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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) 20 January 1994
Air Products and Chemicals, Inc.
(Exact name of registrant as specified in charter)
Delaware 1-4534 23-1274455
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-481-4911
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Item 5. Other Events.
On January 20, 1994, the Registrant reported first quarter income of
$75 million, or 66 cents per share, before the cumulative effect of required
accounting changes, compared to $69 million, or 61 cents per share, last year.
These results reflect an increase of 12 percent after excluding non-operating
gains of 2 cents per share in the current quarter and 4 cents per share last
year. Sales rose 2 percent to $827 million compared to $813 in last year's
first quarter. Including the cumulative effect of accounting changes, net
income equaled $89 million, or 78 cents per share, in the current quarter.
In summarizing the quarter, Air Products' Chairman H. A. Wagner said,
"Improved results reflect higher operating profits in our three major
businesses including equity affiliates and the initial benefits of our program
to improve long-term competitiveness and accelerate profit growth."
Industrial gas sales for the quarter increased 5 percent while
operating income was up 2 percent compared to last year. Most major product
lines experienced increased volumes both in the United States and Europe,
although pricing pressures continued worldwide. Equity affiliates reported
higher results partially due to the full quarter impact of the Company's
increased ownership position in its Mexican joint venture.
In chemicals, first quarter sales rose 4 percent and operating income
increased 6 percent. Volumes were higher in most major product lines. Ammonia
and methanol margins improved substantially on higher prices and lower natural
gas costs during the
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quarter; however margin pressures continued in the Company's polyvinyl alcohol
business.
Profits in the environmental and energy systems business were up
significantly due to stronger operations at cogeneration and waste-to-energy
facilities, including American Ref-Fuel's newest plant in Niagara Falls, New
York.
The Equipment and Technology segment reported lower sales and
operating income compared to the strong quarter last year. A lower overall
level of activity in the equipment business was partially offset by favorable
project execution. Last year's quarter also included a gain from selling the
Company's remaining interest in a small technology business.
Financial tables follow:
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AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
(In millions, except earnings per share)
<TABLE>
<CAPTION>
Three Months Ended 31 December 1993 1992
- ------------------------------ ---- ----
<S> <C> <C>
Sales $827.3 $813.5
Income before Cumulative Effect
of Accounting Changes 75.1(a) 69.0(c)
Cumulative Effect of Accounting
Changes 14.3(b) --
------ ------
Net Income $ 89.4 $ 69.0
Earnings Per Share
Income before Cumulative Effect
of Accounting Changes $.66(a) $.61(c)
Cumulative Effect of Accounting
Changes .12(b) --
---- ----
Net Income $.78 $.61
Average Shares Outstanding 114.2 113.6
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</TABLE>
(a) Includes an after-tax benefit of $2.3 million, or $.02 per share, from the
favorable tax treatment, net of expense, of the charitable contribution of
the remaining shares of a stock investment in an insurance company.
(b) The company adopted Statement of Financial Accounting Standard (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," SFAS No. 109, "Accounting for Income Taxes," and SFAS No. 112,
"Employers' Accounting for Postemployment Benefits," on 1 October 1993 and
recognized the cumulative effect of these accounting changes.
(c) Includes an after-tax gain of $4.2 million, or $.04 per share, from the
sale of a business venture and the partial sale of stock options in an
insurance company.
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AIR PRODUCTS AND CHEMICALS, INC.
OPERATING RESULTS
(Unaudited)
SUMMARY BY BUSINESS SEGMENTS
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
31 December
1993 1992
---- ----
<S> <C> <C>
Sales:
Industrial Gases $471.8 $448.1
Chemicals 271.4 260.1
Environmental/Energy 14.3 23.7
Equipment/Technology 69.8 81.6
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CONSOLIDATED 827.3 813.5
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Operating Income:
Industrial Gases 92.9 91.0
Chemicals 31.8 29.9
Environmental/Energy .2 (1.9)
Equipment/Technology 7.2 15.0
Corporate and Other (11.3) (9.8)
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CONSOLIDATED 120.8 124.2
Equity Affiliates' Income:
Industrial Gases 1.0 (1.6)
Chemicals (.1) --
Environmental/Energy 5.4 1.2
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CONSOLIDATED 6.3 (.4)
Interest Expense 19.8 21.5
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INCOME BEFORE TAXES 107.3 102.3
Income Taxes 32.2 33.3
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INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGES 75.1 69.0
Cumulative Effect of Accounting
Changes, Net of Income Taxes 14.3 --
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NET INCOME $ 89.4 $ 69.0
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</TABLE>
Fiscal 1993 operating income of the industrial gases segment and corporate and
other have been restated to reflect the current year presentation of Brazilian
conversion gains related to U.S. dollar denominated investments. These gains
were reclassified from interest income to foreign exchange gains/losses. For
the three months ended 31 December 1992, operating income of the industrial
gases segment was reduced by $2.1 million with a corresponding increase in
corporate and other. For the year ended 30 September 1993, this
reclassification will reduce the operating income of the industrial gases
segment by $12.3 million.
For the three months ended 31 December 1993, corporate and other includes an
expense of $2.3 million for the charitable contribution of the remaining shares
of a stock investment in an insurance company. The tax benefit associated with
this contribution, based on fair value of the investment, was $4.6 million.
This transaction reduced the effective tax rate from 33.6% to 30.0% for the
three month period ended 31 December 1993.
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Effective 1 October 1993, the company adopted SFAS No. 106, SFAS No. 109, and
SFAS No. 112. The cumulative effect of these accounting changes on years prior
to fiscal 1994 is included in net income of the three months ended 31 December
1993. The cumulative effect of each of these standards is as follows: SFAS No.
106 ($31.3 million charge); SFAS No. 109 ($55.9 million gain); and SFAS No. 112
($10.3 million charge). Prior year financial statements have not been restated
to apply the provisions of these standards. The impact of these accounting
changes on income for the three months ended 31 December 1993, exclusive of the
cumulative effect as of 1 October 1993, is not material.
For the three months ended 31 December 1992, equipment and technology's
operating income includes a gain of $3.9 million ($2.4 million after tax) from
the sale of a business venture. In addition, corporate and other includes a
gain of $2.8 million ($1.8 million after-tax) from the partial sale of stock
options in an insurance company.
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AIR PRODUCTS AND CHEMICALS, INC.
OPERATING RESULTS
(Unaudited)
SUMMARY BY GEOGRAPHIC LOCATIONS
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
31 December
1993 1992
---- ----
<S> <C> <C>
Sales:
United States $621.5 $601.7
Europe 178.7 186.2
Canada/Latin America 27.1 25.6
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CONSOLIDATED $827.3 $813.5
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Operating Income:
United States $ 93.0 $ 96.6
Europe 25.7 24.7
Canada/Latin America 2.1 2.9
Other -- --
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CONSOLIDATED $120.8 $124.2
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</TABLE>
Operating income of the United States includes a $6.7 million-gain from the
sale of a business venture and the partial sale of stock options in an
insurance company during the three months ended 31 December 1992.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Air Products and Chemicals, Inc.
(Registrant)
Dated: January 20, 1994 By: /s/ Gerald A. White
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Gerald A. White
Senior Vice President - Finance
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