LEHIGH VALLEY, Pa.,
April 30, 2015 /PRNewswire/ --
- EPS of $1.55*, up 17 percent*
versus prior year on a non-GAAP diluted basis
- Adjusted EBITDA margin of 29.4* percent up 440* basis points
versus prior year
- Continued strong performance despite currency headwinds
- Organization focused on five-point plan and delivering
results
- Awarded contract with Saudi Aramco for the world's largest
industrial gas complex
- EPS of $1.33 versus prior year of
$1.32 on a GAAP diluted basis
Air Products (NYSE: APD) today reported net income of
$336 million*, up 19 percent* versus
prior year, and diluted earnings per share (EPS) of $1.55*, up 17 percent* versus prior year for its
fiscal second quarter ended March 31,
2015.
On a GAAP basis, net income and diluted EPS from continuing
operations were $290 million and
$1.33, respectively, for the
quarter.
*The results and guidance in this release, unless otherwise
indicated, are based on non-GAAP continuing operations. A
reconciliation of GAAP to non-GAAP results can be found at the end
of this release.
Second quarter sales of $2,415
million decreased six percent versus prior year, as
underlying sales growth of five percent was more than offset by
unfavorable currency and lower energy pass-through. Volumes
increased four percent, primarily in Industrial
Gases–Asia and Materials
Technologies, and pricing was up one percent. Sequentially, sales
declined six percent on unfavorable currency and lower energy
pass-through.
Operating income of $442 million
increased 15 percent versus prior year, and operating margin of
18.3 percent improved 340 basis points. Adjusted EBITDA of
$709 million increased 10 percent
over prior year, and EBITDA margin of 29.4 percent improved 440
basis points, reflecting strong operating leverage.
Commenting on the quarter, Seifi
Ghasemi, chairman, president and chief executive officer,
said, "I am, once again, very proud of the Air Products team, whose
hard work and focus on our five-point plan have enabled us to
deliver these strong results, even in the face of significant
currency headwinds. Despite economic uncertainty, we remain laser
focused on the things we can control and are maintaining our
full-year guidance."
Second Quarter Results by Business Segment:
- Industrial Gases – Americas sales of $890 million decreased 14 percent versus prior
year on 13 percent lower energy pass-through and three percent
unfavorable currency. Underlying sales were up two percent,
primarily on higher North America
liquid bulk and hydrogen volumes. Despite energy and currency
headwinds, operating income of $182
million increased seven percent on improved cost performance
and higher volumes and pricing. Operating margin of 20.4 percent
improved 400 basis points over prior year. Adjusted EBITDA of
$300 million increased seven percent,
and EBITDA margin of 33.7 percent improved 640 basis points over
prior year. Sequentially, operating income decreased 14 percent as
the benefit of restructuring actions was more than offset by the
impact from currency, lower volumes and energy pass-through.
- Industrial Gases – Europe,
Middle East, and Africa (EMEA) sales of $449 million declined 17 percent versus last year
on 15 percent unfavorable currency. Underlying sales were flat, as
higher pricing offset lower volumes. Operating income of
$71 million decreased 19 percent and
adjusted EBITDA of $127 million
decreased 17 percent versus prior year, primarily on the
significant unfavorable currency impact.
- Industrial Gases – Asia
sales of $393 million increased seven
percent versus prior year despite the negative impact of currency
and energy pass-through. Volumes increased 15 percent, primarily on
strong volume growth from new plants. Operating income of
$85 million increased 19 percent, and
operating margin of 21.6 percent improved 210 basis points over
prior year due to higher volumes from the new plants and favorable
cost performance. Adjusted EBITDA of $144
million increased 14 percent, and EBITDA margin of 36.7
percent improved 200 basis points over prior year. Sequentially,
operating income decreased six percent on higher costs, unfavorable
currency and lower pricing.
- Materials Technologies sales of $533 million increased seven percent over the
prior year. Underlying sales were up 11 percent on nine percent
higher volume growth and two percent positive pricing. Electronics
Materials sales were up 16 percent on strong volume growth in all
business units and positive price. Performance Materials sales
declined one percent from the prior year as four percent underlying
sales growth was offset by currency impacts. Operating income of
$124 million increased 32 percent,
and operating margin of 23.3 percent improved 450 basis points
versus prior year, primarily due to higher volumes and pricing.
Adjusted EBITDA of $148 million
increased 27 percent, and EBITDA margin of 27.8 percent improved
440 basis points over prior year.
Non-GAAP results for the company exclude a pre-tax charge of
$55.4 million, or $0.18 per share, for business restructuring and
cost reduction actions, and a pre-tax pension settlement charge of
$12.6 million, or $0.04 per share.
Outlook
Air Products now expects capital expenditures for fiscal year
2015 of about $1.7 billion, at the
low-end of its previous forecast.
Looking ahead, Air Products expects third quarter EPS from
continuing operations to be between $1.55
and $1.60 per share. For the full fiscal year, the Company
is maintaining its guidance from continuing operations of
$6.35 to $6.55 per share, which at
the midpoint, represents a 12 percent increase over fiscal
2014.
Access the Q2 earnings teleconference scheduled for
10:00 a.m. Eastern Time on
April 30 by calling 877-719-9801
(domestic) or 719-325-4818 (international) and entering passcode
5572123, or access the Event Details page on Air
Products' Investor Relations web site.
About Air Products
Air Products (NYSE: APD) is a leading industrial gases company. For
nearly 75 years, the Company has provided atmospheric, process and
specialty gases, and related equipment to manufacturing markets,
including metals, food and beverage, refining and petrochemical,
and natural gas liquefaction. Air Products' Materials Technologies
segment serves the semiconductor, polyurethanes, cleaning and
coatings, and adhesives industries. Over 20,000 employees in 50
countries are working to make Air Products the world's safest and
best performing industrial gases company, providing sustainable
offerings and excellent service to all customers. In fiscal 2014,
Air Products had sales of $10.4
billion and was ranked number 276 on the Fortune 500 annual
list of public companies. For more information, visit
www.airproducts.com.
