LEHIGH VALLEY, Pa.,
April 28, 2016 /PRNewswire/
--
- Quarterly adjusted EPS from continuing operations of
$1.82 up 17 percent driven by
restructuring and self-help measures, up 20 percent at constant
exchange rates
- Quarterly adjusted EBITDA margin of 35.1 percent up 560 basis
points, and adjusted Return on Capital Employed (ROCE) of 13.0
percent up 200 basis points versus prior year
- Quarterly GAAP EPS from continuing operations of $1.74 versus prior year of $1.34
- Announced decision to exit Energy-from-Waste (EfW) business;
segment presented as a discontinued operation
- Fiscal 2016 third quarter adjusted EPS from continuing
operations guidance of $1.87 to
$1.92, up 13 to 16 percent versus prior year
- Increasing fiscal full-year 2016 adjusted EPS from continuing
operations guidance of $7.40 to
$7.55, up 12 to 14 percent
*The results and guidance in this release, including in the
highlights above, unless otherwise indicated, are based on
"adjusted" non-GAAP continuing operations. A reconciliation of GAAP
to non-GAAP results can be found at the end of this
release.
Air Products (NYSE: APD) today reported adjusted net income from
continuing operations of $397
million, up 18 percent versus prior year, and adjusted
earnings per share (EPS) from continuing operations of $1.82, up 17 percent versus prior year, for its
fiscal second quarter ended March 31,
2016.
On a GAAP basis, net income from continuing operations was
$380 million and EPS from continuing
operations was $1.74 for the
quarter.
Second quarter sales of $2,271
million decreased six percent from the prior year on
unfavorable currency and lower energy pass-through of three percent
each. Volumes were unchanged, as Industrial Gases – Asia growth continued while most other segment
volumes were lower. Pricing overall was flat despite higher pricing
in Industrial Gases – Americas and Industrial Gases – Europe, Middle
East and Africa
(EMEA).
Adjusted operating income of $532
million increased 20 percent versus prior year, and record
adjusted operating margin of 23.4 percent improved 500 basis
points. Adjusted EBITDA of $797
million increased 12 percent over prior year, and record
adjusted EBITDA margin of 35.1 percent improved 560 basis points.
Adjusted ROCE increased 200 basis points to 13 percent.
Restructuring and self-help measures drove this improvement.
Commenting on the results, Seifi Ghasemi, chairman, president
and chief executive officer, said, "With their sharp focus on
executing our strategic Five-Point plan by controlling what they
can control, the committed and motivated team at Air Products
delivered excellent results again this quarter. In the face of
challenging economic conditions and a weak manufacturing
environment, Air Products again posted significant profit
improvement, with EPS up 17 percent and record EBITDA margin of
35.1 percent, up 560 basis points. We have now delivered seven
consecutive quarters of double-digit EPS growth."
Second Quarter Results by Business Segment:
- Industrial Gases – Americas sales of $798 million decreased 10 percent versus prior
year, as lower energy pass-through reduced sales by six percent and
unfavorable currency reduced sales by three percent. Volumes
decreased two percent, primarily on lower demand in Latin America, as well as weakness in the
oilfield services and North American steel markets. Pricing
increased one percent. Operating income of $224 million increased 23 percent over prior
year, and adjusted EBITDA of $341
million increased 14 percent, driven by the benefits from
restructuring actions and lower maintenance costs. Record operating
margin of 28.1 percent improved 770 basis points, and record
adjusted EBITDA margin of 42.8 percent improved 910 basis points
over prior year.
- Industrial Gases – EMEA sales of $420 million declined six percent versus last
year, with lower energy pass-through reducing sales by four percent
and unfavorable currency reducing sales by three percent.
Underlying sales were up one percent, as two percent higher pricing
was partially offset by one percent lower volumes. Operating income
of $89 million increased 26 percent
from the prior year, and adjusted EBITDA of $145 million increased 14 percent versus prior
year on the benefits from restructuring and pricing actions. Record
operating margin of 21.3 percent increased 550 basis points, and
record adjusted EBITDA margin of 34.5 percent increased 630 basis
points over the prior year.
- Industrial Gases – Asia
sales of $406 million increased three
percent versus prior year, as volume growth of 10 percent, driven
by both strong underlying business and new plants, was partially
offset by six percent unfavorable currency and one percent lower
pricing. Operating income of $104
million increased 23 percent and adjusted EBITDA of
$170 million increased 18 percent on
the benefits from restructuring actions and higher volumes.
Operating margin of 25.7 percent improved 410 basis points over
prior year, and adjusted EBITDA margin of 41.9 percent increased
520 basis points. Profits declined sequentially, primarily on lower
merchant volumes due to the Lunar New
Year holiday.
- Materials Technologies sales of $494 million decreased seven percent versus the
prior year on six percent lower volumes. Operating income of
$129 million was up four percent and
adjusted EBITDA of $150 million was
up one percent from prior year, with price and raw materials
management, mix and restructuring actions driving the profit
improvement. Record operating margin of 26.2 percent was up 290
basis points, and record adjusted EBITDA margin of 30.2 percent was
up 240 basis points.
- Electronic Materials sales of $234
million declined 10 percent from the prior year due to lower
delivery systems volumes. Operating margin of 30.1 percent was up
400 basis points and adjusted EBITDA margin of 35.5 percent
increased 320 basis points, driven by favorable pricing and mix and
the benefits of restructuring actions.
- Performance Materials sales of $261
million decreased five percent from the prior year on two
percent lower volumes, driven by weaker additives and epoxies
demand, and two percent lower pricing. Operating margin of 22.8
percent and adjusted EBITDA margin of 25.8 percent were both up 160
basis points, driven by lower raw material costs.
In the second fiscal quarter of 2016:
- The EfW business segment has been accounted for as a
discontinued operation. A loss on disposal of $946 million pre-tax ($847
million after-tax) was recorded, primarily to write down the
assets to their estimated net realizable value.
