LEHIGH VALLEY, Pa.,
July 30, 2015 /PRNewswire/ --
- EPS of $1.65*, up 13 percent*
versus prior year on a non-GAAP diluted basis despite significant
currency headwinds
- Adjusted EBITDA margin of 30.7* percent up 430* basis points
versus prior year
- Accelerating benefits from restructuring, enabled by the new
organization
- Awarded major gases supply contract for new semiconductor giga
fab in South Korea
- EPS of $1.47 versus prior year of
$1.46 on a GAAP diluted basis
Air Products (NYSE: APD) today reported net income of
$359 million*, up 14 percent* versus
prior year, and diluted earnings per share (EPS) of $1.65*, up 13 percent* versus prior year for its
fiscal third quarter ended June 30,
2015.
On a GAAP basis, net income and diluted EPS from continuing
operations were $319 million and
$1.47, 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.
Third quarter sales of $2,470 million
decreased six percent versus prior year, as underlying sales growth
of four percent was offset by unfavorable currency and lower energy
pass-through. Volumes increased three percent, primarily in
Industrial Gases–Asia, Materials Technologies and the LNG business,
and pricing was up one percent.
Operating income of $482 million
increased 17 percent versus prior year, and operating margin of
19.5 percent improved 380 basis points, driven by cost performance,
higher pricing and higher volumes. Adjusted EBITDA of $758 million increased nine percent over prior
year, and EBITDA margin of 30.7 percent improved 430 basis points,
reflecting strong operating leverage.
Commenting on the quarter, Seifi
Ghasemi, chairman, president and chief executive officer,
said, "The Air Products team delivered another quarter of great
results, with particular strength in our regional Industrial Gases
segments, while Materials Technologies continued to improve. We
again showed strong improvement in safety, and despite significant
currency headwinds and stagnant economic conditions around the
globe, our earnings per share were up by 13 percent, EBITDA margins
increased to more than 30 percent, and this quarter's operating
margin is the highest in more than 25 years. This significant
improvement is a direct result of our people executing our
five-point strategy. As a result, we have again increased our full
year guidance to $6.50 - $6.60, which
at midpoint is up 13% over last year."
Third Quarter Results by Business Segment:
- Industrial Gases – Americas sales of $898 million decreased 16 percent versus prior
year on 13 percent lower energy pass-through and three percent
unfavorable currency. Underlying sales were flat, as higher pricing
offset lower volumes. Operating income of $207 million increased nine percent. Operating
margin of 23 percent improved 520 basis points over prior year,
driven by cost performance, lower energy pass-through, and higher
pricing. Adjusted EBITDA of $328
million increased six percent, and EBITDA margin of 36.5
percent improved 740 basis points over prior year. Sequentially,
operating income increased 13 percent on higher volumes and price
and lower costs.
- Industrial Gases – Europe,
Middle East, and Africa (EMEA) sales of $455 million declined 15 percent versus last
year, driven by 16 percent unfavorable currency. Volumes and
pricing were both up one percent. Operating income of $88 million increased two percent as strong cost
performance was largely offset by unfavorable currency, while
record operating margin of 19.2 percent increased 330 basis points.
Adjusted EBITDA of $147 million
decreased five percent versus prior year, and record EBITDA margin
of 32.2 percent increased 350 basis points.
- Industrial Gases – Asia
sales of $418 million increased 14
percent versus prior year, primarily on 11 percent volume growth
mainly from new plants. Unfavorable currency impacts reduced sales
by three percent. Operating income of $101
million increased 20 percent, and operating margin of 24.2
percent improved 130 basis points over prior year due to higher
volumes from the new plants and strong cost performance overcoming
negative pricing. Adjusted EBITDA of $166
million increased 12 percent. Sequentially, operating income
increased 19 percent on strong cost performance and higher seasonal
volumes.
- Materials Technologies sales of $540 million increased three percent over the
prior year. Underlying sales were up seven percent on four percent
higher volume growth and three percent positive pricing, partially
offset by unfavorable currency of four percent. On a constant
currency basis, Electronics Materials sales were up 18 percent on
strong volume growth and positive price. On a constant currency
basis, Performance Materials sales declined two percent from the
prior year on softer volumes. Record operating income of
$132 million increased 36 percent,
and record operating margin of 24.4 percent improved 600 basis
points versus prior year, primarily due to higher pricing and
volumes. Record adjusted EBITDA of $155
million increased 27 percent, and record EBITDA margin of
28.6 percent improved 540 basis points over prior year.
Non-GAAP results for the company exclude a pre-tax charge of
$59.8 million, or $0.18 per share, for business restructuring and
pension settlement.
Outlook
Looking ahead, Air Products expects fourth quarter EPS from
continuing operations to be between $1.75
and $1.85 per share. For the full fiscal year, the Company
is raising its guidance from continuing operations to $6.50 to $6.60 per share, which at the midpoint,
represents a 13 percent increase over fiscal 2014.
