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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 April 1996
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Air Products and Chemicals, Inc.
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(Exact name of registrant as specified in charter)
Delaware 1-4534 23-1274455
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(State of other jurisdiction (Commission file number) (IRS Identification
of incorporation) number)
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.
The Registrant reported record income from operations of $94 million,
or 85 cents per share, for the second quarter ended March 31, 1996. This
compares to last year's net income of $88 million, or 79 cents per share, a
per-share increase of 8 percent. Sales of $1 billion were up 3 percent versus
$983 million last year. These results exclude an after-tax gain in the current
quarter of $41 million, or 36 cents per share, from the settlement of certain
derivative-related claims.
Industrial gas sales for the quarter rose 8 percent. Both merchant and
tonnage volumes increased as new capacity came onstream. While operating income
was down 9 percent, the company's gas equity affiliate income was $8 million
higher in the quarter. Strong results from the company's Spanish, Mexican, and
Asian joint ventures were offset by margin pressures in the U.S. and northern
Europe.
In chemicals, second quarter operating income equaled last year's
record results on a 3 percent decline in sales. Despite some weakness in
volumes, improved performance across all the major businesses offset the loss of
profits from exiting merchant ammonia and a significant decline in methanol
pricing.
Profits for the environmental and energy systems business were up
slightly from a year ago. The company announced earlier this month its intent to
sell its 50 percent share in American Ref-Fuel. This waste-to-energy joint
venture with Browning-Ferris Industries typically represents a large portion of
equity affiliate income for this business segment.
The equipment and services segment reported significantly higher
operating income and a record backlog for the quarter despite lower sales.
For the first half of fiscal 1996, Air Products reported income of $183
million, or $1.65 per share, versus $175 million, or $1.56 per share, up 6
percent on an operating basis. Sales rose 3 percent to $2 billion. These results
exclude the 1996 gain from the settlement for certain derivative losses reported
in fiscal year 1994.
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 Six Months Ended
31 March 31 March
1996 1995 1996 1995
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $1,013 $983 $1,960 $1,904
Net Income $ 135(a) $ 88 $ 224(a) $ 175
Earnings Per Share $ 1.21(a) $.79 $ 2.01(a) $ 1.56
</TABLE>
(a) 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 Six Months Ended
31 March 31 March
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
SALES AND OTHER INCOME
Sales $1,013 $983 $1,960 $1,904
Other income (expense), net 4 1 8 --
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1,017 984 1,968 1,904
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COSTS AND EXPENSES
Cost of sales 609 591 1,169 1,135
Selling, distribution and
administrative 231 215 451 421
Research and development 29 26 56 50
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OPERATING INCOME 148 152 292 298
Income from equity affiliates,
net of related expenses 18 8 34 17
Gain on settlement of
leveraged interest rate swaps 67 -- 67 --
Interest expense 31 26 60 50
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INCOME BEFORE TAXES 202 134 333 265
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Income taxes 67 46 109 90
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NET INCOME $ 135 $ 88 $ 224 $ 175
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MONTHLY AVERAGE OF
COMMON SHARES OUTSTANDING -- -- 112 112
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EARNINGS PER COMMON SHARE $ 1.21 $.79 $ 2.01 $ 1.56
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DIVIDENDS DECLARED PER
COMMON SHARE - Cash $.26 $.25 $ .52 $ .49
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</TABLE>
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In millions, except per share)
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31 March 31 March
ASSETS 1996 1995
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<S> <C> <C>
CURRENT ASSETS
Cash and cash items $ 82 $ 94
Trade receivables, less allowances for
doubtful accounts 649 626
Inventories 383 304
Contracts in progress, less progress billings 114 108
Other current assets 144 127
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TOTAL CURRENT ASSETS 1,372 1,259
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INVESTMENTS 795 641
PLANT AND EQUIPMENT, at cost 7,691 7,014
Less - Accumulated depreciation 3,982 3,755
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PLANT AND EQUIPMENT, net 3,709 3,259
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GOODWILL 80 67
OTHER NONCURRENT ASSETS 268 187
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TOTAL ASSETS $6,224 $5,413
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
Payables, trade and other $ 491 $ 503
Accrued liabilities 235 241
Accrued income taxes 94 53
Short-term borrowings 423 211
Current portion of long-term debt 25 146
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TOTAL CURRENT LIABILITIES 1,268 1,154
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LONG-TERM DEBT 1,495 1,103
DEFERRED INCOME & OTHER NONCURRENT LIABILITIES 398 433
DEFERRED INCOME TAXES 510 442
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TOTAL LIABILITIES 3,671 3,132
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SHAREHOLDERS' EQUITY
Common stock, par value $1 per share 125 125
Capital in excess of par value 463 471
Retained earnings 2,556 2,255
Unrealized gain on investments 41 40
Cumulative translation adjustments (48) (19)
Treasury Stock, at cost (126) (133)
Shares in trust (458) (458)
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TOTAL SHAREHOLDERS' EQUITY 2,553 2,281
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $6,224 $5,413
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</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 three and
six months ended 31 March 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
outstanding for financial reporting purposes.
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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
<TABLE>
<CAPTION>
(In millions)
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Three Months Ended Six Months Ended
31 March 31 March
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Sales:
Industrial Gases $ 591 $546 $1,142 $1,071
Chemicals 340 351 650 675
Environmental/Energy 16 17 30 31
Equipment/Services 66 69 138 127
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CONSOLIDATED $1,013 $983 $1,960 $1,904
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Operating Income:
Industrial Gases $ 100 $110 $ 203 $ 219
Chemicals 53 53 102 102
Environmental/Energy -- -- (1) --
Equipment/Services 5 (3) 9 (4)
Corporate and Other (10) (8) (21) (19)
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CONSOLIDATED $ 148 $152 $ 292 $ 298
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Equity Affiliates' Income:
Industrial Gases $ 10 $ 2 $ 19 $ 4
Chemicals -- -- -- --
Environmental/Energy 8 6 15 13
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CONSOLIDATED $ 18 $ 8 $ 34 $ 17
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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 Six Months Ended
31 March 31 March
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Sales:
United States $ 763 $739 $1,462 $1,428
Europe 215 211 427 410
Canada/Latin America 34 33 69 65
Other 1 -- 2 1
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CONSOLIDATED $1,013 $983 $1,960 $1,904
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Operating Income:
United States $ 119 $119 $ 228 $ 236
Europe 25 26 59 52
Canada/Latin America 4 7 5 10
Other -- -- -- --
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CONSOLIDATED $ 148 $152 $ 292 $ 298
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Equity Affiliates' Income:
United States $ 8 $ 6 $ 14 $ 12
Europe 5 2 11 5
Canada/Latin America 3 (1) 4 (2)
Other 2 1 5 2
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CONSOLIDATED $ 18 $ 8 $ 34 $ 17
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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.
(Registrant)
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Dated: 23 April 1996 By: /s/ Arnold H. Kaplan
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Arnold H. Kaplan
Vice President - Finance
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