- Non-GAAP results for the Company exclude $8.6 million, or $0.03 per share, of expenses for cost reduction
actions; $7.4 million, or
$0.04 per share, in legal and
advisory fees related to the intended separation of the Company's
Materials Technologies business; and $2.6
million, or $0.01 per share,
for pension settlement costs.
Outlook
The capital expenditure forecast for
fiscal year 2016 is approximately $1.2
billion.
Air Products expects fiscal 2016 third quarter adjusted EPS from
continuing operations to be between $1.87
and $1.92 per share, up 13 to 16 percent versus prior
year.
The Company is increasing its full-year fiscal 2016 adjusted EPS
from continuing operations guidance to $7.40
to $7.55 earnings per share, up 12 to 14 percent from the
prior year. The Company's previous guidance was $7.25 to $7.50.
Access the Q2 earnings teleconference scheduled for
10:00 a.m. Eastern Time on
April 28 by calling
(913) 312-0726 and entering passcode
6881421, or access the Event Details page
on Air Products' Investor Relations web site.
About Air Products
Air Products (NYSE:APD) is a world-leading Industrial Gases company
celebrating 75 years of operation. The Company's core Industrial
Gases business provides atmospheric and process gases and related
equipment to manufacturing markets, including refining and
petrochemical, metals, electronics, and food and beverage. Air
Products is also the world's leading supplier of liquefied natural
gas process technology and equipment. The Company's Materials
Technologies business serves the semiconductor, polyurethanes,
cleaning and coatings, and adhesives industries.
The Company had fiscal 2015 sales of $9.9
billion and was ranked number 284 on the Fortune 500 annual
list of public companies. Approximately 20,000 employees in 50
countries strive to make Air Products the world's safest and best
performing Industrial Gases company, providing sustainable
offerings and excellent service to all customers. 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; with regard to the previously
announced separation of Materials Technologies, general economic
and business conditions that may affect the separation and the
execution thereof, changes in capital market conditions, or the
Company's decision not to consummate the separation due to market,
economic or other events; future financial and operating
performance of major customers; unanticipated contract terminations
or customer cancellations or postponement of projects and sales;
asset impairments due to economic conditions or specific events;
the impact of competitive products and pricing; challenges of
implementing new technologies; 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 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, 2015. 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 ("adjusted") financial measures.
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 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
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Net
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Diluted
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Operating
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Operating
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Net
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Diluted
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2016 Q2 vs. 2015
Q2
|
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Income
|
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Margin(A)
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Income
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EPS
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Income
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Margin(A)
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Income
|
|
EPS
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2016 Q2
GAAP
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$
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513.3
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22.6%
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$
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379.8
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$
|
1.74
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$
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1,023.9
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22.1%
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$
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757.6
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$
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3.47
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2015 Q2
GAAP
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376.9
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15.6%
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291.9
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1.34
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809.2
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16.3%
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618.2
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2.85
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Change
GAAP
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$
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136.4
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700bp
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$
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87.9
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$
|
.40
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$
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214.7
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580bp
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$
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139.4
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$
|
.62
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% Change
GAAP
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36%
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30%
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30%
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27%
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23%
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22%
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2016 Q2
GAAP
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$
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513.3
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22.6%
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$
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379.8
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$
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1.74
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$
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1,023.9
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22.1%
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$
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757.6
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$
|
3.47
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Business separation
costs (tax impact $1.5)
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7.4
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.3%
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8.9
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.04
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19.4
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.4%
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20.9
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|
.10
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Business
restructuring and cost reduction
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actions (tax impact
$1.5)
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8.6
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.4%
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|
|
7.1
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|
.03
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8.6
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.2%
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7.1
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|
.03
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Pension settlement
loss (tax impact $1.0)
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2.6
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.1%
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1.6
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.01
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2.6
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.1%
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1.6
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.01
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2016 Q2 Non-GAAP
Measure
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$
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531.9
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23.4%
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$
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397.4
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$
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1.82
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$
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1,054.5
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22.8%
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$
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787.2
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$
|
3.61
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2015 Q2
GAAP
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$
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376.9
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15.6%
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$
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291.9
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$
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1.34
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$
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809.2
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16.3%
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$
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618.2
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$
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2.85
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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
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87.8
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1.7%
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59.9
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.27
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Pension settlement
loss (tax impact $4.7)
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12.6
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.5%
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7.9
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.04
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12.6
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.3%
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7.9
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.04
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Gain on previously
held equity interest
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(tax impact
$6.7)
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-
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-
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-
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-
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(17.9)
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(.4)%
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(11.2)
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(.05)
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2015 Q2 Non-GAAP
Measure
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$
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444.9
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18.4%
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$
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338.0
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$
|
1.56
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$
|
891.7
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17.9%
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$
|
674.8
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$
|
3.11
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Change Non-GAAP
Measure
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$
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87.0
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500bp
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$
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59.4
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$
|
.26
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|
$
|
162.8
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|
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|
490bp
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|
|
$
|
112.4
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$
|
.50
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|
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% Change Non-GAAP
Measure
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20%
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18%
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17%
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18%
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17%
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16%
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(A)Operating margin is calculated by
dividing operating income by sales.
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EARNINGS PER SHARE – CONSTANT CURRENCY BASIS
Diluted earnings per share on a constant currency basis equals
current year non-GAAP diluted earnings per share from continuing
operations adjusted for prior period average exchange rates to show
the change versus the prior year.
