Air Products and Chemicals (APD) 3 Nov 222022 Q4 Earnings call transcript

Good morning. And welcome to the Air Products’ Fourth 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. Moore. Simon

Relations and Good results to Moore, today teleconference. of Relations, Simon. quarter Products’ Vice by everyone. am Samir Investor earnings Manjeshwar, I our Senior Chief Financial Chairman, XXXX and Vice This Corporate CEO; our Seifi Operating morning, Ghasemi, you, Executive President, be President Air Corporate Welcome our Serhan, fourth Vice President Treasurer. President Chief Sidd pleased take Officer; be our Thank comments, to Sustainability. and Vice joined Melissa Dr. questions. Secretary; and General and is Simon President we Counsel Sean our pleased Schaeffer, Major, and your our After Officer; to will

available statements. website contains on can release earnings This discussion slide refer airproducts.com. Please be on earnings two. our statement Our the found call and release disclosure forward-looking at and number the slides to forward-looking for our that in are this

website measures. to referring today’s throughout per EBITDA comparable addition, In tax EBITDA are directly adjusted GAAP share, refer margin, company measures, to to both Reconciliations a adjusted and the we financial when rate the employed. earnings adjusted share, total financial can discussion, earnings specifically basis, segment non-GAAP earnings EBITDA, in on effective our will refer financial state return otherwise, capital ROCE relevant most effective we adjusted measures and margin, to various Unless found we we EBITDA, per tax adjusted adjusted on and release measures our on rate of our section. be these

to to pleased turn over am Seifi. Now, call I the

employees again for the today. Air great our busy to good progress exceeded at year extremely to I advanced and macroeconomic significantly be and grit has them day on exceptional would despite I this long-term continue key made each that to for they as you milestones taking strong results, our to from great time same thank of your results, reached executing our Air alongside that call one We am be like Simon, schedule motivated with our I determination say as their growth time, well goals, you, strategy. headwinds. near-term working am financial as proud many at and and our had Products strategy. to dedicated proud Products deliver to efforts. everyone. Thank talented, Thank

Before like would that I to our mentioned some results, his discuss I is us news. call Manjeshwar opening comments, Sidd good share In joining on Simon our Mr. today.

leading be our Corporate on In addition the taking responsibilities also additional will Treasurer, responsibility Relations existing to team. as he Sidd’s for our Investor

March is we As retire the shared quarter, last end at of XXXX. to Simon planning

all as and our know excellent of strategies. across Sidd next a the communicate growth financial stage? Simon ensure a us from Products disciplines, Sidd, strategy. joining for expertise working breadth and exceptional be say be supporting an Air continue something transition. of our For finance a knowledge will to few and key would brings closely policies to to XXXX, since role our smooth and April he in Sidd played analysts at investors of will and execute has months, and like congratulations and together and he you this in I we resource

responsibilities. share to Thank once investors, analysts create growth to our with with be looking to again much them and has Simon you strategy. to these and Seifi. exciting and our kind connecting I of part look engage meeting work continue to and forward honored am additional you, I Thank and done on everyone. and I tremendous be to I very taking appreciate am your and humbled this words team, forward

now And please three. number Sidd. turn you, Thank slide to

is which results, will our highlight priority. to discuss always I our performance, like safety I our would Before highest

we more but safety progress, to make well-being ensure our do always and employees. We the continue of can to

Our and accidents. is incidents a zero ultimate goal

Now to number slide four. please turn

share delivered across and year the as the earnings Jazan fiscal Price regions business and strong an improved last XX% our XXXX, project per $XX.XX, of increase of contributed both to volume expected. For compared year.

delivered impressive results a these headwind resilience near-term currency our sure share portfolio for These macroeconomic per from environment. to challenging team results. absolute confirm commitment Our despite of $X.XX people the our business of results deliver the and and

near-term per again eight an to XX% turn and ambitious growth that executing see our this average confirm we deliver XX% year. last These since delivered exceeded Air once been slide to capacity number to growth please Now the has have six, for goal number has that time EPS years, results On long-term XXXX, of five. In strategy. deliver period. goal excellent the our performance, Products you slide this while

see consistently XXXX you can number seven, on since of we macroeconomic conditions. positive delivered As the growth slide have regardless earnings

its can provide with business volume merchant take-or-pay contracts protection price and flexibility, on-site potential. Our upside downside and having business gives us our

will nearly future. billion in significant our add backlog addition, $XX the growth In of long-term

Now I am eight. slide on number

of per For to later adjusted XXXX, $XX.XX. detail the call. in is guidance discuss year earnings deliver fiscal in to I this share more $XX.XX and trend would our continue our guideline

the This growth. and our see average shareholders. that and achievement per eight business. a very our people flow number turn please to our the dividend XX to years reward you consecutive is can The their dividend. by provide our and have shareholders proud paying XX, earnings extraordinary we of stability on has secure business XX% our slide strength nine. to increase healthy the a provided that Now of of steady to and number strength our in are is stability The past mirroring we team slide years grown our whole a On cash committed year dividend testament

but of than like our pass-through, and growth higher on quarters three billion to in more number still significant $X.X slide which our guide to intend decline shown favorite which years. our you slide, not is see energy XX, our guided On XX, shareholders return support past have margin to expect due cost policies sales, quarter eight since that the profit. we cash we XXXX does our I increases slide have calendar of performance as will point to management can forward consistently the We have in and peak we to These and flow these forward. follow out was go continue I every summary you would impact to my number opportunities. a about which principles principles, the to go as to still

of announcing liquid slide project New our million green Now hydrogen of Lawrence hydrogen megawatts in facility the clean green on a Power almost to power XXX $XXX St. overview hydrogen XX by York, using investment of about green for River. forward step brief we took Authority. in significant The by about project a a Massena, provided the new another York that please latest located turn We the banks hydrogen produce announced toward recently. XX of our hydroelectric metric tons New will on future