Subsequent Event
Earlier in July, Air Products acquired 30.5 percent of the
outstanding shares of Indura−an industrial
gas business in Latin America−increasing its ownership position
to 97.8 percent. The valuation was agreed at the time of initial
purchase in 2012 and will be a use of cash of $278 million in the company's fiscal fourth
quarter.
Access the Q3 earnings teleconference scheduled for
10:00 a.m. Eastern Time on
July 30 by calling 888-500-6954
(domestic) or 719-457-2715 (international) and entering passcode
1083893, 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; 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 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 third 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
|
Q3
|
|
YTD
|
|
|
Operating
|
|
Operating
|
|
Net
|
|
Diluted
|
|
Operating
|
|
Operating
|
|
Net
|
|
Diluted
|
2015 Q3 vs. 2014
Q3
|
|
Income
|
|
Margin
|
|
Income
|
|
EPS
|
|
Income
|
|
Margin
|
|
Income
|
|
EPS
|
2015 Q3
GAAP
|
|
$
|
422.5
|
|
|
|
17.1%
|
|
|
$
|
318.8
|
|
|
$
|
1.47
|
|
|
$
|
1,226.9
|
|
|
|
16.5%
|
|
|
$
|
933.4
|
|
|
$
|
4.30
|
2014 Q3
GAAP
|
|
|
413.8
|
|
|
|
15.7%
|
|
|
|
314.0
|
|
|
|
1.46
|
|
|
|
1,184.1
|
|
|
|
15.3%
|
|
|
|
884.6
|
|
|
|
4.12
|
Change
GAAP
|
|
$
|
8.7
|
|
|
|
140bp
|
|
|
$
|
4.8
|
|
|
$
|
.01
|
|
|
$
|
42.8
|
|
|
|
120bp
|
|
|
$
|
48.8
|
|
|
$
|
.18
|
% Change
GAAP
|
|
|
2%
|
|
|
|
|
|
|
|
2%
|
|
|
|
1%
|
|
|
|
4%
|
|
|
|
|
|
|
|
6%
|
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Q3
GAAP
|
|
$
|
422.5
|
|
|
|
17.1%
|
|
|
$
|
318.8
|
|
|
$
|
1.47
|
|
|
$
|
1,226.9
|
|
|
|
16.5%
|
|
|
$
|
933.4
|
|
|
$
|
4.30
|
Business
restructuring and cost reduction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
actions (tax impact
$19.4 and $47.3)
|
|
|
58.2
|
|
|
|
2.4%
|
|
|
|
38.8
|
|
|
|
.18
|
|
|
|
146.0
|
|
|
|
2.0%
|
|
|
|
98.7
|
|
|
|
.45
|
Pension settlement
loss (tax impact $.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and $5.3)
|
|
|
1.6
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
-
|
|
|
|
14.2
|
|
|
|
.2%
|
|
|
|
8.9
|
|
|
|
.04
|
Gain on previously
held equity interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(tax impact
$6.7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17.9)
|
|
|
|
(.3)%
|
|
|
|
(11.2)
|
|
|
|
(.05)
|
2015 Q3 Non-GAAP
Measure
|
|
$
|
482.3
|
|
|
|
19.5%
|
|
|
$
|
358.6
|
|
|
$
|
1.65
|
|
|
$
|
1,369.2
|
|
|
|
18.4%
|
|
|
$
|
1,029.8
|
|
|
$
|
4.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Q3
GAAP
|
|
$
|
413.8
|
|
|
|
15.7%
|
|
|
$
|
314.0
|
|
|
$
|
1.46
|
|
|
$
|
1,184.1
|
|
|
|
15.3%
|
|
|
$
|
884.6
|
|
|
$
|
4.12
|
2014 Q3 Non-GAAP
Measure
|
|
$
|
413.8
|
|
|
|
15.7%
|
|
|
$
|
314.0
|
|
|
$
|
1.46
|
|
|
$
|
1,184.1
|
|
|
|
15.3%
|
|
|
$
|
884.6
|
|
|
$
|
4.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change Non-GAAP
Measure
|
|
$
|
68.5
|
|
|
|
380bp
|
|
|
$
|
44.6
|
|
|
$
|
.19
|
|
|
$
|
185.1
|
|
|
|
310bp
|
|
|
$
|
145.2
|
|
|
$
|
.62
|
% Change Non-GAAP
Measure
|
|
|
17%
|
|
|
|
|
|
|
|
14%
|
|
|
|
13%
|
|
|
|
16%
|
|
|
|
|
|
|
|
16%
|
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
Operating
|
|
Net
|
|
Diluted
|
|
|
2015 Q3 vs. 2015
Q2
|
|
Income
|
|
Margin
|
|
Income
|
|
EPS
|
|
|
2015 Q3
GAAP
|
|
$
|
422.5
|
|
|
|
17.1%
|
|
|
$
|
318.8
|
|
|
$
|
1.47
|
|
|
2015 Q2
GAAP
|
|
|