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Three Months
Ended
|
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|
|
|
|
|
31 March
|
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Percent
|
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|
2016
|
|
2015
|
|
|
Change
|
|
|
Diluted EPS –
Non-GAAP Measure
|
$
|
1.82
|
|
$
|
1.56
|
|
|
|
17%
|
|
|
Currency
adjustment
|
|
.05
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|
|
-
|
|
|
|
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|
|
Constant Currency
Diluted EPS – Non-GAAP Measure
|
$
|
1.87
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|
$
|
1.56
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|
20%
|
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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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|
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|
|
|
Q2
YTD
|
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2016
|
Q1
|
|
|
Q2
|
|
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Q3
|
|
|
Q4
|
|
|
Total
|
|
|
Income from
Continuing Operations(A)
|
$
|
386.2
|
|
|
$
|
387.6
|
|
|
|
|
|
|
|
|
|
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$
|
773.8
|
|
|
Add: Interest
expense
|
|
22.2
|
|
|
|
25.7
|
|
|
|
|
|
|
|
|
|
|
|
47.9
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|
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Add: Income tax
provision
|
|
135.9
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|
|
|
132.5
|
|
|
|
|
|
|
|
|
|
|
|
268.4
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|
|
Add: Depreciation and
amortization
|
|
232.7
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|
|
|
232.1
|
|
|
|
|
|
|
|
|
|
|
|
464.8
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|
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Add: Business
separation costs
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|
12.0
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|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
19.4
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|
|
Add: Business
restructuring and cost reduction actions
|
|
-
|
|
|
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
8.6
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|
|
Add: Pension
settlement loss
|
|
-
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
Adjusted
EBITDA
|
$
|
789.0
|
|
|
$
|
796.5
|
|
|
|
|
|
|
|
|
|
|
$
|
1,585.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
YTD
|
|
|
2015
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Total
|
|
|
Income from
Continuing Operations(A)
|
$
|
339.2
|
|
|
$
|
298.8
|
|
|
$
|
334.9
|
|
|
$
|
351.5
|
|
|
$
|
638.0
|
|
|
Add: Interest
expense
|
|
29.1
|
|
|
|
23.4
|
|
|
|
28.2
|
|
|
|
22.8
|
|
|
|
52.5
|
|
|
Add: Income tax
provision
|
|
107.1
|
|
|
|
87.7
|
|
|
|
104.1
|
|
|
|
119.4
|
|
|
|
194.8
|
|
|
Add: Depreciation and
amortization
|
|
235.5
|
|
|
|
233.3
|
|
|
|
233.0
|
|
|
|
234.6
|
|
|
|
468.8
|
|
|
Add: Business
restructuring and cost reduction actions
|
|
32.4
|
|
|
|
55.4
|
|
|
|
58.2
|
|
|
|
61.7
|
|
|
|
87.8
|
|
|
Add: Pension
settlement loss
|
|
-
|
|
|
|
12.6
|
|
|
|
1.6
|
|
|
|
7.0
|
|
|
|
12.6
|
|
|
Add: Business
separation costs
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7.5
|
|
|
|
-
|
|
|
Less: Gain on
previously held equity interest
|
|
17.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17.9
|
|
|
Less: Gain on land
sales
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33.6
|
|
|
|
-
|
|
|
Add: Loss on early
retirement of debt
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16.6
|
|
|
|
-
|
|
|
Adjusted
EBITDA
|
$
|
725.4
|
|
|
$
|
711.2
|
|
|
$
|
760.0
|
|
|
$
|
787.5
|
|
|
$
|
1,436.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)Includes net income attributable to
noncontrolling interests.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 vs.
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
63.6
|
|
|
$
|
85.3
|
|
|
|
|
|
|
|
|
|
|
$
|
148.9
|
|
|
Adjusted EBITDA %
change
|
|
9
|
%
|
|
12
|
%
|
|
|
|
|
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Q2 vs. 2016
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
|
|
|
|
$
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA %
change
|
|
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
Below is a reconciliation of segment operating income to
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Materials
|
|
Corporate
|
|
Segment
|
|
|
Americas
|
|
EMEA
|
|
Asia
|
|
Global
|
|
Technologies
|
|
and other
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
224.2
|
|
$
|
89.4
|
|
$
|
104.4
|
|
$
|
(10.9)
|
|
$
|
129.3
|
|
$
|
(4.5)
|
|
$
|
531.9
|
|
Add: Depreciation and
amortization
|
|
109.4
|
|
|
48.3
|
|
|
48.5
|
|
|
1.8
|
|
|
20.0
|
|
|
4.1
|
|
|
232.1
|
|
Add: Equity
affiliates' income
|
|
7.7
|
|
|
7.2
|
|
|
17.4
|
|
|
-
|
|
|
.2
|
|
|
-
|
|
|
32.5
|
|
Adjusted
EBITDA
|
$
|
341.3
|
|
$
|
144.9
|
|
$
|
170.3
|
|
$
|
(9.1)
|
|
$
|
149.5
|
|
$
|
(.4)
|
|
$
|
796.5
|
|
Adjusted EBITDA
margin
|
|
42.8%
|
|
|
34.5%
|
|
|
41.9%
|
|
|
|
|
|
30.2%
|
|
|
|
|
|
35.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
182.0
|
|
$
|
71.0
|
|
$
|
84.7
|
|
$
|
(7.9)
|
|
$
|
124.2
|
|
$
|
(9.1)
|
|
$
|
444.9
|
|
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
|
|
$
|
(5.8)
|
|
$
|
711.2
|
|
Adjusted EBITDA
margin
|
|
33.7%
|
|
|
28.2%
|
|
|
36.7%
|
|
|
|
|
|
27.8%
|
|
|
|
|
|
29.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
40.9
|
|
$
|
18.3
|
|
$
|
25.9
|
|
$
|
(6.5)
|
|
$
|
1.3
|
|
$
|
5.4
|
|
$
|
85.3
|
|
Adjusted EBITDA %
change
|
|
14%
|
|
|
14%
|
|
|
18%
|
|
|
(250)%
|
|
|
1%
|
|
|
93%
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin change
|
910bp
|
|
|
630bp
|
|
|
520bp
|
|
|
|
|
|
240bp
|
|
|
|
|
|
560bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
436.0
|
|
$
|
181.1
|
|
$
|
221.1
|
|
$
|
(30.2)
|
|
$
|
256.5
|
|
$
|
(10.0)
|
|
$
|
1,054.5
|
|
Add: Depreciation and
amortization
|
|
218.2
|
|
|
95.0
|
|
|
100.2
|
|
|
3.9
|
|
|
39.6
|
|
|
7.9
|
|
|
464.8
|
|
Add: Equity
affiliates' income (loss)
|
|
22.2
|
|
|
14.8
|
|
|
29.1
|
|
|
(.5)
|
|
|
.6
|
|
|
-
|
|
|
66.2
|
|
Adjusted
EBITDA
|
$
|
676.4
|
|
$
|
290.9
|
|
$
|
350.4
|
|
$
|
(26.8)
|
|
$
|
296.7
|
|
$
|
(2.1)
|
|
$
|
1,585.5
|
|
Adjusted EBITDA
margin
|
|
41.4%
|
|
|
33.9%
|
|
|
42.8%
|
|
|
|
|
|
30.1%
|
|
|
|
|
|
34.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
393.2
|
|
$
|
152.3
|
|
$
|
175.2
|
|
$
|
(25.8)
|
|
$
|
228.8
|
|
$
|
(32.0)
|
|
$
|
891.7
|
|
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
|
|
$
|
(25.8)
|
|
$
|
1,436.6
|
|
Adjusted EBITDA
margin
|
|
33.4%
|
|
|
28.4%
|
|
|
37.8%
|
|
|
|
|
|
26.2%
|
|
|
|
|
|
28.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
44.0
|
|
$
|
21.6
|
|
$
|
51.3
|
|
$
|
(11.0)
|
|
$
|
19.3
|
|
$
|
23.7
|
|
$
|
148.9
|
|
Adjusted EBITDA %
change
|
|
7%
|
|
|
8%
|
|
|
17%
|
|
|
(70)%
|
|
|
7%
|
|
|
92%
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin change
|
800bp
|
|
|
550bp
|
|
|
500bp
|
|
|
|
|
|
390bp
|
|
|
|
|
|
540bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. 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.