broadens for further passage We the are excited to Reduction in energy. the in this power and project energy the hydro has our reinforced it United Act. the green solar addition renewable about energy It Inflation of with been since to which include the growing support transition States, demonstrates sources also

as pursuing driven forward this the actively more go other United I by look legislation. are world-leading these we project States, sharing forward. for information We hydrogen green projects to opportunities in about

slide Now to number please XX. turn

our Energy we Act April. of investment with announced that know, As another great project This is in opportunities further aviation is the sustainable fuel the support World further supported legislation. Reduction project that by example -- you Investment

earnings will incentives and as for We billion from now the returns we we of in put result like a that increase our have these our legislation $X than promised aviation, the the future. fuel will contribute are billion and aligned that and into now -- will our well minimum energy -- to continue this expanding transition We investment $X.X that are we Projects you project. still will drive we expect are scope to strategy with and more project this before. investment sustainable our

CFO. turn Schaeffer, call that, Now, to like the would I to Melissa with our Melissa?

Seifi. you, Thank

this year. performance despite As Seifi very macroeconomic well challenges fiscal performed our mentioned, the business

which increases. business, half Our while again firm, team through about successfully our managed once of sales, total our the merchant cost energy on-site generates company held significant

chain Air care running to well would our hard across facilities done. the and customers I to Our supply Products like team key a challenges entire job their work for worked people the thank regions, supplied. and overcome hard

merchant our segments to product please XX%, an up every Now in slide of improved our turn increase last overview full significant with price which year and price XX% XX across a largest business. of both regional were our sales price our X%, in for lines. Year-over-year major results. our three most increased to -- quarter for and strong, corresponds volume. Overall, in contributions Underlying

price, and higher a approximately no steadily energy due profit. Europe, offset a demand particularly have of basis -- cost merchant plants, was year. Our X%, reaching of volume Americas impacted volume in we meaningful points sales added energy the noticeable basis drove affiliate The pass-through, over XXX hydrogen, climbed five activity. where X% past which which sales EBITDA and just by last over the new down which but by last points XX.X%, by total income, cost quarters driven favorable has XXX points equipment currency. and business. up partially the are basis half was EBITDA XXX impact is improved by margin ROCE hydrogen in cost unfavorable increase, equity was was the pass-through and increased grew negatively and higher to than

balance we our to this to cash, further on our put bring Adjusting new and sheet the would have We stream on as to work. been cash expect XX.X% continue for improve quarter. ROCE ROCE projects

year please a full turn discussion for slide to our Now of XX EPS.

was EPS than action The Volume Our volume. the largest cost at Price the was in helped up energy Corporate sales price by XX%. driven operations from our increases equipment particularly drive adding increased in favorable and or continuing higher our strong segments. more adjusted full our Americas. $X.XX in significant $X.XX, $X.XX was three strong segment and year also offset Asia

by and Our a other well and the external China, $X.XX chain caused driven such region. disruption inflation supply by across certain unfavorable inefficiencies as factors, COVID parts in of as were costs as were restrictions

also which the significant growth. facilities new as We costs on such include resources as and cavern, future. These well additional our investments in future bring develop support them value incurred as stream, storage our to to generate will helium purposefully projects and required

are the respective first we of phase this in our up local is a cost a translation $X.XX, as contributed income denominated transaction to in project, affiliate rather Jazan businesses. impact. their U.S. X% currencies, We and the the half key continue of our currencies our dollar costs $X.XX Since by to Currency monitor focused fiscal actions most strengthened earnings year. on latter lowered against productivity our the than closely as was revenue Equity are due or across and primarily the primarily committed. which

tax rate primarily Interest lower, effective basis expect adding was Our XX FY $X.XX to was last earnings, rate balance. effective lower year due XX% to than we XX% of and an points XXXX. of XX.X% debt reduced tax a to in expense

In XX success and later double-digit achieved Now we year, macroeconomic slide better achieved worked please results Each review will through turn teams growth for its drivers, as to and fourth for headwinds. of review. key region respective comparison regional profits detailed be to found overcome our to last our hard the sales considerable in own quarter a which results. both its

and up and Asia and hydrogen both X% new by were primarily Americas, equal driven volume Volumes contributions in underlying recovery volumes. are XX% better, better plants, sales from with in Our up merchant about price.

we quarter, XX% merchant double-digit which consecutive compared was fourth the increase For last up year. to achieved pricing, in

X% and XXX-basis-point work to decline this Europe pressures offset X% impacted energy results up equity cost actions volume income about attributed segment. our of Sequentially, absorbing Currency cost favorable continue by headwinds which translated favorable in we more quarter, X% U.S. increased segments reducing the EBITDA and price, hard persist, and X%. than EBITDA increased As was sequentially, volume XX% in primarily about affiliate and Despite margins costs. negatively offset price by and The points. higher dollar region. sales more each on this strengthening EBITDA headwind, pricing margin XXX than by pass-through, EBITDA impacted our was across costs. price basis all higher to from and volumes improved currency primarily to due

please XX. turn slide to Now

items, $X.XX Our GAAP a was of $X.XX of share included both two per impact EPS were fourth which non-GAAP and non-cash. negative for quarter

of had presented loss per we exited our of Ukraine, asset we $X.XX Russia, a previously the This a result separately and business which actions share First, invasion in announced. divestiture of as we our recognized business Russia’s on on charge as the P&L. is as

affiliates equity per $X.XX share a two Asia, in in the item. of of impairment affiliate We for loss also the equity which recognized small included is line