374.4
|
|
|
|
15.5%
|
|
|
|
290.0
|
|
|
|
1.33
|
|
|
Change
GAAP
|
|
$
|
48.1
|
|
|
|
160bp
|
|
|
$
|
28.8
|
|
|
$
|
.14
|
|
|
% Change
GAAP
|
|
|
13%
|
|
|
|
|
|
|
|
10%
|
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Q3
GAAP
|
|
$
|
422.5
|
|
|
|
17.1%
|
|
|
$
|
318.8
|
|
|
$
|
1.47
|
|
|
Business
restructuring and cost reduction actions (tax impact
$19.4)
|
|
58.2
|
|
|
|
2.4%
|
|
|
|
38.8
|
|
|
|
.18
|
|
|
Pension settlement
loss (tax impact $.6)
|
|
1.6
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
-
|
|
|
2015 Q3 Non-GAAP
Measure
|
|
$
|
482.3
|
|
|
|
19.5%
|
|
|
$
|
358.6
|
|
|
$
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change Non-GAAP
Measure
|
|
$
|
39.9
|
|
|
|
120bp
|
|
|
$
|
22.5
|
|
|
$
|
.10
|
|
|
% Change Non-GAAP
Measure
|
|
|
9%
|
|
|
|
|
|
|
|
7%
|
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
YTD
|
|
2015
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Total
|
|
Income from
Continuing Operations(A)
|
$
|
337.5
|
|
|
|
296.9
|
|
|
|
333.2
|
|
|
|
|
|
|
$
|
967.6
|
|
Add: Interest
expense
|
|
29.1
|
|
|
|
23.4
|
|
|
|
28.2
|
|
|
|
|
|
|
|
80.7
|
|
Add: Income tax
provision
|
|
106.5
|
|
|
|
87.1
|
|
|
|
103.5
|
|
|
|
|
|
|
|
297.1
|
|
Add: Depreciation and
amortization
|
|
235.5
|
|
|
|
233.3
|
|
|
|
233.0
|
|
|
|
|
|
|
|
701.8
|
|
Add: Business
restructuring and cost reduction actions
|
|
32.4
|
|
|
|
55.4
|
|
|
|
58.2
|
|
|
|
|
|
|
|
146.0
|
|
Add: Pension
settlement loss
|
|
-
|
|
|
|
12.6
|
|
|
|
1.6
|
|
|
|
|
|
|
|
14.2
|
|
Less: Gain on
previously held equity interest
|
|
17.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
17.9
|
|
Adjusted
EBITDA
|
$
|
723.1
|
|
|
|
708.7
|
|
|
|
757.7
|
|
|
|
|
|
|
$
|
2,189.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
YTD
|
|
2014
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Total
|
|
Income from
Continuing Operations(A)
|
$
|
296.0
|
|
|
$
|
291.5
|
|
|
$
|
323.5
|
|
|
$
|
77.5
|
|
|
$
|
911.0
|
|
Add: Interest
expense
|
|
33.3
|
|
|
|
31.5
|
|
|
|
31.3
|
|
|
|
29.0
|
|
|
|
96.1
|
|
Add: Income tax
provision
|
|
94.5
|
|
|
|
92.1
|
|
|
|
102.1
|
|
|
|
77.3
|
(B)
|
|
|
288.7
|
|
Add: Depreciation and
amortization
|
|
234.2
|
|
|
|
229.1
|
|
|
|
239.0
|
|
|
|
254.6
|
|
|
|
702.3
|
|
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
|
|
|
$
|
1,998.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
$
|
61.8
|
|
|
|
|
|
|
$
|
191.4
|
|
Adjusted EBITDA %
change
|
|
10
|
%
|
|
10
|
%
|
|
9
|
%
|
|
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Q3 vs. 2015
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
|
|
|
|
|
|
|
|
$
|
49.0
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA %
change
|
|
|
|
|
|
|
|
|
7
|
%
|
|
|
|
|
|
|
|
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
30 June 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
206.5
|
|
$
|
87.6
|
|
$
|
100.9
|
|
$
|
(24.1)
|
|
$
|
131.5
|
|
$
|
(2.5)
|
|
$
|
(17.6)
|
|
$
|
482.3
|
|
Add: Depreciation and
amortization
|
|
103.9
|
|
|
47.0
|
|
|
51.9
|
|
|
4.2
|
|
|
22.7
|
|
|
-
|
|
|
3.3
|
|
|
233.0
|
|
Add: Equity
affiliates' income
|
|
17.3
|
|
|
12.1
|
|
|
12.7
|
|
|
-
|
|
|
.3
|
|
|
-
|
|
|
-
|
|
|
42.4
|
|
Adjusted
EBITDA
|
$
|
327.7
|
|
$
|
146.7
|
|
$
|
165.5
|
|
$
|
(19.9)
|
|
$
|
154.5
|
|
$
|
(2.5)
|
|
$
|
(14.3)
|
|
$
|
757.7
|
|
Adjusted EBITDA
margin