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
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Capital expenditures
– GAAP basis
|
|
$
|
253.3
|
|
$
|
315.7
|
|
$
|
534.8
|
|
$
|
663.0
|
|
|
Capital lease
expenditures
|
|
|
11.3
|
|
|
15.3
|
|
|
18.6
|
|
|
47.2
|
|
|
Capital expenditures
– Non-GAAP basis
|
|
$
|
264.6
|
|
$
|
331.0
|
|
$
|
553.4
|
|
$
|
710.2
|
|
We expect capital expenditures for fiscal year 2016 to be
approximately $1,200.
RETURN ON CAPITAL EMPLOYED (ROCE)
Return on capital employed (ROCE) is calculated as earnings
after-tax divided by average total capital. Earnings after-tax is
defined as operating income and equity affiliates' income,
after-tax, at our effective tax rate. On a non-GAAP basis,
operating income and taxes have been adjusted for the impact of the
disclosed items detailed below. Total capital consists of total
debt, total equity, and redeemable noncontrolling interest less
assets of discontinued operations.
|
2016
|
|
2015
|
|
|
2014
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
Operating
income
|
$
|
513.3
|
|
$
|
510.6
|
|
$
|
474.3
|
|
$
|
424.8
|
|
$
|
376.9
|
|
$
|
432.3
|
|
$
|
146.6
|
|
$
|
416.6
|
|
|
|
|
Equity affiliates'
income
|
|
32.5
|
|
|
33.7
|
|
|
36.0
|
|
|
42.4
|
|
|
33.0
|
|
|
43.1
|
|
|
39.7
|
|
|
43.1
|
|
|
|
|
Earnings Before
Tax—GAAP
|
$
|
545.8
|
|
$
|
544.3
|
|
$
|
510.3
|
|
$
|
467.2
|
|
$
|
409.9
|
|
$
|
475.4
|
|
$
|
186.3
|
|
$
|
459.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business separation
costs
|
|
7.4
|
|
|
12.0
|
|
|
7.5
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
Business
restructuring and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost reduction
actions
|
|
8.6
|
|
|
-
|
|
|
61.7
|
|
|
58.2
|
|
|
55.4
|
|
|
32.4
|
|
|
12.7
|
|
|
-
|
|
|
|
|
Pension settlement
loss
|
|
2.6
|
|
|
-
|
|
|
7.0
|
|
|
1.6
|
|
|
12.6
|
|
|
-
|
|
|
5.5
|
|
|
-
|
|
|
|
|
Gain on previously
held
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(17.9)
|
|
|
-
|
|
|
-
|
|
|
|
|
equity
interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangible asset
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
310.1
|
|
|
-
|
|
|
|
|
impairment
charge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on land
sales
|
|
-
|
|
|
-
|
|
|
(33.6)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
Earnings Before
Tax—Non-GAAP
|
$
|
564.4
|
|
$
|
556.3
|
|
$
|
552.9
|
|
$
|
527.0
|
|
$
|
477.9
|
|
$
|
489.9
|
|
$
|
514.6
|
|
$
|
459.7
|
|
|
|
|
Taxes —
Non-GAAP
|
|
140.0
|
|
|
141.3
|
|
|
131.6
|
|
|
131.2
|
|
|
115.2
|
|
|
118.1
|
|
|
124.0
|
|
|
110.3
|
|
|
|
|
Earnings After
Tax—Non-GAAP
|
$
|
424.4
|
|
$
|
415.0
|
|
$
|
421.3
|
|
$
|
395.8
|
|
$
|
362.7
|
|
$
|
371.8
|
|
$
|
390.6
|
|
$
|
349.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
1,480.9
|
|
$
|
1,539.4
|
|
$
|
1,494.3
|
|
$
|
1,087.8
|
|
$
|
1,261.0
|
|
$
|
1,283.5
|
|
$
|
1,228.7
|
|
$
|
1,115.2
|
|
$
|
1,061.5
|
|
Current portion of
long-term debt
|
|
763.9
|
|
|
407.9
|
|
|
435.6
|
|
|
84.9
|
|
|
157.7
|
|
|
54.2
|
|
|
65.3
|
|
|
69.8
|
|
|
112.4
|
|
Long-term
debt
|
|
3,573.2
|
|
|
3,870.5
|
|
|
3,949.1
|
|
|
4,690.5
|
|
|
4,511.5
|
|
|
4,751.3
|
|
|
4,824.5
|
|
|
4,951.0
|
|
|
4,993.2
|
|
Total Debt
|
$
|
5,818.0
|
|
$
|
5,817.8
|
|
$
|
5,879.0
|
|
$
|
5,863.2
|
|
$
|
5,930.2
|
|
$
|
6,089.0
|
|
$
|
6,118.5
|
|
$
|
6,136.0
|
|
$
|
6,167.1
|
|
Total
Equity
|
$
|
7,053.1
|
|
$
|
7,499.0
|
|
$
|
7,381.1
|
|
$
|
7,731.3
|
|
$
|
7,476.3
|
|
$
|
7,503.3
|
|
$
|
7,521.4
|
|
$
|
7,856.2
|
|
$
|
7,527.8
|
|
Redeemable
Noncontrolling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
-
|
|
|
-
|
|
|
-
|
|
|
277.9
|
|
|
280.0
|
|
|
288.7
|
|
|
287.2
|
|
|
341.4
|
|
|
343.6
|
|
Assets of
discontinued operations
|
|
(20.4)
|
|
|
(938.2)
|
|
|
(893.6)
|
|
|
(845.1)
|
|
|
(724.3)
|
|
|
(688.6)
|
|
|
(591.4)
|
|
|
(475.3)
|
|
|
(411.9)
|
|
Total
Capital
|
$
|
12,850.7
|
|
$
|
12,378.6
|
|
$
|
12,366.5
|
|
$
|
13,027.3
|
|
$
|
12,962.2
|
|
$
|
13,192.4
|
|
$
|
13,335.7
|
|
$
|
13,858.3
|
|
$
|
13,626.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings After
Tax—Non-GAAP
|
$
|
1,656.5
|
|
|
|
|
|
|
|
|
|
|
$
|
1,474.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Five-quarter average
total capital
|
|
12,717.1
|
|
|
|
|
|
|
|
|
|
|
|
13,395.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROCE—Non-GAAP