inflation, which due of quarter a increase costs performance unfavorable. first support quarter reflective favorable We this Asia each cost an a improvement Price, positive per then. Americas from Currency resources outstanding the and costs, strong variable the planned currency was EPS was were due X% which America. of about strong quarter in the $X.XX $X.XX pricing, particularly excellent negative has maintenance half higher higher improved who $X.XX improvements. year. is $X.XX, QX equity significant of The a volume we joint from provided worse The costs, negative fourth the teams and $X.XX of incentive increases the or were share, Price July. to of adjusted compensation, primarily achieving expected variable was Price, venture income. needed growth. helped Volume our impact. of this drove affiliate regional prior results. $X.XX contributed Excluding with in and $X.XX XX% in was our price we our addition Other despite the guidance impact our Asia, $X.XX increase and of our had to when or Almost negative $X.XX. non-GAAP since chain impact quarter’s in items, to was net contributed and net based Jazan the each result and of disruptions, due together the cost Europe remaining us to supply was year to improve throughout modest than efforts achieved

our to affiliates equity due However, year. due for compared demand many year, unfavorably COVID strong last in the performance lower the to medical part oxygen other of this

stability more billion $X.X cash more over per high us enable return more leaves our flow, an flow to flow, XX% for billion times $XX through or generate XX. cash in Slide continue as to available This up despite distributable is last create update compared and environment. This uncertain the please year. shareholder dividends year. our turn share, From flow almost us capital increasing high than roughly last value XX% capital projects. $X Now business cash generated we strong than challenging $X.X projects, shareholders. to XX billion deployment cash provides dividends than of drawn to we paid especially to slide return for distributable The fiscal of year our In allows to or of which XXXX, our XX% deployment.

increased expect you our cash we fiscal additional to over billion to available would about still capacity XXXX. growth, generate flow additional and capital potential billion see, believe already and for borrowing more We and given As billion today, $XX The XXXX through is capacity has additional conservative which potential EBITDA the capacity. $XX deployment includes $XX of than cash $X be this by available billion spent. $XX billion debt additional

our current to continue our to As rating. maintain always, we focus on targeted balance debt managing AAX

amount will future. you growth $XX So grown which of nearly has substantial provide see, can backlog to billion, our the in

capacity spent show have XX% already already and updated here. have of the committed we XX% We

by great our to return investment remaining still in investing create high We have invest substantial capacity is and the capital best to options entrusted us the made in that shareholders. determine progress projects cash best the these way long to and We believe for use shareholder have projects. value run. deployment available to our evaluate return continually high way We

our By components mention capital we results. Seifi non-service full Before that plans, are operations. per more call in year fiscal and fiscal tables to non-service-related XXXX defined impact believe the the we provide guidance detail back of in interest including included can The better that and we Seifi, results. websites. year our our discuss The of fiscal like changing by reflects exclude recap underlying I movements starting change. later of this our I from unrelated earnings which of the and adjusted will the effects for to excluding XXXX, visibility would our to quarter benefit items, share these and on for our turn the rates available XXXX, pension quarter markets quarter are EPS first will to first These of the reconciliation XXXX

the Now to review Seifi. to results, over our back business turn Seifi? segment call of the begin I will

Thank you, Melissa.

stronger turn currency Sales was traditional quarter please X% improved fourth for Now slide our price which weaker opportunities continued small- was they Asia increase from region’s mid-sized gas profit Price last offset well industrial the by for price itself up plants despite headwinds. to partially up are new, countries Merchant year, lines. our on-site benefiting as Volume double were most results. this XX X%. an spot XX%, by together both currencies. number to was the key increased than across and sales. Volume digits X% and but XX%, up the product sales in business in major and across as overall region, by

price created of was volume Sequentially, and in parts our a after favorable Continued equity volume -- negative the modestly strong and previous even lower restrictions unfavorable offset higher EBITDA quarter. from absorbing certain up costs. after volumes as versus and COVID increase X% the reduced contribution profit currencies, supply XX% inefficiencies that costs to drove affiliates. China distribution both more than contributed chain and sales of

our call quarter to turn Simon like results. about talk the to to would European I Now fourth Simon?

Thank you, Seifi.

Power XX. costs Now energy please for higher Europe. primary recovery focus to merchant our ever the turn a business via cost to slide in price manage is

of usage our enables on-site the customers us to to production. Our almost for on-site energy and pass hydrogen business all gas our which is has contractual cost pass-through, natural

XXXX. power soared than for the shows, times X to of more beginning this of quarter chart the the Europe As level costs

increases end. price of beginning the business, implemented our a year headwind compensate merchant to tailwind by to costs tirelessly turning in the a has year team commercial these at Our for

year, remain costs the recovered eye keeping winter recovery higher Although, . and are power we we on the on this heading in region. costs fully focused power we the cost into a energy for watchful season have

turn to XX slide for please Now Europe of results. a our review

significant by to price resulting local cost pricing. Prices all unfavorable major currencies key energy the double Compared addition increase in region, All versus prior U.S. were in currency XX% a XX% product were from dollar lines. the our higher also pressured businesses. In increases, increased for to year, and European movements sub-regions weaker digits. merchant

our modestly flat was volume with favorable an customer as Our offset electronics across a this amendment quarter contract demand weaker on-site businesses.

