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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 1995
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Air Products and Chemicals, Inc.
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(Exact name of registrant as specified in charter)
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<S> <C> <C>
Delaware 1-4534 23-1274455
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(State of other jurisdiction of incorporation) (Commission file number) (IRS Identification number)
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7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501
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(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, 1995, the Registrant reported first quarter net income of
$87 million, or 77 cents per share, compared to income of $75 million, or 66
cents per share, before the cumulative effect of required accounting changes
last year. Excluding a non- operating gain of 2 cents per share in last year's
first quarter, the current quarter's results represent a per-share increase of
20 percent. Sales rose 11 percent to $921 million compared to $827 million
last year.
Industrial gas sales for the quarter increased 11 percent, and operating
income was up 17 percent compared to last year. Margins were higher due to
strong volume growth worldwide and improved cost performance, particularly in
Europe. Merchant gas prices in the United States and Europe declined slightly
from a year ago; however, U.S. pricing was higher relative to the fourth
quarter.
In chemicals, first quarter sales were up 19 percent while operating income
increased 54 percent. Approximately half of the profit gain was in the
company's major chemical businesses, including polyvinyl alcohol.
Volume-driven profits were moderated somewhat by higher feedstock costs. The
rest of the gain was a result of higher ammonia and methanol margins.
A portion of the company's ammonia capacity, which contributed $8 million
to first-quarter operating income, is scheduled to be shut down in the middle
of the second quarter and converted to hydrogen production. This conversion
takes Air Products out of the commodity ammonia business and provides needed
capacity for the company's strategic hydrogen program.
Profits in the environmental and energy systems business were up due
primarily to stronger operations at the waste-to-energy facilities of American
Ref-Fuel, Air Products' joint venture with Browning Ferris Industries, Inc.
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The Equipment and Services segment (formerly Equipment and Technology)
reported lower sales compared to last year and a loss in operating income due
to a lower overall level of activity in the equipment business.
The company also indicated that during the quarter the company continued
the share repurchase program that began in fiscal 1994.
Financial tables follow:
AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
(In millions, except earnings per share)
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<CAPTION>
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Three Months Ended 31 December 1994 1993
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Sales $920.8 $827.3
Income before Cumulative Effect
of Accounting Changes 86.7 75.1(a)
Cumulative Effect of Accounting
Changes -- 14.3(b)
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Net Income $ 86.7 $ 89.4
Earnings Per Share
Income before Cumulative Effect
of Accounting Changes $.77 $.66(a)
Cumulative Effect of Accounting
Changes -- .12(b)
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Net Income $.77 $.78
Average Shares Outstanding 113.0 114.2
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(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.
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AIR PRODUCTS AND CHEMICALS, INC.
OPERATING RESULTS
(Unaudited)
SUMMARY BY BUSINESS SEGMENTS
(In millions)
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<CAPTION>
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Three Months Ended
31 December
1994 1993
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<S> <C> <C>
Sales:
Industrial Gases $524.9 $471.8
Chemicals 323.8 271.4
Environmental/Energy 13.7 14.3
Equipment/Services 58.4 69.8
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CONSOLIDATED 920.8 827.3
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Operating Income:
Industrial Gases 109.1 92.9
Chemicals 49.0 31.8
Environmental/Energy .2 .2
Equipment/Services (1.3) 7.2
Corporate and Other (11.1) (11.3)
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CONSOLIDATED 145.9 120.8
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Equity Affiliates' Income:
Industrial Gases 2.5 1.0
Chemicals .1 (.1)
Environmental/Energy 6.8 5.4
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CONSOLIDATED 9.4 6.3
Interest Expense 23.9 19.8
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INCOME BEFORE TAXES 131.4 107.3
Income Taxes 44.7 32.2
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INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGES 86.7 75.1
Cumulative Effect of Accounting
Changes, Net of Income Taxes -- 14.3
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NET INCOME $ 86.7 $ 89.4
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Equipment and services was formerly entitled equipment and technology. The
composition of this segment is unchanged from the prior year. Its name was
changed to more appropriately reflect the products and activities of this
segment.
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).
AIR PRODUCTS AND CHEMICALS, INC.
OPERATING RESULTS
(Unaudited)
SUMMARY BY GEOGRAPHIC LOCATIONS
(In millions)
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<CAPTION>
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Three Months Ended
31 December
1994 1993
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<S> <C> <C>
Sales:
United States $689.0 $621.5
Europe 198.6 178.7
Canada/Latin America 32.6 27.1
Other .6 --
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CONSOLIDATED $920.8 $827.3
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Operating Income:
United States $117.1 $ 93.0
Europe 25.7 25.7
Canada/Latin America 3.1 2.1
Other -- --
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CONSOLIDATED $145.9 $120.8
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Equity Affiliates' Income:
United States $ 6.4 $ 5.5
Europe 3.1 .4
Canada/Latin America (1.3) 2.1
Other 1.2 (1.7)
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CONSOLIDATED $ 9.4 $ 6.3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Air Products and Chemicals, Inc.
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(Registrant)
Dated: January 20, 1995 By: /s/ Gerald A. White
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Gerald A. White
Senior Vice President - Finance
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