NOTE: This release contains "forward-looking statements"
within the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements about earnings
guidance and business outlook. These forward-looking statements are
based on management's reasonable expectations and assumptions as of
the date of this release. Actual performance and financial results
may differ materially from projections and estimates expressed in
the forward-looking statements because of many factors not
anticipated by management, including, without limitation, global or
regional economic conditions and supply and demand dynamics in
market segments into which the Company sells; significant
fluctuations in interest rates and foreign currencies from that
currently anticipated; future financial and operating performance
of major customers; unanticipated contract terminations or customer
cancellations or postponement of projects and sales; the impact of
competitive products and pricing; ability to protect and enforce
the Company's intellectual property rights; unexpected changes in
raw material supply and markets; the impact of price fluctuations
in natural gas and disruptions in markets and the economy due to
oil price volatility; the ability to recover increased energy and
raw material costs from customers; costs and outcomes of litigation
or regulatory investigations; the impact of management and
organizational changes; the success of productivity and cost
reduction programs; the timing, impact, and other uncertainties of
future acquisitions or divestitures; political risks, including the
risks of unanticipated government actions; acts of war or
terrorism; the impact of changes in environmental, tax or other
legislation and regulatory activities in jurisdictions in which the
Company and its affiliates operate; and other risk factors
described in the Company's Form 10-K for its fiscal year ended
September 30, 2014. The Company
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained in this
release to reflect any change in the Company's assumptions, beliefs
or expectations or any change in events, conditions, or
circumstances upon which any such forward-looking statements are
based.
* Presented below are reconciliations of the reported GAAP
results to the non-GAAP measures.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Millions of dollars unless otherwise indicated,
except for share data)
The discussion of second quarter and year-to-date results
includes comparisons to non-GAAP financial measures, including
Adjusted EBITDA and non‑GAAP Capital Expenditures. The presentation
of non-GAAP measures is intended to enhance the usefulness of
financial information by providing measures which management uses
internally to evaluate our operating performance and manage our
capital expenditures.
We use non-GAAP measures to assess our operating performance by
excluding certain disclosed items that we believe are not
representative of our underlying business. We believe non-GAAP
financial measures provide investors with meaningful information to
understand our underlying operating results and to analyze
financial and business trends. Non-GAAP financial measures,
including Adjusted EBITDA, should not be viewed in isolation, are
not a substitute for GAAP measures, and have limitations which
include but are not limited to:
- Our measure excludes certain disclosed items, which we do not
consider to be representative of underlying business operations.
However, these disclosed items represent costs (benefits) to the
Company.
- Though not business operating costs, interest expense and
income tax provision represent ongoing costs of the Company.
- Depreciation, amortization, and impairment charges represent
the wear and tear and/or reduction in value of the plant,
equipment, and intangible assets which permit us to manufacture
and/or market our products.
- Other companies may define non-GAAP measures differently than
we do, limiting their usefulness as comparative measures.
A reader may find any one or all of these items important in
evaluating our performance. Management compensates for the
limitations of using non-GAAP financial measures by using them only
to supplement our GAAP results to provide a more complete
understanding of the factors and trends affecting our business. In
evaluating these financial measures, the reader should be aware
that we may incur expenses similar to those eliminated in this
presentation in the future.
CONSOLIDATED
RESULTS
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Continuing
Operations
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Q2
|
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YTD
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Operating
|
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Operating
|
|
Net
Income
|
|
Diluted
|
|
Operating
|
|
Operating
|
|
Net
Income
|
|
Diluted
|
|
2015 Q2 vs. 2014
Q2
|
|
Income
|
|
Margin
|
|
|
EPS
|
|
Income
|
|
Margin
|
|
|
EPS
|
|
2015 Q2
GAAP
|
|
$
|
374.4
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|
|
15.5%
|
|
|
$
|
290.0
|
|
|
$
|
1.33
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$
|
804.4
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16.2%
|
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$
|
614.6
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|
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$
|
2.83
|
|
2014 Q2
GAAP
|
|
|
384.7
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|
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14.9%
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|
283.5
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|
1.32
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|
770.3
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15.0%
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570.6
|
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|
2.66
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Change
GAAP
|
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$
|
(10.3)
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60bp
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$
|
6.5
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$
|
.01
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$
|
34.1
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120bp
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|
$
|
44.0
|
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$
|
.17
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% Change
GAAP
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(3)%
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2%
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1%
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4%
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8%
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6%
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|
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|
|
|
|
|
|
2015 Q2
GAAP
|
|
$
|
374.4
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|
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|
15.5%
|
|
|
$
|
290.0
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$
|
1.33
|
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$
|
804.4
|
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|
16.2%
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$
|
614.6
|
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$
