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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) 23 July 1996
Air Products and Chemicals, Inc.
(Exact name of registrant as specified in charter)
Delaware 23-1274455
(State of other jurisdiction of incorporation) (IRS Identification number)
1-4534
(Commission file number)
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.
The Registrant reported record income from operations of $98 million,
or 87 cents per share, up 5 percent from $94 million, or 83 cents per share, in
the year-ago quarter. The comparison excludes an after-tax gain of $6 million,
or 6 cents per share, from the sale of an idle asset last year. Sales of $997
million were up 2 percent versus $982 million last year.
Industrial gas sales for the quarter rose 6 percent, reflecting
continued progress in loading new U.S. plants, particularly hydrogen capacity
for the chemicals processing and refinery industry. Operating income was down 6
percent from the year-ago quarter, as stronger U.S. results helped to partially
offset weaker business conditions in northern Europe. Gas equity affiliate
income continued to grow, up $3 million for the quarter.
Chemicals operating income increased by $5 million, or 11 percent, on
flat sales. Though volumes were mixed, strong plant operations and improved
performance across most major businesses resulted in higher profits.
Profits for the environmental and energy systems segment were up from a
year ago, benefiting from better operations and a project buy-out.
The equipment and services segment continued to demonstrate excellent
performance. Operating income was up $4 million, with a near-record backlog of
high-quality projects.
For the quarter, higher interest expense was somewhat offset by lower
taxes.
For the first nine months of fiscal 1996, Air Products reported net
income of $322 million, or $2.88 per share, versus $275 million, or $2.45 per
share, for the same period last year. Excluding special items in both years (an
after-tax gain of $41 million, or 36 cents per share, in the current fiscal year
and an after-tax gain of $6 million, 6 cents per share, in 1995) earnings per
share increased 5 percent compared to last year as sales rose 2 percent to $3
billion.
Financial tables follow:
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AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
<TABLE>
<CAPTION>
(In millions, except earnings per share)
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Three Months Ended Nine Months Ended
30 June 30 June
1996 1995 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $997 $982 $2,957 $2,886
Net Income $ 98 $100(a) $ 322(b) $ 275(a)
Earnings Per Share $.87 $.89(a) $ 2.88(b) $ 2.45(a)
</TABLE>
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(a)Includes an after-tax gain of $6 million, or $.06 per share, from the sale of
an industrial gas plant.
(b)Includes an after-tax gain of $41 million, or $.36 per share, from the
settlement with Bankers Trust Company over losses reported in fiscal 1994
associated with leveraged interest rate swap contracts.
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME
<TABLE>
<CAPTION>
(In millions, except per share)
- -----------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
30 June 30 June
1996 1995 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES AND OTHER INCOME
Sales $ 997 $ 982 $2,957 $2,886
Other income, net 9 17 17 17
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1,006 999 2,974 2,903
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COSTS AND EXPENSES
Cost of sales 594 595 1,763 1,730
Selling, distribution and
administrative 228 217 679 638
Research and development 28 26 84 76
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OPERATING INCOME 156 161 448 459
Income from equity affiliates,
net of related expenses 20 16 54 33
Gain on settlement of leveraged
interest rate swaps -- -- 67 --
Interest expense 34 25 94 75
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INCOME BEFORE TAXES 142 152 475 417
Income taxes 44 52 153 142
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NET INCOME $ 98 $ 100 $ 322 $ 275
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MONTHLY AVERAGE OF
COMMON SHARES OUTSTANDING -- -- 112 112
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EARNINGS PER COMMON SHARE $ .87 $ .89 $ 2.88 $ 2.45
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DIVIDENDS DECLARED PER
COMMON SHARE - Cash $ .27 $ .26 $ .79 $ .75
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</TABLE>
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In millions, except per share)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
30 June 30 June
ASSETS 1996 1995
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<S> <C> <C>
CURRENT ASSETS
Cash and cash items $ 91 $ 122
Trade receivables, less allowances for
doubtful accounts 676 617
Inventories 392 311
Contracts in progress, less progress billings 114 120
Other current assets 160 146
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TOTAL CURRENT ASSETS 1,433 1,316
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INVESTMENTS 835 656
PLANT AND EQUIPMENT, at cost 7,909 7,236
Less - Accumulated depreciation 4,056 3,791