Additionally, our reduced energy this in immaterial XX% improved sales negatively EBITDA currency pass-through cost Despite X% Higher than to price which higher offset basis Russia EBITDA Negative last results longer points. XX% by XXX year. reflect and impacted positive about no business, divested August. was our by currency compared margin as costs. and mix better EBITDA more headwind, by

volume hydrogen impact, this to higher costs. of Excluding operating last another pricing has the as customer better covered price driven flat, by contributed primarily than slightly cost income activities via better energy million year. quarter, margin about was actions. negative to and margin impact price and previously Despite than our the Compared Volume more higher to following team’s the XX%, excluding quarter improved prior a price successful thanks EBITDA higher relatively X% headwind, EBITDA efforts. this was QX $XX a of up Europe’s our currency added the or contract about X% pass-through. X% year, Compared mentioned was ongoing turnaround last planned X% amendment.

turn call Serhan the Dr. like would discussion to a to our other for of I over segments. Now,

Simon. you, Thank

review for for to energy year, due was our XX Americas for the Strong underlying diluted over improved of region higher key to compared by lines other improved to increase last slide Prices profit which year. a business. half nearly pass-through, results. cost to while turn the half the all product in no equivalent merchant increase had of This sales but our a sales margins. last please accounted XX% in Now XX% X%. Price impact is our

grew climbing job improvements in helium primarily hydrogen merchant past the Our more for energy increase to the quarter due been an the and to XX%, hydrogen. and steadily team in an than in excellent in volume has cost. We saw the Americas did higher raising Volume quarters. this several prices demand cover

price year. affiliate higher improved follow this expected, volume, compared EBITDA year, equity margin more to higher path impacted below to but X% grew volume pass-through activities variable than lines. last we compared as into than increased were by year. Maintenance fourth X%, maintenance, income. EBITDA product was in points. Planned to Higher negatively and move XXXX. higher of also last across hydrogen significantly declined offset driven and and expect partially lower XXX basis energy higher activities price, recovery cost. over quarter have by last due last all volume our costs. We quarter as Price offset EBITDA to more the costs the by better they mainly maintenance was average were Sequentially, favorable, and cost X%, which about planned X% covering lower up positive

with for and turn India this please XX and East are smaller our includes India Now it significant to The segments. a in since is, Sales and and Air India the since review Middle venture our segment of in East wholly-owned slide EBITDA joint however, our design operations the segment INOX modest income related are to venture affiliate Middle Products. operating the joint income size.

converted last to mainly acquisitions. the to year settlement in due to were contract last unfavorably versus For sales year. year last unfavorable higher Operating quarter, due income

We over our income in of share profit, quarter. million The the joint also expect we delivering $XX expected. increase planned venture maintenance next equity increase Jazan is which activity net as included to

joint We receiving Corporate turn Please and venture. for segment our to corporate XX sale costs. cash equipment as been This as the well managed our from businesses, slide functions includes our distributions centrally of have segment.

the have activities this activities project recognition under vary for and of results. to segment’s and in sale but sales of our contributors LNG profit historically can become non-LNG [ph], equipment activities, has major segment. the timing The related our business of years For cadence recent grown our been project curve the

centrally Our costs. ongoing and support effort managed functions to also the our has strategy corporate increased growth

to quarter improved sales the sale last primarily profit lower of fourth due year, year and than over the our project segment activities. For EBITDA were $XX million, but equipment fiscal the

our resources to added strategy. also We support growth

but not drive mentioned near-term projects increase potential take to As have will time recently, develop. our projects before, jumped these as for LNG they results

We back comments. are like Seifi? would signing to to new to in provide this momentum this working Seifi maintain to projects the turn At good point, segment. closing I hard the to his call

Serhan. in We high the that Thank projects believe for investing a in you, return is and buyback our choice Dr. long-term. shareholders better share

confident our also deliver near-term goals. we are achieving We that can on while results long-term

the the these Although projects for are. seek large many to time, and and and have get years projects take competencies are where execute we we them that have to working the execute on people to diligently we to been

these Products we deployment Now projects capital stream our in new gains have Air a over share we forward has of come. which the traded quick that phase entered expect in from evolution, choosing to a future. and years for we going By buyback, meaningful of in contribution reward for near-term steady company’s believe greater new the

restrictions China around number the obstacles. continue please to inflation, continue, conflict slide in in supply headwinds. persists, face considerable remain COVID to The Economies and currency chain that XX. may world will issues Ukraine Now as turn see we

increase earnings we for additional XXXX, volume -- will are additional our to growth don’t per an that $X.XX over would $XX.XX world expect projected pay at around to impact. our This so range an of means That that projected that not like compensate year. we we share costs, recession. I for year to increases we a the the currency always, also and obviously, around background, be next last fiscal see crystal will in as on close for price midpoint our economic of the opportunities, push have add based today. have As expected push any neither XX% world, we performed them costs. With we pursue price for ball includes $XX.XX, we significant negative projections representing to attention the have fundamental assumption economies year the roughly a to

based Americas, today China. the guidance Our on in Europe what and we in economies is see

over first joint roughly the Please related of per results fiscal is prior of gain XXXX benefited to the to quarter first note quarter $X.XX of guidance a fiscal that up $X.XX also of separation for finalization XXXX, one quarter Jazan year. earnings for our a XX% For $X.XX, our unit -- X% the to from venture. share last

we Phase including to billion X terms see be our expenditure of the next the the CapEx, $X CapEx $X project. to billion, approximately billion In of Jazan for approximately for year $X.X

slide to number turn XX. please Now

groups. As been recall you hosting answer their I the earnings from the strategy than My employees last and is may discussions regions share our XX,XXX with our have talk call, more our our our in-person goals. around year employees the in values that happy core world goal course to with to across our the over of the truly are next motivation small share I and Their am and on a world long-term employees to around say our commitment focus common advantage. competitive questions.

proud working of the beginning make to alongside the to the at stated this of future for energy the am them clean I be Air call, I Products leader As world.

more we your to pleased than Now, questions. answer are

our from move Thank I will to Instructions] you Steve [Operator comes very Please ahead. first America. Bank Byrne now from much, of which sir. go question,