|
|
13.0%
|
|
|
|
|
|
|
|
|
|
|
|
11.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
200bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OUTLOOK
Guidance provided is on a non-GAAP continuing operations basis,
which excludes the impact of certain items that we believe are not
representative of our underlying business.
|
|
Diluted
EPS
|
|
|
|
Q3
|
|
|
Full Year
|
|
|
2015 GAAP
|
$
|
1.48
|
|
$
|
5.91
|
|
|
Business
restructuring and cost reduction actions
|
|
.18
|
|
|
.71
|
|
|
Pension settlement
loss
|
|
-
|
|
|
.06
|
|
|
Business separation
costs
|
|
|
|
|
.03
|
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
(.05)
|
|
|
Gain on land
sales
|
|
-
|
|
|
(.13)
|
|
|
Loss on early
retirement of debt
|
|
-
|
|
|
.07
|
|
|
2015 Non-GAAP
Measure
|
$
|
1.66
|
|
$
|
6.60
|
|
|
2016 Non-GAAP
Outlook
|
|
1.87–1.92
|
|
|
7.40–7.55
|
|
|
Change
Non-GAAP
|
$
|
.21–.26
|
|
$
|
.80–.95
|
|
|
% Change
Non-GAAP
|
|
13%–16%
|
|
|
12%–14%
|
|
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)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Sales
|
$
|
2,271.2
|
|
|
$
|
2,414.5
|
|
|
$
|
4,627.0
|
|
|
$
|
4,975.3
|
|
|
Cost of
sales
|
|
1,519.0
|
|
|
|
1,698.2
|
|
|
|
3,114.7
|
|
|
|
3,527.9
|
|
|
Selling and
administrative
|
|
207.1
|
|
|
|
240.3
|
|
|
|
418.5
|
|
|
|
497.9
|
|
|
Research and
development
|
|
32.7
|
|
|
|
35.8
|
|
|
|
64.7
|
|
|
|
70.8
|
|
|
Business separation
costs
|
|
7.4
|
|
|
|
-
|
|
|
|
19.4
|
|
|
|
-
|
|
|
Business
restructuring and cost reduction actions
|
|
8.6
|
|
|
|
55.4
|
|
|
|
8.6
|
|
|
|
87.8
|
|
|
Pension settlement
loss
|
|
2.6
|
|
|
|
12.6
|
|
|
|
2.6
|
|
|
|
12.6
|
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17.9
|
|
|
Other income
(expense), net
|
|
19.5
|
|
|
|
4.7
|
|
|
|
25.4
|
|
|
|
13.0
|
|
|
Operating
Income
|
|
513.3
|
|
|
|
376.9
|
|
|
|
1,023.9
|
|
|
|
809.2
|
|
|
Equity affiliates'
income
|
|
32.5
|
|
|
|
33.0
|
|
|
|
66.2
|
|
|
|
76.1
|
|
|
Interest
expense
|
|
25.7
|
|
|
|
23.4
|
|
|
|
47.9
|
|
|
|
52.5
|
|
|
Income From
Continuing Operations Before Taxes
|
|
520.1
|
|
|
|
386.5
|
|
|
|
1,042.2
|
|
|
|
832.8
|
|
|
Income tax
provision
|
|
132.5
|
|
|
|
87.7
|
|
|
|
268.4
|
|
|
|
194.8
|
|
|
Income from
Continuing Operations
|
|
387.6
|
|
|
|
298.8
|
|
|
|
773.8
|
|
|
|
638.0
|
|
|
Loss From
Discontinued Operations, net of tax
|
|
(853.1)
|
|
|
|
(1.9)
|
|
|
|
(867.3)
|
|
|
|
(3.6)
|
|
|
Net Income
(Loss)
|
|
(465.5)
|
|
|
|
296.9
|
|
|
|
(93.5)
|
|
|
|
634.4
|
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
7.8
|
|
|
|
6.9
|
|
|
|
16.2
|
|
|
|
19.8
|
|
|
Net Income (Loss)
Attributable to Air Products
|
$
|
(473.3)
|
|
|
$
|
290.0
|
|
|
$
|
(109.7)
|
|
|
$
|
614.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
379.8
|
|
|
$
|
291.9
|
|
|
$
|
757.6
|
|
|
$
|
618.2
|
|
|
Loss from
discontinued operations
|
|
(853.1)
|
|
|
|
(1.9)
|
|
|
|
(867.3)
|
|
|
|
(3.6)
|
|
|
Net Income (Loss)
Attributable to Air Products
|
$
|
(473.3)
|
|
|
$
|
290.0
|
|
|
$
|
(109.7)
|
|
|
$
|
614.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1.76
|
|
|
$
|
1.36
|
|
|
$
|
3.51
|
|
|
$
|
2.89
|
|
|
Loss from
discontinued operations
|
|
(3.95)
|
|
|
|
(.01)
|
|
|
|
(4.02)
|
|
|
|
(.02)
|
|
|
Net Income (Loss)
Attributable to Air Products
|
$
|
(2.19)
|
|
|
$
|
1.35
|
|
|
$
|
(.51)
|
|
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1.74
|
|
|
$
|
1.34
|
|
|
$
|
3.47
|
|
|
$
|
2.85
|
|
|
Loss from
discontinued operations
|
|
(3.91)
|
|
|
|
(.01)
|
|
|
|
(3.98)
|
|
|
|
(.02)
|
|
|
Net Income (Loss)
Attributable to Air Products
|
$
|
(2.17)
|
|
|
$
|
1.33
|
|
|
$
|
(.51)
|
|
|
$
|
2.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares — Basic (in millions)
|
|
216.1
|
|
|
|
214.9
|
|
|
|
215.9
|
|
|
|
214.5
|
|
|
Weighted Average
Common Shares — Diluted (in millions)
|
|
217.9
|
|
|
|
217.4
|
|
|
|
217.8
|
|
|
|
217.0
|
|
|
Dividends Declared
Per Common Share — Cash
|
$
|
.86
|
|
|
$
|
.81
|
|
|
$
|
1.67
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
232.1
|
|
|
$
|
233.3
|
|
|
$
|
464.8
|
|
|
$
|
468.8
|
|
|
|
Capital expenditures
on a Non-GAAP basis
|
|
264.6
|
|
|
|
331.0
|
|
|
|
553.4
|
|
|
|
710.2
|
|
|
|
|
(see page 9 for
reconciliation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
31 March
|
30
September
|
|
(Millions of
dollars)
|
|
2016
|
|
|
2015