|
|
36.5%
|
|
|
32.2%
|
|
|
39.6%
|
|
|
|
|
|
28.6%
|
|
|
|
|
|
|
|
|
30.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
30 June 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
188.9
|
|
$
|
85.7
|
|
$
|
83.8
|
|
$
|
(14.4)
|
|
$
|
96.6
|
|
$
|
(3.2)
|
|
$
|
(23.6)
|
|
$
|
413.8
|
|
Add: Depreciation and
amortization
|
|
105.6
|
|
|
54.9
|
|
|
50.0
|
|
|
1.7
|
|
|
24.5
|
|
|
-
|
|
|
2.3
|
|
|
239.0
|
|
Add: Equity
affiliates' income
|
|
14.7
|
|
|
13.5
|
|
|
13.4
|
|
|
.7
|
|
|
.8
|
|
|
-
|
|
|
-
|
|
|
43.1
|
|
Adjusted
EBITDA
|
$
|
309.2
|
|
$
|
154.1
|
|
$
|
147.2
|
|
$
|
(12.0)
|
|
$
|
121.9
|
|
$
|
(3.2)
|
|
$
|
(21.3)
|
|
$
|
695.9
|
|
Adjusted EBITDA
margin
|
|
29.1%
|
|
|
28.7%
|
|
|
40.2%
|
|
|
|
|
|
23.2%
|
|
|
|
|
|
|
|
|
26.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
18.5
|
|
$
|
(7.4)
|
|
$
|
18.3
|
|
$
|
(7.9)
|
|
$
|
32.6
|
|
$
|
.7
|
|
$
|
7.0
|
|
$
|
61.8
|
|
Adjusted EBITDA %
change
|
|
6%
|
|
|
(5)%
|
|
|
12%
|
|
|
(66)%
|
|
|
27%
|
|
|
22%
|
|
|
33%
|
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin change
|
740bp
|
|
|
350bp
|
|
|
(60bp)
|
|
|
|
|
|
540bp
|
|
|
|
|
|
|
|
|
430bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
30 June 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
599.7
|
|
$
|
239.9
|
|
$
|
276.1
|
|
$
|
(49.9)
|
|
$
|
360.3
|
|
$
|
(7.8)
|
|
$
|
(49.1)
|
|
$
|
1,369.2
|
|
Add: Depreciation and
amortization
|
|
310.8
|
|
|
145.7
|
|
|
151.8
|
|
|
14.0
|
|
|
70.0
|
|
|
-
|
|
|
9.5
|
|
|
701.8
|
|
Add: Equity
affiliates' income
|
|
49.6
|
|
|
30.4
|
|
|
36.7
|
|
|
.2
|
|
|
1.6
|
|
|
-
|
|
|
-
|
|
|
118.5
|
|
Adjusted
EBITDA
|
$
|
960.1
|
|
$
|
416.0
|
|
$
|
464.6
|
|
$
|
(35.7)
|
|
$
|
431.9
|
|
$
|
(7.8)
|
|
$
|
(39.6)
|
|
$
|
2,189.5
|
|
Adjusted EBITDA
margin
|
|
34.4%
|
|
|
29.6%
|
|
|
38.4%
|
|
|
|
|
|
27.0%
|
|
|
|
|
|
|
|
|
29.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
30 June 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
543.0
|
|
$
|
258.4
|
|
$
|
237.7
|
|
$
|
(39.3)
|
|
$
|
254.7
|
|
$
|
(9.6)
|
|
$
|
(60.8)
|
|
$
|
1,184.1
|
|
Add: Depreciation and
amortization
|
|
309.0
|
|
|
164.8
|
|
|
144.5
|
|
|
5.0
|
|
|
71.7
|
|
|
-
|
|
|
7.3
|
|
|
702.3
|
|
Add: Equity
affiliates' income
|
|
44.9
|
|
|
32.5
|
|
|
30.6
|
|
|
1.7
|
|
|
2.0
|
|
|
-
|
|
|
-
|
|
|
111.7
|
|
Adjusted
EBITDA
|
$
|
896.9
|
|
$
|
455.7
|
|
$
|
412.8
|
|
$
|
(32.6)
|
|
$
|
328.4
|
|
$
|
(9.6)
|
|
$
|
(53.5)
|
|
$
|
1,998.1
|
|
Adjusted EBITDA
margin
|
|
29.5%
|
|
|
28.0%
|
|
|
36.6%
|
|
|
|
|
|
21.8%
|
|
|
|
|
|
|
|
|
25.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change
|
$
|
63.2
|
|
$
|
(39.7)
|
|
$
|
51.8
|
|
$
|
(3.1)
|
|
$
|
103.5
|
|
$
|
1.8
|
|
$
|
13.9
|
|
$
|
191.4
|
|
Adjusted EBITDA %
change
|
|
7%
|
|
|
(9)%
|
|
|
13%
|
|
|
(10)%
|
|
|
32%
|
|
|
19%
|
|
|
26%
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin change
|
490bp
|
|
|
160bp
|
|
|
180bp
|
|
|
|
|
|
520bp
|
|
|
|
|
|
|
|
|
370bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Nine Months
Ended
|
|
|
|
|
30 June
|
|
30 June
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Capital expenditures
– GAAP basis
|
|
$
|
401.4
|
|
$
|
460.4
|
|
$
|
1,253.5
|
|
$
|
1,262.6
|
|
Capital lease
expenditures
|
|
|
31.8
|
|
|
57.7
|
|
|
79.0
|
|
|
156.8
|
|
Purchase of
noncontrolling interests in a subsidiary
