UNITED STATES
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) 23 October 2000
------------------
<TABLE>
<CAPTION>
Air Products and Chemicals, Inc.
--------------------------------------------------
(Exact name of registrant as specified in charter)
<S> <C> <C>
Delaware 1-4534 23-1274455
---------------------------------------------- ------------------------ ---------------------------
(State of other jurisdiction of incorporation) (Commission file number) (IRS Identification number)
7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501
------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (610) 481-4911
---------------
<PAGE>
Item 5. Other Events.
---------------------
AIR PRODUCTS' NET INCOME FROM OPERATIONS UP 20 PERCENT
------------------------------------------------------
LEHIGH VALLEY, Pa. (October 23, 2000) - Air Products and Chemicals, Inc.
(NYSE:APD) today reported record sales and record net income from operations for
its fourth fiscal quarter ended September 30. Sales of $1.4 billion were up
16 percent, and net income from operations increased 20 percent compared with
the fourth quarter of 1999 on strong growth and productivity in industrial
gases. Growth was broad-based across all regions in gases, and particularly
strong in key markets such as electronics and the chemicals and processing
industries (CPI).
The company reported net income from operations of $139 million, or diluted
earnings per share of 64 cents, compared with net income from operations of
$116 million, or 54 cents per share, in the prior year. These results and the
following discussion exclude special items noted in the footnotes to the
financial statements.
Commenting on the quarter, Air Products chairman and chief executive officer
H. A. Wagner said, "Our record operating performance this quarter is
particularly noteworthy. By persistently focusing on productivity, we
overcame severe increases in raw material and energy prices. Our performance
also reflects our ongoing portfolio shift to higher-growth, more value-added
sectors, which sets us apart from the field."
Industrial gas sales increased 23 percent, operating income was up 41 percent,
and the worldwide gases operating margin improved to 20.2 percent. The
electronics division's sales of premier specialty gases and high purity
specialty chemicals for use in semiconductor and flat panel display
manufacturing increased dramatically. Robust sales of industrial and specialty
gases, better loading, and the consolidation of the company's Korean gas
affiliate, Korea Industrial Gases (KIG), led to better Asian results compared
with the prior year. CPI performed well due to higher North American hydrogen
volumes. Total European gases operations also turned in solid results,
particularly in light of a challenging currency environment.
Chemicals sales increased four percent compared with last year, driven by volume
growth in performance chemicals and polyurethane intermediates. Cost control and
productivity only partially
2
<PAGE>
offset higher raw material and energy costs, causing operating income to fall
significantly compared with the prior year.
For fiscal 2000, Air Products' record sales of $5.5 billion were up nine percent
compared with the prior year. Income from operations increased 18 percent to
$533 million, or $2.46 per share, compared with last year's $451 million, or
$2.09 per share. These results do not include the special items noted in the
footnotes to the financial statements.
"Our strategy of establishing leadership positions in electronics, CPI,
performance chemicals, and Asia delivered exceptional results. By doing what we
said we'd do across the company--improve prices, load assets and drive
productivity--we delivered better-than-expected results despite pressure from
energy and raw material price increases. Air Products' employees around the
world succeeded in building lasting relationships with our customers and making
our businesses more competitive," Mr. Wagner said, commenting on the year.
Mr. Wagner concluded by saying, "Going forward, our primary goal is to create
more value for our shareholders by providing our customers with innovative
products and services, increasing our focus on high-growth sectors, and
improving our return on capital. But 2001 will not be without its external
challenges, including anticipated slower growth in the North American economy
and elevated energy prices. On balance, this leads us to anticipate earnings
growth for fiscal 2001 of about 8-12 percent with a profile similar to last
year's."
***NOTE: The forward-looking statements contained in this release are based on
current expectations regarding important risk factors. Actual results may differ
materially from those expressed. Factors that might cause forward-looking
statements to differ materially from actual results include, among other things,
overall economic and business conditions; demand for the goods and services of
Air Products; competitive factors in the industries in which it competes; the
ability to recover increased energy and raw material costs through pricing;
changes in government regulation; success of implementing cost reduction
programs; the timing, impact and other uncertainties of future acquisitions or
combinations within relevant industries; fluctuations in interest rates and
foreign currencies; the impact of tax and other legislation and regulations in
the jurisdictions in which Air Products and its affiliates operate; and the
timing and rate at which tax credits can be utilized.