|
2.83
|
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Business
restructuring and cost reduction
|
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actions (tax impact
$17.2 and $27.9)
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55.4
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2.3%
|
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|
38.2
|
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|
|
.18
|
|
|
|
87.8
|
|
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|
1.7%
|
|
|
|
59.9
|
|
|
|
.27
|
|
Pension settlement
loss (tax impact $4.7)
|
|
|
12.6
|
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|
|
.5%
|
|
|
|
7.9
|
|
|
|
.04
|
|
|
|
12.6
|
|
|
|
.3%
|
|
|
|
7.9
|
|
|
|
.04
|
|
Gain on previously
held equity interest
|
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(tax impact
$6.7)
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-
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-
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|
-
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|
-
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(17.9)
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(.4)%
|
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|
(11.2)
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|
(.05)
|
|
2015 Q2 Non-GAAP
Measure
|
|
$
|
442.4
|
|
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18.3%
|
|
|
$
|
336.1
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|
|
$
|
1.55
|
|
|
$
|
886.9
|
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17.8%
|
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|
$
|
671.2
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|
$
|
3.09
|
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|
2014 Q2
GAAP
|
|
$
|
384.7
|
|
|
|
14.9%
|
|
|
$
|
283.5
|
|
|
$
|
1.32
|
|
|
$
|
770.3
|
|
|
|
15.0%
|
|
|
$
|
570.6
|
|
|
$
|
2.66
|
|
2014 Q2 Non-GAAP
Measure
|
|
$
|
384.7
|
|
|
|
14.9%
|
|
|
$
|
283.5
|
|
|
$
|
1.32
|
|
|
$
|
770.3
|
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|
15.0%
|
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$
|
570.6
|
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$
|
2.66
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Change Non-GAAP
Measure
|
|
$
|
57.7
|
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|
340bp
|
|
|
$
|
52.6
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|
|
$
|
.23
|
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|
$
|
116.6
|
|
|
|
280bp
|
|
|
$
|
100.6
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$
|
.43
|
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% Change Non-GAAP
Measure
|
|
|
15%
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19%
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17%
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15%
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18%
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16%
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QTD
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Operating
|
|
Operating
|
|
Net
Income
|
|
Diluted
|
|
|
|
2015 Q2 vs. 2015
Q1
|
|
Income
|
|
Margin
|
|
|
EPS
|
|
|
|
2015 Q2
GAAP
|
|
$
|
374.4
|
|
|
|
15.5%
|
|
|
$
|
290.0
|
|
|
$
|
1.33
|
|
|
|
2015 Q1
GAAP
|
|
|
430.0
|
|
|
|
16.8%
|
|
|
|
324.6
|
|
|
|
1.50
|
|
|
|
Change
GAAP
|
|
$
|
(55.6)
|
|
|
|
(130bp)
|
|
|
$
|
(34.6)
|
|
|
$
|
(.17)
|
|
|
|
% Change
GAAP
|
|
|
(13)%
|
|
|
|
|
|
|
|
(11)%
|
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|
|
(11)%
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
2015 Q2
GAAP
|
|
$
|
374.4
|
|
|
|
15.5%
|
|
|
$
|
290.0
|
|
|
$
|
1.33
|
|
|
|
Business
restructuring and cost reduction actions (tax impact
$17.2)
|
|
55.4
|
|
|
|
2.3%
|
|
|
|
38.2
|
|
|
|
.18
|
|
|
|
Pension settlement
loss (tax impact $4.7)
|
|
12.6
|
|
|
|
.5%
|
|
|
|
7.9
|
|
|
|
.04
|
|
|
|
2015 Q2 Non-GAAP
Measure
|
|
$
|
442.4
|
|
|
|
18.3%
|
|
|
$
|
336.1
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Q1
GAAP
|
|
$
|
430.0
|
|
|
|
16.8%
|
|
|
$
|
324.6
|
|
|
$
|
1.50
|
|
|
|
Business
restructuring and cost reduction actions (tax impact
$10.7)
|
|
32.4
|
|
|
|
1.3%
|
|
|
|
21.7
|
|
|
|
.10
|
|
|
|
Gain on previously
held equity interest (tax impact $6.7)
|
|
(17.9)
|
|
|
|
(.7)%
|
|
|
|
(11.2)
|
|
|
|
(.05)
|
|
|
|
2015 Q1 Non-GAAP
Measure
|
|
$
|
444.5
|
|
|
|
17.4%
|
|
|
$
|
335.1
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change Non-GAAP
Measure
|
|
$
|
(2.1)
|
|
|
|
90bp
|
|
|
$
|
1.0
|
|
|
$
|
-
|
|
|
|
% Change Non-GAAP
Measure
|
|
|
–%
|
|
|
|
|
|
|
|
–%
|
|
|
|
–%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA
We define Adjusted EBITDA as income from continuing operations
(including noncontrolling interests) excluding certain disclosed
items, which the Company does not believe to be indicative of
underlying business trends, before interest expense, income tax
provision, and depreciation and amortization expense. Adjusted
EBITDA provides a useful metric for management to assess operating
performance.
Below is a reconciliation of Income from Continuing Operations
on a GAAP basis to Adjusted EBITDA:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
YTD
|
|
|
2015
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Total
|
|
|
Income from
Continuing Operations(A)
|
$
|
337.5
|
|
|
|
296.9
|
|
|
|
|
|
|
|
|
|
|
$
|
634.4
|
|
|
Add: Interest
expense
|
|
29.1
|
|
|
|
23.4
|
|
|
|
|
|
|
|
|
|
|
|
52.5
|
|
|
Add: Income tax
provision
|
|
106.5
|
|
|
|
87.1
|
|
|
|
|
|
|
|
|
|
|
|
193.6
|
|
|
Add: Depreciation and
amortization
|
|
235.5
|
|
|
|
233.3
|
|
|
|
|
|
|
|
|
|
|
|
468.8
|
|
|
Add: Business
restructuring and cost reduction actions
|
|
32.4
|
|
|
|
55.4
|
|
|
|
|
|
|
|
|
|
|
|
87.8
|
|
|
Add: Pension
settlement loss
|
|
-
|
|
|
|
12.6
|
|
|
|
|
|
|
|
|
|
|
|
12.6
|
|
|
Less: Gain on
previously held equity interest
|
|
17.9
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
17.9
|
|
|
Adjusted
EBITDA
|
$
|
723.1
|
|
|
|
708.7
|
|
|
|
|
|
|
|
|
|
|
$
|
1,431.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
YTD
|
|
|
2014
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Total
|
|
|
Income from
Continuing Operations(A)
|
$
|
296.0
|
|
|
$
|
291.5
|
|
|
$
|
323.5
|
|
|
$
|
77.5
|
|
|
$
|
587.5
|
|
|
Add: Interest
expense
|
|
33.3
|
|
|
|
31.5
|
|
|
|
31.3
|
|
|
|
29.0
|
|
|
|
64.8
|
|
|
Add: Income tax
provision
|
|
94.5
|
|
|
|
92.1
|
|
|
|
102.1
|
|
|
|
77.3
|
(B)
|
|
|
186.6
|
|
|
Add: Depreciation and
amortization
|
|
234.2
|
|
|
|
229.1
|
|
|
|
239.0
|
|
|
|
254.6
|
|
|
|
463.3
|
|
|
Add: Business
restructuring and cost reduction actions
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12.7
|
|
|
|
-
|
|
|
Add: Pension
settlement loss
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5.5
|
|
|
|
-
|
|
|
Add: Goodwill and
intangible asset impairment charge
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
310.1
|
|
|
|
-
|
|
|
Adjusted
EBITDA
|
$
|
658.0
|
|
|
$
|
644.2
|
|
|
$
|
695.9
|
|
|
$
|
766.7
|
|
|
$
|
1,302.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)Includes net income attributable to
noncontrolling interests.
|
|
|
(B)Includes an income tax benefit of $51.6
from the favorable impact of a tax election in a non-U.S.
subsidiary partially offset by $20.6 of income
|
|
|
tax expense from
Chilean tax reform.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 vs.