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
.5
|
|
Capital expenditures
– Non-GAAP basis
|
|
$
|
433.2
|
|
$
|
518.1
|
|
$
|
1,332.5
|
|
$
|
1,419.9
|
|
|
|
|
FY2015
|
|
|
|
|
Forecast
|
|
Capital expenditures
– GAAP basis
|
|
$
|
1,650-1,700
|
|
Capital lease
expenditures
|
|
|
50-100
|
|
Purchase of
noncontrolling interest
|
|
|
280
|
|
Capital expenditures
– Non-GAAP basis
|
|
$
|
1,980-2,080
|
|
OUTLOOK
Guidance provided is on a non-GAAP basis, which excludes the
impact of certain items that we believe are not representative of
our underlying business.
|
|
Diluted
EPS
|
|
2014
Non-GAAP
|
$
|
5.78
|
|
2015 Non-GAAP
Outlook
|
|
6.50–6.60
|
|
Change
Non-GAAP
|
$
|
.72–.82
|
|
% Change
Non-GAAP
|
|
12%–14%
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
INCOME STATEMENTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
30 June
|
|
|
30 June
|
|
(Millions of dollars,
except for share data)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Sales
|
$
|
2,470.2
|
|
|
$
|
2,634.6
|
|
|
$
|
7,445.5
|
|
|
$
|
7,762.0
|
|
Cost of
sales
|
|
1,716.4
|
|
|
|
1,918.7
|
|
|
|
5,247.0
|
|
|
|
5,702.2
|
|
Selling and
administrative
|
|
242.2
|
|
|
|
272.0
|
|
|
|
741.3
|
|
|
|
816.3
|
|
Research and
development
|
|
33.8
|
|
|
|
33.8
|
|
|
|
105.5
|
|
|
|
100.5
|
|
Business
restructuring and cost reduction actions
|
|
58.2
|
|
|
|
-
|
|
|
|
146.0
|
|
|
|
-
|
|
Pension settlement
loss
|
|
1.6
|
|
|
|
-
|
|
|
|
14.2
|
|
|
|
-
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
|
-
|
|
|
|
17.9
|
|
|
|
-
|
|
Other income
(expense), net
|
|
4.5
|
|
|
|
3.7
|
|
|
|
17.5
|
|
|
|
41.1
|
|
Operating
Income
|
|
422.5
|
|
|
|
413.8
|
|
|
|
1,226.9
|
|
|
|
1,184.1
|
|
Equity affiliates'
income
|
|
42.4
|
|
|
|
43.1
|
|
|
|
118.5
|
|
|
|
111.7
|
|
Interest
expense
|
|
28.2
|
|
|
|
31.3
|
|
|
|
80.7
|
|
|
|
96.1
|
|
Income from
Continuing Operations before Taxes
|
|
436.7
|
|
|
|
425.6
|
|
|
|
1,264.7
|
|
|
|
1,199.7
|
|
Income tax
provision
|
|
103.5
|
|
|
|
102.1
|
|
|
|
297.1
|
|
|
|
288.7
|
|
Income from
Continuing Operations
|
|
333.2
|
|
|
|
323.5
|
|
|
|
967.6
|
|
|
|
911.0
|
|
Income from
Discontinued Operations, net of tax
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.1
|
|
Net
Income
|
|
333.2
|
|
|
|
323.5
|
|
|
|
967.6
|
|
|
|
914.1
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
14.4
|
|
|
|
9.5
|
|
|
|
34.2
|
|
|
|
26.4
|
|
Net Income
Attributable to Air Products
|
$
|
318.8
|
|
|
$
|
314.0
|
|
|
$
|
933.4
|
|
|
$
|
887.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
318.8
|
|
|
$
|
314.0
|
|
|
$
|
933.4
|
|
|
$
|
884.6
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.1
|
|
Net Income
Attributable to Air Products
|
$
|
318.8
|
|
|
$
|
314.0
|
|
|
$
|
933.4
|
|
|
$
|
887.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1.48
|
|
|
$
|
1.47
|
|
|
$
|
4.35
|
|
|
$
|
4.17
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
.01
|
|
Net Income
Attributable to Air Products
|
$
|
1.48
|
|
|
$
|
1.47
|
|
|
$
|
4.35
|
|
|
$
|
4.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1.47
|
|
|
$
|
1.46
|
|
|
$
|
4.30
|
|
|
$
|
4.12
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
.01
|
|
Net Income
Attributable to Air Products
|
$
|
1.47
|
|
|
$
|
1.46
|
|
|
$
|
4.30
|
|
|
$
|
4.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares — Basic (in millions)