Financial tables follow:
3
<PAGE>
<TABLE>
<CAPTION>
AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
(Millions of dollars, except per share)
----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
30 September 30 September
2000 1999 2000 1999
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $1,449.1 $1,254.4 $5,467.1 $5,020.1
----------------------------------------------------------------------------------------------------------------------------------
Net Income:
As reported $218.5 $122.6 $124.2 $450.5
Exclusive of special items $139.4(a) $115.8(c) $532.6(b) $450.8(d)
----------------------------------------------------------------------------------------------------------------------------------
Basic Earnings Per Share:
As reported $1.02 $.58 $.58 $2.12
Exclusive of special items $.65 $.55 $2.50 $2.12
----------------------------------------------------------------------------------------------------------------------------------
Diluted Earnings Per Share:
As reported $1.01 $.57 $.57 $2.09
Exclusive of special items $.64(a) $.54(c) $2.46(b) $2.09(d)
----------------------------------------------------------------------------------------------------------------------------------
Operating Return on Net 11.1% 10.4%
Assets(e)
Capital Expenditures $971.4 $1,108.4(f)
Depreciation $151.6 $140.4 $578.3 $527.2
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Excludes an after-tax gain of $79.1 million, or $.37 per share, on the sale
of the polyvinyl alcohol business.
(b) Excludes an after-tax gain of $79.1 million, or $.37 per share, on the sale
of the polyvinyl alcohol business, an after-tax charge of $456.5 million,
or $2.12 per share, for costs related to the BOC transaction, an after-tax
charge of $35.0 million, or $.16 per share, for a global cost reduction
plan, and an after-tax gain of $4.0 million, or $.02 per share, on the sale
of packaged gas facilities.
(c) Excludes a net after-tax gain of $4.4 million, or $.02 per share, from BOC
currency options net of expenses and excludes an after-tax gain of
$2.4 million, or $.01 per share, due to reductions in costs for the
formation of Air Products Polymers.
(d) Excludes a net after-tax gain of $4.4 million, or $.02 per share,
from BOC currency options net of expenses, an after-tax gain of $23.6
million, or $.11 per share, related to the formation of Air Products
Polymers, an after-tax charge of $21.9 million, or $.10 per share, related
to the global cost reduction programs, and an after-tax charge of $6.4
million, or $.03 per share, primarily related to Chemicals facility closure
costs.
(e) Operating return on net assets (ORONA) is calculated as the rolling
four quarter sum of operating income divided by the rolling five quarter
average of total assets less investments in equity affiliates. The ORONA
calculation for the twelve months ended 30 September 2000 excludes $55.4
million in charges related to a global cost reduction plan and $6.3 million
in income related to the sale of packaged gas facilities. The ORONA
calculation for the twelve months ended 30 September 1999 excludes $34.2
million in charges related to a global cost reduction plan and $10.3
million in charges primarily related to Chemicals facility closure costs.
(f) Excludes the company's contribution of $121.7 million of assets to the
Air Products Polymers venture.
4
<PAGE>
<TABLE>
<CAPTION>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME
(Unaudited)
(Millions of dollars, except per share)
----------------------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
30 September 30 September
2000 1999 2000 1999
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES AND OTHER INCOME
Sales $1,449.1 $1,254.4 $5,467.1 $5,020.1
Other income, net 19.0 7.4 28.4 19.7
----------------------------------------------------------------------------------------------------------------------------
1,468.1 1,261.8 5,495.5 5,039.8
----------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of sales 1,029.2 877.3 3,825.6 3,501.4
Selling and administrative 177.5 166.5 714.7 690.6
Research and development 32.1 32.7 124.4 123.1
----------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 229.3 185.3 830.8 724.7
Income from equity affiliates, net of 25.6 22.4 87.6 61.5
related expenses
Net gain on formation of polymer -- 3.8 -- 34.9
venture
Gain/(loss) on currency hedges -- 7.0 (730.4) 7.0
related to BOC transaction and
expenses
Gain on sale of polyvinyl alcohol 126.8 -- 126.8 --
business
Interest expense 55.7 39.0 196.7 159.1
----------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE TAXES AND 326.0 179.5 118.1 669.0
MINORITY INTEREST
Income taxes (benefits) 106.5 54.0 (13.7) 203.4
Minority interest (a) 1.0 2.9 7.6 15.1
----------------------------------------------------------------------------------------------------------------------------
NET INCOME $218.5 $122.6 $124.2 $450.5
============================================================================================================================
BASIC EARNINGS PER $1.02 $.58 $.58 $2.12
COMMON SHARE
----------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER $1.01 $.57 $.57 $2.09
COMMON SHARE
----------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE 213.8 213.0 213.4 212.2
NUMBER OF COMMON
SHARES (in millions)
----------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE 217.2 216.3 216.2 216.0
NUMBER OF COMMON AND
COMMON EQUIVALENT
SHARES (in millions) (b)
----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS DECLARED PER COMMON SHARE - Cash $.19 $.18 $.74 $.70
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Minority interest primarily includes before-tax amounts.