Your line open. is

importantly, more to markets would end product? for this What see to an wanted The the a are this you. you about seem be hydrogen primary a little project Thank in up costs remote capital greenfield $X ask the undeveloped New what a high. pretty that little this York. watt demand maybe as selling a bit I you site, Yeah. be liquid Is at do into? and this location. It’s going

morning. question. Good Excellent

we rather is mobility in is a auxiliary future for hydrogen than the terms gas distribution develop the and Therefore, in at the two, to hydrogen it and cost, we targeting capital to it liquefier in in near site. of once the of might investments is example, it for that obviously, of The of have significant. -- facility that all, terms to liquid customers. The that believe we remote, in hydrogen get for also includes Canada because doing to full cost make liquids you mobility. NEOM, the if the include are hydrogen, also liquid the this site includes, right are designed it you market primary order Number hydrogen. and is of First includes liquid of greenfield sell seem it, liquid California. what site we are liquefaction, in -- We is, how of now the product Toronto have not but hydrogen comparing in

to we and water. location was access that it of the chose the and to because the there site proximity So the the power

things. XX about besides that that per So trucks is average costs facility. will that I any consume XX uses need tons output it you day, to the significant a about going be on not that of XXX not because am this considering concerned in kilograms And day, and scheme the about truck overall of distribution heavy the the

we for about are to New it optimistic location we So and very power. State the of and and using thankful this to the hydro York, locating facilitating Governor to NYPA very are us in

follow-up up Seifi, And merchants XX%. one European you in the pricing results for on

merchant XX% reversible and two is a you on Your relatively characterize their large potentially cost be as surcharge something similar. how would they competitors deck modest much that impressive. thus the that’s reported customers That’s your can increase? in and absorb you a Can of primary really cost comment would hydrogen

helium, is inflation. are mainly on in the and cost increases and Europe to general And all to Well, the oxygen nitrogen liquid addition and argon hydrogen, that, liquid electricity. and liquid in obviously, price of there related

cost. increase our So of the reflection overall of increases a are cost the

purely are down, long have on to it costs And gone a we go because the is of doesn’t down. just rather therefore, as just prices to based than to can on that power our electricity if try inflation of hang for it as price costs. increases necessarily going we justified mean are all lot So

Thank you.

Thank you. Yeah.

you. Thank

We from JPMorgan. move will comes to from which our over go on Zekauskas phone, next Jeff the now question Please ahead.

Your is open. line

ton Thanks a sure, million it Reduction tax spare for it read I very In in Inflation is smaller year a much. am your $XXX $XX a bigger Seifi, facility, Louisiana X benefit or number? or your a time, times the you calculating tons million is Act. number the or

numbers sequestration. are Inflation in clear Jeff. Act Yeah. to COX The morning, with very Reduction respect Good the

your Louisiana correct. plan in project that $XX, and you For to million is math our we year COX produce of is going get so sequester, every X ton to ton, obviously, exactly a

We million XX for will after-tax. sequestration $XXX years the $XXX doing benefit of That in correct. get year million, is a about a

Okay.

you are Second of call for future, number flow question that? negative Is income. that year $XXX.X negative what the first your is is maybe think, negative earnings to second equity million the in and $XXX million other Melissa. get your $XXX versus, so going have I number any undistributed is improve? adjustments to better million, million, the what’s cash it, going for the of statement, In And $XXX equity

to I Melissa, answer you answer. question, that can you not but That’s Melissa that take Yeah. wanted would please question? a problem.

Yeah.

Jeff? activities, that So the your other question, investing is

million, other negative adjustments, adjustment $XXX.X is other because The what’s that?

you. Thank Okay.

is So that our our to associated associated There deferred the to is is a that majority portion intercompany largely one intercompany of but costs, of CTA, CTA. Jeff. large projects is massive

change So does next that year?

project that deferred year largely that role, So change that the will decrease it again large there won’t -- a cost, but will be now. to associated next

of undistributed Okay. equity we method equity to get to And investments, income? closer going the the are earnings

to for there the and joint in largely fluctuations the the JIGPC distributions of our So, project so timing Jeff, venture. is all that from that’s associated just

much. Thank Great. very you Okay.

Yeah. Thank Jeff. you,

Jeff. Thank you,

phone, We move question go will John comes Credit [Operator Instructions] you. the Suisse. from Thank on next ahead. which on our Roberts from to Please Mr. now

where do welcome, guarantees? volume sustainable than clean other a and hydrogen, have fuel, to any Seifi, the Sidd. don’t you expect for aviation you you primarily merchant pricing have Thank model

a will talked have that contracts it possibility and ensure I they they want large I supply. long-term of about For trucking think they the would even it think, of fuel, like, because firms for to the to that, and using for all when hydrogen customers, business? mixture, some are No, be

combination think I a both, will we that So have of John.

Thank you. it I on. will past

Sure. Thank you.

Operator, next will you please to go question. the

Certainly, sir. Thank you.

will comes the from David question which Begleiter over go We to Please next move Deutsche ahead. now from on our phone, Bank.

include [ph] and Hi. David of any project expanded scope the the here any Dave. is the inflation? to guess, I This increased on due SAF on project is project, what’s Wang investment for the cost SAF

capacity because going gallons that is XXX year. has been $X.XX is total IRA, increased, be approximately is of incentive SAF. in well, But main know there you that with as very making the the for million to reason the the The the a plant SAF portion,

that and cost. design to adding SAF to the have plan we of more changed So the make that is

Dave? Okay,

Debang XXXX And Can has you causing the project in then XXXX. about China from like been delayed half what’s delay? half the to looks it second first talk

the and COVID-related basically through over there. It’s going COVID shutdowns China that is

Next question, please?

Thank you.

We to will Spector over phone, the now from UBS. which Mr. ahead. move on Please Josh to question our comes go next

could Seifi, you predicted. wondering taking was no particularly mean, if clarify next assumptions Thanks Hi. year, where I say my for your for recession Yeah. I I question.