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
65.1
|
|
|
$
|
64.5
|
|
|
|
|
|
|
|
|
|
|
$
|
129.6
|
|
|
Adjusted EBITDA %
change
|
|
10
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Q2 vs. 2015
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
|
|
|
|
$
|
(14.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA %
change
|
|
|
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Below is a reconciliation of segment Operating Income to
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
|
|
|
Energy-
|
|
|
|
|
|
|
|
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Materials
|
|
from-
|
|
Corporate
|
|
Segment
|
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
Global
|
|
Technologies
|
|
Waste
|
|
and other
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
182.0
|
|
$
|
71.0
|
|
$
|
84.7
|
|
$
|
(7.9)
|
|
$
|
124.2
|
|
$
|
(2.8)
|
|
$
|
(8.8)
|
|
$
|
442.4
|
|
Add: Depreciation and
amortization
|
|
103.3
|
|
|
47.6
|
|
|
50.3
|
|
|
5.5
|
|
|
23.3
|
|
|
-
|
|
|
3.3
|
|
|
233.3
|
|
Add: Equity
affiliates' income (loss)
|
|
15.1
|
|
|
8.0
|
|
|
9.4
|
|
|
(.2)
|
|
|
.7
|
|
|
-
|
|
|
-
|
|
|
33.0
|
|
Adjusted
EBITDA
|
$
|
300.4
|
|
$
|
126.6
|
|
$
|
144.4
|
|
$
|
(2.6)
|
|
$
|
148.2
|
|
$
|
(2.8)
|
|
$
|
(5.5)
|
|
$
|
708.7
|
|
Adjusted EBITDA
margin
|
|
33.7%
|
|
|
28.2%
|
|
|
36.7%
|
|
|
|
|
|
27.8%
|
|
|
|
|
|
|
|
|
29.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
169.6
|
|
$
|
87.5
|
|
$
|
71.2
|
|
$
|
(14.6)
|
|
$
|
93.8
|
|
$
|
(3.5)
|
|
$
|
(19.3)
|
|
$
|
384.7
|
|
Add: Depreciation and
amortization
|
|
99.4
|
|
|
55.0
|
|
|
48.1
|
|
|
1.6
|
|
|
22.7
|
|
|
-
|
|
|
2.3
|
|
|
229.1
|
|
Add: Equity
affiliates' income
|
|
12.6
|
|
|
9.3
|
|
|
7.6
|
|
|
.3
|
|
|
.6
|
|
|
-
|
|
|
-
|
|
|
30.4
|
|
Adjusted
EBITDA
|
$
|
281.6
|
|
$
|
151.8
|
|
$
|
126.9
|
|
$
|
(12.7)
|
|
$
|
117.1
|
|
$
|
(3.5)
|
|
$
|
(17.0)
|
|
$
|
644.2
|
|
Adjusted EBITDA
margin
|
|
27.3%
|
|
|
28.0%
|
|
|
34.7%
|
|
|
|
|
|
23.4%
|
|
|
|
|
|
|
|
|
25.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
18.8
|
|
$
|
(25.2)
|
|
$
|
17.5
|
|
$
|
10.1
|
|
$
|
31.1
|
|
$
|
.7
|
|
$
|
11.5
|
|
$
|
64.5
|
|
Adjusted EBITDA %
change
|
|
7%
|
|
|
(17)%
|
|
|
14%
|
|
|
80%
|
|
|
27%
|
|
|
20%
|
|
|
68%
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin change
|
640bp
|
|
|
20bp
|
|
|
200bp
|
|
|
|
|
|
440bp
|
|
|
|
|
|
|
|
|
440bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
393.2
|
|
$
|
152.3
|
|
$
|
175.2
|
|
$
|
(25.8)
|
|
$
|
228.8
|
|
$
|
(5.3)
|
|
$
|
(31.5)
|
|
$
|
886.9
|
|
Add: Depreciation and
amortization
|
|
206.9
|
|
|
98.7
|
|
|
99.9
|
|
|
9.8
|
|
|
47.3
|
|
|
-
|
|
|
6.2
|
|
|
468.8
|
|
Add: Equity
affiliates' income
|
|
32.3
|
|
|
18.3
|
|
|
24.0
|
|
|
.2
|
|
|
1.3
|
|
|
-
|
|
|
-
|
|
|
76.1
|
|
Adjusted
EBITDA
|
$
|
632.4
|
|
$
|
269.3
|
|
$
|
299.1
|
|
$
|
(15.8)
|
|
$
|
277.4
|
|
$
|
(5.3)
|
|
$
|
(25.3)
|
|
$
|
1,431.8
|
|
Adjusted EBITDA
margin
|
|
33.4%
|
|
|
28.4%
|
|
|
37.8%
|
|
|
|
|
|
26.2%
|
|
|
|
|
|
|
|
|
28.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
354.1
|
|
$
|
172.7
|
|
$
|
153.9
|
|
$
|
(24.9)
|
|
$
|
158.1
|
|
$
|
(6.4)
|
|
$
|
(37.2)
|
|
$
|
770.3
|
|
Add: Depreciation and
amortization
|
|
203.4
|
|
|
109.9
|
|
|
94.5
|
|
|
3.3
|
|
|
47.2
|
|
|
-
|
|
|
5.0
|
|
|
463.3
|
|
Add: Equity
affiliates' income
|
|
30.2
|
|
|
19.0
|
|
|
17.2
|
|
|
1.0
|
|
|
1.2
|
|
|
-
|
|
|
-
|
|
|
68.6
|
|
Adjusted
EBITDA
|
$
|
587.7
|
|
$
|
301.6
|
|
$
|
265.6
|
|
$
|
(20.6)
|
|
$
|
206.5
|
|
$
|
(6.4)
|
|
$
|
(32.2)
|
|
$
|
1,302.2
|
|
Adjusted EBITDA
margin
|
|
29.7%
|
|
|
27.6%
|
|
|
34.9%
|
|
|
|
|
|
21.1%
|
|
|
|
|
|
|
|
|
25.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
44.7
|
|
$
|
(32.3)
|
|
$
|
33.5
|
|
$
|
4.8
|
|
$
|
70.9
|
|
$
|
1.1
|
|
$
|
6.9
|
|
$
|
129.6
|
|
Adjusted EBITDA %
change
|
|
8%
|
|
|
(11)%
|
|
|
13%
|
|
|
23%
|
|
|
34%
|
|
|
17%
|
|
|
21%
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin change
|
370bp
|
|
|
80bp
|
|
|
290bp
|
|
|
|
|
|
510bp
|
|
|
|
|
|
|
|
|
340bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL EXPENDITURES
We utilize a non-GAAP measure in the computation of capital
expenditures and include spending associated with facilities
accounted for as capital leases and purchases of noncontrolling
interests. Certain contracts associated with facilities that are
built to provide product to a specific customer are required to be
accounted for as leases and such spending is reflected as a use of
cash within cash provided by operating activities, if the
arrangement qualifies as a capital lease. Additionally, the
purchase of noncontrolling interests in a subsidiary is accounted
for as an equity transaction and is reflected as a financing
activity in the statement of cash flows.