|
|
215.2
|
|
|
|
212.9
|
|
|
|
214.8
|
|
|
|
212.4
|
|
Weighted Average
Common Shares — Diluted (in millions)
|
|
217.4
|
|
|
|
215.4
|
|
|
|
217.2
|
|
|
|
214.9
|
|
Dividends Declared
Per Common Share — Cash
|
$
|
.81
|
|
|
$
|
.77
|
|
|
$
|
2.39
|
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
233.0
|
|
|
$
|
239.0
|
|
|
$
|
701.8
|
|
|
$
|
702.3
|
|
|
Capital expenditures
on a Non-GAAP basis
|
|
433.2
|
|
|
|
518.1
|
|
|
|
1,332.5
|
|
|
|
1,419.9
|
|
|
|
(see page 8 for
reconciliation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June
|
30
September
|
|
(Millions of
dollars)
|
|
2015
|
|
|
2014
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
items
|
|
$
|
215.3
|
|
|
$
|
336.6
|
|
|
Trade receivables,
net
|
|
|
1,440.8
|
|
|
|
1,486.0
|
|
|
Inventories
|
|
|
681.9
|
|
|
|
706.0
|
|
|
Contracts in
progress, less progress billings
|
|
|
149.0
|
|
|
|
155.4
|
|
|
Prepaid
expenses
|
|
|
63.4
|
|
|
|
87.8
|
|
|
Other receivables and
current assets
|
|
|
551.9
|
|
|
|
523.0
|
|
|
Total Current
Assets
|
|
|
3,102.3
|
|
|
|
3,294.8
|
|
|
Investment in net
assets of and advances to equity affiliates
|
|
|
1,244.2
|
|
|
|
1,257.9
|
|
|
Plant and equipment,
at cost
|
|
|
20,472.4
|
|
|
|
20,223.5
|
|
|
Less: accumulated
depreciation
|
|
|
10,751.6
|
|
|
|
10,691.4
|
|
|
Plant and equipment,
net
|
|
|
9,720.8
|
|
|
|
9,532.1
|
|
|
Goodwill,
net
|
|
|
1,163.8
|
|
|
|
1,237.3
|
|
|
Intangible assets,
net
|
|
|
541.5
|
|
|
|
615.8
|
|
|
Noncurrent capital
lease receivables
|
|
|
1,375.1
|
|
|
|
1,414.9
|
|
|
Other noncurrent
assets
|
|
|
523.8
|
|
|
|
426.3
|
|
|
Total Noncurrent
Assets
|
|
|
14,569.2
|
|
|
|
14,484.3
|
|
|
Total
Assets
|
|
$
|
17,671.5
|
|
|
$
|
17,779.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Payables and accrued
liabilities
|
|
$
|
1,700.6
|
|
|
$
|
1,591.0
|
|
|
Accrued income
taxes
|
|
|
45.6
|
|
|
|
78.0
|
|
|
Short-term
borrowings
|
|
|
1,087.8
|
|
|
|
1,228.7
|
|
|
Current portion of
long-term debt
|
|
|
84.9
|
|
|
|
65.3
|
|
|
Total Current
Liabilities
|
|
|
2,918.9
|
|
|
|
2,963.0
|
|
|
Long-term
debt
|
|
|
4,690.5
|
|
|
|
4,824.5
|
|
|
Other noncurrent
liabilities
|
|
|
1,022.5
|
|
|
|
1,187.5
|
|
|
Deferred income
taxes
|
|
|
1,030.4
|
|
|
|
995.5
|
|
|
Total Noncurrent
Liabilities
|
|
|
6,743.4
|
|
|
|
7,007.5
|
|
|
Total
Liabilities
|
|
|
9,662.3
|
|
|
|
9,970.5
|
|
|
Redeemable
Noncontrolling Interest
|
|
|
277.9
|
|
|
|
287.2
|
|
|
Air Products
Shareholders' Equity
|
|
|
7,586.0
|
|
|
|
7,365.8
|
|
|
Noncontrolling
Interests
|
|
|
145.3
|
|
|
|
155.6
|
|
|
Total
Equity
|
|
|
7,731.3
|
|
|
|
7,521.4
|
|
|
Total Liabilities
and Equity
|
|
$
|
17,671.5
|
|
|
$
|
17,779.1
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Nine Months
Ended
|
|
|
|
|
30 June
|
|
|
(Millions of
dollars)
|
2015
|
|
|
2014
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
967.6
|
|
|
$
|
914.1
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
34.2
|
|
|
|
26.4
|
|
|
Net income
attributable to Air Products
|
|
933.4
|
|
|
|
887.7
|
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
(3.1)
|
|
|
Income from
continuing operations attributable to Air Products
|
|
933.4
|
|
|
|
884.6
|
|
|
Adjustments to
reconcile income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
701.8
|
|
|
|
702.3
|
|
|
|