I you Europe is markets? If kind I improvement you of China or rating those any recession, a underperforming. you in assuming obviously assuming are that arguable is continues it’s that in that demand, run Are are think, mean, current

No.

improvement assuming in markets. are We any the not

We we are down you activity next have that right, our it’s in it’s debatable Europe, see results, our we today, but China economic made is that year on forecast the are in assuming we and what are improvement in for is down saying in it U.S. based where

we basing what our see, that’s on assumptions We correct. currently are

are any are we are. expecting be, deterioration to We and get much we we to not place where not assuming we growth any but are significant on good a worse. assuming not are not that economic significant Where is

could within And level I helpful. the how if clarify, there? just volumes so Europe, not That’s am base the much are on helped Thanks. base amendment -- So like volumes, I within sure what contract down? just curious that

with I respect contract the it? get what? amendment mean You didn’t to

the by flat volumes, European contract you amendment the the base business the helped with about volumes On talked for down volumes.

third So today Europe just base in I what in September in your -- or quarter? volumes am wondering the are

the can business to think contract amendment. Any to follow business? me our not Simon, referring on-site am you our or Are help maybe? on… you I relating I Yeah. merchant

Sure. Yeah.

Yeah.

Yeah.

roughly the So, base volumes were modestly, volumes were the amendment, so in around Josh. that, down were volumes slightly. we quantify had details flat. said Europe, but our our didn’t down We amendment contract We positive contract base because we the a of said and

Right.

you. Okay. Thank

Sure.

Okay.

comes now move John from Please I will ahead. on which to from our Markets. McNulty BMO go next question, Capital sir,

question, Yeah. Thanks for taking my Seifi.

that first guess I carbon guess, when about announced opportunities, versus, look would kind for would the guess going So, just you sequestration. big future IRA I Products have How it? opportunities the be way when your ones already potential the be, characterize and for guys? the carbon you backlog you the say, think green I may of at would green but you hydrogen say, blue the you ones? bill one Air and not arena to around which be say leaning, would you next sequestration arena, is is or say blue would there of push in opportunity, you more you in the

and opportunities pursuing say, I is Very Yeah. Good the all very about good announcement green the question. morning, above. That hydrogen like hydrogen we with and And you additional blue saw about the project us in will will we as do, United IRA to in would hydrogen John. do projects that means do green States. of coverage favorable New the and ton help the a castration projects. the $XX then additional the will York

the for transition we as to us and those -- are know, are of IRA provides you opportunity committed things. do We both to the

Okay. enough. Fair

okay, that John? Is

around the second a -- There project you demand getting in can most environment for it? ammonia, question had coming guess, guess, one No. of that just the port with offshore more earlier was agreement the likely the in fine. hydrogen have for your green one I Yeah. another green confidence speak regions guess in I you you those the actually the then, Europe believe be, green year, comfortable NEOM? would the Are with in the was I I taking and to signed, U.K. Netherlands. an That’s saw demand And you in I of out project it

additional war has especially there the significant has Ukraine, There need been -- since for conversations about the been green. in Yes.

in very Some committed green. to are Europe countries much

the blue are of countries and on Yes, green conversation is very right considering Some in terms also level noticeable. demand Europe of you But in that. for significant blue. hydrogen are

color. very much the Thanks Okay. for

Thank you, sir.

you. Thank

move from Andrews the question over on We will now phone, ahead. Stanley. from next Please Morgan go Vincent to which our comes

you the and you, to project? York reference in the project get a everyone. potentially talk there’s Northeast. little over of that that on line the Seifi, would with building sort announcement, Could more a bit you Thank what morning, New and good about fueling station network a

options buy are know how so obviously, about exploring we options. have different would In do. and to and refueling we the it, all the stop trucks is order locations those are Well, of a liquid that hydrogen. we are There get sell fuel. to doing that of something stations hydrogen how This at we and need come we can that lot

about of or that XXX already stations more think we than world. have I the these around

the especially these how And We design to build things. these. for have to say patents. forefront kind these know have of to technology We are I I that, think, of how know liquid We stations. we at

order the building So those in sell product. to we will be be to able

inflation announcements, a in Okay. surprise, for IRA? the risk the of there’s How in just no the United projects the follow-up, are post post U.S. IRA, a CapEx about thinking been lot And the you as of States

even plant that the projects of just MOUs. inflation of kind up of I I the of rather mean, that than the real But U.S., cost enough a build think, to context all in in you are those Well, economy, don’t affect to U.S. I the going of add are the not think projects you it’s so.

don’t focused not think on that. are We that’s relevant. We

much. Thanks very

Thank you, sir.

Thank you.

move ahead. will Please our next We over which now Mike Leithead from to Barclays. the phone, question from comes go

Great. Thanks. Good morning, guys.

question, I now EPS. too. one adjusted Seifi, answer, making Just want for if Melissa. think, be are you adjustment But, clarifying great, that pension The for to would you

you from to it is million $XX what for forward. in best it reconciliation, understand XXXX? But was that exclude what be Melissa, might in income of going your XXXX. disclosed think, you line fiscal your adjusted plan EPS a I item estimate I

Melissa? better answer than a job should that. She does would on do this. Yeah. Melissa I

Seifi. you, Yeah. Yeah. Thank

so FY moving So was But we anticipated for components, benefit. $X.XX non-service XXXX, that about look are for $X.XX forecasting headwind XXXX forward. if back I an the at FY

just to $X.XX clarify, And is $X.XX, it’s one year-over-year, Got it. year, in the not correct? just that

It’s correct. year. every readjusted That’s

Great. Thank you so much.

a absolutely, we provide we reconciliation table And will yes, for -- will that.

you. Thank

Mike from Please which Harrison to comes over next ahead. phone, question move now will Seaport the from Research go our on Partners. We

maybe impacts seeing they they Hi. natural if wondering customers been But your gas Europe feedback recent Good encouraging what to costs? are now be from pricing you talk have gas that harder going do you and a pass-through. in regard that Seifi, to decline the think prices. on that could changes was about I are bit, relief natural little that obviously, running are morning. you to with a ability there, you any get some seeing do There’s

morning, Mike. Good Yeah.