Below is a reconciliation of capital expenditures on a GAAP
basis to a non-GAAP measure:
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
31 March
|
|
31 March
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
Capital expenditures
– GAAP basis
|
|
$
|
383.0
|
|
$
|
411.1
|
|
$
|
852.1
|
|
$
|
802.2
|
|
|
Capital lease
expenditures
|
|
|
15.3
|
|
|
51.0
|
|
|
47.2
|
|
|
99.1
|
|
|
Purchase of
noncontrolling interests in a subsidiary
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
.5
|
|
|
Capital expenditures
– Non-GAAP basis
|
|
$
|
398.3
|
|
$
|
462.1
|
|
$
|
899.3
|
|
$
|
901.8
|
|
|
|
|
|
FY2015
|
|
|
|
|
|
Forecast
|
|
|
Capital expenditures
- GAAP basis
|
|
$
|
1,650-1,700
|
|
|
Capital lease
expenditures
|
|
|
50-100
|
|
|
Capital expenditures
- Non-GAAP basis
|
|
$
|
1,700-1,800
|
|
OUTLOOK
Guidance provided is on a non-GAAP basis, which excludes the
impact of items that are non-operational in nature.
|
|
|
Diluted
EPS
|
|
|
2014
Non-GAAP
|
$
|
5.78
|
|
|
2015 Non-GAAP
Outlook
|
|
6.35–6.55
|
|
|
Change
Non-GAAP
|
$
|
.57–.77
|
|
|
% Change
Non-GAAP
|
|
10%–13%
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
INCOME STATEMENTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
31 March
|
|
|
31 March
|
|
|
(Millions of dollars,
except for share data)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
Sales
|
$
|
2,414.5
|
|
|
$
|
2,581.9
|
|
|
$
|
4,975.3
|
|
|
$
|
5,127.4
|
|
|
Cost of
sales
|
|
1,699.6
|
|
|
|
1,917.6
|
|
|
|
3,530.6
|
|
|
|
3,783.5
|
|
|
Selling and
administrative
|
|
240.9
|
|
|
|
263.4
|
|
|
|
499.1
|
|
|
|
544.3
|
|
|
Research and
development
|
|
36.3
|
|
|
|
33.2
|
|
|
|
71.7
|
|
|
|
66.7
|
|
|
Business
restructuring and cost reduction actions
|
|
55.4
|
|
|
|
-
|
|
|
|
87.8
|
|
|
|
-
|
|
|
Pension settlement
loss
|
|
12.6
|
|
|
|
-
|
|
|
|
12.6
|
|
|
|
-
|
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
|
-
|
|
|
|
17.9
|
|
|
|
-
|
|
|
Other income
(expense), net
|
|
4.7
|
|
|
|
17.0
|
|
|
|
13.0
|
|
|
|
37.4
|
|
|
Operating
Income
|
|
374.4
|
|
|
|
384.7
|
|
|
|
804.4
|
|
|
|
770.3
|
|
|
Equity affiliates'
income
|
|
33.0
|
|
|
|
30.4
|
|
|
|
76.1
|
|
|
|
68.6
|
|
|
Interest
expense
|
|
23.4
|
|
|
|
31.5
|
|
|
|
52.5
|
|
|
|
64.8
|
|
|
Income from
Continuing Operations before Taxes
|
|
384.0
|
|
|
|
383.6
|
|
|
|
828.0
|
|
|
|
774.1
|
|
|
Income tax
provision
|
|
87.1
|
|
|
|
92.1
|
|
|
|
193.6
|
|
|
|
186.6
|
|
|
Income from
Continuing Operations
|
|
296.9
|
|
|
|
291.5
|
|
|
|
634.4
|
|
|
|
587.5
|
|
|
Income from
Discontinued Operations, net of tax
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.1
|
|
|
Net
Income
|
|
296.9
|
|
|
|
291.5
|
|
|
|
634.4
|
|
|
|
590.6
|
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
6.9
|
|
|
|
8.0
|
|
|
|
19.8
|
|
|
|
16.9
|
|
|
Net Income
Attributable to Air Products
|
$
|
290.0
|
|
|
$
|
283.5
|
|
|
$
|
614.6
|
|
|
$
|
573.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
290.0
|
|
|
$
|
283.5
|
|
|
$
|
614.6
|
|
|
$
|
570.6
|
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.1
|
|
|
Net Income
Attributable to Air Products
|
$
|
290.0
|
|
|
$
|
283.5
|
|
|
$
|
614.6
|
|
|
$
|
573.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1.35
|
|
|
$
|
1.33
|
|
|
$
|
2.87
|
|
|
$
|
2.69
|
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
.01
|
|
|
Net Income
Attributable to Air Products
|
$
|
1.35
|
|
|
$
|
1.33
|
|
|
$
|
2.87
|
|
|
$
|
2.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1.33
|
|
|
$
|
1.32
|
|
|
$
|
2.83
|
|
|
$
|
2.66
|
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
.01
|
|
|
Net Income
Attributable to Air Products
|
$
|
1.33
|
|
|
$
|
1.32
|
|
|
$
|
2.83
|
|
|
$
|
2.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares — Basic (in millions)
|
|
214.9
|
|
|
|
212.4
|
|
|
|
214.5
|
|
|
|
212.1
|
|
|
Weighted Average
Common Shares — Diluted (in millions)
|
|
217.4
|
|
|
|
214.9
|
|
|
|
217.0
|
|
|
|
214.6
|
|
|
Dividends Declared
Per Common Share — Cash
|
$
|
.81
|
|
|
$
|
.77
|
|
|
$
|
1.58
|
|
|
$
|
1.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
233.3
|
|
|
$
|
229.1
|
|
|
$
|
468.8
|
|
|
$
|
463.3
|
|
|
|
Capital expenditures
on a Non-GAAP basis
|
|
398.3
|
|
|
|
462.1
|
|
|
|
899.3
|
|
|
|
901.8
|
|
|
|
|
(see page 8 for
reconciliation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
31 March
|
30
September
|
|
(Millions of
dollars)
|
|
2015
|
|
|
2014
