By any measurement, fiscal 2007 was the best year in our 25-year history. A strong U.S. economy, a favorable pricing environment driven by higher energy costs and tight supply conditions, and solid execution by Airgas associates led to record earnings and cash flow. On an adjusted basis, we grew earnings 30 percent to $2.00 per diluted share from continuing operations. Net EPS grew to $1.92. Return on capital improved 150 basis points to 13.3 percent. Total revenues grew 13 percent to $3.2 billion.

It was also a record year for acquisitions, with more than $335 million in acquired revenue in 13 transactions, including important core acquisitions of Aeriform and Union Industrial Gas Group. The year’s largest acquisition added the divested Linde U.S. bulk gas business, which now operates as Airgas Merchant Gases. The product-line acquisition of CFC Refimax added refrigerant supply and reclamation offerings to Airgas Specialty Products, further leveraging our infrastructure. At year-end, we announced the Linde packaged gas acquisition, the largest in our 25-year history, which will add another $346 million in acquired revenue, ensuring that fiscal 2008 will be another record year for acquisitions.

And to top it all off, we celebrated our 25th Anniversary in 2007. Recently, Les Graff, Airgas’ senior vice president of corporate development, asked me, “What was the most exciting time in Airgas’ 25-year history?” I thought about it for two or three seconds and answered, “Now!” We both laughed, because we both knew I would have answered the same way two years ago, 10 years ago, or back in 1982 when Tom Mason and I founded the company.

It has always been that way at Airgas. We focus on making Airgas better right “Now!”— by winning new customers, by adapting new technology, and by getting more efficient and effective in every aspect of our business. Airgas truly is a “Now!” kind of company. We are mindful of our history and that of our industry, and we have looked back to learn from our mistakes. We also look to the future and have developed forward-thinking strategies that have changed our industry in the past quarter-century. Yet, we spend most of our time executing on current opportunities. We feel a sense of urgency to move forward, and we do! That is why “Now!” is my favorite time at Airgas, and why I start this letter by telling you what is happening right “Now!” After that, I will look back on our 25 years and highlight those things most important to our success. So, let’s begin, right “Now!”

Airgas Right Now

As I write this letter, we are preparing to complete the biggest acquisition in our history. The addition of Linde’s U.S. packaged gas business will strengthen our core packaged gas business with another 130 locations in 18 states, filling out our network in the key Pittsburgh-to-Chicago corridor, and strengthening our presence in other important geographies in the eastern U.S.

Letter Continued…