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
items
|
|
$
|
313.1
|
|
|
$
|
206.4
|
|
|
Trade receivables,
net
|
|
|
1,373.3
|
|
|
|
1,406.2
|
|
|
Inventories
|
|
|
649.8
|
|
|
|
657.8
|
|
|
Contracts in
progress, less progress billings
|
|
|
144.6
|
|
|
|
110.8
|
|
|
Prepaid
expenses
|
|
|
85.1
|
|
|
|
67.0
|
|
|
Other receivables and
current assets
|
|
|
444.9
|
|
|
|
343.5
|
|
|
Current assets of
discontinued operations
|
|
|
20.4
|
|
|
|
1.8
|
|
|
Total Current
Assets
|
|
|
3,031.2
|
|
|
|
2,793.5
|
|
|
Investment in net
assets of and advances to equity affiliates
|
|
|
1,264.3
|
|
|
|
1,265.7
|
|
|
Plant and equipment,
at cost
|
|
|
19,961.8
|
|
|
|
19,462.8
|
|
|
Less: accumulated
depreciation
|
|
|
11,107.7
|
|
|
|
10,717.7
|
|
|
Plant and equipment,
net
|
|
|
8,854.1
|
|
|
|
8,745.1
|
|
|
Goodwill,
net
|
|
|
1,150.6
|
|
|
|
1,131.3
|
|
|
Intangible assets,
net
|
|
|
499.9
|
|
|
|
508.3
|
|
|
Noncurrent capital
lease receivables
|
|
|
1,291.5
|
|
|
|
1,350.2
|
|
|
Other noncurrent
assets
|
|
|
719.2
|
|
|
|
648.6
|
|
|
Noncurrent assets of
discontinued operations
|
|
|
-
|
|
|
|
891.8
|
|
|
Total Noncurrent
Assets
|
|
|
13,779.6
|
|
|
|
14,541.0
|
|
|
Total
Assets
|
|
$
|
16,810.8
|
|
|
$
|
17,334.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Payables and accrued
liabilities
|
|
$
|
1,470.6
|
|
|
$
|
1,641.7
|
|
|
Accrued income
taxes
|
|
|
77.2
|
|
|
|
55.8
|
|
|
Short-term
borrowings
|
|
|
1,480.9
|
|
|
|
1,494.3
|
|
|
Current portion of
long-term debt
|
|
|
763.9
|
|
|
|
435.6
|
|
|
Current liabilities
of discontinued operations
|
|
|
46.5
|
|
|
|
17.0
|
|
|
Total Current
Liabilities
|
|
|
3,839.1
|
|
|
|
3,644.4
|
|
|
Long-term
debt
|
|
|
3,573.2
|
|
|
|
3,949.1
|
|
|
Other noncurrent
liabilities
|
|
|
1,462.8
|
|
|
|
1,554.0
|
|
|
Deferred income
taxes
|
|
|
882.6
|
|
|
|
803.4
|
|
|
Noncurrent
liabilities of discontinued operations
|
|
|
-
|
|
|
|
2.5
|
|
|
Total Noncurrent
Liabilities
|
|
|
5,918.6
|
|
|
|
6,309.0
|
|
|
Total
Liabilities
|
|
|
9,757.7
|
|
|
|
9,953.4
|
|
|
Air Products
Shareholders' Equity
|
|
|
6,916.6
|
|
|
|
7,249.0
|
|
|
Noncontrolling
Interests
|
|
|
136.5
|
|
|
|
132.1
|
|
|
Total
Equity
|
|
|
7,053.1
|
|
|
|
7,381.1
|
|
|
Total Liabilities
and Equity
|
|
$
|
16,810.8
|
|
|
$
|
17,334.5
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Six Months
Ended
|
|
|
|
|
31 March
|
|
|
(Millions of
dollars)
|
2016
|
|
|
2015
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(93.5)
|
|
|
$
|
634.4
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
16.2
|
|
|
|
19.8
|
|
|
Net income (loss)
attributable to Air Products
|
|
(109.7)
|
|
|
|
614.6
|
|
|
Loss from
discontinued operations
|
|
867.3
|
|
|
|
3.6
|
|
|
Income from
continuing operations attributable to Air Products
|
|
757.6
|
|
|
|
618.2
|
|
|
Adjustments to
reconcile income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
464.8
|
|
|
|
468.8
|
|
|
|
Deferred income
taxes
|
|
87.0
|
|
|
|
53.5
|
|
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
|
(17.9)
|
|
|
|
Undistributed
earnings of unconsolidated affiliates
|
|
(7.7)
|
|
|
|
(58.0)
|
|
|
|
Share-based
compensation
|
|
19.5
|
|
|
|
24.8
|
|
|
|
Noncurrent capital
lease receivables
|
|
40.2
|
|
|
|
(8.7)
|
|
|
|
Other
adjustments
|
|
15.0
|
|
|
|
(58.8)
|
|
|
Working capital
changes that provided (used) cash, excluding effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
33.2
|
|
|
|
23.6
|
|
|
|
Inventories
|
|
10.5
|
|
|
|
(14.0)
|
|
|
|
Contracts in
progress, less progress billings
|
|
(35.3)
|
|
|
|
(17.2)
|
|
|
|
Other
receivables
|
|
(57.4)
|
|
|
|
(75.2)
|
|
|
|
Payables and accrued
liabilities
|
|
(226.5)
|
|
|
|
89.1
|
|
|
|
Other working
capital
|
|
(13.4)
|
|
|
|
(41.1)
|
|
|
Cash Provided by
Operating Activities
|
|
1,087.5
|
|
|
|
987.1
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Additions to plant
and equipment
|
|
(534.8)
|
|
|
|
(628.5)
|
|
|
Acquisitions, less
cash acquired
|
|
-
|
|
|
|
(34.5)
|
|
|
Proceeds from sale of
assets and investments
|
|
70.6
|
|
|
|
10.8
|
|
|
Other investing
activities
|
|
(2.5)
|
|
|
|
1.5
|
|
|
Cash Used for
Investing Activities
|
|
(466.7)
|
|
|
|
(650.7)
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Long-term debt
proceeds
|
|
-
|
|
|
|
337.3
|
|
|
Payments on long-term
debt
|
|
(70.2)
|
|
|
|
(384.6)
|
|
|
Net increase in