in Europe prices X what are they Europe natural million or gas natural a moderated, which times gas still think X have X times to be. used $XX is in I the increases around Btu, prices but there’s

much which I that the know, would is the they the to electricity the do terms have I as be of to speculate But or to we one you ability, other hope, as the And for affect the the that cost prices, which cost that. is change. do. demonstrated energy that us. determination and thing to But that flexible cost unpredictable. don’t but on obviously as we seen things, want on prices, people Mike, not and -- are a depends prices significant gas pretty electricity, we costs all a lot increases, recover I as moderating the have have the see like becomes correctly haven’t to react it, expect we agility natural we of so and mostly attached relevant natural said, In It done. of thing gas The if higher

news. that’s the think good I

All question right. this other that. two in And business pieces for kind to U.S., Thank of the the my on then question. hydrogen you is

the a can on greater to hydrogen than all, we going being compared to low? comment cost levels, better customers starting expecting as you is you volumes outages and that utilization in it QX better of you. see are And stocks First be your all at saw QX from you relatively QX? are diesel refinery maintenance to Thank some see you in spot

I have He his Mike. to hydrogen demand? on remarks to like would you mentioned question. Sure, expand about remarks. Serhan, But of kind in would prepared that your Serhan answer something Dr. that like Dr. about

as been it’s picking stated we definitely, mean, few quarters. up last the I before in

to for best before the we and demand see now even we basically high. our system, really can are high is refineries at more in even The to opportunities we utilization. customers and Texas, volume The so our our level our to very additional further. the still have pipeline level the system we doing And So are COVID Louisiana in more recovering is pipeline customers. definitely, supply add capacity our really

Thank you.

much. very you Thank

Fischer Duffy next We will from the our Goldman phone, question from over which to now move Sachs. go comes Please ahead.

guys. Yes. Good morning,

XX% were First Seifi, out just there APAC question up think, starting I And strong, volumes you X% relative to business. is around only of ASUs number called smaller up. traditional very The of the up kind quarter. a last

So strong already? is built anniversary have business just it the because we fair APAC very of quarters be that should three that to in over that number the next

and our if fact business short-term, mines future, the online, But of the found will they the last that and that. help absolutely. some that things things affect very a we in question we our business, Hi, you you? asking not and on have are traditional that that I because are very, are large -- just projects focused noticing. Duffy. you grown How now have Province will whole in quarter for fact The good these thing thank now they this only so none -- world. we Those happen assume Shanxi provinces correct. obviously, is in part COVID happen, is of they China, Theoretically, some are is in and coal you are what totally are state that of unpredictable right then the is we those cases unpredictable. operate you to new helped the of what in bringing and these that that shutdowns all the the do going facilities to one shutdown The is in saying

at of you When the you And then ball around look how because you have see on your you in, Perfect. and a do think out kind at cycle look maybe plays cycles. have your seen this data you coming when world customers, few crystal you the of get think there one you just we the here we better leg put through for broader and down get this in or year? into quarter as in next trough into the base you the early kind do calendar your part another things of QX next customer year? have Is

are -- of would Duffy, indicator predict any the -- right you why, happen very months, happening with hesitant But three that U.S. what any the next business, guidance, affairs. know because, But the obviously, is So, both in I with leading predicting what of in terms have we the different for little down. things month or or in inventory, our China you a But don’t months a and I are tell to of am is going we to that, since and I exactly our also bit so now state now. in two difficult. rather all than many predicting assume now especially we and that, of moving this be way they as said, or can are things is

wait So we have to and see.

I specific can’t be with Sorry about that. that.

No. That…

was specific enough. That

Fair enough. you, guys. Thank

Thank you. Yeah.

much. very you Thank

We the over will from which now from Parkinson our phone, question Christopher comes ahead. Mizuho. go to move on next Please

Your line is open.

you. much. us macro? update terms in you your world are where just so operating When what can give of seeing on in you rates Thank you you for a at now, Thank are right merchant quick the rough are Great. the just estimates looking

Chris. Yes. Sure, morning. Good

Good morning.

maybe which XX%, And from of in XX% in XX%. you we are I you is, around you U.K. are certain at mean, high of around as in as on the as country if XX%, Europe. at look are, goes we low now, XX%, Europe I that. all right at parts XX% can give to U.S., depending Asia, XX%, it as somewhere XX%.

necessarily understanding Seifi, in lot Year to a fluctuation been just circle forth. China factors you ball, -- all there’s by a It’s are and what’s helpful. the of ground, hearing as so just obviously, insights we the crystal question you be for various would year on been you so in next if hearing caused your Europe and Very any back China, best, economy of been And year. don’t you. very macro and what’s But entirely regional that view outlook activity this from are in mean, a after have on customers, helpful? you your what what Thank previous your know, the I for best Chinese terms I mean, of Lunar New the

Obviously, to talk wants to obviously, everybody be much. you that, China, you, pessimistic when Well, to Chris, very nobody in they everybody optimistic. wants is, thank be

So to on it’s do. different the up input expect based I a make estimate you get do that talking an what of difficult significant very people to will not real economy down. the change or

estimate be exactly is think who in put and now, in right utilization okay. that what the my guidance I currently our in of it have will is our for of will GDP happen. things steady. are they stay But where it’s -- to growth, what’s But knows going terms we best terms

very Understood. much. Thank you

you, Thank Chris.

