Air Products and Chemicals, Inc.

Please stand by. Good morning and welcome to Air Products' second 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 Megan Britt.

Hello and welcome to the second quarter fiscal 2026 earnings conference call for Air Products. Our prepared remarks today will be led by Eduardo Menezes, Chief Executive Officer, and Melissa Schaefer, Chief Financial Officer. We have prepared presentation slides to supplement our remarks during the call, which are posted on the investor relations section of the Air Products website. During this call, we'll make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including but not limited to those discussed on this call and in the forward-looking statements and risk factor sections of our reports filed with or furnished to the SEC. We do not undertake any duty to update any forward-looking statements. Please note in today's presentation, we will refer to various financial measures, including earnings per share, capital expenditures, operating income, operating margin, the effective tax rate, ROC, and net debt to EBITDA on a total company basis. Unless we specifically state otherwise, statements regarding these measures refer to our adjusted non-GAAP financial measures. Reconciliations of these measures to our most directly comparable GAAP financial measures can be found on our investor website in the relevant earnings release section. It's now my pleasure to turn the call over to Eduardo.

Thank you, Megan. Hello, and thank you for joining our call today. Before we begin, I want to take a moment to express my appreciation to the entire Air Products team, especially the more than 3,000 employees of our direct operations and minority-owned joint ventures in the Middle East. During this period of uncertainty, our people have continued to show dedication, staying focused on safety, reliably serving our customers, and supporting critical projects and operations. Now, please turn to slide three. Earlier today, we reported results for the second quarter of fiscal 2026. We delivered a broad-based operating income improvement across our reporting segments. Earnings per share of $3.20 increased 19% compared to the prior year quarter on improved volumes, productivity, and currency. We also experienced reduced headwinds from helium with volumes better than expected due to aerospace. Our operating margin of 23.7% was also up compared to the prior year quarter, reflecting strong underlying volumes, particularly in our on-site business, as well as the continued benefit of cost productivity. Return on capital of 11.4% was in line with prior year and improved sequentially. Overall, we were able to improve our business performance during the first half of the fiscal year and effectively manage the market dynamics that have emerged due to the recent Middle East conflict. Moving to slide four, we remain focused on three key priorities for 2026, consistent with our strategic roadmap. On unlocking earnings growth, we are raising our full-year earnings guidance which now implies an improvement of 8% to 10% at the midpoint of the full fiscal year. We expect EPS growth to be achieved primarily through our continued focus on pricing actions, productivity, and new asset contributions. Additionally, we anticipate a more favorable operating environment in the second half for improved volumes in several key end markets, including refining, electronics, and aerospace. On our second priority, we continue to make progress on optimizing our large project portfolio. On NEON, negotiations on a marketing and distribution agreement with FIARA are progressing in line with expectations. The project continues to make progress and is ready to produce renewable power that will be used in the commissioning of the hydrogen and ammonia plants. Notably, activities at NEON have not been impacted by recent events in the Middle East. We continue to monitor the situation closely and prioritize safety. On the Louisiana project, we have set a high bar for moving forward where we require a reliable capital cost estimate and construction agreements that meet our project risk-adjusted return requirements. We are currently reviewing construction needs from EPC firms and remain committed to reaching a goal-no-goal decision in conjunction with our partners by the middle of this calendar year. Finally, on our third priority, maintaining capital discipline, we are staying focused on our capital allocation, investing growth projects, and returning cash to shareholders. As we have previously indicated, we expect to reduce our capital expenditure by approximately $1 billion in fiscal 2026 and remain on track to achieve that objective. We are focused on investing in our backlog of traditional industrial gas projects and have strengthened our project pipeline in electronics and aerospace. In the electronics area, we are currently executing approximately $1 billion in ASU and hydrogen projects in Asia for several multi-phase projects serving semiconductor and memory customers. We expect to add another $1.5 to $2 billion to the backlog in the next six