Deferred income
taxes
|
|
18.5
|
|
|
|
69.8
|
|
|
|
Gain on previously
held equity interest
|
|
(17.9)
|
|
|
|
-
|
|
|
|
Undistributed
earnings of unconsolidated affiliates
|
|
(74.6)
|
|
|
|
(36.7)
|
|
|
|
Share-based
compensation
|
|
37.3
|
|
|
|
32.5
|
|
|
|
Noncurrent capital
lease receivables
|
|
(3.9)
|
|
|
|
11.8
|
|
|
|
Write-down of
long-lived assets associated with restructuring
|
|
27.8
|
|
|
|
-
|
|
|
|
Other
adjustments
|
|
(62.9)
|
|
|
|
102.8
|
|
|
Working capital
changes that provided (used) cash, excluding effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
(25.6)
|
|
|
|
(77.1)
|
|
|
|
Inventories
|
|
2.4
|
|
|
|
12.6
|
|
|
|
Contracts in
progress, less progress billings
|
|
.9
|
|
|
|
(1.1)
|
|
|
|
Other
receivables
|
|
(52.3)
|
|
|
|
(3.1)
|
|
|
|
Payables and accrued
liabilities
|
|
178.9
|
|
|
|
(125.6)
|
|
|
|
Other working
capital
|
|
(5.9)
|
|
|
|
11.2
|
|
|
Cash Provided by
Operating Activities
|
|
1,657.9
|
|
|
|
1,584.0
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Additions to plant
and equipment
|
|
(1,214.7)
|
|
|
|
(1,264.9)
|
|
|
Acquisitions, less
cash acquired
|
|
(34.5)
|
|
|
|
-
|
|
|
Investment in and
advances to unconsolidated affiliates
|
|
(4.3)
|
|
|
|
2.3
|
|
|
Proceeds from sale of
assets and investments
|
|
15.1
|
|
|
|
34.0
|
|
|
Other investing
activities
|
|
(.6)
|
|
|
|
(1.5)
|
|
|
Cash Used for
Investing Activities
|
|
(1,239.0)
|
|
|
|
(1,230.1)
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Long-term debt
proceeds
|
|
338.0
|
|
|
|
57.3
|
|
|
Payments on long-term
debt
|
|
(559.2)
|
|
|
|
(591.7)
|
|
|
Net increase in
commercial paper and short-term borrowings
|
|
122.0
|
|
|
|
422.7
|
|
|
Dividends paid to
shareholders
|
|
(503.4)
|
|
|
|
(463.7)
|
|
|
Proceeds from stock
option exercises
|
|
92.5
|
|
|
|
106.5
|
|
|
Excess tax benefit
from share-based compensation
|
|
26.7
|
|
|
|
22.5
|
|
|
Other financing
activities
|
|
(45.3)
|
|
|
|
(36.3)
|
|
|
Cash Used for
Financing Activities
|
|
(528.7)
|
|
|
|
(482.7)
|
|
|
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
|
|
(11.5)
|
|
|
|
5.5
|
|
|
Decrease in Cash and
Cash Items
|
|
(121.3)
|
|
|
|
(112.8)
|
|
|
Cash and Cash Items –
Beginning of Year
|
|
336.6
|
|
|
|
450.4
|
|
|
Cash and Cash
Items – End of Period
|
$
|
215.3
|
|
|
$
|
337.6
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
|
|
|
|
Cash paid for taxes
(net of cash refunds)
|
$
|
261.9
|
|
|
$
|
118.3
|
|
|
|
|
|
|
|
|
|
|
|
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
30 June 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
898.2
|
|
$
|
455.2
|
|
$
|
417.6
|
|
$
|
71.3
|
|
$
|
539.8
|
|
$
|
-
|
|
$
|
88.1
|
|
$
|
2,470.2
|
|
Operating income
(loss)
|
|
206.5
|
|
|
87.6
|
|
|
100.9
|
|
|
(24.1)
|
|
|
131.5
|
|
|
(2.5)
|
|
|
(17.6)
|
|
|
482.3
|
|
Depreciation and
amortization
|
|
103.9
|
|
|
47.0
|
|
|
51.9
|
|
|
4.2
|
|
|
22.7
|
|
|
-
|
|
|
3.3
|
|
|
233.0
|
|
Equity affiliates'
income
|
|
17.3
|
|
|
12.1
|
|
|
12.7
|
|
|
-
|
|
|
.3
|
|
|
-
|
|
|
-
|
|
|
42.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
30 June 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,064.0
|
|
$
|
537.4
|
|
$
|
366.2
|
|
$
|
70.8
|
|
$
|
524.7
|
|
$
|
-
|
|
$
|
71.5
|
|
$
|
2,634.6
|
|
Operating income
(loss)
|
|
188.9
|
|
|
85.7
|
|
|
83.8
|
|
|
(14.4)
|
|
|
96.6
|