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PLANT AND EQUIPMENT, net 3,853 3,445
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GOODWILL 80 66
OTHER NONCURRENT ASSETS 271 237
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TOTAL ASSETS $ 6,472 $ 5,720
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
Payables, trade and other $ 579 $ 580
Accrued liabilities 224 243
Accrued income taxes 62 59
Short-term borrowings 249 238
Current portion of long-term debt 25 37
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TOTAL CURRENT LIABILITIES 1,139 1,157
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LONG-TERM DEBT 1,850 1,326
DEFERRED INCOME & OTHER NONCURRENT LIABILITIES 357 421
DEFERRED INCOME TAXES 537 462
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TOTAL LIABILITIES 3,883 3,366
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SHAREHOLDERS' EQUITY
Common stock, par value $1 per share 125 125
Capital in excess of par value 462 467
Retained earnings 2,624 2,326
Unrealized gain on investments 42 40
Cumulative translation adjustments (68) (8)
Treasury Stock, at cost (138) (138)
Shares in trust (458) (458)
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TOTAL SHAREHOLDERS' EQUITY 2,589 2,354
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 6,472 $ 5,720
====================================================================================
</TABLE>
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the second quarter of 1996, the Company reached a $67 million settlement
with Bankers Trust Company over $107 million in losses the Company reported in
fiscal 1994 associated with leveraged interest rate swap contracts. The
settlement included the termination of two previously closed contracts with
Bankers Trust. Prior to the settlement there was an outstanding liability of $62
million associated with these closed contracts. The results for the nine months
ended 30 June 1996 include a gain of $67 million ($41 million after tax, or $.36
per share) from the settlement.
In April 1996, the Company announced its plan to divest its joint venture
interest in a waste-to-energy business and commence a share repurchase program
designed to acquire approximately 10 percent of its 112 million shares
oustanding for financial reporting purposes.
The three and nine months ended 30 June 1995 include a gain of $11 million ($6
million after tax, or $.06 per share) from the sale of an industrial gas plant.
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
<TABLE>
<CAPTION>
(In millions)
- ------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
30 June 30 June
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Sales:
Industrial Gases $578 $542 $1,720 $1,613
Chemicals 352 352 1,002 1,027
Environmental/Energy 13 11 43 42
Equipment/Services 54 77 192 204
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CONSOLIDATED $997 $982 $2,957 $2,886
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Operating Income:
Industrial Gases $102 $119 $ 305 $ 338
Chemicals 55 50 157 152
Environmental/Energy 3 (2) 2 (2)
Equipment/Services 4 -- 13 (4)
Corporate and Other (8) (6) (29) (25)
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CONSOLIDATED $156 $161 $ 448 $ 459
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Equity Affiliates' Income:
Industrial Gases $ 12 $ 9 $ 31 $ 13
Chemicals -- -- -- --
Environmental/Energy 8 7 23 20
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CONSOLIDATED $ 20 $ 16 $ 54 $ 33
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</TABLE>
For the three and nine months ended 30 June 1995, operating income of industrial
gases includes a gain of $11 million from a plant sale.
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY GEOGRAPHIC REGIONS
<TABLE>
<CAPTION>
(In millions)
- ------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
30 June 30 June
1996 1995 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales:
United States $761 $732 $2,223 $2,160
Europe 191 216 618 626
Canada/Latin America 37 33 106 98
Other 8 1 10 2
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CONSOLIDATED $997 $982 $2,957 $2,886
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Operating Income:
United States $124 $120 $ 352 $ 356
Europe 27 33 86 85
Canada/Latin America 5 8 10 18
Other -- -- -- --
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CONSOLIDATED $156 $161 $ 448 $ 459
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Equity Affiliates' Income:
United States $ 7 $ 7 $ 21 $ 19
Europe 7 6 18 11
Canada/Latin America 2 2 6 --
Other 4 1 9 3
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CONSOLIDATED $ 20 $ 16 $ 54 $ 33
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</TABLE>
For the three and nine months ended 30 June 1995, operating income of the United
States includes a gain of $11 million from the sale of an industrial gas plant.
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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.
-----------------------------------
(Registrant)
Dated: 23 July 1996 By: /s/ Arnold H. Kaplan
---------------------------
Arnold H. Kaplan
Vice President - Finance
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