Air Products & Chemicals Earnings Call Nuggets: European Restructuring and Natural Gas Price Outlook
Laurence Alexander – Jefferies: I guess two quick questions. First, given the current outlook can you give a little bit more of a sense on the restructuring in Europe I mean and how much more you might need to do to see significant margin improvement there, if demand doesn’t recover? Secondly, with a slower demand environment this year, does that change the way you think about how much of a backlog related tailwind you should have next fiscal year, because some of the projects that come on stream this year would be ramping up with a bit of a lag?
John E. McGlade – Chairman, President and CEO: Yes. This is John. On your first question as we noted, we did complete the restructuring in Europe on schedule and on budget delivering the benefits that we forecasted. Certainly and my comments in the script are we are going to continue to look across our portfolio as to what the current business environment looks like and we will make judgments around any additional actions we need to take as we go through our planning cycle this summer and as we link that planning cycle with the business environment we see going forward. From the standpoint of the backlog impact for next year and I will let Scott add some commentary here as well. I think we have talked a number of times around the fact that while the general economic environment in a lot of the markets that we operate and particularly impacting our Merchant and Electronics businesses, the bidding activity in sort of the Energy and the Environmental areas whether it be larger separation (blocks) for gasification, hydrogen, LNG continues to remain strong. The majority of those projects are currently in execution and meeting what we would’ve anticipated to be schedules associated with large complex projects like that.
M. Scott Crocco – CFO: Just to build, this is Scott, I just want to reinforce that over 80% of our projects in backlog are tried to long-term take-or-pay contracts. So we are not exposed to the general economic uncertainties that we are when we put in Merchant capacity.
Laurence Alexander – Jefferies: Then just a very quick clarification on the helium. The BLM is talking about shifting to market-based pricing supplies. Would that be a neutral for you or a negative?
Simon R. Moore – Director, IR: Laurence this Simon. It’s a good question, as obviously a lot of dynamics going on in helium supply, there is different builds in front of different sections of the government to extend the helium program. What we believe is that BLM will want to continue to provide helium that will help enable industry as best as it can and we’re going to be a key player in that helium business going forward. At this point it’s unclear exactly how that’s going to shake out, but we think helium will continue to be a good part of Air Products going forward.
Natural Gas Price Outlook
Neil Singhania – Goldman Sachs: This is actually (Niel Singhania) on for Bob. Just looking to understand how much the firmness in the general outlook for natural gas prices over the quarter would have been a tailwind to the guidance, prior to the back half macro headwind?
M. Scott Crocco – CFO: This is Scott. There really hasn’t been any change in our outlook for natural gas in terms of our results or guidance.
Neil Singhania – Goldman Sachs: Then in the past, you’ve been a bit more aggressive with repurchases around the current share price levels. Is the lower outlook going to change your strategy or should we expect a similar pace?
M. Scott Crocco – CFO: There’s no change to our strategy and our cash priorities. Just to reemphasize, we’re going to focus primarily and foremost on core projects with good returns. Focus on raising the dividend and striving to maintain an A rating and then buy back shares. I would remind folks too that we did do a share repurchase last quarter of about $460 million and if I look back over the last seven years or so, we did about $3 billion of share repurchases. That said, at this point in time, we’re always looking at it, I wouldn’t see anything on the order of what we did in the first quarter going forward in terms of share repurchase.
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