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
items
|
|
$
|
195.7
|
|
|
$
|
336.6
|
|
|
Trade receivables,
net
|
|
|
1,381.4
|
|
|
|
1,486.0
|
|
|
Inventories
|
|
|
693.3
|
|
|
|
706.0
|
|
|
Contracts in
progress, less progress billings
|
|
|
159.3
|
|
|
|
155.4
|
|
|
Prepaid
expenses
|
|
|
114.9
|
|
|
|
87.8
|
|
|
Other receivables and
current assets
|
|
|
569.9
|
|
|
|
523.0
|
|
|
Total Current
Assets
|
|
|
3,114.5
|
|
|
|
3,294.8
|
|
|
Investment in net
assets of and advances to equity affiliates
|
|
|
1,223.9
|
|
|
|
1,257.9
|
|
|
Plant and equipment,
at cost
|
|
|
19,981.8
|
|
|
|
20,223.5
|
|
|
Less: accumulated
depreciation
|
|
|
10,495.9
|
|
|
|
10,691.4
|
|
|
Plant and equipment,
net
|
|
|
9,485.9
|
|
|
|
9,532.1
|
|
|
Goodwill,
net
|
|
|
1,155.4
|
|
|
|
1,237.3
|
|
|
Intangible assets,
net
|
|
|
553.4
|
|
|
|
615.8
|
|
|
Noncurrent capital
lease receivables
|
|
|
1,373.9
|
|
|
|
1,414.9
|
|
|
Other noncurrent
assets
|
|
|
586.8
|
|
|
|
426.3
|
|
|
Total Noncurrent
Assets
|
|
|
14,379.3
|
|
|
|
14,484.3
|
|
|
Total
Assets
|
|
$
|
17,493.8
|
|
|
$
|
17,779.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Payables and accrued
liabilities
|
|
$
|
1,606.9
|
|
|
$
|
1,591.0
|
|
|
Accrued income
taxes
|
|
|
55.7
|
|
|
|
78.0
|
|
|
Short-term
borrowings
|
|
|
1,261.0
|
|
|
|
1,228.7
|
|
|
Current portion of
long-term debt
|
|
|
157.7
|
|
|
|
65.3
|
|
|
Total Current
Liabilities
|
|
|
3,081.3
|
|
|
|
2,963.0
|
|
|
Long-term
debt
|
|
|
4,511.5
|
|
|
|
4,824.5
|
|
|
Other noncurrent
liabilities
|
|
|
1,042.9
|
|
|
|
1,187.5
|
|
|
Deferred income
taxes
|
|
|
1,101.8
|
|
|
|
995.5
|
|
|
Total Noncurrent
Liabilities
|
|
|
6,656.2
|
|
|
|
7,007.5
|
|
|
Total
Liabilities
|
|
|
9,737.5
|
|
|
|
9,970.5
|
|
|
Redeemable
Noncontrolling Interest
|
|
|
280.0
|
|
|
|
287.2
|
|
|
Air Products
Shareholders' Equity
|
|
|
7,332.5
|
|
|
|
7,365.8
|
|
|
Noncontrolling
Interests
|
|
|
143.8
|
|
|
|
155.6
|
|
|
Total
Equity
|
|
|
7,476.3
|
|
|
|
7,521.4
|
|
|
Total Liabilities
and Equity
|
|
$
|
17,493.8
|
|
|
$
|
17,779.1
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Six Months
Ended
|
|
|
|
|
31 March
|
|
|
(Millions of
dollars)
|
2015
|
|
|
2014
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
634.4
|
|
|
$
|
590.6
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
19.8
|
|
|
|
16.9
|
|
|
Net income
attributable to Air Products
|
|
614.6
|
|
|
|
573.7
|
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
(3.1)
|
|
|
Income from
continuing operations attributable to Air Products
|
|
614.6
|
|
|
|
570.6
|
|
|
Adjustments to
reconcile income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
468.8
|
|
|
|
463.3
|
|
|
|
Deferred income
taxes
|
|
53.5
|
|
|
|
36.4
|
|
|
|
Gain on previously
held equity interest
|
|
(17.9)
|
|
|
|
-
|
|
|
|
Undistributed
earnings of unconsolidated affiliates
|
|
(58.0)
|
|
|
|
(19.2)
|
|
|
|
Share-based
compensation
|
|
24.8
|
|
|
|
23.4
|
|
|
|
Noncurrent capital
lease receivables
|
|
(8.7)
|
|
|
|
1.1
|
|
|
|
Other
adjustments
|
|
(58.6)
|
|
|
|
75.0
|
|
|
Working capital
changes that provided (used) cash, excluding effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
23.6
|
|
|
|
(82.0)
|
|
|
|
Inventories
|
|
(14.0)
|
|
|
|
33.6
|
|
|
|
Contracts in
progress, less progress billings
|
|
(16.2)
|
|
|
|
17.6
|
|
|
|
Other
receivables
|
|
(75.2)
|
|
|
|
(3.7)
|
|
|
|
Payables and accrued
liabilities
|
|
71.8
|
|
|
|
(130.0)
|
|
|
|
Other working
capital
|
|
(41.3)
|
|
|
|
38.6
|
|
|
Cash Provided by
Operating Activities
|
|
967.2
|
|
|
|
1,024.7
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Additions to plant
and equipment
|
|
(817.6)
|
|
|
|
(802.2)
|
|
|
Acquisitions, less
cash acquired
|
|
(34.5)
|
|
|
|
-
|
|
|
Proceeds from sale of
assets and investments
|
|
10.8
|
|
|
|
11.2
|
|
|
Other investing
activities
|
|
1.5
|
|
|
|
(.4)
|
|
|
Cash Used for
Investing Activities
|
|
(839.8)
|
|
|
|
(791.4)
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Long-term debt
proceeds
|
|
337.3
|
|
|
|
39.2
|
|
|
Payments on long-term
debt
|
|
(384.6)
|
|
|
|
(491.2)
|
|
|
Net increase in
commercial paper and short-term borrowings
|
|
54.3
|
|
|
|
370.9
|
|
|
Dividends paid to
shareholders
|
|
(329.4)
|
|
|
|
(300.2)
|
|
|
Proceeds from stock
option exercises
|
|
77.2
|
|
|
|
57.7
|
|
|
Excess tax benefit
from share-based compensation
|
|
22.7
|
|
|
|
12.6
|
|
|
Other financing
activities
|
|
(34.1)
|
|