months, including the project we announced yesterday to build on and operate multiple production facilities and bulk specialty gas supply systems for a new advanced fab with Samsung in South Korea. We also have announced our intent to build on and operate a new ASU in Florida to further enhance our support for our space launch customers. Lastly, we remain committed to disciplined capital allocations that ensures that we are well positioned to continue our strong track record of returning cash to our shareholders. In the first half of fiscal 2026, we have returned $800 million to shareholders in the form of dividends. Please turn to slide five. As has been widely reported, recent events in the Middle East have resulted in containment of hidden supply from Qatar. Heating is an important product line for our products, with the largest end-market sales in electronics, aerospace, and medical. Air Products' heating supply chain is very resilient, with, one, multiple sources in the U.S., in addition to our long-term partnerships in Algeria with Sonatrac and in Qatar with Qatar Energy, two, a dedicated heating storage cabinet in Texas, which has been operational for nearly five years. The cabin contains a significant volume, allowing us to provide high supply reliability to our customers when one of our sources is unable to produce as we are now experiencing. And three, a large helium isocontainer fleet produced by our subsidiary Gardner Cryogenics, which provides flexibility and responsiveness in managing supply flows during periods of uncertainty. Since the beginning of the conflict, we have activated our contingency plans, drawing product from the cavern, and positioning our container fleet to bypass conflict-affected areas. We look forward to our partners in Qatar resuming normal production as soon as possible, but until that can be achieved, we are well positioned to enable supply chain resilience through this current supply disruption. We are working very closely with our customers to meet our commitments to them and capture long-term volume growth in critical end markets. Moving to slide six, before Melissa shares detailed quarterly performance, I wanted to offer some additional context on end market conditions. Given the ongoing conflict in the Middle East, we are closely engaged with key customers in each end market. We are also working strategically beyond current events to fully participate in compelling in-market growth. Entering the fiscal year, we held a relatively conservative view, giving muted outlooks for industrial production and manufacturing growth. Now, with our performance through the first half, we are more confident about a sustained level of industrial activity and the potential for continued volume growth in some areas. Though the ongoing conflict in the Middle East introduces some uncertainty, we expect a combination of favorable dynamics in core and markets and some new wins to support volume improvement. Looking at a few highlights, we see strong run rates across our refining customer base, particularly in the U.S. Gulf Coast, where we serve a large number of complex refineries that can process heavy sour crudes and produce high-demand products such as jet fuel. We expect U.S. refineries to continue to run hard, which will support higher on-site volumes. Moving to chemicals, we are closely monitoring supply chain conditions that could impact volumes. In Europe, challenges securing feedstocks and high costs that customers cannot mitigate with pricing could have an impact on run rates. Beyond Europe, volumes are relatively stable. Additionally, we expect to see stronger oxygen demand from our coal gasification customers in China, where increased oil and LNG costs are supporting higher volumes. Electronics and aerospace continue to be bright spots. We have historically had a meaningful percentage of our sales in electronics and are benefiting from increased volumes in this end market due to a new asset on stream this year. The industry is in the midst of a historical super cycle period to satisfy AI demands with record CapEx expenditures projected between now and 2030. This expansion will generate expansion opportunities for industrial gas providers. Currently, we're working closely with our large, long-term electronic customers on heating supply. Already, with the long-term agreement signed during the last six months, we expect our heating volumes to large electronic customers in Asia to more than double between 2026 and 2030. Finally, in aerospace, we'll continue to see volume improvement in launches, engine testing, and manufacturing. We were very proud to be part of the recent NASA Artemis II mission, where our products supplied liquid hydrogen and liquid heating using our proprietary liquid heating pumps. We see a tremendous opportunity to continue to grow in the space area, and our recently announced Florida ASU investment is expected to increase our participation with both NASA and commercial launches. Now, I'll turn the call over to Melissa to discuss our financial results in greater depth and review our 2026 outlook. Melissa?