Thank you much. very

Kevin go our next over on move the We from Vertical will now which from comes Partners. McCarthy to question Research ahead. Please phone,

This Murphy questions Two Kevin. project on your for morning. Good Hi. Cory is pipeline. on

by is in the be as Thank on helpful? slide what projects C$XXX electronics, net $XXX that and increase have in see Alberta major might project you. are zero have What million And activity would expectations? you return size and in your of projects and second, any electronics, $X.X I billion. though in to billion hydrogen on timing, it can increased you appears on future First, press million then release XX impact Taiwan. highlighted Why project the color provide C$X.X that in major location

Sure.

what compensate of to customer very got increase about is also return a finalized Canadian and in was project they because the of adjusted the The prices wanted. once bit operation, respect we terms little that In good, still to Scope changes on with that. for we the with our

they more that, have the project they few details. we expect will to have are projects, downside with the doing. the So semiconductor customers us the I don’t With the the in are big you we it what where customers about say and anybody $XXX Taiwan I than agreement But don’t want project disclosed, next have the in to the for what we that under to electronic million manufacturer. and actually, weeks. more want about because on very don’t know confidentiality and can’t because any say It’s is some to respect talk

can the guess people. for is other one you that and So other is some almost what

already we been, So -- what the more by restrictions give our more I be can’t any have you any customers. of because specific than

much. Understood. Thank very you

Yeah.

you. Thank

comes next question We will over the on ahead. phone, Alexander go Please now from Jefferies. move our to which from Laurence

is Rizzo Thank Laurence. you. question. my Dan for Thank This on you for taking

or disruptions a affecting your was little supply chain wondering about some well. are mentioned COVID You if operations operations bit affecting they as in I projects China. and customer’s your

Well, because that, the to mentioned of did we caused, these operations, because have it and costs our our distribution is the affect reason causes lockdowns of they affect plans most it to some down. shut sometimes

mentioned So effect the on because we operations. Yes. they it our an did reason is have

given it’s the a considering you something know rates, debt given are a current focus potentially question, wondering if final pay down but costs? And solid have you just elevating interest was all? the just mean, rating, with just at I environment I that is I

corporate based rates bonds. is of billion bonds, of our which not approximately have our billion, okay. -- where form them will when the we pay debt Well, in -- It’s amounts of pay in -- significant of debt. you we to payments. that on $X.X and debt those, can debt, of you see it $X we have And we fixed are supposed bond interest is Most most schedule our are the so disclose the down down

Thank much. you right. All very

you. Sure. Thank Thank you.

you. Thank

We to will go from question from on now next comes Eric Please the Petrie phone, ahead. move over Citi. our which

morning, Seifi. Good Hi.

you? are how Eric, Hi,

cells heavy-duty or developing fuel update Cummins from and potential Any with Good. expected for milestones trucks? your MOU

They development are have the the are trucks. they -- forward and and truck on receiving looking are it working we they and the and

in delayed And a of to the we continue terms schedule I with they think are that have us. -- we have I they working are that… say But bit them. promised little

Great.

other working with just … It’s Cummins. people, we not also too. are

you costs How York think, going and your hydrogen $XX see Okay. a CapEx costs? roughly and the per in between project, projects do translates New million for I power that hydrogen forward And then green day. liquefication on green ton to future electrolyzer, reduction

the much dependent terms things cost the have do work projects to to existing in you building going. in down. site, significantly to are a what real to how don’t terms have location is green for the is that. of Well, of get But order expect come do, you of in There cost project hydrogen do no I greenfield very reason much sites, that

about down of hydrogen two, the fact go that the of thing will cost a inflation. the not the and And myth, electrolyzers this number have cost electrolyzers building facility. significant We green is one, of part are number a

something building now from the two So who. real or years from will be promoted somebody, that years is five by plant But don’t world, I three a higher now the of or in know of just from inflation. now cost years because

these build the things, is. it you sooner better the So

Thank you.

That Thank okay? Sure. you.

you. Thank

go We next will from ahead. which over Please now question move on to our comes from phone, the Sebastian Bray Berenberg.

and two, thank would morning taking Good I have my questions. for please. Hello. you

it $XXX the earlier in to to years Products plausible was CapEx Air on three charge the next I two the three for this refinancing one for the up My follows investments. changes expansion current look space question number costs. years, years or XXXX schedule years? If That’s interest Scope the or the two one first is on be first would million. of on interest in at Melissa, double my in question. The and the over second

that Thank three the or there and blue upscaled. chance could you. Is $X.X happen two had at hydrogen to the a same have thing billion We investments be all Louisiana project?

answer you with project to had Louisiana. have the question the second and the that will had Okay. Melissa first that question respect I in you

a the Scope Scope for and of Reduction increased increase the that about as actually the Investment based change project and on looking the capital are project. we cost We might Scope, Act the result, and that

that advantage what So conclude the terms all of take depends the to we options what is us on for in of best legislation.

we of or depending know, we do. it decide billion we is Scope possible say, the that we I $X that now, that project and project, would, on on years a to now, yeah, increased spent, have that what year two from $X don’t billion So, from

now, would the Melissa, you So, answer like please? question, to first

you, Seifi. Thank Yeah.

right are said, have where But the That to next So we being rates a that having now, going Obviously, debt we ball. crystal we lot market, and given market talked the current a in evaluating near-term. to rate our ball have to year. crystal up in obviously, AAX given access double liquidity the we anticipate interest go. a market our we moving a about to the of actually we obtained don’t don’t go always are don’t to the level rating. them anticipate the But

That’s taking you helpful. questions. my for Thank

Yeah. Thank you.

Yeah. Thank you.

over at over time. queued I conference you, questions phone back are would Mr. the no like additional closing turn any further remarks. this There or for to sir, the Ghasemi, to

for would to appreciate just results interest Yeah. to you our and your look forward discussing presentation. Thank you again like very with our much. we We next everybody to thank I listening quarter.

the very As very you. for much appreciate and very I said Have Thank day. a earlier, you much We all please and the questions. it. healthy great Thank very and good thank you also best. stay safe

and Ladies conclude for very Thank this for today’s call. your much speakers. much Thank does participation. you very the you gentlemen,

disconnect. You may now