(b) The dilution of earnings per common share is due mainly to the impact
of unexercised stock options.
5
<PAGE>
<TABLE>
<CAPTION>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions of dollars)
--------------------------------------------------------------------------------------------------------
30 September
ASSETS 2000 1999
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash items $94.1 $61.6
Fair value of currency options related to BOC transaction -- 70.4
Trade receivables, less allowances for 982.7 894.7
doubtful accounts
Inventories and contracts in progress 482.2 504.7
Other current assets 224.3 251.0
--------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,783.3 1,782.4
--------------------------------------------------------------------------------------------------------
INVESTMENTS IN NET ASSETS OF AND ADVANCES
TO EQUITY AFFILIATES 466.6 521.4
PLANT AND EQUIPMENT, at cost 10,310.9 10,187.9
Less - Accumulated depreciation 5,054.2 4,995.0
--------------------------------------------------------------------------------------------------------
PLANT AND EQUIPMENT, net 5,256.7 5,192.9
--------------------------------------------------------------------------------------------------------
GOODWILL AND OTHER NONCURRENT ASSETS 746.4 738.8
--------------------------------------------------------------------------------------------------------
TOTAL ASSETS $8,253.0 $8,235.5
========================================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY
--------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Payables, trade and other $578.4 $505.8
Accrued liabilities 357.2 407.0
Accrued income taxes 10.0 64.4
Short-term borrowings 249.7 407.6
Current portion of long-term debt 179.5 473.0
--------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,374.8 1,857.8
--------------------------------------------------------------------------------------------------------
LONG-TERM DEBT 2,615.8 1,961.6
DEFERRED INCOME & OTHER NONCURRENT 568.8 596.1
LIABILITIES
DEFERRED INCOME TAXES 758.9 731.1
--------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 5,318.3 5,146.6
--------------------------------------------------------------------------------------------------------
MINORITY INTERESTS IN SUBSIDIARY 115.5 127.3
COMPANIES
--------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 2,819.2 2,961.6
--------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,253.0 $8,235.5
========================================================================================================
</TABLE>
6
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONDENSED CONSOLIDATED CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars)
----------------------------------------------------------------------------------------------------------------------------
Twelve Months Ended
30 September
2000 1999
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $124.2 $450.5
Adjustments to reconcile income to cash provided by operating
activities:
Depreciation 578.3 527.2
Deferred income taxes (27.1) 58.8
Loss (gain) on BOC transaction 706.1 (12.5)
Undistributed earnings of unconsolidated affiliates (49.9) (46.3)
(Gain) loss on sale of assets and investments (138.6) 3.6
Other 95.7 73.3
Working capital changes that provided (used) cash, net of
effects of acquisitions
Trade receivables (158.5) (26.3)
Inventories and contracts in progress (57.4) 37.0
Payables, trade and other 92.2 26.3
Other 6.7 (2.7)
----------------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 1,171.7 1,088.9
----------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to plant and equipment (a) (766.1) (888.9)
Acquisitions, less cash acquired (b) (c) (170.4) (83.0)
Investment in and advances to unconsolidated affiliates (5.6) (110.6)
BOC transaction costs (d) (665.8) (27.7)
Proceeds from sale of assets and investments 382.6 45.6
Other .1 4.5
----------------------------------------------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (1,225.2) (1,060.1)
----------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Long-term debt proceeds 820.9 119.5
Payments on long-term debt (418.0) (82.9)
Net (decrease) increase in commercial paper and short-term (182.1) 57.5
borrowings
Dividends paid to shareholders (155.7) (146.2)
Other 15.0 22.0
----------------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 80.1 (30.1)
----------------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash 5.9 1.4
----------------------------------------------------------------------------------------------------------------------------
Increase in Cash and Cash Items 32.5 .1
Cash and Cash Items - Beginning of Year 61.6 61.5
----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Items - End of Period $94.1 $61.6
============================================================================================================================
</TABLE>
(a) Excludes capital lease additions of $4.9 million and $18.5 million in
fiscal 2000 and 1999, respectively.