|
|
(3.2)
|
|
|
(23.6)
|
|
|
413.8
|
|
Depreciation and
amortization
|
|
105.6
|
|
|
54.9
|
|
|
50.0
|
|
|
1.7
|
|
|
24.5
|
|
|
-
|
|
|
2.3
|
|
|
239.0
|
|
Equity affiliates'
income
|
|
14.7
|
|
|
13.5
|
|
|
13.4
|
|
|
.7
|
|
|
.8
|
|
|
-
|
|
|
-
|
|
|
43.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
30 June 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
2,791.6
|
|
$
|
1,404.8
|
|
$
|
1,209.3
|
|
$
|
197.4
|
|
$
|
1,597.1
|
|
$
|
-
|
|
$
|
245.3
|
|
$
|
7,445.5
|
|
Operating income
(loss)
|
|
599.7
|
|
|
239.9
|
|
|
276.1
|
|
|
(49.9)
|
|
|
360.3
|
|
|
(7.8)
|
|
|
(49.1)
|
|
|
1,369.2
|
|
Depreciation and
amortization
|
|
310.8
|
|
|
145.7
|
|
|
151.8
|
|
|
14.0
|
|
|
70.0
|
|
|
-
|
|
|
9.5
|
|
|
701.8
|
|
Equity affiliates'
income
|
|
49.6
|
|
|
30.4
|
|
|
36.7
|
|
|
.2
|
|
|
1.6
|
|
|
-
|
|
|
-
|
|
|
118.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
30 June 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
3,040.8
|
|
$
|
1,630.0
|
|
$
|
1,127.2
|
|
$
|
206.4
|
|
$
|
1,503.8
|
|
$
|
-
|
|
$
|
253.8
|
|
$
|
7,762.0
|
|
Operating income
(loss)
|
|
543.0
|
|
|
258.4
|
|
|
237.7
|
|
|
(39.3)
|
|
|
254.7
|
|
|
(9.6)
|
|
|
(60.8)
|
|
|
1,184.1
|
|
Depreciation and
amortization
|
|
309.0
|
|
|
164.8
|
|
|
144.5
|
|
|
5.0
|
|
|
71.7
|
|
|
-
|
|
|
7.3
|
|
|
702.3
|
|
Equity affiliates'
income
|
|
44.9
|
|
|
32.5
|
|
|
30.6
|
|
|
1.7
|
|
|
2.0
|
|
|
-
|
|
|
-
|
|
|
111.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June
2015
|
$
|
6,092.4
|
|
$
|
3,268.4
|
|
$
|
4,207.1
|
|
$
|
291.2
|
|
$
|
1,826.8
|
|
$
|
846.0
|
|
$
|
1,139.6
|
|
$
|
17,671.5
|
|
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
|
|
|
Nine Months
Ended
|
|
|
|
|
30 June
|
|
|
30 June
|
|
Operating
Income
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Segment
total
|
$
|
482.3
|
|
$
|
413.8
|
|
$
|
1,369.2
|
|
$
|
1,184.1
|
|
Business
restructuring and cost reduction actions
|
|
(58.2)
|
|
|
-
|
|
|
(146.0)
|
|
|
-
|
|
Pension settlement
loss
|
|
(1.6)
|
|
|
-
|
|
|
(14.2)
|
|
|
-
|
|
Gain on previously
held equity interest
|
|
-
|
|
|
-
|
|
|
17.9
|
|
|
-
|
|
Consolidated
Total
|
$
|
422.5
|
|
$
|
413.8
|
|
$
|
1,226.9
|
|
$
|
1,184.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 nine months
ended 30 June 2015, we recognized an
expense of $58.2 ($38.8 after-tax, or $.18 per share) and $146.0 ($98.7
after-tax, or $.45 per share),
respectively. Severance and other benefits totaled $22.5 and $110.3
for the three and nine months ended 30 June
2015, respectively. During the first nine months of fiscal
year 2015, the reorganization has resulted in the elimination of
approximately 1,500 positions. The third quarter expense also
included $35.7 for asset and
associated contract actions related to the exit of product lines
within the Industrial Gases – Global and Materials
Technologies segments. 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 and nine months
ended 30 June 2015, we recognized a
pension settlement charge of $1.6
($1.0 after-tax) and $14.2 ($8.9
after-tax, or $.04 per share) 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 fourth quarter.
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 nine months ended 30 June 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-third-quarter-eps-up-13-percent-300121132.html
SOURCE Air Products