We think that’s something that truly will pay-off, not just today, but over time.

Great. And then when you think about each of the businesses within ASI, your balance sheet is going to be in a good – is still in pretty good shape and you are nearing the spin of Valvoline here, what areas make sense to really focus on continue to grow the, you know, may be bolt-on acquisitions and maybe fortify, anything in particular you’d like to add to the portfolio longer term as you continue to grow the business?

So what I would say and I think it will be a little clearer when we have our Investor Day coming up here. And last time in our Investor Day, we talked about – a lot about the chemistry platforms and how those basically took us into spaces which were very attractive like the pharma and personal care and coatings and others. And I think what you will hear a bit more about in May is the real value and the real differentiation that we have in those industry areas. So what is the value equation that we’d bring specifically in pharma and in coatings and we can articulate that a bit now, but the point is that we would be looking for acquisitions that clearly have the right financial, economics associated with them, and -- that’s a whole separate discussion, but I think hopefully that’s fairly straightforward what our thinking would be on that point. There’s been a lot of discipline in the past and there certainly would be going forward. But to your question in areas that would have value propositions to the customer that would extend the solutions that we provide pneumatically [ph] within those spaces. And so that’s how we put it. I mean clearly we would concentrate our efforts in the areas which we view as core and in certain very differentiated niche areas, but it would really be to expand or to the extent the range of solutions that we can provide within those market spaces.

Great. Thank you.

Thank you. And that does conclude our Q&A session for day. I’d like to turn the call back over to Mr. Seth Mrozek for any further remarks.

Thank you, Christi, and thank you everyone for your time this morning and your interest in Ashland. I hope everyone has a great day. Take care.

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