|
|
(26.7)
|
|
|
Cash Used for
Financing Activities
|
|
(256.6)
|
|
|
|
(337.7)
|
|
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
|
-
|
|
|
|
.7
|
|
|
Cash provided by
investing activities
|
|
-
|
|
|
|
9.8
|
|
|
Cash used for
financing activities
|
|
-
|
|
|
|
-
|
|
|
Cash Provided by
Discontinued Operations
|
|
-
|
|
|
|
10.5
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
(11.7)
|
|
|
|
.4
|
|
|
Decrease in Cash and
Cash Items
|
|
(140.9)
|
|
|
|
(93.5)
|
|
|
Cash and Cash Items –
Beginning of Year
|
|
336.6
|
|
|
|
450.4
|
|
|
Cash and Cash
Items – End of Period
|
$
|
195.7
|
|
|
$
|
356.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
|
|
|
|
Cash paid for taxes
(net of cash refunds)
|
$
|
155.8
|
|
|
$
|
64.5
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
|
SUMMARY BY
BUSINESS SEGMENTS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
|
|
|
Energy-
|
|
|
|
|
|
|
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Materials
|
|
from-
|
|
Corporate
|
|
Segment
|
|
(Millions of
dollars)
|
Americas
|
|
EMEA
|
|
Asia
|
|
Global
|
|
Technologies
|
|
Waste
|
|
and other
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
890.4
|
|
$
|
448.8
|
|
$
|
393.0
|
|
$
|
67.1
|
|
$
|
533.3
|
|
$
|
-
|
|
$
|
81.9
|
|
$
|
2,414.5
|
|
Operating income
(loss)
|
|
182.0
|
|
|
71.0
|
|
|
84.7
|
|
|
(7.9)
|
|
|
124.2
|
|
|
(2.8)
|
|
|
(8.8)
|
|
|
442.4
|
|
Depreciation and
amortization
|
|
103.3
|
|
|
47.6
|
|
|
50.3
|
|
|
5.5
|
|
|
23.3
|
|
|
-
|
|
|
3.3
|
|
|
233.3
|
|
Equity affiliates'
income (loss)
|
|
15.1
|
|
|
8.0
|
|
|
9.4
|
|
|
(.2)
|
|
|
.7
|
|
|
-
|
|
|
-
|
|
|
33.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,032.9
|
|
$
|
542.7
|
|
$
|
365.7
|
|
$
|
68.4
|
|
$
|
499.6
|
|
$
|
-
|
|
$
|
72.6
|
|
$
|
2,581.9
|
|
Operating income
(loss)
|
|
169.6
|
|
|
87.5
|
|
|
71.2
|
|
|
(14.6)
|
|
|
93.8
|
|
|
(3.5)
|
|
|
(19.3)
|
|
|
384.7
|
|
Depreciation and
amortization
|
|
99.4
|
|
|
55.0
|
|
|
48.1
|
|
|
1.6
|
|
|
22.7
|
|
|
-
|
|
|
2.3
|
|
|
229.1
|
|
Equity affiliates'
income
|
|
12.6
|
|
|
9.3
|
|
|
7.6
|
|
|
.3
|
|
|
.6
|
|
|
-
|
|
|
-
|
|
|
30.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,893.4
|
|
$
|
949.6
|
|
$
|
791.7
|
|
$
|
126.1
|
|
$
|
1,057.3
|
|
$
|
-
|
|
$
|
157.2
|
|
$
|
4,975.3
|
|
Operating income
(loss)
|
|
393.2
|
|
|
152.3
|
|
|
175.2
|
|
|
(25.8)
|
|
|
228.8
|
|
|
(5.3)
|
|
|
(31.5)
|
|
|
886.9
|
|
Depreciation and
amortization
|
|
206.9
|
|
|
98.7
|
|
|
99.9
|
|
|
9.8
|
|
|
47.3
|
|
|
-
|
|
|
6.2
|
|
|
468.8
|
|
Equity affiliates'
income
|
|
32.3
|
|
|
18.3
|
|
|
24.0
|
|
|
.2
|
|
|
1.3
|
|
|
-
|
|
|
-
|
|
|
76.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,976.8
|
|
$
|
1,092.6
|
|
$
|
761.0
|
|
$
|
135.6
|
|
$
|
979.1
|
|
$
|
-
|
|
$
|
182.3
|
|
$
|
5,127.4
|
|
Operating income
(loss)
|
|
354.1
|
|
|
172.7
|
|
|
153.9
|
|
|
(24.9)
|
|
|
158.1
|
|
|
(6.4)
|
|
|
(37.2)
|
|
|
770.3
|
|
Depreciation and
amortization
|
|
203.4
|
|
|
109.9
|
|
|
94.5
|
|
|
3.3
|
|
|
47.2
|
|
|
-
|
|
|
5.0
|
|
|
463.3
|
|
Equity affiliates'
income
|
|
30.2
|
|
|
19.0
|
|
|
17.2
|
|
|
1.0
|
|
|
1.2
|
|
|
-
|
|
|
-
|
|
|
68.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 March
2015
|
$
|
6,074.5
|
|
$
|
3,131.6
|
|
$
|
4,174.3
|
|
$
|
338.8
|
|
$
|
1,801.2
|
|
$
|
724.8
|
|
$
|
1,248.6
|
|
$
|
17,493.8
|
|
30 September
2014
|
|
6,240.7
|
|
|
3,521.0
|
|
|
4,045.6
|
|
|
389.4
|
|
|
1,835.7
|
|
|
591.9
|
|
|
1,154.8
|
|
|
17,779.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below is a
reconciliation of segment total operating income to consolidated
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
31 March
|
|
|
31 March
|
|
Operating
Income
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Segment
total
|
$
|
442.4
|
|
$
|
384.7
|
|
$
|
886.9
|
|
$
|
770.3
|
|
Business
restructuring and cost reduction actions
|
|
(55.4)
|
|
|
-
|
|
|
(87.8)
|
|
|
-
|
|
Pension settlement
loss
|
|
(12.6)
|
|
|
-
|
|
|
(12.6)
|
|
|
-
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
-
|
|
|
17.9
|
|
|
-
|
|
Consolidated
Total
|
$
|
374.4
|
|
$
|
384.7
|
|
$
|
804.4
|
|
$
|
770.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND CHEMICALS, INC. and
Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
(Millions of dollars, unless otherwise indicated)
1. BUSINESS RESTRUCTURING
On 18 September 2014, we announced
plans to reorganize the Company, including realignment of our
