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UNITED STATES
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) 24 January 1996
Air Products and Chemicals, Inc.
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(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
Delaware 1-4534 23-1274455
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(State of other jurisdiction of incorporation) (Commission file number) (IRS Identification number)
</TABLE>
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 24, 1996, the Registrant announced it has reached a $67
million settlement with Bankers Trust Company over $107 million in losses Air
Products reported in fiscal 1994 associated with leveraged interest rate swap
contracts it entered into between October and December 1993. The settlement
includes the termination of two previously closed contracts with Bankers Trust.
Under a confidentiality agreement between the two parties, other terms and
conditions of the settlement were not made public.
The settlement will result in a gain of approximately $40 million after
taxes and will be reflected in the company's second fiscal quarter ending March
31, 1996.
The Registrant reported net income of $89 million, or 80 cents per
share, for the first quarter ended December 31, 1995, compared to last year's
$87 million, or 77 cents per share, a per-share increase of 4 percent. Sales of
$947 million were up 3 percent versus $921 million last year.
Commenting on the first quarter's results, Air Products Chairman H. A.
Wagner said, "Our first quarter proved to be a difficult one. We are pleased
that our chemicals business could replace the ammonia profits made last year
prior to exiting the merchant market. In addition, our equipment business
returned to profitability, capitalizing upon the active sales efforts undertaken
over the past few years. Slower volume growth and higher costs in our U. S.
gases business, however, impacted overall results."
Industrial gas sales for the quarter increased 5 percent, while
operating income was down 5 percent. Worldwide merchant and tonnage volumes were
up from a year ago, despite unexpected U.S. tonnage customer outages. However,
the rate of growth has slowed from previous quarters. Merchant prices in the
U.S. continued to improve. Operating costs--while lower than the previous
quarter--were still higher than last year. Prices across Europe were mixed, but
have improved in the United Kingdom during the last three quarters. Strong
performance from our joint ventures in southern Europe and
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Asia contributed to the quarter's results. The prior year results also included
a loss related to the peso devaluation in our Mexican investment.
In chemicals, first quarter sales decreased 4 percent, and operating
income equaled last year's results. Margin improvements across the businesses
offset the loss of profits from exiting merchant ammonia in last year's second
quarter and a decline in methanol pricing.
Profits for the environmental and energy systems business were down
slightly from a year ago.
The equipment and services segment reported significantly higher sales
and operating income for the quarter due to increased business activity,
including additional liquefied natural gas heat exchanger orders.
Looking ahead, Mr. Wagner said, "We are currently enjoying a firm
pricing environment in both gases and chemicals, but given the outlook for
moderating economic growth rates in 1996, we remain cautious in the near term.
We are confident, however, we will continue to deliver earnings growth, although
at rates below recent trends."
Financial tables follow:
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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
1995 1994
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<S> <C> <C>
Sales $947 $921
Net Income $ 89 $ 87
Earnings Per Share $.80 $.77
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME
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<CAPTION>
(In millions, except per share)
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Three Months Ended
31 December
1995 1994
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<S> <C> <C>
SALES AND OTHER INCOME
Sales $947 $921
Other income (expense), net 4 (1)
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951 920
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COSTS AND EXPENSES
Cost of sales 560 544
Selling, distribution and
administrative 220 206
Research and development 27 24
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OPERATING INCOME 144 146
Income from equity affiliates,
net of related expenses 16 9
Interest expense 29 24
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INCOME BEFORE TAXES 131 131
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Income taxes 42 44
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NET INCOME $ 89 $ 87
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MONTHLY AVERAGE OF
COMMON SHARES OUTSTANDING 112 113
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EARNINGS PER COMMON SHARE $.80 $.77
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DIVIDENDS DECLARED PER
COMMON SHARE - Cash $.26 $.24
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</TABLE>
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In millions, except per share)
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<CAPTION>
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31 December 31 December
ASSETS 1995 1994
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<S> <C> <C>
CURRENT ASSETS
Cash and cash items $ 95 $ 104
Trade receivables, less allowances for
doubtful accounts 628 578
Inventories 371 305
Contracts in progress, less progress billings 111 99
Other current assets 151 127
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TOTAL CURRENT ASSETS 1,356 1,213
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INVESTMENTS 783 656
PLANT AND EQUIPMENT, at cost 7,501 6,681
Less - Accumulated depreciation 3,926 3,606
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PLANT AND EQUIPMENT, net 3,575 3,075
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GOODWILL 80 66
OTHER NONCURRENT ASSETS 240 176
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TOTAL ASSETS $ 6,034 $ 5,186
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
Payables, trade and other $ 487 $ 468
Accrued liabilities 223 216
Accrued income taxes 68 60
Short-term borrowings 387 268
Current portion of long-term debt 168 145
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TOTAL CURRENT LIABILITIES 1,333 1,157
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LONG-TERM DEBT 1,314 998
DEFERRED INCOME &
OTHER NONCURRENT LIABILITIES 436 408
DEFERRED INCOME TAXES 506 436
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TOTAL LIABILITIES 3,589 2,999
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SHAREHOLDERS' EQUITY
Common stock, par value $1 per share 125 125
Capital in excess of par value 465 475
Retained earnings 2,450 2,194
Unrealized gain on investments 46 41
Cumulative translation adjustments (50) (50)
Treasury Stock, at cost (133) (140)
Shares in trust (458) (458)
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TOTAL SHAREHOLDERS' EQUITY 2,445 2,187
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 6,034 $ 5,186
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</TABLE>
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
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<CAPTION>
(In millions)
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Three Months Ended
31 December
1995 1994
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<S> <C> <C>
Sales:
Industrial Gases $ 551 $525
Chemicals 310 324
Environmental/Energy 14 14
Equipment/Services 72 58
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CONSOLIDATED $ 947 $921
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Operating Income:
Industrial Gases $ 103 $109
Chemicals 49 49
Environmental/Energy (1) --
Equipment/Services 4 (1)
Corporate and Other (11) (11)
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CONSOLIDATED $ 144 $146
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Equity Affiliates' Income:
Industrial Gases $ 9 $ 2
Environmental/Energy 7 7
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CONSOLIDATED $ 16 $ 9
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</TABLE>
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY GEOGRAPHIC REGIONS
<TABLE>
<CAPTION>
(In millions)
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Three Months Ended
31 December
1995 1994
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<S> <C> <C>
Sales:
United States $699 $689
Europe 212 199
Canada/Latin America 35 32
Other 1 1
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CONSOLIDATED $947 $921
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Operating Income:
United States $109 $117
Europe 34 26
Canada/Latin America 1 3
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CONSOLIDATED $144 $146
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Equity Affiliates' Income:
United States $ 6 $ 6
Europe 6 3
Canada/Latin America 1 (1)
Other 3 1
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CONSOLIDATED $ 16 $ 9
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</TABLE>
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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 24, 1996 By: /s/ Arnold H. Kaplan
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Arnold H. Kaplan
Vice President - Finance
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