(b) Excludes $24.4 of long-term debt assumed in acquisitions in fiscal 2000.
(c) Excludes assumption of $7.4 of former shareholder liability of company
acquired in fiscal 1999.
(d) Impact of BOC transaction is described in the Notes to Consolidated
Financial Statements.
7
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The results for the three and twelve months ended 30 September 2000 include a
gain of $126.8 million ($79.1 million after-tax, or $.37 per share) on the sale
of the polyvinyl alcohol business to Celanese AG, for $326 million. Included in
the sale are facilities in Pasadena, TX and Calvert City, KY that produce nearly
200 million pounds per year of polyvinyl alcohol and employ approximately 200
people. Sales in fiscal year 2000 were $194.2 million, with essentially no
operating income contribution.
On 13 July 1999, the Boards of Air Products and Chemicals, Inc., The BOC Group,
and Air Liquide announced that they had agreed to the terms of a recommended
offer for the share capital of BOC at UK(pound)14.60 per BOC share (the
"Offer"). The Offer, which was to be made jointly by Air Products and Air
Liquide, was subject to certain pre-conditions, one of which was the approval of
the U.S. Federal Trade Commission (FTC).
During 10 months of discussions with the FTC, Air Products and Air Liquide made
a number of comprehensive and practical proposals, including divestitures, which
responded to the requirements of the FTC. On 10 May 2000, Air Products and Air
Liquide announced it had recently become clear that the FTC would not approve
the Offer by 12 May 2000, the date on which the period for satisfying the
pre-conditions to the Offer would expire and the Offer was not extended beyond
12 May 2000.
Since the BOC transaction did not occur, certain costs and financing fees that
had been deferred were required to be expensed in fiscal year 2000. In addition,
the Company and Air Liquide were obligated to pay BOC a fee of $50 million each
since the Offer to acquire BOC was not made.
Additionally, the Company had entered into various purchased currency options
and forward exchange contracts to hedge the currency exposure related to the
proposed purchase of BOC shares at UK(pound)14.60 per share. Net losses
associated with the change in market value of these contracts were recorded in
earnings. Additional losses through the date of termination of the hedging
instruments were incurred due to the continued decline in the value of the
British Pound. The Company purchased British Pound put options to cap the rate
change exposure of those forward exchange contracts. The cost of these put
instruments was $78.5 million.
The results for twelve months ended 30 September 2000 include a total charge
related to the proposed BOC transaction of $730.4 million ($456.5 million
after-tax, or $2.12 per share). Of this amount, $594.6 million ($371.6 million
after-tax) of charges were recorded on purchased currency option and forward
exchange contracts entered into to hedge the currency exposure of the
transaction, resulting in a cumulative charge recorded on the currency hedging
instruments of $582.0 million ($363.8 million after-tax). The remaining charge
of $135.8 million ($84.9 million after-tax) consists of the BOC fee paid and
transaction expenses.
The cash impact of the BOC transaction of $690.1 million in fiscal year 2000 was
principally reflected as an investing activity in the statement of Consolidated
Cash Flows. This cash impact does not consider the tax benefits associated with
this transaction.
8
<PAGE>
The results for the twelve months ended 30 September 2000 include cost reduction
charges of $55.4 million ($35.0 million after-tax, or $.16 per share). The 2000
plan, initiated in the quarter ending 31 March 2000, includes 450 staff
reductions in total and three facility impairments. The charges to cost of
sales, selling and administrative, research and development, and other expense
were $20.6 million, $25.4 million, $1.9 million, and $7.5 million, respectively.
The results for the twelve months ended 30 September 2000 also include a gain of
$6.3 million ($4.0 million after-tax, or $.02 per share) related to the sale of
packaged gas facilities.