commercial paper and short-term borrowings
|
|
.2
|
|
|
|
54.3
|
|
|
Dividends paid to
shareholders
|
|
(349.1)
|
|
|
|
(329.4)
|
|
|
Proceeds from stock
option exercises
|
|
35.5
|
|
|
|
77.2
|
|
|
Excess tax benefit
from share-based compensation
|
|
9.7
|
|
|
|
22.7
|
|
|
Other financing
activities
|
|
(25.0)
|
|
|
|
(34.1)
|
|
|
Cash Used for
Financing Activities
|
|
(398.9)
|
|
|
|
(256.6)
|
|
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
Cash used for
operating activities
|
|
(25.1)
|
|
|
|
(19.9)
|
|
|
Cash used for
investing activities
|
|
(97.0)
|
|
|
|
(189.1)
|
|
|
Cash provided by
financing activities
|
|
-
|
|
|
|
-
|
|
|
Cash Used for
Discontinued Operations
|
|
(122.1)
|
|
|
|
(209.0)
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
6.9
|
|
|
|
(11.7)
|
|
|
Increase (Decrease)
in Cash and Cash Items
|
|
106.7
|
|
|
|
(140.9)
|
|
|
Cash and Cash Items –
Beginning of Year
|
|
206.4
|
|
|
|
336.6
|
|
|
Cash and Cash
Items – End of Period
|
$
|
313.1
|
|
|
$
|
195.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
|
|
|
|
Cash paid for taxes
(net of cash refunds)
|
$
|
177.9
|
|
|
$
|
155.8
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
|
SUMMARY BY
BUSINESS SEGMENTS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Gases–
|
|
Materials
|
|
Corporate
|
|
Segment
|
|
(Millions of
dollars)
|
Americas
|
|
EMEA
|
|
Asia
|
|
Global
|
|
Technologies
|
|
and other
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
797.9
|
|
$
|
420.3
|
|
$
|
406.4
|
|
$
|
86.6
|
|
$
|
494.3
|
|
$
|
65.7
|
|
$
|
2,271.2
|
|
Operating income
(loss)
|
|
224.2
|
|
|
89.4
|
|
|
104.4
|
|
|
(10.9)
|
|
|
129.3
|
|
|
(4.5)
|
|
|
531.9
|
|
Depreciation and
amortization
|
|
109.4
|
|
|
48.3
|
|
|
48.5
|
|
|
1.8
|
|
|
20.0
|
|
|
4.1
|
|
|
232.1
|
|
Equity affiliates'
income
|
|
7.7
|
|
|
7.2
|
|
|
17.4
|
|
|
-
|
|
|
.2
|
|
|
-
|
|
|
32.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
(9.1)
|
|
|
444.9
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
31 March 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,634.0
|
|
$
|
858.6
|
|
$
|
819.6
|
|
$
|
190.9
|
|
$
|
984.3
|
|
$
|
139.6
|
|
$
|
4,627.0
|
|
Operating income
(loss)
|
|
436.0
|
|
|
181.1
|
|
|
221.1
|
|
|
(30.2)
|
|
|
256.5
|
|
|
(10.0)
|
|
|
1,054.5
|
|
Depreciation and
amortization
|
|
218.2
|
|
|
95.0
|
|
|
100.2
|
|
|
3.9
|
|
|
39.6
|
|
|
7.9
|
|
|
464.8
|
|
Equity affiliates'
income (loss)
|
|
22.2
|
|
|
14.8
|
|
|
29.1
|
|
|
(.5)
|
|
|
.6
|
|
|
-
|
|
|
66.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
(32.0)
|
|
|
891.7
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 March
2016
|
$
|
5,899.2
|
|
$
|
3,314.4
|
|
$
|
4,215.5
|
|
$
|
278.6
|
|
$
|
1,735.1
|
|
$
|
1,347.6
|
|
$
|
16,790.4
|
|
30 September
2015
|
|
5,774.9
|
|
|
3,323.9
|
|
|
4,154.0
|
|
|
370.5
|
|
|
1,741.9
|
|
|
1,075.7
|
|
|
16,440.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Segment
total
|
$
|
531.9
|
|
$
|
444.9
|
|
$
|
1,054.5
|
|
$
|
891.7
|
|
Business separation
costs
|
|
(7.4)
|
|
|
-
|
|
|
(19.4)
|
|
|
-
|
|
Business
restructuring and cost reduction actions
|
|
(8.6)
|
|
|
(55.4)
|
|
|
(8.6)
|
|
|
(87.8)
|
|
Pension settlement
loss
|
|
(2.6)
|
|
|
(12.6)
|
|
|
(2.6)
|
|
|
(12.6)
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
-
|
|
|
-
|
|
|
17.9
|
|
Consolidated
Total
|
$
|
513.3
|
|
$
|
376.9
|
|
$
|
1,023.9
|
|
$
|
809.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below is a
reconciliation of segment total assets to consolidated total
assets:
|
|
|
|
|
|
|
|
|
31 March
|
|
30
September
|
|
Total
Assets
|
2016
|
|
2015
|
|
Segment
total
|
$
|
16,790.4
|
|
$
|
16,440.9
|
|
Discontinued
operations
|
|
20.4
|
|
|
893.6
|
|
Consolidated
Total
|
$
|
16,810.8
|
|
$
|
17,334.5
|
|
AIR PRODUCTS AND CHEMICALS, INC. and
Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
(Millions of dollars, unless otherwise indicated)
1. DISCONTINUED OPERATIONS
On 29 March 2016, the Board of
Directors approved the Company's exit of its Energy-from-Waste
(EfW) business. As a result, efforts to start up and operate its
two EfW projects located in Tees Valley, United Kingdom, have been discontinued. The
decision to exit the business and stop development of the projects
was based on continued difficulties encountered; and the Company's
conclusion, based on testing and analysis completed during the