businesses in new reporting segments and other organizational
changes, effective as of 1 October
2014. As a result of this reorganization, we will incur
ongoing severance and other charges. For the three and six months
ended 31 March 2015, we recognized an
expense of $55.4 ($38.2 after-tax, or $.18 per share) and $87.8 ($59.9
after-tax, or $.27 per share),
respectively. During the first six months of fiscal year 2015, the
reorganization has resulted in the elimination of approximately
1,100 positions. Additional charges will be recorded in future
periods as the Company commits to specific actions.
2. PENSION SETTLEMENT
Our U.S. supplemental pension plan provides for a lump sum
benefit payment option at the time of retirement, or for corporate
officers, six months after the participant's retirement date. We
recognize pension settlement losses when cash payments exceed the
sum of service and interest cost components of net periodic pension
cost of the plan for the fiscal year. For the three months ended
31 March 2015, we recognized a pension settlement charge of
$12.6 to accelerate recognition of a
portion of actuarial losses deferred in accumulated other
comprehensive loss associated with this plan. We expect that
additional settlement losses will be recognized during the second
half of the fiscal year.
3. BUSINESS SEGMENT INFORMATION
Effective 1 October 2014, we began
operating under a new structure and reporting our results under the
following seven new segments:
- Industrial Gases – Americas
- Industrial Gases – EMEA (Europe, Middle
East, and Africa)
- Industrial Gases – Asia
- Industrial Gases – Global
- Materials Technologies
- Energy-from-Waste
- Corporate and other
Each of the three regional Industrial Gases segments (Americas,
EMEA, Asia) includes, with respect
to such region, onsite Air Separation Units (ASUs producing
primarily oxygen, nitrogen and argon), Hydrogen/HyCO Plants
(producing primarily hydrogen, carbon monoxide, syngas and steam),
and the regional Merchant Gases businesses (including liquid/bulk,
packaged gases and related equipment). The Industrial Gases –
Global segment includes atmospheric sale of equipment businesses,
such as ASUs and noncryogenic generators, as well as global
resources associated with the Industrial Gases business. The
Materials Technologies segment includes the Electronics Materials
and Performance Materials businesses, but excludes the previous
Electronics tonnage gases business which is now part of the three
regional Industrial Gases segments. The Energy-from-Waste segment
consists of the Tees Valley projects in the United Kingdom. The Corporate and other
segment includes two on-going global businesses (our liquefied
natural gas, or LNG, sale of equipment business and our helium
storage and distribution vessel sale of equipment business), the
polyurethane intermediates business that was exited in early fiscal
year 2014, and corporate support functions that benefit all of the
business segments. Support functions that support a specific
business are allocated directly to the related segment.
Prior year information conforms with the fiscal year 2015
presentation. For additional historical financial information
comparable to the 2015 presentation, see our Form 8-K filed on
5 January 2015.
4. BUSINESS COMBINATIONS
On 30 December 2014, we acquired
our partner's equity ownership interest in a liquefied industrial
gases production joint venture in North
America for $22.6, which
increased our ownership from 50% to 100%. The transaction was
accounted for as a business combination, and subsequent to the
acquisition, the results are consolidated within our Industrial
Gases – Americas segment. The assets acquired, primarily plant and
equipment, were recorded at their fair market values as of the
acquisition date.
The acquisition date fair value of the previously held equity
interest was determined using a discounted cash flow analysis under
the income approach. The six months ended 31
March 2015 include a gain of $17.9 ($11.2
after-tax, or $.05 per share) as a
result of revaluing our previously held equity interest to fair
value as of the acquisition date. This gain is reflected on the
consolidated income statements as "Gain on previously held equity
interest."
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/air-products-reports-fiscal-2015-second-quarter-eps-up-17-percent-300074982.html
SOURCE Air Products