The company has a net tax benefit for the fiscal year ended 30 September 2000.
This net benefit results from the loss on the BOC transaction, as well as tax
credits and adjustments. The current year net tax benefit compares to an
effective tax rate of 31.1%, after minority interest of $15.1 million, in the
prior year. The fiscal 2000 rate is significantly impacted by the PVOH sale, the
BOC transaction, the global cost reduction plan, and the sale of packaged gas
facilities. Excluding the tax impact of the fiscal 2000 special items, the
effective rate for the year is 30.2%, after minority interest of $7.6 million.
The comparable effective rate in fiscal year 1999 was 31.3%, excluding the tax
rate impact of the gain on formation of the polymer ventures, a chemical
facility closure, and the global cost reduction plan. The 1.1% reduction in
effective tax rates after special items is due to credits and adjustments.
The results for the twelve months ended 30 September 1999 include a charge of
$34.2 million ($21.9 million after-tax, or $.10 per share) for a global cost
reduction plan. The total staff reduction for the 1999 plan was 348 employees.
The charges to cost of sales, selling and administrative, and research and
development were $15.3 million, $17.8 million, and $1.1 million, respectively
for the twelve months ended 30 September 1999.
The results for the twelve months ended 30 September 1999 include a net gain of
$34.9 million ($23.6 million after-tax, or $.11 per share) related to the
formation of Air Products Polymers (a 65% majority owned venture with
Wacker-Chemie GmbH). The gain was partially offset by costs related to an
emulsions facility shutdown not included in the joint venture and for costs
related to indemnities provided by Air Products to the venture.
The results for the twelve months ended 30 September 1999 also include a charge
of $10.3 million ($6.4 million after-tax, or $.03 per share) primarily related
to Chemicals facility closure costs.
9
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
(Unaudited)
<TABLE>
<CAPTION>
Business segment information is shown below:
--------------------------------------------------------------------------------------------------------------------------
(Millions of dollars) Three Months Ended Twelve Months Ended
30 September 30 September
2000 1999 2000 1999
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues from external customers
Gases $948.0 $770.4 $3,465.5 $2,996.4
Equipment 59.4 61.1 228.8 366.3
Chemicals 441.7 422.9 1,772.8 1,657.4
-----------------------------------------------------------------------------------------------------------------------
Segment Totals 1,449.1 1,254.4 5,467.1 5,020.1
-----------------------------------------------------------------------------------------------------------------------
Consolidated Totals $1,449.1 $1,254.4 $5,467.1 $5,020.1
-----------------------------------------------------------------------------------------------------------------------
Operating income
Gases $191.5 $135.8 $673.1(a)(b) $521.9(c)
Equipment 6.7 4.6 9.9(a) 34.7(c)
Chemicals 35.7 52.1 182.1(a) 193.7(c)(d)
-----------------------------------------------------------------------------------------------------------------------
Segment Totals 233.9 192.5 865.1 750.3
-----------------------------------------------------------------------------------------------------------------------
Corporate research and development (4.6) (7.2) (34.3)(a) (25.6)(c)
and other income/(expense)
-----------------------------------------------------------------------------------------------------------------------
Consolidated Totals $229.3 $185.3 $830.8 $724.7
-----------------------------------------------------------------------------------------------------------------------
Operating income (excluding special
items)
Gases $191.5 $135.8 $698.8 $548.9
Equipment 6.7 4.6 16.8 37.4
Chemicals 35.7 52.1 197.7 208.0
-----------------------------------------------------------------------------------------------------------------------
Segment Totals 233.9 192.5 913.3 794.3
-----------------------------------------------------------------------------------------------------------------------
Corporate research and development (4.6) (7.2) (33.4) (25.1)
and other income/(expense)
-----------------------------------------------------------------------------------------------------------------------
Consolidated Totals $229.3 $185.3 $879.9 $769.2
-----------------------------------------------------------------------------------------------------------------------
Equity affiliates' income
Gases 21.0 $18.3 $73.6 $46.8
Equipment .2 .5 2.0 1.6
Chemicals 3.8 3.5 12.5 12.4
Other .6 .1 (.5) .7
-----------------------------------------------------------------------------------------------------------------------
Segment Totals 25.6 22.4 87.6 61.5
-----------------------------------------------------------------------------------------------------------------------
Consolidated Totals $25.6 $22.4 $87.6 $61.5
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
(Millions of dollars)