second fiscal quarter of 2016, that significant additional time and
resources would be required to make the projects operational. In
addition, the decision allows the Company to execute its strategy
of focusing resources on its core Industrial Gases business. As a
result, the EfW segment has been presented as a discontinued
operation. Prior year EfW business segment information has been
reclassified to conform to current year presentation. During the
three months ended 31 March 2016, a
loss on disposal of $945.7
($846.6 after-tax) was recorded,
primarily to write down assets to their estimated net realizable
value and record a liability for plant disposition costs. Income
tax benefits related only to one of the projects, as the other did
not qualify for a local tax deduction.
2. BALANCE SHEET CLASSIFICATION OF DEFERRED TAXES
In November 2015, the Financial
Accounting Standards Board (FASB) issued guidance to simplify the
presentation of deferred income taxes by requiring that all
deferred tax liabilities and assets be classified as noncurrent on
the balance sheet. As of the first quarter of fiscal year 2016, we
adopted this guidance on a retrospective basis. Accordingly, prior
year amounts have been reclassified to conform to the current year
presentation. The guidance, which did not change the existing
requirement to net deferred tax assets and liabilities within a
jurisdiction, resulted in a reclassification adjustment that
increased noncurrent deferred tax assets by $13.7 and decreased noncurrent deferred tax
liabilities by $99.9 as of
30 September 2015.
3. MATERIALS TECHNOLOGIES SEPARATION
On 16 September 2015, the Company
announced plans to separate its Materials Technologies business
into an independent publicly traded company and distribute to Air
Products shareholders all of the shares of the new public company
in a tax free distribution (a "spin-off"). Versum Materials, LLC,
or Versum, was formed as the new company to hold the Materials
Technologies business in November
2015 and is currently a wholly owned subsidiary of the
Company. The Company expects to complete the work to prepare Versum
to be a separate and independent company during fiscal year 2016
and is assessing market conditions to determine favorability for a
spin-off. Versum will be converted from a limited liability company
to a Delaware corporation (Versum
Materials, Inc.) prior to spin-off.
For the three and six months ended 31 March 2016, we
incurred separation costs of $7.4
($8.9 including tax impact, or
$.04 per share) and $19.4 ($20.9
including tax impact, or $.10 per
share), respectively, primarily related to legal and other advisory
fees. These fees are reflected on the consolidated income
statements as "Business separation costs." The results of
operations, financial condition, and cash flows of the Materials
Technologies business continue to be presented within our
consolidated financial statements as continuing operations. If the
Board of Directors approves the final spin-off and the spin-off
occurs, we expect the financial presentation of the historical
results of the spun-off business will be reflected as a
discontinued operation.
4. COST REDUCTION ACTIONS
In the second quarter of fiscal year 2016, we recognized an
expense of $8.6 ($7.1 after-tax, or $.03 per share) for severance and other benefits
related to the elimination of approximately 170 positions as part
of cost reduction actions. The expenses related primarily to the
Industrial Gases – Americas and the Industrial Gases – EMEA
segments.
5. 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 retirement date. Pension settlements
are recognized when cash payments exceed the sum of the service and
interest cost components of net periodic pension cost of the plan
for the fiscal year. During the second quarter of 2016, we
recognized a pension settlement charge of $2.6 ($1.6
after-tax, or $.01 per share). This
settlement accelerated the recognition of a portion of actuarial
losses deferred in accumulated other comprehensive loss. We expect
that additional settlement losses will be recognized during the
second half of the fiscal year.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/air-products-reports-fiscal-2016-second-quarter-adjusted-eps-up-17-percent-300259231.html
SOURCE Air Products