----------------------------------------------------------------------------------------------------------------------------------
Twelve Months Ended
30 September
2000 1999
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total assets
Gases $6,224.3 $5,894.7
Equipment 236.6 265.8
Chemicals 1,505.2 1,687.5
---------------------------------------------------------------------------------------------------------------------------
Segment Totals 7,966.1 7,848.0
---------------------------------------------------------------------------------------------------------------------------
Corporate assets 286.9 387.5
---------------------------------------------------------------------------------------------------------------------------
Consolidated Totals $8,253.0 $8,235.5
---------------------------------------------------------------------------------------------------------------------------
ORONA
Gases 12.3% 10.4%
Equipment 7.1% 13.0%
Chemicals 12.3% 12.9%
---------------------------------------------------------------------------------------------------------------------------
Segment Totals 12.1% 11.1%
---------------------------------------------------------------------------------------------------------------------------
Consolidated Totals 11.1% 10.4%
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The results for the twelve months ended 30 September 2000 include the cost
reduction charge in Gases ($32.0 million), Equipment ($6.9 million),
Chemicals ($15.6 million), and Corporate ($.9 million).
(b) The results for the twelve months ended 30 September 2000 include a gain on
the sale of packaged gas facilities of $6.3 million.
(c) The results for the twelve months ended 30 September 1999 include the cost
reduction charge in Gases ($27.0 million), Equipment
($2.7 million), Chemicals ($4.0 million), and Corporate ($.5 million).
(d) The results for the twelve months ended 30 September 1999 include a charge
of $10.3 million primarily related to Chemicals facility closure costs.
11
<PAGE>
A reconciliation of total segment operating income to consolidated income before
income taxes and minority interest is as follows:
<TABLE>
<CAPTION>
(Millions of dollars)
----------------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
30 September 30 September
2000 1999 2000 1999
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total segment operating income $233.9 $192.5 $865.1 $750.3
Corporate research and (4.6) (7.2) (34.3) (25.6)
development and other
income/(expense)
----------------------------------------------------------------------------------------------------------------------
Consolidated operating income 229.3 185.3 830.8 724.7
----------------------------------------------------------------------------------------------------------------------
Equity affiliates' income 25.6 22.4 87.6 61.5
Gain on formation of polymer -- 3.8 -- 34.9
venture
Gain (loss) on currency hedges related -- 7.0 (730.4) 7.0
to BOC transaction and expenses
Gain on sale of polyvinyl alcohol 126.8 -- 126.8 --
business
Interest expense 55.7 39.0 196.7 159.1
----------------------------------------------------------------------------------------------------------------------
Consolidated income before taxes and $326.0 $179.5 $118.1 $669.0
minority interest
======================================================================================================================
</TABLE>
12
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY GEOGRAPHIC REGIONS
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars)
--------------------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
30 September 30 September
2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues from external customers
United States $973.0 $823.7 $3,628.8 $3,226.9
United Kingdom 115.9 144.3 483.8 620.4
Spain 69.5 75.6 300.7 319.0
Other Europe 142.1 126.3 559.8 564.3
--------------------------------------------------------------------------------------------------------------------------
Total Europe 327.5 346.2 1,344.3 1,503.7
--------------------------------------------------------------------------------------------------------------------------
Canada/Latin America 66.8 51.4 240.6 202.4
Asia 81.8 33.0 253.1 86.8
All Other -- .1 .3 .3
--------------------------------------------------------------------------------------------------------------------------
Total $1,449.1 $1,254.4 $5,467.1 $5,020.1
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Geographic information is based on country of origin. The other Europe
segment operates principally in France, Germany, Netherlands, and Belgium.
13
<PAGE>
Clarifying the statement in the preceding release regarding "anticipate[d]
earnings growth for fiscal 2001 of about 8-12 percent with a profile similar to
last year's," the company expects first quarter 2001 earnings per share to be in
the range of 60 cents to 63 cents.
14
<PAGE>
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 October 2000 By: /s/ Leo J. Daley
-------------------------------------------
Leo J. Daley
Vice President - Finance and Controller
(Chief Financial Officer)
15
